Reconstructed Companies Act 1893

s. 14

In the case of any new company mentioned in the said Schedule the same rules as to set-off in the case of mutual credits mutual debts or other mutual dealings as would have applied or would apply under the sixty-third section of the Supreme Court Act if such company were a company whose assets had proved to be insufficient for the payment of its debts and liabilities and which was being wound up under Part I of the Companies Act 1890 shall be deemed to have applied as from the date of the commencement of the winding up of the old company and shall continue to apply as regards any debt or claim existing at the commencement of such winding up or arising out of founded upon or substituted for any debt or claim then existing:

Provided always that no person shall be entitled to any set-off by virtue of this section against such new company in respect of any sum secured by or mentioned in any deposit receipt or other instrument received by him under or in pursuance of any such compromise or arrangement as is hereinbefore mentioned unless he shall surrender such receipt or instrument to such company, but upon surrendering the same he shall be entitled to receive from such company a new deposit receipt or instrument for the balance of the sum secured by or mentioned in the deposit receipt or instrument so surrendered after deduction from such sum of the amount of the set-off.