—(1) Where any part of the property of the bankrupt consists of —
land of any tenure burdened with onerous covenants;
shares or stock in companies;
unprofitable contracts; or
any other property that is unsaleable or not readily saleable by reason of its binding the possessor thereof to the performance of any onerous act or to the payment of any sum of money,
the Official Assignee, notwithstanding that he has endeavoured to sell or has taken possession of the property or exercised any act of ownership in relation thereto, but subject to this section, may, by writing signed by him, at any time disclaim the property.
(2) 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
discharge the Official Assignee from all personal liability in respect of the property disclaimed as from the date when the property vested in him.
(3) The disclaimer shall not, except so far as is necessary for the purpose of releasing the bankrupt and his property and the Official Assignee from liability, affect the rights or liabilities of any other person.
(4) The Official Assignee shall not be entitled to disclaim a lease without the leave of the court, except in any case which may be prescribed or where all persons interested in the property consent to the disclaimer.
(5) The court may, before or on granting 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.
(6) The Official Assignee 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 21 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 Official Assignee, after such application as aforesaid, does not within the said period or extended period disclaim the contract, he shall be deemed to have adopted it.
(7) The court may, on the application of any person who is, as against the Official Assignee, 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.
(8) Any damages payable under the order made under subsection (7) to any person may be proved by him as a debt under the bankruptcy.
(9) The court may —
on an 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;
on hearing such persons as the court may think fit; and
on such terms as the court may think just,
make an order for the vesting of the property in or delivery thereof to —
any person entitled thereto;
any person to whom it seems just that the same should be delivered by way of compensation for such liability as aforesaid; or
a trustee for any person referred to in sub-paragraph (i) or (ii).
(10) On the vesting order being made under subsection (9), the property comprised therein shall vest accordingly in the person therein named in that behalf, without any conveyance or assignment for the purpose.
(11) 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 the 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 application was made.
(12) Any mortgagee or under-lessee declining to accept a vesting order upon those terms shall be excluded from all interest in and security upon the property.
(13) If there is no person claiming under the bankrupt who is willing to accept an order upon those 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 the lease, freed and discharged from all estates, encumbrances and interests created therein by the bankrupt.
(14) Any person sustaining loss or damage by the operation of a disclaimer under this section shall be deemed to be a creditor of the bankrupt to the extent of the loss or damage, and may accordingly prove the same as a debt under the bankruptcy.