87. The following new Chapters are hereby inserted immediately after section 554E, and shall have effect as Chapters .XXXVIIIA, XXXVIIIB and Lxxxviii, of the principal enactment:-
| 554F. The estate of a deceased person shall be 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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| 554G.
| | (1) Where an estate is deemed to be insolvent at the date an application for probate or letters of administration is made, the petitioner shall, in addition to the other averments required to be stated in the petition 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 petitioner'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 petitioner. |
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| | (2) In the petition so filed, the persons who are required to be named as respondents to the application for probate or letters, shall be made respondents. | | |
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| 554H.
| | (1) Where after grant of probate or letters an estate is deemed to be insolvent, the executor or administrator shall file a petition by way of summary procedure for an adjudication that the estate shall be deemed to be insolvent, and such petition shall set out the material facts and the lists as are required to be filed under the last preceding section. | | |
| | (2) In such petition all persons named in the original petition for grant of probate or letters shall be made respondents. | | |
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| 554J.
| | (1) 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 section 554G shall, mutatis mutandis, apply to such application. | | |
| | (2) The applicant for probate or letters or the executor or administrator of the estate, shall in addition be made respondent to such application. | | |
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| 554K. Upon the court being satisfied that the facts stated in the petition are prima facie established, it shall enter a testamentary insolvency order nisi declaring the estate to be insolvent in the form No. 93A in the First Schedule. |
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| 554L. A copy of the testamentary insolvency order nisi shall be served on each of the respondents named therein and notice of such order nisi in the form No. 93B in the First Schedule shall be advertised at the expense of the petitioner not later than one month prior to the date fixed in such order nisi for the determination of the matters contained therein in accordance with the provisions of section 532. |
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| 554M. Any person interested in the estate shall be entitled to appear on the day fixed therein and may show cause or support the application, and the court may after due inquiry in accordance with the provisions of Chapter XXIV, either dismiss the petition or make the testamentary insolvency order nisi absolute. |
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| 554N. The testamentary insolvency order absolute shall be in the form No. 93c in the First Schedule, and shall be advertised in the same manner as the order nisi and in such other manner if any, as the court shall consider necessary in the circumstances of the case. |
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| 554P. As from the date on which the testamentary insolvency order nisi 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 stayed, 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 the court, having regard to the provisions of the Insolvency Ordinance, shall order. |
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| 554Q. 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 with reasonable despatch, the court may, having regard to the proper conservation of the estate and the interest of all parties before it, appoint any fit person to administer the estate. |
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| 554R. Where a testamentary insolvency order shall have been made, the estate shall be distributed in accordance with the following provisions:-
| | (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 debts and liabilities provable, the valuation of annuities and future and contingent liabilities, and the priorities of debts and liabilities . | | |
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| 554S. 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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| 554T. An appeal from a testamentary insolvency order nisi or absolute declaring an estate insolvent shall not have the effect of staying the further reseedings in administration, unless the Supreme Court shall make order to the contrary. |
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| 554U. Where a Court of Probate or other authority in a foreign country has either before or after the relevant date granted probate or letters of administration in respect of the estate of a deceased person, probate or letters so granted may, on being produced to, and a copy thereof deposited with, a competent court, be sealed with the seal of that court and thereupon shall be of like force and effect and have the same operation in Sri Lanka as if granted by that court. |
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| 554V. The court shall, before sealing the probate or letters of administration under this Chapter, be satisfied-
| | (a) that the testamentary duty has been paid or secured in respect of so much, if any, of the estate as is liable to testamentary duty in Sri Lanka; and | | |
| | (b) in the case of letters of administration, that security has been given in a sum sufficient in amount to cover the property, if any, in Sri Lanka to which the letters of administration relate; | | |
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| 554W. The court may also if it thinks fit on the application of any Creditor require, before sealing, that adequate security be given for the payment of debts due from the estate to creditors residing in Sri Lanka. |
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| 554X. A duplicate of any probate or lectors of administration sealed with the seal of the court granting the same, or a copy thereof certified as correct by or under the authority of such court shall have the same effect as the original. |
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| 554Y. The sealing of probate or letters of administration under this Chapter shall not affect the liability of an executor or administrator-
| | (a) to file within the time appointed by court an inventory of the deceased person's property and effects situated in Sri Lanka with valuation of same as required by section 538; | | |
| | (b) to file, on or before the expiration of twelve months from the date of such sealing, a true and final account, as regards the deceased's property and effects situated in Sri Lanka, of his executorship or his administration, as the case may be, verified on oath or affirmation, with all receipts or vouchers attached as required by section 553; and | | |
| | (c) to be compelled to make a judicial settlement of his account as executor or administrator, with respect to the deceased's property situated in Sri Lanka, under the provisions of Chapter LV. | | |
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| 554Z. For the purpose of all estates to which this Chapter applies-
| | (a) all references in this Ordinance to any court as being the court from which grant of probate or letters of administration issued shall be construed as references to the court by which probate or letters of administration have been sealed under this Chapter and all references to the granting of probate or letters of administration or to an order absolute declaring a person entitled to such grant shall be construed as referring to the sealing of probate or letters of administration under this Chapter; | | |
| | (b) all references in the Stamp Ordinance to the grant of probate or letters of administration shall be deemed to include a reference to the sealing of probate or letters of administration under this Chapter, and all references to probate or letters of administration shall be deemed to include a reference to any probate or letters of administration or to any duplicate or certified copy thereof sealed under this Chapter. | | |
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| 554AA. Notwithstanding the repeal of the British Courts Probate (Resealing) Ordinance (Chapter 99), the British Courts Resealing Rules, 1939, shall be deemed to be and to continue in force for the purposes of this Chapter as if the said Ordinance had not been repealed, and may be amended, varied, altered or rescinded by rules made under section 15 of the Administration of Justice Law, No. 44 of 1973. |
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| 554CC. The provisions of the Stamp Ordinance shall apply to, and in relation to, every application, order or other document in testamentary proceedings and the executor or administrator, as the case may be, shall be personally liable for the payment of such stamp duty. The amount so paid by way of stamp duty shall be recoverable by the executor or administrator as a first charge on the estate of the deceased after the grant of probate or letters of administration. |
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| 554DD. Where any person has prior to the relevant date died in Sri Lanka leaving an estate and testamentary proceedings had not been commenced in respect of such estate before the relevant date, such proceedings may be instituted under the provisions of this Ordinance. |
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Sri Lanka Consolidated Acts