Insolvency Act 1985

• (b) if the court thinks fit, subject to the same liabilities and obligations as that person would be subject to if the lease had been assigned to him on that day.

• (6) For the purposes of an order under this section relating to only part of any property comprised in a lease, the requirements of subsection (5) above shall apply as if the lease comprised only the property to which the order relates.

• (7) Where subsection (5) above applies and no person is willing to accept an order under this section on the terms required by virtue of that subsection, the court may, by order under this section, vest the estate or interest of the bankrupt in the property in any person who is liable (whether personally or in a representative capacity and whether alone or jointly with the bankrupt) to perform the lessee's covenants in the lease ; and the court may vest that estate and interest in such a person freed and discharged from all estates, incumbrances and interests created by the bankrupt.

• (8) Where subsection (5) above applies and a person declines to accept any order under this section, that person shall be excluded from all interest in the property.

• (9) The effect of any order under this section shall be taken into account in assessing for the purposes of section 161(10) above the extent of any loss or damage sustained by any person in consequence of the disclaimer.

• (10) An order under this section vesting any property in any person shall not need to be completed by any conveyance, assignment or transfer.

Distribution of bankrupt's estate

Proof of debts

163

• (1) Subject to the following provisions of this section and to section 164 below, the proof of any bankruptcy debt by any secured or unsecured creditor of the bankrupt and the admission or rejection of any proof shall take place in accordance with the rules.

• (2) Where a bankruptcy debt bears interest, that interest shall be provable as part of that debt except in so far as it is payable in respect of any period after the commencement of the bankruptcy.

• (3) The trustee shall estimate the value of any bankruptcy debt which, by reason of its being subject to any contingency or contingencies or for any other reason, does not bear a certain value.

• (4) Where the value of any bankruptcy debt is estimated by the trustee under subsection (3) above or, by virtue of section 150 above, by the court, the amount provable in the bankruptcy in respect of that debt shall be the amount of the estimate.

Mutual credit and set off

164

• (1) This section applies where before the commencement of the bankruptcy there have been mutual credits, mutual debts or other mutual dealings between the bankrupt and any creditor of the bankrupt proving or claiming to prove for a bankruptcy debt.

• (2) An account shall be taken of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set off against the sums due from the other.

• (3) Sums due from the bankrupt to another party shall not be included in the account taken under subsection (2) above if that other party had notice at the time they became due that a bankruptcy petition relating to the bankrupt was pending.

• (4) Only the balance (if any) of the account taken under subsection (2) above shall be provable as a bankruptcy debt or. as the case may be, be paid to the trustee as part of the bankrupt's estate.

Manner of distribution of estate

165

• (1) Whenever the trustee has sufficient funds in hand for the purpose he shall, subject to the retention of such sums as may be necessary for the expenses of the bankruptcy, declare and distribute dividends among the creditors in respect of the bankruptcy debts which they have respectively proved.

• (2) The trustee shall give notice of his intention to declare and distribute a dividend.

• (3) Where the trustee has declared a dividend he shall give notice of the dividend and of how it is proposed to distribute it; and a notice given under this subsection shall contain the prescribed particulars of the bankrupt's estate.

• (4) In the calculation and distribution of a dividend the trustee shall make provision—

• (a) for any bankruptcy debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs ;

• (b) for any bankruptcy debts which are the subject of claims which have not yet been determined; and

• (c) for disputed proofs and claims.

• (5) A creditor who has not proved his debt before the declaration of any dividend shall not be entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but—

• (a) when he has proved that debt he shall be entitled to be paid, out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he has failed to receive ; and

• (b) any dividend or dividends payable under paragraph (a) above shall be paid before that money is applied to the payment of any such further dividend.

• (6) No action shall lie against the trustee for a dividend, but if the trustee refuses to pay a dividend the court may, if it thinks fit, order him to pay it and also to pay, out of his own money—

• (a) interest on the dividend, at the rate for the time being specified in section 17 of the Judgments Act 1838, from the time it was withheld ; and

• (b) the costs of the proceedings in which the order to pay is made.

• (7) Without prejudice to section 161 above, the trustee may, with the permission of the committee established under section 148 above, divide in its existing form amongst the bankrupt's creditors, according to its estimated value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.

• (8) Subsections (4) and (5) of section 160 above shall have effect in relation to the power conferred by subsection (7) above as they have effect in relation to the powers conferred by subsections (2) and (3) of that section.

• (9) Where the bankruptcy order was made on a petition under section 119(1)(d) above, no distribution shall be made under this section so long as an appeal is pending (within the meaning of section 125 above) against the bankrupt's conviction of any offence by virtue of which the criminal bankruptcy order on which the petition was based was made.

Priority of debts

166

• (1) In the distribution of the bankrupt's estate, the preferential debts listed in Part I of Schedule 4 to this Act shall be paid in priority to other debts; and Part II of that Schedule shall have effect for the interpretation of the said Part I.

• (2) Preferential debts shall rank equally between themselves after the expenses of the bankruptcy and shall be paid in full unless the bankrupt's estate is insufficient for meeting them, in which case they shall abate in equal proportions between themselves.

• (3) Debts which are neither preferential debts nor debts falling within subsection (6) below shall also rank equally between themselves and, after the preferential debts, shall be paid in full unless the bankrupt's estate is insufficient for meeting them, in which case they shall abate in equal proportions between themselves.

• (4) Any surplus remaining after the payment of the debts that are preferential or rank equally under subsection (3) above shall be applied in paying interest on those debts in respect of the periods during which they have been outstanding since the commencement of the bankruptcy; and interest on preferential debts shall rank equally with interest on debts other than preferential debts.

• (5) The rate of the interest payable under subsection (4) above in respect of any debt shall be whichever is the greater of—

• (a) the rate specified in section 17 of the Judgments Act 1838 at the commencement of the bankruptcy; and

• (b) the rate applicable to that debt apart from the bankruptcy.

• (6) Bankruptcy debts owed in respect of credit provided by a person who (whether or not the bankrupt's spouse at the time the credit was provided) was the bankrupt's spouse at the commencement of the bankruptcy shall—

• (a) rank in priority after the debts and interest required to be paid in pursuance of subsections (3) and (4) above; and

• (b) be payable with interest at the rate specified in subsection (5) above in respect of the period during which they have been outstanding since the commencement of the bankruptcy; and the interest payable under paragraph (b) above shall have the same priority as the debts on which it is payable.

• (7) This section is without prejudice to any provision of this Act or of any other Act under which the payment of any debt or the making of any other payment is, in the event of bankruptcy, to have a particular priority or to be postponed.

Final distribution

167

• (1) When the trustee has realised all the bankrupt's estate or so much of it as can, in the opinion of the trustee, be realised without needlessly protracting the trusteeship, he shall give notice in the prescribed manner either—

• (a) of his intention to declare a final dividend; or

• (b) that no dividend, or further dividend, will be declared.

• (2) The notice given under subsection (1) above shall contain the prescribed particulars and shall require claims against the bankrupt's estate to be established by a date (" the final date ") specified in the notice.

• (3) The court may, on the application of any person, postpone the final date.

• (4) After the final date, the trustee shall—

• (a) defray any outstanding expenses of the bankruptcy out of the bankrupt's estate; and

• (b) if he intends to declare a final dividend, declare and distribute that dividend without regard to the claim of any person in respect of a debt not already proved in the bankruptcy.

• (5) If a surplus remains after payment in full and with interest of all the bankrupt's creditors and the payment of the expenses of the bankruptcy, the bankrupt shall be entitled to the surplus.

Final meeting

168

• (1) Subject to subsections (2) and (3) below, where it appears to the trustee that the administration of the bankrupt's estate in accordance with this Chapter is for practical purposes complete and the trustee is not the official receiver, the trustee shall summon a final general meeting of the bankrupt's creditors which—

• (a) shall receive the trustee's report of his administration of the bankrupt's estate; and

• (b) shall determine whether the trustee should have his release under section 146 above.

• (2) The trustee may, if he thinks fit, give the notice summoning the final general meeting at the same time as giving notice under section 167(1) above but, if summoned for an earlier date, that meeting shall be adjourned (and, if necessary, further adjourned) until a date on which the trustee is able to report to the meeting that the administration of the bankrupt's estate is for practical purposes complete.

• (3) In a case where property consisting of an interest in a dwelling house which is occupied by the bankrupt or by his spouse or former spouse is comprised in the bankrupt's estate and the trustee has been unable for any reason to realise that property, the trustee shall not summon a meeting under this section unless either—

• (a) the court has made an order under section 159 above imposing a charge on that property for the benefit of the bankrupt's estate ; or

• (b) the court has declined, on an application under that section, to make such an order ; or

• (c) the Secretary of State has issued a certificate to the trustee stating that it would be inappropriate or inexpedient for such an application to be made in the case in question.

• (4) In the administration of the bankrupt's estate it shall be the duty of the trustee to retain sufficient sums from the bankrupt's estate to cover the expenses of summoning and holding the meeting required by this section.

Supplemental

Duties of bankrupt in relation to trustee

169

• (1) The bankrupt shall—

• (a) give to the trustee such information as to his affairs;

• (b) attend on the trustee at such times ; and

• (c) do all such other things,

as the trustee may for the purposes of carrying out his functions under this Part reasonably require.

• (2) Where at any time after the commencement of the bankruptcy any property is acquired by, or devolves upon, the bankrupt or there is any increase of the bankrupt's income, the bankrupt shall, within the prescribed period, give the trustee-notice of the property or, as the case may be, of the increase.

• (3) Subsection (1) above shall apply to a bankrupt after his discharge.

• (4) If the bankrupt without reasonable excuse fails to comply with any obligation imposed by this section, he shall, in addition to any other punishment to which he may be subject, be guilty of contempt of court and liable to be punished accordingly.

Second bankruptcy

170

• (1) This section applies where a bankruptcy order is made against an undischarged bankrupt; and in this section—

• (a) references to the later bankruptcy are references to the bankruptcy arising from that order ;

• (b) references to the earlier bankruptcy are references to the bankruptcy (or, as the case may be, most recent bankruptcy) from which the bankrupt has not been discharged at the commencement of the later bankruptcy; and

• (c) references to the existing trustee are references to the trustee (if any) of the bankrupt's estate for the purposes of the earlier bankruptcy.

• (2) Without prejudice to section 131 above, where the existing trustee has been given the prescribed notice of the presentation of the petition for the later bankruptcy, any distribution or other disposition by him of anything to which subsection (3) below applies shall, if made after the giving of the notice, be void except to the extent that it was made with the consent of the court or is or was subsequently ratified by the court.

• (3) This subsection applies to—

• (a) any property which is vested in the existing trustee under section 154(3) above ;

• (b) any money paid to the existing trustee in pursuance of an order under section 156 above ; and

• (c) any property or money which is, or in the hands of the existing trustee represents, the proceeds of sale or application of property or money falling within paragraph (a) or (b) above.

• (4) With effect from the commencement of the later bankruptcy anything to which subsection (3) above applies which, immediately before the commencement of that bankruptcy, is comprised in the bankrupt's estate for the purposes of the earlier bankruptcy shall be treated as comprised in the bankrupt's estate for the purposes of the later bankruptcy and, until there is a trustee of that estate, shall be dealt with by the existing trustee in accordance with the rules.

• (5) Any sums which in pursuance of an order under section 156 above are payable after the commencement of the later bankruptcy to the existing trustee shall form part of the bankrupt's estate for the purposes of the later bankruptcy and the court may give such consequential directions for the modification of the order as it thinks fit.

• (6) Anything comprised in a bankrupt's estate by virtue of subsection (4) or (5) above shall be so comprised subject to a first charge in favour of the existing trustee for any bankruptcy expenses incurred by him in relation thereto.

• (7) Except as provided by the preceding provisions of this section, property which is, or by virtue of section 155 above is capable of being, comprised in the bankrupt's estate for the purposes of the earlier bankruptcy, or of any bankruptcy prior to the earlier bankruptcy, shall not be comprised in his estate for the purposes of the later bankruptcy.

• (8) The creditors of the bankrupt in the earlier bankruptcy and the creditors of the bankrupt in any bankruptcy prior to the earlier bankruptcy shall not be creditors of the bankrupt in the later bankruptcy in respect of the same debts, but the existing trustee may prove in the later bankruptcy for—

• (a) the unsatisfied balance of the debts (including any debt under this subsection) provable against the bankrupt's estate in the earlier bankruptcy ;

• (b) any interest payable on that balance ; and

• (c) any unpaid expenses of the earlier bankruptcy.

• (9) Any amount provable under subsection (8) above shall rank in priority after all the other debts provable in the later bankruptcy and after interest on those debts and, accordingly, shall not be paid unless those debts and that interest have first been paid in full.

CHAPTER VI — Effect of Bankruptcy on Certain Rights, Transactions Etc

Rights of occupation

Rights of occupation etc. of bankrupt's spouse

171

• (1) Nothing occurring in the period to which section 131 above applies shall be taken as having given rise to any rights of occupation under the Matrimonial Homes Act 1983 in relation to a dwelling house comprised in a bankrupt's estate.

• (2) Where a spouse's rights of occupation under the said Act of 1983 are a charge on the estate or interest of the other spouse or of trustees for the other spouse and the other spouse is adjudged bankrupt—

• (a) the charge shall continue to subsist notwithstanding the bankruptcy and, subject to the provisions of that Act, shall bind the trustee of the bankrupt's estate and persons deriving title under that trustee; and

• (b) any application for an order under section 1 of that Act shall be made to the court having jurisdiction in relation to the bankruptcy.

• (3) Where a person and his spouse or former spouse are trustees for sale of a dwelling house and that person is adjudged bankrupt, any application by the trustee of the bankrupt's estate for an order under section 30 of the Law of Property Act 1925 (powers of court where trustees for sale refuse to exercise powers) shall be made to the court having jurisdiction in relation to the bankruptcy.

• (4) On such an application as is mentioned in subsection (2) or (3) above the court shall make such order under the said section 1 or the said section 30 as it thinks just and reasonable having regard to the interests of the bankrupt's creditors, to the conduct of the spouse or former spouse so far as contributing to the bankruptcy, to the needs and financial resources of the spouse or former spouse, to the needs of any children and to all the circumstances of the case other than the needs of the bankrupt.

• (5) Where such an application is made after the end of the period of one year beginning with the first vesting, under Chapter V of this Part, of the bankrupt's estate in a trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt's creditors outweigh all other considerations.

Rights of occupation of bankrupt

172

• (1) This section applies where—

• (a) a person who is entitled to occupy a dwelling house by virtue of a beneficial estate or interest is adjudged bankrupt; and

• (b) any persons under the age of eighteen with whom that person had at some time occupied that dwelling house had their home with that person at the time when the bankruptcy petition was presented and at the commencement of the bankruptcy.

• (2) Whether or not the bankrupt's spouse (if any) has rights of occupation under the Matrimonial Homes Act 1983—

• (a) the bankrupt shall have the following rights as against the trustee of his estate—

• (i) if in occupation, a right not to be evicted or excluded from the dwelling house or any part thereof, except with the leave of the court;

• (ii) if not in occupation, a right with the leave of the court to enter into and occupy the dwelling house; and

• (b) the bankrupt's rights shall be a charge, having the like priority as an equitable interest created immediately before the commencement of the bankruptcy, on so much of his estate or interest in the dwelling house as vests in the trustee.

• (3) The Matrimonial Homes Act 1983 shall have effect, with the necessary modifications, as if—

• (a) the rights conferred by paragraph (a) of subsection (2) above were rights of occupation under that Act;

• (b) any application for leave such as is mentioned in that paragraph were an application for an order under section 1 of that Act; and

• (c) any charge under paragraph (b) of that subsection on the estate or interest of the trustee were a charge under that Act on the estate or interest of a spouse.

• (4) Any application for leave such as is mentioned in subsection (2)(a) above or otherwise by virtue of this section for an order under section 1 of the said Act of 1983 shall be made to the court having jurisdiction in relation to the bankruptcy.

• (5) On such an application as is mentioned in subsection (4) above the court shall make such order under the said section 1 as it thinks just and reasonable having regard to the interests of the creditors, to the bankrupt's financial resources, to the needs of the children and to all the circumstances of the case other than the needs of the bankrupt.

• (6) Where such an application is made after the end of the period of one year beginning with the first vesting, under Chapter V of this Part, of the bankrupt's estate in a trustee, the court shall assume, unless the circumstances of the case are exceptional, that the interests of the bankrupt's creditors outweigh all other considerations.

Payments in respect of premises occupied by bankrupt

173

Where any premises comprised in a bankrupt's estate are occupied by him (whether by virtue of section 172 above or otherwise) on condition that he makes payments towards satisfying any liability arising under a mortgage of the premises or otherwise towards the outgoings of the premises, the bankrupt shall not, by virtue of those payments, acquire any interest in the premises.

Transactions etc.

Transactions at an undervalue and preferences

174

• (1) Subject to the following provisions of this section and to section 175 below, where an individual is adjudged bankrupt and he has at a relevant time entered into a transaction with any person at an undervalue or given a preference to any person—

• (a) the trustee of the bankrupt's estate may apply to the court for an order under this section ; and

• (b) the court shall, on such an application, make such order as it thinks fit for restoring the position to what it would have been if that individual had not entered into that transaction or, as the case may be, had not given that preference.

• (2) For the purposes of this section and section 175 below an individual enters into a transaction with a person at an undervalue if—

• (a) he makes a gift to that person or he otherwise enters into a transaction with that person on terms that provide for him to receive no consideration;

• (b) he enters into a transaction with that person in consideration of marriage; or

• (c) he enters into a transaction with that person for a consideration the value of which, in money or money's worth, is significantly less than the value, in money or money's worth, of the consideration provided by the individual.

• (3) For the purposes of this section and section 175 below an individual gives a preference to a person if—

• (a) that person is one of the individual's creditors or a surety or guarantor for any of his debts or other liabilities ; and

• (b) the individual does anything or suffers anything to be done which (in either case) has the effect of putting that person into a position which, in the event of the individual's bankruptcy, will be better than the position he would have been in if that thing had not been done.

• (4) The court shall not make an order under this section in respect of a preference given to any person unless the individual who gave the preference was influenced in deciding to give it by a desire to produce in relation to that person the effect mentioned in subsection (3) (b) above.

• (5) An individual who has given a preference to a person who, at the time the preference was given, was an associate of his shall be presumed, unless the contrary is shown, to have been influenced in deciding to give it by such a desire as is mentioned in subsection (4) above.

• (6) The fact that something has been done in pursuance of the order of a court shall not, without more, prevent the doing or suffering of that thing from constituting the giving of a preference.

• (7) Subject to subsections (8) and (10) below, the time at which an individual enters into a transaction at an undervalue or gives a preference is a relevant time for the purposes of this section if the transaction is entered into or the preference is given—

• (a) in the case of a transaction at an undervalue, at a time in the period of five years ending with the day of the presentation of the bankruptcy petition on which that individual is adjudged bankrupt;

• (b) in the case of a preference which is not a transaction at an undervalue and is given to a person who is an associate of that individual, at a time in the period of two years ending with that day; and

• (c) in any other case of a preference which is not a transaction at an undervalue, at a time in the period of six months ending with that day.

• (8) Where an individual enters into a transaction at an undervalue or gives a preference at a time mentioned in paragraph (a), (b) or (c) of subsection (7) above, not being, in the case of a transaction at an undervalue, a time less than two years before the end of the period mentioned in the said paragraph (a), that time shall not be a relevant time for the purposes of this section unless the individual—

• (a) is insolvent at that time ; or

• (b) becomes insolvent in consequence of the transaction or preference;

but the requirements of this subsection shall be presumed to be satisfied, unless the contrary is shown, in relation to any transaction at an undervalue which is entered into by an individual with a person who is an associate of his.

• (9) For the purposes of subsection (8) above an individual is insolvent if—

• (a) he is unable to pay his debts as they fall due ; or

• (b) the value of his assets is less than the amount of his liabilities, taking into account his contingent and prospective liabilities.

• (10) A transaction entered into or preference given by a person who is subsequently adjudged bankrupt on a petition under section 119(1)(d) above shall be treated as having been entered into or given at a relevant time for the purposes of this section if it was entered into or given at any time on or after the date specified for the purposes of this subsection in the criminal bankruptcy order on which the petition was based.

• (11) No order shall be made under this section by virtue of subsection (10) above where an appeal is pending (within the meaning of section 125 above) against the individual's conviction of any offence by virtue of which the criminal bankruptcy order was made.

• (12) For the purposes of this section a person who is an associate of an individual by reason only of being his employee shall be deemed not to be an associate of that individual.

Orders under s. 174

175

• (1) Without prejudice to the generality of subsection (1)(b) of section 174 above, an order under that section with respect to a transaction or preference entered into or given by an individual who is subsequently adjudged bankrupt may (subject to subsection (2) below)—

• (a) require any property transferred as part of the transaction, or in connection with the giving of the preference, to be vested in the trustee of the bankrupt's estate as part of that estate;

• (b) require any property to be so vested if it represents in any person's hands the application either of the proceeds of sale of property so transferred or of money so transferred;

• (c) release or discharge (in whole or in part) any security given by the individual;

• (d) require any person to pay, in respect of benefits received by him from the individual, such sums to the trustee of his estate as the court may direct;

• (e) provide for any surety or guarantor whose obligations to any person were released or discharged (in whole or in part) under the transaction or by the giving of the preference to be under such new or revived obligations to that person as the court thinks appropriate ;

• (f) provide for security to be provided for the discharge of any obligation imposed by or arising under the order, for such an obligation to be charged on any property and for such security or charge to have the same priority as a security or charge released or discharged (in whole or in part) under the transaction or by the giving of the preference; and

• (g) provide for the extent to which any person whose property is vested by the order in the trustee of the bankrupt's estate, or on whom obligations are imposed by the order, is to be able to prove in the bankruptcy for debts or other liabilities which arose from, or were released or discharged (in whole or in part) under or by, the transaction or the giving of the preference.

• (2) An order under section 174 above may affect the property of, or impose any obligation on, any person whether or not he is the person with whom the individual in question entered into the transaction or, as the case may be, the person to whom the preference was given; but such an order—

• (a) shall not prejudice any interest in property which was acquired from a person other than that individual and was acquired in good faith, for value and without notice of the relevant circumstances, or prejudice any interest deriving from such an interest; and

• (b) shall not require a person who received a benefit from the transaction or preference in good faith, for value and without notice of the relevant circumstances to pay a sum to the trustee of the bankrupt's estate, except where he was a party to the transaction or the payment is to be in respect of a preference given to that person at a time when he was a creditor of that individual.

• (3) Any sums required to be paid to the trustee in accordance with an order under section 174 above shall be comprised in the bankrupt's estate.

• (4) For the purposes of this section the relevant circumstances, in relation to a transaction or preference, are—

• (a) the circumstances by virtue of which an order under section 174 above could be made in respect of the transaction or preference if the individual in question were adjudged bankrupt within a particular period after the transaction is entered into or the preference given; and

• (b) if that period has expired, the fact that that individual has been adjudged bankrupt within that period.

Extortionate credit transactions

176

• (1) This section applies where a person who is or has been a party to a transaction for, or involving, the provision to him of credit is adjudged bankrupt.

• (2) The court may, on the application of the trustee of the bankrupt's estate, make an order with respect to the transaction if the transaction is or was extortionate and was not entered into more than three years before the commencement of the bankruptcy.

• (3) For the purposes of this section a transaction is extortionate if, having regard to the risk accepted by the person providing the credit—

• (a) the terms of it are or were such as to require grossly exorbitant payments to be made (whether unconditionally or in certain contingencies) in respect of the provision of the credit; or

• (b) it otherwise grossly contravened ordinary principles of fair dealing;

and it shall be presumed, unless the contrary is proved, that a transaction with respect to which an application is made under this section is or, as the case may be, was extortionate.

• (4) An order under this section with respect to any transaction may contain such one or more of the following as the court thinks fit, that is to say—

• (a) provision setting aside the whole or part of any obligation created by the transaction ;

• (b) provision otherwise varying the terms of the transaction or varying the terms on which any security for the purposes of the transaction is held ;

• (c) provision requiring any person who is or was party to the transaction to pay to the trustee any sums paid to that person, by virtue of the transaction, by the bankrupt;

• (d) provision requiring any person to surrender to the trustee any property held by him as security for the purposes of the transaction ;

• (e) provision directing accounts to be taken between any persons.

• (5) Any sums or property required to be paid or surrendered to the trustee in accordance with an order under this section shall be comprised in the bankrupt's estate.

• (6) Neither the trustee of a bankrupt's estate nor an undischarged bankrupt shall be entitled to make an application under section 139(1)(a) of the Consumer Credit Act 1974 (re-opening of extortionate credit agreements) for any agreement by which credit is or has been provided to the bankrupt to be re-opened ; but the powers conferred by this section shall be exercisable in relation to any transaction concurrently with any powers exercisable under this Act in relation to that transaction as a transaction at an undervalue.

Avoidance of general assignment of book debts

177

• (1) Where a person engaged in any business makes a general assignment to another person of his existing or future book debts, or any class of them, and is subsequently adjudged bankrupt, the assignment shall be void against the trustee of the bankrupt's estate as regards book debts which were not paid before the presentation of the bankruptcy petition unless the assignment has been registered under the Bills of Sale Act 1878.

• (2) For the purposes of subsection (1) above " assignment" includes an assignment by way of security or charge on book debts and " general assignment" does not include an assignment of book debts due at the date of the assignment from specified debtors or of debts becoming due under specified contracts or an assignment of book debts included either in a transfer of a business made in good faith and for value or in an assignment of assets for the benefit of creditors generally.

• (3) For the purposes of registration under the said Act of 1878 an assignment of book debts shall be treated as if it were a bill of sale given otherwise than by way of security for the payment of a sum of money; and the provisions of that Act with respect to the registration of bills of sale shall apply accordingly with such necessary modifications as may be made by rules under that Act.

Contracts to which bankrupt is a party

178

• (1) Where a contract has been made with a person who is subsequently adjudged bankrupt, the court may, on the application of any other party to the contract, make an order discharging obligations under the contract on such terms as to payment by the applicant or the bankrupt of damages for non-performance or otherwise as appear to the court to be equitable.

• (2) Any damages payable by the bankrupt by virtue of an order of the court under subsection (1) above shall be provable as a bankruptcy debt.

• (3) Where an undischarged bankrupt is a contractor in respect of any contract jointly with any person, that person may sue or be sued in respect of the contract without the joinder of the bankrupt.

Enforcement procedures

179

• (1) Subject to section 132 above and to the following provisions of this section, where the creditor of any person who is adjudged bankrupt has, before the commencement of the bankruptcy—

• (a) issued execution against the goods or land of that person; or

• (b) attached a debt due to that person from another person,

that creditor shall not be entitled, as against the official receiver or trustee of the bankrupt's estate, to retain the benefit of the execution or attachment, or any sums paid to avoid it, unless the execution or attachment was completed, or the sums were paid, before the commencement of the bankruptcy.

• (2) Subject to subsections (6) to (8) below, where any goods of a person have been taken in execution, then, if before the completion of the execution notice is given to the sheriff or other officer charged with the execution that that person has been adjudged bankrupt—

• (a) the sheriff or other officer shall on request deliver to the official receiver or trustee of the bankrupt's estate the goods and any money seized or recovered in part satisfaction of the execution ; but

• (b) the costs of the execution shall be a first charge on the goods or money so delivered and the official receiver or trustee of the bankrupt's estate may sell the goods or a sufficient part of them for the purpose of satisfying the ' charge.

• (3) Subject to subsection (6) below, where—

• (a) under an execution in respect of a judgment for a sum exceeding such sum as may be prescribed for the purposes of this subsection, the goods of any person are sold or money is paid in order to avoid a sale ; and

• (b) before the end of the period of fourteen days beginning with the day of the sale or payment the sheriff or other officer charged with the execution is given notice that a bankruptcy petition has been presented in relation to that person ; and

• (c) a bankruptcy order is or has been made on that petition,

the balance of the proceeds of sale or money paid, after deducting the costs of execution, shall (in priority to the claim of the execution creditor) be comprised in the bankrupt's estate.

• (4) Accordingly, in the case of an execution in respect of a judgment for a sum exceeding the sum prescribed for the purposes of subsection (3) above, the sheriff or other officer charged with the execution—

• (a) shall not dispose of the balance mentioned in subsection (3) above at any time within the period of fourteen days so mentioned or while a bankruptcy petition of which he has been given notice under that subsection is pending ; and

• (b) shall pay that balance, where by virtue of that subsection it is comprised in the bankrupt's estate, to the official receiver or (if there is one) to the trustee of that estate.

• (5) For the purposes of this section—

• (a) an execution against goods is completed by seizure and sale or by the making of a charging order under section 1 of the Charging Orders Act 1979 ;

• (b) an execution against land is completed by seizure, by the appointment of a receiver or by the making of a charging order under that section ;

• (c) an attachment of a debt is completed by the receipt of the debt.

• (6) The rights conferred by virtue of subsections (1) to (3) above on the official receiver or the trustee of a bankrupt's estate may, to such extent and on such terms as it thinks fit, be set aside by the court in favour of the creditor who has issued the execution or attached the debt.

• (7) Nothing in this section shall entitle the trustee of a bankrupt's estate to claim goods from a person who has acquired them in good faith under a sale by a sheriff or other officer charged with an execution.

• (8) Neither subsection (2) nor subsection (3) above shall apply in relation to any execution against property which has been acquired by or has devolved upon the bankrupt since the commencement of the bankruptcy unless, at the time the execution is issued or before it is completed—

• (a) the property has been or is claimed for the bankrupt's estate under section 154 above ; and

• (b) a copy of the notice given under that section has been or is served on the sheriff or other officer charged with the execution.

Distress etc.

180

• (1) The right of any landlord or other person to whom rent is payable to distrain upon the goods and effects of an undischarged bankrupt for rent due to him from the bankrupt shall be available (subject to subsection (5) below) against goods and effects comprised in the bankrupt's estate but only for six months' rent accrued due before the commencement of the bankruptcy.

• (2) Where a landlord or other person to whom rent is payable has distrained for rent upon the goods and effects of an individual to whom a bankruptcy petition relates and a bankruptcy order is subsequently made on that petition, any amount recovered by way of that distress which—

• (a) is in excess of the amount which by virtue of subsection (1) above would have been recoverable after the commencement of the bankruptcy ; or

• (b) is in respect of rent for a period or part of a period after the distress was levied,

shall be held for the bankrupt as part of his estate.

• (3) Where any person (whether or not a landlord or person entitled to rent) has distrained upon the goods or effects of an individual who is adjudged bankrupt before the end of the period of three months beginning with the distraint, so much of those goods or effects, or of the proceeds of sale of those goods or effects, as is not held for the bankrupt under subsection (2) above shall be charged for the benefit of the bankrupt's estate with-the preferential debts of the bankrupt to the extent that the bankrupt's estate is for the time being insufficient for meeting them.

• (4) Where by virtue of any charge under subsection (3) above any person surrenders any goods or effects to the trustee of a bankrupt's estate or makes a payment to such a trustee, that person shall, in respect of the amount of the proceeds of the sale of those goods or effects by the trustee or, as the case may be, the amount of the payment, rank as a preferential creditor of the bankrupt, except as against so much of the bankrupt's estate as is available for the payment of preferential creditors by virtue of the surrender or payment.

• (5) A landlord or other person to whom rent is payable shall not at any time after the discharge of a bankrupt be entitled to distrain upon any goods or effects comprised in the bankrupt's estate.

• (6) Where in the case of any execution—

• (a) a landlord is (apart from this section) entitled under section 1 of the Landlord and Tenant Act 1709 or section 102 of the County Courts Act 1984 (claims for rent where goods seized in execution) to claim for an amount not exceeding one year's rent; and

• (b) the person against whom the execution is levied is adjudged bankrupt before the notice of claim is served on the sheriff or other officer charged with the execution,

the right of the landlord to claim under that section shall be restricted to a right to claim for an amount not exceeding six months' rent and shall not extend to any rent payable in respect of a period after the notice of claim is so served.

• (7) Nothing in subsection (6) above shall impose any liability on a sheriff or other officer charged with an execution to account to the official receiver or the trustee of a bankrupt's estate for any sums paid by him to a landlord at any time before the sheriff or other officer was served with notice of the bankruptcy order in question; but this subsection is without prejudice to the liability of the landlord.

• (8) Nothing in this Part shall affect any right to distrain otherwise than for rent, and any such right shall at any time be exercisable without restriction against property comprised in a bankrupt's estate, even if that right is expressed by any enactment to be exercisable in like manner as a right to distrain for rent.

• (9) Any right to distrain against property comprised in a bankrupt's estate shall be exercisable notwithstanding that the property has vested in the trustee of that estate.

• (10) The provisions of this section are without prejudice to a landlord's right in a bankruptcy to prove for any bankruptcy debt in respect of rent.

Apprenticeships etc.

181

• (1) This section applies where—

• (a) a bankruptcy order is made in respect of an individual to whom another individual was an apprentice or articled clerk at the time when the petition on which that order was made was presented ; and

• (b) the bankrupt or the apprentice or clerk gives notice to the trustee terminating the apprenticeship or articles.

• (2) Subject to subsection (6) below, the indenture of apprenticeship or, as the case may be, the articles of agreement shall be discharged with effect from the commencement of the bankruptcy.

• (3) If any money has been paid by or on behalf of the apprentice or clerk to the bankrupt as a fee, the trustee may, on an application made by or on behalf of the apprentice or clerk, pay such sum to the apprentice or clerk as the trustee thinks reasonable, having regard to—

• (a) the amount of the fee ;

• (b) the proportion of the period in respect of which the fee was paid that has been served by the apprentice or clerk before the commencement of the bankruptcy; and

• (c) the other circumstances of the case.

• (4) The power of the trustee to make a payment under subsection (3) above shall have priority over the obligation of the trustee to distribute the bankrupt's estate.

• (5) Instead of making a payment under subsection (3) above, the trustee may, if it appears to him expedient to do so on an application made by or on behalf of the apprentice or clerk, transfer the indenture or articles to a person other than the bankrupt.

• (6) Where a transfer is made under subsection (5) above, subsection (2) above shall have effect only as between the apprentice or clerk and the bankrupt.

Unenforceability of liens on books etc.

182

• (1) Subject to subsection (2) below, a lien or other right to retain possession of any of the books, papers or other records of a bankrupt shall be unenforceable to the extent that its enforcement would deny possession of any books, papers or other records to the official receiver or the trustee of the bankrupt's estate.

• (2) Subsection (1) above does not apply to a lien on documents which give a title to property and are held as such.

CHAPTER VII — Bankruptcy Offences

Preliminary

183

• (1) Subject to section 189(3) below, this Chapter applies where the court has made a bankruptcy order on a bankruptcy petition.

• (2) This Chapter applies whether or not the bankruptcy is annulled, but proceedings for an offence under this Chapter shall not be instituted after the annulment.

• (3) Without prejudice to his liability in respect of a subsequent bankruptcy, the bankrupt shall not be guilty of an offence under this Chapter in respect of anything done after his discharge ; but nothing in this Part shall prevent the institution of proceedings against a discharged bankrupt for an offence committed before his discharge.

• (4) A person shall not be guilty of an offence under section 184(1), (2) or (3), 185(1), (2) or (3), 186(1), 187(1) or (2) or 188 (1) below if he proves that, at the time of the conduct constituting the offence, he had no intent to defraud or to conceal the state of his affairs.

• (5) It shall not be a defence in proceedings for an offence under this Chapter that anything relied on, in whole or in part, as constituting that offence was done outside England and Wales.

• (6) Proceedings for an offence under this Chapter or under the rules shall not be instituted except by the Secretary of State or by or with the consent of the Director of Public Prosecutions.

Failure to hand over property etc.

184

• (1) The bankrupt shall be guilty of an offence if—

• (a) he does not to the best of his knowledge and belief disclose all the property comprised in his estate to the official receiver or the trustee of that estate; or

• (b) he does not inform the official receiver or that trustee of any disposal of any property which but for the disposal would be so comprised, stating how, when, to whom and for what consideration the property was disposed of;

but paragraph (b) above shall not apply to any disposal in the ordinary course of a business carried on by the bankrupt or to any payment of the ordinary expenses of the bankrupt or his family.

• (2) The bankrupt shall be guilty of an offence if—

• (a) he does not deliver up possession to the official receiver or trustee, or as the official receiver or trustee may direct, of such part of the property comprised in his estate as is in his possession or under his control and possession of which he is required by law so to deliver up;

• (b) he conceals any debt due to or from him or conceals any property the value of which is not less than the prescribed amount and possession of which he is required to deliver up to the official receiver or trustee; or

• (c) in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (b) above if the order had been made immediately before he did it.

• (3) The bankrupt shall be guilty of an offence if he removes, or between the presentation of the petition and the commencement of the bankruptcy removed, any property the value of which was not less than the prescribed amount and possession of which he has or would have been required to deliver up to the official receiver or the trustee of his estate.

• (4) The bankrupt shall be guilty of an offence if he without reasonable excuse fails, on being required to do so by the official receiver or by the court—

• (a) to account for the loss of any substantial part of his property incurred in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy; or

• (b) to give a satisfactory explanation of the manner in which such a loss was incurred.

• (5) References in this section to property comprised in the bankrupt's estate or to property possession of which is required to be delivered up to the official receiver or the trustee of a bankrupt's estate include references to any property which would be such property if a notice in respect of it were given under section 154 or 155 above.

Concealment etc. of books and papers

185

• (1) The bankrupt shall be guilty of an offence if he does not deliver up possession to the official receiver or the trustee of his estate, or as the official receiver or trustee may direct, of all books, papers and other records of which he has possession or control and which relate to his estate or affairs.

• (2) The bankrupt shall be guilty of an offence if—

• (a) he prevents, or between the presentation of the petition and the commencement of the bankruptcy prevented, the production of any books, papers or records relating to his estate or affairs ;

• (b) he conceals, destroys, mutilates or falsifies, or causes or permits the concealment, destruction, mutilation or falsification of, any books, papers or other records relating to his estate or affairs ;

• (c) he makes, or causes or permits the making of, any false entries in any book, document or record relating to his estate or affairs; or

• (d) in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the making of the bankruptcy order, he did anything which would have been an offence under paragraph (b) or (c) above if the order had been made before he did it.

• (3) The bankrupt shall be guilty of an offence if—

• (a) he disposes of, alters or makes any omission in, or causes or permits the disposal, altering or making of any omission in, any book, document or record relating to his estate or affairs ; or

• (b) in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (a) above if the order had been made before he did it.

False statements

186

• (1) The bankrupt shall be guilty of an offence if he makes or has made any material omission in any statement made under this Part and relating to his affairs.

• (2) The bankrupt shall be guilty of an offence if—

• (a) knowing or believing that a false debt has been proved by any person under the bankruptcy, he fails to inform the trustee of his estate as soon as practicable; or

• (b) he attempts to account for any part of his property by fictitious losses or expenses; or

• (c) at any meeting of his creditors in the period of twelve months ending with the presentation of the petition or (whether or not at such a meeting) at any time between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (b) above if the order had been made before he did it; or

• (d) he is, or has at any time been, guilty of any false representation or other fraud for the purpose of obtaining the consent of his creditors, or any of them, to an agreement with reference to his affairs or to his bankruptcy.

Fraudulent disposal etc. of property

187

• (1) The bankrupt shall be guilty of an offence if—

• (a) he makes or causes to be made, or has in the period of five years ending with the commencement of the bankruptcy made or caused to be made, any gift or transfer of, or any charge on, his property ; or

• (b) he conceals or removes, or has at any time before the commencement of the bankruptcy concealed or removed, any part of his property after, or within two months before, the date on which a judgment or order for the payment of money has been obtained against him, being a judgment or order which was not satisfied before the commencement of the bankruptcy.

• (2) The bankrupt shall be guilty of an offence if—

• (a) he leaves, or attempts or makes preparations to leave, England and Wales with any property the value of which is not less than the prescribed amount and possession of which he is required to deliver up to the official receiver or the trustee of his estate ; or

• (b) in the period of six months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he did anything which would have been an offence under paragraph (a) above if the order had been made immediately before he did it.

• (3) In this section—

• (a) references to property possession of which is required to be delivered up to the official receiver or the trustee of a bankrupt's estate include references to any property which would be such property if a notice in respect of it were given under section 154 or 155 above; and

• (b) references to making a transfer of or charge on any property include references to causing or conniving at the levying of any execution against that property.

Fraudulent dealing with property obtained on credit

188

• (1) The bankrupt shall be guilty of an offence if, in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he disposed of any property which he had obtained on credit and, at the time he disposed of it, had not paid for.

• (2) A person shall be guilty of an offence if, in the period of twelve months ending with the presentation of the petition or between the presentation of the petition and the commencement of the bankruptcy, he acquired or received property from the bankrupt knowing or believing—

• (a) that the bankrupt owed money in respect of the property ; and

• (b) that the bankrupt did not intend, or was unlikely to be able, to pay the money he so owed.

• (3) A person shall not be guilty of an offence under subsection (1) or (2) above if the disposal, acquisition or receipt of the property was in the ordinary course of a business carried on by the bankrupt at the time of the disposal, acquisition or receipt.

• (4) In determining for the purposes of this section whether any property is disposed of, acquired or received in the ordinary course of a business carried on by the bankrupt, regard may be had, in particular, to the price paid for the property.

• (5) In this section references to disposing of property include references to pawning or pledging it, and references to acquiring or receiving property shall be construed accordingly.

Obtaining credit

189

• (1) The bankrupt shall be guilty of an offence if—

• (a) either alone or jointly with another person, he obtains credit to the extent of the prescribed amount or more without giving the person from whom he obtains it the relevant information about his status ; or

• (b) he engages (whether directly or indirectly) in any business under a name other than that in which he was adjudged bankrupt without disclosing to all persons with whom he enters into any business transaction the name in which he was so adjudged.

• (2) The reference in subsection (1) above to the bankrupt obtaining credit includes a reference to—

• (a) a case where goods are bailed to him under a hire purchase agreement or agreed to be sold to him under a conditional sale agreement; and

• (b) a case where he is paid in advance (whether in money or otherwise) for the supply of goods or services.

• (3) A person whose estate has been sequestrated in Scotland or who has been adjudged bankrupt in Northern Ireland shall be guilty of an offence if, before his discharge, he does anything in England and Wales which would be an offence under subsection (1) above if he were an undischarged bankrupt and the sequestration of his estate or the adjudication in Northern Ireland were an adjudication under this Part.

• (4) For the purposes of subsection (1)(a) above the relevant information about the status of the person in question is the information that he is an undischarged bankrupt or, as the case may be, that his estate has been sequestrated in Scotland and that he has not been discharged.

Failure to keep proper accounts of business

190

• (1) Where the bankrupt has been engaged in any business for any of the period of two years ending with the presentation of the petition, he shall be guilty of an offence if he has not kept proper accounting records throughout that period and throughout any further period in which he was so engaged between the presentation of the petition and the commencement of the bankruptcy, or has not preserved all the accounting records which he has kept.

• (2) The bankrupt shall not be guilty of an offence under subsection (1) above—

• (a) if his unsecured liabilities at the commencement of the bankruptcy did not exceed the prescribed amount; or

• (b) if he proves that in the circumstances in which he carried on business the omission was honest and excusable.

• (3) For the purposes of this section a person shall be deemed not to have kept proper accounting records if he has not kept such records as are necessary to show or explain his transactions and financial position in his business, including—

• (a) records containing entries from day to day, in sufficient detail, of all cash received and paid ;

• (b) where the business involved dealings in goods, statements of annual stock-takings ; and

• (c) except in the case of goods sold by way of retail trade to the actual customer, records of all goods sold and purchased showing the buyers and sellers in sufficient detail to enable the goods and the buyers and sellers to be identified.

• (4) In relation to any such records as are mentioned in subsection (3) above, section 185(2)(d) and (3)(b) above shall have effect with the substitution for any reference to twelve months of a reference to two years.

Gambling

191

• (1) The bankrupt shall be guilty of an offence if he has—

• (a) in the period of two years ending with the presentation of the petition, materially contributed to, or increased the extent of, his insolvency by gambling or by rash and hazardous speculations ; or

• (b) between the presentation of the petition and the commencement of the bankruptcy, lost any part of his property by gambling or by rash and hazardous speculations.

• (2) In determining for the purposes of this section whether any speculations were rash and hazardous, the financial position of the bankrupt at the time when he entered into them shall be taken into consideration.

Penalties

192

• (1) A person guilty of an offence under section 184(1), (2) or (3), 185(1), (2) or (3), 186(1) or (2) or 188(1) or (2) above shall be liable—

• (a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both ;

• (b) on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both.

• (2) A person guilty of an offence under section 184(4), 187(1) or (2), 189(1) or (3), 190(1) or 191 above shall be liable—

• (a) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both;

• (b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.

CHAPTER VIII — Powers of Court in Bankruptcy

General control of court

193

• (1) Every bankruptcy shall be under the general control of the court and, subject to the provisions of this Part, the court shall have full power to decide all questions of priorities and all other questions, whether of law or fact, arising in any bankruptcy.

• (2) Without prejudice to any other provision of this Part, an undischarged bankrupt or a discharged bankrupt whose estate is still being administered under Chapter V of this Part shall do all such things as he may be directed to do by the court for the purposes of his bankruptcy or, as the case may be, the administration of that estate.

• (3) The official receiver or the trustee of a bankrupt's estate may at any time apply to the court for a direction under subsection (2) above.

• (4) If any person without reasonable excuse fails to comply with any obligation imposed on him by subsection (2) above, he shall, in addition to any other punishment to which he may be subject, be guilty of contempt of court and liable to be punished accordingly.

Power of arrest

194

• (1) In the cases specified in subsection (2) below the court may cause a warrant to be issued to a constable or prescribed officer of the court—

• (a) for the arrest of a debtor to whom a bankruptcy petition relates or of an undischarged bankrupt or of a discharged bankrupt whose estate is still being administered under Chapter V of this Part; and

• (b) for the seizure of any books, papers, records, money or goods in the possession of a person arrested under the warrant;

and may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until such time as the court may order.

• (2) The powers conferred by subsection (1) above shall be exercisable in relation to a debtor or undischarged or discharged bankrupt if, at any time after the presentation of the bankruptcy petition relating to him or the making of the bankruptcy order against him, it appears to the court—

• (a) that there are reasonable grounds for believing that he has absconded, or is about to abscond, with a view to avoiding or delaying the payment of any of his debts or his appearance to a bankruptcy petition or to avoiding, delaying or disrupting any proceedings in bankruptcy against him or any examination of his affairs;

or

• (b) that he is about to remove his goods with a view to preventing or delaying possession being taken of them by the official receiver or the trustee of his estate; or

• (c) that there are reasonable grounds for believing that he has concealed or destroyed, or is about to conceal or destroy, any of his goods or any books, papers or records which might be of use to his creditors in the course of his bankruptcy or in connection with the administration of his estate ; or

• (d) that he has, without the leave of the official receiver or the trustee of his estate, removed any goods in his possession which exceed in value such sum as may be prescribed for the purposes of this paragraph ; or

• (e) that he has failed, without reasonable excuse, to attend any examination ordered by the court.

Seizure of bankrupt's property

195

• (1) At any time after a bankruptcy order has been made, the court may, on the application of the official receiver or the trustee of the bankrupt's estate, issue a warrant authorising the person to whom it is directed to seize any property comprised in the bankrupt's estate which is, or any books, papers or records relating to the bankrupt's estate or affairs which are, in the possession or under the control of the bankrupt or any other person who is required to deliver the property, books, papers or records to the official receiver or trustee.

• (2) Any person executing a warrant under this section may, for the purpose of seizing any property comprised in the bankrupt's estate or any books, papers or records relating to the bankrupt's estate or affairs, break open any premises where the bankrupt or anything that may be seized under the warrant is or is believed to be and any receptacle of the bankrupt which contains or is believed to contain anything that may be so seized.

• (3) If, after a bankruptcy order has been made, the court is satisfied that any property comprised in the bankrupt's estate is, or any books, papers or records relating to the bankrupt's estate or affairs are, concealed in any premises not belonging to him, it may issue a warrant authorising any constable or prescribed officer of the court to search those premises for the property, books, papers or records.

• (4) A warrant under subsection (3) above shall not be executed except in the prescribed manner and in accordance with its terms.

Inquiry into bankrupt's dealings and property

196

• (1) At any time after a bankruptcy order has been made the court may, on the application of the official receiver or the trustee of the bankrupt's estate, summon to appear before it—

• (a) the bankrupt or the bankrupt's spouse or former spouse ;

• (b) any person known or believed to have any property comprised in the bankrupt's estate in his possession or to be indebted to the bankrupt;

• (c) any person appearing to the court to be able to give information concerning the bankrupt or the bankrupt's dealings, affairs or property ;

and the court may require any such person as is mentioned in paragraph (b) or (c) above to submit an affidavit to the court containing an account of his dealings with the bankrupt or to produce any documents in his possession or under his control relating to the bankrupt or the bankrupt's dealings, affairs or property.

• (2) Without prejudice to section 194 above, in a case where a person without reasonable excuse fails to appear before the court when he is summoned to do so under this section or there are reasonable grounds for believing that a person has absconded, or is about to abscond, with a view to avoiding his appearance before the court under this section, the court may, for the purpose of bringing that person and anything in his possession before the court, cause a warrant to be issued to a constable or prescribed officer of the court—

• (a) for the arrest of that person ; and

• (b) for the seizure of any books, papers, records, money or goods in that person's possession;

and may authorise a person arrested under such a warrant to be kept in custody, and anything seized under such a warrant to be held, in accordance with the rules, until that person is brought before the court under the warrant or until such other time as the court may order.

• (3) Any person who appears or is brought before the court under this section may be examined on oath, either orally or by interrogatories, concerning the bankrupt or the bankrupt's dealings, affairs and property.

• (4) If it appears to the court, on consideration of any evidence obtained under this section, that any person has in his possession any property comprised in the bankrupt's estate, the court may, on the application of the official receiver or the trustee of the bankrupt's estate, order that person to deliver the whole or any part of the property to the official receiver or trustee at such time, in such manner and on such terms as the court thinks fit.

• (5) If it appears to the court, on consideration of any evidence obtained under this section, that any person is indebted to the bankrupt, the court may, on the application of the official receiver or the trustee of the bankrupt's estate, order that person to pay to the official receiver or trustee, at such time and in such manner as the court may direct, the whole or part of the amount due, whether in full discharge of the debt or otherwise as the court thinks fit.

• (6) The court may, if it thinks fit, order that any person who if within the jurisdiction of the court would be liable to be summoned to appear before it under this section shall be examined in any part of the United Kingdom where he may for the time being be, or in any place outside the United Kingdom.

• (7) This section shall apply where an interim receiver has been appointed under section 133 above as it applies where a bankruptcy order has been made as if—

• (a) references to the official receiver or trustee of the bankrupt's estate were references to the interim receiver, and

• (b) references to the bankrupt and to his estate were references, respectively, to the debtor and his property.

Power to order production of documents in custody of inland revenue official

197

• (1) For the purposes of an examination under section 137 above or proceedings under section 196 above, the court may, on the application of the official receiver or the trustee of the bankrupt's estate, order an inland revenue official to produce to the court—

• (a) any return, account or accounts submitted (whether before or after the commencement of the bankruptcy) by the bankrupt to any inland revenue official;