289.
| (1) The estate of a deceased person shall he deemed to be insolvent-
| | (i) if upon the basis of a valuation of his assets and liabilities as at the date of his death or at any time subsequent thereto It appears that the assets are or will be insufficient to pay in full the funeral, testamentary and administration expenses relating to the estate, and the claims of creditors; or | | |
| | (ii) if owing to execution proceedings being taken against the deceased or his estate or the difficulty of realizing any of the assets of the estate, or because of disputed claims, or for any other sufficient reason, the estate should be administered as an insolvent estate, for the benefit of all parties interested in the estate. | | |
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| (2) Where an estate is deemed to be insolvent on the date an application for probate or letters of administration is made, the applicant shall, in addition to the other averments required to be stated in the application for probate or letters, set out the material facts upon which adjudication that the estate should be deemed to be insolvent is claimed, and shall contain detailed lists showing-
| | (a) the names of all persons who to the best of the applicant's knowledge and belief have claims against the estate; | | |
| | (b) the last known place of abode or business of such persons; | | |
| | (c) the sums claimed by each of such persons and whether or not the sums claimed are liquidated or unliquidated amounts; and | | |
| | (d) whether or not the sums claimed or any part thereof are admitted by the applicant. | | |
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| (3) Where after grant of probate or letters an estate is deemed to be insolvent, the executor or administrator shall apply for an adjudication that the estate should be deemed to be insolvent, and such application shall set out the material facts and the lists as are required to be filed under the preceding subsection. |
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| (4) It shall be competent for a creditor, heir, beneficiary, or other person interested in the estate, similarly to make application for adjudication that the estate should be deemed to be insolvent, and the provisions of subsection (2) of this section shall mutatis mutandis apply to such application. |
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| (5) As from the date on which the Interim order declaring the estate insolvent is made, all actions In respect of admitted claims and all execution proceedings against the estate of the deceased shall be staved, subject, however, to the right of any secured creditor who has taken out execution proceedings, to proceed to realize his security upon such conditions as a court, having regard to the provisions of the Insolvency Ordinance, shall order. |
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| (6) Where the executor named in the will or the widow or widower is unwilling to proceed with the due administration of an insolvent estate, or where the executor or administrator to whom probate or letters have been issued fails to administer the estate within a reasonable time, the Public Trustee may, having regard to the proper conservation of the estate and the interest of all parties concerned, appoint any fit person to administer the estate. |
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| (7) When a final order is made, the estate shall be administered in accordance with the provisions following: -
| | (a) The funeral, testamentary and administration expenses shall first be paid out of the assets available; | | |
| | (b) Subject as aforesaid, the provisions for the time being in force under the law of insolvency with respect to the estate of a person adjudged insolvent shall apply and be observed in regard to the respective rights of secured and unsecured creditors as to the depths and liabilities provable, the valuation of annuities and future and contingent liabilities, and the priorities of debts and liabilities. | | |
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| (8) An executor or administrator of an insolvent estate shall have the same powers and be subject to the same obligations as the assignee of an insolvent appointed under the Insolvency Ordinance. |
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Sri Lanka Consolidated Acts