PROOF OF DEBTS RULES

PROOF OF DEBTS RULES

25. If within half an hour from the time appointed for
the meeting a quorum of creditors is not present or repre-
sented, the meeting shall be adjourned to the same day in
the following week at the same time and place or to such
other day as the chairman may appoint, being not less than
seven nor more than twenty-one days after the day first
appointed.

26. The chairman of every meeting shall cause minutes
of the proceedings at the meeting to be drawn tip and
fairly entered in a record kept for that purpose and the
rdinutes shall be signed by him or by thechairInan of the
next ensuing meeting.

27. No person acting under either a general or a
special proxy shall vote in favour of any resolution which
would directly or indirectly place himself or his partner
or employer in a position to receive any remuneration out
of the estate of the debtor otherwise than as a creditor
rateably with the other creditors of the debtor: Provided
that where any person holds special proxies to vote for the
appointment of himself as trustee he may use the said
proxies and vote accordingly.

28. The vote of the trustee or of his partner, clerk,
solicitor or solicitor's clerk, either as creditor or as proxy
for a creditor, shall not be reckoned in the majority re-
quired for passing any resolution affecting the conduct of
the trustee.

29. These rules may be cited as the Meetings of Creditors
Rules.

PROOF OF DEBTS RULES. -

(Cap. 6, section 36).
(Ordinance No. 10 Of 1930.
[1st January, 1932.]

Proof in ordinary cases.

1. Every creditor shall prove his debt as soon as may
be after the making of a receiving order.





2. A debt may be proved by delivering or sending
through.the post in a prepaid letter to the Official Receiver,
or if a trustee has been appointed, to the trustee, an affidavit
verifying the debt.


3. The affidavit may be made by the creditor himself
or by some person authorized by or on behalf of the creditor
and having knowledge of the facts. If made by a person
so authorized, it shall state his authority and means of
knowledge.

4. The affidavit shall contain or refer to a statement
of account showing the particulars of the debt, and shall
specify the vouchers, if any, by which the same can be
substantiated. The Official Receiver or trustee may at any
time call for the production of the vouchers. The parti-
culars shall be in the English language.

5. The affidavit shall state whether the creditor is or
is not a secured creditor, and if it is found at any time that
the affidavit made by or on behalf of a secured creditor has
omitted to state that he is a secured creditor, the secured
creditor shall surrender his security to the Official Receiver
or trustee for the general benefit of the creditors unless the
court on application is satisfied that the omission has arisen
from inadvertence, and in that case the court may allow
the affidavit to be amended upon such terms as to the repay-
ment of any dividends or otherwise as the court may con-
sider just.

6. A creditor shall bear the cost of proving his debt
unless the court otherwise specially orders.

7. Every creditor who has lodged a proof shall be
entitled to see and examine the proofs of other creditors
before the first meeting, and at all reasonable times on
payment of the prescribed fee.

8. A creditor proving his debt shall deduct therefrom
all trade discounts, but he shall not be compelled to deduct
any discount, not exceeding five per cent on the net amount
of his claim, which he may have agreed to allow for pay-
ment in cash.





Proof by secured creditors.

9. If a secured creditor realizes his security he may
prove for the balance due to him, after deducting the net
amount realized.

10. If a secured creditor surrenders his security to the
Official Receiver or trustee for the general benefit of the
creditors, lie may prove for his whole debt.

11. If a secured creditor does not either realize 01* SUr-
render his security he shall, before ranking for dividend,
state in his proof the particulars of his security, the date
when it was given and the value at which he assesses it,
and shall be entitled to receive a dividend only in respect
of the balance due to him after deducting the value so
assessed.

12. (1) Where a security is so valued the trustee may
at any time redeem it on payment to the creditor of the
assesed value.

(2) If the trustee is dissatisfied with the value nt which
a security is assessed he may require that the property
comprised in any security so valued be offered for sale at such
times and on such terms and conditions as may be agreed
on between the creditor and the trustee or as, in default
of such agreement, the court may direct. If the sale be
by public auction the creditor, or the trustee on behalf of
the estate, may bid or purchase :

(3) Provided that the creditor may at any time by
notice in writing require the trustee to elect whether he will
or will not exercise his power of redeeming the security or
requiring it to be realized, and if the trustee does not within
six months after receiving the notice signify in writing to
the creditor his election to exercise the power, he shall not
be entitled to exercise it ; and the equity of redemption, or
any other interest in the property comprised in the security
which is vested in the trustee, shall vest in the creditor and
the amount of his debt shall be reduced by the amount at
which the security has been valued.

13. Where a creditor has so valued his security he
may at any time amend the valuation and proof on showing
to the satisfaction of the trustee or the court that the valua-





tion and proof were made bona fide on a mistaken estimate
or that the security has diminished or increased in value
since its previous valuation ; but every such amendment
shall be made at the cost of the creditor and upon such
terms as the court shall order, unless the trustee allows
the amendment without application to the court.

14. Where a valuation has been amended in accord-
ance with the foregoing rule the creditor shall forthwith
repay any surplus dividend which he may have received
in excess of that to which he would have been 'entitled
on the amended valuation or, as the case maybe, shall he
entitled to be paid out of any money, for the time being
available for dividend, any dividend or share of dividend
which he may have failed to receive by reason of the in-
accuracy of the original valuation, before that money is
made applicable to the payment of any future dividend,
but lie shall not be entitled to disturb the distribution of
any dividend declared before the date of the amendment.

15. If a creditor after having valued his security sub-
sequently realizes it, or if it is realized under the provisions
of rule 12, the net amount realized shall be substituted for
the amount of any valuation previously made by the
creditor, and shall be treated in all respects as an amended
valuation made by the creditor.

16. If a secured creditor does not comply with the
foregoing rules he shall be excluded from all share in any
dividend.

17. Subject to the provisions of rule 12, a creditor shall
in no case receive more than the full amount of his debt,
and interest as provided by the Bankruptcy Ordinance.

Proof in respect of distinct contracts.

18. If a debtor was at the date of the receiving order
liable in respect of distinct contracts as a member of two
or more distinct firms, or as a sole contractor, and also as
member of a firm, the circumstance that the firms are in
whole or in part composed of the same individuals, or that
the sole contractor is also one of the joint contractors, shall
not prevent proof in respect of the contracts, against the
properties respectively liable on the contracts.





Periodical payments.

19. When any rent or other payment falls due at stated
periods and the receiving order is made it any time other
than one of those periods, the person entitled to the rent
or payment may prove for a proportionate part thereof up
to the date of the order as if the rent or payment became
due from day to day.

20. On any debt or sum certain, payable at a certain
time or otherwise, whereon interest is not reserved or
agreed and which is overdue at the date of the receiving
order and provable in bankruptcy, the creditor may prove
for interest at a. rate not exceeding eight per cent Per annum
to the date of the order from the time when the debt or
sum was payable, if the debt or sum is payable by virtue
of a written instrument at a certain time, and if payable
otherwise, then from the time. when a demand in writhig
has been made giving the debtor notice that interest will
be claimed from the date of the demand until the time of
payment.

Interest.

Debt payable at a future time.

21. A creditor may prove for a debt not payable when
the debtor committed an act of bankruptcy as if it were
payable presently, and may receive dividends equally with
the other creditors, deducting only thereout a rebate of
interest at the rate of five per cent per annum computed from
the declaration of a dividend to the time when the debt
would have become payable, according to the terms on
which it was contracted.

Admission or rejection of proofs.

22. The trustee shall examine every proof and the
grounds of the debt, and in writing admit or reject it in
whole or in part or require further evidence in support of
it. If he rejects a proof he shall state in writing to the
creditor the grounds of the rejection.

23. If the trustee thinks that proof has been improperly
admitted the court may, on the application of the trustee,





after notice to the creditor who. made the proof, expunge the
proof or reduce its amount.

24. If a creditor is dissatisfied with the decision of the
trustee in respect of a proof the court may, on the applica-
tion of the creditor, reverse or vary the decision. The
Official Receiver or trustee shall not be personally liable for
any costs in respect of the rejection by him in whole or in
part of any proof unless it is proved to the satisfaction of
the court that lie has acted inala fide or with gross negligence.

25. The court may also expunge or reduce a proof
upon the application of a creditor if the trustee declines to
interfere in the matter, or in the case of a composition or
scheme, upon the application of the debtor.

26. The Official Receiver before the appointment of a
trustee shall have all the powers of a trustee with respect to
the examination, admission and rejection of proofs, and
any act or decision of his in relation thereto shall be sub-
ject to the like appeal.

27. These rules may be cited as the Proof of Debts
Rules.

BANKRUPTCY RULES.

(Cap. 6, section 113).
(Ordinance No. 10 Of 1931).

[18th, November, 1932.]

11
(The marginal references, e.g., 'R1. , are to the English
Bankruptcy Rules, 1915.)

PART I.

PRELIMINARY.

1. These rules may be cited as the Bankruptcy Rules.
Forms 37, Bankruptcy Rules. Regulations-Fraser, vol. 3, p. 1141. Forms 46, 47, 48. Bankruptcy Rules. (Cap. 6) Form 49. Bankruptcy Rules. Regulations-Fraser, vol. 3, p. 1146. Short title. R1.

Forms 37, Bankruptcy Rules. Regulations-Fraser, vol. 3, p. 1141. Forms 46, 47, 48. Bankruptcy Rules. (Cap. 6) Form 49. Bankruptcy Rules. Regulations-Fraser, vol. 3, p. 1146. Short title. R1.

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