Report No. 26
19. Effect of an order of adjudication.-(1) On the making of an order of adjudication, the property of the insolvent wherever situate shall, subject to the provisions of section 48, vest in the Official Assignee and shall become divisible
among the creditors, and thereafter except as provided by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable in insolvency shall, during pendency of the insolvency proceedings, have any remedy against the property of the insolvent in respect of the debt, or commence any suit or other legal proceeding, except with the leave of the court and on such terms as the court may impose.
[Section 28(2), part, P.A.] [Cf. section 17, main para., P.T.A.]
(2) An application under rule 6 of Order XXXIV in the First Schedule to the Code of Civil Procedure, 1908, shall be governed by the provisions of sub-section (1) in the same manner as an application for execution by an unsecured creditor against the property of the insolvent.
[New]
(3) Any suit or other legal proceeding commenced without obtaining leave under subsection (1) shall be dismissed.
[New]
(4) Nothing in this section shall-
(a) affect the power of any secured creditor to realise or otherwise deal with his security, in the same manner as he would have been entitled to realise or deal with if this section had not been enacted, or
(b) bar a creditor from taking, subject to any order which may be passed under section 24, any proceedings against the person of the debtor which are permitted under the law.
[Section 28(6), P.A.] [Cf. section 17, proviso, P.T.A.]
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