Schedule C SCHEDULE CSupplementary
[Section 42] PROOF OF DEBTS Proof in Ordinary Cases 1. Every creditor shall prove his debt as soon as may be after the making of a bankruptcy order. 2. A debt may be proved by delivering or sending through the post in a prepaid letter to the Director General of Insolvency an affidavit verifying the debt. 3. The affidavit may be made by the creditor himself or by some person authorized by or on behalf of the creditor or his estate. If made by a person so authorized, it shall state his authority and means of knowledge. 4. The affidavit shall contain or refer to a statement of account showing the particulars of the debt and shall specify the vouchers, if any, by which the same can be substantiated. The Director General of Insolvency may at any time call for the production of the vouchers or books of account. 5. The affidavit shall state whether the creditor is or is not a secured creditor. 6. A creditor shall bear the cost of proving his debt unless the court otherwise specially orders. 7. Every creditor who has lodged a proof shall be entitled to see and examine the proofs of other creditors at all reasonable times. 8. A creditor proving his debt shall deduct therefrom all trade discounts, but he shall not be compelled to deduct any discount not exceeding five per centum on the net amount of his claim, which he has agreed to allow for payment in cash. Proof by Secured Creditors 9. If a secured creditor realizes his security he may prove for the balance due to him after deducting the net amount realized. 10. If a secured creditor surrenders his security to the Director General of Insolvency for the general benefit of the creditors he may prove for his whole debt. 11. If a secured creditor does not either realize or surrender his security he shall state in his proof the particulars of his security, the date when it was given and the value at which he assesses it, and shall be entitled to receive a dividend only in respect of the balance due to him after deducting the value so assessed. 12. (a) Where a security is so valued the Director General of Insolvency may at any time redeem it on payment to the creditor of the assessed value. (b) If the Director General of Insolvency is dissatisfied with the value at which a security is assessed he may require that the property comprised in any security so valued be offered for sale at such times and on such terms and conditions as are agreed on between the creditor and the Director General of Insolvency, or as in default of agreement the court directs. If the sale is by public auction the creditor or the Director General of Insolvency on behalf of the estate may bid or purchase: Provided that the creditor may at any time by notice in writing require the Director General of Insolvency to elect whether he will or will not exercise his power of redeeming the security or requiring it to be realized, and if the Director General of Insolvency does not within six months after receiving the notice signify in writing to the creditor his election to exercise the power, he shall not be entitled to exercise it; and the equity of redemption or any other interest in the property comprised in the security, which is vested in the Director General of Insolvency, shall vest in the creditor, and the amount of his debt shall be reduced by the amount at which the security has been valued. 13. Where a creditor has so valued his security he may at any time amend the valuation and proof on showing to the satisfaction of the Director General of Insolvency or the court that the valuation and proof were made bona fide on a mistaken estimate, or that the security has diminished or increased in value since its previous valuation; but every such amendment shall be made at the cost of the creditor and upon such terms as the court orders, unless the Director General of Insolvency allows the amendment without application to the court. 14. Where a valuation has been amended in accordance with the foregoing rule, the creditor shall forthwith repay any surplus dividend which he has received in excess of that to which he would have been entitled on the amended valuation, or as the case may be, shall be entitled to be paid out of any money for the time being available for dividend any dividend or share of dividend which he has failed to receive by reason of the inaccuracy of the original valuation, before that money is made applicable to the payment of any future dividend, but he shall not be entitled to disturb the distribution of any dividend declared before the date of the amendment. 15. If a creditor, after having valued his security, subsequently realizes it, or if it is realized under rule 12, the net amount realized shall be substituted for the amount of any valuation previously made by the creditor, and shall be treated in all respects as an amended valuation made by the creditor. 16. If a secured creditor does not comply with the foregoing rules he shall be excluded from all share in any dividend. 17. Subject to rule 12, a creditor shall in no case receive more than one hundred sen in the ringgit and interest as provided by this Act. Taking Accounts of Property mortgaged or charged and sale thereof 18. Upon application by summons in Chambers supported by an affidavit by any person claiming to be a mortgagee or chargee of any part of the bankrupt’s immovable property, whether the mortgage or charge is of a legal or equitable nature, the court shall proceed to inquire whether the person is such mortgagee or chargee and for what consideration and under what circumstances; and if it is found that the person is such mortgagee or chargee, and if no sufficient objection appears to the title of the person to the sum claimed by him under the mortgage or charge, the court shall direct such accounts and inquiries to be taken as are necessary for ascertaining the principal, interest and costs due upon the mortgage or charge and the rents and profits or dividends, interest or other proceeds received by the person or by any other person by his order or for his use, in case he has been in possession of the property over which the mortgage or charge extends or any part thereof; and the court, if satisfied that there ought to be a sale, shall direct notice to be given, in such manner as it thinks fit, when and where and by whom and in what way the property or the interest therein so mortgaged or charged is to be sold, and that the sale be made accordingly and that the Director General of Insolvency, unless it is otherwise ordered, shall have the conduct of the sale; but it shall not be imperative on any such mortgagee or chargee to make such application. At any such sale the mortgagee or chargee may bid and purchase. 19. All proper parties shall join in the conveyance to the purchaser as the court directs. 20. The moneys arising from the sale shall be applied in the first place in payment of the costs, charges and expenses of the Director General of Insolvency of and occasioned by the application to the court and of and attending the sale, and then in payment and satisfaction, so far as the same will extend, of what is found due to the mortgagee or chargee for principal, interest and costs; and the surplus of the said moneys, if any, shall then be paid to the Director General of Insolvency. But in case the moneys arising from the sale are insufficient to pay and satisfy what is so found due to the mortgagee or chargee, then he shall be entitled to prove as a creditor for the deficiency and receive dividends thereon rateably with the other creditors, but not so as to disturb any dividend then already declared. 21. For the better taking of such inquiries and accounts and making a title to the purchaser, all parties may be examined by the court upon interrogatories or otherwise as it thinks fit, and shall produce before the court upon oath all deeds, papers, books and writings in their respective custody or power relating to the estate or effects of the bankruptcy as the court directs. Proof in respect of Distinct Contracts 22. If a bankrupt was at the date of the bankruptcy order liable in respect of distinct contracts as a member of two or more distinct firms or as a sole contractor and also as member of a firm, the circumstance that the firms are in whole or in part composed of the same individuals, or that the sole contractor is also one of the joint contractors, shall not prevent proof in respect of the contracts against the properties respectively liable on the contracts. Periodical Payments 23. When any rent or other payment falls due at stated periods, and the bankruptcy order is made at any time other than one of those periods, the person entitled to the rent or payment may prove for a proportionate part thereof up to the date of the order, as if the rent or payment grew due from day to day. Interest 24. On any debt or sum certain payable at a certain time or otherwise, whereon interest is not reserved or agreed upon and which is overdue at the date of the bankruptcy order and provable in bankruptcy, the creditor may prove for interest at a rate not exceeding six per centum per annum to the date of the bankruptcy order from— (a) if the debt or sum is payable by virtue of a written instrument at a certain time, the time the debt or sum was payable; or (b) if the debt or sum is payable otherwise than by virtue of a written instrument, the time when demand in writing was made. Debt payable at a future time 25. A creditor may prove for a debt not payable when the bankrupt committed an act of bankruptcy as if it were payable presently, and may receive dividends equally with the other creditors, deducting only thereout a rebate of interest at the rate of six per centum per annum computed from the declaration of a dividend to the time when the debt would have become payable according to the terms on which it was contracted. Admission or Rejection of Proofs 26. The Director General of Insolvency shall examine every proof and the grounds of the debt, and in writing admit or reject it in whole or in part or require further evidence in support of it. If he rejects a proof he shall state in writing to the creditor the grounds of the rejection. 27. If the Director General of Insolvency thinks that a proof has been improperly admitted the court may on his application, after notice to the creditor who made the proof, expunge the proof or reduce its amount. 28. If a creditor is dissatisfied with the decision of the Director General of Insolvency in respect of a proof, the court may on the application of the creditor reverse or vary the decision. 29. The court may also expunge or reduce a proof upon the application of a creditor if the Director General of Insolvency declines to interfere in the matter, or in the case of a composition or scheme upon the application of the bankrupt. 30. For the purpose of any of his duties in relation to proofs the Director General of Insolvency may administer oaths and take affidavits. LAWS OF MALAYSIA INSOLVENCY ACT 1967