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Section 42 – The Provincial Insolvency Act,1920

The Provincial Insolvency Act,1920

Section 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 hooks of account as are usual and proper in the business carried on by him and as sufficiently disclose his 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 debts provable under this Act without having at the time of contracting it any reasonable or probable ground of expectation (the burden of proving which shall he on him) that he would he able to pay it;

(e) That the insolvent has failed to account satisfactorily for any loss of 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 become due, given an undue preference to any of his creditors;

(h) That the insolvent has 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.

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The Provincial Insolvency Act,1920

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