(1) If any debtor and any or all of his creditors arrive at a settlement in respect of any debt due by the debtor to the creditor, the debtor or any of the creditors may, within thirty days from the date of such settlement, make an application to the Board for recording such settlement.
(2) Every such application shall be in the prescribed form, and shall be signed and verified in the prescribed manner.
(3) On receipt of such application the Board shall, after giving notice to the creditor or the debtor, as the case may be, and after making such enquiry as it thinks fit, if it is satisfied that the settlement arrived at is bona fide and voluntary and is not made with intent to defeat or delay any of the creditors of the debtor, and is in the interest of the Assignees from non-debtor not entitled to benefit of this Act.
Application for recording settlement.
[Act No. XII of 1952] 11 debtor, and that the debtor is a person who fulfils the conditions referred to in clauses (a) and (b) of sub-section
(1) of section 24, record such settlement and certify the same. Every such settlement so recorded and certified shall be binding upon the parties thereto and shall not, save as otherwise hereinafter provided be reopened.
(4) After the Board has recorded and certified a settlement under sub-section (3), the Board shall call upon the debtor to make a declaration whether there are any other debts due by the debtor which are not included in the settlement. If the debtor makes a declaration that there are no such debts, the Board shall make an award in terms of such settlement.
(5) If the Board is satisfied, after recording such settlement, that there are other debts due from the debtor which are not included in the settlement the Board shall treat the application made under sub-section (1) as an application for settlement of debts under section 11.
16. Notwithstanding anything contained in the preceding sections, if during the pendency of proceedings before the Board or the Court in appeal, as the case may be, a settlement is arrived at between a debtor and all his creditors and if such Board or Court is satisfied that the settlement has been made by the debtor voluntarily and is for his benefit, such Board or Court may make an award in terms of such settlement.
17. Every settlement by consent of a debt due from a debtor to any creditor, which is not certified by the Board under section 15, or in terms of which no award has been made under section 16, shall be void and shall not be recognised by any Court or Tribunal for any purpose whatsoever.
Settlement during pendency of proceedings before Board or Court in appeal.
Certain settlements to be void.
12 [Act No. XII of 1952]
18. No application under section 11 or 15 shall be entertained by the Board on behalf of or in respect of any debtor, unless the total amount of debts due from him on the date of the application is not less than Rs.5,000.
19. An application for settlement of debts under section 11 or an application for recording a settlement under section 15 shall not be withdrawn without the leave of the Board.
20. Where two or more applications for settlement of debts under section 11 are presented by or against the same debtor, all such applications shall be consolidated. Where such separate applications are presented against joint debtors, all such applications shall be heard together.
21. On receipt of an application for settlement of debts, the Board shall-
(a) give notice to the debtor (unless the debtor is himself an applicant) and to every creditor (other than the creditor who is himself an applicant) whose name and address are given in the application, and
(b) publish a general notice, requiring the debtor and all creditors to submit a statement in the prescribed form within one month from the date of the service of the notice or the publication of the general notice, whichever is later:
Provided that if the Board is satisfied that the debtor or any other creditor is for good and sufficient cause unable to comply with the notice within the time specified therein it may extend the period for the submission of the statement.
Application under section 11 or 15 to be made only in respect of debtor whose debts are not less than Rs.5,000.
Withdrawal of applications.
Consolidations of applications.
Service of notice on debtors and creditors to submit statements of debts.
[Act No. XII of 1952] 13