Under existing law the court may appoint a receiver or manager of the property or business of a debtor after the presentation of a petition of bankruptcy or arrangement on the application of a creditor on proof by affidavit or on sufficient grounds and the receiver must submit his accounts to the Official Assignee or where the Official Assignee is the receiver to the court — rules 38 and 39. Receivers are normally appointed on the application of mortgagees. The affidavit usually states that it is in the interest of the creditors that the business of the bankrupt or arranging debtor should be carried on for some time in order to sell the business as a going concern. In practice the few cases which have arisen concerned hotels. The receiver appointed to the bankruptcy court seems to have very limited functions as he has no duty to investigate the state of the debtor's affairs or to make a report thereon to the creditors. No qualifications are necessary and, unlike the chancery practice, the receiver does not obtain his discharge from that court. The commitee stated that since the function of the Official Assignee is to realise the property and distribute the proceeds it is not surprising that the Bankruptcy Acts do not give power to either the Official Assignee or the bankrupt to carry on the bankrupt's business after bankruptcy. Where, however, a bankrupt offers a composition to his creditors the court may allow him under certain conditions to continue trading — under section 41 of the Bill. As the power to appoint a receiver or manager to carry on the business of the bankrupt is granted for the purpose of selling it as a going concern the committee considered it essential that the section should be re-enacted. It is not necessary to provide expressly in the section that the mode of appointment of a receiver and his duty will be prescribed.
SECTION 73.
Question proposed: "That section 73 stand part of the Bill".
Question put and agreed to.