This section outlines the procedure for attaching debts, shares in corporations, or other movable properties that are not in the possession of a defaulter. Specifically, it applies to debts not secured by negotiable instruments, shares, or other movable properties unless deposited in or held by a court. The attachment is executed through a written order using FORM GST DRC-16. This order prohibits certain actions: creditors are barred from recovering debts, debtors from paying them, and share owners from transferring shares or receiving dividends. Additionally, it prevents those in possession of other movable properties from giving them to the defaulter.
The order must be visibly posted at the office of the proper officer, and copies must be sent to relevant parties: the debtor in the case of debts, the corporation's registered address for shares, and the person holding other movable properties. If a debtor is prohibited from paying under this order, they may instead pay the amount to the proper officer, and this payment is considered as if it were made to the defaulter. This ensures that the assets are secured and managed according to the legal requirements, preventing the defaulter from accessing them until further notice from the proper officer.
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151. Attachment of debts and shares, etc.
(1) A debt Not secured by a negotiable instrument, a share in a corporation, or other movable property Not in the possession of the defaulter except for property deposited in, or in the custody of any court shall be attached by a written order in FORM GST DRC-16prohibiting.-
(a) in the case of a debt, the creditor from recovering the debt and the debtor from making payment thereof until the receipt of a further order from the proper officer;
(b) in the case of a share, the person in whose name the share may be standing from transferring the same or receiving any dividend thereon;
(c) in the case of any other movable property, the person in possession of the same from giving it to the defaulter.
(2) A copy of such order shall be affixed on some conspicuous part of the office of the proper officer, and another copy shall be sent, in the case of debt, to the debtor, and in the case of shares, to the registered address of the corporation and in the case of other movable property, to the person in possession of the same.
(3) A debtor, prohibited under clause (a) of sub-rule (1), may pay the amount of his debt to the proper officer, and such payment shall be deemed as paid to the defaulter.
