Reference may be made to the BA Section 20 and BR 180 – 185.
The grounds for Making an Adjudication Order
Sec. 20 BA BR 180-185
When a receiving order has been made the official receiver or any creditor may apply to the court to adjudge the debtor bankrupt.
The court may adjudge the debtor bankrupt in the following cases:
1. If the creditors at their first meeting or at any adjournment thereof so resolve by ordinary resolution;
2. If they pass no resolution;
3. If they do not meet at all;
4. If a composition or scheme is not approved within 14 days after the conclusion of the public examination of the debtor or such further time as the court may allow;’
5. If the debtor applies to be made Bankrupt;
6. If a quorum of creditors has not attended the first meeting of creditors or one adjournment thereof;
7. If the court is satisfied that the debtor has absconded or does not intend to propose a composition or scheme;
8. If the public examination is adjourned sine die;
9. If the debtor without reasonable cause fails to submit his statement of affairs;
10. If a composition of scheme is annulled by the court.
Upon the making of an adjudication order, notice thereof must be gazetted and advertised in a local paper.
Annulment of the Adjudication Order:
The adjudication order may be annulled in the following cases:
1. If in the opinion of the court the debtor ought not to have been adjudged bankrupt;
2. If his debts are paid in full;
3. If a composition or scheme is accepted by the creditors and approved by the court;
The court has a discretion as to annulling the adjudication order and may not do so where the bankrupt has committed bankruptcy offences even if the debts are paid in full. Here a voluntarily lease by a creditor is not equivalent to payment in full by the debtor.
Under Section 33(b) any debts disputed by the debtor is considered as paid in full if he enters into a bond in such sum and with such sureties as the court approves to pay the amount to be recovered in any proceedings for its recovery with costs. Also any debts due to a creditor who cannot be found or cannot be identified is considered as paid in full if paid into court. It should be noted that the annulment of an adjudication does not affect the validity of any sales or dispositions of property or other acts properly done by the official receiver, trustee or any person acting under their authority or by the court.
The annulment of an adjudication order releases the debtor from the personal disabilities imposed upon him by the bankruptcy but does not prevent criminal proceedings from being brought against him for Bankruptcy offences.