Section 59

The disclaimer shall operate to determine as from the date of disclaimer the rights, interests and liabilities of the bankrupt and his property in or in respect of the property disclaimed, and shall also discharge the Director General of Insolvency from all personal liability in respect of the property disclaimed as from the date when the property vested in him, but shall not, except so far as is necessary for the purpose of releasing the bankrupt and his property and the Director General of Insolvency from liability, affect the rights or liabilities of any other person.

The Director General of Insolvency shall not be entitled to disclaim a lease without the leave of the court, except in any cases which may be prescribed or where all persons interested in the property consent to such disclaimer, and the court may, before or on granting such leave, require such notices to be given to persons interested and impose such terms as a condition of granting leave and make such orders with respect to fixtures, tenant’s improvements and other matters arising out of the tenancy as the court thinks just.

The Director General of Insolvency shall not be entitled to disclaim any property, in pursuance of this section, in any case where an application in writing has been made to him by any person interested in the property, requiring him to decide whether he will disclaim or not, and he has for a period of twenty-eight days after the receipt of the application, or such extended period as is allowed by the court, declined or neglected to give notice whether he disclaims the property or not; and in the case of a contract if the Director General of Insolvency, after the application, does not within the said period or extended period disclaim the contract, he shall be deemed to have adopted it.

The court may, on the application of any person who is, as against the Director General of Insolvency, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract or otherwise as to the court seems equitable; and any damages payable under the order to any such person may be proved by him as a debt under the bankruptcy.

Act 360

The court may, on application by any person either claiming any interest in any disclaimed property or under any liability not discharged by this Act in respect of any disclaimed property, and on hearing such persons as it thinks fit, make an order for the vesting of the property in or delivery thereof to any person entitled thereto or to whom it seems just that the same should be delivered by way of compensation for the liability or a trustee for him and on such terms as the court thinks just; and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf, without any conveyance or assignment for the purpose.

Where the property disclaimed is of a leasehold nature the court shall not make a vesting order in favour of any person claiming under the bankrupt, whether as under-lessee or as mortgagee by demise, except upon the terms of making such person subject to the same liabilities and obligations as the bankrupt was subject to under the lease in respect of the property at the date when the bankruptcy petition was filed, and any mortgagee or under-lessee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property, and if there is no person claiming under the bankrupt who is willing to accept an order upon such terms, the court shall have power to vest the bankrupt’s estate and interest in the property in any person liable, either personally or in a representative character, and either alone or jointly with the bankrupt, to perform the lessee’s covenants in such lease, freed and discharged from all estates, incumbrances and interests created therein by the bankrupt.

Any person injured by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the extent of the injury, and may accordingly prove the same as a debt under the bankruptcy.

Powers of Director General of Insolvency to deal with property