The law has prescribed the category of persons who can be declared to insolvent by court. ‘Any person who is capable of entering into a contract (i.e., who has attained the age of majority and is of sound mind and is not disqualified from contracting by any law) can be adjudged insolvent provided he is a debtor and he has committed an act of insolvency’. Since a minor is not competent to contract, he cannot therefore, be adjudged insolvent under any circumstances. If the debtor is a lunatic, he can be adjudged insolvent for the debts contracted by him when he was sane. A minor partner in a firm cannot be adjudged an insolvent but his share in the property of the firm is, however, liable for the debts of the firm. A partnership firm may be adjudged insolvent in the name of the firm when each of the partners has committed an act of insolvency or a joint act of insolvency. A deceased person cannot be adjudged an insolvent on any proceedings initiated after his death. A foreigner in India may be adjudged insolvent if he is a debtor and has committed an act of insolvency. In case of a Hindu joint family, when all the members are personally liable on a joint debt and have committed a joint act of insolvency, the members of the Hindu joint family can be adjudged insolvent.
