(1) In carrying out or
causing to be carried out the bankruptcy proceedings of the assets
of a person pursuant to this Chapter, the debts to be paid or
liabilities to be discharged by such a person shall be settled, on the
basis of the following priority order, from the assets of such a
person:
(a) Costs incurred in the carrying out of the bankruptcy
proceedings,
(b) The liability of the secured creditor, who has
provided debt against a pledge or mortgage, to the
extent of such pledge or mortgage,
37
(c) Tax, fine to be paid to the Government of Nepal or
other government charges and dues,
(d) Debts of the creditors other than those referred to in
clause (b),
(e) Claim of the claimants other than those referred to
in clause (b), (c) or (d).
(2) In paying or setting off debts or liabilities pursuant to
sub-section (1), if there are more than one creditor or claimant of
the same priority order, the debt or claim shall be paid or set off pro
rata basis from the assets bankrupted in proportion to the debt or
claim of each creditor or claimant.
(3) In paying the debts of the secured creditors pursuant to
clause (b) of sub-section (1), if, after recovery of his or her debts
from the assets pledged or mortgaged to him or her, there remains
any portion or sum of such pledge or mortgage, other creditors or
claimants may make claim over such portion or sum.
Provided that if the secured creditor's debts cannot be fully
recovered from such assets, he or she cannot claim other property.