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Section 26: Award of compensation
(1) Where a petition presented by a creditor is dismissed under sub-section (1) of section 25, and the Court is satisfied that the petition was frivolous or vexatious, the Court may, on the application of the debtor, award against such creditor such amount, not exceeding Rs. 1,000, as it deems a reasonable compensation to the debtor for the expense or injury occasioned to him by the petition and the proceedings thereon, and such amount may be realised as if it were a fine.
Source: official text of The Provincial Insolvency Act, 1920 as published on India Code (PDF). All sections of the Provincial Insolvency Act, 1920.