Amendment status not verified — confirm the current text below against the official source.
Prionty of debts. (1) In the distribution of the pro- perty of the insolvent there shall be paid in priority to all other debts- ( a) all debts due to the Government or to any local authority; and (b) all salary or wages, not exceeding forty five rupees in all, of any clerk, servant, or labourer m respect of services rendered to the insolvent durmg four months before the elate of the presentation of the petition. ( 2) The debts specified m sub-section ( 1) shall rank equally between themselves, and shall be paid in full, unless the property of the insolvent is insufficient to meet them, in which case they shall abate in equal proportions between them- selves. (3) Subject to the retention of such sums as may be necessary for the expenses of administration or otherwise, the debts specified in sub-section (1) shall be discharged forth- with in so far as the property of the insolvent is sufficient to meet them. 37 ( 4) In the case of partners, the partnership property shall be applicable in the first mstance m the payment of the part- nership debts and the separate property of each pa:tner shall be applicable m the first mstance m payment of his separate debts. Where there is a surplus of the separate property of the partners, It shall be dealt with as part of the partnership property; and where there is a surplus of the partnership pro- perty, it shall be dealt w1th as part of the respective separate property m proport10n to the rights and interests of each part- ner in the partnership property. (5) Subject to the provisions of this Act, all debts entered in the schedule shall be paid rateably accordmg to the amounts of such debts respectively and without any preference. ( 6) Where there 1s any surplus after payment of the fore- going debts, it shall be applied m payment of interer-t from the date on wh1ch the debtor is adjudged an msolvent at the rate of six per centum per annum on all debts entered in the schedule.