Section 55: Petition to be filed to initiate bankruptcy proceedings

1) A person who is likely to become a bankrupt may himself or herself, or a creditor or group of creditors having claim of at least twenty five percent or more of the total debts if the amount of debts is disclosed and, if the amount of debts is not disclosed, a creditor or group of creditors having claim of more than five hundred thousand rupees borrowed by such a person, may file a petition in the court, in order to initiate bankruptcy proceedings.

2) In filing a petition by a person likely to become a bankrupt for bankruptcy pursuant to sub-section (1), the petition shall specify the following details:

(a) Actual statement of his or her total assets and value thereof,

(b) Statement of the total amount of debts borrowed by him or her, interest accrued thereon and details of the creditor or creditors having lent such debts, along with their addresses,

(c) If he or she has to discharge other liabilities, details thereof,

(d) The reason for the failure to repay or discharge debts and other liabilities.

3) In filing a petition by a creditor or group of creditors for bankruptcy pursuant to sub-section (1), the petition shall specify the following details:

(a) Evidence indicating that the borrower is likely to be a bankrupt,

(b) Statement of the assets of the borrower and approximate value thereof, to the extent of the petitioner’s knowledge,

(c) Statement of the petitioner’s claim, and if the petitioner has knowledge of other creditors’ debt or claim, such debt or claim,

(d) Details, including addresses of the creditors.

4) Prior to filing a petition pursuant to sub-section (1) to initiate bankruptcy proceedings, a creditor or group of creditor shall give a notice to the borrower indicating that the borrower shall repay his or her debts or discharge other liabilities within a period of at least three months and that in the event of failure to repay the debts within that period, a petition shall be filed in the court to initiate bankruptcy proceedings.