GLASGOW CITY COUNCIL v NAGMANA CHAUDHRY [2015] ScotSC 31 (23 April 2015)

GLASGOW CITY COUNCIL v NAGMANA CHAUDHRY [2015] ScotSC 31 (23 April 2015)

A standard security over heritable property does not, by its mere existence, constitute 'sufficient security for the payment of the debt' under section 12(3A)(b) unless it is capable of immediate realisation to result in payment without undue delay. The debtor failed to demonstrate this, and sequestration should be granted.

Citation
[2015] ScotSC 31
Parties
Petitioner: Glasgow City Council; Respondent: Nagmana Chaudhry
Jurisdiction
Scotland
Judgment Date
23 April 2015
Procedural Posture
Appeal (sequestration/bankruptcy) / Appeal Against Sheriff's Refusal to Grant Sequestration
Outcome
Appeal allowed; sequestration awarded.
Legal Topics
Sequestration, Standard Security, Bankruptcy (scotland) Act 1985 Section 12(3 A), Sufficient Security for Payment of Debt
Insolvency Bankruptcy Sequestration Standard Security Bankruptcy (scotland) Act 1985 Section 12(3 A) Sufficient Security for Payment of Debt

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Parties

Glasgow City Council

Petitioner

Nagmana Chaudhry

Respondent

Procedural Posture

Appeal (sequestration/bankruptcy) / Appeal Against Sheriff's Refusal to Grant Sequestration

Legal Issues

  1. 1 Whether the existence of a standard security held by a creditor over a third party's property constitutes 'sufficient security for the payment of the debt' under section 12(3A)(b) of the Bankruptcy (Scotland) Act 1985 so as to avoid sequestration.
  2. 2 Whether such security must be capable of immediate realisation to satisfy the statutory requirement.

Ratio Decidendi

A standard security over heritable property does not, by its mere existence, constitute 'sufficient security for the payment of the debt' under section 12(3A)(b) unless it is capable of immediate realisation to result in payment without undue delay. The debtor failed to demonstrate this, and sequestration should be granted.

Court Disposition

Appeal allowed; sequestration awarded.

Orders

  • Sheriff's interlocutor of 10 December 2014 recalled.
  • Award of sequestration granted against the respondent.