PROCEEDINGS FROM ACT OF INSOLVENCY TO DISCHARGECentral

Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920 in hindi

(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 prescribed, 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—
1. (a)grant or refuse an absolute order of discharge; or
2. (b)suspend the operation of the order for a specified time; or
3. (c)grant an order of discharge subject to any conditions with respect to any earnings or income which may afterwards become due to the insolvent, or with respect to his after acquired property.

Summary

(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 prescribed, for hearing such application, and any.

Practical examples

1Peter was declared insolvent on January 1st. On June 1st, he applied to the court for a discharge, which would legally free him from his old debts. This is his right under Section 41.

2The court reviewed Sara's insolvency case. Instead of freeing her from all debts immediately, the court decided under Section 41 to suspend her discharge for six months to see if her conduct improved.

FAQ

1. When can a debtor apply for a discharge under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920?

According to Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920, a debtor can apply any time after the court declares them insolvent, but they must do it within the period the court sets.

2. What can the court consider during a discharge hearing under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920?

Under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920, the court considers any objections from creditors and the report of the receiver.

3. Can a discharge be granted with strings attached under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920?

Yes, Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920 allows the court to grant a discharge subject to conditions about the debtor's future earnings or property.

Test yourself

Q1.Under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920, what must the court do after a debtor applies for discharge?

Q2.Which of these is an option for the court under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920?

Q3.Under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920, a conditional discharge can specifically target what?

Q4.Who can object to a discharge under Section 41 of THE PROVINCIAL INSOLVENCY ACT, 1920?

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