PROVINCIAL INSOLVENCY ACT, 1920

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Provincial Insolvency 
1920: Act V 
CONTENTS 
1. Short title and extent. 
2. Definitions. 
PART I 
Constitution and Powers of Court 
3. Insolvency jurisdiction. 
4. Power of Court to decide all questions arising in insolvency. 
5. General Powers of Courts. 
PART II 
Proceedings from Act of Insolvency to Discharge 
6. Acts of insolvency. 
7. Petition and adjudication. 
8. Exemption of corporation, etc., from insolvency proceedings. 
9. Conditions on which creditor may petition. 
 10. Conditions on which debtor may petition. 
 11. Court to which petition shall be presented. 
 12. Verification of petition. 
 13. Contents of petition. 
 14. Withdrawal of petitions. 
 15. Consolidation of petitions. 
 16. Power to change carriage of proceedings. 
 17. Continuance of proceedings on death of debtor. 
 18. Procedure for admission of petition. 
 19. Procedure on admission of petition. 
 20. Appointment of interim receiver. 
 21. Interim proceedings against debtor. 
THE PROVINCIAL INSOLVENCY ACT, 1920 
(V of 1920) 
 
 22. Duties of debtors. 
 23. Release of debtor. 
 24. Procedure at hearing. 
 25. Dismissal of petition. 
 26. Award of compensation. 
 27. Order of adjudication. 
 28. Effect of an order of adjudication. 
 29. Stay of pending proceeding. 
 30. Publication of order of adjudication. 
 31. Protection order. 
 32. Power to arrest after adjudication. 
 33. Schedule of creditors. 
 34. Debts provable under the Act. 
 35. Power to annul adjudication of insolvency. 
 36. Power to cancel one of concurrent orders of adjudication. 
 37. Proceedings on annulment. 
 38. Compositions and schemes of arrangement. 
 39. Order on approval. 
 40. Power to re-adjudge debtor insolvent. 
 41. Discharge. 
 42. Cases in which Court must refuse an absolute discharge. 
 43. Adjudication to be annulled on failure to apply for discharge. 
 44. Effect of order of discharge. 
PART III 
Administration of Property 
 45. Debts payable at the future time. 
 46. Mutual dealing and set-off. 
 47. Secured creditors. 
 48. Interest. 
 49. Mode of proof. 
 50. Disallowance and reduction of entries in schedule. 
 51. Restriction of rights of creditor under execution. 
 52. Duties of Court executing decree as to property taken in execution. 
 53. Avoidance of voluntary transfer. 
 54. Avoidance of preference in certain cases. 
54-A.  By whom petitions for annulment may be made. 
 55. Protection of bona fide transactions. 
 56. Appointment of receiver. 
 57. Power to appoint Official Receivers. 
 58. Powers of Court if no receiver appointed. 
 59. Duties and powers of receiver. 
59-A. Power to require information regarding insolvent’s property. 
 60. Special provisions in regard to immoveable property. 
 61. Priority of debts. 
 62. Calculation of dividends. 
 63. Right of creditor who has not proved debt before declaration of a 
dividend. 
 64. Final dividend. 
 65. No suit for dividend. 
 66. Management by and allowance to insolvent. 
 67. Right of insolvent to surplus. 
67-A. Committee of inspection. 
 68. Appeal to Court against receiver. 
PART IV 
Penalties 
 69. Offences by debtors. 
 70. Procedure on charge under section 69. 
 71. Criminal liability after discharge or composition. 
 72. Undischarged insolvent obtaining credit. 
 73. Disqualifications of insolvent. 
PART V 
Summary Administration 
 74. Summary administration. 
PART VI 
Appeals 
 75. Appeals. 
PART VII 
Miscellaneous 
 76. Costs. 
 77. Courts to be auxiliary to each other. 
 78. Limitation. 
 79. Power to make rules. 
 80. Delegation of powers to Official Receivers. 
 81. Power of Provincial Government to bar application of certain provisions 
to certain Courts. 
 82. [Omitted] 
 83. Repeals. 
SCHEDULE I 
SCHEDULE II 
SCHEDULE III 
[Repealed] 
 
TEXT 
1
THE PROVINCIAL INSOLVENCY ACT, 1920 
2
(V of 1920) 
[5 March 1920] 
An 
Act 
to consolidate and amend the Law relating to Insolvency  
3
[* * *], as administered by 
Courts having jurisdiction 
4
[in the Punjab]. 
WHEREAS it is expedient to consolidate and amend the law relating to 
insolvency 
5
[* * *], as administered by Courts having jurisdiction 
6
[in the Punjab]; It is 
hereby enacted as follows:– 
1. Short title and extent .– (1) This Act may be called the Provincial Insolvency 
Act, 1920. 
 (2) 
7
[It extends to the whole of the Punjab.] 
2. Definitions.– (1) In this Act, unless there is anything repugnant in the subject 
or context,– 
(a) "creditor" includes a decree -holder, "debt" includes a j udgment-debt, 
and "debtor" includes a judgment-debtor; 
8
[(b) "District Court" means the principal Civil Court of original jurisdiction in 
any area;] 
9
[(bb) “Government” means Government of the Punjab;] 
(c) "prescribed" means prescribed by rules made under this Act; 
(d) "property" includes any property over which or the profits of which any 
person has a disposing power which he may exercise for his own 
benefit; 
                                                           
1For Statement of Objects and Reasons, see Gazette of India, 1918, Part -V, p. 63; for Report of Select Committee, see ibid., 
1919, Part-V, p. 119; and ibid., 1920, Part-V. p. 9; and for Proceedings i n Council, see ibid., 1918, Part-VI, pp. 761 and 1322, 
and ibid., 1920, Part -VI, pp. 15 and 389. This Act was published in the Gazette of India, Part -IV, dated 28.2.1920, pp. 11-24 
and also published in the Punjab Gazette, Part-IV, dated 5.3.1920, pp. 15-28. 
2The Act of the Indian Legislative Council received the assent of the Governor General on the 25 th February, 1920 and 
published in the Gazette of India, Part-IV, dated 28.2.1920, pp. 11-24 and also published in the Punjab Gazette, Part -IV, dated 
5.3.1920, pp. 15-28. 
3Omitted the words “in British India” by the Government of India (Adaptation of Indian Laws) Order, 1937, published in the 
Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 3 and Schedule. 
4Substituted for the words “outsi de the Karachi Division” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), 
published in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 3. 
5Omitted the words “in British India” by the Adaptation of Central Acts and Ordinances Order, 1949, vide Notification No. G.G.O. 
4, dated 25 th March, 1949, published in the Gazette of Pakistan (Extraordinary), dated March 28, 1949, pp. 223-283, s. 3 and 
Schedule. 
6Substituted for the words “outside the Karachi Division” by t he Provincial Insolvency (Amendment) Act 2012 (IX of 2012), 
published in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 3. 
7Substituted by the Act ibid., s. 4. 
8Substituted by the Act ibid., clause (i) of s. 5. 
9Substituted by the Act ibid., clause (ii) of s. 5. 
(e) "secured creditor" means a person holding a mortgage, charge or lien 
on the property of the debtor or any part thereof as a security for a debt 
due to him from the debtor; and 
(f) "transfer of property" includes a transfer of any interest in property and 
the creation of any charge upon property. 
(2) Words and expressions used in this Act and define d in the Code of 
Civil Procedure, 1908, and not hereinbefore defined shall have the same meanings 
as those respectively attributed to them by the said Code. 
PART I 
Constitution and Powers of Court 
3. Insolvency jurisdiction.– (1) The District Courts shall be the Courts having 
jurisdiction under this Act: 
Provided that the 
1
[
2
[Government]] may, by notification in the 
3
[Official 
Gazette], invest any Court subordinate to a District Court with jurisdiction in any 
class of cases, and any Court so invested shall within the local limits of its jurisdiction 
have concurrent jurisdiction with the District Court under this Act. 
(2) For the purposes of this Act, a Court of Small Causes shall be deemed 
to be subordinate to the District Court. 
4. Power of Court to decide all questions arising in insolvency.– (1) Subject 
to the provisions of this Act the Court shall have full power to decide all questions 
whether of title or priority, or of any nature whatsoever, and whether involving 
matters of law or of fact, which may arise in any case of insolvency coming within the 
cognizance of the Court, or which the Court may deem it expedient or necessary to 
decide for the purpose of doing complete justice or making a complete distribution of 
property in any such case. 
(2) Subject t o the provisions of this Act and notwithstanding anything 
contained in any other law for the time being in force, every such decision shall be 
final and binding for all purposes as between, on the one hand, the debtor and the 
debtor's estate and, on the other hand, all claimants against him or it and all persons 
claiming through or under them or any of them. 
(3) Where the Court does not deem it expedient or necessary to decide 
any question of the nature referred to in sub -section (1), but has reason to beli eve 
that the debtor has a saleable interest in any property, the Court may without further 
inquiry sell such interest in such manner and subject to such conditions as it may 
think fit. 
5. General powers of Courts .– (1) Subject to the provisions of this Act , the 
Court, in regard to proceedings under this Act, shall  have the same  powers and 
                                                           
1Substituted for the words “Local Government” by the Government of India (Adaptation of Indian Laws) Order, 1937, published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
2Substituted for the words “Provincial Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published 
in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 6. 
3Substituted for the w ords “local official Gazette” by the Government of India (Adaptation of Indian Laws) Order, 1937, 
published in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
shall follow the same procedure as it has and follows in the exercise of original civil 
jurisdiction. 
(2) Subject as aforesaid, 
1
[Lahore High Court] and District Courts,  in 
regard to proceedings under this Act in Courts subordinate to them, shall have the 
same powers and shall follow the same procedure as they respectively have and 
follow in regard to civil suits. 
PART II 
Proceedings from Act of Insolvency to Discharge 
Acts of insolvency 
6. Acts of insolvency .– A debtor commits an act of insolvency in each of the 
following cases, namely:– 
(a) if, in 
2
[the Punjab], he makes a transfer of all or substantially all his 
property to a third person for the benefit of his creditors generally; 
(b) if, in 
3
[the Punjab], he makes a transfer of his property or of any part 
thereof with intent to defeat or delay his creditors; 
(c) if, in 
4
[the Punjab], he makes any transfer of his property, or of any part 
thereof, which would, under this  or any other enactment for the time 
being in force, be void as a fraudulent preference if he were adjudged 
an insolvent; 
(d) if, with intent to defeat or delay his creditors,–  
(i) he departs or remains out of 
5
[the Punjab]; 
(ii) he departs from his dwelling-house or usual place of business or 
otherwise absents himself, 
(iii) he secludes himself so as to deprive his creditors of the means 
of communicating with him; 
(e) if any of his property has been sold in execution of the decree of any 
Court for the payment of money; 
(f) if he petitions to be adjudged an insolvent under the provisions of this 
Act; 
(g) if he gives notice to any of his creditors that he has suspended, or that 
he is about to suspend, payment of his debts; or 
(h) if he is imprisoned in execu tion of the decree of any Court for the 
payment of money. 
Explanation.– For the purposes of this section the act of an agent may be the act of 
the principal. 
                                                           
1Substituted for the words “High Co urts” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 7. 
2Substituted for the words “Pakistan or elsewhere” by the Act ibid., clause (i) of s. 8. 
3Ibid. 
4Ibid. 
5Substituted for the word “Pakistan” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the Punjab 
Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, clause (ii) of s. 8. 
Petition 
7. Petition and adjudication .– Subject to the conditions specified in this Act, if 
a debt or commits an act of insolvency, an insolvency petition may be presented 
either by a creditor or by the debtor, and the Court may on such petition make an 
order (hereinafter called an order of adjudication) adjudging him an insolvent. 
Explanation.– The presentation of a petition by the debtor shall be deemed an act of 
insolvency within the meaning of this section, and on such petition the Court may 
make an order of adjudication. 
8. Exemption of corporation, etc., from insolvency proceedings .– No 
insolvency petition shall be presented against any corporation or against any 
association or company registered under any enactment for the time being in force. 
9. Conditions on which creditor may petition .– (1) A creditor shall not be 
entitled to present an insolvency petition against a debtor unless– 
(a) the debt owing by the debtor to the creditor, or, if two or more creditors 
join in the petition, the aggregate amount of debts owing to such 
creditors amounts to five hundred rupees, and 
(b) the debt is a liquidated  sum payable either immediately or at some 
certain future time, and  
(c) the act of insolvency on which the petition is grounded has occurred 
within three months before the presentation of the petition. 
(2) If the petitioning creditor is a secured creditor , he shall in his petition 
either state that he is willing to relinquish his security for the benefit of the creditors in 
the event of the debtor being adjudged insolvent, or give an estimate of the value of 
the security. In the latter case, he may be admi tted as a petitioning creditor to the 
extent of the balance of the debt due to him after deducting the value so estimated in 
the same way as if he were an unsecured creditor. 
10. Conditions on which debtor may petition .– (1) A debtor shall not be 
entitled to present an insolvency petition, unless he is unable to pay his debts and– 
(a) his debts amount to five hundred  rupees; or 
1
[(aa) * * * * * * * * *   ] 
(b) he is under arrest or imprisonment in execution of the decree of any 
Court for the payment of money; or 
(c) an order of attachment in execution of such a decree has been made, 
and is subsisting, against his property. 
(2) A debtor in respect of whom an order of adjudication 
2
[
1
[made]] has 
been annulled, owing to his failure to apply, or to prosecute an  application for his 
                                                           
1Inserted by the Punjab Relie f of Indebtedness Act, 1934 (VII of 1934), dated 8 th April, 1934, published in the Punjab Gazette, 
Part-I, dated April 12, 1935,  pp. 354-359, s. 2. 
2Substituted by the Insolvency (Amendment) Act, 1927 (XI of 1927), published in the Gazette of India, dated  September 10, 
1927, pp. 27-28, s. 4. 
discharge, shall not be entitled to present an insolvency petition without the leave of 
the Court by which the order of adjudication was annulled. Such Court shall not grant 
leave unless it is satisfied either that the debtor was preve nted by any reasonable 
cause from presenting or prosecuting his application, as the case may be, or that the 
petition is founded on facts substantially different from those contained in the petition 
on which the order of adjudication was made. 
11. Court to which petition shall be presented.– Every insolvency petition shall 
be presented to a Court having jurisdiction under this Act in any local area in which 
the debtor ordinarily resides or carries on business, or personally works for gain, or if 
he has been arrested or imprisoned, where he is in custody: 
Provided that no objection as to the place of presentment shall be allowed by 
any Court in the exercise of appellate or revisional jurisdiction unless such objection 
was taken in the Court by which the peti tion was heard at the earliest possible 
opportunity, and unless there has been a consequent failure of justice. 
12. Verification of petition .– Every insolvency petition shall be in writing and 
shall be signed and verified in the manner prescribed by the Code of Civil Procedure, 
1908
2
, for signing and verifying plaints. 
13. Contents of petition .– (1) Every insolvency petition presented by a debtor 
shall contain the following particulars, namely:– 
(a) a statement that the debtor is unable to pay his debts; 
(b) the place where he ordinarily resides or carries on business or 
personally works for gain, or, if he has been arrested or imprisoned, the 
place where he is in custody; 
(c) the Court (if any) by whose order he has been arrested or imprisoned, 
or by which an order has been made for the attachment of his property, 
together with particulars of the decree in respect of which any such 
order has been made; 
(d) the amount and particulars of all  pecuniary claims against him, 
together with the names and residences  of his creditors so far as they 
are known to, or can by the exercise of reasonable care and diligence 
be ascertained by, him; 
(e) the amount and particulars of all his property, together with– 
(i) a specification of the value of all such property not consisting of money; 
(ii) the place or places at which any such property is to be found; and 
(iii) a declaration of his willingness to place at the disposal of the Court of 
such property save in so far as it includes such particulars (not being 
his books of account) as are exempted by the Code of Civil Procedure, 
1908, or by any other enactment for the time being in force from liability 
to attachment and sale in execution of a decree; 
                                                                                                                                                                                     
1Substituted for the words “whether made under the Insolvency (Karachi Division) Act, or” by the Provincial Insolvency 
(Amendment) Act 2012 (IX of 2012), published in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-
40135, s. 9. 
2V of 1908. 
(f) a statement whether the debtor has on any previous occasion filed a 
petition to be adjudged an insolvent, and (where such a petition has 
been filed)– 
(i) if such petition has been dismissed, the reasons for such dismissal, or 
(ii) if the debtor has been adjudged an insolvent, concise particulars of the 
insolvency, including a s tatement whether any previous adjudication 
has been annulled and, if so, the grounds therefor. 
(2) Every insolvency petition presented by a creditor or creditors shall set 
forth the particulars regarding the debtor specified in clause (b) of sub -section (1), 
and shall also specify– 
(a) the act of insolvency committed by such debtor, together with the date 
of its commission; and 
(b) the amount and particulars of his or their pecuniary claim or claims 
against such debtor. 
14. Withdrawal of petitions.– No petition, whether presented by a debtor or by a 
creditor, shall be withdrawn without the leave of the Court. 
15. Consolidation of petitions .– Where two or more insolvency petitions are 
presented against the same debtor, or where separate petitions are presente d 
against joint debtors, the Court may consolidate the proceedings or any of them, on 
such terms as the Court thinks fit. 
16. Power to change carriage of proceedings .– Where the petitioner does not 
proceed with due diligence on his petition the Court may s ubstitute as petitioner any 
other creditor to whom the debtor may be indebted in the amount required by this Act 
in the case of a petitioning creditor. 
17. Continuance of proceedings on death of debtor .– If a debtor by or against 
whom an insolvency petition has been presented dies, the proceedings in the matter 
shall, unless the Court otherwise orders, be continued so far as may be necessary 
for the realisation and distribution of the property of the debtor. 
18. Procedure for admission of petition.– The procedure laid down in the Code 
of Civil Procedure, 1908
1
, with respect to the admission of plaints, shall, so far as it is 
applicable, be followed in the case of insolvency petitions. 
19. Procedure on admission of petition .– (1) Where an insolvency petition is 
admitted, the Court shall make an order fixing a date for hearing the petition. 
(2) Notice of the order under sub -section (1) shall be given to creditors in 
such manner as may be prescribed. 
(3) Where the debtor is not the petitioner, notice of the orde r under sub -
section (1) shall be served on him in the manner provided for the service of 
summons. 
                                                           
1V of 1908. 
20. Appointment of interim receiver .– The Court when making an order 
admitting the petition may, and where the debtor is the petitioner ordinarily shall, 
appoint an interim receiver of the property of the debtor or of any part thereof, and 
may direct him to take immediate possession thereof or of any part thereof, and the 
interim receiver shall thereupon have such of the powers conferrable on a receiver 
appointed under the Code of Civil Procedure, 1908
1
, as the Court may direct. If an 
interim receiver is not so appointed, the Court may make such appointment at any 
subsequent time before adjudication, and the provisions of 
2
[this section] shall apply 
accordingly. 
21. Interim proceedings against debtor .– At the time of making an order 
admitting the petition or at any subsequent time before adjudication, the Court may, 
either of its own motion or on the application of any creditor, make one or more of 
the following orders, namely:– 
(1) order the debtor to give reasonable security for his appearance until 
final orders are made upon the petition, and direct that, in default of giving such 
security, he shall be detained in the civil prison; 
(2) order the attachment by a ctual seizure of the whole or any part of the 
property in the possession or under the control of the debtor, other than such 
particulars (not being his books of account) as are exempted by the Code of Civil 
Procedure, 1908
3
, or by any other enactment for t he time being in force from liability 
to attachment and sale in execution of a decree; 
(3) order a warrant to issue with or without bail for the arrest of the debtor, 
and direct either that he be detained in the civil prison until the disposal of the 
petition, or that he be released on such terms as to security as may be reasonable 
and necessary: 
Provided that an order under clause (2) or clause (3) shall not be made unless 
the Court is satisfied that the debtor, with intent to defeat or delay his creditors  or to 
avoid any process of the Court,– 
(i) has absconded or has departed from the local limits of the jurisdiction 
of the Court, or is about to abscond or to depart from such limits, or is 
remaining outside them, or 
(ii) has failed to disclose or has conc ealed, destroyed, transferred or 
removed from such limits, or is about to conceal, destroy, transfer or 
remove from such limits, any documents likely to be of use to his 
creditors in the course of the hearing, or any part of his property other 
than such particulars as aforesaid. 
22. Duties of debtors.– The debtor shall on the making of an order admitting the 
petition produce all books of account, and shall at any time thereafter give such 
inventories of his property, and such lists of his creditors and debt ors and of the 
debts due to and from them, respectively, submit to such examination in respect of 
his property or his creditors, attend at such times before the Court or receiver, 
                                                           
1V of 1908. 
2Substituted for the words “this sub -section” by the Repealing and Amending Act 1939 (XXXIV of 1939), published in the 
Gazette of India, Part-IV, dated September 30, 1939, pp. 204-207, s. 2 and First Schedule. 
3V of 1908. 
execute such instruments, and generally do all such acts and things in relat ion to his 
property as may be required by the Court or receiver, or as may be prescribed. 
23. Release of debtor.– (1) At the time of making an order admitting the petition 
or at any subsequent time before adjudication, the Court may, if the debtor is under  
arrest or imprisonment in execution of the decree of any Court for the payment of 
money, order his release on such terms as to security as may be reasonable and 
necessary. 
 (2) The Court may at any time order any person who has been released 
under this se ction to be re -arrested and re -committed to the custody from which he 
was released. 
 (3) At the time of making any order under this section, the Court shall 
record in writing its reasons therefor. 
24. Procedure at hearing.– (1) On the day fixed for the hea ring of the petition, or 
on any subsequent day to which the hearing may be adjourned, the Court shall 
require proof of the following matters, namely:– 
(a) that the creditor or the debtor, as the case may be, is entitled to 
present the petition: 
Provided that, where the debtor is the petitioner, he shall, for the purpose of 
proving his inability to pay his debts, be required to furnish only such proof as to 
satisfy the Court that there are prima facie grounds for believing the same and the 
Court, if and when  so satisfied, shall not be bound to hear any further evidence 
thereon; 
(b) that the debtor, if he does not appear on a petition presented by a 
creditor, has been served with notice of the order admitting the petition; 
and 
(c) that the debtor has committed  the act of insolvency alleged against 
him. 
(2) The Court shall also examine the debtor, if he is present, as to his 
conduct, dealings and property in the presence of such creditors as appear at the 
hearing, and the creditors shall have the right to question the debtor thereon. 
(3) The Court shall, if sufficient cause is shown, grant time to the debtor or 
to any creditor to produce any evidence which appears to it to be necessary for the 
proper disposal of the petition. 
(4) A memorandum of the substance of the examination of the debtor and 
of any other oral evidence given shall be made by the Judge, and shall form part of 
the record of the case. 
25. Dismissal of petition .– (1) In the case of a petition presented by a creditor, 
where the Court is not satisfie d with the proof of his right to present the petition or of 
the service on the debtor of notice of the order admitting the petition, or of the 
alleged act of insolvency, or is satisfied by the debtor that he is able to pay his debts, 
or that for any other sufficient cause no order ought to be made, the Court shall 
dismiss the petition. 
(2) In the case of a petition presented by a debtor, the Court shall dismiss 
the petition if it is not satisfied of his right to present the petition. 
26. Award of compensat ion.– (1) Where a petition presented by a creditor is 
dismissed under sub -section (1) of section 25, and the Court is satisfied that the 
petition was frivolous or vexatious, the Court may, on  the application of the debtor, 
award against such creditor such  amount, not exceeding one thousand rupees, as it 
deems a reasonable compensation to the debtor for the expense or injury 
occasioned to him by the petition and the proceedings thereon, and such amount 
may be realised as if it were a fine. 
(2) An award unde r this section shall bar any suit for compensation in 
respect of such petition and the proceedings thereon. 
Order of Adjudication 
27. Order of adjudication.– (1) If the Court does not dismiss the petition, it shall  
make an order of adjudication, and shall specify in such order the period within which 
the debtor shall apply for his discharge. 
 (2) The Court may, if sufficient cause is shown, extend the period within 
which the debtor shall apply for his discharge, and in that case shall publish notice of 
the order in such manner as it thinks fit. 
28. Effect of an order of adjudication .– (1) On the making of an order of 
adjudication, the insolvent shall aid to the utmost of his power in the realisation of his 
property and the distribution of the proceeds among his creditors. 
(2) On the making of an order of adjudication the whole of the property of 
the insolvent shall vest in the Court or in a receiver as hereinafter provided, and shall 
become divisible among the creditors, and thereafter, except as provided by  this Act, 
no creditor to whom the insolvent is indebted in respect of any debt provable under 
this Act shall during the pendency of the insolvency proceedings have any remedy 
against the property of the insolvent in respect of the debt, or commence any su it or 
other legal proceeding, except with the leave of the Court and on such terms as the 
Court may impose. 
(3) For the purposes of sub -section (2), all goods being, at the date of the 
presentation of the petition on which the order is made, in the possess ion, order or 
disposition of the insolvent in his trade or business, by the consent and permission of 
the true owner, under such circumstances that he is the reputed owner thereof, shall 
be deemed to be the property of the insolvent. 
(4) All property which is acquired by or devolves on the insolvent after the 
date of an order of adjudication and before his discharge shall forthwith vest in the 
Court or receiver, and the provisions of sub-section (2) shall apply in respect thereof. 
(5) The property of the in solvent for the purposes of this section shall not 
include any property (not being books of account) which is exempted by the Code of 
Civil Procedure, 1908
1
, or by any other enactment for the time being in force from 
liability to attachment and sale in execution of a decree. 
                                                           
1V of 1908. 
(6) Nothing in this section shall affect the power of any secured creditor to 
realise or otherwise deal with his security, in the same manner as he would have 
been entitled to realise or deal with it if this section had not been passed. 
(7) An order of adjudication shall relate back to, and take effect from, the 
date of the presentation of the petition on which it is made. 
29. Stay of pending proceeding.– Any Court in which a suit or other proceeding 
is pending against a debtor shall, on  proof that an order of adjudication has been 
made against him under this Act, either stay the proceeding, or allow it to continue 
on such terms as such Court may impose. 
30. Publication of order of adjudication .– Notice of an order of adjudication 
stating the  name, address and description of the insolvent, the date of the 
adjudication, the period within which the debtor shall apply for  his discharge, and the 
Court by which the adjudication is made, shall be published in the 
1
[Official Gazette] 
and in such other manner as may be prescribed. 
Proceedings consequent on order of adjudication 
31. Protection order .– (1) Any insolvent in respect of whom an order of 
adjudication has been made may apply to the Court for protection, and the Court 
may on such application make an order for the protection of the insolvent from arrest 
or detention. 
(2) A protection order may apply either to all the debts of the debtor, or to 
any of them as the Court may think proper, and may commence and take effect at 
and for such time as the Court may direct, and may be revoked or renewed as the 
Court may think fit. 
(3) A protection order shall protect the insolvent from being arrested or 
detained in prison for any debt to which such order applies, and any insolvent 
arrested or detained  contrary to the terms of such an order shall be entitled to his 
release: 
Provided that no such order shall operate to prejudice the rights of any 
creditor in the event of such order being revoked or the adjudication annulled. 
(4) Any creditor shall be ent itled to appear and oppose the grant of a 
protection order. 
32. Power to arrest after adjudication .– At any time after an order of 
adjudication has been made, the Court may, if it has reason to believe on the 
application of any creditor or the receiver, that the debtor has absconded or departed 
from the local limits of its jurisdiction with intent to avoid any obligation which has 
been, or might be, imposed on him by or under this Act, order a warrant to issue for 
his arrest, and on his appearing or being b rought before it, may, if satisfied that he 
was absconding or had departed with such intent, order his release on such terms as 
to security as may be reasonable or necessary, or if such security is not furnished, 
                                                           
1Substituted for the words “local official Gazette” by the Government of India (Adaptation of Indian Laws) Order, 1937, 
published in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations.  
direct that he shall be detained in the civ il prison for a period which may extend to 
three months. 
33. Schedule of creditors .– (1) When an order of adjudication has been made 
under this Act, all persons alleging themselves to be creditors of the insolvent in 
respect of debts provable under this Ac t shall tender proof of their respective debts 
by producing evidence of  the amount and particulars thereof, and the Court shall, by 
order, determine the persons who have proved themselves to be creditors of the 
insolvent in respect of such debts, and the amount of such debts, respectively, and 
shall frame a schedule of such persons and debts: 
Provided that, if, in the opinion of the Court, the value of any debt is incapable 
of being fairly estimated, the Court may make an order to that effect, and thereupo n 
the debt shall not be included in the schedule. 
(2) A copy of every such schedule shall be posted in the Court-house. 
(3) Any creditor of the insolvent may, at any time before the discharge of 
the insolvent, tender proof of his debt and apply to the Cour t for an order directing 
his name to be entered in the schedule as a creditor in respect of any debt provable 
under this Act, and not entered in the schedule, and the Court, after causing notice 
to be served on the 
1
[receiver] and the other creditors who h ave proved their debts, 
and hearing their objections (if any) shall comply with or reject the application. 
34. Debts provable under the Act .– (1) Debts which have been excluded from 
the schedule on the ground that their value is incapable of being fairly e stimated and 
demands in the nature of unliquidated damages arising otherwise than by reason of 
a contract or a breach of trust shall not be provable under this Act. 
(2) Save as provided by sub-section (1), all debts and liabilities, present or 
future, certain or contingent, to which the debtor is subject when he is adjudged an 
insolvent, or to which he may become subject before his discharge by reason of any 
obligation incurred before the date of such adjudication, shall be deemed to be debts 
provable under this Act. 
Annulment of adjudication 
35. Power to annul adjudication of insolvency .– Where, in the opinion of the 
Court, a debtor ought not to have been adjudged insolvent, or where it is proved to 
the satisfaction of the Court that the debts of the insolv ent have been paid in full, the 
Court shall, on the application of the debtor, or of any other person interested, by 
order in writing, annul the adjudication 
2
[and the Court may, of its own motion or on 
application made by the receiver or any creditor, ann ul any adjudication made on the 
petition of a debtor who was, by reason of the provisions of sub-section (2) of section 
10, not entitled to present such petition.] 
36. Power to cancel one of concurrent orders of adjudication.– If, in any case 
in which an o rder of adjudication has been made, it shall be proved to the Court by 
                                                           
1Substituted for the word “insolvent” by the Provincial Insolvency (Amendment) Act, 1926 (XXXIX of 1926), published in the 
Punjab Gazette, Part-IV, dated October 1, 1926, pp. 200-201, s. 2. 
2Added by the Insolvency (Amend ment) Act, 1927 (XI of 1927), published in the Gazette of India, dated September 10, 1927, 
pp. 27-28, s. 5. 
which such order was made that insolvency proceedings are pending in another 
Court against the same debtor, and that the property of the debtor can be more 
conveniently distributed by such other Court, the Court may annul the adjudication or 
stay all proceedings thereon. 
37. Proceedings on annulment .– (1) Where an adjudication is annulled, all 
sales and dispositions of property and payments duly made, and all acts theretofore 
done, by the Court or receiver, shall be valid; but, subject as aforesaid, the property 
of the debtor who was adjudged insolvent shall vest in such person as the Court may 
appoint, or, in default of any such appointment, shall revert to the debtor to the 
extent of his right or interest therein on such conditions (if any) as the Court may, by 
order in writing, declare. 
(2) Notice of every order annulling an adjudication shall be published in the 
1
[Official Gazette] and in such other manner as may be prescribed. 
Compositions and schemes of arrangement 
38. Compositions and schemes of arrangement.– (1) Where a debtor, after the 
making of an order of adjudication, submits a proposal for a composition in 
satisfaction of his debts, or a proposal for a scheme of arrangement of  his  affairs, 
the Court shall fix a date for the consideration of the proposal, and shall issue a 
notice to all creditors in such manner as may be prescribed. 
(2) If, on the consideration of the proposal, a majority in number and three -
fourths in value of  all the creditors whose debts are proved and who are present in 
person or by pleader, resolve to accept the proposal, the same shall be deemed to 
be duly accepted by the creditors. 
(3) The debtor may at the meeting amend the terms of his proposal if the 
amendment is, in the opinion of the Court, calculated to benefit the general body of 
creditors. 
(4) Where the Court is of opinion, after hearing the report of the receiver, if 
a receiver has been appointed, and after considering any objections which may be 
made by or on behalf of any creditor, that the terms of the proposal are not 
reasonable or are not calculated to benefit the general body of creditors, the Court 
shall refuse to approve the proposal. 
(5) If any facts are proved on proof of which the Court would be required 
either to refuse, suspend or attach conditions to the debtor's discharge, the Court 
shall refuse to approve the proposal unless it provides reasonable security for 
payment of not less than six annas in the rupee on all the unsecured debts  provable 
against the debtor's estate. 
(6) No composition or scheme shall be approved by the Court which does 
not provide for the payment in priority to other debts of all debts directed to be so 
paid in the distribution of the property of an insolvent. 
(7) In any other case the Court may either approve or refuse to approve 
the proposal. 
                                                           
1Substituted for the words “local official Gazette” by the Government of India (Adaptation of Indian Laws) Order, 1937, 
published in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
39. Order on approval .– If the Court approves the proposal, the terms shall be 
embodied in an order of the Court, and 
1
[*  *  *  *  *  *  *  *  *  *   *], the order of 
adjudication shall be annulled, and the provisions of section 37 shall apply, and the 
composition or scheme shall be binding on all the creditors 
2
[so far as relates to any 
debt due to them from the debtor and provable under this Act]. 
40. Power to re-adjudge debtor insolvent.– If default is made in the payment of 
any instalment due in pursuance of the composition or scheme, or if it appears to the 
Court that the composition or scheme cannot proceed without injustice or undue 
delay, or that the approval of the Court was obtained by fraud, the Court may, if it 
thinks fit, re -adjudge the debtor insolvent and annul the composition or scheme but 
without prejudice to the validity of any transfer or payment duly made or of anything 
duly done under or in pursuance of t he composition or scheme. When a debtor is re -
adjudged insolvent under this sub-section, all debts provable in other respects which 
have been contracted before the date of such re-adjudication shall be provable in the 
insolvency. 
Discharge 
41. Discharge.– (1) A debtor may, at any time after the order of adjudication, and 
shall, within the period specified by the Court, apply to the Court for an order of 
discharge, and the Court shall fix a day, notice whereof shall be given in such 
manner as may be prescrib ed, for hearing such application, and any objections 
which may be made thereto. 
(2) Subject to the provisions of this section, the Court may, after 
considering the objections of any creditor and, where a receiver has been appointed, 
the report of the receiver– 
(a) grant or refuse an absolute order of discharge; or 
(b) suspend the operation of the order for a specified time; or 
(c) grant an order of discharge subject to any conditions with respect to 
any earnings or income which may afterwards become due to 
insolvent, or with respect to his after-acquired property. 
42. Cases in which Court must refuse an absolute discharge .– (1) The Court 
shall refuse to grant an absolute order of discharge under section 41 on proof of any 
of the following facts namely– 
(a) that the insolvent’s assets are not of a value equal to eight annas in the 
rupee on the amount of his unsecured liabilities, unless he satisfies the 
Court that the fact that the assets are not of a value equal to eight 
annas in the rupee on the amount of his unsecured liabilities has arisen 
from circumstances for which he cannot justly be held responsible; 
(b) that the insolvent has omitted to keep such books of account as are 
usual and proper in the business carried on by him and as sufficiently 
                                                           
1Omitted the words “the Court shall frame a schedule in accordance with the provisions of section 33” by the Provincial 
Insolvency (Amendment) Act, 1935 (X of 1935), published in the Gazette of India, Part IV, dated October 5, 1935, p. 21, clause 
(i) of s. 2. 
2Substituted for the words “entered in the said schedule so far as relates to any debts entered therein” by the Act ibid., clause 
(ii) of s. 2. 
disclose hi s business transactions and financial position within the 
three years immediately preceding his insolvency; 
(c) that the insolvent has continued to trade after knowing himself to be 
insolvent; 
(d) that the insolvent has contracted any debt provable under t his Act 
without having at the time of contracting it any reasonable or probable 
ground of expectation (the burden of proving which shall lie on him) 
that he would be able to pay it; 
(e) that the insolvent has failed to account satisfactorily for any loss o f 
assets or for any deficiency of assets to meet his liabilities; 
(f) that the insolvent has brought on, or contributed to, his insolvency by 
rash and hazardous speculations, or by unjustifiable extravagance in 
living, or by gambling, or by culpable neglect of his business affairs; 
(g) that the insolvent has, within three months preceding the date of the 
presentation of the petition, when unable to pay his debts as they 
became due, given an undue preference to any of his creditors; 
(h) that the insolvent ha s on any previous occasion been adjudged an 
insolvent or made a composition or arrangement with his creditors; 
(i) that the insolvent has concealed or removed his property or any part 
thereof, or has been guilty of any other fraud or fraudulent breach of 
trust. 
(2) For the purposes of this section, the report of the receiver shall be 
deemed to be evidence; and the Court may presume the correctness of any 
statement contained therein. 
(3) The powers of suspending, and of attaching conditions to, an 
insolvent's discharge may be exercised concurrently. 
43. Adjudication to be annulled on failure to apply for discharge .– (1) If the 
debtor does not appear on the day fixed for hearing his application for discharge or 
on such subsequent day as the Court may direct, o r if the debtor does not apply for 
an order of discharge within the period specified by the Court, the order of 
adjudication shall be annulled, and the provisions of section 37 shall apply 
accordingly. 
 (2) Where a debtor has been released from custody und er the provisions 
of this Act, and the order of adjudication is annulled under sub -section (1), the Court 
may, if it thinks fit, re -commit the debtor to his former custody, and the officer 
incharge of the prison to whose custody such debtor is so re -committed shall receive 
such debtor into his custody according to such re -commitment, and thereupon all 
processes which were in force against the person of such debtor at the time of such 
release as aforesaid shall be deemed to be still in force against him as i f no order of 
adjudication had been made. 
44. Effect of order of discharge.– (1) An order of discharge shall not release the 
insolvent from– 
(a) any debt due to the 
1
[Federal Government or a Provincial Government]; 
(b) any debt or liability incurred by means of any fraud or fraudulent breach 
of trust to which he was a party; 
(c) any debt or liability in respect of which he has obtained forbearance by 
any fraud to which he was a party; or 
(d) 
2
[any liability under an order for the maintenance of a wife or child.] 
 (2) Save as otherwise provided by sub -section (1), an order of discharge 
shall release the insolvent from all debts provable under this Act. 
 (3) An order of discharge shall not release any person who, at the date of 
the presentation of the petition, was a partner or co-trustee with the insolvent, or was 
jointly bound or had made any joint contract with him or any person who was surety 
for him. 
PART III 
Administration of Property 
Method of proof of debts 
45. Debts payable at the future time .– A credi tor may prove for a debt not 
payable when the debtor is adjudged an insolvent as if it were payable presently, 
and may receive dividends equally with the other creditors, deducting therefrom only 
a rebate of interest at the rate of six per centum per annum  computed from the 
declaration of a dividend to the time when the debt would have become payable, 
according to the terms on which it was contracted. 
46. Mutual dealing and set -off.– Where there have been mutual dealings 
between an insolvent and a creditor proving or claiming to prove a debt under this 
Act, an account shall be taken of what is due from the one party to the other in 
respect of such mutual dealings, and the sum due from the one party shall be set off 
against any sum due from the other party, a nd the balance of the account, and no 
more, shall be claimed or paid on either side respectively. 
47. Secured creditors .– (1) Where a secured creditor realises his security, he 
may prove for the balance due to him, after deducting the net amount realised. 
(2) Where a secured creditor relinquishes his security for the general 
benefit of the creditors, he may prove for his whole debt. 
(3) Where a secured creditor does not either realise or relinquish his 
security, he shall, before being entitled to have his d ebt entered in the schedule, 
state in his proof the particulars of his security, and the value at which he assesses 
it, and shall be entitled to receive a dividend only in respect of the balance due to 
him after deducting the value so assessed. 
(4) Where a  security is so valued, the Court may at any time before 
realisation redeem it on payment to the creditor of the assessed value. 
                                                           
1Substituted for the word “Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 10. 
2Substituted by the Federal Laws (Revision and Declaration) Ordinanc e, 1981 (XXVII of 1981), published in the Gazette of 
Pakistan (Extraordinary), Part I, dated July 8,1981, pp. 345-475, s. 3 and Second Schedule. 
(5) Where a creditor, after having valued his security, subsequently 
realises it, the net amount realised shall be substituted for the amount of any 
valuation previously made by the creditor, and shall be treated in all respects as an 
amended valuation made by the creditor. 
(6) Where a secured creditor does not comply with the provisions of this 
section, he shall be excluded from all share in any dividend. 
48. Interest.– (1) On any debt or sum certain whereon interest is not reserved or 
agreed for, and which is overdue when the debtor is adjudged an insolvent, and 
which is provable under this Act, the creditor may prove for interes t at a rate not 
exceeding six per centum per annum,– 
(a) if the debt or sum is payable by virtue of a written instrument at a 
certain time, from the time when such debt or sum was payable to the 
date of such adjudication; or 
(b) if the debt or sum is payab le otherwise, from the time when a demand 
in writing has been made giving the debtor notice that interest will be 
claimed from the date of the demand until the time of payment to the 
date of such adjudication. 
(2) Where a debt which has been proved under t his Act includes interest 
or any pecuniary consideration in lieu of interest, the interest or consideration shall, 
for the purposes of dividend, be calculated at a rate not exceeding six per centum 
per annum, without prejudice to the right of a creditor to  receive out of the debtor's 
estate any higher rate of interest to which he may be entitled after all the debts 
proved have been paid in full. 
49. Mode of proof .– (1) A debt may be proved under this Act by delivering, or 
sending by post in a registered letter, to the Court an affidavit verifying the debt. 
 (2) The affidavit shall contain or refer to a statement of account showing 
the particulars of the debt, and shall specify the vouchers (if any) by which the same 
can be substantiated. The Court may at any  time call for the production of the 
vouchers. 
50. Disallowance and reduction of entries in schedule .– (1) Where the 
receiver thinks that a debt has been improperly entered in the schedule, the Court 
may, on the application of the receiver and after notice  to the creditor, and such 
inquiry (if any) as the Court thinks necessary, expunge such entry or reduce the 
amount of the debt. 
(2) The Court may also, after like inquiry, expunge an entry or reduce the 
amount of a debt upon the application of a creditor w here no receiver has been 
appointed, or where the receiver declines to interfere in the matter or, in the case of 
a composition or scheme, upon the application of the debtor. 
Effect of insolvency on antecedent transactions 
51. Restriction of rights of cred itor under execution.– (1) Where execution of 
a decree has issued against the property of a debtor, no person shall be entitled to 
the benefit of the execution against the receiver except in respect of assets realised 
in the course of the execution by sale  or otherwise before the date of the admission 
of the petition. 
(2) Nothing in this section shall affect the rights of a secured creditor in 
respect of the property against which the decree is executed. 
(3) A person who in good faith purchases the property  of a debtor under a 
sale in execution shall in all cases acquire a good title to it against the receiver. 
52. Duties of Court executing decree as to property taken in execution .– 
Where execution of a decree has issued against any  property of a debtor whi ch is 
saleable in execution and before the sale thereof notice is given to the Court 
executing the decree that an insolvency petition by or against the debtor has been 
admitted, the Court shall, on application, direct the property, if in the possession of 
the Court, to be delivered to the receiver, but the costs of the suit in which the decree 
was made and of the execution shall be a first charge on the property so delivered, 
and the receiver may sell the property or an adequate part thereof for the purpose  of 
satisfying the charge. 
53. Avoidance of voluntary transfer .– Any transfer of property not being a 
transfer made before and in consideration of marriage or made in favour of a 
purchaser or incumbrancer in good faith and for valuable consideration shall,  if the 
transferor is adjudged insolvent 
1
[on a petition presented]  within two years after the 
date of the transfer, be voidable as against the receiver and may be annulled by the 
Court. 
54. Avoidance of preference in certain cases .– (1) Every transfer of  property, 
every payment made, every obligation incurred, and every judicial proceeding taken 
or suffered by any person unable to pay his debts as they become due from his own 
money in favour of any creditor, with a view of giving that creditor a preferenc e over 
the other creditors, shall, if such person is adjudged insolvent on a petition presented 
within three months after the date thereof, be deemed fraudulent and void as against 
the receiver and shall be annulled by the Court. 
(2) This section shall not  affect the rights of any person who in good faith 
and for valuable consideration has acquired a title through or under a creditor of the 
insolvent. 
2
[54-A. By whom petitions for annulment may be made .– A petition for the 
annulment of any transfer under section 53, or of any transfer, payment, obligation or 
judicial proceeding under section 54, may be made by the receiver or, with the leave 
of the Court, by any creditor who has proved his debt and who satisfies the Court 
that the receiver has been requested and has refused to make such petition.] 
55. Protection of bona fide transactions.– Subject to the foregoing provisions 
of this Act with respect to the effect of insolvency on an execution, and with respect 
                                                           
1Inserted by Insolvency Law (Amendment) Act, 1930 (X of 1930), published in the Punjab Gazette, Part -IV, dated April 11, 
1930, p. 147. 
2Inserted by the Provincial Insolvency (Amendment) Act, 1926 (XXXIX of 1926), published in the Punjab Gazette, Part-IV, dated 
October 1, 1926, pp. 200-201, s. 3. 
to the avoidance of certain transfers and prefere nces, nothing in this Act shall 
invalidate in the case of an insolvency– 
(a) any payment by the insolvent to any of his creditors; 
(b) any payment or delivery to the insolvent; 
(c) any transfer by the insolvent for valuable  consideration; or 
(d) any contr act or dealing by or with the insolvent for valuable 
consideration: 
Provided that any such transaction takes place before the date of the order of 
adjudication, and that the person with whom such transaction takes place has not at 
the time notice of the presentation of any insolvency petition by or against the debtor. 
Realisation of Property 
56. Appointment of receiver .– (1) The Court may, at the time of the order of 
adjudication, or at any time afterwards, appoint a receiver for the property of the 
insolvent, and such property shall thereupon vest in such receiver. 
 (2) Subject to such conditions as may be prescribed, the Court may– 
(a) require the receiver to give such security as it thinks fit duly to account 
for what he shall receive in respect of the property; and 
(b) by general or special order, fix the amount to be paid as remuneration 
for the services of the receiver out of the assets of the insolvent. 
(3) Where the Court appoints a receiver, it may remove the person in 
whose possession or custody any such property as aforesaid is from the possession 
or custody thereof: 
 Provided that nothing in this section shall be deemed to authorise the Court to 
remove from the possession or custody of property any person whom the insolvent 
has not a present right so to remove. 
(4) Where a receiver appointed under this section– 
(a) fails to submit his accounts at such periods and in such form as the 
Court directs, or 
(b) fails to pay the balance due from him thereon as the Court directs, or 
(c) occasions loss to the property by his wilful default or gross negligence, 
the Court may direct his property to be attached and sold, and may 
apply the proceeds to make good any balance found to be due from 
him or any loss so occasioned by him. 
(5) The provisions of this sectio n shall apply, so far as may be, to interim 
receivers appointed under section 20. 
57. Power to appoint Official Receivers.– (1) The 
1
[
1
[Government]] may appoint 
such persons as it thinks fit (to be called "Official Receivers") to be receivers under 
this Act within such local limits as it may prescribe. 
                                                           
1Substituted for the words “Local Government” by the Government of Ind ia (Adaptation of Indian Laws) Order, 1937, published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
(2) Where any Official Receiver has been so appointed for the local limits 
of the jurisdiction of any Court having jurisdiction under this Act, he shall be the 
receiver for the purpose of every order appointi ng a receiver or an interim receiver 
issued by any such Court, unless the Court for special reasons otherwise directs. 
(3) Any sum payable under clause (b) of sub-section (2) of section 56 in 
respect of the services of an Official Receiver shall be credite d to such fund as the 
2
[
3
[Government]] may direct. 
(4) Every Official Receiver shall receive such remuneration out of the said 
fund or otherwise as the 
4
[
5
[Government]] may fix in this behalf, and no remuneration 
whatever beyond that so fixed shall be received by the Official Receiver as such. 
58. Powers of Court if no receiver appointed.– Where no receiver is appointed, 
the Court shall have all the rights of, and may exercise all the powers conferred on, a 
receiver under this Act. 
59. Duties and powers of receiver.– Subject to the provisions of this Act, the 
receiver shall, with all convenient speed, realise the property of the debtor and 
distribute dividends among the creditors entitled thereto, and for that purpose may– 
(a) sell all or any part of the property of the insolvent; 
(b) give receipts for any money received by him; 
and may, by leave of the Court, do all or any of the following things, 
namely:– 
(c) carry on the business of the insolvent so far as may be necessary for 
the beneficial winding up of the same; 
(d) institute, defend or continue any suit or other legal proceeding relating 
to the property of the insolvent; 
(e) employ a pleader or other agent to take any proceedings or do any 
business which may be sanctioned by the Court; 
(f) accept as the consideration for the sale of any property of the insolvent 
a sum of money payable at a future time subject to such stipulations as 
to security and otherwise as the Court thinks fit; 
(g) mortgage or pledge any part of the property of the insolvent for the  
purpose of raising money for the payment of his debts; 
(h) refer any dispute to arbitration, and compromise all debts, claims and 
liabilities, on such terms as may be agreed upon; and 
                                                                                                                                                                                     
1Substituted for the words “Provincial Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published 
in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 6. 
2Substituted for the words “Local Government” by the Government of India (Adaptation of Indian Laws) Order, 1937, published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
3Substituted for the words “Provincial Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published 
in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 6. 
4Substituted for the words “Local Government” by the Government of India (Adaptation of Indian Laws) Order, 1937, published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
5Substituted for the words “Provincial Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published 
in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 6. 
(i) divide in its existing form amongst the creditors, according to its  
estimated value, any property which, from its peculiar nature or other 
special circumstances, cannot readily or advantageously be sold. 
1
[59-A. Power to require information regarding insolvent’s property .– (1) The 
Court, if specially empowered in this beh alf by an order of the 
2
[
3
[Government]], or 
any officer of the Court so empowered by a like order, may, on the application of the 
receiver or any creditor who has proved his debt, at any time after an order of 
adjudication has been made, summon before it i n the prescribed manner any person 
known or suspected to have in his possession any property belonging to the 
insolvent, or supposed to be indebted to the insolvent, or any person whom the 
Court or such officer, as the case may be, may deem capable of givi ng information 
respecting the insolvent or his dealings or property, and the Court or such officer 
may require any such person to produce any documents in his custody or power 
relating to the insolvent or to his dealings or property.  
(2) If any person so summoned, after having been tendered a reasonable 
sum, refuses to come before the Court or such officer at the time appointed, or 
refuses to produce any such document, having lawful impediment made known to 
and allowed by the court or such officer, the Cou rt or such officer may, by warrant, 
cause him to be apprehended and brought up for examination.  
(3) The Court or such officer may examine any person so brought before it 
or him concerning the insolvent, his dealings or property, and such person may be 
represented by a legal practitioner.] 
60. Special provisions in regard to immoveable property .– (1) In any local 
area in which a declaration has been made under section 68 of the Code of Civil 
Procedure, 1908
4
, and is in force, no sale of immoveable property paying revenue to 
the Government or held or let for agricultural purposes shall be made by the 
receiver; but, after the other property of the insolvent has been realised, the Court 
shall ascertain– 
(a) the amount required to satisfy the debts proved under this Act after 
deducting the monies already received; 
(b) the immoveable property of the insolvent remaining unsold; and 
(c) the incumbra nces (if any) existing thereon; and shall forward a 
statement to the Collector containing the particulars aforesaid; an d 
thereupon the Collector shall proceed to raise the amount so required 
by the exercise of such of the powers conferred on him by paragraphs 
2 to 10 of the Third Schedule to the said Code as he thinks fit, and 
subject to the provisions of those paragraphs so far as they are 
applicable, and shall hold at the disposal of the Court all sums that may 
come to his hands by the exercise of such powers. 
                                                           
1Inserted by the Provincial Insolvency (Amendment) Act, 1926 (XXXIX of 1926), published in the Punjab Gazette, Part-IV, dated 
October 1, 1926, pp. 200-201, s. 4. 
2Substituted for the words “Local Government” by the Government of India (Adaptation of Indian La ws) Order, 1937, published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
3Substituted for the words “Provincial Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), p ublished 
in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 6. 
4V of 1908. 
(2)  Nothing in this Act shall be deemed to affect any provisions of any 
enactment for the time being in force pr ohibiting or restricting the execution of 
decrees or orders against immoveable property; and any such provisions shall be 
deemed to apply to the enforcement of an order of adjudication made under this Act 
as if it were such a decree or order. 
1
[
2
[(3) In particular and without prejudice to the generality of sub -section (2), 
when the whole or any part of the estate of an Insolvent consists of land, such land 
shall not be temporarily alienated by the receiver; but after the other property of the 
Insolvent has been realized the Court shall proceed in the manner provided in sub -
section (1), and the Collector shall thereupon proceed to raise the amount required 
by means of a temporary alienation in such form and for such period as may be 
legally permissible and as he thinks fit, and shall hold at the disposal of the Court all 
sums which may thereby come to his hands: 
Provided that such portions of the land shall be exempted from alienation as 
in the opinion of the Collector, having regard to the income of the judgm ent-debtor 
from all sources except such income as is dependent on the will of another person, 
is sufficient to provide for the maintenance of the insolvent and members of his 
family who are dependent on him, and such portion shall be deemed not to form par t 
of the estate under administration. 
Explanation.– For purposes of sub -section (3), “land” means land which is not 
occupied as the site of any building in a town or village and is occupied or has been 
let for agricultural purposes or for purposes sub -servient to agriculture or for pasture, 
and includes the sites of buildings and other structures on such land.]] 
Distribution of Property 
61. Priority of debts.– (1) In the distribution of the property of the insolvent, there 
shall be paid in priority to all other debts– 
(a) all debts due to the 
3
[Federal Government or Provincial Government or 
to a local government]; and 
(b) all salary or wages, not exceeding twenty rupees in all, of any clerk, 
servant or labourer in respect of service rendered to the insolvent  
during four months before the date of the presentation of the petition. 
(2) The debts specified in sub -section (1) shall rank equally between 
themselves, and shall be paid in full, unless the property of the insolvent is 
insufficient to meet them, in whic h case they shall abate in equal proportions 
between themselves. 
(3) Subject to the retention of such sums as may be necessary for the 
expenses of administration or otherwise, the debts specified in sub -section (1) shall 
be discharged forthwith in so far a s the property of the insolvent is sufficient to meet 
them. 
                                                           
1Added by the Provincial Insolvency (Punjab Amendment) Act, 1939 (III of 1939), published in the Punjab Government Gazette 
(Extraordinary), dated April 20, 1939, s. 2.   
2Added by the Provincial Insolvency (West Pakistan Amendment) Ordinance, 1959, published in the Gazette of West Pakistan 
(Extraordinary), dated March 25, 1959, pp. 199-200, s. 2.   
3Substituted for the words “Government or to any loca l authority” by the Provincial Insolvency (Amendment) Act 2012 (IX of 
2012), published in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 11. 
(4) In the case of partners, the partnership property shall be applicable in 
the first instance in payment of the partnership debts, and the separate property of 
each partner shall be applicable i n the first instance in payment of his separate 
debts. Where there is a surplus of the separate property of the partners, it shall be 
dealt with as part of the partnership property; and where there is a surplus of the 
partnership property, it shall be deal t with as part of the respective separate property 
in proportion to the rights and interests of each partner in the partnership property. 
(5) Subject to the provisions of this Act, all debts entered in the schedule 
shall be paid rateably according to the a mounts of such debts respectively and 
without any preference. 
(6) Where there is any surplus after payment of the foregoing debts, it 
shall be applied in payment of interest from the date on which the debtor is adjudged 
an insolvent at the rate of six per centum per annum on all debts entered in the 
schedule. 
62. Calculation of dividends .– (1) In the calculation of dividends, the receiver 
shall retain in his hands sufficient assets to meet– 
(a) debts provable under this Act and appearing, from the insolvent 's 
statements or otherwise, to be due to persons resident in places so 
distant that in the ordinary course of communication they have not had 
sufficient time to tender their proofs; 
(b) debts provable under this Act, the subject of claims not yet determined; 
(c) disputed proofs or claims; and 
(d) the expenses necessary for the administration of the estate or 
otherwise. 
(2) Subject to the provisions of sub -section (1), all money in hand shall be 
distributed as dividends. 
63. Right of creditor who has not pro ved debt before declaration of a 
dividend.– Any creditor who has not proved his debt before the declaration of any 
dividend or dividends shall be entitled to be paid, out of any money for the time being 
in the hands of the receiver, any dividend or dividen ds which he may have failed to 
receive before that money is applied to the payment of any future dividend or 
dividends; but he shall not be entitled to disturb the distribution of any dividend 
declared before his debt was proved by reason that he has not participated therein. 
64. Final dividend .– When the receiver has realised all the property of the 
insolvent or so much thereof as can, in the opinion of the Court, be realised without 
needlessly protracting the receivership, he shall declare a final dividen d; but before 
so doing, he shall give notice in manner prescribed to the persons whose claims to 
be creditors have been notified but not proved, that if they do not prove their claims 
within the time limited by the notice, he will proceed to make a final d ividend without 
regard to their claims. After the expiration of the time so limited, or if the Court, on 
application by any such claimant, grants him further time for establishing his claim, 
then on the expiration of such further time, the property of the insolvent shall be 
divided among the creditors entered in the schedule without regard to the claims of 
any other persons. 
65. No suit for dividend.– No suit for a dividend shall lie against the receiver; but 
where the receiver refuses to pay any dividend, the Court may, on the application of 
any creditor who is entered in the schedule, order him to pay it, and also to pay out 
of his own money interest thereon for the time that it is withheld, and the costs of the 
application. 
66. Management by and allowance  to insolvent.– (1) The Court may appoint 
the insolvent himself to superintend the management of the property of the insolvent 
or of any part thereof, or to carry on the trade (if any) of the insolvent for the benefit 
of the creditors, and in any other res pect to aid in administering the property in such 
manner and on such terms as the Court may direct. 
(2) The Court may, from time to time, make such allowance as it may think 
just to the insolvent out of his property for the support of himself and his famil y, or in 
consideration of his services if he is engaged in winding up his estate; but any such 
allowance may, at any time, be varied or determined by the Court. 
67. Right of insolvent to surplus.– The insolvent shall be entitled to any surplus 
remaining after payment in full of his creditors, with interest as provided by this Act, 
and of the expenses of the proceedings taken thereunder. 
 
1
[67-A. Committee of inspection .– (1) The court may, if it thinks fit, authorise the 
creditors who have proved their debt s to appoint a committee of inspection for the 
purpose of superintending the administration of the insolvent's property by the 
receiver.  
(2) The persons appointed to a committee of inspection shall be creditors 
who have proved their debts or persons holdi ng general powers -of-attorney from 
such creditors. 
(3) The committee of inspection shall have such powers of control over the 
proceedings of the receiver as may be prescribed.] 
Appeal to Court against receiver 
68. Appeal to Court against receiver .– If the insolvent or any of the creditors or 
any other person is aggrieved by any act or decision of the receiver, he may apply to 
the Court, and the Court may confirm, reverse or modify the act or decision 
complained of, and make such order as it thinks just: 
 Provided that no application under this section shall be entertained after the 
expiration of twenty-one days from the date of the act or decision complained of. 
PART IV 
Penalties 
69. Offences by debtors .– If a debtor, whether before or after the making of an  
order of adjudication,– 
(a) wilfully fails to perform the duties imposed on him by section 22 or to 
deliver up possession of any part of his property which is divisible 
                                                           
1Inserted by the Provincial Insolvency (Amendment) Act, 1926 (XXXIX of 1926), published in the Punjab Gazette, Part-IV, dated 
October 1, 1926, pp. 200-201, s. 5. 
among his creditors under this Act, and which is for the time being in 
his possession or under his control to the Court or to any person 
authorised by the Court to take possession of it, or 
(b) fraudulently with intent to conceal the state of his affairs or to defeat the 
objects of this Act,– 
(i) has destroyed or otherwise wilfully prevente d or purposely 
withheld the production of any document relating to such of his 
affairs as are subject to investigation under this Act, or 
(ii) has kept or caused to be kept false books, or 
(iii) has made false entries in or withheld entries from or wilfull y 
altered or falsified any document relating to such of his affairs as 
are subject to investigation under this Act, or 
(c) fraudulently with intent to diminish the sum to be divided among his creditors 
or to give an undue preference to any of his creditors,– 
(i) has discharged or concealed any debt due to or from him, or 
(ii) has made away with, charged, mortgaged or concealed any part 
of his pr operty of any kind whatsoever,  he shall be punishable 
on conviction 
1
[* * *] with imprisonment which may extend t o one 
year. 
 
2
[70. Procedure on charge under section 69 .– Where the Court is satisfied, after 
such preliminary inquiry, if any, as it thinks necessary, that there is ground for 
inquiring into any offence referred to in section 69 and appearing to have been  
committed by the insolvent, the Court may record a finding to that effect and make a 
complaint of the offence in writing to a Magistrate of the first class having jurisdiction, 
and such Magistrate shall deal with such complaint in the manner laid down in the 
Code of Criminal Procedure, 1898
3
.]  
71. Criminal liability after discharge or composition .– Where an insolvent has 
been guilty of any of the offences specified in section 69, he shall not be exempt 
from being proceeded against therefor by reason that he has obtained his discharge 
or that a composition or scheme of arrangement has been accepted or approved. 
72. Undischarged insolvent obtaining credit .– (1) An undischarged insolvent 
obtaining credit to the extent of fifty rupees or upwards from any perso n without 
informing such person that he is an undischarged insolvent shall, on conviction by a 
Magistrate, be punishable with imprisonment for a term which may extend to six 
months, or with fine, or with both. 
(2) Where the Court has reason to believe that  an undischarged insolvent 
has committed the offence referred to in sub -section (1), the Court, after making any 
                                                           
1Repealed the words “by the Court” by the Repealing Act, 1927 (XII of 1927), published in the Gazette of India, Part -IV, dated 
September 10, 1927, pp. 29-37, s. 2 and Schedule. 
2Substituted by the Insolvency (Amendment) Act, 1926 (IX of 1926), assented by the Governor General on 26.2.1926 , s. 11. 
Later on, amended by the Repealing and Amending Act, 1927 (X of 1927), published in the Gazette of India, Part -IV, dated 
April 16, 1927, pp. 19-25, s. 3 and Second Schedule. 
3V of 1898. 
preliminary inquiry that may be necessary, may send the case for trial to the nearest 
Magistrate of the first class, and may send the accused i n custody or take sufficient 
security for his appearance before such Magistrate; and may bind over any person to 
appear and give evidence on such trial. 
73. Disqualifications of insolvent .– (1) Where a debtor is adjudged or re -
adjudged insolvent under this  Act, he shall, subject to the provisions of this section, 
be disqualified from– 
(a) being appointed or acting as a Magistrate; 
(b) being elected to any office of any 
1
[local government] where the 
appointment to such office is by election or holding or exe rcising any 
such office to which no salary is attached; and 
(c) being elected or sitting or voting as member of any local authority. 
(2) The disqualifications which an insolvent is subject to under this section 
shall be removed, and shall cease if– 
(a) the order of adjudication is annulled under section 35, or 
(b) he obtains from the Court an order of discharge, whether absolute or 
conditional, with a certificate that his insolvency was caused by 
misfortune without any misconduct on his part. 
 (3) The Court may grant or refuse such certificate as it thinks fit, but 
any order of refusal shall be subject to appeal. 
PART V 
Summary Administration 
74. Summary administration .– When a petition is presented by or against a 
debtor, if the Court is satisfied by affidavit or otherwise that the property of the debtor 
is not likely to exceed in value 
2
[
3
[five hundred rupees]], the Court may make an 
order that the debtor's estate be administered in a summary manner, and thereupon 
the provisions of this Act shall be subject to the following modifications, namely:– 
(i) unless the Court otherwise directs, no notice required under this Act, 
shall be published in the 
4
[Official Gazette]; 
(ii) on the admission of a petition by a debtor, the property of the debtor 
shall vest in the Court as a receiver; 
(iii) at the hearing of the petition, the Court shall inquire into the debts and 
assets of the debtor, and determine the same by order in writing, and it 
                                                           
1Substituted for the words “local authority” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 12. 
2Substituted for the words “five hundred rupees” by the Punjab Relief of Indebtedness Act, 1934 (VII of 1934) and published in  
the Punjab Gazette, Part-I, dated April 12, 1935, pp. 354-359, s. 4. 
3The words “two thousand rupees” substituted by the Punj ab Relief of Indebtedness Act,  1934 (VII of 1934), s. 4, repealed by 
the Provincial Insolvency (West Pakistan Amendment) Ordinance,  1959, vide Notification No.  Leg.3(8)/59, dated 25 th March, 
1959, published in the Gazette of West Pakistan (Extraordinary), dated March 25, 1959, pp. 199-200, s. 3 and Schedule. 
4Substituted for the words “local official Gazette” by the Government of India (Adaptation of Indian Laws) Order, 1937, 
published in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
shall not be necessary to frame a schedule under the provisions of 
section 33; 
(iv) the property of the debtor shall be realised with all reasonable dispatch 
and thereafter, when practicable, distributed in a single dividend; 
(v) the debtor shall apply for his discharge within six months from the date 
of adjudication; and 
(vi) such other modifications as may be prescribed with the view of saving 
expense and simplifying procedure: 
Provided that the Court may at any time direct that the ordinary procedure 
provided for in this Act shall be followed in regard to the debtor's estate, and 
thereafter the Act shall have effect accordingly. 
PART VI 
Appeals 
75. Appeals.– (1) The debtor, any creditor, the receiver or any other person 
aggrieved by a decision come to or an order made in the exercise of insolvency 
jurisdiction by a Court subordinate  to a District Court may appeal to the District 
Court, and the order of the District Court upon such appeal shall be final: 
Provided that 
1
[Lahore High Court], for the purpose of satisfying itself that an 
order made in any appeal decided by the District Co urt was according to law, may 
call for the case and pass such order with respect thereto as it thinks fit: 
Provided, further, that any such person aggrieved by a decision of the District 
Court on appeal from a decision of a subordinate Court under section 4 may appeal 
to 
2
[Lahore High Court] on any of the grounds mentioned in sub-section (1) of section 
100 of the Code of Civil Procedure, 1908
3
. 
(2) Any such person aggrieved by any such decision or order of a District 
Court as is specified in Schedule I, com e to or made otherwise than in appeal from 
an order made by a subordinate Court, may appeal to 
4
[Lahore High Court]. 
(3) Any such person aggrieved by any other order made by a District Court 
otherwise than in appeal from an order made by a subordinate Cour t may appeal to 
5
[Lahore High Court] by leave of the District Court or of 
6
[Lahore High Court]. 
(4) The periods of limitation for appeals to the District Court and to 
7
[Lahore High Court] under this section shall be thirty days and ninety days, 
respectively. 
PART VII 
                                                           
1Substituted for the words “the High Court” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 13. 
2Ibid. 
3V of 1908. 
4Substituted for the words “the High Court” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 13. 
5Ibid. 
6Ibid. 
7Ibid. 
Miscellaneous 
76. Costs.– The costs of any proceeding under this Act, including the costs of 
maintaining a debtor in the civil prison, shall, subject to any rules made under this 
Act, be in the discretion of the Court in which the proceeding is had. 
77. Courts to be auxiliary to each other .– All Courts having jurisdiction in 
insolvency and the officers of such Courts respectively shall severally act in aid of 
and be auxiliary to each other in all matters of insolvency, and an order of a Court 
seeking aid with a request to another of the said Courts shall be deemed sufficient to 
enable the latter Court to exercise, in regard to the matters directed by the order, 
such jurisdiction as either of such Courts could exercise in regard to similar matters  
within their respective jurisdictions. 
78. Limitation.– (1) The provisions of sections 5 and 12 of the Limitation Act, 
1908
1
, shall apply to appeals and applications under this Act, and for the purpose of 
the said section 12, a decision under section 4 shall be deemed to be a decree. 
(2) Where an order of adjudication has been annulled under this Act, in 
computing the period of limitation prescribed for any suit or application for the 
execution of a decree (other than a suit or application in respect of which the leave of 
the Court was obtained under sub -section (2) of section 28) which might have been 
brought or made but for the making of an order of adjudication under this Act, the 
period from the date of the order of adjudication to the date of the order of annulment 
shall be excluded: 
Provided that nothing in this section shall apply to a suit or application in 
respect of a debt provable but not proved under this Act. 
79. Power to make rules .– 
2
[(1) 
3
[Lahore High Court] may, with the previous 
sanction of the 
4
[Government], make rules for carrying into effect the provisions of 
this Act.] 
 (2) In particular and without prejudice to the foregoing power, such rules 
may provide– 
(a) for the appointment and remuneration of receivers (other than Official 
Receivers), the audit of the accounts of all receivers and the costs of 
such audit, 
(b) for meetings of creditors, 
(c) for the procedure to be followed where the debtor is a firm, 
5
[* ] 
                                                           
1V of 1908. 
2Substituted by the Government of India (Adaptation of Indian Laws) Order, 1937, published in the Gazette of India 
(Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Schedule. 
3Substituted for the words “the High Court” by the Provincial Insolvency (Amend ment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 14. 
4Substituted for the words “Provincial Government” by the Act ibid. 
5Omitted the word “and” by the Provincial Insolvency (Amendme nt) Act, 1926 (XXXIX of 1926), published in the Punjab 
Gazette, Part-IV, dated October 1, 1926, pp. 200-201, s. 6. 
(d) for the procedure to be followed in the case of estates to be 
administered in a summary manner,
1
[and 
(e)  for any matter which is to be or may be prescribed.]  
(3) All rules made under this section shall be published 
2
[* * *] in 
3
[Official 
Gazette], 
4
[* * * *], and shall, on such publication, have effect as if 
enacted in this Act. 
80. Delegation of powers to Official Receivers .– (1) 
5
[Lahore High Court], with 
the like sanction, may from time to time direct that, in any matters in respect of which 
jurisdiction is given to the Court by this Act, the Official Receiver shall, subjec t to the 
directions of the Court, have all or any of the following powers, namely:– 
(a) 
6
[* * * * * * * * *   ] 
(b) to frame schedules and to admit or reject proofs of creditors; 
(c) 
7
[* * * * * * * * *   ] 
(d) 
8
[* * * * * * * * *   ] 
(e) to make interim orders in any case of urgency; and  
(f) to hear and determine any unopposed or ex parte application. 
(2) Subject to the appeal to the Court provided for by section 68, any order 
made or act done by the Official Receiver in the exercise of the said 
powers shall be deemed the order or act of the Court. 
81. Power of 
9
[Provincial Government ] to bar application of certain 
provisions to certain Courts.– 
10
[the Government], 
11
[*  *  *  * ], may, by notification 
in the 
12
[Official Gazette], declare that any of the prov isions of this Act specified in 
Schedule II shall not apply to insolvency proceedings in any Court or Courts having 
                                                           
1Inserted by the Act ibid. 
2Omitted the words “in the Gazette of India or” by the Government of India (Adaptation of Indian Laws) Order, 1937 , published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Schedule. 
3Substituted for the words “local official Gazette” by the Order ibid., s. 4 and Table of General Adaptations. 
4Omitted the words “as the case may be” by the Order ibid. 
5Substituted for the words “the High Court” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 15. 
6Omitted by the Provincial Insolvency (Amendment) Act, 1926 (XXXIX of 1926), published in the Punjab Gazette, Part-IV, dated 
October 1, 1926, pp. 200-201, s. 7. 
7Ibid. 
8Ibid. 
9Substituted for the words “Local Government” by the Government of India (Adaptation of Indian Laws) Order, 1937 , published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
10Substituted for the words “Any Provincial Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), 
published in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, clause (i) of s. 16. 
11Omitted the words “with the previous sanction of the Governor General in Council” by the Devolution Act, 1920 (XXXVIII of 
1920), published in the Punjab Gazette, Part IV, dated September 24, 1920, pp. 127-153, s. 2 and Part I of the First Schedule. 
12Substituted for the words “local official Gazette” by the Government of India (Adaptation of Indian Laws) Order, 1937, 
published in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
jurisdiction under this Act in any part of the territories administered by 
1
[the 
Government]. 
82. 
2
[ * * * * * * * * *   ] 
83. Repeals.– (1) 
3
[ * * * * * * *   ] 
(2) Where in any enactment or instrument in force at the date of the 
commencement of this Act, reference is made to Chapter XX (of Insolvent 
Judgment-debtors) of the Code of Civil Procedure, 1877
4
, or of the Code of Civil 
Procedure, 1882
5
, or to any section of either of those Chapters, such reference shall, 
so far as may be practicable, be construed as applying to this Act or to the 
corresponding section thereof. 
 
 
 
 
 
 
                                                           
1Substituted for the words “such Provincial Government” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), 
published in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, clause (ii) of s. 16. 
2Omitted by the Act ibid., s. 17. 
3Repealed by the Repealing Act, 1927 (XII of 1927), published in the Gazette of India, Part -IV, dated September 10, 1927, pp. 
29-37, s. 2 and Schedule. 
4X of 1877. 
5XIV of 1882. 
SCHEDULE I 
[See section 75(2)] 
Decisions and Orders from which an appeal lies to 
1
[Lahore High Court] under 
section 75 (2). 
Section Nature of decision or order 
4 Decision of questions of title, priority, etc., arising in insolvency. 
25 Order dismissing a petition. 
26 Order awarding compensation. 
27 Order of adjudication. 
33 Orders regarding entries in the schedule. 
35 Order annulling adjudication. 
37 Order declaring the conditions on which the debtor's property shall 
revert to him on annulment of adjudication. 
41 Order on application for discharge. 
50 Order disallowing or reducing entries in the schedule. 
53 Order annulling a voluntary transfer. 
54 Decision that a transfer of property is a preference in favour of a 
creditor. 
69 2
[*        *          *            *          *           *            *          *    ] 
 
 
 
 
 
 
 
                                                           
1Substituted for the words “the High Court” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), published in the 
Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 18. 
2Repealed by the Repealing Act, 1927 (XII of 1927), published in the Gazette of India, Part -IV, dated September 10, 1927, pp. 
29-37, s. 2 and Schedule. 
SCHEDULE II 
(See section 81) 
Provisions of the Act application of which may be barred by 
1
[
2
[Government]]. 
Provisions of the 
Act 
 Subject 
Section   
26  Award of compensation. 
28, sub-section (3)  Reputed property of an insolvent. 
34  Debts provable under the Act. 
38  
Compositions and schemes of 
arrangement. 39 
40 
42, sub-sections (1) and (2). Obligation to refuse absolute 
discharge. 
45  
Method of proof of debts. 
46 
47 
48 
49 
50 
51  
Effect of insolvency on 
antecedent transactions. 
52 
53 
54 
55 
61 [except clause (a) of 
sub-section (1) and sub -
section (4)] 
Priority of debts. 
62  
Dividends. 
63 
64 
65 
66  Management by and allowance to 
                                                           
1Substituted for the words “Local Government” by the Government of India (Adaptation of Indian Laws) Order, 1937, published 
in the Gazette of India (Extraordinary), dated April 1, 1937, pp. 75-344, s. 4 and Table of General Adaptations. 
2Substituted for the words “Provincial Governments” by the Provincial Insolvency (Amendment) Act 2012 (IX of 2012), 
published in the Punjab Gazette (Extraordinary), dated February 11, 2012, pp. 40133-40135, s. 19. 
insolvent. 
72  Penalty for obtaining of credit by 
undischarged insolvent. 
 
SCHEDULE III 
1
[* * * * * *] 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
1Repealed by the Repealing Act, 1927 (XII of 1927), published in the Gazette of India, Part -IV, dated September 10, 1927, pp. 
29-37, s. 2 and Schedule.