Acts of Insolvency
Acts of Insolvency
The personal insolvency laws in India are designed to address the case of an individual who is not able to pay his/her debts. The aim of the personal insolvency laws in India is to protect the insolvent debtor, arrange for distribution of property amongst creditors and discharge the debtor from demands of the creditor. To being insolvency proceedings, an insolvency petition can be filed by the individual or a creditor. In the case of commission of any of the following acts of insolvency, a creditor can initiate insolvency proceedings within three months.
Transfer of all Property
If in India or elsewhere, an individual makes a transfer of all or substantially all his/her property to a third person for the benefit of his/her creditors generally.
Intent to Delay Creditors
If in India or elsewhere, an individual makes a transfer of his/her property or of any part thereof with intent to defeat or delay his/her creditors.
If an individual makes any transfer of property under fraudulent preference in India or elsewhere. Then such individual is adjudged as insolvent.
Departs or Absents Himself
If an individual with an intent to defeat or delay his/her creditors departs or remains outside of India. Or, departs from his/her house or place of business or secludes him/herself so as to deprive creditors of means of communicating with him/her.
Property Sold by Decree
If any of an individuals property sold in execution of a decree of any Court for the payment of money.
Files for Insolvency
If an individual filed an insolvency petition to be adjudged an insolvent.
Provides Notice to Creditors
If an individual provides notice to any creditors that he/she has suspended or is about to suspend the payment of his/her debts.
If an individual is imprisoned in execution of the decree of any Court for the payment of money.