Primary law, Tamil Nadu land law
The Presidency-Towns Insolvency Act, 1909
The Presidency-Towns Insolvency Act, 1909, enacted as Act No. 3 of 1909 and dated 12 March 1909, is a primary law governing insolvency in the Presidency towns, including proceedings before the High Court at Madras. It came into force on 1 January 1910 and covers adjudication, creditor claims, property transfers, administration and distribution of an insolvent person's property, and discharge. The supplied text includes later amendments and states that the Act was amended in Madras by Madras Act 5 of 1943.
What the law governs
The Presidency-Towns Insolvency Act, 1909 establishes the court process for declaring and administering insolvency in the Presidency towns. Insolvency jurisdiction is given to the High Courts at Calcutta, Madras and Bombay, and matters are ordinarily handled by a single judge.
The High Court may decide questions of law, fact and priority that arise in an insolvency case. It may also review, cancel or vary its insolvency orders, subject to the appeal provisions in the Act.
Who may be affected
The Presidency-Towns Insolvency Act, 1909 affects debtors, creditors, decree holders, judgment debtors, secured creditors, landlords with a statutory charge on land for rent, partners and legal representatives of a person who dies insolvent. It also sets out the role and powers of the official assignee.
A property buyer, owner or creditor may be affected where a debtor has transferred, charged or dealt with property before or during insolvency proceedings. The definition of property includes property, or its profits, over which a person has a power of disposal exercisable for that person's own benefit.
Key property and debt provisions
The Presidency-Towns Insolvency Act, 1909 provides for:
- Treating certain transfers as acts of insolvency, including transfers intended to defeat or delay creditors.
- Avoidance of voluntary transfers and certain preferences.
- Protection of bona fide transactions.
- Vesting, possession, seizure and realization of an insolvent person's property through the official assignee.
- Disclaimer of onerous property and leaseholds.
- Proof of debts, set-off, priority of debts and rent due before adjudication.
- Declaration and distribution of dividends among creditors.
- Administration of joint and separate property involving partners.
- Administration of the estate of a person who dies insolvent.
Insolvency process
The Presidency-Towns Insolvency Act, 1909 covers creditor and debtor petitions, adjudication, stays of proceedings, meetings of creditors, public examination, compositions and schemes of arrangement. It also addresses discharge, fraudulent settlements, penalties for specified conduct, summary administration in small cases, unclaimed dividends, access to the insolvent's book, and rules concerning fees and percentages.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Can an insolvency case affect property transferred by a debtor?
Yes. The Presidency-Towns Insolvency Act, 1909 treats some transfers intended to defeat or delay creditors as acts of insolvency and provides for avoidance of voluntary transfers and certain preferences.
Which court handles these insolvency matters in Madras?
The Act gives insolvency jurisdiction to the High Court at Madras, along with the High Courts at Calcutta and Bombay.
Does the Act protect every property purchase made from an insolvent person?
The Act contains a provision for protection of bona fide transactions, but the supplied text does not set out the detailed conditions for that protection.
Can a landlord be treated as a secured creditor?
Yes, where an enactment in force gives the landlord a charge on land for the rent of that land.
