Chapter IV INSOLVENCY PROCEEDINGS

1. (1) If at any stage of the proceedings under Chapter II, the Court finds that the income of the debtor and his moveable property are not sufficient to allow his debts to be liquidated by annual instalments not exceeding twelve in number, the Court shall make an order adjudicating the debtor an insolvent.
2. (2) If at any time after the expiration of two years from the date of an award, the debtor satisfies the Court that there is no reasonable probability of his being in a position to pay the remaining amount of instalments fixed under the award, the Court may, notwithstanding anything contained in this Act, after giving notice to the creditor modify the terms of the award, and reduce the amount of the instalment as it may think fit, provided that the total annual instalments in which the balance of the debts shall be paid in such instalments shall not exceed twenty or the Court may make an order adjudicating the debtor an insolvent.
3. (3) After the debtor has been adjudicated an insolvent, the Court shall direct that such portion of the property of the debtor (being property liable to attachment and sale under section 60 of the Code of Civil Procedure, 1908 (V of 1908) excluding such portion thereof as the State Government shall, from time to time, notify in the Official Gazette as the minimum necessary for the maintenance of the debtor and his dependants) referred to in section 29 as may be required to liquidate all the debts of the debtor, shall immediately be sold free of all encumbrances in liquidation of all debts outstanding against such debtor.

The order of adjudication made under sub-section (1) or (2) of section 42 shall have the force of an order made by a competent court in the exercise of its powers under section 27 of the Provincial Insolvency Act, 1920 (V of 1920).

The proceeds realised by the sale of the property of the insolvent under section 42 shall be distributed in the order of priority specified in clause (iii) of sub-section (2) of section 23.

No application or proceeding in regard to the insolvency of a debtor shall lie in, or shall be dealt with by, any other court.

Save as provided by sub-clause (vi) of clause (1) of section 31, no appeal shall lie from any order passed under this Chapter.