3.6. Bankruptcy Law
In India, the law relating to bankruptcy and insolvency, is implemented under the provisions of the Provincial Insolvency Act, 1920 and the Presidency Towns Insolvency
Act, 1909. The former Act is applicable to the insolvency proceedings in the Moffusil area, Tehsil and district. The latter act is applicable to solvency proceedings, in
Presidency Towns only.
The procedural distinction between bankruptcy and insolvency is that insolvency proceedings are initiated and operated at the instance of a debtor who is unable to pay his debts or who has been imprisoned for indebtedness, whereas bankruptcy laws are put into action at the instance of the creditor. The distinction between bankruptcy and insolvency law, is blurred and it is difficult to define what belongs to one, and not to the other.
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