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As enacted
Contents

Part VI

133. Validity of certain payments to bankrupt debtor and assignee

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

(1)

This section applies where a Bankruptcy Order has been made against a debtor who is or has been a party to a transaction for, or involving, the provision of credit.

(2)

The court may, on the application of the Bankruptcy

Trustee, make an order with respect to the transaction if the transaction is or was extortionate and was not entered into more than two years before the commencement of the

Bankruptcy.

(3)

For the purposes of this section a transaction is extortionate if, having regard to the risk accepted by the person providing the credit—

Rescue, Rehabilitation and Insolvency

(a)

the terms of it are or were such as to require grossly exorbitant payments to be made whether unconditionally or in certain contingencies, in respect of the provision of the credit; or

(b)

it otherwise grossly contravened ordinary principles of fair dealing, and it shall be presumed, unless the contrary is proved, that a transaction with respect to which an application is made under this section is or, as the case may be, was extortionate.

(4)

An order under this section with respect to any transaction may contain such one or more of the following, as necessary—

(a)

provision setting aside the whole or part of any obligation created by the transaction;

(b)

provision otherwise varying the terms of the transaction or varying the terms on which any security for the purposes of the transaction is held;

(c)

provision requiring any person who is or was party to the transaction to pay to the Bankruptcy

Trustee any sums paid to that person, by virtue of the transaction, by the bankrupt debtor;

(d)

provision requiring any person to surrender to the

Bankruptcy Trustee any property held by him as security for the purposes of the transaction;

(e)

provision directing accounts to be taken between any persons.

(5)

Any sums or property required to be paid or surrendered to the Bankruptcy Trustee in accordance with an order under this section shall be comprised in the Bankruptcy Estate.

Rescue, Rehabilitation and Insolvency

(6)

The powers conferred by this section are exercisable in relation to any transaction concurrently with any powers exercisable under this Act in relation to that transaction as a transaction at an undervalue.

Read on from s 134

Part VII

Personal Insolvency Register

Read on from Part VII

Part VIII

Read on from Part VIII

Part IX

Read on from Part IX

Part X

Compromises

Read on from Part X

Part XI

Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements

Read on from Part XI

Part XII

Read on from Part XII

Part XIII

Read on from Part XIII

Part XIV

Cross - Border Insolvency

Read on from Part XIV

Part XV

Read on from Part XV

Part XVI

Read on from Part XVI

Part XVII

Read on from Part XVII

Schedules