RECEIVING ORDER. Where a debtor has committed an " act of bankruptcy " (see ACTS OF BANKRUPTCY), a creditor, wishing to have the estate realised under the bankruptcy law for the benefit of the creditors, may petition the Court to make a receiving order. The petition may be presented either by a creditor or by the debtor himself. \Vhen a receiving order is made, it means that the Court appoints the official receiver to take charge of the debtor's estate. The debtor is not immediately adjudged a bankrupt, but as soon as may be after making a receiving order, a general meeting of creditors is held to consider whether a proposal for a composition or scheme of arrangement shall be entertained, or whether he shall he adjudged bankrupt. (See MEETING OF CREDITORS.) After a receiving order has been made, a creditor cannot bring any action against the debtor unless under sanction of the Court, but a creditor's power to deal with any securities he may have is not affected by the receiving order.
A receiving order may be made even if there is only one creditor.
As soon as convenient after the expiration of the time for the submission of a debtor's statement of affairs (see Section 16, below), the Court shall hold a public sitting for the examination of the debtor. (See PUBLIC EXAMINATION OF DEBTOR.) When an act of bankruptcy has been committed by, or a receiving order made against, a customer, the banker must not pay any further cheques upon the account.
The following Sections of the Bankruptcy Act, 1883, deal with a bankruptcy petition and the making of a receiving order :— Jurisdiction to make Receiving Order.
" 5. Subject to the conditions hereinafter specified, if a debtor commits an act of bankruptcy the Court may, on a bankruptcy petition being presented either by a creditor or by the debtor, make an order, in this Act called a receiving order, for the protection of the estate.
Conditions on which Creditor may Petition. "R. (I1 A creditor shall not be entitled to present a bankruptcy petition against a debtor unless " (a) The debt owing by the debtor to the petitioning creditor, or, if two or more creditors join in the petition, the aggregate amount of debts owing to the several peti tioning creditors, amounts to fifty pounds, and "(b) The debt is a liquidated sum, payable either immediately or at some certain future time, and " c) The •act of bankruptcy on which the petition is grounded has occurred with in three months before the presentation of the petition, and " (d) The debtor is domiciled in England, or, within a year before the date of the pre sentation of the petition, has ordinarily resided or had a dwelling-house or place of business in England.
" (2) If the petitioning creditor is a secured creditor, he must, in his petition, either state that he is willing to give up his security for the benefit of the creditors in the event of the debtor being adjudged bankrupt, or give an estimate of the value of his security. In the latter case, he may be admitted as a petitioning creditor to the extent of the balance of the debt due to him, after deducting the value so estimated in the same manner as if he were an unsecured creditor.
Proceedings and Order on Creditor's Petition.
"7. (1) A creditor's petition shall be veri fied by affidavit of the creditor, or of some person on his behalf having knowledge of the facts, and served in the prescribed manner.
" (2) At the hearing the Court shall require proof of the debt of the petitioning creditor of the service of the petition, and of the act of bankruptcy, or, if more than one act of bankruptcy is alleged in the petition, of some one of the alleged acts of bankruptcy, and, if satisfied with the proof, may make a receiving order in pursuance of the petition.
" (3) If the Court is not satisfied with the proof of the petitioning creditor's debt, or of the act of bankruptcy, or of the service of the petition, or is satisfied by the debtor that he is able to pay his debts, or that for other sufficient cause no order ought to be made, the Court may dismiss the petition.