Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part IX
224. Extent to which a deed is binding
Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.
Official translationFrom Department of Government Printing, unchanged
A deed of company arrangement is binding on the company, each director and shareholder of the company, the deed administrator and each person who was entitled to vote on the resolution of creditors approving the deed.
Rescue, Rehabilitation and Insolvency
This section shall not prevent a grantee of an encumbrance from enforcing the encumbrance except so far as –
the deed provides that the grantee will not enforce the encumbrance and the grantee voted in favour of the resolution approving the deed; or
the court orders otherwise under subsection (4).
This section shall not prevent an owner or lessor of property, including under a hire-purchase agreement, from taking possession of the property or otherwise recovering it except so far as –
the deed provides that the owner or lessor, as the case may be, will not take possession of the property or otherwise recover it and the owner or lessor, as the case may be, voted in favour of the resolution approving the deed; or
the court orders otherwise under subsection (4).
Subject to subsection (5), on an application by an administrator or deed administrator, whichever holds office, the court may order that as from the day on which and time at which a deed of company arrangement is made by the company and for such time as may be specified in the order, which may be for a fixed period or until the occurrence of a specified event –
a grantee of an encumbrance shall not enforce the encumbrance; or
an owner or lessor of property, including under a hire-purchase agreement, shall not take possession of the property or otherwise recover it.
Rescue, Rehabilitation and Insolvency
The court may make an order under subsection (4)
where it is satisfied that –
granting the application shall not materially adversely affect the purposes of the deed; and
in all the circumstances of the case, prejudice will be caused to those with an interest in the company other than the grantee, owner or lessor, as the case may be, if the application is not granted, that outweighs the prejudice that will be caused to the grantee, owner or lessor, as the case may be, from the granting of the application.
An order under subsection (4) may be made subject to such terms and conditions as may be necessary.
B - DEED ADMINISTRATOR
Part X
Compromises
Part XI
Micro Small Medium Enterprise (MSME) Company Debt Restructuring Arrangements
Part XII
Part XIII
Part XIV