Municipal Corporation of Greater Mumbai (MCGM) Vs. Abhilash Lal & Ors-15/11/2019

SUPREME COURT OF INDIA JUDGMENTS

STATUTORY INTERPRETATION-If a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed.

The principle behind the Rule is that if this were not so, the statutory provision might as well not have been enacted. A Magistrate, therefore, cannot in the course of investigation record a confession except in the manner laid down in Section 164. The power to record the confession had obviously been given so that the confession might be proved by the record of it made in the manner laid down. If proof of the confession by other means was permissible, the whole provision of Section 164 including the safeguards contained in it for the protection of Accused persons would be rendered nugatory. The section, therefore, by conferring on Magistrates the power to record statements or confessions, by necessary implication, prohibited a Magistrate from giving oral evidence of the statements or confessions made to him.

SUPREME COURT OF INDIA

Municipal Corporation of Greater Mumbai (MCGM) Vs. Abhilash Lal & Ors.

[Civil Appeal No. 6350 of 2019]

ACT: Section 62 of the Insolvency and Bankruptcy Code, 2016

FROM: National Company Law Appellate Tribunal

S. RAVINDRA BHAT, J.

1. The Municipal Corporation of Greater Mumbai (hereafter “MCGM”) appeals under Section 62 of the Insolvency and Bankruptcy Code, 2016 (hereafter “IBC” or “the Code”) against the order of the National Company Law Appellate Tribunal (hereafter variously “NCLAT” and “the Appellate Tribunal”), rejecting its plea with respect to a resolution plan approved by the National Company Law Tribunal (“NCLT”) under the provisions of that Code.

2. MCGM owns inter alia, Plot Nos. 155156, 162 and 168 (all plots hereafter called “the lands”) in village Marol, Andheri (East) Mumbai. By a contract (dated 20th December, 2005) SevenHills Healthcare (P.) Ltd. (the company facing insolvency proceedings, hereafter “SevenHills”) agreed to develop these lands (which were to be leased to it for 30 years) and construct a 1500 bed hospital. MCGM stipulated several conditions, including that 20% of the beds had to be reserved for use by the economically deprived, and that SevenHills had to complete the construction in 60 months (excluding monsoons). The sixtymonth period ended on 24th April, 2013; the project however, was not completed. In terms of Clause 15(g), the lease deed had to be executed within a month after completion. However, the deed was not executed as the project was not completed. Further, SevenHills had to pay lease rent at the annual rate of 10,41,04,000. MGCM alleges that there were defaults in these payments. In these circumstances, MCGM issued a show cause notice on 23rd January, 2018, proposing termination of the contract/agreement. It is submitted that SevenHills owed MCGM an amount of Rs. 76,05,07,780.

3. On the strength of the contract, SevenHills had borrowed from banks and financial institutions. It had created security by way of mortgage of the said lands, citing Clause 5, which enabled the creation of such encumbrances. SevenHills’ inability to repay its debts led to the initiation of insolvency proceedings by Axis Bank. On 13th March, 2018, before the period given by MCGM’s showcause notice ended, the Petition (CP (IB) No. 282/7/HBD/2017) was admitted by the Hyderabad Bench of the NCLT. The first respondent was appointed as the Resolution Professional (hereafter “RP”); this was approved by the Committee of Creditors (“CoC”) as required by the Code, on 12 April, 2018. A publication for expression of interest (“EOP”) was issued on 14 May, 2018; later, on 25th June, 2018 and 16th July, 2018, the terms of the Request for Proposal (RFP) and criteria for evaluation (of RFPs received) were approved. As a result of the RFP published, a resolution plan was submitted by Dr. Shetty’s New Medical Centre (“SNMC”). After discussion with the CoC, a revised RFP was submitted by the RP. The revised resolution plan was approved by the CoC on 4th September, 2018.

4. The resolution plan projected infusion of over Rs.1000 crores by SNMC. That amount was to be borrowed; for this purpose, SevenHills’ properties movable and immovable, were proposed to be secured by hypothecation and mortgage respectively. Operational creditors were to be paid off to the extent of 75%. Further, the plan proposed payout to the tune of Rs.102.3 crores to MCGM as against its total claim of

Rs.140.88 crores, and also committed to honouring the terms of the agreement entered into by SevenHills and providing 20% of the beds (of the hospital to be constructed) to the poor and weaker sections of society. The networth certificate furnished by SNMC indicated that it possessed sufficient funds.

5. MCGM filed an application (I.A. No. 207/ 2018) claiming that it ought to be declared as a Financial Creditor and a Member of the Committee of Creditors. It made several submissions, which indicated that subject to stipulations with respect to completion of the hospital project in a timebound manner, and subject to SNMC providing 20% beds in the completed hospital, for use by the economically weaker sections (and at the disposal of MCGM) and, lastly subject to clearing its (MCGM’s) claims to the tune of Rs.140.88 crores, it was agreeable to the resolution plan.

However, later during the proceedings, it opposed the resolution plan, arguing that being a public body as well as a planning authority, it had to comply with the provisions of the Mumbai Municipal Corporation Act, 1888 (“MMC Act”), which meant that all action and approval had to be taken by the Improvement Committee of the Corporation. It was also stated that the show cause notice (“SCN”) dated 23rd January, 2018 had been already issued by MCGM proposing to terminate the contract (with SevenHills) to which there was no response and that in the absence of a lease, the provisions of Section 14(1)(d) of the Code could not prevent the MCGM from terminating the agreement. Another argument made was that the period of CIRP in the case began on 13th March, 2018 when the petition was admitted and the period of 270 days expired on 8th September, 2018; an extension of 90 days provided in Section 12(3) was granted by the Adjudicating Authority on 4th September, 2018 and the extended period came to an end on 7th December, 2018; thus the CIRP has lapsed by efflux of time.

6. The NCLT, after considering the views of the RP, MCGM, the creditors and SNMC, held that: “29. It may be relevant to note here that the Application for approval of the resolution plan was filed on 07.09.2018. The MCGM at a belated stage has come up with its objections to the Resolution Plan with the contention that it is undisputed owner of the plot on which one of the hospitals of the Corporate Debtor in Mumbai is built. The various objections raised by MCGM as enumerated hereinabove at a belated stage are neither tenable nor acceptable. It is clear from the record that MCGM is taking a stand which is totally contrary to its own decisions and factual submissions.

The final prayer of MCGM is to reject the ‘resolution plan’ and order for liquidation of the Corporate Debtor. The RP in his submissions has clearly pointed out as to why the averments of MCGM are erroneous and incorrect. For the sake of briefness, the submissions made by RP as stated supra are not discussed in detail once again. This Adjudicating Authority is of the view that the contentions raised by MCGM cannot be accepted due to the conflicting and contradictory stands taken by it in the course of hearings. Further, the contention of MCGM relating to expiry of the period of 270 days is untenable and unacceptable for the reason that the Application by the Resolution Professional for the approval of the Resolution Plan has been made well before the expiry of the period of CIRP and the same is in accordance with the provisions of the Code. Therefore, the objections raised by the MCGM are hereby rejected.”

7. The NCLT also held that the plan filed along with the application met the requirements of Section 30(2) of the Code, and Regulations 37, 38, 38(IA) and 39(4) of IBBI (CIRP) Regulations, 2016. It also held that the resolution plan did not contravene any of the provisions of Section 29A and was unanimously approved by that CoC; it provided for 78.07% of payment to financial creditors and 75% of payment to operational creditors including doctors, irrespective of claims in incorrect forms. Further, the resolution applicant is also addressing the dues payable to MCGM as stated in the resolution plan. Further, that NCLT observed that on comparison of the amount offered in the resolution plan with FormH submitted by the RP, it was seen that the amount proposed in the plan was more than that of the value of liquidation of the Corporate Debtor. It accordingly approved the plan.

8. Aggrieved by NCLT’s order, MCGM approached the Appellate Tribunal, before which several grounds were urged, including that since the conditions stipulated in the contract (with SevenHills Healthcare) had not been complied with, there was no lease deed and consequently no interest inured in the land, in favour of the Corporate Debtor. It was also urged that the resolution applicant was aware that the property belonged to MCGM, and had not vested in the Corporate Debtor. Despite these circumstances, the proposal and revised proposal incorporating encumbrances of the lands were made contrary to law. It was also specifically urged that mandatory provisions of the MMC Act requiring express authorization by the corporation for transfer or creation of any interest in land had not been complied with and resultantly, the proposal and revised proposal approved by the NCLT, so far as they dealt with the property and lands, were not enforceable against MCGM.

9. The NCLAT in its impugned order, took note of a memo filed on behalf of the MCGM on 20th April, 2019 (before the NCLT), that the revised resolution plan had been accepted and all terms specified in its written submissions, were to be incorporated. As a result, the NCLAT was of the opinion that there was no scope for interference with the order of the Adjudicating Authority/NCLT.

10. It is argued on behalf of MCGM by its learned senior counsel, Mr. Neeraj Kaul, that no lease deed was executed in favour of SevenHills, the Corporate Debtor. MCGM was the undeniable owner of the land; as there were no assets of the Corporate Debtor, it stated that a duly registered lease deed would be executed. The proposal and revised proposal seeking direction with regard to the lease deed, had to be necessarily dealt with in accordance with law. This meant that unless MCGM, expressly approved the revised plan, whereby a lease deed could be executed in favour of the SevenHills Healthcare Pvt. Ltd. (or in favour of the resolution applicant SNFC), neither the adjudicating authority nor the NCLAT could issue any direction seeking to bind MCGM with respect to the manner it had to deal with properties that belonged to it.

11. It was emphasised that the effect of the impugned order is to prevent MCGM from violating the law. The direction which was highlighted was in violation of Section 92 of the MMC Act. Learned senior counsel underlined that the written submissions filed on behalf of MCGM could not be construed as an admission, or that MCGM was bound to agree to the revised proposal. It was alternatively argued that at best, these submissions could be considered as concessions of law which were never binding on MCGM.

12. It was argued that there was no question of incorporating any direction or approving the revised plan, which in any manner affected MCGM’s properties. In this context, Mr. Neeraj Kaul, learned Senior Counsel, urged that the terms of the original contract (dated 20th December, 2005) had been violated; the 1500 bed hospital had not been completed by the stipulated date. Furthermore, arrears of lease rentals had mounted together every attendant liability. In these circumstances, even before the insolvency proceedings were initiated, MCGM issued a show cause notice proposing to terminate the contract. It was further emphasised that since the terms of the contract were infringed, in fact, there was no subsisting lease which could have been dealt with by the revised proposal and later by the Adjudicating Authority. It was submitted that the impugned order has completely noted these salient aspects.

13. On behalf of the RP (who has been arrayed as the first respondent) it is argued by Mr. C.A. Sundaram, learned senior counsel that MCGM had categorically consented to the resolution plan in writing before the NCLT and the Appellate Tribunal. He points out that in the written submissions dated 28th November, 2018, 29th April, 2019 and 14th May, 2019 MCGM categorically stated that the resolution plan be approved and its application before the NCLT ought to be disposed of in terms of the commitment given by the resolution applicant/SNMC. It is pointed out that the Appellate Tribunal, after hearing the submissions of MCGM that it had no objections to the resolution plan, affirmed it. MCGM, counsel submitted, has not refuted that such a statement was made before the NCLAT. It is therefore the undisputed position that MCGM had no objections to the resolution plan. That being the case, counsel argues that the appeal is not maintainable.

14. Mr. Sundaram argued that MCGM’s contentions that no interest or leasehold rights in the land were created in favour of the Corporate Debtor, flies in the face of its letters and also its application to the NCLT, which in para 4, admitted that the lands were leased to the Corporate Debtor. In fact, MCGM filed the application claiming that the lease was a capital or finance lease and the unpaid lease rentals were a financial debt within the meaning of the Code. Unlike the written submissions, MCGM did not even explain on what basis it had filed the application to the NCLT regarding its position that no leasehold rights subsisted.

15. Learned senior counsel submitted that MCGM was invited to attend and participate in CoC meetings due to its position as owner of the land on which the Mumbai hospital of the Corporate Debtor is located. The issue of whether or not the corporate debtor has any leasehold rights under the contract (of 2005) is a disputed question of fact which can only be adjudicated upon in civil proceedings after conducting a civil trial.

16. It is also argued alternatively, that assuming for the purpose of argument that no leasehold rights were created in favour of the Corporate Debtor, the resolution plan does not create any leasehold rights in favour of the respondent applicant/SNMC. Learned senior counsel argued that the resolution plan merely envisages a change in the shareholding of the Corporate Debtor but does not transfer any of MCGM’s assets to SNMC. Therefore, it is false to suggest that the resolution plan transfers MCGM’s assets to SNMC. It was argued furthermore that though MCGM was not entitled to, nor treated as a financial creditor, it was nevertheless invited to participate in CoC meetings, interact as well as negotiate favourable terms with potential resolution applicants. To further safeguard MCGM’s interests, the RFP also required all prospective resolution applicants to submit their plans to resolve the dispute with MCGM.

17. Mr. Sundaram also submitted that SNMC’s revised proposal to MCGM assured repayment of its entire dues. In light of a proposal of this nature, MCGM’s stand seeking liquidation of the Corporate Debtor appears not only arbitrary but also prima facie vindictive.

18. It is also submitted that the resolution plan is absolutely unconditional in nature and in no manner contingent on the resolution of the dispute with MCGM. It is submitted that such unconditionality is the most fundamental aspect of the resolution plan. This unconditional nature is recorded in the minutes of meetings of the 8th meeting of the CoC held on 20th August 2018. MCGM participated in the meetings of the CoC, including the 8th CoC meeting, and was provided a copy of the minutes contemporaneously. These minutes record SNMC’s categorical statement that the negotiations with MCGM are in progress and that the resolution plan is unconditional and in no manner dependent on the outcome of such negotiations. Further, there is no provision in the resolution plan (and none has been cited by MCGM) which suggests that the plan is conditional on settlement with it (i.e. MCGM).

19. It is also submitted that any dispute with MCGM in relation to the lease of the underlying land has no bearing on the validity of the resolution plan, under Section 31 of the Code. Having been approved by the CoC and the NCLT on merits, the plan attained finality and binds MCGM as a stakeholder in the Corporate Debtor. MCGM therefore, cannot hold the entire CIRP of the Corporate Debtor to ransom despite not even having raised a single objection on the validity of any specific term in the resolution plan under Section 30(2) of the Code.

20. Mr. Ramji Srinivasan, appearing on behalf of the CoC, argued that the financial creditors were interested in ensuring that their dues were paid, preferably in full. SNFC’s resolution plan held out the best assurance toward that end. He also argued that the question of obtaining any approval under Section 92A either for creation of charge, or for any other purpose did not arise, because the terms of the contract, which in fact amounted to a lease (as it was a registered instrument and MCGM had received over Rs. 10 crores as initial lease consideration). Therefore, the resolution plan approved by the NCLT, and later, NCLAT, were sound and did not call for interference.

21. It was argued, furthermore, that the reliance on Section 92 of the MMC Act is misguided as it seeks to superimpose provisions of the MMC Act on the provisions of the Code. This is clearly impermissible in terms of the nonobstante provision contained in Section 238 of the Code.

22. Mr. K.V. Vishwanathan, learned senior counsel for SNFC, argued that the plan approved provided the best solution for the financial woes of the Corporate Debtor. It was argued that SNFC never represented that it would mortgage or obtain any loan on the strength of the lease. Nor did it ever urge that MCGM’s permission was not necessary. He pointed to the terms of the resolution plan and submitted that they were subject to MCGM’s obligations to follow the law.

23. It was submitted that the proposed plan contemplates compliance with the various conditions of the contract agreement including without limitation, 20% reservation of beds for MCGM’s employees and settlement of MCGM’s claimed dues. The resolution plan proposed payment to MCGM (which was enhanced to 100% by a later proposal) at clause 2.2.2(b). Further, clause 2.2.3(f) of the resolution plan again records the proposed payment to MCGM by stating that while the resolution professional has not admitted the claims submitted by MCGM, SNMC recognizes such dues payable to it and shall pay 102 crores in terms of the Rs. offer made to MCGM as recorded.

24. In the present case, Section 92 of the MMC Act has no bearing on the validity of the resolution plan, the approval order or the impugned order. Section 92 of the MMC Act mandates and prescribes the manner in which disposal of land belonging to the appellant would take place. However, the resolution plan does not contemplate any disposal of the said land or creation of any additional rights and obligations of MCGM or the Corporate Debtor in relation to the lands. It is merely the shareholding of the Corporate Debtor which undergoes a change pursuant to the resolution plan. MCGM cannot place any embargo on such shareholding changes by resorting to proceeding under the Code.

25. It was urged that SNMC does not acquire any interest in the said land and only acquires managerial control over the Corporate Debtor by way of holding equity shares in the Corporate Debtor. Therefore, there arises no question of Section 92 of the MMC Act being violated through the resolution plan.

Discussion regarding the insolvency process and relevant provisions of the MMC Act

26. On admission of an insolvency application preferred by a financial creditor/operational creditor, a moratorium is declared on the continuation and initiation of all legal proceedings against the debtor. The NCLT appoints an interim resolution professional (“IRP”). The moratorium operates till the completion of the insolvency resolution process which, by law should be completed within a mandated time frame. During the moratorium period, the debtor cannot transfer, encumber or sell any asset. Upon appointment of an IRP, the board of directors stands suspended and management vests with the IRP. These professionals (IRPs) have to conduct the insolvency resolution process, take over the assets and management of the company, assist creditors in collecting information and manage the insolvency resolution process. The term of the IRP continues until an RP is appointed under Section 22. The IRP has to first determine the debtor’s financial position through information collection regarding assets, finances and operations. Information may include data relating to operations, payments, list of assets and liabilities. The IRP further has to receive and collate claims submitted by creditors.

27. The RP selected by the NCLT has to constitute a committee of creditors (CoC) comprising all the financial creditors of the corporate debtor. This provision is aimed at creditors adopting a collective approach towards insolvency resolution instead of proceeding individually. Key decisions of the process, and the plan to be eventually finalized are to be approved by the CoC upon its satisfaction that the provisions of the most acceptable plan would ensure that their dues are cleared.

28. The Code is principally aimed at aiding a corporate debtor in the resolution of its insolvency condition without approaching liquidation. The key to this process is the finalization of an insolvency resolution plan. A suitably structured plan would provide for repayment of the debtor’s outstanding liabilities after evaluating its financial worth, at the same time ensuring its survival as a going concern. The resolution plan must necessarily provision for repayment of the debt of operational creditors in a manner such that it shall not be lesser than the amounts that would be due, should the debtor be liquidated per Section 30(2) of the Code. Also, the plan should identify the manner of repayment of insolvency resolution costs, the implementation and supervision of the strategy, and should be in compliance with the law. If the terms (including the terms of repayment) under the resolution plan are approved by the committee of creditors, it has to be further approved by the NCLT, which is the adjudicating authority.

29. In this case, it is not the provisions of the IBC which this court has to primarily deal with; it is rather whether the process and procedure adopted by the NCLT and later the NCLAT, in overruling MCGM’s concerns and objections with regard to the treatment of its property (i.e. the lands) is in accordance with law. The relevant provisions of the Municipal Corporation of Greater Mumbai Act, 1888 are extracted below:

Provisions governing the disposal of municipal property:

Section 92. With respect to the disposal of property belonging to the corporation other than property vesting in the corporation for the purposes of the Brihan Mumbai Electric Supply and Transport Undertaking, the following provisions shall have effect, namely: –

(a) the Commissioner may, subject to the regulations made in this behalf, dispose of, by sale or otherwise, any movable property belonging to the corporation not exceeding in value, in each instance, five lakh rupees, of grant a lease of any immovable property belonging to the corporation, including any right of fishing or of gathering and taking fruit and the like, for any period not exceeding twelve months at a time : Provided that every lease of immoveable property granted by the Commissioner (other than a contract for a monthly tenancy) the annual rent where of at a rack rent exceeds 6 [fifty thousand rupees] shall be reported by him, within fifteen days after the same has been granted, to the Improvements Committee;

(b) the Commissioner may, –

(i) with the sanction of the concerned Committee, dispose off, by sale of otherwise any movable property held by the Corporation, the value of which exceeds rupees five lakhs ;

(ii) with the sanction of the 9[Standing Committee], dispose off any moveable property held by the Corporation, the value of which exceeds rupees two crores ;

(iii) with the sanction of the concerned Committee, grant a lease (other than a lease in perpetuity) of any immovable property belonging to the Corporation, including any such right as aforesaid; or sell, or grant a lease in perpetuity of any immovable property, the value of which does not exceed 50,000 rupees or the annual rent of which does not exceed 3,000 rupees ;

(c) with the sanction of the corporation, the Commissioner may lease, sell or otherwise convey any immovable property belonging to the corporation (cc) the consideration for which any immovable property or any right belonging to the corporation may be sold, leased or otherwise transferred shall not be less than market value of such premium, rent or other consideration;

(d) sanction of the corporation under clauses (b) and (c) may be given either generally for any class of cases or specially in any particular case ;

(dd) notwithstanding anything contained in this section, the Commissioner may, with the sanction of the Corporation, and with the approval of the State Government, grant a lease of immovable property belonging to the Corporation to a Cooperative Housing Society formed exclusively by the officers and servants of the Corporation, or to a public trust exclusively for medical and educational purposes registered under the Bombay Public Trust Act, 1950 or to a society registered under the Societies Registration Act, 1860 or the Maharashtra Cooperative Societies Act, 1960, a public trust registered under the Bombay Public Trust Act, 1950, or a company registered under the Companies Act, 1956 3[or any person for the purposes of provision of public latrines, urinals and similar conveniences or construction of a plant for processing excrementitious and other filthy matters of garbages] or to a person who is dishoused as a result of the implementation of any Development Scheme of the Corporation or to a Cooperative Housing Society formed exclusively by the persons who are dishoused as a result of the implementation of any Development Scheme of the Corporation, at such rent, which may be less than the market value of the premium, rent, or other consideration, for the grant of such lease, and subject to such conditions, as may be provided by the byelaws made under section 461;

(ddd) notwithstanding anything contained in this section, the Commissioner may, with the sanction of the Corporation, and with the approval of the State Government, grant a lease for a period not exceeding 60 years, of municipal land which is declared as a slum area under the provisions of the Maharashtra Slum Areas (Improvement, Clearance and Redevelopment) Act, 1971 to a cooperative society of slum dwellers occupying such land, at such rent, which may be less than the market value of the premium, rent, or other consideration, for grant of such lease, and subject to such conditions, as the Corporation may impose. The approval of the State Government under this clause may be given either generally for any class of cases of such lands or specifically in any particular case of such land : Provided that, the Commissioner may in like manner renew, from time to time ; the lease for such period and subject to such conditions as the Corporation may determine and impose ;

(dddd) All leases granted by the corporation of the immovable properties belonging to the corporation for whatever term shall be subject to the following conditions in addition to the conditions stipulated in the Leasedeed or Leaseagreement executed by the corporation, namely: – (i) Leasehold rights in respect of the properties belonging to the corporation and given on lease may be further assigned or transferred only with the prior permission of the Commissioner, on payment of such premium on account of unearned income and transfer fees or charges at such rates as may be specified by the corporation, from time to time.

(ii) In the case of any contravention of the provisions of subclause (i), the lessee or transferor of such leasehold rights, shall be liable to pay penalty in addition to such premium and transfer fees or charges, at such rates as may be specified by the corporation, from time to time.

(e) the aforesaid provisions of this section shall apply, respectively, to every disposal of property belonging to the Corporation made under or for any purpose of this Act; Provided that nothing in this section shall apply Dr. Bhau Daji Lad Museum or to the site thereof referred to in section 89C except with the previous sanction of 5[the 6[State] Government].

Section 92A. Where-

(1) the Commissioner has transferred by way of sale or exchange any immovable property belonging to the Corporation and the terms of such transfer direct that the property shall be applied or enjoyed in a particular manner or the use or enjoyment thereof shall be restricted in a particular manner, or

(2) the owner of any immovable property has entered into an agreement with the Corporation concerning the application, enjoyment or use of the property in a particular manner, such term, condition or obligation shall be held to be annexed to the property which is the subjectmatter of the transfer or agreement and shall be enforced against the transferee or owner and all persons deriving title or interest under or through him, notwithstanding-

(a) any law for the time being in force, and

(b) that the Corporation are not in possession of or interested in any immovable property for the benefit of which, the term, condition or obligation was agreed to, entered into or imposed.”

30. At this stage, it would be relevant to notice certain conditions in the contract.

Clause 2(i) stipulates the minimum lease rent as 10.40 crores for which SHCL agreed Rs. to pay 0.1% over and above the minimum lease rent.

Clause 5 of the agreement permitted SevenHills to mortgage and/or create charge of the schedule property. The conditions read as follows:

“5. The Owner hereby agrees to permit and allow the SHCL on the terms and conditions to be approved by the Owner which permission/approval shall not be unreasonably withheld, to mortgage and/or create charge on the Schedule Property and/or SHCL’s leasehold right thereon with or without the Buildings on the Schedule property during the lease period or prior thereto i.e. during the project period) in any manner whatsoever either in whole or in part as SHCL may require from time to time to the satisfaction of the lenders, for the purpose of raising financial assistance from the Financial Institutions/Banks/NBFOs/Cooperative Societies/ Trust/ UF/ Partnership/Proprietary Firm and any other lending individuals/institutions, whether incorporated or not, for any purpose for and in connection with the said Project including for the purpose of commencing, carrying out and completing the construction of the Buildings, setting up of hospital, Medical Educational institutions commercial and other establishments within the Frame work of Development Control Regulations in force, in such Buildings, their running, maintenance, renovation, reconstruction etc. For this purpose, the SHCL shall have to apply for permission not mortgage and/or create charge to Municipal Commissioner two months in advance and if the approval is not received within two months from the date of receipt of such a request by the Commissioner, it will be deemed as approved and SHCL shall be at liberty to create the mortgage of the Schedule Property in favour of the Lenders without any recourse to the Owner.”

31. Clause 15(a) which stated that the lease deed had to be entered into upon on completion of the project and contained other conditions, pertinently, reads as follows:

“15. LEASE OF PLOT: a) Lease period:

i) The SHCL shall enter into a Lease Deed on completion of project period for leasing the plot to SHCL for the period of 60 years. After 60 years, the lease period will be extended with the mutual consent of Owner and SHCL on the terms that may be mutually agreed upon by both the parties for further period.

ii) The lease period of 60 years shall commence from the date of completion of the Project period.

iii) On completion of the said Project the Owner shall issue to SHCL ‘Project Completion Certificate’. Till the completion and commissioning of the project and running of the Project facilities, till the end of lease period, this Contract Agreement is to be read, in conjunction with the said Lease Deed which both Parties will enter into on completion of the project period. iv) The SHCL shall complete the construction of the hospital building within the project period of 60 months excluding monsoon. the MCGM shall be liable to issue the Project Completion Certificate on written application by SHCL to that effect after completion of the project.

xxxxxx xxxxxx xxxxxx

e) Penalty for delay:

i) SHCL shall complete the entire Project and open the facility to public use within the approved time limit. SHCL shall submit the work programme with defined milestones. the progress of the work shall be strictly as per the programme of construction submitted by SHCL and approved by the Commissioner. In case SHCL fails to complete the Project as aforesaid within the said Project Period of 60 (sixty) months excluding monsoon from issuance of Commencement Certificate, and unless such failure is due to force Majeure conditions, penalty for delay shall be charged for the period of delay which will be equivalent to 25% of Lease Rent which SHCL would have paid to the Owner for that period, had the Project been completed within the Project Period and this shall be in addition to lease rent.

ii) SHCL shall have to separately pay the compensation for delay to the Owner at the end of notice period. iii) However, in case any delay occurs because of circumstances beyond the control of SHCL only suitable extension in the period of the Project without imposing penalty or demand for compensation for delay shall be granted for completing the Project. No other claim or compensation of whatsoever nature shall be entertained.

xxxxxx xxxxxx xxxxxx

g) Lease Deed: A Lease Deed shall be executed as per draft annexed to this Contract Agreement as Annexure’ II’ within one month from the expiry of the Project period or on intimation from the owner whichever is earlier. 17. MORTGAGE OF PLOT AND BUILDINGS a) The SHCL is hereby allowed to sublease; mortgage and create a charge on the said plot and buildings either in part or in total to the satisfaction of lenders for the purpose of raising financial assistance to commence, progress, complete, commission and run the hospital complex and other commercial activities during the Pendency of the lease period, from the financial institutions/ FIIS/Banks/Mutual Funds/Cooperative Societies, Trusts/individuals/HUFs/Partnership Firms, other lending institutions and lenders of any constitution for the said Project with the prior permission of the Commissioner, which permission shall not be unreasonably withheld, during the Project period and/or during the subsistence of the lease and the Owner shall be kept informed of such deals after permission by the Commissioner and SHCL shall file relevant documentary evidence to that effect for record of the owner.

The permission which shall be granted by the Owner to SHCL to mortgage the Schedule Property in favour of the lender (s) for raising finance will remain irrevocable and irreversible during the tenure of the Project period and lease period except when the contact is terminated. In case the contract is terminated for valid reason, the Owner shall not bear any cost and consequences of resultant termination of mortgage by SHCL to any Financial Institution. While the right of ownership will remain with the Owner, the leasehold rights to the property will remain free from encumbrances and dedicated to the lenders during the currency of loan or the lease period whichever is earlier and the lenders shall continue to enjoy the same rights and privileges as that of SHCL. SHCL is also hereby allowed, with prior written permission from Commissioner to sublet the whole or part thereof and/or the buildings on the Schedule Property.

The SHCL shall be entitled to sublet the Schedule Property and the Building/s thereon from time to time in whole or in part for any duration (not beyond the lease period) to any other Party/ies (sublessee/ s) on such terms and conditions, as may be agreeable to SHCL within the frame work of the tender and this Agreement and for the same or similar purposes for which agreement is intended, by means of duly registered Deed/s. SHCL shall have to apply for permission to Municipal Commissioner two months in advance and if the approval is not received within two months from the date of receipt of such a request by the Commissioner, it shall be deemed as approved.”

32. A cumulative reading of the stipulations reveals that the contract/agreement contemplates that the lease deed was to be executed after the completion of the project. The contract reveals that (a) the project period was for 60 months starting from the date excluding the monsoon period; (b) by Clauses 5 and 17, SevenHills could mortgage the property for securing advances from financial institutions for the construction of the project and thereafter towards its working. Such mortgage/charge or interest was subject to approval by MCGM. In the event the contract was to be terminated, it was agreed that MCGM would not in any manner be liable towards the mortgaged amount and all its rights and ownership would continue to vest in it free from encumbrances (Clause 17).

33. The show cause notice in this case preceded admission of the insolvency resolution process. In view of the clear conditions stipulated in the contract, MCGM reserved all its rights and its properties could not have therefore, in any manner, been affected by the resolution plan. Equally in the opinion of this Court, the adjudicating authority could not have approved the plan which implicates the assets of MCGM especially when SevenHills had not fulfilled its obligations under the contract.

34. The argument of the RP, the financial institutions (CoC), and the SNMC with regard to MCGM’s interest not being affected, in this court’s opinion is insubstantial. SNMC’s proposed insolvency plan on the one hand no doubt provided for the liquidation of MCGM’s liabilities initially to the tune of 102 crores Rs. (later revised to over Rs.140 crores). However, the provisions of the resolution plan clearly contemplated infusion of capital to achieve its objectives. One of the modes spelt out in the plan for securing capital was mortgaging the land. Initially, no doubt, SNMC stepped into the shoes of SevenHills and assumed its control. What is important to notice is that the corporate restructuring was a way of taking over of the company’s liquidation by SNMC as it was not only Seven Hills’ project with shares and liquidation of debts, but also the restructuring of the company’s liabilities if necessary, by creating fresh debts and mortgage of the land which directly affected MCGM.

35. Section 92 unequivocally prescribes the method whereby MCGM’s properties can be dealt with through lease or by way of creation of any other interest. The only mode permitted is through prior permission of the corporation. It is a matter of record that in the present case, the resolution plan was never approved by the corporation and that it was put to vote. The contesting parties, including the RP and CoC were unable to point out to anything on the record to establish that a valid permission contemplated by Section 92 was ever obtained with regard to the proposal in the resolution plan. The proposal was approved by the NCLT and MCGM’s appeal was rejected by NCLAT. The proposal could be approved only to the extent it did not result in encumbering the land belonging to MCGM.

36. It is evident from a plain reading of Section 92(c), that the Commissioner (of MCGM) is empowered to, with the sanction of the corporation, “lease, sell or otherwise convey any immovable property belonging to the corporation.” It is not in dispute that the original contract entered into on 20122005 contemplated the fulfilment of some important conditions, including firstly, the completion of the hospital project within a time frame; and secondly, timely payment of annual lease rentals. It is a matter of record that the hospital project was scheduled to be completed by 24th April, 2013. MCGM cites Clause 15(g) of the contract to urge that within a month of this event, i.e. completion of the hospital, a lease deed had to be executed.

This event never took place. Therefore, the terms of the contract remained, in the opinion of the court, an agreement to enter into a lease; it did not per se confer any right or interest, except that in the event of MCGM’s failure or omission to register the lease (in the event SevenHills had complied with its obligations under the contract), it could be sued for specific performance of the agreement, and compelled to execute a lease deed. That event did not occur; SevenHills did not complete construction of the 1600 bed hospital. Apparently, it did not even fulfill its commitment, or pay annual lease rentals. In these circumstances, MCGM was constrained to issue a show cause notice before the insolvency resolution process began, and before the moratorium was declared by NCLT on 13 th March, 2018. According to MCGM, in terms of Clause 26 (of the contract), even the agreement stood terminated due to default by SevenHills. This court does not propose to comment on that issue, as that is contentious and no finding has been recorded by either the adjudicating authority or the NCLAT.

37. In Ram Singh Vijay Pal Singh & Ors. v. State of U.P. & Ors (2007) 6 SCC 44, this court dealt with a similar provision, requiring prior approval of the statutory authority without which the property could not be disposed of. The court held that: “The proviso to Subsection (1) of Section 12 of the Act would show that the Mandi Samiti (Committee) is not empowered to transfer any immovable property without the previous approval in writing of the State Agricultural Produce Markets Board (Mandi Parishad). Section 26L of the Act deals with the powers and functions of the Board. The Director of Mandi Parishad (Board) has not been conferred any power whereunder he may issue a general direction that the shops, godowns and sheds of the Mandi Parishad shall be transferred or sold to the traders on hirepurchase basis.

Therefore, the appellants can derive no benefit from the letter of the Director dated 4.11.1995, wherein it was mentioned that a decision had been taken to give the shops on hirepurchase basis. In the counter affidavit the respondents have specifically asserted that the Board never took any such decision to sell the property of the Mandi Samiti to the traders either on hirepurchase basis or otherwise. No document has been filed to show that the Board ever took any such decision. It is the case of the respondents that the letter sent by the Director was his own action which had never been authorized by the Board. At any rate the proposal made by the Director never fructified as no such decision was taken by the Board and the Board never authorized the Mandi Samities (Committees) of various districts in the State to transfer the property of the Samiti in favour of the traders of agricultural produce who had been allotted the shops, godowns and sheds by the Mandi Parishad. In this view of the matter, the appellants have no legal right to claim that the property be given to them on hirepurchase basis.”

38. In Essar Bulk Terminal Limited & Anr. v. State of Gujarat & Ors. (2018) 3 SCC 750, again, this court held as follows: “16. Despite this, what is clear from the record is that the Appellants appear to have actually dredged the channel to a depth of 14 meters and appear to have reclaimed an area of 164 hectares plus 170 hectares to the south of the mangroves, without any permission at all. When this was pointed out to Shri Mihir Joshi, the answer given was that when permission is granted Under Section 35(1) of the Gujarat Maritime Board Act, a letter granting such permission specifically says that it is permission that is granted Under Section 35(1) and for this purpose, a letter dated 2nd August, 2008 was referred to. According to him, therefore, the letter dated 14th June, 2007, which referred only to an NOC for reclamation, could not be given the status of permission Under Section 35(1).

According to the learned Counsel, therefore, if Section 35(1) were to be read with Section 35(2), it would be clear that permission for reclamation would only be necessary if a private asset were to be created in the hands of a private person. However, it is clear that the asset to be created belonged only to the Government of Gujarat and it was for the GMB to grant permission to the Appellants to use the same. We are afraid that it is difficult for us to accept this line of argument. Section 35(1) is couched in negative language and does not refer to private rights being created. Section 35(2) cannot be read so as to throw light on Section 35(1), as Under Section 35(2), the GMB is only given a discretionary power to require a person, who has acted in contravention of Section 35(1), to remove the illegal erection.

The wide language of Section 35(1) cannot be whittled down by Section 35(2) in the manner argued by Shri Joshi, as the GMB may or may not utilise the discretionary power granted to it Under Section 35(2). The plain language of Section 35(1) cannot be curtailed by reading by inference, into Subsection (2), the fact that the GMB may, by notice, require a person to remove an erection, only when it has been made without previous permission, so as to create a private asset in the hands of a private person. The wide language of Section 35(1) makes it clear that any reclamation within the limits of the GMB cannot be carried out except with the previous permission in writing of the GMB. It is clear, therefore, that dredging to a depth of below 8 meters and reclamation of any area to the south of the mangroves was done by the Appellants in the teeth of Section 35(1) of the Gujarat Maritime Board Act.

17. Mr. Sibal laid great stress on the letter dated 15th November, 2012 to show that, in point of fact, what the Appellants were really angling for was to conduct commercial operations beyond the captive requirements of the Essar Steel plant at Hazira. This letter, while asking for an addition of 3700 meters in addition to the existing 1100 meters waterfront, also went on to speak of developing a 700 meters berth, along with the GMB, for handling commercial cargo. Apart from this, Essar planned to build a world class container terminal and a dry dock, which would serve the shipping industry generally. It also proposed to reclaim a further 334 hectares land on the southern side with the additional dredged material. A perusal of this letter would leave no doubt about the fact that despite Essar Steel’s production being at much less than what was projected, the Appellants’ continued demands would show that the real motive was to go beyond a captive jetty and to develop a commercial port which, as we have seen, cannot be done without a global tender under the Gujarat Infrastructure Development Act.

18. As stated hereinabove, as many as three MOUs were executed between the Appellants, the GMB and the State Government, which MOUs were valid only for a period of 12 months and were stated not to have granted any right to the Appellants, who would incur all the expenditure for the same. This being the case, it is a little difficult to appreciate Shri Joshi’s contention that any legitimate expectation could be based on any of the aforesaid expired MOUs. The High Court is correct in its conclusion that no such expectation could possibly have arisen out of the aforesaid MOUs or the correspondence between the Appellants and the GMB referred to.

19. It is also important to note from the correspondence between the Appellants and the GMB, that the Appellants were clearly told that the land to be reclaimed by the Appellants would not only belong to the Government of Gujarat, but also that the GMB could utilize the aforesaid land for any purpose. What seems to emerge on a reading of the letters between the parties is that the Appellants wished to dredge the canal, at their own cost, which was next to their captive jetty, for their own purposes, for which they obtained the necessary permission. However, since dumping of earth, which would emerge as a consequence of dredging, into the open sea would be extremely expensive, it was stated that instead this earth could be dumped to create reclaimed land next to the captive jetty, which would then benefit both the Appellants and the GMB.

In point of fact, 140 hectares out of 195 hectares that is reclaimed by the Appellants is allocated to the Appellants for their own purposes, the balance to be given as and when a jetty of 1100 meters plus 3700 meters of waterfront is constructed. The argument that huge amounts had been spent to reclaim land is wholly fallacioushuge amounts were spent to dredge a canal which was permitted as the Appellants alone were to bear the cost, and as an increased draft would benefit all, as the canal was open to all to use. Therefore, any plea as to a legitimate expectation of reclaimed land being allocated for the Appellants’ own use, thanks to large amounts being spent, is contrary to the correspondence by the Appellants themselves.” An identical approach was adopted in Saroj Screens Pvt. Ltd. v Ghanshyam & Ors., (2012) 11 SCC 434.

39. The principle that if a statute requires a thing to be done in a particular manner, it should be done in that manner or not at all, articulated in Nazir Ahmad v. Emperor, AIR 1936 PC 253, has found widespread acceptance. In the context of this case, it means that if alienation or creation of any interest in respect of MCGM’s properties is contemplated in the statute through a particular manner, that end can be achieved only through the prescribed mode, or not at all.

40. This Court also notices that an initial No Objection Certificate was issued by MCGM voluntarily, for creation of interest in respect of its properties. Upon its refusal to grant approval, SevenHills filed proceedings under Article 226 before the Bombay High court (W.P. No 1728 of 2011), in which the Court directed to grant issuance of certificate. At the same time, the High Court observed as follows:

“11. …… It is, however, required to be noted here that the Corporation is nor borrowing any amount for its purpose….If the petitioners want financial assistance from the Bank, naturally, it cannot mortgage only the superstructure but the entire property is required to be mortgaged. Aprart from that even if there is a defect in the title in the matter of creating mortgage, the Corporation is not going to suffer in any manner and it is for the concerned Bank to consider the same while giving financial assistance.

The Corporation is not going to get any financial assistance from the Bank and, therefore, whatever documents which the petitioners may execute in favour of the Bank, the Corporation is not bound by the same….The said NOC can be granted by the Corporation without prejudice to its rights and contentions that the land in question belongs to them and, therefore, no mortgage could have been created for the same. It is always open to the Corporation to ascertains right to the extent that they are not bound by execution of such documents with the Bank….However, such grant of NOC, would be without prejudice to the rights and contentions of the Corporation. The Corporation may also mention such aspect while giving NOC to the petitioners that such NOC is given without prejudice to the rights and contentions that their land could not have been mortgaged by the petitioners with the Bank.

(emphasis supplied)

12. ……Apart from the same, by granting NOC it cannot be construed that the Corporation has also mortgaged its property in favour of Axis Bank in any manner….

15. ….It is clarified that this order is passed without prejudice to the rights and contentions of both the sides and it will have no effect so far as deciding the matter on merit is concerned…..”

*************** *************

41. The material placed on record by MCGM before this Court also reveals that the meeting held by the Corporation on 14th December, 2018, referred back to the resolution proposal given by SNMC. The minutes of the meeting records that three members were unanimous in their view that since SevenHills had not complied with the terms and had even sought to encumber the property by mortgage, SNMC, a UAE based company, ought not be granted approval to take over the plot and proceed with its project.

42. Now, this court proposes to deal with the contention that the provisions of the Code override all other laws and hence, that the resolution plan approved by the NCLT acquires primacy over all other legal provisions. Facially, this argument appears merited. Section 238 enacts that: “238. Provisions of this Code to override other laws. – The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.”

43. The scope of this provision has been the subject matter of debate in several judgments of this court. In Jaipur Metals & Electricals Employees Organization v. Jaipur Metals & Electricals Ltd. (2019) 4 SCC 227, the correctness of a High Court’s view which refused to transfer winding up proceedings pending before it and set aside the NCLT’s order admitting an insolvency resolution application at the behest of a financial creditor, was in issue. This court held as follows, setting aside the judgment impugned in that case: “It is clear that Respondent No. 3 has filed a Section 7 application under the Code on 11.01.2018, on which an order has been passed admitting such application by the NCLT on 13.04.2018. This proceeding is an independent proceeding which has nothing to do with the transfer of pending winding up proceedings before the High Court. It was open for Respondent No. 3 at any time before a winding up order is passed to apply under Section 7 of the Code. This is clear from a reading of Section 7 together with Section 238 of the Code which reads as follows:

“238. Provisions of this Code to override other laws. – The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.” 18. Shri Dave’s ingenious argument that since Section 434 of the Companies Act, 2013 is amended by the Eleventh Schedule of the Code, the amended Section 434 must be read as being part of the Code and not the Companies Act 2013, must be rejected for the reason that though Section 434 of the Companies Act, 2013 is substituted by the Eleventh Schedule of the Code, yet Section 434, as substituted, appears only in the Companies Act, 2013 and is part and parcel of that Act. This being so, if there is any inconsistency between Section 434 as substituted and the provisions of the Code, the latter must prevail. We are of the view that the NCLT was absolutely correct in applying Section 238 of the Code to an independent proceeding instituted by a secured financial creditor, namely, the Alchemist Asset Reconstruction Company Ltd. This being the case, it is difficult to comprehend how the High Court could have held that the proceedings before the NCLT were without jurisdiction. On this score, therefore, the High Court judgment has to be set aside.”

44. In the recent judgment in Duncans Industries v. A.J. Agrochem 2019 SCC Online (SC) 1319, the issue was that action under Section 16D(4) of the Tea Act, which provides that the Central Government could take such steps as may be necessary for the purpose of efficiently managing the business of the undertaking, had been taken. It was urged that any notification under Section 16D has effect for five years, which could only be extended if the Central Government was of the opinion that it is expedient to do so in public interest, for such period not exceeding one year at a time, and for total period not exceeding six years. It was submitted that Section 16E refers to the power of the Central Government to restart the tea undertaking if it is found necessary in the interest of the general public. The argument was that an insolvency process is also meant to culminate in liquidation, if there is no revival, and that since the Tea Act permits the Central Government to take over the management of a tea estate which is not run properly, prior permission under Section 16G is applicable to such an estate, the management of which has been taken over by the Government. This contention was negatived, by this court, which relied on Section 238 of the Code.

45. In Macquaire Bank Ltd. v. Shilipi Cable Techologies Ltd. (2018) 2 SCC 674, one of the issues was the interplay between Section 9 of the Code and provisions of the Advocates Act. It was argued that a demand notice issued through an advocate was not permissible and that the provisions of the Code overrode all other laws. This court negative the contention, holding that it is only in the case of inconsistency, that by reason of Section 238 of the Code would its provisions prevail. On a harmonious construction of the seemingly inconsistent provisions, if the court could give effect to both, it would do so.

46. Dharani Sugars & Chemicals Ltd. v. Union of India & Ors. (2019) 5 SCC 480 is a relevant recent decision of this court. The question which arose in that case was the legality and constitutionality of directions issued by the Reserve Bank of India, through a circular of 12th February, 2018 regulating resolution of stressed assets of debtors. This court elaborately dealt with provisions of the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934 and held that the power to issue directions regarding initiation of insolvency proceedings vested in the RBI, subject to the approval of the Central Government. The court significantly held that the power was contained “within the four corners” of Section 35AA and observed as follows:

“A conspectus of all these provisions shows that the Banking Regulation Act specifies that the Central Government is either to exercise powers along with the RBI or by itself. The role assigned, therefore, by Section 35AA, when it comes to initiating the insolvency resolution process under the Insolvency Code, is thus, important. Without authorisation of the Central Government, obviously, no such directions can be issued.

30. The corollary of this is that prior to the enactment of Section 35AA, it may have been possible to say that when it comes to the RBI issuing directions to a banking company to initiate insolvency resolution process under the Insolvency Code, it could have issued such directions Under Sections 21 and 35A. But after Section 35AA, it may do so only within the four corners of Section 35AA.

31. The matter can be looked at from a slightly different angle. If a statute confers power to do a particular act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any manner other than that which has been prescribed. This is the wellknown Rule in Taylor v. Taylor, [1875] 1 Ch. D. 426, which has been repeatedly followed by this Court. Thus, in State of U.P. v. Singhara Singh, (1964) 4 SCR 485, this Court held: ‘The Rule adopted in Taylor v. Taylor [(1875) 1 Ch D 426, 431] is well recognised and is founded on sound principle. Its result is that if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed.

The principle behind the Rule is that if this were not so, the statutory provision might as well not have been enacted. A Magistrate, therefore, cannot in the course of investigation record a confession except in the manner laid down in Section 164. The power to record the confession had obviously been given so that the confession might be proved by the record of it made in the manner laid down. If proof of the confession by other means was permissible, the whole provision of Section 164 including the safeguards contained in it for the protection of Accused persons would be rendered nugatory. The section, therefore, by conferring on Magistrates the power to record statements or confessions, by necessary implication, prohibited a Magistrate from giving oral evidence of the statements or confessions made to him. (at pp. 490-491).

Following this principle, therefore, it is clear that the RBI can only direct banking institutions to move under the Insolvency Code if two conditions precedent are specified, namely,

(i) that there is a Central Government authorisation to do so; and

(ii) that it should be in respect of specific defaults. The Section, therefore, by necessary implication, prohibits this power from being exercised in any manner other than the manner set out in Section 35AA.”

47. In the opinion of this court, Section 238 cannot be read as overriding the MCGM’s right – indeed its public duty to control and regulate how its properties are to be dealt with. That exists in Sections 92 and 92A of the MMC Act. This court is of opinion that Section 238 could be of importance when the properties and assets are of a debtor and not when a third party like the MCGM is involved. Therefore, in the absence of approval in terms of Section 92 and 92A of the MMC Act, the adjudicating authority could not have overridden MCGM’s objections and enabled the creation of a fresh interest in respect of its properties and lands.

No doubt, the resolution plans talk of seeking MCGM’s approval; they also acknowledge the liabilities of the corporate debtor; equally, however, there are proposals which envision the creation of charge or securities in respect of MCGM’s properties. Nevertheless, the authorities under the Code could not have precluded the control that MCGM undoubtedly has, under law, to deal with its properties and the land in questionwhich undeniably are public properties. The resolution plan therefore, would be a serious impediment to MCGM’s independent plans to ensure that public health amenities are developed in the manner it chooses, and for which fresh approval under the MMC Act may be forthcoming for a separate scheme formulated by that corporation (MCGM).

48. The last contention of the respondents, that MCGM was bound by the statement made by its counsel, in the opinion of this court, cannot prevail. As held earlier, there is no approval for the plan, in accordance with law; in such circumstances, the written plea accepting the plan, by a counsel or other representative who is not demonstrated to possess the power to bind MCGM, is inconclusive. In this regard, the court notices the wellknown principle that there can be no estoppel against the express provisions of law. (Ref. Kasinka Trading v. Union of India (1995) 1 SCC 274, Darshan Oils (P) Ltd. v. Union of India (1995) 1 SCC 345, Shrijee Sales Corporation v. Union of India (1997) 3 SCC 398, Shree Sidhbali Steels Ltd. v. State of U.P. (2011) 3 SCC 193, Pappu Sweets and Biscuits v. Commr. of Trade Tax, U.P. (1998) 7 SCC 228 and Commr. of Customs v. Dilip Kumar & Co. (2018) 9 SCC 1.)

49. In view of the foregoing reasons, this court holds that the impugned order and the order of the NCLT cannot stand; they are hereby set aside. The appeal is accordingly allowed, without orders on costs.

J. [ARUN MISHRA]

J. [VINEET SARAN]

J. [S. RAVINDRA BHAT]

New Delhi,

November 15, 2019.


 

ESQUIRE ELECTRONICS Vs. NETHERLANDS INDIA COMMUNICATIONS

A perusal of the aforesaid provision makes it patent that the Limitation Act would apply to the proceedings or appeals before the Tribunal or the Appellate Tribunal. The question then is, what would be the period of limitation in cases where the petitioner has complained of illegal induction of respondents as directors and wrongful reduction of their share capital with the allegations against the respondents of grabbing majority shareholding unfairly as an act of oppression. It appears that there is no specific provision made either in the substantive section of the Limitation Act or in the articles as per the Schedule. A close scanning of the schedule, however, reveals that Articles 1-112 deal with various types of suits, viz., suits relating to accounts where period of limitation is three years, suits relating to contracts where again the period of limitation is three year; suits relating to declarations, suits relating to immovable properties, suits relating to movable properties, suits relating to Trust and Trust property and miscellaneous matters. In most of die cases, the period of limitation is three years except the suit for possession of a hereditary office etc (from Articles 107 to 110) where the period of limitation prescribed is 12 years or Articles 111 and 112 where the period prescribed is 30 years.

(2017) 1 CompLJ 131

NATIONAL COMPANY LAW TRIBUNAL (NEW DELHI)

DIVISION BENCH

( Before : M.M. Kumar, CJ., President and Ina Malhotra, Judicial Member. )

ESQUIRE ELECTRONICS — Appellant

Vs.

NETHERLANDS INDIA COMMUNICATIONS — Respondent

Company Petition No. 108/ND/2016

Decided on : 06-10-2016

Companies Act, 2013 – Section 241, Section 242, Section 424, Section 425, Section 433

Cases Referred

Manish Mohan Sharma Vs. Ram Bahadur Thakur Ltd., AIR 2006 SC 1690
Sampuran Singh Vs. Niranjan Kaur, AIR 1999 SC 1047

Counsel for Appearing Parties

Mr. Uttam Datt, Manu Beri and Tarun Sharma, Advocates, for the Petitioner

ORDER

M.M. KUMAR, CJ., President – It is a well settled principle of law that law comes to the rescue of those who are vigilant about their rights. For measuring the extent of vigilance, the legislature has provided period of limitation under the Limitation Act, 1963 (for brevity, ‘Limitation Act’). The Limitation Act incorporated by reference and has been applied to matters concerning companies by section 433 of the Companies Act, 2013 (for brevity, ‘2013 Act’). It is pertinent to first notice section 433 of 2013 Act which reads as follows:

“433. The provisions of the Limitation Act, 1963 (36 of 1963) shall, as far as may be, apply to proceedings or appeals before the Tribunal or the Appellate Tribunal, as the case may be.”

2. A perusal of the aforesaid provision makes it patent that the Limitation Act would apply to the proceedings or appeals before the Tribunal or the Appellate Tribunal. The question then is, what would be the period of limitation in cases where the petitioner has complained of illegal induction of respondents as directors and wrongful reduction of their share capital with the allegations against the respondents of grabbing majority shareholding unfairly as an act of oppression. It appears that there is no specific provision made either in the substantive section of the Limitation Act or in the articles as per the Schedule. A close scanning of the schedule, however, reveals that Articles 1-112 deal with various types of suits, viz., suits relating to accounts where period of limitation is three years, suits relating to contracts where again the period of limitation is three year; suits relating to declarations, suits relating to immovable properties, suits relating to movable properties, suits relating to Trust and Trust property and miscellaneous matters. In most of die cases, the period of limitation is three years except the suit for possession of a hereditary office etc (from Articles 107 to 110) where the period of limitation prescribed is 12 years or Articles 111 and 112 where the period prescribed is 30 years.

3. It appears that the matters concerning illegal removal or induction of directors has not been specifically dealt with in any of the articles. It also becomes obvious that no period of limitation has been provided for illegal reduction of shareholding with malafide intention to acquire majority shareholding. In these circumstances, the question is which provision of the Limitation Act would apply. The answer is found in Article 113 which deals with the subject of suits for which there is no prescribed period of limitation. The aforesaid provision reads as below:

“Part X -Suit for which there is no prescribed period

Description of Application
Period of Limitation
Time from which period begins to run

113. Any suit for which no period of limitation is provided elsewhere in this Schedule
Three years
When the right to sue accrues.”

4. A perusal of the aforesaid provision would show that in cases where no period of limitation is provided elsewhere in the Schedule, there Article 113 is to apply. In such cases, the period of limitation provided is three years from the date when the right to sue accrues.

5. It is equally well settled that when the adjudication results in passing of a decree by a court or tribunal, then it is preceded by filing of suits. Every suit is commenced by filing of a plaint. Honourable the Supreme Court, in the case of Manish Mohan Sharma v. Ram Bahadur Thakur Ltd. AIR 2006 SC 1690, held that section 634 A of the Companies Act, 1956, read with sections 397 and 398, indicates that all orders passed by the Company Law Board in an application under section 397 and 398 are enforceable like decrees without any limit on the nature of the order passed by the Company Law Board. In that case, it was further held that the order passed by the Company Law Board in terms of the memorandum of family arrangement was a preliminary decree and the final decree was to be passed after complete implementation of its terms. It was further held that the Company Law Board, when it deals with an application under section 634 A of the 1956 Act and sits as an executing court, then it is subject to all the limitations to which a court executing a decree is subject.

6. The aforesaid view is based on the provisions of Companies Act, 1956, and the position of the present Tribunal is far superior to that of the erstwhile Company Law Board in the matter concerning implementation of orders passed by the Tribunal. Section 424 of 2013 Act classifies the nature of proceedings before the Tribunal and provides as under:

“424. (1) The Tribunal and the Appellate Tribunal shall not, while disposing of any proceeding before it or, as the case may be, an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice, and, subject to the other provisions of this Act [or of the Insolvency and Bankruptcy Code, 2016] and of any rules made thereunder, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure.

(2) The Tribunal land the Appellate Tribunal shall have for the purpose of discharging their functions under this Act [or under the insolvency and Bankruptcy Code, 2016], the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents,

(c) receiving evidence on affidavit;

(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872) requisitioning any public record or documents or a copy of such record or document from any office;

(e) issuing commissions for the examination of witnesses or documents, ,

(f) dismissing a representation for default or deciding it ex-parte;

(g) setting aside any order of dismissal of any representation for default or any order passed by it ex-parte and

(h) any other matter which may be prescribed.

(3) Any order made by the Tribunal or the Appellate Tribunal may be enforced by that Tribunal in the same manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful for the Tribunal or the Appellate Tribunal to send for execution of its orders to the court within the local limits of whose jurisdiction,-

(a) in the case of an order against a company the registered office of the company is situated; or

(b) in the case of an order against any other person, the person concerned voluntarily resides or carried on business or personally works for gain.

(4) All proceedings before the Tribunal or the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 and for the purposes of section 196 of the Indian Penal Code (45 of 1860) and the Tribunal and the Appellate Tribunal shall be deemed to be civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).”

7. A perusal of the aforesaid provisions would reveal beyond any doubt that the Tribunal is not bound by the procedure laid down by the Code of Civil Procedure. For the purposes of discharging their functions under 2013 Act or under the Insolvency/Bankruptcy Code, it is vested with the same powers as are vested in a Civil Court under the Code of Civil Procedure while trying a suit in respect of the matter specified in items 2(a) to 2(h). Sub-section (3) makes it further clear that any order made by the Tribunal may be enforced by it in the same manner as if it were a decree made by a court in a suit pending therein. It has further been clarified that all proceedings before tire Tribunal are deemed to be judicial proceedings within the meaning of Sections 193 and 228 and for the purpose of section 196 of the Indian Penal Code. The Tribunal is deemed to be a Civil Court for the purpose of Section 195 and Chapter 26 of the Code of Criminal Procedure, 1973.

8. Another feature in this regard is revealed by Section 425 of 2013 Act. The Tribunal has been vested with the same jurisdiction, powers and authority in respect of its contempt as the High Court has and it may exercise for this purpose all the powers under the provisions of Contempt of Courts Act 1971. Therefore, it becomes evident that the orders passed by the Tribunal are executable as decree of the court and, in case of any violation of its orders, Section 425 vests the Tribunal with the power of issuing contempt. Once it is a decree then it follows that the proceedings under Section 241 and 242 of 2013 Act are necessarily proceedings in a suit. It has all trappings of a suit. Therefore, the period of limitation provided for suits would, ipso facto, be applicable as the Limitation Act has been specifically made applicable by Section 433 of 2013 Act. Therefore, in cases where no period of limitation has been provided, the residuary Article 113 would be applicable and Ore period of limitation would be three years from the date the right to sue accrues.

9. It is also pertinent to mention that the provision of Section 5 of the Limitation Act would not apply to proceedings before the Tribunal as it is the original Court of jurisdiction and the petition filed before it under section 241 and 242 of the 2013 Act are in the nature of suits. The adjudication by the Tribunal would result in passing of a decree which is executable by virtue of the provisions made in sections 424 and 425 of 2013 Act.

10. The benefit concerning acknowledgment in writing under section 18 of the Limitation Act would be available to a party if it is able to show that before the expiration of the prescribed period for a suit or application, all acknowledgments of liability in respect of such rights must be made in writing duly signed by the party against whom such right is claimed or by his representative. The aforesaid position is evident from the reading of Section 18(1) itself and it has been explained in details by the Hon’ble Supreme Court in the case of Sampuran Singh v. Niranjan Kaur AIR 1999 SC 1047.

11. We have prefaced this order with various principles of law, equity and justice for the reason that the facts presented before us in the present petition are required to be examined in the light of the aforesaid principles.

12. It would be first profitable to closely examine the reliefs claimed by the petitioner which are evident from tine perusal of para 8 of the petition filed in July 2016. The petitioner has claimed that respondent Nos. 2 to 5 be removed as directors and directions be issued to bona fide shareholders of the company for re-constitution of the board of directors by excluding Respondent Nos. 2 to 5. A consequential relief of restraining Respondent Nos. 2 to 5 either by themselves or by their agents, from interfering in the management and affairs of Respondent No. 1 company and not to hold themselves out as directors of Respondent No. 1 company. They have further prayed that all resolutions passed by Respondent No. 1 company allotting shares to various shareholders between 2000 and 2012 be declared as null and void. As a consequential Relief, the names of such allottees may be deleted from the register of Respondent No. 1 company by rectifying the same.

13. On a close scrutiny of the averments made in the body of the petition filed under sections 241 and 242 of 2013 Act, it is revealed that Respondent No. 6 company was incorporated in the year 1995 and Respondent Nos. 2 and 3 were its initial promoters. There is a joint venture agreement dated 20.12.1995 between Petitioner No. 1 and Respondent No. 6 (S.M. Telesys Ltd., Noida) along with two other companies. They had all agreed initially to incorporate a joint venture company in India by the name of NICE Telecom Ltd. A copy of the Joint Venture agreement dated 29.12.1995 has been placed on record (P-9). However, on a proposal mooted out by Respondent No. 2 on a subsequent date, all parties to the joint venture agreement agreed to subscribe to the shares of Respondent No. 6 company in the same proportion as agreed in the joint venture agreement. The idea of incorporating NICE Telecom Ltd. was dropped. Consequently, the petitioner subscribed to the shares of Respondent No. 6 company which was followed by the other partners of joint venture agreement like LG Information and Communications Ltd. and NARAY Mobile Telecom Inc. of South Korea. One Shri G.S. Saluja was appointed as nominee of petitioner No. 1 on the Board of Directors; and Respondent Nos. 2 and 3 were appointed as nominee directors of Respondent No. 6 company. Likewise, one director each was appointed as its nominee by L.G. Information and Communication Ltd. and NARAY Mobile Telecom Inc. In total six members Board was constituted in accordance with the stipulations of joint venture agreement. The nominees of the petitioners were appointed as Non-residential directors. Accordingly, Form No. 32 was filed before the Registrar of Companies showing the appointment of G.S. Saluja and S.S. Lamba as directors (P-10).

14. It is also important to notice that, as per the allegations of the petitioners, Respondent No. 1 company was secretly incorporated in the year 1996 and the petitioners have claimed that they had no knowledge of its incorporation (see para 6, Facts of the Case, sub-para xxxv). Respondent No. 1 was granted paging licenses by Ministry of Telecommunications, Government of India, and Respondent No. 1 had an arbitrational claim dispute in different arbitral proceedings where a total claim of Rs. 200/- Crores has been made. It has also been alleged that Respondents Nos. 2 to 5 had kept the petitioner in dark about the arbitral proceedings and failed to disclose the status of those proceedings till the talks for compromise were started. It is thus alleged that Respondent No. 1 was incorporated fraudulently which has the same name as was considered by the joint venture agreement dated 29.12.1995 (P-9).

15. The petitioners have also alleged that Respondent No. 1 company has failed to file audited balance sheet since the year 2003 till date and no AGM has been ever convened after 2012. Even prior to 2012, as per record available with the Registrar, no AGM was conducted for the year 2002 till 2010. Disclosing the particulars of Respondent No. 1 company, it has been stated in para 1(b) that the registered office of the company is at A-18, Shivalik, New Delhi-110 017. It has further been stated that the aforesaid premises were auctioned some time back and it has no office, which is in violation of Sections 17, 18 and 19 of the Companies Act, 1956. The company was incorporated with Respondent Nos. 2 and 3 being its initial promoters with the authorised share capital of Rs. 10/- lacs which was increased later to Rs. 4,50,00,000/-. It is further alleged that Respondent No. 1 company has not been doing any business since 2004-2005 and no statutory filings and compliances have been made since 2012. Even the filings prior to 2012 are incomplete. The last AGM was held in September 2012 which was illegal.

16. There are allegations of oppression and mismanagement against Respondents Nos. 2 and 3, with further allegations of siphoning of funds in the name of fictitious creditors of the company. A reference has been made to an illegal AGM held on 30.8.2010. Likewise, instances have been given of appointment of one Adardeep Apparels (P) Ltd. as a consultant on 7.8.2009.

17. The petitioners have also disclosed that the petitioners have not previously filed any suit, application or petition with regard to matters complained of in the instant petition against Respondent No. 1 company. However, Petitioner No. 1 is stated to have filed a petition under section 397 and 398 of Companies Act, 1956 against Respondent No. 6 being Company Petition 67 of 2006 but Respondent No. 1 has not been a party respondent in the aforesaid petition. It is thus patent that the petitioners have not agitated any cause before any forum against Respondent No. 1 company except the one in hand for the first time.

18. A perusal of Annexure P-3 (Form 20B) shows that the last AGM of Respondent No. 1 company was held on 29.9.2012 and there is no mention of names of either petitioner No. 1 or petitioner No. 2. Likewise, a copy of the Annual Return again would show that the petitioners were neither directors nor shareholders in Respondent No. 1 company.

19. In the facts and circumstances set out in the paragraphs above, we asked the learned counsel for the petitioner to show how this petition is not hit by the bar created by the Limitation Act as it has been filed beyond the period of three years. According to our view, the cause of action, if any, arose to the petitioners on 30.9.2012 and the instant petition having been filed on 25.7.2016 is clearly beyond the period of three years provided by Article 113 of the Limitation Act as noticed above. We suggested to the learned counsel that the petition is liable to be dismissed on that count.

20. Mr. Uttam Datt, learned counsel for the petitioner, however, made an endeavour to point out that there are numerous e-mails which have been placed on record (P-8) from 21.8.2013 to 02.10.2015 which reveal acknowledgement on the part of Respondent Nos. 2 and 3 conceding the claim of the petitioners to remove Respondent Nos. 2 to 5 as directors and have reconstitution of the Board without them. Learned counsel also claims that acknowledgement has also been made with regard to illegal allotment of shares to shareholders between 2000 and 2012 and, therefore, the instant petition is not hit by the period of limitation. He has taken us through various e-mails which did not even touch upon the aforesaid issues as per the claim made by the learned counsel. A perusal of e-mail dated 3.6.2014, 20.7.2014 and 24.7.2014 at page 174 did not reveal any acknowledgment of the relief claimed by the petitioners. It only refers to the working out of account on the shareholding as per the request made by one Subodh. The other email also did not reflect on any acknowledgment nor could any such email be pointed out by the petitioner. We deem it appropriate to make a reference to the email of December, 2014, and 2015 which talks of grant of amnesty and filing of the company petition. There is no mention of any acknowledgement in terms of Section 18 of the Limitation Act, either before the expiry of the period of three years which commenced from 30.9.2012 and expired on 29.9.2015 or thereafter. Moreover, acknowledgment has to be made to those who have some interest in Respondent No. 1 company. The petitioners have never been director or shareholder in Respondent No. 1 company. The question of acknowledgment does not even arise. There is a serious doubt whether the petitioners have any locus standi to file such a petition. Therefore, we are satisfied that this petition is liable to be dismissed without grant of any benefit of Section 18 of the Limitation Act and for lack of locus standi on the part of the petitioners.

21. In so far as Company Petition No. 67 of 2006 filed by Petitioner No. 1 against 09 respondents is concerned (P-6), it has no bearing on the grievances made in the instant petition preferred against Respondent No. 1 company. It has not been even a party in Company Petition No. 67 of 2006. The present petition is directed against Respondent No. 1 company or its directors, Respondents Nos. 2 to 5. Company Petition No. 67 of 2006 as filed by petitioner No. 1 is directed against 9 respondents which are as follows :

(1) S.M. Telesys Limited, Bhiwadi (Raj)

(2) Ram Janki Sharan, Lucknow

(3) Mr. Nageshwar P. Sen, New Delhi

(4) Ms. Renuka Devi Sen, New Delhi

(5) Rohit Kumar, New Delhi

(6) Jaya Kumar, New Delhi

(7) Ms. Kamna Gupta, New Delhi

(8) S.N. Gupta, Etah (U.P.)

(9) Sanjay Kumar, Vaishali, Bihar

22. It is needless to say that any observation made in the instant order shall not be construed as an expression of opinion on the merit of controversy raised in Company Petition No. 67 of 2006 or any application filed therein. As the petitioners have filed the instant petition against Respondent. No. 1 and against its directors Respondent Nos. 2 to 5 and Respondent No. 6 company, we find that the petition is hopelessly time barred and an attempt has been made to rake up issues in respect of, and seeking reliefs pertaining to, the years 2000 to 2012. Even otherwise, the petitioners lack locus standi to file the instant petition as they have neither been director, shareholder or members of the Respondent No. 1 company at any stage whatsoever.

23. Accordingly, this petition fails and the same is dismissed with Rs. 25,000/- as cost.

INSOLVENCY ACT 1986[UK]

Ireland Advocatetanmoy

Introductory Text

The First Group of Parts Company Insolvency; Companies Winding Up

Part I Company Voluntary Arrangements

Part II administration

Part II Administration Orders

Part III Receivership

Part IV Winding Up of Companies Registered under the Companies Acts

Part V Winding Up of Unregistered Companies

Part VI Miscellaneous Provisions Applying to Companies Which are Insolvent or in Liquidation

Part VII Interpretation for First Group of Parts

The Second Group of Parts Insolvency of Individuals; Bankruptcy

Part 7A Debt relief orders

Part VIII Individual Voluntary Arrangements

Part IX Bankruptcy

Part X Individual Insolvency: General Provisions

Part XI Interpretation for Second Group of Parts

The Third Group of Parts Miscellaneous Matters Bearing on Both Company and Individual Insolvency; General Interpretation; Final Provisions

Part XII Preferential debts in Company and Individual Insolvency

Part XIII Insolvency Practitioners and their Qualification

Part XIV Public Administration (England and Wales)

Part XV Subordinate Legislation

Part XVI Provisions Against Debt Avoidance (England and Wales only)

Part XVII Miscellaneous and General

PART 17A SUPPLEMENTARY PROVISIONS

Part XVIII Interpretation

Part XIX Final Provisions

SCHEDULES

SCHEDULE A1 Moratorium where directors propose voluntary arrangement

SCHEDULE B1 ADMINISTRATION

SCHEDULE 1 Powers of Administrator or Administrative Receiver

SCHEDULE 2 Powers of a Scottish Receiver (Additional to Those Conferred on him by the Instrument of Charge)

SCHEDULE 2A EXCEPTIONS TO PROHIBITION ON APPOINTMENT OF ADMINISTRATIVE RECEIVER: SUPPLEMENTARY PROVISIONS

SCHEDULE 3 Orders in Course of Winding Up Pronounced in Vacation (Scotland)

SCHEDULE 4 Powers of Liquidator in a Winding Up

SCHEDULE 4ZAConditions for making a debt relief order

SCHEDULE 4ZBDebt relief restrictions orders and undertakings

SCHEDULE 4A

SCHEDULE 5 Powers of Trustee in Bankruptcy

SCHEDULE 6 The Categories of Preferential Debts

SCHEDULE 7 Insolvency Practitioners Tribunal

SCHEDULE 8 Provisions Capable of Inclusion in Company Insolvency Rules

SCHEDULE 9 Provisions Capable of Inclusion in Individual Insolvency Rules

SCHEDULE 10 Punishment of Offences under this Act

SCHEDULE 11 Transitional Provisions and Savings

SCHEDULE 12 Enactments Repealed

SCHEDULE 13 Consequential Amendments of Companies Act 1985

SCHEDULE 14 Consequential Amendments of other Enactments


Insolvency Act 1986

1986 CHAPTER 45

An Act to consolidate the enactments relating to company insolvency and winding up (including the winding up of companies that are not insolvent, and of unregistered companies); enactments relating to the insolvency and bankruptcy of individuals; and other enactments bearing on those two subject matters, including the functions and qualification of insolvency practitioners, the public administration of insolvency, the penalisation and redress of malpractice and wrongdoing, and the avoidance of certain transactions at an undervalue

[25th July 1986]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

  1. The First Group of Parts Company Insolvency; Companies Winding Up

    Part I Company Voluntary Arrangements

    1. The Proposal

      1. 1.Those who may propose an arrangement.

      2. 1A.Moratorium.

      3. 2.Procedure where nominee is not the liquidator or administrator.

      4. 3.Summoning of meetings.

    2. Consideration and implementation of proposal

      1. 4.Decisions of meetings.

      2. 4A.Approval of arrangement.

      3. 5.Effect of approval.

      4. 6.Challenge of decisions.

      5. 6A.False representations, etc.

      6. 7.Implementation of proposal.

      7. 7A.Prosecution of delinquent officers of company.

      8. 7B.Arrangements coming to an end prematurely.

  2. Part II administration

    1. 8.Administration

  3. Part II Administration Orders

    1. Making etc. of administration order

      1. 9.Application for order.

      2. 10.Effect of application.

      3. 11.Effect of order.

      4. 12.Notification of order.

    2. Administrators

      1. 13.Appointment of administrator.

      2. 14.General powers.

      3. 15.Power to deal with charged property, etc.

      4. 16.Operation of s. 15 in Scotland.

      5. 17.General duties.

      6. 18.Discharge or variation of administration order.

      7. 19.Vacation of office.

      8. 20.Release of administrator.

    3. Ascertainment and investigation of company’s affairs

      1. 21.Information to be given by administrator.

      2. 22.Statement of affairs to be submitted to administrator.

    4. Administrator’s proposals

      1. 23.Statement of proposals.

      2. 24.Consideration of proposals by creditors’ meeting.

      3. 25.Approval of substantial revisions.

    5. Miscellaneous

      1. 26.Creditors’ committee.

      2. 27.Protection of interests of creditors and members.

  4. Part III Receivership

    1. Chapter I Receivers and Managers (England and Wales)

      1. Preliminary and general provisions

        1. 28.Extent of this Chapter.

        2. 29.Definitions.

        3. 30.Disqualification of body corporate from acting as receiver.

        4. 31.Disqualification of bankrupt or person in respect of whom a debt relief order is made

        5. 32.Power for court to appoint official receiver.

      2. Receivers and managers appointed out of court

        1. 33.Time from which appointment is effective.

        2. 34.Liability for invalid appointment.

        3. 35.Application to court for directions.

        4. 36.Court’s power to fix remuneration.

        5. 37.Liability for contracts, etc.

        6. 38.Receivership accounts to be delivered to registrar.

      3. Provisions applicable to every receivership

        1. 39.Notification that receiver or manager appointed.

        2. 40.Payment of debts out of assets subject to floating charge.

        3. 41.Enforcement of duty to make returns.

      4. Administrative receivers: general

        1. 42.General powers.

        2. 43.Power to dispose of charged property, etc.

        3. 44.Agency and liability for contracts.

        4. 45.Vacation of office.

      5. Administrative receivers: ascertainment and investigation of company’s affairs

        1. 46.Information to be given by administrative receiver.

        2. 47.Statement of affairs to be submitted.

        3. 48.Report by administrative receiver.

        4. 49.Committee of creditors.

    2. Chapter II Receivers (Scotland)

      1. 50.Extent of this Chapter.

      2. 51.Power to appoint receiver.

      3. 52.Circumstances justifying appointment.

      4. 53.Mode of appointment by holder of charge.

      5. 54.Appointment by court.

      6. 55.Powers of receiver.

      7. 56.Precedence among receivers.

      8. 57.Agency and liability of receiver for contracts.

      9. 58.Remuneration of receiver.

      10. 59.Priority of debts.

      11. 60.Distribution of moneys.

      12. 61.Disposal of interest in property.

      13. 62.Cessation of appointment of receiver.

      14. 63.Powers of court.

      15. 64.Notification that receiver appointed.

      16. 65.Information to be given by receiver.

      17. 66.Company’s statement of affairs.

      18. 67.Report by receiver.

      19. 68.Committee of creditors

      20. 69.Enforcement of receiver’s duty to make returns, etc.

      21. 70.Interpretation for Chapter II.

      22. 71.Prescription of forms, etc.; regulations.

    3. Chapter III Receivers’ Powers in Great Britain as a Whole

      1. 72.Cross-border operation of receivership provisions.

    4. CHAPTER IV PROHIBITION OF APPOINTMENT OF ADMINISTRATIVE RECEIVER

      1. 72A.Floating charge holder not to appoint administrative receiver

      2. 72B.First exception: capital market

      3. 72C.Second exception: public-private partnership

      4. 72D.Third exception: utilities

      5. 72DA.Exception in respect of urban regeneration projects

      6. 72E.Fourth exception: project finance

      7. 72F.Fifth exception: financial market

      8. 72G.Sixth exception: social landlords

      9. 72GA.Exception in relation to protected railway companies etc.

      10. 72H.Sections 72A to 72G: supplementary

  5. Part IV Winding Up of Companies Registered under the Companies Acts

    1. Chapter I Preliminary

      1. Introductory

        1. 73.Scheme of this Part

      2. Contributories

        1. 74.Liability as contributories of present and past members.

        2. 75.Directors, etc. with unlimited liability.

        3. 76.Liability of past directors and shareholders.

        4. 77.Limited company formerly unlimited.

        5. 78.Unlimited company formerly limited.

        6. 79.Meaning of “contributory”.

        7. 80.Nature of contributory’s liability.

        8. 81.Contributories in case of death of a member.

        9. 82.Effect of contributory’s bankruptcy.

        10. 83.Companies registered but not formed under the Companies Act 2006

    2. Chapter II Voluntary Winding Up (Introductory and General)

      1. Resolutions for, and commencement of, voluntary winding up

        1. 84.Circumstances in which company may be wound up voluntarily.

        2. 85.Notice of resolution to wind up.

        3. 86.Commencement of winding up.

      2. Consequences of resolution to wind up

        1. 87.(1) In case of a voluntary winding up, the company…

        2. 88.Avoidance of share transfers, etc. after winding-up resolution.

      3. Declaration of solvency

        1. 89.Statutory declaration of solvency.

        2. 90.Distinction between “members’” and “creditors’” voluntary winding up.

    3. Chapter III Members’ Voluntary Winding Up

      1. 91.Appointment of liquidator.

      2. 92.Power to fill vacancy in office of liquidator.

      3. 92A.Progress report to company at year’s end (England and Wales)

      4. 93.General company meeting at each year’s end. (Scotland)

      5. 94.Final meeting prior to dissolution.

      6. 95.Effect of company’s insolvency.

      7. 96.Conversion to creditors’ voluntary winding up.

    4. Chapter IV Creditors’ Voluntary Winding Up

      1. 97.Application of this Chapter.

      2. 98.Meeting of creditors.

      3. 99.Directors to lay statement of affairs before creditors.

      4. 100.Appointment of liquidator.

      5. 101.Appointment of liquidation committee.

      6. 102.Creditors’ meeting where winding up converted under s. 96.

      7. 103.Cesser of directors’ powers.

      8. 104.Vacancy in office of liquidator.

      9. 104A.Progress report to company and creditors at year’s end (England and Wales)

      10. 105.Meetings of company and creditors at each year’s end (Scotland).

      11. 106.Final meeting prior to dissolution.

    5. Chapter V Provisions Applying to both kinds of Voluntary Winding Up

      1. 107.Distribution of company’s property.

      2. 108.Appointment or removal of liquidator by the court.

      3. 109.Notice by liquidator of his appointment.

      4. 110.Acceptance of shares, etc., as consideration for sale of company property.

      5. 111.Dissent from arrangement under s. 110.

      6. 112.Reference of questions to court.

      7. 113.Court’s power to control proceedings (Scotland).

      8. 114.No liquidator appointed or nominated by company.

      9. 115.Expenses of voluntary winding up.

      10. 116.Saving for certain rights.

    6. Chapter VI Winding Up by the Court

      1. Jurisdiction (England and Wales)

        1. 117.High Court and county court jurisdiction.

        2. 118.Proceedings taken in wrong court.

        3. 119.Proceedings in county court; case stated for High Court.

      2. Jurisdiction (Scotland)

        1. 120.Court of Session and sheriff court jurisdiction.

        2. 121.Power to remit winding up to Lord Ordinary.

      3. Grounds and effect of winding-up petition

        1. 122.Circumstances in which company may be wound up by the court.

        2. 123.Definition of inability to pay debts.

        3. 124.Application for winding up.

        4. 124A.Petition for winding up on grounds of public interest.

        5. 124B.Petition for winding up of SE

        6. 124C.Petition for winding up of SCE

        7. 125.Powers of court on hearing of petition.

        8. 126.Power to stay or restrain proceedings against company.

        9. 127.Avoidance of property dispositions, etc.

        10. 128.Avoidance of attachments, etc.

      4. Commencement of winding up

        1. 129.Commencement of winding up by the court.

        2. 130.Consequences of winding-up order.

      5. Investigation procedures

        1. 131.Company’s statement of affairs.

        2. 132.Investigation by official receiver.

        3. 133.Public examination of officers

        4. 134.Enforcement of s. 133.

      6. Appointment of liquidator

        1. 135.Appointment and powers of provisional liquidator.

        2. 136.Functions of official receiver in relation to office of liquidator.

        3. 137.Appointment by Secretary of State.

        4. 138.Appointment of liquidator in Scotland.

        5. 139.Choice of liquidator at meetings of creditors and contributories.

        6. 140.Appointment by the court following administration or voluntary arrangement.

      7. Liquidation committees

        1. 141.Liquidation committee (England and Wales).

        2. 142.Liquidation committee (Scotland).

      8. The liquidator’s functions

        1. 143.General functions in winding up by the court.

        2. 144.Custody of company’s property.

        3. 145.Vesting of company property in liquidator.

        4. 146.Duty to summon final meeting.

      9. General powers of court

        1. 147.Power to stay or sist winding up.

        2. 148.Settlement of list of contributories and application of assets.

        3. 149.Debts due from contributory to company.

        4. 150.Power to make calls.

        5. 151.Payment into bank of money due to company.

        6. 152.Order on contributory to be conclusive evidence.

        7. 153.Power to exclude creditors not proving in time.

        8. 154.Adjustment of rights of contributories.

        9. 155.Inspection of books by creditors, etc.

        10. 156.Payment of expenses of winding up.

        11. 157.Attendance at company meetings (Scotland).

        12. 158.Power to arrest absconding contributory.

        13. 159.Powers of court to be cumulative.

        14. 160.Delegation of powers to liquidator (England and Wales).

      10. Enforcement of, and appeal from, orders

        1. 161.Orders for calls on contributories (Scotland).

        2. 162.Appeals from orders in Scotland.

    7. Chapter VII Liquidators

      1. Preliminary

        1. 163.Style and title of liquidators.

        2. 164.Corrupt inducement affecting appointment.

      2. Liquidator’s powers and duties

        1. 165.Voluntary winding up.

        2. 166.Creditors’ voluntary winding up.

        3. 167.Winding up by the court.

        4. 168.Supplementary powers (England and Wales).

        5. 169.Supplementary powers (Scotland).

        6. 170.Enforcement of liquidator’s duty to make returns, etc.

      3. Removal; vacation of office

        1. 171.Removal, etc. (voluntary winding up).

        2. 172.Removal, etc. (winding up by the court).

      4. Release of liquidator

        1. 173.Release (voluntary winding up).

        2. 174.Release (winding up by the court).

    8. Chapter VIII Provisions of General Application in Winding Up

      1. Preferential debts

        1. 175.Preferential debts (general provision).

        2. 176.Preferential charge on goods distrained.

      2. 176ZA.Payment of expenses of winding up (England and Wales)

      3. 176A.Share of assets for unsecured creditors

      4. Special managers

        1. 177.Power to appoint special manager.

      5. Disclaimer (England and Wales only)

        1. 178.Power to disclaim onerous property.

        2. 179.Disclaimer of leaseholds.

        3. 180.Land subject ot rentcharge.

        4. 181.Powers of court (general).

        5. 182.Powers of court (leaseholds).

      6. Execution, attachment and the Scottish equivalents

        1. 183.Effect of execution or attachment (England and Wales).

        2. 184.Duties of officers charged with execution of writs and other processes (England and Wales).

        3. 185.Effect of diligence (Scotland)

      7. Miscellaneous matters

        1. 186.Rescission of contracts by the court.

        2. 187.Power to make over assets to employees.

        3. 188.Notification that company is in liquidation.

        4. 189.Interest on debts.

        5. 190.Documents exempt from stamp duty.

        6. 191.Company’s books to be evidence.

        7. 192.Information as to pending liquidations.

        8. 193.Unclaimed dividends (Scotland).

        9. 194.Resolutions passed at adjourned meetings.

        10. 195.Meetings to ascertain wishes of creditors or contributories.

        11. 196.Judicial notice of court documents.

        12. 197.Commission for receiving evidence.

        13. 198.Court order for examination of persons in Scotland.

        14. 199.Costs of application for leave to proceed (Scottish companies).

        15. 200.Affidavits etc. in United Kingdom and overseas.

    9. Chaper IX Dissolution of Companies After Winding Up

      1. 201.Dissolution (voluntary winding up).

      2. 202.Early dissolution (England and Wales).

      3. 203.Consequence of notice under s. 202.

      4. 204.Early dissolution (Scotland).

      5. 205.Dissolution otherwise than under ss. 202-204.

    10. Chapter X Malpractice before and during Liquidation; Penalisation of Companies and Company Officers; Investigations and Prosecutions

      1. Offences of fraud, deception, etc.

        1. 206.Fraud, etc. in anticipation of winding up.

        2. 207.Transactions in fraud of creditors.

        3. 208.Misconduct in course of winding up.

        4. 209.Falsification of company’s books.

        5. 210.Material omissions from statement relating to company’s affairs.

        6. 211.False representations to creditors.

      2. Penalisation of directors and officers

        1. 212.Summary remedy against delinquent directors, liquidators, etc.

        2. 213.Fraudulent trading.

        3. 214.Wrongful trading.

        4. 215.Proceedings under ss. 213, 214.

        5. 216.Restriction on re-use of company names.

        6. 217.Personal liability for debts, following contravention of s. 216.

      3. Investigation and prosecution of malpractice

        1. 218.Prosecution of delinquent officers and members of company.

        2. 219.Obligations arising under s. 218.

  6. Part V Winding Up of Unregistered Companies

    1. 220.Meaning of “unregistered company”.

    2. 221.Winding up of unregistered companies.

    3. 222.Inability to pay debts: unpaid creditor for £750 or more.

    4. 223.Inability to pay debts: debt remaining unsatisfed after action brought.

    5. 224.Inability to pay debts: other cases.

    6. 225.Company incorporated outside Great Britain may be wound up though dissolved.

    7. 226.Contributories in winding up of unregistered company.

    8. 227.Power of court to stay, sist or restrain proceedings.

    9. 228.Actions stayed on winding-up order.

    10. 229.Provisions of this Part to be cumulative.

  7. Part VI Miscellaneous Provisions Applying to Companies Which are Insolvent or in Liquidation

    1. Office-holders

      1. 230.Holders of office to be qualified insolvency practitioners.

      2. 231.Appointment to office of two or more persons.

      3. 232.Validity of office-holder’s acts.

    2. Management by administrators, liquidators, etc.

      1. 233.Supplies of gas, water, electricity, etc.

      2. 234.Getting in the company’s property.

      3. 235.Duty to co-operate with office-holder.

      4. 236.Inquiry into company’s dealings, etc.

      5. 237.Court’s enforcement powers under s. 236.

    3. Adjustment of prior transactions (administration and liquidation)

      1. 238.Transactions at an undervalue (England and Wales).

      2. 239.Preferences (England and Wales).

      3. 240.“Relevant time” under ss. 238, 239.

      4. 241.Orders under ss. 238, 239.

      5. 242.Gratuitous alienations (Scotland).

      6. 243.Unfair preferences (Scotland).

      7. 244.Extortionate credit transactions.

      8. 245.Avoidance of certain floating charges.

      9. 246.Unenforceability of liens on books, etc.

    4. Remote attendance at meetings

      1. 246A.Remote attendance at meetings

    5. Use of websites

      1. 246B.Use of websites

  8. Part VII Interpretation for First Group of Parts

    1. 247.“Insolvency” and “go into liquidation”.

    2. 248.“Secured creditor”, etc.

    3. 249.“Connected” with a company.

    4. 250.“Member” of a company.

    5. 251.Expressions used generally.

  9. The Second Group of Parts Insolvency of Individuals; Bankruptcy

  10. Part 7A Debt relief orders

    1. Preliminary

      1. 251A.Debt relief orders

    2. Applications for a debt relief order

      1. 251B.Making of application

      2. 251C.Duty of official receiver to consider and determine application

      3. 251D.Presumptions applicable to the determination of an application

    3. Making and effect of debt relief order

      1. 251E.Making of debt relief orders

      2. 251F.Effect of debt relief order on other debt management arrangements

      3. 251G.Moratorium from qualifying debts

      4. 251H.The moratorium period

      5. 251I.Discharge from qualifying debts

    4. Duties of debtor

      1. 251J.Providing assistance to official receiver etc

    5. Objections, investigations and revocation

      1. 251K.Objections and investigations

      2. 251L.Power of official receiver to revoke or amend a debt relief order

    6. Role of the court

      1. 251M.Powers of court in relation to debt relief orders

      2. 251N.Inquiry into debtor’s dealings and property

    7. Offences

      1. 251O.False representations and omissions

      2. 251P.Concealment or falsification of documents

      3. 251Q.Fraudulent disposal of property

      4. 251R.Fraudulent dealing with property obtained on credit

      5. 251S.Obtaining credit or engaging in business

      6. 251T.Offences: supplementary

    8. Supplementary

      1. 251U.Approved intermediaries

      2. 251V.Debt relief restrictions orders and undertakings

      3. 251W.Register of debt relief orders etc

      4. 251X.Interpretation

  11. Part VIII Individual Voluntary Arrangements

    1. Moratorium for insolvent debtor

      1. 252.Interim order of court.

      2. 253.Application for interim order.

      3. 254.Effect of application.

      4. 255.Cases in which interim order can be made.

      5. 256.Nominee’s report on debtor’s proposal.

    2. Procedure where no interim order made

      1. 256A.Debtor’s proposal and nominee’s report.

    3. Creditors’ meeting

      1. 257.Summoning of creditors’ meeting.

    4. Consideration and implementation of debtor’s proposal

      1. 258.Decisions of creditor’s meeting.

      2. 259.Report of decisions to court.

      3. 260.Effect of approval.

      4. 261.Additional effect on undischarged bankrupt

      5. 262.Challenge of meeting’s decision.

      6. 262A.False representations etc.

      7. 262B.Prosecution of delinquent debtors.

      8. 262C.Arrangements coming to an end prematurely.

      9. 263.Implementation and supervision of approved voluntary arrangement.

    5. 263A.Availability

    6. 263B.Decision

    7. 263C.Result

    8. 263D.Approval of voluntary arrangement

    9. 263E.Implementation

    10. 263F.Revocation

    11. 263G.Offences

  12. Part IX Bankruptcy

    1. Chapter I Bankruptcy Petitions; Bankruptcy Orders

      1. Preliminary

        1. 264.Who may present a bankruptcy petition.

        2. 265.Conditions to be satisfied in respect of debtor.

        3. 266.Other preliminary conditions.

      2. Creditor’s petition

        1. 267.Grounds of creditor’s petition.

        2. 268.Definition of “inability to pay”, etc.; the statutory demand.

        3. 269.Creditor with security.

        4. 270.Expedited petition.

        5. 271.Proceedings on creditor’s petition.

      3. Debtor’s petition

        1. 272.Grounds of debtor’s petition.

        2. 273.Appointment of insolvency practitioner by the court.

        3. 274.Action on report of insolvency practitioner.

        4. 274A.Debtor who meets conditions for a debt relief order

        5. 275.Summary administration.

      4. Other cases for special consideration

        1. 276.Default in connection with voluntary arrangement.

        2. 277.Petition based on criminal bankruptcy order.

      5. Commencement and duration of bankruptcy; discharge

        1. 278.Commencement and continuance.

        2. 279.Duration

        3. 280.Discharge by order of the court.

        4. 281.Effect of discharge.

        5. 281A.Post-discharge restrictions

        6. 282.Court’s power to annul bankruptcy order.

    2. Chapter II Protection of Bankrupt’s Estate and Investigation of His Affairs

      1. 283.Definition of bankrupt’s estate.

      2. 283A.Bankrupt’s home ceasing to form part of estate

      3. 284.Restrictions on dispositions of property.

      4. 285.Restriction on proceedings and remedies.

      5. 286.Power to appoint interim receiver.

      6. 287.Receivership pending appointment of trustee.

      7. 288.Statement of affairs.

      8. 289.Investigatory duties of official receiver

      9. 290.Public examination of bankrupt.

      10. 291.Duties of bankrupt in relation to official receiver.

    3. Chapter III Trustees in Bankruptcy

      1. Tenure of office as trustee

        1. 292.Power to make appointments.

        2. 293.Summoning of meeting to appoint first trustee.

        3. 294.Power of creditors to requisition meeting.

        4. 295.Failure of meeting to appoint trustee.

        5. 296.Appointment of trustee by Secretary of State.

        6. 297.Special cases.

        7. 298.Removal of trustee; vacation of office.

        8. 299.Release of trustee.

        9. 300.Vacancy in office as trustee.

      2. Control of trustee

        1. 301.Creditors’ committee.

        2. 302.Exercise by Secretary of State of functions of creditors’ committee.

        3. 303.General control of trustee by the court.

        4. 304.Liability of trustee.

    4. Chapter IV Administration by Trustee

      1. Preliminary

        1. 305.General functions of trustee.

      2. Acquisition, control and realisation of bankrupt’s estate

        1. 306.Vesting of bankrupt’s estate in trustee.

        2. 306A.Property subject to restraint order

        3. 306AA.Property released from detention

        4. 306B.Property in respect of which receivership or administration order made

        5. 306BA.Property in respect of which realisation order made

        6. 306C.Property subject to certain orders where confiscation order discharged or quashed

        7. 307.After-acquired property.

        8. 308.Vesting in trustee of certain items of excess value.

        9. 308A.Vesting in trustee of certain tenancies.

        10. 309.Time-limit for notice under s. 307 or 308.

        11. 310.Income payments orders.

        12. 310A.Income payments agreement

        13. 311.Acquisition by trustee of control.

        14. 312.Obligation to surrender control to trustee.

        15. 313.Charge on bankrupt’s home.

        16. 313A.Low value home: application for sale, possession or charge

        17. 314.Powers of trustee.

      3. Disclaimer of onerous property

        1. 315.Disclaimer (general power).

        2. 316.Notice requiring trustee’s decision.

        3. 317.Disclaimer of leaseholds.

        4. 318.Disclaimer of dwelling house.

        5. 319.Disclaimer of land subject to rentcharge.

        6. 320.Court order vesting disclaimed property.

        7. 321.Order under s. 320 in respect of leaseholds.

      4. Distribution of bankrupt’s estate

        1. 322.Proof of debts.

        2. 323.Mutual credit and set-off.

        3. 324.Distribution by means of dividend.

        4. 325.Claims by unsatisfied creditors.

        5. 326.Distribution of property in specie.

        6. 327.Distribution in criminal bankruptcy.

        7. 328.Priority of debts.

        8. 329.Debts to spouse.

        9. 330.Final distribution.

        10. 331.Final meeting.

        11. 332.Saving for bankrupt’s home.

      5. Supplemental

        1. 333.Duties of bankrupt in relation to trustee.

        2. 334.Stay of distribution in case of second bankruptcy.

        3. 335.Adjustment between earlier and later bankruptcy estates.

    5. Chapter V Effect of Bankruptcy on Certain Rights Transacttions, Etc.

      1. Rights under trusts of land

        1. 335A.Rights under trusts of land.

      2. Rights of occupation

        1. 336.Rights of occupation etc. of bankrupt’s spouse or civil partner.

        2. 337.Rights of occupation of bankrupt.

        3. 338.Payments in respect of premises occupied by bankrupt.

      3. Adjustment of prior transactions, etc.

        1. 339.Transactions at an undervalue.

        2. 340.Preferences.

        3. 341.“Relevant time” under ss. 339, 340.

        4. 342.Orders under ss. 339, 340.

        5. 342A.Recovery of excessive pension contributions.

        6. 342B.Orders under section 342A.

        7. 342C.Orders under section 342A: supplementary.

        8. 342D.Recovery of excessive contributions in pension-sharing cases.

        9. 342E.Orders under section 339 or 340 in respect of pension-sharing transactions.

        10. 342F.Orders under section 339 or 340 in pension-sharing cases: supplementary.

        11. 343.Extortionate credit transactions.

        12. 344.Avoidance of general assignment of book debts.

        13. 345.Contracts to which bankrupt is a party.

        14. 346.Enforcement procedures.

        15. 347.Distress, etc.

        16. 348.Apprenticeships, etc.

        17. 349.Unenforceability of liens on books, etc.

        18. 349A.Arbitration agreements to which bankrupt is party.

    6. Chapter VI Bankruptcy Offences

      1. Preliminary

        1. 350.Scheme of this Chapter.

        2. 351.Definitions.

        3. 352.Defence of innocent intention.

      2. Wrongdoing by the bankrupt before and after bankruptcy

        1. 353.Non-disclosure.

        2. 354.Concealment of property.

        3. 355.Concealment of books and papers; falsification.

        4. 356.False statements.

        5. 357.Fraudulent disposal of property.

        6. 358.Absconding.

        7. 359.Fraudulent dealing with property obtained on credit.

        8. 360.Obtaining credit; engaging in business.

        9. 361.Failure to keep proper accounts of business.

        10. 362.Gambling.

    7. Chapter VII Powers of Court In Bankruptcy

      1. 363.General control of court.

      2. 364.Power of arrest.

      3. 365.Seizure of bankrupt’s property.

      4. 366.Inquiry into bankrupt’s dealings and property.

      5. 367.Court’s enforcement powers under s. 366.

      6. 368.Provision corresponding to s. 366, where interim receiver appointed.

      7. 369.Order for production of documents by inland revenue.

      8. 370.Power to appoint special manager.

      9. 371.Re-direction of bankrupt’s letters, etc.

  13. Part X Individual Insolvency: General Provisions

    1. 372.Supplies of gas, water, electricity, etc.

    2. 373.Jurisdiction in relation to insolvent individuals.

    3. 374.Insolvency districts.

    4. 375.Appeals etc. from courts exercising insolvency jurisdiction.

    5. 376.Time-limits.

    6. 377.Formal defects.

    7. 378.Exemption from stamp duty.

    8. 379.Annual report.

    9. Remote attendance at meetings

      1. 379A.Remote attendance at meetings

    10. Use of websites

      1. 379B.Use of websites

  14. Part XI Interpretation for Second Group of Parts

    1. 380.Introductory.

    2. 381.“Bankrupt” and associated terminology.

    3. 382.“Bankruptcy debt”, etc.

    4. 383.“Creditor”, “security”, etc.

    5. 384.“Prescribed” and “the rules”.

    6. 385.Miscellaneous definitions.

  15. The Third Group of Parts Miscellaneous Matters Bearing on Both Company and Individual Insolvency; General Interpretation; Final Provisions

  16. Part XII Preferential debts in Company and Individual Insolvency

    1. 386.Categories of preferential debts.

    2. 387.“The relevant date”.

  17. Part XIII Insolvency Practitioners and their Qualification

    1. Restrictions on unqualified persons acting as liquidator, trustee in bankruptcy, etc.

      1. 388.Meaning of “act as insolvency practitioner”

      2. 389.Acting without qualification an offence.

      3. 389A.Authorisation of nominees and supervisors.

      4. 389B.Official receiver as nominee or supervisor

    2. The requisite qualification, and the means of obtaining it

      1. 390.Persons not qualified to act as insolvency practitioners.

      2. 391.Recognised professional bodies.

      3. 392.Authorisation by competent authority.

      4. 393.Grant, refusal and withdrawal of authorisation.

      5. 394.Notices.

      6. 395.Right to make representations.

      7. 396.Reference to Tribunal.

      8. 397.Action of Tribunal on reference.

      9. 398.Refusal or withdrawal without reference to Tribunal.

  18. Part XIV Public Administration (England and Wales)

    1. Official receivers

      1. 399.Appointment, etc. of official receivers.

      2. 400.Functions and status of official receivers.

      3. 401.Deputy official receivers and staff.

    2. The Official Petitioner

      1. 402.Official Petitioner.

    3. Insolvency Service finance, accounting and investment

      1. 403.Insolvency Services Account.

      2. 404.Investment Account.

      3. 405.Application of income in Investment Account; adjustment of balances.

      4. 406.Interest on money received by liquidators or trustees in bankruptcy and invested.

      5. 407.Unclaimed dividends and undistributed balances.

      6. 408.Adjustment of balances

      7. 409.Annual financial statement and audit.

    4. Supplementary

      1. 410.Extent of this Part.

  19. Part XV Subordinate Legislation

    1. General insolvency rules

      1. 411.Company insolvency rules.

      2. 412.Individual insolvency rules (England and Wales).

      3. 413.Insolvency Rules Committee.

    2. Fees orders

      1. 414.Fees orders (company insolvency proceedings).

      2. 415.Fees orders (individual insolvency proceedings in England and Wales).

      3. 415A.Fees orders (general)

    3. Specification, increase and reduction of money sums relevant in the operation of this Act

      1. 416.Monetary limits (companies winding up).

      2. 417.Money sum in s. 222.

      3. 417A.Money sums (company moratorium).

      4. 418.Monetary limits (bankruptcy).

    4. Insolvency practice

      1. 419.Regulations for purposes of Part XIII.

    5. Other order-making powers

      1. 420.Insolvent partnerships.

      2. 421.Insolvent estates of deceased persons.

      3. 421A.Insolvent estates: joint tenancies.

      4. 422.Formerly authorised banks.

  20. Part XVI Provisions Against Debt Avoidance (England and Wales only)

    1. 423.Transactions defrauding creditors.

    2. 424.Those who may apply for an order under s. 423.

    3. 425.Provision which may be made by order under s. 423.

  21. Part XVII Miscellaneous and General

    1. 426.Co-operation between courts exercising jurisdiction in relation to insolvency.

    2. 426A.Disqualification from Parliament (England and Wales)

    3. 426B.Devolution

    4. 426C.Irrelevance of privilege

    5. 427.Disqualification from Parliament (Scotland and Northern Ireland)

    6. 428.Exemptions from Restrictive Trade Practices Act.

    7. 429.Disabilities on revocation of administration order against an individual.

    8. 430.Provision introducing Schedule of punishments.

    9. 431.Summary proceedings.

    10. 432.Offences by bodies corporate.

    11. 433.Admissibility in evidence of statements of affairs, etc.

    12. 434.Crown application.

  22. PART 17A SUPPLEMENTARY PROVISIONS

    1. 434A.Introductory

    2. 434B.Representation of corporations at meetings

    3. 434C.Legal professional privilege

    4. 434D.Enforcement of company’s filing obligations

    5. 434E.Application of filing obligations to overseas companies

  23. Part XVIII Interpretation

    1. 435.Meaning of “associate”.

    2. 436.Expressions used generally.

    3. 436A.Proceedings under EC Regulations: modified definition of property

    4. 436B.References to things in writing

  24. Part XIX Final Provisions

    1. 437.Transitional provisions, and savings.

    2. 438.Repeals.

    3. 439.Amendment of enactments.

    4. 440.Extent (Scotland).

    5. 441.Extent (Northern Ireland).

    6. 442.Extent (other territories).

    7. 443.Commencement.

    8. 444.Citation.

  25. SCHEDULES

    1. SCHEDULE A1

      Moratorium where directors propose voluntary arrangement

      1. Part I Introductory

        1. Interpretation

          1. 1.In this Schedule— “ the beginning of the moratorium ”…

        2. Eligible companies

          1. 2.(1) A company is eligible for a moratorium if it…

          2. 3.(1) A company meets the requirements of this paragraph if…

          3. 4.(1) A company is excluded from being eligible for a…

          4. 4A.Capital market arrangement

          5. 4B.Public private partnership

          6. 4C.Liability under an arrangement

          7. 4D.Interpretation of capital market arrangement

          8. 4E.Capital market investment

          9. 4F.(1) For the purposes of paragraphs 4A and 4D an…

          10. 4G.Debt

          11. 4H.Interpretation of project company

          12. 4I.Public-private partnership project

          13. 4J.Step-in rights

          14. 4K.Person

          15. 5.The Secretary of State may by regulations modify the qualifications…

      2. Part II Obtaining a moratorium

        1. Nominee’s statement

          1. 6.(1) Where the directors of a company wish to obtain…

        2. Documents to be submitted to court

          1. 7.(1) To obtain a moratorium the directors of a company…

        3. Duration of moratorium

          1. 8.(1) A moratorium comes into force when the documents for…

        4. Notification of beginning of moratorium

          1. 9.(1) When a moratorium comes into force, the directors shall…

          2. 10.(1) When a moratorium comes into force, the nominee shall,…

        5. Notification of end of moratorium

          1. 11.(1) When a moratorium comes to an end, the nominee…

      3. Part III Effects of moratorium

        1. Effect on creditors, etc.

          1. 12.(1) During the period for which a moratorium is in…

          2. 13.(1) This paragraph applies where there is an uncrystallised floating…

          3. 14.Security granted by a company at a time when a…

        2. Effect on company

          1. 15.(1) Paragraphs 16 to 23 apply in relation to a…

        3. Company invoices, etc.

          1. 16.(1) Every invoice, order for goods or services, business letter…

        4. Obtaining credit during moratorium

          1. 17.(1) The company may not obtain credit to the extent…

        5. Disposals and payments

          1. 18.(1) Subject to sub-paragraph (2), the company may only dispose…

          2. 19.(1) Subject to sub-paragraph (2), the company may only make…

        6. Disposal of charged property, etc.

          1. 20.(1) This paragraph applies where— (a) any property of the…

          2. 21.(1) Where property is disposed of under paragraph 20 in…

          3. 22.(1) If the company— (a) without any consent or leave…

        7. Market contracts, etc.

          1. 23.(1) If the company enters into any transaction to which…

      4. Part IV Nominees

        1. Monitoring of company’s activities

          1. 24.(1) During a moratorium, the nominee shall monitor the company’s…

        2. Withdrawal of consent to act

          1. 25.(1) The nominee may only withdraw his consent to act…

        3. Challenge of nominee’s actions, etc.

          1. 26.(1) If any creditor, director or member of the company,…

          2. 27.(1) Where there are reasonable grounds for believing that—

        4. Replacement of nominee by court

          1. 28.(1) The court may— (a) on an application made by…

      5. Part V Consideration and implementation of voluntary arrangement

        1. Summoning of meetings

          1. 29.(1) Where a moratorium is in force, the nominee shall…

        2. Conduct of meetings

          1. 30.(1) Subject to the provisions of paragraphs 31 to 35,…

        3. Approval of voluntary arrangement

          1. 31.(1) The meetings summoned under paragraph 29 shall decide whether…

        4. Extension of moratorium

          1. 32.(1) Subject to sub-paragraph (2), a meeting summoned under paragraph…

          2. 33.(1) The conditions which may be imposed when a moratorium…

          3. 34.(1) If a decision to extend, or further extend, the…

        5. Moratorium committee

          1. 35.(1) A meeting summoned under paragraph 29 which resolves that…

        6. Effectiveness of decisions

          1. 36.(1) Sub-paragraph (2) applies to references to one of the…

        7. Effect of approval of voluntary arrangement

          1. 37.(1) This paragraph applies where a decision approving a voluntary…

        8. Challenge of decisions

          1. 38.(1) Subject to the following provisions of this paragraph, any…

        9. Implementation of voluntary arrangement

          1. 39.(1) This paragraph applies where a voluntary arrangement approved by…

      6. Part VI Miscellaneous

        1. Challenge of directors’ actions

          1. 40.(1) This paragraph applies in relation to acts or omissions…

        2. Offences

          1. 41.(1) This paragraph applies where a moratorium has been obtained…

          2. 42.(1) If, for the purpose of obtaining a moratorium, or…

        3. Void provisions in floating charge documents

          1. 43.(1) A provision in an instrument creating a floating charge…

        4. Functions of the Financial Services Authority

          1. 44.(1) This Schedule has effect in relation to a moratorium…

        5. Subordinate legislation

          1. 45.(1) Regulations or an order made by the Secretary of…

    2. SCHEDULE B1

      ADMINISTRATION

      1. ARRANGEMENT OF SCHEDULE

      2. NATURE OF ADMINISTRATION

        1. 1.Administration

        2. 2.A person may be appointed as administrator of a company—…

        3. 3.Purpose of administration

        4. 4.The administrator of a company must perform his functions as…

        5. 5.Status of administrator

        6. 6.General restrictions

        7. 7.A person may not be appointed as administrator of a…

        8. 8.(1) A person may not be appointed as administrator of…

        9. 9.(1) A person may not be appointed as administrator of…

      3. APPOINTMENT OF ADMINISTRATOR BY COURT

        1. 10.Administration order

        2. 11.Conditions for making order

        3. 12.Administration application

        4. 13.Powers of court

      4. APPOINTMENT OF ADMINISTRATOR BY HOLDER OF FLOATING CHARGE

        1. 14.Power to appoint

        2. 15.Restrictions on power to appoint

        3. 16.An administrator may not be appointed under paragraph 14 while…

        4. 17.An administrator of a company may not be appointed under…

        5. 18.Notice of appointment

        6. 19.Commencement of appointment

        7. 20.A person who appoints an administrator under paragraph 14—

        8. 21.Invalid appointment: indemnity

      5. APPOINTMENT OF ADMINISTRATOR BY COMPANY OR DIRECTORS

        1. 22.Power to appoint

        2. 23.Restrictions on power to appoint

        3. 24.(1) If a moratorium for a company under Schedule A1…

        4. 25.An administrator of a company may not be appointed under…

        5. 26.Notice of intention to appoint

        6. 27.(1) A person who gives notice of intention to appoint…

        7. 28.(1) An appointment may not be made under paragraph 22…

        8. 29.Notice of appointment

        9. 30.In a case in which no person is entitled to…

        10. 31.Commencement of appointment

        11. 32.A person who appoints an administrator under paragraph 22—

        12. 33.If before the requirements of paragraph 29 are satisfied the…

        13. 34.Invalid appointment: indemnity

      6. ADMINISTRATION APPLICATION – SPECIAL CASES

        1. 35.Application by holder of floating charge

        2. 36.Intervention by holder of floating charge

        3. 37.Application where company in liquidation

        4. 38.(1) The liquidator of a company may make an administration…

        5. 39.Effect of administrative receivership

      7. EFFECT OF ADMINISTRATION

        1. 40.Dismissal of pending winding-up petition

        2. 41.Dismissal of administrative or other receiver

        3. 42.Moratorium on insolvency proceedings

        4. 43.Moratorium on other legal process

        5. 44.Interim moratorium

        6. 45.Publicity

      8. PROCESS OF ADMINISTRATION

        1. 46.Announcement of administrator’s appointment

        2. 47.Statement of company’s affairs

        3. 48.(1) A person required to submit a statement of affairs…

        4. 49.Administrator’s proposals

        5. 50.Creditors’ meeting

        6. 51.Requirement for initial creditors’ meeting

        7. 52.(1) Paragraph 51(1) shall not apply where the statement of…

        8. 53.Business and result of initial creditors’ meeting

        9. 54.Revision of administrator’s proposals

        10. 55.Failure to obtain approval of administrator’s proposals

        11. 56.Further creditors’ meetings

        12. 57.Creditors’ committee

        13. 58.Correspondence instead of creditors’ meeting

      9. FUNCTIONS OF ADMINISTRATOR

        1. 59.General powers

        2. 60.The administrator of a company has the powers specified in…

        3. 61.The administrator of a company— (a) may remove a director…

        4. 62.The administrator of a company may call a meeting of…

        5. 63.The administrator of a company may apply to the court…

        6. 64.(1) A company in administration or an officer of a…

        7. 65.Distribution

        8. 66.The administrator of a company may make a payment otherwise…

        9. 67.General duties

        10. 68.(1) Subject to sub-paragraph (2), the administrator of a company…

        11. 69.Administrator as agent of company

        12. 70.Charged property: floating charge

        13. 71.Charged property: non-floating charge

        14. 72.Hire-purchase property

        15. 73.Protection for secured or preferential creditor

        16. 74.Challenge to administrator’s conduct of company

        17. 75.Misfeasance

      10. ENDING ADMINISTRATION

        1. 76.Automatic end of administration

        2. 77.(1) An order of the court under paragraph 76—

        3. 78.(1) In paragraph 76(2)(b) “ consent ” means consent of—…

        4. 79.Court ending administration on application of administrator

        5. 80.Termination of administration where objective achieved

        6. 81.Court ending administration on application of creditor

        7. 82.Public interest winding-up

        8. 83.Moving from administration to creditors’ voluntary liquidation

        9. 84.Moving from administration to dissolution

        10. 85.Discharge of administration order where administration ends

        11. 86.Notice to Companies Registrar where administration ends

      11. REPLACING ADMINISTRATOR

        1. 87.Resignation of administrator

        2. 88.Removal of administrator from office

        3. 89.Administrator ceasing to be qualified

        4. 90.Supplying vacancy in office of administrator

        5. 91.(1) Where the administrator was appointed by administration order, the…

        6. 92.Where the administrator was appointed under paragraph 14 the holder…

        7. 93.(1) Where the administrator was appointed under paragraph 22(1) by…

        8. 94.(1) Where the administrator was appointed under paragraph 22(2) the…

        9. 95.The court may replace an administrator on the application of…

        10. 96.Substitution of administrator: competing floating charge-holder

        11. 97.Substitution of administrator appointed by company or directors: creditors’ meeting

        12. 98.Vacation of office: discharge from liability

        13. 99.Vacation of office: charges and liabilities

      12. GENERAL

        1. 100.Joint and concurrent administrators

        2. 101.(1) This paragraph applies where two or more persons are…

        3. 102.(1) This paragraph applies where two or more persons are…

        4. 103.(1) Where a company is in administration, a person may…

        5. 104.Presumption of validity

        6. 105.Majority decision of directors

        7. 106.Penalties

        8. 107.Extension of time limit

        9. 108.(1) A period specified in paragraph 49(5), 50(1)(b) or 51(2)…

        10. 109.Where a period is extended under paragraph 107 or 108,…

        11. 110.Amendment of provision about time

        12. 111.Interpretation

        13. 111A.Non-UK companies

        14. 112.Scotland

        15. 113.Where property in Scotland is disposed of under paragraph 70…

        16. 114.In Scotland, where goods in the possession of a company…

        17. 115.(1) In Scotland, the administrator of a company may make,…

        18. 116.In Scotland, the administrator in making any payment in accordance…

    3. SCHEDULE 1

      Powers of Administrator or Administrative Receiver

      1. 1.Power to take possession of, collect and get in the…

      2. 2.Power to sell or otherwise dispose of the property of…

      3. 3.Power to raise or borrow money and grant security therefor…

      4. 4.Power to appoint a solicitor or accountant or other professionally…

      5. 5.Power to bring or defend any action or other legal…

      6. 6.Power to refer to arbitration any question affecting the company….

      7. 7.Power to effect and maintain insurances in respect of the…

      8. 8.Power to use the company’s seal.

      9. 9.Power to do all acts and to execute in the…

      10. 10.Power to draw, accept, make and endorse any bill of…

      11. 11.Power to appoint any agent to do any business which…

      12. 12.Power to do all such things (including the carrying out…

      13. 13.Power to make any payment which is necessary or incidental…

      14. 14.Power to carry on the business of the company.

      15. 15.Power to establish subsidiaries of the company.

      16. 16.Power to transfer to subsidiaries of the company the whole…

      17. 17.Power to grant or accept a surrender of a lease…

      18. 18.Power to make any arrangement or compromise on behalf of…

      19. 19.Power to call up any uncalled capital of the company….

      20. 20.Power to rank and claim in the bankruptcy, insolvency, sequestration…

      21. 21.Power to present or defend a petition for the winding…

      22. 22.Power to change the situation of the company’s registered office….

      23. 23.Power to do all other things incidental to the exercise…

    4. SCHEDULE 2

      Powers of a Scottish Receiver (Additional to Those Conferred on him by the Instrument of Charge)

      1. 1.Power to take possession of, collect and get in the…

      2. 2.Power to sell, feu, hire out or otherwise dispose of…

      3. 3.Power to raise or borrow money and grant security therefor…

      4. 4.Power to appoint a solicitor or accountant or other professionally…

      5. 5.Power to bring or defend any action or other legal…

      6. 6.Power to refer to arbitration all questions affecting the company….

      7. 7.Power to effect and maintain insurances in respect of the…

      8. 8.Power to use the company’s seal.

      9. 9.Power to do all acts and to execute in the…

      10. 10.Power to to draw, accept, make and endorse any bill…

      11. 11.Power to to appoint any agent to do any business…

      12. 12.Power to do all such things (including the carrying out…

      13. 13.Power to make any payment which is necessary or incidental…

      14. 14.Power to carry on the business of the company or…

      15. 15.Power to grant or accept a surrender of a lease…

      16. 16.Power to make any arrangement or compromise on behalf of…

      17. 17.Power to call up any uncalled capital of the company….

      18. 18.Power to to establish subsidiaries of the company.

      19. 19.Power to to transfer to subsidiaries of the company the…

      20. 20.Power to rank and claim in the bankruptcy, insolvency, sequestration…

      21. 21.Power to present or defend a petition for the winding…

      22. 22.Power to change the situation of the company’s registered office….

      23. 23.Power to do all other things incidental to the exercise…

    5. SCHEDULE 2A

      EXCEPTIONS TO PROHIBITION ON APPOINTMENT OF ADMINISTRATIVE RECEIVER: SUPPLEMENTARY PROVISIONS

      1. 1.Capital market arrangement

      2. 2.Capital market investment

      3. 3.(1) An investment is also a capital market investment for…

      4. 4.“Agreement”

      5. 5.Debt

      6. 6.Step-in rights

      7. 7.Project company

      8. 8.“Resources”

      9. 9.“Public body”

      10. 10.Regulated business

      11. 11.“Person”

    6. SCHEDULE 3

      Orders in Course of Winding Up Pronounced in Vacation (Scotland)

      1. Part I Orders Which are to be Final

      2. Part II Orders Which are to take Effect Until Matter Disposed of by Inner House

    7. SCHEDULE 4

      Powers of Liquidator in a Winding Up

      1. Part I Powers Exercisable with Sanction

        1. 1.Power to pay any class of creditors in full.

        2. 2.Power to make any compromise or arrangement with creditors or…

        3. 3.In the case of a winding up in Scotland, power…

        4. 3A.Power to bring legal proceedings under section 213, 214, 238,…

      2. Part II Powers Exercisable without Sanction in Voluntary Winding Up, with Sanction in Winding Up by the Court

        1. 4.Power to bring or defend any action or other legal…

        2. 5.Power to carry on the business of the company so…

      3. Part III Powers Exercisable Without Sanction in any Winding Up

        1. 6.Power to sell any of the company’s property by public…

        2. 6A.In the case of a winding up in England and…

        3. 7.Power to do all acts and execute, in the name…

        4. 8.Power to prove, rank and claim in the bankruptcy, insolvency…

        5. 9.Power to draw, accept, make and indorse any bill of…

        6. 10.Power to raise on the security of the assets of…

        7. 11.Power to take out in his official name letters of…

        8. 12.Power to appoint an agent to do any business which…

        9. 13.Power to do all such other things as may be…

    8. SCHEDULE 4ZA

      Conditions for making a debt relief order

      1. Part 1 Conditions which must be met

        1. Connection with England and Wales

          1. 1.(1) The debtor— (a) is domiciled in England and Wales…

        2. Debtor’s previous insolvency history

          1. 2.The debtor is not, on the determination date—

          2. 3.A debtor’s petition for the debtor’s bankruptcy under Part 9—…

          3. 4.A creditor’s petition for the debtor’s bankruptcy under Part 9—…

          4. 5.A debt relief order has not been made in relation…

        3. Limit on debtor’s overall indebtedness

          1. 6.(1) The total amount of the debtor’s debts on the…

        4. Limit on debtor’s monthly surplus income

          1. 7.(1) The debtor’s monthly surplus income (if any) on the…

        5. Limit on value of debtor’s property

          1. 8.(1) The total value of the debtor’s property on the…

      2. Part 2 Other conditions

        1. 9.(1) The debtor has not entered into a transaction with…

        2. 10.(1) The debtor has not given a preference to any…

    9. SCHEDULE 4ZB

      Debt relief restrictions orders and undertakings

      1. Debt relief restrictions order

        1. 1.(1) A debt relief restrictions order may be made by…

      2. Grounds for making order

        1. 2.(1) The court shall grant an application for a debt…

      3. Timing of application for order

        1. 3.An application for a debt relief restrictions order in respect…

      4. Duration of order

        1. 4.(1) A debt relief restrictions order— (a) comes into force…

      5. Interim debt relief restrictions order

        1. 5.(1) This paragraph applies at any time between—

        2. 6.(1) This paragraph applies to a case in which both…

      6. Debt relief restrictions undertaking

        1. 7.(1) A debtor may offer a debt relief restrictions undertaking…

        2. 8.A reference in an enactment to a person in respect…

        3. 9.(1) A debt relief restrictions undertaking— (a) comes into force…

      7. Effect of revocation of debt relief order

        1. 10.Unless the court directs otherwise, the revocation at any time…

    10. SCHEDULE 4A

      1. 1.Bankruptcy restrictions order

      2. 2.Grounds for making order

      3. 3.Timing of application for order

      4. 4.Duration of order

      5. 5.Interim bankruptcy restrictions order

      6. 6.(1) This paragraph applies to a case in which both…

      7. 7.Bankruptcy restrictions undertaking

      8. 8.A reference in an enactment to a person in respect…

      9. 9.(1) A bankruptcy restrictions undertaking— (a) shall come into force…

      10. 10.Effect of annulment of bankruptcy order

      11. 11.Where a bankruptcy order is annulled under section 261, 263D…

      12. 12.Registration

    11. SCHEDULE 5

      Powers of Trustee in Bankruptcy

      1. Part I Powers Exercisable with Sanction

        1. 1.Power to carry on any business of the bankrupt so…

        2. 2.Power to bring, institute or defend any action or legal…

        3. 2A.Power to bring legal proceedings under section 339, 340 or…

        4. 3.Power to accept as the consideration for the sale of…

        5. 4.Power to mortgage or pledge any part of the property…

        6. 5.Power, where any right, option or other power forms part…

        7. 6.Power to refer to arbitration, or compromise on such terms…

        8. 7.Power to make such compromise or other arrangement as may…

        9. 8.Power to make such compromise or other arrangement as ay…

      2. Part II General Powers

        1. 9.Power to sell any part of the property for the…

        2. 9A.Power to refer to arbitration, or compromise on such terms…

        3. 9B.Power to make such compromise or other arrangement as may…

        4. 10.Power to give receipts for any money received by him,…

        5. 11.Power to prove, rank, claim and draw a dividend in…

        6. 12.Power to exercise in relation to any property comprised in…

        7. 13.Power to deal with any property comprised in the estate…

      3. Part III Ancillary Powers

        1. 14.For the purposes of, or in connection with, the exercise…

    12. SCHEDULE 6

      The Categories of Preferential Debts

      1. Category 1: Debts due to Inland Revenue

        1. 1.Sums due at the relevant date from the debtor on…

        2. 2.Sums due to the relevant date from the debtor in…

      2. Category 2: Debts due to Customs and Excise

        1. 3.Any value added tax which is referable to the period…

        2. 3A.Any insurance premium tax which is referable to the period…

        3. 3B.Any landfill tax which is referable to the period of…

        4. 3C.Any climate change levy which is referable to the period…

        5. 3D.Any aggregates levy which is referable to the period of…

        6. 4.The amount of any car tax which is due at…

        7. 5.Any amount which is due— (a) by way of general…

        8. 5A.The amount of any excise duty on beer which is…

        9. 5B.Any amount which is due by way of lottery duty…

        10. 5C.Any amount which is due by way of air passenger…

      3. Category 3: Social security contributions

        1. 6.All sums which on the relevant date are due from…

        2. 7.All sums which on the relevant date have been assessed…

      4. Category 4: Contributions to occupational pension schemes, etc.

        1. 8.Any sum which is owed by the debtor and is…

      5. Category 5: Remuneration, etc., of employees

        1. 9.So much of any amount which— (a) is owed by…

        2. 10.An amount owed by way of accrued holiday remuneration, in…

        3. 11.So much of any sum owed in respect of money…

        4. 12.So much of any amount which— (a) is ordered (whether…

      6. Interpertation for Category 5

        1. 13.(1) For the purposes of paragraphs 9 to 12, a…

        2. 14.(1) This paragraph relates to a case in which a…

        3. 15.Without prejudice to paragraphs 13 and 14—

      7. Category 6: Levies on coal and steel production

        1. 15A.Any sums due at the relevant date from the debtor…

      8. Orders

        1. 16.An order under paragraph 9 or 12—

    13. SCHEDULE 7

      Insolvency Practitioners Tribunal

      1. Panels of members

        1. 1.(1) The Secretary of State shall draw up and from…

      2. Remuneration of members

        1. 2.The Secretary of State may out of money provided by…

      3. Sittings of Tribunal

        1. 3.(1) For the purposes of carrying out their functions in…

      4. Procedure of Tribunal

        1. 4.(1) Any investigation by the Tribunal shall be so conducted…

    14. SCHEDULE 8

      Provisions Capable of Inclusion in Company Insolvency Rules

      1. Courts

        1. 1.Provision for supplementing, in relation to the insolvency or winding…

        2. 2.(1) Provision for regulating the practice and procedure of any…

      2. Notices, etc.

        1. 3.Provision requiring notice of any proceedings in connection with or…

        2. 4.Provision with respect to the form, manner of serving, contents…

        3. 5.Provision specifying the persons to whom any notice is to…

      3. Registration of voluntary arrangements

        1. 6.Provision for the registration of voluntary arrangements approved under Part…

      4. Provisional liquidator

        1. 7.Provision as to the manner in which a provisional liquidator…

      5. Conduct of insolvency

        1. 8.Provision with respect to the certification of any person as,…

        2. 9.The following provision with respect to meetings of a company’s…

        3. 10.(1) Provision as to the functions, membership and proceedings of…

        4. 11.Provision as to the manner in which any requirement that…

        5. 12.Provision as to the debts that may be proved in…

        6. 13.Provision with respect to the manner of the distribution of…

        7. 14.Provision which, with or without modifications, applies in relation to…

        8. 14A.Provision about the application of section 176A of this Act…

        9. 14B.Administration

      6. Financial provisions

        1. 15.Provision as to the amount, or manner of determining the…

        2. 16.Provision with respect to the manner in which moneys received…

        3. 16A.Provision enabling the Secretary of State to set the rate…

        4. 17.Provision as to the fees, costs, charges and other expenses…

        5. 18.Provision as to the fees, costs, charges and other expenses…

        6. 19.Provision as to the fees, costs, charges and other expenses…

      7. Information and records

        1. 20.Provision requiring registrars and other officers of courts having jurisdiction…

        2. 21.Provision requiring a creditor, member or contributory, or such a…

        3. 22.Provision as to the manner in which public examinations under…

        4. 23.Provision imposing requirements with respect to— (a) the preparation and…

        5. 24.Provision requiring the person who is the supervisor of a…

        6. 25.Provision as to the manner in which the liquidator of…

        7. 26.Provision imposing requirements in connection with the carrying out of…

      8. General

        1. 27.Provision conferring power on the Secretary of State or the…

        2. 28.Provision conferring a discretion on the court.

        3. 29.Provision conferring power on the court to make orders for…

        4. 30.Provision making non-compliance with any of the rules a criminal…

        5. 31.Provision making different provision for different cases or descriptions of…

    15. SCHEDULE 9

      Provisions Capable of Inclusion in Individual Insolvency Rules

      1. Courts

        1. 1.Provision with respect to the arrangement and disposition of the…

        2. 2.Provision for enabling a registrar in bankruptcy of the High…

        3. 3.Provision for regulating the practice and procedure of any court…

        4. 4.Provision conferring rights of audience, in courts exercising jurisdiction for…

      2. Notices, etc.

        1. 5.Provision requiring notice of any proceedings under Parts 7A to…

        2. 6.Provision with respect to the form, manner of serving, contents…

        3. 7.Provision specifying the persons to whom any notice under Parts…

      3. Debt relief orders

        1. 7A.Provision as to the manner in which the official receiver…

        2. 7B.Provision as to the manner in which any requirement that…

        3. 7C.Provision modifying the application of Part 7A in relation to…

      4. Debt relief restrictions orders and undertakings

        1. 7D.Provision about debt relief restrictions orders, interim orders and undertakings,…

      5. Register of debt relief orders and debt relief restrictions orders etc

        1. 7E.Provision about the register required to be maintained by section…

      6. Registration of voluntary arrangements

        1. 8.Provision for the registration of voluntary arrangements approved under Part…

        2. 8A.Official receiver acting on voluntary arrangement

      7. Interim receiver

        1. 9.Provision as to the manner in which an interim receiver…

      8. Receiver or manager

        1. 10.Provision as to the manner in which the official receiver…

      9. Administration of individual insolvency

        1. 11.Provision with respect to the certification of the appointment of…

        2. 12.The following provision with respect to meetings of creditors—

        3. 13.Provision as to the functions, membership and proceedings of a…

        4. 14.Provision as to the manner in which any requirement that…

        5. 15.Provision as to the manner in which any requirement imposed…

        6. 16.Provision as to the terms and conditions that may be…

        7. 17.Provision as to the debts that may be proved in…

        8. 18.Provision with respect to the manner of the distribution of…

        9. 19.Provision modifying the application of Parts VIII to XI of…

      10. Financial provisions

        1. 20.Provision as to the amount, or manner of determining the…

        2. 21.Provision with respect to the manner in which moneys received…

        3. 21A.Provision enabling the Secretary of State to set the rate…

        4. 22.Provision as to the fees, costs, charges and other expenses…

        5. 23.Provision as to the fees, costs, charges and other expenses…

      11. Information and records

        1. 24.Provision requiring registrars and other officers of courts having jurisdiction…

        2. 25.Provision requiring a creditor or a committee established under section…

        3. 26.Provision as to the manner in which public examinations under…

        4. 27.Provision imposing requirements with respect to— (a) the preparation and…

        5. 28.Provision requiring the person who is the supervisor of a…

        6. 29.Provision as to the manner in which the trustee of…

        7. 29A.Bankruptcy restrictions orders and undertakings

      12. General

        1. 30.Provision conferring power on the Secretary of State to make…

        2. 31.Provision conferring a discretion on the court.

        3. 32.Provision making non-compliance with any of the rule a criminal…

        4. 33.Provision making different provision for different cases including different provision…

    16. SCHEDULE 10

      Punishment of Offences under this Act

      1. Note:. . . . . . . . . ….

    17. SCHEDULE 11

      Transitional Provisions and Savings

      1. Part I Company Insolvency and Winding Up

        1. Administration orders

          1. 1.(1) Where any right to appoint an administrative receiver of…

        2. Receivers and managers (England and Wales)

          1. 2.(1) In relation to any receiver or manager of a…

        3. Receivers (Scotland)

          1. 3.(1) In relation to any receiver appointed under section 467…

        4. Winding up already in progress

          1. 4.(1) In relation to any winding up which has commenced,…

        5. Statement of affairs

          1. 5.(1) Where a winding up by the court in England…

        6. Provisions relating to liquidator

          1. 6.(1) This paragraph applies as regards the liquidator in the…

        7. Winding up under supervision of the court

          1. 7.The repeals in Part II of Schedule 10 the Insolvency…

        8. Saving for power to make rules

          1. 8.(1) Paragraphs 4 to 7 are without prejudice to the…

        9. Setting aside of preferences and other transactions

          1. 9.(1) Where a provision in Part VI of this Act…

      2. Part II Individual Insolvency

        1. Bankruptcy (general)

          1. 10.(1) Subject to the following provisions of this Part of…

          2. 11.(1) In relation to any such case as is mentioned…

          3. 12.Transactions entered into before the appointed day have effect on…

        2. Discharge from old bankruptcy

          1. 13.(1) Where a person— (a) was adjudged bankrupt before the…

        3. Provisions relating to trustee

          1. 14.(1) This paragraph applies as regards the trustee in the…

        4. Copyright

          1. 15.(1) Where a person who is adjudged bankrupt on a…

        5. Second bankruptcy

          1. 16.(1) Sections 334 and 335 of this Act apply with…

        6. Setting aside of preferences and other transactions

          1. 17.(1) A performance given, assignment made or other transaction entered…

        7. Bankruptcy offences

          1. 18.(1) Where a bankruptcy order is made under this Act…

        8. Power to make rules

          1. 19.(1) The preceding provisions of this Part of this Schedule…

      3. Part III Transitional Effect of Part XVI

        1. 20.(1) A transaction entered into before the appointed day shall…

      4. Part IV Insolvency Practitioners

        1. 21.Where an individual began to act as an insolvency practitioner…

      5. Part V General Transitional Provisions and Savings

        1. Interpretation for this Part

          1. 22.In this Part of this Schedule, “the former enactments” means…

        2. General saving for past acts and events

          1. 23.So far as anything done or treated as done under…

        3. Periods of time

          1. 24.Where any period of time specified in a provision of…

        4. Internal cross-references in this Act

          1. 25.Where in any provision of this Act there is a…

        5. Punishment of offences

          1. 26.(1) Offences committed before the appointed day under any provision…

        6. References elsewhere to the former enactments

          1. 27.(1) A reference in any enactment, instrument or document (whether…

        7. Saving for power to repeal provisions in section 51

          1. 28.The Secretary of State may by order in a statutory…

        8. Saving for Interpretation Act 1978 ss. 16, 17

          1. 29.Nothing in this Schedule is to be taken as prejudicing…

    18. SCHEDULE 12

      Enactments Repealed

    19. SCHEDULE 13

      Consequential Amendments of Companies Act 1985

      1. Part I Internal and Other Section References Amended or Re-amended

      2. Part II Amendement of Part XXVI (Interpretation)

        1. In Part XXVI of the Companies Act, after section 735,…

    20. SCHEDULE 14

      Consequential Amendments of other Enactments