ADJUDICATION OF BANKRUPTCY. Where a receiving order has been made against a debtor (see RECEIVING ORDER), though he is not at that date adjudged bank rupt, it means that, unless a composition or scheme of arrangement is accepted by the creditors, the court will, shortly, make an order adjudicating the debtor bankrupt.
Section 20 of the Bankruptcy Act. 1883, enacts :— "(1) Where areceiving order ismade against a debtor, then, if the creditors at the first meeting or any adjournment thereof by ordinary resolution re solve that the debtor be adjudged bankrupt, or pass no resolution, or if the creditors do not meet, or if a composition or scheme is not ac cepted or approved in pursuance of this Act within fourteen days after the conclusion of the examination of the debtor or such further time as the Court may allow, the Court shall adjudge the debtor bankrupt ; and thereupon the property of the bankrupt shall become his creditors and shall vest in a trustee.
" (2) Notice of every order adjudging a debtor bankrupt, stating the name, address, and description of the bank rupt, the date of the adjudication, and the Court by which the adjudi cation is made, shall be gazetted and advertised in a local paper in the prescribed manner, and the date of the order shall for the purposes of this Act be the date of the adjudica tion." The Court has power in certain cases to annul an adjudication. 7.`4 Section 35 provides :— " (1) Where in the opinion of the Court a debtor ought not to have been adjudged bankrupt, or where it is proved to the satisfaction of the Court that the debts of the bankrupt are paid in full, the Court may, on the application of any person inter ested, by order, annul the adjudica tion."
The creditors may, if they think fit, at any time after a debtor is adjudicated a bank rupt, entertain a proposal for a composition in satisfaction of the debts due to them or for a scheme of arrangement of the bank rupt's affairs (Section 23).
Section 43 relates to the date when a bankruptcy is deemed to commence :— • The bankruptcy of a debtor, whether the same takes place on the debtor's own petition or upon that of a creditor or creditors, shall he deemed to have relation back to, and to commence at, the time of the act of bankruptcy being committed on which a receiving order is made against him, or, if the bankrupt is proved to have committed more acts of bankruptcy than one, to have relation back to, and to commence at, the time of the first of the acts of bankruptcy proved to have been committed by the bankrupt within three months next preceding the date of the presentation of the bankruptcy petition ; but no bankruptcy petition, receiving order, or adjudication shall be rendered invalid by reason of any act of bankruptcy anterior to the debt of the petitioning creditor." (See BANKRUPTCY.)