Section 123Part 18 — Debts Provable Against the Debtor’s Estate
Interest on debts, how calculated
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Where a debt has been proved and the debt includes interest or any pecuniary consideration in lieu of interest or in the nature of premiums, fines, bonus or commissions, such interest or consideration shall, for the purpose of dividend, be calculated at a rate not exceeding six per cent per annum, without prejudice to the right of a creditor to receive out of the estate any higher rate of interest to which the creditor may be entitled after all the debts proved in the estate have been paid in full.
In dealing with the proof of the debt —
any account settled between the debtor and the creditor within three years preceding the date of the provisional order may be examined, and, if it appears that the settlement of the account forms substantially one transaction with any debt alleged to be due out of the debtor’s estate (whether in the form of renewal of a loan or capitalisation of interest or ascertainment of loans or otherwise) the account may be reopened and the whole transaction treated as one;
any payments made by the debtor to the creditor before the provisional order whether by way of bonus, premium, fines, commissions or otherwise, and any sums received by the creditor before the provisional order from the realisation of any security for the debt, shall, notwithstanding any agreement to the contrary, be appropriated in the first place to the satisfaction of interest at a rate not exceeding six per cent per annum as in this section previously provided, and thereafter to the satisfaction of the principal; and
where the debt due is secured and the security is realised after the provisional order, or the value thereof is assessed in the proof, the amount realised or assessed shall be appropriated in the first place to the satisfaction of interest at a rate not exceeding six per cent per annum as in this section previously provided, and thereafter to the satisfaction of the principal.