ACTS OF GHANA

INSOLVENCY ACT, 1962 (ACT 153)

 ARRANGEMENT OF SECTIONS

Section

PART I—THE OFFICIAL TRUSTEE

1. The Official Trustee.

2.  Powers of Court.

3. Insolvent Estates Fund.

4. Insolvency Register.

5. Notices in Gazette.

6. Liability for default.

7. Annual Report.

PART II—INSOLVENCY PROCEEDINGS

Petitions

8. Commencement of proceedings.

9. Creditor's petition.

10. Debtor's petition.

11. Procedure on petitions.

Protection Orders

12. Effect of protection order.

13. Debtor's statement of affairs.

14. Debtor's proposal for arrangement with creditors.

15. Creditors' proof of debts.

16. First meeting of creditors.

Judicial Consideration

17. Application to Court.

18. Hearing of application.

19. Insolvency order.

20. Confirmation of arrangement with creditors.

21. Rescission of protection order.

Bankruptcy

22. Public examination of debtor.

23. Adjudication of bankruptcy.

24. Additional duties and disabilities of bankrupt.

General Duties and Disabilities of Debtor

25. Duty to co-operate with Official Trustee.

26. Duty to disclose after-acquired property.

27. Duty of disclosure when obtaining credit.

28. Liability to arrest and seizure of property.

29. Liability to interception of letters, etc.

Discharge

30. Date of discharge.

31. Earlier discharge where additional payment made.

32. Alteration of bankrupt's discharge date.

33. Certificate of discharge.

34. Effect of discharge.

Termination of Proceedings

35. When proceedings come to an end.

36. Order terminating proceedings.

PART III—ADMINISTRATION OF DEBTOR'S PROPERTY

Assets passing to Official Trustee

37.  Vesting on making of protection order.

38.  After-acquired property.

39.  Repayments by preferred creditors.

40.  Repayment of gifts, etc.

41.  Repayments by moneylenders.

42.  Sums to be credited to debtor's official account.

General Functions of Official Trustee

43.  Duty to protect assets.

44.  Duty to realise assets.

45.  Duty to verify debts ranking for dividend.

46.  Duty to amend admitted proofs.

47.  Duty to ascertain priority of debts.

48.  Duty to consult creditors.

49.  Enquiries by Court.

Assets Passing from Official Trustee

50.  Cases where insolvency order not made.

51.  Disclaimer.

52.  Fees and outgoings.

53.  Return of personal effects to debtor.

54.  Dividends to creditors.

55.  Return of surplus assets to debtor.

56   Payments to be made only out of debtor's property.

PART IV—ARRANGEMENTS WITH CREDITORS APART FROM INSOLVENCY PROCEEDINGS

57.  Arrangements to which this Part applies.

58.  Arrangements Register.

59.  Arrangements voidable unless registered.

60.  Setting aside of arrangement.

61.  Arrangement not to count as suspension of payments.

PART V—MODIFICATIONS IN SPECIAL CASES

62.  Debtors not of full age and capacity.

63.  Joint debtors.

64.  Debtors who are trustees.

65.  Participation in insolvency proceedings by subsequent creditors.

PART VI— ADMINISTRATION OF ESTATES OF DECEASED INSOLVENTS

66.  Administration orders.

67.  Effect of administration order.

68.  Creditors' proof of debts.

69.  First meeting of creditors.

70. Duties of deceased's representative.

71. Application of Part III of this Act.

72. Order terminating administration.

73. Death of debtor during insolvency proceedings.

PART VII—SUPPLEMENTAL PROVISIONS

74. Offences.

75. Evidence.

76. Rules.

77. Interpretation.

78. Commencement.

SCHEDULE

Schedule—Meetings of Creditors

THE HUNDRED AND FIFTY-THIRD

ACT OF THE PARLIAMENT OF THE REPUBLIC OF GHANA

ENTITLED

THE INSOLVENCY ACT, 1962

AN ACT to provide for the protection of creditors and debtors in cases of insolvency.

DATE OF ASSENT: 20th November, 1962

BE IT ENACTED by the President and the National Assembly in this present Parliament assembled as follows:—

PART I—THE OFFICIAL TRUSTEE

Section 1—Official Trustee.

(1) There shall be an Official Trustee, whose post shall be a Civil Service post.

(2) Any act required or authorised to be done by or in relation to the Official Trustee may instead be done by or in relation to any Civil Servant for the time being authorised in that behalf either by the Official Trustee or under any enactment, and a Civil Servant shall be presumed to be so authorised unless the contrary is shown.

(3) References to the Official Trustee in any enactment shall be taken to include all Civil Servants authorised or presumed to be authorised as aforesaid.

(4) Where he considers it necessary for the exercise of his functions, the Official Trustee may avail himself for appropriate payment of the services of persons who are not Civil Servants.

Section 2—Powers of Court.

(1) Any person aggrieved by an act done by the Official Trustee in the exercise of his functions under this Act may appeal to the Court, which shall make such order as it thinks fit.

(2) If any person refuses or fails to comply with a requirement made by the Official Trustee under this Act, the Official Trustee may apply to the Court, and the Court may order the requirement to be carried out.

(3) If the Official Trustee is in doubt as to any matter arising in connection with his functions under this Act he may apply to the Court for directions.

Section 3—Insolvent Estates Fund.

(1) There shall be a public fund to be known as the Insolvent Estates Fund, to which shall be credited all sums received by the Official Trustee under this Act and to which shall be debited all sums disbursed by him thereunder.

(2) There shall be an account within the Insolvent Estates Fund to which shall be credited all sums received by the Official Trustee by way of fees and other charges, in this Act referred to as the Fees Account.

(3) All payments required or authorised by this Act to be met out of the Insolvent Estates Fund are hereby charged on that Fund.

Section 4—Insolvency Register.

(1)  The Official Trustee shall make and keep a register, to be known as the Insolvency Register, in which as respects every debtor in relation to whom a protection order is made, the  following information shall be recorded as it becomes available, that is to say,

(a) the name and address of the debtor, any previous names of the debtor, and any change in the debtor's name or address which is notified to the Official Trustee;

(b)  the date of the making of the protection order;

(c)  the date on which the protection order ceases to have effect, and the reason for its ceasing to have effect;

(d) if an insolvency order is made, the date of the making of the order, the date on which the debtor is discharged and the date on which the insolvency proceedings are terminated;

(e) if the debtor is adjudged bankrupt, the date of the adjudication, the appointed discharge date, and any alteration in that date;

(f) if a participation order is made, the date of the making of the order and, if the debtor's discharge is revoked by virtue of the order, a statement to that effect.

(2) Where an administration order is made in respect of a deceased debtor, the following information shall be recorded in the Insolvency Register as it becomes available, that is to say,

(a) the name and the last address of the debtor, and any previous names of the debtor;

(b)  the date of the making of the administration order; and

(c) the date of the termination of the administration.

(3) The Insolvency Register shall at all reasonable times be open for public inspection on payment of such fee, if any, as may be prescribed.

(4) The Official Trustee shall, on application being made by any person in the prescribed form, and on payment of the prescribed fee, provide copies of any entry in the Insolvency Register.

Section 5—Notices in Gazette.

(1) Whenever any information requires to be recorded in the Insolvency Register, the Official Trustee, in addition to recording the information in the Register, shall also cause it to be published in the Gazette within fourteen days after it becomes available to him.

(2) As soon as may be after the end of each June and December, the Official Trustee shall cause a notice to be published in the Gazette giving the names, including former names, and addresses of all bankrupts, together with the dates on which they were adjudged bankrupt and their appointed discharge dates.

Section 6—Liability for Default.

(1) No liability shall attach to the Official Trustee in respect of any breach of a duty imposed on him by or under this Act, and except in so far as may result from an order made under subsection (3) of section 42 of this Act, no liability shall attach to the Republic in respect of any such breach.

(2) Nothing in this section shall affect the institution against a Civil Servant of any criminal proceedings or of disciplinary proceedings under the Civil Service Act, 1960 (C.A. 5).

Section 7—Annual Report.

As soon as may be after the end of each December, the Official Trustee shall prepare a report giving details of the operation of this Act during the previous year, and the report shall be laid before the National Assembly.

PART II—INSOLVENCY PROCEEDINGS

Petitions

Section 8—Commencement of Proceedings.

(1) Insolvency proceedings in respect of a debtor shall be initiated by the presentation of a petition to the Official Trustee in the prescribed manner, and accompanied by the prescribed fee, for the making by him of an interim order, to be known as a protection order, enabling the debtor's assets to be conserved for the protection of his creditors until his affairs have been considered by the Court.

(2)  A petition shall not be presented in respect of a body corporate.

(3) A petition shall not be presented in respect of two or more debtors except where debts are owed by those debtors jointly.

(4) Where a petition has been presented, the Court may, on  an application being made by the Official Trustee, restrain the institution or continuance of any civil proceedings by or against the debtor other than proceedings by a secured creditor for the realisation of his security.

(5) A petition may be withdrawn or amended, with the consent in writing of the Official Trustee, at any time before a protection order is made.

Section 9—Creditor's Petition.

(1) A petition may be presented in respect of a debtor by any one or more of his creditors if his indebtedness to the petitioner, or, as the case may be, the petitioners collectively, in liquidated sums payable immediately amounts to at least five hundred pounds and if,

(a) the debtor has, within the preceding three months, given notice to any of his creditors that he has suspended, or is about to suspend, payment of his debts;

(b) the sheriff has, within the preceding three months, and in pursuance of a writ of fieri facias issued in Ghana in respect of the debtor, taken possession of any of the debtor's property and either sold the property or retained it for at least twenty-one days; or

(c) any of the debtor's creditors is entitled to proceed with the execution, by means of a writ of fieri facias issued or issuable in Ghana, of a judgment or order obtained against the debtor not less than seven days previously.

(2)  Where any of the petitioners is a secured creditor,

(a)  the value and description of the security shall be specified in the petition; and

(b) for the purpose of applying the five hundred pounds limit under the preceding subsection the amount of the secured debt shall be reduced by the value of the security as so specified.

Section 10—Debtor's Petition.

(1) A petition may be presented by a debtor in respect of his own affairs if the debtor is insolvent and his indebtedness in liquidated sums payable immediately amounts to at least five hundred pounds.

(2) If any of his said indebtedness is to a secured creditor then, unless the total of unsecured debts amounts to at least five hundred pounds in liquidated sums payable immediately, the debtor shall specify the value and description of the security in his petition and, for the purpose of applying the five hundred pounds limit under the preceding subsection, the amount of the secured debt shall be reduced by the value of the security as so specified.

Section 11—Procedure on Petitions.

(1) A copy of a creditor's petition shall be served on the debtor by the petitioner on or before the day on which it is presented.

(2) After seven days have elapsed following the presentation of a petition, the Official Trustee shall consider the petition and evidence in support thereof, together, in the case of a creditor's petition, with any representations made by the debtor and evidence in support thereof; and if the petition is not withdrawn and the Official Trustee considers that it was duly presented he shall make a protection order thereon:

Provided that he shall not make a protection order if it appears to him that, owing to payments by the debtor or other change of circumstances, the debtor's total indebtedness in liquidated sums payable immediately, including indebtedness to persons who are not parties to the petition, has, after deduction of the value of securities held in respect thereof, fallen below five hundred pounds.

(3) Where the Official Trustee is of opinion that a petition was not duly presented or that the indebtedness of the debtor has been reduced as aforesaid he shall, if the petition has not been withdrawn, give notice to the petitioner and, in the case of a creditor's petition, to the debtor that the petition is dismissed.

(4) Where two or more petitions are presented in respect of a debtor a protection order made on any of the petitions shall be deemed to have been made on all of them.

(5) After a protection order has been made no further petition shall be presented in respect of the debtor before the termination of the insolvency proceedings.

Protection Orders

Section 12—Effect of Protection Order.

While a protection order has effect,

(a) existing and after-acquired property of the debtor shall vest in the Official Trustee in accordance with sections 37 and 38 of this Act and shall be conserved by him in accordance with section 43 thereof;

(b)  the debtor shall be subject to the duties and disabilities specified in sections 25, 26, 28 and 29 of this Act;

(c)  no civil proceedings by or against the debtor shall be instituted or continued without the leave of the Court.

Section 13—Debtor's Statement of Affairs.

(1) Within seven days after the making of a protection order, or such longer period as the Official Trustee may allow, the debtor shall lodge with the Official Trustee a statement of his affairs conforming to the following subsection, unless such a statement has been lodged previously.

(2)  The statement of affairs shall contain,

(a) particulars of the debtor's existing and potential assets and of all other property in his possession or control;

(b) a list of creditors, showing the amounts and due dates of debts and particulars of securities held;

(c) particulars of the debtor's transactions during such period as the Official Trustee may specify;

(d)  a statement of the reasons for the debtor's insolvency, unless he denies that he is insolvent,

together with such additional information as may be required by rules or by the Official Trustee.

Section 14—Debtor's Proposal for Arrangement with Creditors.

Within seven days after the making of a protection order, or such longer period as the Official Trustee may allow, the debtor, if he wishes to make a proposal for an arrangement with creditors, may lodge details of the proposal with the Official Trustee.

Section 15—Creditors' Proof of Debts.

(1) In this Act "provable debt" means an obligation the value of which is capable of assessment in money, being,

(a) any obligation which, apart from this Act, would have been enforceable by the creditor against the debtor at the date on which the protection order was made, or

(b) any existing or future obligation, other than an obligation unenforceable by virtue of the law relating to limitation of actions, which, by reason of some transaction which took place before the said date, might, apart from this Act, have become enforceable by the creditor against the debtor after that date,

and references in this Act to the value of a provable debt shall be references to its value apart from this Act on the said date.

(2) At any time while a protection order has effect any creditor may lodge with the Official Trustee a statement, to be known as a proof of debts, in accordance with the following subsection.

(3)  A proof of debts shall be in two parts, the first part containing brief particulars of,

(a) the values and due dates of provable debts alleged by the creditor to be outstanding in his favour against the debtor and the nature and value of any securities held by the creditor in respect of such debts;

(b) the values and due dates of any obligations outstanding in the debtor's favour against the creditor, being obligations which would be provable debts if a protection order had been made against the creditor on the date on which the protection order was made against the debtor;

(c) the nature and value of securities of any description held by the debtor in respect of such obligations as are mentioned in the preceding paragraph;

(d) the total values of the aforesaid debts, obligations and securities, and the second part containing details of the transactions from which the said debts and obligations arose.

(4) A copy of the first part of any proof lodged under this section shall be given by the Official Trustee to the debtor and to each creditor who is mentioned in the debtor's statement of affairs or who, not being so mentioned, himself lodges a proof; and if the debtor knows or believes that the proof is false in any material particular it shall be his duty to inform the Official Trustee thereof as soon as is practicable.

(5) The Official Trustee shall examine every proof of debts lodged with him and if, after considering any representations made by the debtor or any other creditor, it appears to him that any item is improperly included or any value incorrectly stated or that the proof is otherwise incorrect, he shall give notice of the objection to the creditor, who may lodge an amended proof within the period specified in the notice or such extended period as the Official Trustee may allow.

(6) If it does not appear to the Official Trustee that a proof is incorrect he shall give notice to the creditor that he admits the proof subject to verification under section 45 of this Act.

(7) If the creditor fails to lodge an amended proof or a further amended proof, as the case may be, within the period allowed under subsection (5) of this section and the Official Trustee is still of opinion that the previous proof is incorrect he shall give notice to the creditor that he rejects the proof.

Section 16—First Meeting of Creditors.

(1) The Official Trustee shall call a first meeting of creditors for a date not later than four weeks after the publication of a protection order, and shall give such notice of the meeting as may be practicable to each creditor who is mentioned in the debtor's statement of affairs or who, not being so mentioned, has lodged a proof of debts.

(2) So far in advance as may be practicable, the Official Trustee shall give to every such creditor a copy of the debtor's statement of affairs and of any proposal for an arrangement with creditors lodged by him, together with any observations thereon that the Official Trustee may wish to make.

(3) The Official Trustee shall put to the meeting such questions as he considers appropriate:

Provided that if the debtor has proposed an arrangement with creditors, the meeting shall be asked to approve or reject the proposal.

(4) An arrangement with creditors shall not be taken to be approved unless it has secured at least three-quarters of the votes cast.

(5) The meeting shall be closed not later than six weeks after the publication of the protection order.

(6)  The Schedule to this Act shall apply in relation to the meeting.

Judicial Consideration

Section 17—Application to Court.

(1) Within fourteen days after the closing of the first meeting of creditors, the Official Trustee shall make an application to the Court, in this Act referred to as an application for judicial consideration, to enable the Court to consider the debtor's affairs and give its decision as to the future course of the insolvency proceedings.

(2) On an application for judicial consideration the Court  may make one or other of the following orders, namely,

(a) an insolvency order;

(b) an order confirming an arrangement with creditors;

(c) an order rescinding the protection order.

(3) On the making of any such order the protection order shall cease to have effect, so however that the debtor's assets shall remain vested in the Official Trustee except as otherwise provided by section 50 of this Act.

Section 18—Hearing of Application.

(1) At the hearing of an application for judicial consideration the debtor and any creditor who has lodged a proof of debts may appear and be heard either in person or by counsel, and the Official Trustee shall submit to the Court a report on the circumstances of the case.

(2)  The Official Trustee's report shall include a statement of,

(a)  the grounds on which the protection order was made ;

(b) the assets of the debtor which have become vested  in the Official Trustee;

(c)  the liabilities of the debtor;

(d) the conduct of the debtor before and since the presentation of the petition; and

(e) any decisions taken at the first meeting of creditors, together with any other information which may assist the Court.

(3) The Official Trustee and any other person entitled to appear may, with the leave of the Court, adduce oral or written evidence and cross-examine any witness.

(4) It shall be the duty of the Official Trustee to give whatever assistance the Court may require to enable it to reach a conclusion.

Section 19—Insolvency Order.

(1) The Court shall make an insolvency order in every case in which it does not, under either of the two following sections, confirm an arrangement with creditors or rescind the protection order.

(2) Where an insolvency order is made the Official Trustee shall proceed to realise and distribute the debtor's assets in accordance with Part III of this Act, and while the order has effect,

(a) the debtor shall be subject to the duties and disabilities specified in sections 25 to 29 of this Act;

(b)  no civil proceedings by or against the debtor shall be instituted or continued without the leave of the Court.

Section 20—Confirmation of Arrangement with Creditors.

(1) Where an arrangement with creditors was approved by the first meeting of creditors and it does not appear that grounds for bankruptcy exist or that it is likely that they exist, the Court shall make an order confirming the arrangement if,

(a) its terms are fair and reasonable;

(b) it provides for an order of priority of payments corresponding to that laid down by section 54 of this Act; and

(c) it provides for payment in full of any fees and outgoings due to the Official Trustee in respect of the insolvency proceedings.

(2) If the conditions specified in paragraphs (a) to (c) of the preceding subsection are not satisfied the Court may adjourn the hearing of the application for judicial consideration and direct the first meeting of creditors to be reopened with a view to the submission by the debtor of proposals for a modified arrangement.

(3) On confirmation by the Court an arrangement with creditors shall, in respect of every provable debt owed by the debtor, become binding on the debtor and on each creditor who was entitled to lodge a proof, whether or not that creditor voted in favour of the arrangement.

(4) It shall be the duty of the Official Trustee to supervise the carrying into effect of an arrangement with creditors confirmed by the Court; and the Court may, on the application of the Official Trustee or any person interested, from time to time give such directions as may be expedient for carrying it into effect.

(5) If it appears to the Court, on the application of the Official Trustee or any person interested,

(a) that default has been made in carrying into effect an arrangement with creditors confirmed by the Court, or

(b) that for any reason it is impracticable or would be unjust to proceed with the arrangement, or

(c) that confirmation of the arrangement was procured by fraud,

the Court may annul the arrangement but without prejudice to anything previously done thereunder.

(6) Where an arrangement is annulled the Court may make a protection order against the debtor, and this Act shall thereafter apply as if the protection order had been then made on a creditor's petition by the Official Trustee.

Section 21—Rescission of Protection Order.

(1) The Court shall rescind the protection order if it appears,

(a) that having regard to any new evidence and to the circumstances generally, the order should not have been made; or

(b) that owing to payments made on behalf of the debtor or other change of circumstances, payment in full has been achieved.

(2) If the Official Trustee informs the Court that the assets vested in him in respect of the debtor are likely to be sufficient to provide for payment in full, the Court may adjourn  the hearing of the application for judicial consideration and authorise the Official Trustee to realise and distribute the assets in the same manner as if an insolvency order had been made.

(3) Where the hearing has been adjourned under the preceding subsection the Official Trustee shall apply to the Court for the hearing to be resumed,

(a) when payment in full has been achieved; or—

(b) if at any time it appears to him that the assets are after all insufficient to provide for payment  in full,

and where it is satisfied that payment in full has been achieved the Court shall rescind the protection order.

Bankruptcy.

Section 22—Public Examination of Debtor.

(1) If, at any time when an insolvency order is made, or on an application made by the Official Trustee at any subsequent time before the debtor's discharge from the insolvency order, it appears to the Court that grounds for bankruptcy exist or that it is likely that they exist, the Court shall direct the debtor to undergo an examination as to his conduct and affairs at a public sitting of the Court.

(2) Subject to section 8 of the Oaths Act, 1960 (C.A. 12) (by which a person is permitted to give evidence on affirmation in certain cases) the debtor shall be examined on oath and shall answer all questions put to him by the Court or allowed by the Court to be put to him by or on behalf of the Official Trustee or any creditor who has lodged a proof of debts.

(3) A transcript of the examination shall be made and read to or by the debtor and signed by him; and the signed transcript may be used as evidence in any subsequent civil or criminal proceedings affecting the debtor, whether instituted under this Act or not.

Section 23—Adjudication of Bankruptcy.

(1) Where a public examination has been held under the preceding section, the Court shall make an order adjudging the debtor a bankrupt if one or more of the following have been established, namely,

(a) that for a consecutive period of twelve months within the three years preceding the making of the protection order, the debtor continued to carry on his trade or business in the knowledge that he was insolvent;

(b) that the debtor contributed to his insolvency by rash speculations or culpable neglect of his business affairs, or by gambling or unjustifiable extravagance;

(c) that a provable debt was contracted by the debtor with the intention that it should not be met or without a reasonable expectation of being able to meet it;

(d) that the debtor has failed to account satisfactorily for assets of his which have disappeared since the date of the making of the protection order or during the year previous to that date;

(e) that the debtor has persistently and without adequate excuse failed to carry out his duties in the insolvency proceedings;

(f) that the debtor is a former bankrupt;

(g) that within the preceding three years the debtor has been convicted of an offence involving dishonesty in relation to property and has been sentenced to imprisonment for three months or more,

(h) that within the preceding three years the debtor has been convicted of an offence under section 7 or 8 of the Registration of Business Names Act, 1962 (Act 151).

(2) The order shall specify a date for the discharge of the bankrupt, being a date at least two years after the making of the order.

(3) Where the Court has directed the debtor to undergo a public examination under the preceding section but the examination cannot be held because the debtor has absconded, or is medically unfit to appear, or for any other reason, the Court may proceed under this section as if the examination had been held.

Section 24—Additional Duties and Disabilities of Bankrupt.

(1) In addition to the duties and disabilities imposed on a bankrupt by virtue of an insolvency order having been made against him, he shall be subject to the provisions of this section.

(2) A bankrupt shall not,

(a) carry on, or take part in the management or direction of, any trade or business;

(b) operate an account with a bank, building society or similar institution;

(c) obtain credit exceeding ten pounds; or

(d) enter into any hire-purchase agreement,

except with the consent in writing of the Official Trustee and in accordance with such directions as may from time to time be given to him by the Official Trustee.

(3)  A bankrupt shall,

(a) keep a record of his income, expenditure and other financial dealings in a form approved by the Official Trustee; and

(b) lodge with the Official Trustee at intervals of not more than four months an income and expenditure account in a form so approved.

(4) In this section "hire-purchase agreement" means an agreement by which a person agrees to bail goods to a bailee on terms such that property in the goods may or will pass to the bailee after payment of two or more instalments.

General Duties and Disabilities of Debtor

Section 25—Duty to Co-operate with Official Trustee

(1) In addition to the specific duties imposed on him by or under this Act, it shall be the general duty of the debtor, at all times during the period between the making of a protection order and the termination of the insolvency proceedings, to comply as promptly and fully as is practicable with any direction given by the Official Trustee in connection with the exercise of his functions as to the debtor's affairs.

(2) During the said period it shall be the duty of the debtor,

(a) to attend every meeting of creditors called by the Official Trustee and give such information to the meeting as may be required by the chairman;

(b) as soon as is practicable to give notice to the Official Trustee of any change in his name or address;

(c)  not to destroy, alter, conceal or dispose of any account book or other record of his financial affairs.

Section 26—Duty to Disclose After-Acquired Property.

(1) It shall be the duty of the debtor, whenever he becomes entitled to any after-acquired property, to give notice thereof to the Official Trustee.

(2) In this Act "after-acquired property" means movable and immovable property, including income, which becomes, or but for this Act would become, vested in the debtor during the period between the making of the protection order and the discharge of the debtor or earlier termination of the insolvency proceedings.

Section 27—Duty of Disclosure when Obtaining Credit.

Where a bankrupt or other debtor who has not been discharged intends, whether by himself or jointly with another person, to obtain credit exceeding ten pounds from any person, it shall be the debtor's duty to disclose to that person, before seeking to obtain the credit, that he is a bankrupt or is undischarged from an insolvency order, as the case may be.

Section 28—Liability to Arrest and Seizure of Property.

(1) If, while insolvency proceedings are in progress against a debtor, it appears to the Court that the proceedings are or may be impeded by reason that the debtor,

(a) has absconded, or is likely to do so;

(b) has removed, concealed, destroyed or damaged any property, or is likely to do so; or

(c) is likely to fail to attend as required before the Court, the Official Trustee or any meeting of creditors,

then, without prejudice to its powers in relation to contempt of court, the Court may issue a warrant for the arrest of the debtor, or the seizure of the property in question, or for both arrest and seizure.

(2) Where a warrant of arrest is issued under this section the provisions of the Criminal Procedure Code, 1960 (Act 30) relating to arrest shall apply in the same way as they apply to arrest for a criminal offence; and a debtor arrested under such warrant may, for the purposes of the insolvency proceedings, be conveyed in custody to any hearing by the Court or the Official Trustee, or to any meeting of creditors.

(3) Property seized under this section shall be dealt with as the Court may direct, so however that property which does not belong to the debtor and is not likely to be subject to the powers of the Official Trustee under Part III of this Act shall be returned to its owner as soon as is practicable.

Section 29—Liability to Interception of Letters, Etc.

(1) If, during the period between the making of a protection order and the termination of the insolvency proceedings, it appears to the Court that the proceedings may be impeded unless the Official Trustee is enabled to inspect the debtor's incoming correspondence, the Court may make an order directed to the Minister responsible for Communications requiring him to cause any postal article in course of transmission by post to the debtor during such period, not exceeding six months, as may be specified in the order to be readdressed to the Official Trustee.

(2) After taking such copies and retaining such articles as he considers expedient for the purposes of the proceedings, the Official Trustee shall transmit the remaining articles to the debtor as soon as is practicable.

(3)  This section shall be read as one with the Post Office Ordinance (Cap. 214).

Discharge

Section 30—Date of Discharge.

(1) The date of discharge from an insolvency order of a debtor who is not a bankrupt shall be the earliest of the following dates, namely,

(a) the date two years after the insolvency order was made;

(b) the date on which payment in full is achieved;

(c) the date specified in a proposal for additional payment approved by the Court under section 31 of this Act.

(2) The date of discharge from an insolvency order and from bankruptcy of a debtor who is a bankrupt shall be the date fixed under section 23 of this Act at the time when the debtor was adjudged bankrupt, or if that date has been altered by the Court under section 31 or 32 of this Act, shall be the date as so altered.

(3) The date which will be the date of discharge unless an event occurs to alter it is in this Act referred to as the appointed discharge date.

Section 31—Earlier Discharge where Additional Payment Made.

(1) Where before the appointed discharge date of a bankrupt or other debtor,

(a) a person other than the debtor gives notice to the Official Trustee that he proposes to pay to the Official Trustee a sum specified in the notice for distribution to the creditors if the debtor's discharge is fixed for an earlier date specified therein, in this section referred to as the specified date; and

 (b) it appears to the Official Trustee that the proposal is made in good faith and could be carried out,

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the Official Trustee shall call a meeting of creditors, to which the Schedule to this Act shall apply, and shall report to the meeting his views on the proposal and also, if the debtor is a bankrupt, his views on the debtor's conduct since he was adjudged a bankrupt together with an account of any new facts which have since come to light as to his conduct and affairs before he was so adjudged.

(2) After hearing the Official Trustee's report and any observations made by or on behalf of the debtor, the meeting shall vote on the proposal.

(3) If the meeting approves the proposal the Official Trustee shall apply to the Court for its decision thereon and shall submit to the Court a report dealing with the matters required to be dealt with in his report to the meeting and including the decision of the meeting.

(4) If the Court is satisfied that it would be proper to discharge the debtor on the specified date it shall make an order,

(a) fixing the date as the appointed discharge date; and

(b) requiring the person making the proposal to pay the sum specified therein to the Official Trustee within such period as is specified in the order.

(5) The specified date,

(a) shall not be less than two months after the date on which notice of the proposal is given to the Official Trustee, and

(b) in the case of a bankrupt shall not be less than two years after the date on which he was adjudged bankrupt,

and the Official Trustee shall carry out the requirements of this section in sufficient time to enable the Court to give its decision before the specified date.

(6) A sum paid under this section shall be taken to be paid by way of gift to the debtor unless the proposal states that it is to be paid by way of loan.

Section 32—Alteration of Bankrupt's Discharge Date.

(1) Where, before the appointed discharge date of a bankrupt, it appears to the Official Trustee that the date should be altered to an earlier or later date by reason of,

(a) the conduct of the bankrupt since he was adjudged a bankrupt; or

(b) new facts which have come to light as to his conduct or affairs before he was so adjudged,

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the Official Trustee shall call a meeting of creditors, to which the Schedule to this Act shall apply, and shall report to the meeting his view as to the appropriate new discharge date and as to the debtor's conduct since he was adjudged a bankrupt, together with an account of any such new facts as aforesaid.

(2) After hearing the Official Trustee's report and any observations made by or on behalf of the debtor, the meeting shall vote on whether the discharge date should be altered and if so what the new date should be.

(3) If after the meeting the Official Trustee remains of the opinion that the discharge date should be altered he shall apply to the Court for its decision, and if he does so shall submit to the Court a report dealing with the matters required to be dealt with in his report to the meeting and including the decision of the meeting.

(4) If the Court is satisfied that the date should be altered it shall make an order fixing as the appointed discharge date whichever new date it considers appropriate.

(5) The same meeting of creditors may, if the Official Trustee thinks fit, consider a proposal made under the preceding section and matters brought before it under this section, and if the Court thinks fits, the Court may deal in the same proceedings with applications under the preceding section and under this section.

Section 33—Certificate of Discharge.

On the arrival of the appointed discharge date of a bankrupt or other debtor, the debtor shall be deemed to be discharged, and as soon as may be thereafter the Official Trustee shall issue to the debtor a certificate of discharge.

Section 34—Effect of Discharge.

(1) The discharge of a bankrupt or other debtor shall,

(a) release him from all provable debts whether or not included in any proof of debts;

(b) relieve him for the future from any duties and liabilities under section 24, 26, and 27 of this Act.

(2) The discharge of a bankrupt or other debtor shall not,

(a) release any person who at the date when the insolvency order was made was a partner or co-trustee of the debtor, or was jointly bound with him under a contract or otherwise, or was a surety or in the nature of a surety for him; or

(b)  bring the insolvency proceedings to an end.

Termination of Proceedings

Section 35—When Proceedings Come to an End.

(1) Where an insolvency order is not made, insolvency proceedings shall come to an end on the happening of any of the following events, namely,

(a) the withdrawal or dismissal of the petition by which the proceedings were initiated;

(b) the confirmation of an arrangement with creditors under section 20 of this Act;

(c) the rescission of the protection order under section 21 of this Act.

(2) Where an insolvency order is made the insolvency proceedings shall come to an end on the making by the Court of an order under the following section.

Section 36—Order Terminating Proceedings.

(1) Where a bankrupt or other debtor has been discharged and,

(a) the Official Trustee has completed the distribution of the debtor's assets under Part III of this Act; and

(b) the Official Trustee's final accounts in the insolvency have been drawn up,

and have passed by the Auditor-General, the Official Trustee shall apply to the Court for an order terminating the insolvency proceedings.

(2) The Official Trustee shall give notice of the application, together with a summary of the final accounts, to the debtor and to every creditor with an admitted proof.

(3) The Court shall grant the application if satisfied that it is duly made.

PART III—ADMINISTRATION OF DEBTOR'S PROPERTY

Assets Passing to Official Trustee

Section 37—Vesting on making of Protection Order.

(1) On and by the virtue of the making of a protection order there shall vest in the Official Trustee to the same extent and, subject to subsection (3) of this section, with the same incidents, all movable and immovable property vested in the debtor immediately before the order was made.

(2) All property in the possession of the debtor at any time within six months before the protection order was made shall be presumed to be vested in the debtor unless the contrary is shown.

(3) Property which has become vested in the Official Trustee under this section shall not be subject to attachment, distress or other proceedings for the enforcement of an obligation against the debtor, whether founded on a judgment or not:

Provided that this subsection shall not apply to proceedings for the enforcement of a security.

Section 38—After-Acquired Property.

(1) The Official Trustee shall bring about the vesting in him, to the same extent and, subject to subsection (3) of this section, with the same incidents, of all after-acquired property of the debtor except property exempted by the next subsection or property which would not be of value to the creditors.

(2) The following after-acquired property shall be exempted namely,

(a) property necessary for the reasonable current maintenance of the debtor, his spouse and children;

(b)  money paid or payable to the debtor, as compensation for his diminished earning capacity, by way of damages for personal injury or other lump sum;

(c)  money paid or payable to the debtor by way of loan;

(d)  movable property bought by the debtor and not paid for in full;

(e) property in which any property mentioned in paragraph (b),(c), or (d) of this subsection has been directly or indirectly invested, or which otherwise represents the same.

(3) Property which has become vested in the Official Trustee under this section shall not be subject to attachment, distress or other proceedings for the enforcement of an obligation against the debtor, whether founded on a judgment or not:

Provided that this subsection shall not apply to proceedings for the enforcement of a security.

(4) If the debtor has, with respect to after-acquired property which is not exempted, entered into any transaction whereby the whole or any part of the value of the property is lost to the creditors, the Official Trustee may apply to the Court for an order setting aside the transaction and requiring the property or its value, or such part thereof as was lost to the creditors, as the case may be, to be transferred to the Official Trustee.

(5) The Official Trustee may give notice to any employer, banker or other person who but for this section would be under an obligation to transfer after-acquired property which is not exempted to, or to the order of, the debtor to transfer the property instead to the Official Trustee, whose receipt shall be a sufficient discharge.

(6) A person who fails to comply with a notice under the preceding subsection shall pay to the Official Trustee such sum as may be necessary to make good any loss to the creditors arising from the failure.

Section 39—Repayments by Preferred Creditors.

(1) Where, at any time between the making of an insolvency order and the debtor's discharge, it appears to the Official Trustee that, during the six months ending with the making of the protection order and at a time when he was insolvent, the debtor made any payment or other transfer of property, or created any mortgage or other charge, or suffered any judgment or incurred any other obligation, with the dominant intent that any of his creditors should benefit  at the expense of others, the Official Trustee shall give notice to the creditor so preferred requiring him, within the period specified in the notice, to restore to the Official Trustee, whether by payment of money, transfer of property or surrender of rights, the benefit which has accrued to the creditor by reason of his being preferred.

(2) Where an insolvency order is made against a debtor every person who, during the relevant period, received a payment of money, or other transfer of property, in respect of a debt owed to him by the debtor shall, on receipt of a notice given in that behalf by the Official Trustee, restore the property or its value to the Official Trustee:

(3) Where an insolvency order is made against a debtor, all property in the possession of the sheriff at the time of the making of the protection order, being property of which possession was taken under an execution issued by a creditor of the debtor or the proceeds of such property, shall, after deduction of the sheriff's and bailiff's charges in the execution, be transferred to the Official Trustee.

(4) Where a person has complied with a notice given under subsection (1) or (2) of this section, he may, within one month after the notice was given, lodge a proof of debts, or require the Official Trustee to amend his proof, as the case may be, so as to enable the debt in respect of which the notice was given to rank for dividend at the value which is appropriate in view of his compliance.

(5) In this section "relevant period" means the period beginning twenty-one days before the presentation of the petition on which the protection order was made, or, if the protection order was made on two or more petitions, before the presentation of the first petition, and ending with the making of the protection order.

Section 40—Repayment of Gifts, Etc.

(1) Where, at any time between the making of an insolvency order and the debtor's discharge, it appears to the Official Trustee that the debtor made any disposition of his property otherwise than for full value or in settlement of a due debt, or incurred any obligation otherwise than for full value,

(a) during the two years ending with the making of the protection order, or

(b) more than two years but less than ten years before the making of the protection order and at a time when he was insolvent, the Official Trustee shall give notice to the person to whom the disposition was made or for whose benefit the obligation was incurred requiring him, within the period specified in the notice, to restore to the Official Trustee, whether by payment of money, transfer of property or surrender of rights, the excess of the benefit which thereby accrued to him above the value of any consideration provided.

(2) Excess benefit restored under this section shall be treated as a provable debt in respect of which a proof may be lodged at any time within one month after it was restored.

(3) This section shall not apply to any disposition made in consideration of marriage unless the Court is of opinion that the disposition was made for the purpose of defeating creditors.

Section 41—Repayments by Moneylenders.

Where, at any time between the making of an insolvency order and the debtor's discharge, it appears to the Official Trustee that, during the ten years ending with the making of the protection order, any sum was paid or allowed by the debtor in respect of a loan in circumstances such that the Court would, if proceedings had been brought under section 3 of the Loans Recovery Ordinance (Cap. 175), have ordered the lender to make a repayment to the debtor, the Official Trustee may give notice to the lender requiring him, within the period specified in the notice, to make a like repayment to the Official Trustee.

Section 42—Sums to be Credited to Debtor's Official Account.

(1) The Official Trustee shall open an account, in this Act referred to as the debtor's official account, within the Insolvent Estates Fund for each debtor in respect of whom a protection order is made.

(2)  There shall be credited to the debtor's official account,

(a) all moneys received by the Official Trustee in respect of the debtor by virtue of the preceding provisions of this Part of this Act;

(b) payments made to the Official Trustee in respect of the debtor either under an order for early discharge made under section 31 of this Act or otherwise for the purpose of increasing the assets available for dividend;

(c) repayments in respect of excess dividends made under subsection (2) of section 54 of this Act.

(3) If on the application of the debtor or any creditor it appears to the Court before the termination of the insolvency proceedings that the assets have been lost to the estate by reason of any default by the Official Trustee, the Court may order that the debtor's official account be credited with such sum as may appear to the Court to be just and that an equivalent sum be debited to the Fees Account.

General Functions of Official Trustee

Section 43—Duty to Protect Assets.

(1) On the making of a protection order it shall be the duty of the Official Trustee,

(a) to take possession of all property which has passed to him under section 37 of this Act;

(b) to take such steps as may be expedient to procure, in relation to stocks and shares and other property transferable in the books of any body corporate or other person which have passed to him under the said section 37, the transfer of the property into his name;

(c) to make such arrangements as may be expedient to secure the carrying on of any trade or business the continuance of which would be likely to benefit the creditors;

(d) to secure the payment to him or other discharge of all debts and other obligations the right to which has passed to him under the said section 37;

(e) to take such steps as may be expedient to ensure the protection of the debtor's assets for the benefit of the creditors.

(2) Until an insolvency order is made the Official Trustee shall not dispose or encumber any property, otherwise than in the course of a trade or business, without the consent of the debtor or the authority of the Court.

(3) No restriction on the transferability of such property as is mentioned in paragraph (b) of subsection (1) of this section shall be operative in the case of a transfer to the Official Trustee.

(4) If the Official Trustee suspects that property has been concealed he may offer a reward to any person, not being the debtor himself, who shall produce the property or give information leading to its discovery, but the reward shall not exceed one-twentieth of the value of the property recovered by the action of that person.

Section 44—Duty to Realise Assets.

On the making of an insolvency order it shall be the duty of the Official Trustee to realise as soon as practicable all assets not held as cash by such means and for such return as will produce for distribution to the creditors sums representing the full value of the assets:

Provided that this section shall not be taken to require the realisation of any asset which cannot be readily or advantageously disposed of.

Section 45—Duty to Verify Debts Ranking for Dividend.

(1) On the making of an insolvency order it shall be the duty of the Official Trustee to take such steps as are practicable to verify the correctness of every admitted proof.

(2) If, where an insolvency order is made, creditor's obligations such as are mentioned in paragraph (b) of subsection (3) of section 15 of this Act are included in the creditor's admitted proof,

(a)  where the total value of the obligations as shown in the proof is less than the total value of debts owed to the creditor as so shown, the obligations shall be deemed to be cancelled at the making of the insolvency order and the values of the said debts shall be pro rata reduced;

(b) in any other case the obligations shall be deemed to be pro rata reduced at the making of the insolvency order by the total value of the said debts, and the proof shall be deemed to be expunged.

(3) The Official Trustee may give notice to a creditor holding a security that, if the security is not realised within the period specified in the notice, which shall not be less than six months, it will be treated as surrendered.

(4) Subject to the provisions of this Part of this Act, a debt shall rank for dividend at any time if, but only if, it is at that time included in an admitted proof; and the value of the debt shall be taken to be the value shown at that time in the proof.

Section 46—Duty to Amend Admitted Proofs.

(1) If the value of a debt or security included in an admitted proof has changed otherwise than in respect of interest accruing after the protection order was made, the proof shall be subject to amendment for the purpose of altering the value shown therein to give effect to the change.

(2) If a debt or security is incorrectly included in an admitted proof, or the value of a debt or security at the date of the making of the protection order is incorrectly stated, the proof shall be subject to amendment for the purpose of rectifying the incorrectness.

(3) If a creditor desires to withdraw his claim to the whole or a part of a debt included in an admitted proof the proof shall be subject to amendment for the purpose of deleting the debt or reducing its value accordingly, as the case may be.

(4) Where an admitted proof is subject to amendment under this section,

(a) the Official Trustee may, except in the case of an amendment under the preceding subsection, give notice to the creditor specifying the proposed amendment and inviting him to consent to it within the period specified in the notice; or

(b)  the creditor may, if the Official Trustee has not given him notice as aforesaid, give notice to the Official Trustee specifying the proposed amendment and, except in the case of an amendment under the preceding subsection, inviting him to consent to it within the period specified in the notice.

(5) Where notice of a proposed amendment is given under the preceding subsection the Official Trustee shall amend the proof accordingly if,

(a) the party to whom the notice is given consents to the amendment;

(b) consent is not given but, on an appeal by the creditor or an application by the Official Trustee, the Court orders the amendment to be made; or 

(c) the amendment is proposed by the creditor under subsection (3) of this section.

Section 47—Duty to Ascertain Priority of Debts.

(1) On the making of an insolvency order it shall be the duty of the Official Trustee, in relation to each debt which ranks for dividend, to ascertain into which of the following classes the whole or any part of the debt falls:

Class A.— A debt or part of a debt which answers either of the following descriptions, that is to say,

(a) remuneration not exceeding one hundred and fifty pounds owed to an employee of the debtor, not being a near relative, in respect of employment during the whole or any part of the four months preceding the making of the protection order;

(b) rates, taxes or similar payments owed to the Republic or a local authority which have become due and payable within the year preceding the making of the protection order.

Class B.—A debt or part of a debt which does not fall into any other class.

Class C.— a debt or part of a debt which does not fall within class D and is, or was at any time within the year preceding the making of the protection order, owed to a near relative of the debtor.

Class D.— A debt or part of a debt which answers either of the following descriptions, that is to say,

(a) excess benefit restored to the Official Trustee under section 40 of this Act;

(b) excess interest, that is any portion of a debt which, whether it is stated to do so or not, represents interest at a rate in excess of seven per centum per annum.

(2) For the purposes of this section the following shall be taken to be near relatives of the debtor, that is to say,

(a)  his spouse, parents and issue;

(b) his brothers, sisters, uncles, aunts, nephews and nieces, whether of the whole or the half blood.

Section 48—Duty to Consult Creditors.

(1) Subject to the provisions of this Act, it shall be the duty of the Official Trustee,

(a) to report to the creditors, at intervals not greater than six months, on the progress of the insolvency proceedings;

(b) to consult the creditors on any matter arising in the proceedings which substantially affects their interests; and

(c) to give effect, so far as may be practicable, to any views expressed by the creditors in relation to the realisation and distribution of assets.

(2) For the purpose of complying with the preceding subsection, the Official Trustee may call a meeting of creditors at any time, and shall call such a meeting if required to do so by a notice in writing signed by creditors whose votes exceed one-fifth of the total number of votes which could be cast at the meeting.

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(3) The Schedule to this Act shall apply in relation to every meeting of creditors called under this section.

Section 49—Enquiries by Court.

(1) If the Official Trustee is of opinion that it is necessary, in order to enable him to carry out his functions under this Part of this Act in relation to a debtor, for the debtor, any creditor or any other person to be brought before and examined by the Court he may order him to attend for that purpose before the Court.

(2) In proceedings under this section the Court may examine on oath or otherwise any person brought before it, may order the delivery up by any such person of assets to which the Official Trustee is entitled under this Act, and make such other order as it thinks just.

Assets Passing from Official Trustee

Section 50—Cases where Insolvency Order not Made.

(1) As soon as is practicable after an arrangement with creditors is confirmed under section 20 of this Act, the Official Trustee, unless he is to act as trustee under the arrangement, shall cause all property which has become vested in him under section 37 or 38 of this Act in respect of the debtor to be transferred to the person entitled thereto under the arrangement.

(2) As soon as practicable after a protection order is rescinded under section 21 of this Act, the Official Trustee shall cause all property which has become vested in him under section 37 or 38 of this Act in respect of the debtor to be transferred back to the debtor.

(3) Notwithstanding the preceding provisions of this section, the Official Trustee shall be entitled to retain assets sufficient to reimburse him for fees and outgoings due to him from the debtor in respect of the insolvency proceedings.

(4) This section shall not apply to any property which has already passed from the Official Trustee under the provisions of this Part of this Act, so however that it shall apply to the proceeds of property which has been realised as it applies to property which has been retained in its original form.

Section 51—Disclaimer.

(1) Within one year after any property has become vested in him under section 37 of this Act, the Official Trustee, if he is of opinion that the property will not be of benefit to the creditors, may by notice published in the Gazette disclaim the property:

Provided that if any person interested in property so vested in the Official Trustee has by application in writing required the Official Trustee to elect whether he disclaims the property or not, this subsection shall not apply if the Official Trustee fails to disclaim within one month after the making of the application, or such longer period as the Court may allow.

(2) The Court may on the application of any person interested, give such relief and make such other provision as it thinks just in consequence of disclaimer under this section.

(3) Subject to an order made by the Court, the effect of disclaimer shall be as follows, that is to say,

(a) if the property consists of rights under a lease, share, contract or other interest, the interest shall be void to the extent that it affects the Official Trustee or the debtor;

(b) if the property consists of the absolute ownership of land or chattels that ownership shall revert to the debtor.

Section 52—Fees and Outgoings.

(1) The Official Trustee shall be entitled to withdraw from the property of the debtor which has become vested in the Official Trustee sums sufficient to satisfy fees of the prescribed amount charged in respect of the costs of the administration.

(2) When any fees become due to the Official Trustee in respect of a debtor, the Official Trustee shall cause them to be paid by transferring the necessary sum from the debtor's official account to the Fees Account.

(3) When any rent, rates, charges or other outgoings fail  to be met by the Official Trustee in respect of the debtor, the Official Trustee shall cause them to be paid out of the debtor's official account.

Section 53—Return of Personal Effects to Debtor.

As soon as is practicable after the debtor's property has vested in the Official Trustee under section 37 of this Act he shall restore to the debtor such of the following as the debtor may select, not being of a total value exceeding fifty pounds, namely,

(a) property used personally by the debtor for the purposes of of his employment;

(b) furniture, clothing and other household effects used by the debtor or any of his dependents.

Section 54—Dividends to Creditors.

(1) Subject to the two immediately preceding sections, the Official Trustee shall from time to time, and as early as is practicable, declare and distribute dividends to creditors in accordance with the following rules, that is to say,

(a) provision shall be made for the payment in full of all class A debts before any dividend is declared in respect of class B debts, and so on throughout the classes;

(b) all debts within one class shall rank pari passu;

(c) payments shall be made only in respect of debts which rank for dividend and shall not exceed the values thereof;

(d) where a security held by a creditor has not yet been realised or surrendered, the value of the debt against which the security is held shall be treated as reduced by the value of the security;

(e) interest shall not be allowed in respect of any period after the making of the protection order.

(2) Where a dividend has been paid under this section in respect of a debt which is subsequently struck out or reduced in value by an amendment of the admitted proof, the creditor shall repay to the Official Trustee the difference between the amount of the dividend and the amount which, in the light of the amendment, should have been paid.

(3) Where a dividend has been paid under this section in respect of a debt which is subsequently increased in value by any amendment of the admitted proof, the Official Trustee shall, so far as may be practicable without disturbing dividends already declared, pay to the creditor the difference between the amount of the dividend and the amount which, in the light of the amendment, should have been paid.

(4) Where a creditor has omitted to lodge a proof of debts during the period allowed by this Act, or has omitted a provable debt from his proof, he may at any time during the insolvency proceedings apply to the Court for relief, and if the Court is of opinion that the omission was excusable it shall make an order requiring the Official Trustee, so far as may be practicable without disturbing dividends already declared, to pay to the creditor such sums as would have been payable to him under this section if the omission had not occurred.

(5) If, at the end of the period of one year following the declaration of a dividend stated by the Official Trustee to be the final dividend, any payments under that or any previous dividend remain outstanding because the creditors in question cannot be found, the Official Trustee shall cancel the payments and, unless payment in full has been achieved, shall declare a further dividend in favour of the remainder of the creditors.

(6) In the case of a final dividend, or a further dividend declared under the preceding subsection, no payment of less than ten shillings shall be required to be made.

(7) Payments under this section shall be in money drawn from the debtor's official account:

Provided that property which has not been converted into money may be transferred to a creditor in lieu of the equivalent amount of money if the creditor consents.

Section 55—Return of Surplus Assets to Debtor.

(1) Where, after provision has been made for all payments and transfers of property required to be made under the three immediately preceding sections, any balance remains in the debtor's official account, the Official Trustee shall pay that balance to the debtor.

(2) Where, after such provision has been made, the Official Trustee retains property which has not been converted into money, he shall transfer that property to the debtor.

(3) If the debtor cannot be found, the Court may direct any such balance to be transferred to the Fees Account, and may give directions for the disposal of any such property.

Section 56—Payments to be made only Out of Debtor's Property.

(1) No person shall be entitled to any payment in respect of anything done by the Official Trustee in relation to a debtor except out of any balance in the debtor's official account or out of assets otherwise vested in the Official Trustee in respect of the debtor under this Part of this Act:

Provided that if in any proceedings costs are given against the Official Trustee they shall be met out of the Fees Account.

(2) During the continuance of insolvency proceedings, no person shall be required, under a contract entered into with the debtor before the protection order was made, to supply goods, render services or otherwise perform an obligation unless he has received an assurance in writing from the Official Trustee that the debtor's estate is sufficient to enable the goods or services to be  paid for, or the performance of the obligation otherwise recompensed, in accordance with the terms of the contract.

(3) Notwithstanding subsection (1) of this section, if an assurance given under the preceding subsection proves incorrect the person to whom the assurance was given shall be entitled to be reimbursed out of the Fees Account.

PART IV—ARRANGEMENTS WITH CREDITORS APART FROM INSOLVENCY PROCEEDINGS

Section 57—Arrangements to Which this Part Applies.

This Part of this Act shall apply to any arrangement with creditors made by an insolvent debtor, not being a body corporate, whether in writing or orally,

(a) if the arrangement is made at a time when insolvency proceedings are not in progress against the debtor; and

(b) if the debts subject to the arrangement amount to at least five hundred pounds and constitute the whole, or substantially the whole, of the debtor's indebtedness at the time when the arrangement is made.

Section 58—Arrangements Register.

(1) The Official Trustee shall make and keep a register, to be known as the Arrangements Register, in which shall be recorded the prescribed particulars of instruments lodged with the Official Trustee under the following section.

(2) If the Official Trustee is satisfied that an arrangement recorded in the Arrangements Register has been fully carried out, or has otherwise ceased to have effect, he shall record the fact in the Register.

(3) The Arrangements Register and copies of instruments recorded therein shall at all reasonable times be open for public inspection on payment of such fee, if any, as may be prescribed.

(4) The Official Trustee shall, on application being made by any person in the prescribed form, and on payment of the prescribed fee, provide copies of any entry in the Arrangements Register or any instrument recorded therein.

Section 59—Arrangements Voidable Unless Registered.

(1) An arrangement to which this Part of this Act applies shall be voidable unless, within fourteen days after the arrangement has become binding on the debtor, two copies of the instrument embodying the arrangement, or, where the arrangement was oral, of an instrument recording the details of the arrangement, have been lodged with the Official Trustee for entry in the Arrangements Register.

(2) If, on an application by the Official Trustee or any person interested, it appears to the Court that an arrangement is voidable by virtue  of the preceding subsection, the Court shall declare the arrangement to have been void from the beginning, or from such later date as may appear just, unless it considers that the failure to register was neither wilful nor negligent.

(3) An arrangement which is voidable by virtue of subsection (1) of this section shall not on that ground be avoided otherwise than by the Court under the preceding subsection.

(4) Where an arrangement is declared void under this section the Court may make a protection order against the debtor and this Act shall thereafter apply as if the protection order had been then made on a creditor's petition by the Official Trustee.

Section 60—Setting Aside of Arrangement.

(1) If, on the application of any person interested, it appears to the Court, as respects an arrangement to which this Part of this Act applies, not being an arrangement subject to avoidance under the preceding section,

(a) that default has been made in carrying the arrangement into effect;

(b) that for any reason it is impracticable or would be unjust to proceed with the arrangement; or

(c) that the agreement of creditors to the arrangement was procured by fraud,

the Court may set aside the arrangement but without prejudice to anything previously done thereunder.

(2) Where an arrangement is set aside under this section the Court may make a protection order against the debtor and this Act shall thereafter apply as if the protection order had been then made on a creditor's petition by the Official Trustee.

Section 61—Arrangement not to Count as Suspension of Payments.

Where an arrangement has been duly registered under this Part of this Act neither the arrangement itself nor any act done for the purpose of entering into the arrangement shall be treated as falling within paragraph (a) of subsection (1) of section 9 of this Act for the purpose of founding a petition for a protection order against the debtor.

PART V—MODIFICATIONS IN SPECIAL CASES

Section 62—Debtors Not of Full Age and Capacity.

(1) Subject to the provisions of this section, this Act shall apply in relation to debtors who are not of full age and capacity in the same manner as it applies in relation to debtors who are of full age and capacity.

(2) Where a debtor is an infant or of unsound mind the Court may, on the application of the Official Trustee or any person interested, appoint a person to act as the debtor's guardian in insolvency proceedings.

(3) In the case of a debtor who is of unsound mind this Act shall apply in relation to property vested in any person as committee of the debtor or otherwise on his behalf as it applies in relation to property vested in the debtor.

Section 63—Joint Debtors.

(1) Where insolvency proceedings are instituted in respect of two or more debtors jointly, debts not owed jointly by all the debtors shall be disregarded for the purpose of section 9 or 10 of this Act.

(2) Where a protection order is made in respect of two or more debtors jointly,

(a) any petition pending against any of the debtors individually shall lapse;

(b) subject to the provisions of this section, the insolvency proceedings shall extend to debts owed by the debtors separately as well as to their joint debts, and assets of the debtors shall vest in the Official Trustee whether or not they are referable to the joint debts;

(c) in addition to the joint official account opened under section 42 of this Act, a separate official account shall be opened in respect of each debtor, in which shall be entered items referable to his separate estate and his separate debts.

(3) Where an insolvency order is made in respect of two or more debtors jointly,

(a) the joint estate shall be applicable in the first instance in payment of the joint debts, and if there is a surplus of the joint estate it shall be dealt with as part of the respective separate estates in proportion to the interest of each debtor in the joint estate;

(b) the separate estate of each debtor shall be applicable in the first instance in payment of his separate debts and if there is a surplus of any separate estate it shall be dealt with, so far as may be necessary for satisfying the joint debts, as part of the joint estate.

Section 64—Debtors Who are Trustees.

(1) Where a debtor in respect of whom an insolvency order is made is, whether by himself or jointly with any other person or persons, a trustee of any property, and the debtor's interest in the property as trustee has become vested in the Official Trustee under this Act, then,

(a) if the debtor had any beneficial interest in the property, the Official Trustee shall continue to act as trustee in place of the debtor until the beneficial interest has been realised;

(b) subject to the preceding paragraph, the Official Trustee shall as soon as is practicable take steps to secure the appointment of another trustee in his place or, if there are two or more remaining trustees, to retire from the trust.

(2) Nothing in this Act shall affect the beneficial interest of any person other than the debtor in trust property.

(3) In this section "trustee" includes a personal representative or other person holding property on a fiduciary basis, and "trust property" shall be construed accordingly.

Section 65—Participation in Insolvency Proceedings by Subsequent Creditors.

(1) Where an insolvency order has been made but the insolvency proceedings have not yet come to an end, any one or more creditors of the debtor may, on payment of the prescribed fee, apply to the Official Trustee for the making by him of an order, to be known as a participation order, enabling creditors to participate in the insolvency proceedings in respect of new debts:

Provided that an application shall not be made unless,

(a) the debtor's indebtedness to the applicant or, as the case may be, the applicants collectively, comprises new debts in liquidated sums payable immediately and amounting to at least one hundred pounds; and

(b) debts to that amount remain unpaid fourteen days after the service on the debtor of a written demand for payment.

(2) Sections 11, 13, 15 and 16 of this Act shall apply as nearly as may be in relation to an application under this section subject to the following modifications, namely,

(a) references to a petition shall be read as references to the application;

(b) references to a protection order shall be read as references to a participation order;

(c) sections 13 and 15 shall not apply to debts which are not new debts, and the period within which a proof of debts may be lodged shall be limited to three months from the making of the participation order;

(d) in section 16 the following shall be omitted, namely, the reference to an arrangement with creditors in subsection (2), the proviso to subsection (3), and subsection (5).

(3) Part III of this Act shall apply as nearly as may be in relation to a participation order, subject to the following modifications, namely,

(a) references to a protection order or an insolvency order shall be read as references to the participation order;

(b) the Official Trustee shall open a sub-account within the debtor's official account, in this section referred to as a participation account, to which shall be credited the proceeds of all after-acquired property which becomes vested in the Official Trustee after the making of the participation order and before any such subsequent order is made, together with any other moneys which become vested in the Official Trustee by virtue of the participation order;

(c) subject to section 52 of this Act, the participation account shall be used only for the payment of dividends in respect of debts ranking for dividend by virtue of the participation order, and dividends in respect of such debts shall be paid only out of the participation account;

(d) if there is a surplus on the participation account and a deficiency on the debtor's main account, or a surplus on the main account and a deficiency on the participation account, the surplus shall be transferred to the credit of the main account or the participation account, as the case may be;

(e) where more than one participation order has been made a surplus shall be dealt with on the principle that the main account is to be credited in preference to a participation account and an earlier participation account is to be credited in preference to a later participation account.

(4) Where a participation order is made,

(a) if the debtor is a bankrupt and his appointed discharge date is less than two years ahead, then, subject to sections 31 and 32 of this Act, it shall be postponed to the date two years after the participation order is made;

(b) if the debtor is not a bankrupt and has not been discharged from the insolvency order, then, subject to sections 23 and 31 of this Act, his appointed discharge date shall be postponed to the date two years after the participation order is made;

(c) if the debtor has been discharged from the insolvency order and, where applicable, from bankruptcy, his discharge shall be treated as revoked, and,

(i)  subject to sections 23, 31 and 32 of this Act, his appointed discharge date shall be the date two years after the participation order is made;

(ii) the debtor shall surrender his certificate of discharge to the Official Trustee;

(iii) the debtor shall not be treated as having contravened section 24, 26 or 27 of this Act by reason of any act done by him between his discharge and the revocation thereof.

(5) In this section "new debt" means a debt incurred by the debtor since the making of the protection order or, if the participation order is a second or subsequent participation order, means a debt incurred by the debtor since the making of the last participation order.

PART VI—ADMINISTRATION OF ESTATES OF DECEASED INSOLVENTS

Section 66—Administration Orders.

(1) Where the estate of a deceased debtor is insufficient to pay his debts the representative or any creditor of the deceased may, on payment of the prescribed fee, apply to the Official Trustee for the making by him of an order, to be known as an administration order for the administration of the estate under this Part of this Act.

(2) Where an application under this section is made by a  creditor, the applicant shall at the same time serve a copy of the application on the representative of the deceased.

(3) After seven days have elapsed following the making of the application, the Official Trustee shall consider the application and evidence in support thereof, together, in the case of a creditor's application, with any representations made by the representative of the deceased, and,

(a) if he considers that the application was duly made he shall make an administration order thereon; or

(b) if he considers that the application was not duly made he shall give notice to the applicant and, in the case of a creditor's application, to the representative of the deceased that the application is dismissed.

(4) References in this Part of this Act to the representative of a deceased debtor shall be construed as references to his personal representative if he has any or, if he has not and was subject to customary law, as references to his successor under customary law.

(5) Where there is no representative of the deceased, provisions of this Part requiring anything to be done by or in relation to the representative shall not apply.

Section 67—Effect of Administration Order.

(1) On and by virtue of the making of an administration order there shall vest in the Official Trustee to the same extent and, subject to the following subsections, with the same incidents, all movable and immovable property which, immediately before the order was made, was vested for the purposes of the administration of the deceased's estate in his representative or, by virtue of section 1 of the Administration of Estates Act, 1961 (Act 63), in the Chief Justice; and the representative shall have no right of retainer in respect of debts owed to him.

(2) Property which has become vested in the Official Trustee under this section shall not be subject to attachment, distress or other proceedings for the enforcement of an obligation against the debtor's estate, whether founded on a judgment or not:

Provided that this subsection shall not apply to proceedings for the enforcement of a security.

(3) The administration order shall not affect the validity of any realisation or distribution of assets made by the representative, or any other act of administration done by him, before he received notice of the making of the administration order.

(4) Within seven days after the making of an administration order, or such longer period as the Official Trustee may allow, the representative of the deceased shall lodge with the Official Trustee a copy of any will left by the deceased, whether or not it has been admitted to probate, and a statement containing,

(a) particulars of the assets of the deceased;

(b) a list of creditors, showing the amounts and due dates of debts and particulars of securities held;

(c) a description of any steps already taken by the representative by way of realising and distributing the assets;

(d) a description of any funeral, testamentary or administration expenses incurred.

Section 68—Creditor's Proof of Debt.

(1) At any time during the period of three months following the making of an administration order any creditor of the deceased may lodge with the Official Trustee a statement, to be known as a proof of debts, in accordance with the following subsection.

(2) A proof of debts shall be in two parts, the first part containing brief particulars of,

(a) the amount outstanding of every debt owed to the creditor by the deceased's estate;

(b) the amount outstanding of any debt owed by the creditor to the deceased's estate;

(c) the nature and value of any securities held by the creditor, or held on behalf of the deceased's estate, in respect of the said debts,

and the second part containing details of the transactions from which the said debts arose.

(3) A copy of the first part of every proof lodged under this section shall be given by the Official Trustee to the representative of the deceased and to each creditor who is mentioned in the statement lodged by the representative or who, not being so mentioned, himself lodges a proof; and if the representative knows or believes that the proof is false in any material particular it shall be his duty to inform the Official Trustee thereof as soon as is practicable.

(4) The Official Trustee shall examine every proof of debts lodged by a creditor and if, after considering any representations made by the representative or any creditor, it appears to him that any item is improperly included or any value  incorrectly stated or that the proof is otherwise incorrect he shall give notice of the objection to the creditor, who may lodge an amended proof within the period specified in the notice or such extended period as the Official Trustee may allow.

(5) If it does not appear to the Official Trustee that a proof is incorrect he shall give notice to the creditor that he admits the proof subject to verification under section 45 of this Act.

(6) If the creditor fails to lodge an amended proof or a further amended proof, as the case may be, within the period allowed under subsection (4) of this section and the Official Trustee is still of opinion that the previous proof is incorrect he shall give notice to the creditor that he rejects the proof.

Section 69—First Meeting of Creditors.

(1) The Official Trustee shall call a first meeting of creditors for a date not less than six or more than eight weeks after the publication of an administration order, and shall give such notice of the meeting as may be practicable to each creditor who is mentioned in the representative's statement or who, not being so mentioned, has lodged a proof of debts.

(2) So far in advance as may be practicable, the Official Trustee shall give to every such creditor a copy of the representative's statement, together with any observations thereon that the Official Trustee may wish to make.

Sch.

(3) The Schedule to this Act shall apply in relation to the meeting.

Section 70—Duties of Deceased's Representative.

(1) In addition to the specific duties imposed on him by or under this Act, it shall be the general duty of the representative of the deceased, at all times during the period between the making of an administration order and the termination of the administration, to comply as promptly and fully as is practicable with any direction given by the Official Trustee in connection with the exercise of his functions as to the deceased's estate.

(2) During the said period it shall be the duty of the representative,

(a) to attend every meeting of creditors called by the Official Trustee and give such information  to the meeting as may be required by the chairman;

(b) as soon as is practicable to give notice to the Official Trustee of any change in his name or address;

(c) not to destroy, alter, conceal or dispose of any account-book or other record of the deceased's financial affairs.

Section 71—Application of Part III of This Act.

(1) Where an administration order has effect Part III of this Act shall apply as nearly as may be for the purposes of the administration, subject to the modifications set out in this section.

(2) The following provisions shall be omitted, namely,

(a) sections 37 and 38 (which deal with vesting of property);

(b) subsection (2) of section 43 (which restricts the disposition of property by the Official Trustee);

(c) section 50 (which relates to divesting of assets where an insolvency order is not made);

(d) section 53 (which provides for the return of personal effects to a debtor); and

(e) section 55 (which requires surplus assets to be returned to the debtor).

(3) Except where the context otherwise requires, the following adaptations shall be made, that is to say,

(a) references to the debtor shall be read as references to the representative of the deceased;

(b) references to section 37 of this Act shall be read as references to section 67;

(c) references to a protection order or an insolvency order shall be read as references to an administration order;

(d) references to the debtor's discharge shall be read as references to the termination of the administration.

(4) The Official Trustee shall cause all funeral, testamentary and administration expenses incurred by the representative to be met out of the deceased's official account in priority to all other payments:

Provided that funeral expenses in excess of twenty-five pounds shall rank as a Class D debt.

(5) Where, after provision has been made for all payments and transfers of property required to be made by virtue of the preceding provisions of this section, any balance remains in the deceased's official account, the Official Trustee shall pay that balance,

(a) to the representative of the deceased, who shall deal with it as property of the deceased's estate; or

(b) if there is no representative, to the Administrator-General, who shall deal with it as unrepresented estate.

Section 72—Order Terminating Administration.

(1) Where an estate has been administered under this Part of this Act and,

(a) the Official Trustee has duly completed the distribution of the assets of the deceased; and

(b) the Official Trustee's accounts in the administration have been drawn up, and have been passed by the Auditor-General, the Official Trustee shall apply to the Court for an order terminating the administration.

(2) The Official Trustee shall give notice of the application, together with a summary of the accounts in the prescribed form, to the representative and to every creditor with an admitted proof.

(3)  The Court shall grant the application if satisfied that it is duly made.

Section 73—Death of Debtor During Insolvency Proceedings.

(1) This section shall apply where a debtor in respect of whom insolvency proceedings have been instituted dies before the proceedings have come to an end.

(2) The proceedings shall lapse if the death occurs either before a protection order has been made or while a protection order has effect, and in the latter case property vested in the Official Trustee by virtue of the protection order shall devolve in accordance with section 1 of the Administration of Estates Act, 1961 (Act 63).

(3) If the death occurs after an insolvency order has been made the proceedings shall continue, except so far as they concern the debtor personally, as if a participation order had been made immediately before the death, and,

(a) no administration order shall be made in respect of the deceased;

(b) the deceased's representative shall be subject to the provisions of subsection (4) of section 67 of this Act, and of section 70 thereof, as if references in those provisions to the making of an administration order were references to the death;

(c) in relation to the disposal of surplus assets, subsection (5) of section 71 of this Act shall apply in place of section 55;

(d) in relation to the termination of the proceedings, section 72 of this Act shall apply in place of section 36;

(e) in relation to funeral, testamentary and administration expenses incurred by the deceased's representative, subsection (4) of section 71 of this Act shall apply.

PART VII—SUPPLEMENTAL PROVISIONS

Section 74—Offences.

(1) A person who does any act in contravention of a duty imposed on him as a debtor or as the representative of a deceased debtor by or under this Act is guilty of a misdemeanour.

(2) This section is without prejudice to the power of the Court to issue a warrant in relation to a debtor under section 28 of this Act, or to punish any person for contempt of court or for an offence under the Criminal Code, 1960 (Act 29).

Section 75—Evidence.

A register kept, notice published or certificate given under this Act shall be prima facie evidence of the matters stated therein.

Section 76—Rules.

(1) The Minister responsible for Justice may, by legislative instrument, makes Rules, other than rules of Court, providing for any matter which under this Act is to be provided for by rules or which otherwise relates to procedure under this Act.

(2) If it appears to the said Minister that any of the monetary limits specified in sections 9, 10, 57 and 65 of this Act should be altered he may, by legislative instrument, make such amendments in this Act as are necessary for effecting the alteration.

Section 77—Interpretation.

In this Act, unless the context otherwise requires,

"address" includes place of residence, place of business and any post office box number habitually used;

"admitted proof" means a proof admitted under subsection (6) of section 15 of this Act or subsection (5) of section 68 thereof;

"after-acquired property" has the meaning assigned to it by subsection (2) of section 26 of this Act;

"application for judicial consideration" has the meaning assigned to it by subsection (1) of section 17 of this Act;

"appointed discharge date" has the meaning assigned to it by subsection (3) of section 30 of this Act;

"arrangement with creditors" means a contract between a debtor and his creditors under which, with a view to the payment of debts in whole or in part, the creditors agree not to exercise, or agree to defer or modify the exercise of, any of their rights in respect of the debtor;

"bankrupt" means a person who has been adjudged a bankrupt under section 23 of this Act and has not been discharged;

"civil proceedings" means proceedings, other than criminal proceedings or proceedings under this Act, in or on the order of any court, and includes the levying of distress, or the attachment of a debt, without a court order;

"Court" means the High Court;

"Fees Account" has the meaning assigned to it by subsection (2) of section 3 of this Act;

"ground for bankruptcy" means any one or more of the grounds specified in subsection (1) of section 23 of this Act;

"insolvent" means unable to pay debts as they fall due;

"name" in relation to a debtor includes any name under which the debtor carries on a business, whether by himself or with other persons;

"official account" in relation to a debtor means the account opened in respect of the debtor under section 42 of this Act;

"payment in full" means the making of provision for all such payments and transfers of property as in the circumstances are required to be made under sections 52 to 54 of this Act;

"prescribed" means prescribed by Rules made under subsection (1) of section 76 of this Act;

"provable debt" has the meaning assigned to it by subsection (1) of section 15 of this Act;

"security" means a mortgage, charge or lien on the property of the debtor for securing payment of a debt, and "secured creditor" and "secured debt" shall be construed accordingly.

Section 78—Commencement.

(1) This Act shall come into operation on such date as the Minister responsible for Justice may, by legislative instrument, appoint, and different dates may be appointed for different provisions.

(2) A provision of this Act shall apply in relation to matters arising before the commencement of that provision as it applies in relation to matters arising thereafter:

Provided that,

(a) no act done or suffered before the commencement of Part II of this Act shall be taken into account in considering whether the grounds for bankruptcy exist under paragraph (a) or (h) of subsection (1) of section 23 of this Act;

(b) Part IV of this Act shall not apply to an arrangement with creditors made before the commencement of that Part.

SCHEDULE

MEETINGS OF CREDITORS

1. A meeting of creditors shall not be competent to act for any purpose unless at least three creditors with admitted proofs, or all such creditors if there are less than three, are present either in person or by representatives holding proxies.

2. If there is no quorum within half an hour after the time appointed for a meeting of creditors the Official Trustee shall adjourn the meeting to such date as he may determine, not being less than seven or more than fourteen days thereafter; and if there is still no quorum within half an hour after the time appointed for the adjourned meeting, the meeting shall be taken to be cancelled.

3. The cancellation of a meeting under the preceding paragraph shall not prevent the Court from considering and determining any matter as if the meeting had been held and closed on the day on which it was cancelled:

Provided that this paragraph shall not authorise the Court to confirm an arrangement with creditors which has not been approved by the first meeting of creditors.

4.  A meeting of creditors shall be presided over by the Official Trustee.

5. At a meeting of creditors each creditor with an admitted proof shall be entitled to be heard either in person or by a representative holding a proxy.

6.(1) Except where this Act otherwise provides, questions at a meeting of creditors shall be decided by a simple majority of votes cast.

(2) Each creditor with an admitted proof shall be entitled to one vote for each complete pound of the net amount of his debt as shown in his proof at the time when the meeting opens.

(3) For voting purposes the net amount of a debt shall be calculated by deducting the following amounts, if any, from the total value of the debts owed to the creditor, that is to say,

(a) the total value of securities held by the creditor;

(b) the total value of obligations outstanding in the debtor's favour against the creditor;

(c) the amount of every dividend to which the creditor has become entitled.