CHAPTER VI - BANKRUPTCY OFFENCES
Preliminary
350. Scheme of this Chapter
(1) Subject to section 360(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 order 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 the subsequent bankruptcy, the
bankrupt is not guilty in respect of an
offence under this Chapter in respect of
anything done after his discharge; but
nothing in this Group of Parts prevents the
institution of proceedings against a
discharge of bankrupt for an offence
committed before his discharge.
(4) It is not 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.
(5) Proceedings for an offence under this
Chapter or under the rules should be
instituted except by the Secretary of State
or by or with the consent of the Director of
public Prosecutions.
(6) A person guilty of any offence under
this Chapter is liable to imprisonment or a
fine, or both.
351. Definitions
In the following provisions of this Chapter-
(a) references 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 the bankrupt's estate
include any property which would be such
property if a notice in respect of it
were given under section 307
(after-acquired property) or 308
(personal property and effects of
bankrupt having more than replacement
value);
(b) "the initial period" means the
period between the presentation of the
bankruptcy petition and the commencement
of the bankruptcy; and
(c) a reference to a number of months
or years before petition is to that
period ending with the presentation of
the bankruptcy petition.
352. Defence of innocent
intention
Where in the case of an offence under any
provision of this Chapter it is stated that
this section applies, a person id not guilty
of the offence 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.
Wrongdoing by the bankrupt before and after
bankruptcy
353. Non-disclosure
(1) The bankrupt is guilty of an offence
if-
(a) he does not to the best of his
knowledge and belief disclose all the
property comprises in his estate to the
official receiver or the trustee, or
(b) he does not inform the official
receiver or the 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.
(2) Subsection (1)(b) does 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.
(3) Section 352 applies to this offence.
354. Concealment of property
(1) The bankrupt is 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 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 he is requires to deliver
up to the official receiver or trustee
or
(c) in the 12 months before petition,
or in the initial period, he did
anything which would have been an
offence under paragraph (b) above if the
bankruptcy order had made immediately
before he did it.
Section 352 applies to this offence.
(2) The bankrupt is guilty of an offence
if he removes, or in the initial period
removes, 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.
Section 352 applies to this offence.
(3) The bankrupt is guilty of an offence
if he without reasonable excuse fails, on
being required to do so by the official
receiver or the court-
(a) to account for the loss of any
substantial part of his property
incurred in the 12 months before
petition or in the initial period, or
(b) to give a satisfactory
explanation of the manner in which such
a loss was incurred.
355. Concealment of books and
papers; falsification
(1) The bankrupt is guilty of an offence
if he does not deliver up possession to the
official receiver or the trustee, 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 his affairs
Section 352 applies to this offence.
(2) The bankrupt is guilty of an offence
if-
(a) he prevents, or in the initial
period prevented, the production of any
books, papers or recods 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
records relating to his estate or
affairs;
(c) he makes, or causes or permits
the making of, any false entries in any
books, document or records relating to
his estate or affairs; or
(d) in the 12 months before petition,
or in the initial period, he did
anything which would have been an
offence under paragraph (b) or (c) above
if the bankruptcy order had been made
before he did it.
Section 352 applies to this offence.
(3) The bankrupt is guilty of an offence
if-
(a) he disposes of, or 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 12 months before petition,
or in the initial period he did anything
which would have been an offence under
paragraph (a) if the bankruptcy order
had been made before he did it.
Section 352 applies to this offence.
356. False statements
(1) The bankrupt is guilty of an offence
if he makes or has made any material
omission in any statement made under any
provision in this Group of Parts and
relating to his affairs.
Section 352 applies to this offence.
(2) The bankrupt is 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 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 12 months before petition or
(whether or not at such a meeting) at
any time in the initial period, he did
anything which would have been an
offence under paragraph (b) if the
bankruptcy order had been made before he
did it; or
(d) he is, or at any time has been ,
guilty of any false representation or
other fraud for the purposes of
obtaining the consent of his creditors,
or any of them, to an agreement with
reference to his affairs or to his
bankruptcy.
357. Fraudulent disposal of
property
(1) The bankrupt is guilty of an offence
if he makes or causes to be made. or has in
the period of 5 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.
Section 352 applies to this offence.
(2) The reference to making a transfer of
a charge on any property includes causing or
conniving at the levying of any execution
against that property.
(3) The bankrupt is guilty of an offence
if 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 2 months
before, the date on which a judgement or
order for the payment of money has been
obtained against him, being a judgement or
order which was not satisfied before the
commencement of the bankruptcy.
Section 352 applies to this offence.
358. Absconding
The bankrupt is 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 prescribed amount and
possession of which he is required to
deliver up to the official receiver or
the trustee, or
(b) in the 6 months before petition,
or in the initial period he did anything
which would have been an offence under
paragraph(a)if the bankruptcy order had
been made immediately before he did it.
Section 352 applies to this offence.
359. Fraudulent dealing with
property obtained on credit
(1) The bankrupt is guilty of an offence
if, in the 12 months before petition, or in
the initial period, he disposed of any
property which he had obtained on credit
and, at the time he disposed of it, had not
paid for
Section 352 applies to this offence.
(2) A person is guilty of an offence if,
in the 12 months before petition or in the
initial period, 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 be so owed.
(3) A person is not guilty of an offence
under subsection (1) or (2) 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 pawning or
pledging it; and references to acquiring or
receiving property shall be read
accordingly.
360. Obtaining credit; engaging
in business
(1) The bankrupt is guilty of an offence
if-
(a) either alone or jointly with any
other person, he obtained 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 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 to the bankrupt
obtaining credit includes the following
cases-
(a) where goods are billed to him
under a hire-purchase agreement, or
agreed to be sold to him under a
conditional sale agreement, and
(b) where he is paid in advance
(whether in money or otherwise)for the
supply of goods and services.
(3) A person whose estate has been
sequestrated in Scotland, or who has been
adjudges bankrupt in Northern Ireland, is
guilty of an offence if, before his
discharge, he does anything in England and
Wales which would be an offence under
subsection (1) 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 purpose of subsection (1)(a),
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
need discharged.
361. Failure to keep proper
accounts of business
(1) Where the bankrupt has been engaged
in the business for any of the period of 2
years before petition, he is guilty of an
offence if he-
(a) has not kept proper accounting
records throughout that period and
throughout any part of the initial
period in which he was so engaged, or
(b) has not preserved all the
accounting records which he has kept.
(2) The bankrupt is not guilty of an
offence under subsection (1)-
(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 purpose of this section a
person is 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 paid and received,
(b) where the business involves
dealing 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), Subsections
(2)(d) and (3)(b) of sections 355 apply with
the substitution of 2 years for 12 months.
362. Gambling
(1) The bankrupt is guilty of an offence
if he has-
(a) in the 2 years before petition,
materially contributed to, or increased
the extent of, his insolvency by
gambling or by rash and hazardous
speculations, or
(b) in the initial period, 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.
The above is the actual text of the
Insolvency Act 1986.
For more information please visit: Her
Majesty's Stationery Office.
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