Rescue, Rehabilitation and Insolvency (Corporate and Personal) Act 2026 · As enacted · Part XII
334. Onerous Property
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
In this section, “onerous property” means –
an unprofitable contract; or
property that is unsaleable, or not readily saleable, or that may give rise to a liability to pay money or perform an onerous act.
Subject to subsection (3), a Bankruptcy Trustee (in a bankruptcy) or a liquidator (in a liquidation) may disclaim onerous property.
A Bankruptcy Trustee or liquidator may not disclaim onerous property where the onerous property presents an imminent and serious risk to public health or public safety, or involves an environmental liability.
A contract may be disclaimed under subsection (2)
even if the Bankruptcy Trustee or liquidator has tried to assign it or has exercised rights in relation to it or to any property to which it relates.
Property may be disclaimed under subsection (2)
even if the Bankruptcy Trustee or liquidator has taken
Rescue, Rehabilitation and Insolvency possession of it, tried to sell it, or otherwise exercised rights of ownership in relation to it.
A disclaimer under subsection (2) –
brings to an end as from the time of the disclaimer the rights, interests and liabilities of the debtor in relation to the property disclaimed; but
does not, except so far as may be necessary to release the debtor from a liability, affect or limit the rights or liabilities of any other person.
A Bankruptcy Trustee or liquidator who disclaims onerous property shall, as soon as practicable and in any event within five working days after the disclaimer, give written notice of the disclaimer, containing such information and in such manner as may be prescribed, to each person whose rights are, to the knowledge of the Bankruptcy Trustee or liquidator, as the case may be, affected by the disclaimer.
A person suffering loss as a result of a disclaimer under subsection (2) may –
claim as a creditor for the amount of the loss, taking account of the effect of an order made under paragraph (b); and
apply to the court for an order for the disclaimed property be delivered to or vested in that person.
The court may make an order under this section where the court is satisfied that it is just that the property be delivered to or vested in the applicant.
In making an order under this section, the court may, as necessary –
impose any term or condition; and
make any other ancillary order.
Rescue, Rehabilitation and Insolvency
Part XIII
Part XIV