difficulties, or for any sufficient cause, proceed without injustice or undue delay to the creditors or to the debtor, or that the approval of the Court was obtained by fraud, the Court may, if it thinks fit, on application by any creditor, adjudge the debtor bankrupt, and annul the composition or scheme, but without prejudice to the validity of any sale, disposition, or payment duly made, or thing duly done under or in pursuance of the composition or scheme. Where a debtor is adjudged bankrupt under this sub-section any debt provable in other respects, which has been contracted before the date of the adjudication, shall be provable in the bankruptcy.

When a composition or scheme is annulled, the property of the debtor, unless the Court otherwise orders, vests forthwith in the official receiver to whom the estate was originally assigned, without any special order being necessary, and the trustee thereunder must pay over, and account for, to the trustee under the bankruptcy, any money or property of the debtor which has come to his hands (r r. 165, 166).

(12.) If, under or in pursuance of a composition or scheme, a trustee is appointed to administer the debtor's property or manage his business, Part V. of this Act,1 shall apply to the trustee as if he were a trustee in a bankruptcy, and as if the terms "bankruptcy," "bankrupt," and "order of adjudication" included respectively a composition or scheme of arrangement, a compounding or arranging debtor, and order approving the composition or scheme.

1 Ss. 72-91.

(13.) Part III. of this Act1 shall, so far as the nature of the case and the terms of the composition or scheme admit, apply thereto, the same interpretation being given to the words "trustee," "bankruptcy," "bankrupt," and "order of adjudication," as in the last preceding sub-section.

1 ss. 37—65, having reference to the proof of debts and the realisation and distribution of the debtor's property.

(14) No composition or scheme shall be approved by the Court which does not provide for the payment in

s. 18.

ss. 18-20. priority to other debts of all debts directed to be so paid in the distribution of the property of a bankrupt.1

Effect of composition or scheme.

Adjudication

where composition not accepted or approved.

Iss. 40 (I) and 41.

And if the composition or scheme does not provide for the payment in full of the costs of the petitioning creditor directed to be paid out of the first net proceeds of the estate, it may be disallowed (r. 154).

(15.) The acceptance by a creditor of a composition or scheme shall not release any person who under this Act would not be released by an order of discharge if the debtor had been adjudged bankrupt.1

1 %. 30 (4).

This clause will prevent any such question as arose in the cases of (Ellis v. Wilmot, L. R. 10, Ex. 10; Ex pte Jacobs, In re Jacobs, L. R. 10, Ch. 211; and Megrath v. Gray, L. R. 9, C. P., 216).

19. Notwithstanding the acceptance and approval of a composition or scheme, such composition or scheme shall not be binding on any creditor so far as regards a debt or liability from which, under the provisions of this Act, the debtor would not be discharged by an order of discharge in bankruptcy,' unless the creditor assents to the composition or scheme.2

1 s. 30.

"It seems therefore that by assenting to a composition or scheme, which is accepted and approved by the Court, a creditor will be in a worse position than if the debtor had been adjudged bankrupt.

Adjudication of Bankruptcy.

20.-(1.) Where a receiving order is made against a of bankruptcy debtor, then, if the creditors at the first meeting or any adjournment thereof by ordinary resolution resolve 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 accepted 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 divisible among his creditors and shall vest ss. 20, 21.

in a trustee.2

1 "When a receiving order has been made and no creditors attend at the time and place appointed for the first meeting, or one adjournment thereof, or if sufficient creditors do not attend there to pass a special resolution, or where the official receiver satisfies the Court that the debtor has absconded, or that the debtor does not intend to propose a composition or scheme, or in any of the other cases mentioned in the Act, the Court may, either on the application of a creditor, or of the official receiver, forthwith adjudge the debtor bankrupt " (r. 156).

On the application of the debtor himself the Court may at the time of making the receiving order or at any time thereafter adjudge him bankrupt ; and such application may be made orally and without notice (r. 155).

No order of adjudication shall be made against a firm in the name of the firm, but against the partners individually (r. 197).

(2.) Notice of every order adjudging a debtor bankrupt, stating the name, address, and description of the bankrupt, the date of the adjudication, and the Court by which the adjudication is made, shall be gazetted and advertised in a local paper in the prescribed manner,1 and the date of the order shall for the purposes of this Act be the date of the adjudication.

1 When an order of adjudication is made the Registrar shall forthwith give notice thereof (r. 157) to the Board of Trade, who shall cause it to be gazetted (r. 203), and to the official receiver who shall advertise it (r. 157 (2) and s. 70(1) (ƒ)).

A copy of the London Gazette containing a notice of the order is conclusive evidence in all legal proceedings of the order having been duly made and of its date (s. 132 (2) ).

of trustee.

21. (1.) Where a debtor is adjudged bankrupt, or the Appointment creditors have resolved that he be adjudged bankrupt, the creditors may, by ordinary resolution, appoint some fit person, whether a creditor or not, to fill the office of trustee of the property of the bankrupt; or they may resolve to leave his appointment to the committee of inspection herein-after mentioned.

If the creditors do not at the first meeting, or some adjournment thereof, appoint a trustee or pass a resolution to leave his appointment to the committee of inspection, the official receiver must, after the debtor has

s. 21.

been adjudged bankrupt, forthwith call a meeting for the purpose of appointing one labs. 8, infra, and if a trustee be not appointed within four weeks from the date of the adjudication, or in the event of negotiations for a composition or scheme being then pending within seven days from their determination y failure, the official receiver shall report the matter to the Board of Trade, and the Board of Trade shall thereupon make the appointment (sub-s. 6. infri; but the person so appointed may be superseded at any subsequent time by the creditors or committee of inspection if so authorised appointing a trustee and getting his appointment certified (sabes. 7, infr.

The creditors may appoint more persons than one to fill the office of trustee, and may also appoint persons as trustees in succession to one another (s. 84).

The remuneration of the trustee may be fixed by an ordinary resolution of the creditors or by the committee of inspection (if so authorised), and in certain cases by the Board of Trade, s. 72.

(2.) The person so appointed shall give security in manner prescribed to the satisfaction of the Board of Trade, and the Board, if satisfied with the security, shall certify that his appointment has been duly made,2 unless they object to the appointment on the ground that it has not been made in good faith by a majority in value of the creditors voting, or that the person appointed is not fit to act as trustee, or that his connection with or relation to the bankrupt or his estate or any particular creditor makes it difficult for him to act with impartiality in the interests of the creditors generally.

1 r. 253.

* Such certificate is conclusive evidence of his appointment (s. 138), and for the purposes of any law requiring the registration or enrolment of a conveyance or assignment is to be deemed to be a conveyance or assign. ment, and may be registered or enrolled accordingly (s. 54 (4)).

As to the form of the certificate, see r. 218, and Form No. 71 in the Appendix.

(3.) Provided that where the Board make any such objection they shall, if so requested by a majority in value of the creditors, notify the objection to the High Court, and thereupon the High Court may decide on its validity.

As to the form of the requisition and proceedings thereon, see r r. 220 and 221 and Form No. 70 in the Appendix.

(4) The appointment of a trustee shall take effect as from the date of the certificate.

The Court will not vacate the appointment merely on the ground that a proof has been improperly rejected unless fraud be proved (Ex pte Kimber, In re Thrift, 11 Ch. D., 869; Ex pte Milner, 3 Deac. and Ch. 235).

(5.) The official receiver shall not, save as by this Act provided, be the trustee of the bankrupt's property.

The cases in which this Act provides that the official receiver shall fill the office of trustee are as follows:

1. Until a trustee is appointed (s. 54 (1)).

2. During any vacancy in the office of trustee (ss. 70 (1) (g), and 87 (4)). 3. After the release of the trustee (s. 82 (4)).

4. In the administration of small bankruptcies (s. 121 (1)).

5. In the administration of the estates of persons dying insolvent

(s. 125 (5)).

6. If there is no trustee acting in a liquidation by arrangement under the
Act of 1869 pending after the commencement of this Act (s. 159).
7. In cases where a Registrar of the London Bankruptcy Court is or
would become trustee (s. 161).

(6.) If a trustee is not appointed by the creditors within four weeks from the date of the adjudication, or, in the event of negotiations for a composition or scheme being pending at the expiration of those four weeks, then within seven days from the close of those negotiations by the refusal of the creditors to accept, or of the Court to approve, the composition or scheme, the official receiver shall report the matter to the Board of Trade, and thereupon the Board of Trade shall appoint some fit person to be trustee of the bankrupt's property, and shall certify the appointment.

(7.) Provided that the creditors or the committee of inspection (if so authorised by resolution of the creditors) may, at any subsequent time, if they think fit, appoint a trustee, and on the appointment being made and certified the person appointed shall become trustee in the place of the person appointed by the Board of Trade.

(8.) When a debtor is adjudged bankrupt after the first meeting of creditors has been held, and a trustee has not been appointed prior to the adjudication, the

s. 21.