LAWS OF MALAYSIA
REPRINT
Act 360
BANKRUPTCY ACT 1967
Incorporating all amendments up to 1 January 2006
PUBLISHED BY
THE COMMISSIONER OF LAW REVISION, MALAYSIA
UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968
IN COLLABORATION WITH
PERCETAKAN NASIONAL MALAYSIA BHD
2006
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Laws of Malaysia
ACT 360
BANKRUPTCY ACT 1967
First enacted ...
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... 1967 (Act 55 of 1967)
Revised
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... 1988 (Act 360 w.e.f.
31 December 1988)
PREVIOUS REPRINT
First Reprint
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2001
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Bankruptcy
LAWS OF MALAYSIA
Act 360
BANKRUPTCY ACT 1967
ARRANGEMENT OF SECTIONS
PRELIMINARY
Section
1.
Short title and application
Interpretation
2.
Interpretation
PART I
PROCEEDINGS FROM ACT OF BANKRUPTCY
TO DISCHARGE
Acts of Bankruptcy
3.
Acts of bankruptcy
Receiving Order
4.
Jurisdiction to make receiving order
5.
Conditions on which creditor may petition
6.
Proceedings and order on creditor's petition
7.
Debtor 's petition and order thereon
8.
Effect of receiving order
9.
Court may detain or order arrest of debtor and commit him to prison
unless he gives security not to leave Malaysia
10.
Discretionary powers as to appointment of interim receiver and stay
of proceedings
11.
Service of order staying proceedings
12.
Power to appoint special manager
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ACT 360
Section
13.
Advertisement of receiving order
14.
Power of court to rescind receiving order in certain cases
Proceedings consequent on Receiving Order
15.
First and other meetings of creditors
16.
Debtor 's statement of affairs
Public Examination of Debtor
17.
Public examination of debtor
Composition or Scheme of Arrangement
18.
Power for creditors to accept and court to approve composition or
arrangement
19.
Effect of composition or scheme
20.
No deed of arrangement valid except under section 18 or 26 unless
registered
21.
Penalty for collusive preference
22.
Power of Minister to make rules
23.
Rectification of registers
Adjudication of Bankruptcy
24.
Adjudication of bankruptcy
25.
Consultative committee
26.
Power to accept composition or scheme after bankruptcy adjudication
Control over Person and Property of Debtor
27.
Duties of debtor as to discovery and realization of property
28.
Arrest of debtor under certain circumstances
29.
Release of debtor on security
30.
Re-direction of letters and telegrams
31.
Discovery of debtor's property
32.
Director General of Insolvency to settle list of debtors to the estate
Discharge of Bankrupt
33.
Discharge of bankrupt by order of court
33A. Discharge of bankrupt by Certificate of Director General of Insolvency
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Section
33B. Objection by creditor to discharge of bankrupt under section 33A
34.
Fraudulent settlements
35.
Effect of discharge
35A. Discharged bankrupt to give assistance
PART II
DISQUALIFICATION AND DISABILITIES OF BANKRUPT
36.
Disqualification of bankrupt
37.
Vacating offices by bankruptcy
Undischarged Bankrupt
38.
Consequences of refusal of discharge
38A. Power to prevent bankrupt from leaving Malaysia
39.
List of undischarged bankrupts to be kept
PART III
ADMINISTRATION OF PROPERTY
Proof of Debts
40.
Description of debts provable in bankruptcy
41.
Mutual credit and set-off
42.
Rules as to proof of debts
43.
Priority of debts
44.
Preferential claim in case of apprenticeship and in respect of passage
money
45.
Power to landlord to distrain for rent
46.
Postponement of husband's or wife's claims
Property Available for Payment of Debts
47.
Relation back of Director General of Insolvency's title
48.
Description of bankrupt's property divisible amongst creditors
49.
Provisions as to second bankruptcy
Effect of Bankruptcy on Antecedent Transactions
50.
Restriction of rights of creditor under execution or attachment
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ACT 360
Section
51.
Property taken in execution
52.
Avoidance of voluntary settlement
53.
Avoidance of preferences in certain cases
53A. Avoidance of assignment of book debts
53B. Property or proceeds therefrom deemed to be property of Director
General of Insolvency
53C. Fair market value may be fixed on review
Protection of bona fide transactions without notice
54.
Realization of Property
55.
Possession of property by assignee
56.
Seizure of property of bankrupt
57.
Appropriation of portion of pay or salary to creditors
58.
Vesting and transfer of property
59.
Disclaimer of onerous property
60.
Powers of Director General of Insolvency to deal with property
61.
Powers exercisable by Director General of Insolvency subject to orders
of court
Distribution of Property
62.
Declaration and distribution of dividends
63.
Joint and separate dividends
Provision for creditors residing at a distance, etc.
64.
65.
Right of creditor who has not proved debt before declaration of a
dividend
66.
Final dividend
67.
No action for dividend
68.
Power to allow bankrupt to manage property
69.
Right of bankrupt to surplus
PART IV
DIRECTOR GENERAL OF INSOLVENCY
Appointment
70.
Appointment of Director General of Insolvency and other officers
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Bankruptcy
Duties
Section
71.
Status of Director General of Insolvency
72.
Duties of Director General of Insolvency as regards the debtor's conduct
73.
Duties of Director General of Insolvency as to debtor's estate
74.
Protection of Director General of Insolvency and person acting under
his direction or control
Costs
75.
Allowance and taxation of costs
Receipts, Payments, Accounts, Audit
76.
Bankruptcy Estates Account
77.
Investment of surplus funds
78.
Inspection and audit of Director General of Insolvency's accounts
79.
Director General of Insolvency to furnish list of creditors
80.
Books to be kept by Director General of Insolvency
81.
Official examination of Director General of Insolvency's records
Release
82.
Release of Director General of Insolvency
Official Name
83.
Official name of Director General of Insolvency
Vacation of Office on Insolvency
84.
Office of Director General of Insolvency vacated by insolvency
Additional Powers
84A. Additional powers of Director General of Insolvency
Control
85.
Discretionary powers of Director General of Insolvency and control
thereof
86.
Appeal to court against Director General of Insolvency
87.
Control of court over Director General of Insolvency
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ACT 360
PART V
CONSTITUTION, PROCEDURE AND POWERS
OF COURT
Jurisdiction
Section
88.
High Court to be the court having jurisdiction in bankruptcy
89.
Exercise in Chambers of jurisdiction
90.
Jurisdiction in bankruptcy of Registrar
91.
General power of bankruptcy courts
Appeals
92.
Appeals in bankruptcy
Procedure
93.
Discretionary powers of the court
94.
Consolidation of petitions
95.
Power to change carriage of proceedings
96.
Continuance of proceedings on death of debtor
97.
Power to stay proceedings
98.
Power to present petition against one partner
99.
Power to dismiss petition against some respondents only
100.
Consolidation of bankruptcy proceedings by or against partners
101.
Actions by Director General of Insolvency and bankrupt's partners
102.
Actions on joint contracts
103.
Proceedings in partnership name
104.
Reciprocal provisions relating to Singapore and designated countries
Annulment of Adjudication
105.
Power of court to annul adjudication in certain cases
PART VI
SMALL BANKRUPTCIES
106.
Summary administration in small cases
107.
Wage-earner
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Bankruptcy
Section
108.
No public examination in small cases
PART VII
FRAUDULENT DEBTORS AND CREDITORS
109.
Punishment of fraudulent debtors
110.
Bankrupt failing to keep proper account
111.
Bankrupt incurring debt without reasonable ground of expectation of
paying it
112.
Penalty for absconding with property
113.
Penalty for absconding in order to avoid service of bankruptcy process
or embarrass bankruptcy proceedings
Penalty on fraudulently obtaining credit, etc.
114.
Penalty on false claims, etc.
115.
116.
Debts incurred by fraud
(Deleted)
117.
117A. Sessions Court to have full jurisdiction to try offences
118.
Criminal liability after discharge or composition
119.
Form of charge
PART VIII
SUPPLEMENTAL PROVISIONS
Application of Act
120.
Application to married women
121.
Exclusion of corporations and companies
122.
Administration in bankruptcy of estate of person dying insolvent
General Rules
123.
Power to make rules
Fees
124.
Fees
Evidence
Gazette to be evidence
125.
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ACT 360
Section
126.
Evidence of proceedings at meetings of creditors
127.
Evidence of proceedings in bankruptcy
128.
Swearing of affidavits
129.
Death of witness
Notices
130.
Service of notices
Formal Defects
131.
Formal defect not to invalidate proceedings
Stamp Duty
Exemption of deeds, etc., from stamp duty
132.
Corporations, Firms and Mentally Disordered Persons
133.
Acts of corporations, firms and mentally disordered persons
Unclaimed Funds or Dividends
134.
Unclaimed or undistributed money
Debtor's Books
135.
Access to debtor's books
Repeals and Special Provisions
(Omitted)
136.
137.
Transitional provisions for States of Malaya
138.
Jurisdiction of District Officers, Sarawak and Sabah
139.
Transitional provisions for Sarawak and Sabah
SCHEDULE A
SCHEDULE B
SCHEDULE C
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Bankruptcy
LAWS OF MALAYSIA
Act 360
BANKRUPTCY ACT 1967
An Act relating to the law of bankruptcy.
[30 September 1967]
BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan
Agong with the advice and consent of the Dewan Negara and
Dewan Rakyat in Parliament assembled, and by the authority of
the same, as follows:
PRELIMINARY
Short title and application
1. (1) This Act may be cited as the Bankruptcy Act 1967.
(2) This Act shall apply throughout Malaysia.
Interpretation
Interpretation
2. In this Act, unless the context otherwise requires--
"advocate" means any person entitled to practise as an advocate
or as a solicitor or as an advocate and solicitor under any law in
any part of Malaysia;
"affidavit" includes attestation on honour;
"available act of bankruptcy" means any act of bankruptcy available
for a bankruptcy petition at the date of the presentation of the
petition on which the receiving order is made;
"bankruptcy petition" includes a petition for a receiving order;
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ACT 360
"Chief Judge" means the Chief Judge of the High Court in
Malaya or of the High Court in Sabah and Sarawak, as the case
may require;
"consultative committee" means the committee appointed under
section 25;
"the court" means the court having jurisdiction in bankruptcy
under this Act;
"debt provable in bankruptcy" or "provable debt" includes any
debt or liability by this Act made provable in bankruptcy;
"deed of arrangement" includes any of the following instruments,
whether under seal or not, made by, for, or in respect of the affairs
of a debtor for the benefit of his creditors generally:
(a) an assignment of property;
(b) a deed or agreement for a composition;
and in cases where creditors of a debtor obtain any control
over the property or business--
(c) a deed of inspectorship entered into for the purpose of
winding-up or carrying on a business;
(d) a letter of licence authorizing the debtor or any other
person to manage, carry on, realize or dispose of a business
with a view to the payment of debts; and
(e) any agreement or instrument entered into for the purpose
of carrying on or winding up the debtor's business, or
authorizing the debtor or any other person to manage,
carry on, realize or dispose of the debtor's business with
a view to the payment of his debts;
"Director General of Insolvency" includes any officer appointed
under section 70 and authorized to exercise the powers of the
Director General of Insolvency;
"gazetted" means published in the official Gazette of Malaysia
or of any State (as the case may require) including any supplement
or Extraordinary Gazette;
"general rules" includes forms;
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Bankruptcy
"goods" includes all chattels personal;
"liability" includes any compensation for work or labour done,
any obligation or possibility of an obligation to pay money or
money's worth on the breach of any express or implied covenant,
contract, agreement or undertaking, whether the breach does or
does not occur or is or is not likely to occur or capable of occurring
before the discharge of the debtor, and generally it shall include
any express or implied engagement, agreement or undertaking to
pay, or capable or resulting in the payment of money or money's
w o r t h , whether the payment is as respects amount fixed or
unliquidated or as respects time, present or future, certain or dependent
on any one contingency or on two or more contingencies, or as
to mode of valuation capable of being ascertained by fixed rules
or as matter of opinion;
"oath" includes attestation on honour;
"ordinary resolution" means a resolution decided by a majority
in value of the creditors present personally or by proxy at a meeting
of creditors and voting on the resolution;
"property" includes money, goods, things in action, land and
every description of property, whether real or personal and whether
situate in Malaysia or elsewhere, also obligations, easements and
every description of estate, interest and profit, present or future,
vested or contingent, arising out of or incident to property as
above defined;
"Registrar" means the Registrar of the High Court and includes
a Deputy Registrar, a Senior Assistant Registrar or an Assistant
Registrar of the High Court;
"resolution" means ordinary resolution;
"secured creditor" means a person holding a mortgage, charge
or lien on the property of the debtor or any part thereof as a
security for a debt due to him from the debtor but shall not include
a plaintiff in any action who has attached the property of the
debtor before judgement;
"social guarantor" means a person who provides, not for the
purpose of making profit, the following guarantees:
(a) a guarantee for a loan, scholarship or grant for educational
or research purposes;
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ACT 360
(b) a guarantee for a hire-purchase transaction of a vehicle
for personal or non-business use; and
(c) a guarantee for a housing loan transaction solely for
personal dwelling;
"special resolution" means a resolution decided by a majority
in number and at least three-fourths in value of the creditors
present personally or by proxy at a meeting of creditors and voting
on the resolution.
PART I
PROCEEDINGS FROM ACT OF BANKRUPTCY TO DISCHARGE
Act of Bankruptcy
Acts of bankruptcy
3. (1) A debtor commits an act of bankruptcy in each of the
following cases:
(a) if in Malaysia or elsewhere he makes a conveyance or
assignment of his property to a trustee or trustees for the
benefit of his creditors generally;
(b) if in Malaysia or elsewhere he makes a fraudulent
conveyance, gift, delivery or transfer of his property or
of any part thereof;
(c) if in Malaysia or elsewhere he makes any conveyance or
transfer of his property or of any part thereof, or creates
any charge thereon which would under this or any other
written law for the time being in force be void as a
fraudulent preference if he were adjudged bankrupt;
(d) if with intent to defeat or delay his creditors he does any
of the following things:
(i) departs out of Malaysia or being out of Malaysia
remains out of Malaysia;
(ii) departs from his dwelling-house or otherwise
absents himself, or begins to keep house or closes
his place of business; or
(iii) submits collusively or fraudulently to an adverse
judgment or order for the payment of money;
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Bankruptcy
(e) if execution issued against him has been levied by seizure
of his property under process in an action or in any civil
proceeding in the High Court, Sessions Court or Magistrates
Court where the judgment, including costs, is for an
amount of *one thousand ringgit or more;
(f) if he files in the court a declaration of his inability to pay
his debts or presents a bankruptcy petition against himself;
(g) if he gives notice to any of his creditors that he has
suspended or that he is about to suspend payment of his
debts;
(h) if he makes to any two or more of his creditors, not being
partners, an offer of composition with his creditors or a
proposal for a scheme of arrangement of his affairs, and
such offer or proposal is not followed by the registration
within fourteen days thereafter of a deed of arrangement
with his creditors, in accordance with the rules for the
time being in force for the registration of deeds of
arrangement under this Act;
(i) if a creditor has obtained a final judgment or final order
against him for any amount and execution thereon not
having been stayed has served on him in Malaysia, or by
leave of the court elsewhere, a bankruptcy notice under
this Act requiring him to pay the judgment debt or sum
ordered to be paid in accordance with the terms of the
judgment or order with interest quantified up to the date
of issue of the bankruptcy notice, or to secure or compound
for it to the satisfaction of the creditor or the court; and
he does not within seven days after service of the notice
in case the service is effected in Malaysia, and in case
the service is effected elsewhere then within the time
limited in that behalf by the order giving leave to effect
the service, either comply with the requirements of the
notice or satisfy the court that he has a counterclaim, set
off or cross demand which equals or exceeds the amount
of the judgment debt or sum ordered to be paid and
which he could not set up in the action in which the
judgment was obtained or in the proceedings in which
the order was obtained:
Provided that for the purposes of this paragraph and
of section 5 any person who is for the time being entitled
to enforce a final judgment or final order shall be deemed
to be a creditor who has obtained a final judgment or
final order;
*NOTE--Previously "five hundred ringgit"see the Bankruptcy (Amendment) Act 1976 [Act A364].
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ACT 360
(j) if the officer charged with the execution of a writ of
attachment or other process makes a return that the
debtor was possessed of no property liable to seizure;
and for the purposes of this paragraph the date when the
writ is lodged with the officer shall be deemed to be the
date of the act of bankruptcy.
(2) A bankruptcy notice under this Act shall be in the prescribed
form and shall state the consequences of non compliance therewith
and shall be served in the prescribed manner:
Provided that a bankruptcy notice--
(i) may specify an agent to act on behalf of the creditor in
respect of any payment or other thing required by the
notice to be made to or done to the satisfaction of the
creditor; and
(ii) shall not be invalidated by reason only that the sum
specified in the notice as the amount due exceeds the
amount actually due unless the debtor within the time
allowed for payment gives notice to the creditor that he
disputes the validity of the notice on the ground of such
mistake; but if the debtor does not give such notice he
shall be deemed to have complied with the bankruptcy
notice, if within the time allowed he takes such steps as
would have constituted compliance with the notice had
the actual amount due been correctly specified therein.
(3) The word "debtor" in this Act shall be deemed to include
any person who at the time when the act of bankruptcy was done
or suffered by him--
(a) was personally present in Malaysia;
(b) ordinarily resided or had a place of residence in Malaysia;
(c) was carrying on business in Malaysia either personally
or by means of an agent; or
(d) was a member of a firm or partnership which carried on
business in Malaysia.
Receiving Order
Jurisdiction to make receiving order
4. Subject to the conditions hereinafter specified, if a debtor has
committed an act of bankruptcy, the Court may on a bankruptcy
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Bankruptcy
petition being presented, either by a creditor or by the debtor make
an order for the protection of the estate, which order is in this Act
called a receiving order.
Conditions on which creditor may petition
5. (1) A creditor shall not be entitled to present a bankruptcy
petition against a debtor unless--
(a) the debt owing by the debtor to the petitioning creditor,
or if two or more creditors join in the petition the aggregate
amount of debts owing to the several petitioning creditors,
amounts to *thirty thousand ringgit;
(b) the debt is a liquidated sum payable either immediately
or at some certain future time;
(c) the act of bankruptcy on which the petition is grounded
has occurred within six months before the presentation
of the petition; and
(d) the debtor is domiciled in Malaysia or in any State or
within one year before the date of the presentation of the
petition has ordinarily resided or had a dwelling house
or place of business in Malaysia or has carried on business
in Malaysia personally or by means of an agent or is or
has been within the same period a member of a firm or
partnership which has carried on business in Malaysia by
means of a partner or partners or an agent or manager.
(2) If the petitioning creditor is a secured creditor he must in
his petition either state that he is willing to give up his security
for the benefit of the creditors in the event of the debtor being
adjudged bankrupt or give an estimate of the value of his security.
In the latter case he may to the extent of the balance of the debt
due to him, after deducting the value so estimated, be admitted as
a petitioning creditor in the same manner as if he were an unsecured
creditor.
(3) A petitioning creditor shall not be entitled to commence any
bankruptcy action against a social guarantor unless he proves to
the satisfaction of the court that he has exhausted all avenues to
recover debts owed to him by the debtor.
*NOTE--Previously "ten thousand ringgit"see the Bankruptcy (Amendment) Act 2003 [Act A1197].
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ACT 360
Proceedings and order on creditor's petition
6. (1) A creditor's petition shall be verified by affidavit of the
creditor or of some person on his behalf having knowledge of the
facts, and shall be served as prescribed.
(2) At the hearing the court shall require proof of--
(a) the debt of the petitioning creditor;
(b) the act of bankruptcy or, if more than one act of bankruptcy
is alleged in the petition, some one of the alleged acts
of bankruptcy; and
(c) if the debtor does not appear, the service of the petition,
and if satisfied with the proof may make a receiving order in
pursuance of the petition.
(3) If the court is not satisfied with the proof of the petitioning
creditor 's debt or of the act of bankruptcy or of the service of the
petition, or is satisfied by the debtor that he is able to pay his
debts, or that for other sufficient cause no order ought to be made,
the court may dismiss the petition.
(4) When the act of bankruptcy relied on is non-compliance
with a bankruptcy notice to pay, secure or compound for a judgment
debt, the court may if it thinks fit stay or dismiss the petition on
the ground that an appeal is pending from the judgment.
(5) Where the debtor appears on the petition and denies that he
is indebted to the petitioner, or that he is indebted to such an
amount as would justify the petitioner in presenting a petition
against him, the court, on such security, if any, being given as the
court may require for payment to the petitioner of any debt which
may be established against the debtor in due course of law and of
the costs of establishing the debt, may, instead of dismissing the
petition, stay all proceedings on the petition for such time as may
be required for trial of the question relating to the debt.
(6) Where proceedings are stayed the court may, if by reason
of the delay caused by the stay of proceedings or for any other
cause it thinks just, make a receiving order on the petition of some
other creditor, and shall thereupon dismiss, on such terms as it
thinks just, the petition in which proceedings have been stayed as
aforesaid.
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Bankruptcy
(7) A creditor's petition shall not after presentation be withdrawn
without the leave of the court.
Debtor's petition and order thereon
7. (1) A debtor's petition shall allege that the debtor is unable to
pay his debts, and the presentation thereof shall be deemed an act
of bankruptcy without the previous filing by the debtor of any
declaration of inability to pay his debts, and the court shall thereupon
make a receiving order.
(2) A debtor's petition shall not after presentation be withdrawn
without the leave of the court.
Effect of receiving order
8. (1) On the making of a receiving order the Director General
of Insolvency shall be thereby constituted receiver of the property
of the debtor, and thereafter, except as directed by this Act, no
creditor to whom the debtor is indebted in respect of any debt
provable in bankruptcy shall have any remedy against the property
or person of the debtor in respect of the debt, or shall proceed with
or commence any action or other legal proceeding in respect of
such debt unless with the leave of the court and on such terms as
the court may impose.
(2) This section shall not affect the power of any secured creditor
to realize or otherwise deal with his security in the same manner
as he would have been entitled to realize or deal with it if this
section had not been passed--nor shall it operate to prejudice the
right of any person to receive any payment under or by virtue of
section 31 of the Employment Act 1955 [Act 265] of the States
of *Peninsular Malaysia or any corresponding provisions in Sabah
and Sarawak.
(2A) Notwithstanding subsection (2), no secured creditor shall
be entitled to any interest in respect of his debt after the making
of a receiving order if he does not realize his security within six
months from the date of the receiving order.
(3) On a receiving order being made against a debtor he shall,
within twenty-four hours after such order has been served upon
him file an affidavit in the office of the Director General of Insolvency,
containing a true and correct statement of the names and residences
*NOTE--All references to "West Malaysia" shall be construed as reference to "Penisular Malaysia"see
the Interpretation (Amendment) Act 1997 [Act A996], subsection 5(2).
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ACT 360
of all the partners, if any, in his business and of his principal assets
and liabilities. Such statement shall for the purposes of this Act
be deemed to be part of the debtor's statement of his affairs
referred to in section 16.
(4) On such order as aforesaid being made against a debtor the
Director General of Insolvency shall forthwith take possession of
all books of account and other papers and documents in the possession,
custody or control of the debtor relating to his property or affairs,
and may take into his possession all or any deeds, books, documents
and other property of the debtor.
Court may detain or order arrest of debtor and commit him
to prison unless he gives security not to leave Malaysia
9. (1) On making a receiving order, the court, on application
made by or on behalf of the petitioning creditor or any other
person claiming to be a creditor, may detain the debtor if he is
present, and if he is not present may order the debtor to be arrested
and brought before the court by warrant addressed to any police
officer or officer of the court, and unless the debtor, when so
detained or brought before the court, gives security to the satisfaction
of the court that he will not leave Malaysia without the previous
permission in writing of the Director General of Insolvency or of
the court, he may be committed to the civil prison and be there
kept until the close of his public examination or until the court
otherwise orders.
(2) If a receiving order is made against a firm in the firm's name
no such warrant to arrest any alleged partner in the firm shall
issue, except upon the application of the petitioning or some other
creditor and upon evidence on oath as to the persons who at the
date of the receiving order are partners in the firm.
(3) If any person arrested denies that he is a partner, the court
shall order his release unless the petitioning or other creditor gives
security, to the satisfaction of the court, to meet the probable
damages if such person is found not to be a partner.
(4) The cost of maintaining any debtor in prison under this
section shall be prepaid by the applicant from time to time to the
gaol authority, according to the cost of rations for the time being.
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Bankruptcy
Discretionary powers as to appointment of interim receiver
and stay of proceedings
10. (1) The court may, if it thinks it advisable for the protection
of the estate, at any time after the presentation of a bankruptcy
petition and before a receiving order is made, appoint the Director
General of Insolvency to be interim receiver of the property of the
debtor or of any part thereof, and direct him to take immediate
possession thereof or of any part thereof, including all books of
account and other papers and documents belonging to the debtor
and relating to his business.
(2) The court may at any time after the presentation of a bankruptcy
petition stay any action, execution or other legal process against
the property or person of the debtor.
Service of order staying proceedings
11.  Where an order is made under section 10, staying any action
or proceeding or staying proceedings generally, the order may be
served by sending a copy thereof, under the seal of the court, by
prepaid registered post to the address for service of the plaintiff
or other party prosecuting such proceeding.
Power to appoint special manager
12. (1) The Director General of Insolvency may, if satisfied that
the nature of the debtor's estate or business or the interests of the
creditors generally require the appointment of a special manager
of the estate or business other than the Director General of Insolvency,
appoint a manager thereof accordingly to act until the first meeting
of creditors, and with such powers, including any of the powers
of a receiver, as are entrusted to him by the Director General of
Insolvency.
(2) The debtor may be appointed special manager.
(3) The special manager shall give security and account in such
manner as the Director General of Insolvency, subject to the control
of the court, directs.
(4) The special manager shall receive such remuneration as the
Director General of Insolvency, within the prescribed limits and
subject to such control as aforesaid, determines.
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Advertisement of receiving order
13.  Notice of every receiving order, stating the name, address
and description of the debtor, the date of the order and the date
of the petition, shall be gazetted and advertised in a local paper
as prescribed.
Power of court to rescind receiving order in certain cases
14.  If in any case where a receiving order has been made on a
bankruptcy petition it appears to the court, upon an application by
the Director General of Insolvency or any creditor or other person
interested, that a majority of the creditors in number and value are
resident in the Republic of Singapore, and that from the situation
of the property of the debtor or for other causes his estate and
effects ought to be distributed among the creditors under the
bankruptcy or insolvency laws of that country, the court, after such
inquiry as it seems fit, may rescind the receiving order and stay
all proceedings on or dismiss the petition upon such terms, if any,
as it thinks fit.
Proceedings consequent on Receiving Order
First and other meetings of creditors
15. (1) As soon as may be after the making of a receiving order
against a debtor a general meeting of his creditors, in this Act
referred to as the first meeting of creditors, shall be held for the
purpose of considering whether a proposal for a composition or
scheme of arrangement shall be entertained, or whether it is expedient
that the debtor be adjudged bankrupt, and generally as to the mode
of dealing with the debtor's property.
(1A) Any creditor who has tendered a proof of debts, or his
representative duly authorized in writing, may question the debtor
concerning his affairs and the causes of his failure.
(2) With respect to the summoning of and proceedings at the
first and other meetings of creditors the rules in Schedule A shall
be observed.
Debtor's statement of affairs
16. (1) Where a receiving order is made against a debtor he shall
make out and submit to the Director General of Insolvency a
statement of and in relation to his affairs in the prescribed form,
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Bankruptcy
verified by affidavit, showing the particulars of the debtor's assets,
debts and liabilities, the names, residences and occupations of his
creditors, the securities held by them respectively, the dates when
the securities were respectively given, the cause of his insolvency,
the date when he last balanced his accounts before becoming
insolvent, the amount of his capital at the date of such balance,
after providing for all his liabilities and making allowances for bad
and doubtful debts, and such further and other information as is
prescribed or as the Director General of Insolvency requires.
(2) The statement shall be so submitted within the following
times:
(a) if the order is made on the petition of the debtor, within
seven days from the date of the order;
(b) if the order is made on the petition of a creditor, within
twenty-one days from the date of the order,
but the Director General of Insolvency may in either case for
special reasons extend the time by order made under his hand, to
be forthwith filed, recording the reasons therefor.
(3) If the debtor fails without reasonable excuse, proof whereof
shall lie on him, to comply with the requirements of this section
he shall be guilty of a contempt of court and may be punished
accordingly, and the court may on the application of the Director
General of Insolvency or of any creditor adjudge him bankrupt.
(4) Any person stating himself, in writing, to be a creditor of
the bankrupt may personally or by agent inspect this statement at
all reasonable times and take any copy thereof or extract therefrom,
but any person untruthfully so stating himself to be a creditor shall
be guilty of a contempt of court and shall be punishable accordingly
on the application of the Director General of Insolvency.
Public Examination of Debtor
Public examination of debtor
17. (1) Where the court makes a receiving order, the Director
General of Insolvency may make an application to hold a public
sitting on a day to be appointed by the court for the examination
of the debtor, and the debtor shall attend thereat, and shall be
examined as to his conduct, dealing and property:
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ACT 360
Provided that when the debtor is a lunatic or suffers from any
such mental or physical affliction or disability as in the opinion
of the Court renders him unfit to attend his public examination the
court may dispense with such examination or direct the debtor to
be examined in such manner and place as the court thinks expedient.
(2) The examination shall be held as soon as conveniently may
be after the expiration of the time for the submission of the debtor's
statement of affairs and after the first meeting of creditors.
(3) The court may adjourn the examination from time to time.
(4) Any creditor who has tendered a proof, or his representative
authorized in writing, may question the debtor concerning his
affairs and the causes of his failure.
(5) The Director General of Insolvency shall take part in the
examination of the debtor, and for the purpose thereof may, if
specially authorized by the Attorney General, employ an advocate
and solicitor but no advocate and solicitor shall be allowed to take
part in the examination on behalf of the debtor.
(6) The court may put such questions to the debtor as it thinks
expedient.
(7) The debtor shall be examined upon oath, and it shall be his
duty to answer all such questions as the court puts or allows to
be put to him.
(8) Such notes of the examination as the court thinks proper
shall be taken down in writing by the Registrar and shall be read
over to and signed by the debtor, and may thereafter be used in
evidence against him, and shall be open to the inspection of any
creditor at all reasonable times.
(9) When the court is of opinion that the affairs of the debtor
have been sufficiently investigated, it shall, by order, declare that
his examination is concluded, but such order shall not preclude the
court from directing a further examination of the debtor as to his
conduct, dealings and property whenever it sees fit to do so.
(10) (Deleted by Act A827).
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Bankruptcy
Composition or Scheme of Arrangement
Power for creditors to accept and court to approve composition
or arrangement
18. (1) The creditors may, by special resolution at the first meeting
or any adjournment thereof, resolve to entertain a proposal for a
composition in satisfaction of the debts due to them from the
debtor, or a proposal for a scheme of arrangement of the debtor's
affairs.
(2) The composition or scheme shall not be binding on the
creditors unless it is confirmed at a subsequent meeting of the
creditors by a resolution passed by a majority in number, representing
at least three-fourths in value of all the creditors who have proved,
and is approved by the court.
(3) Any creditor who has proved his debt may assent to or
dissent from such composition or scheme by a letter addressed to
the Director General of Insolvency in the prescribed form, and
attested by a witness, and sent or posted so as to be received by
such Director General of Insolvency not later than the day preceding
such subsequent meeting, and a creditor so assenting or dissenting
shall be taken as being present and voting at such meeting.
(4) The subsequent meeting shall be summoned by the Director
General of Insolvency by not less than seven days' notice and shall
not be held until after the public examination of the debtor is
concluded.
(5) The notice shall state generally the terms of the proposal
and shall be accompanied by a report of the Director General of
Insolvency thereon.
(6) The debtor or the Director General of Insolvency may, after
the composition or scheme is accepted by the creditors, apply to
the court to approve it, and notice of the time appointed for hearing
the application shall be given as prescribed.
(7) (Deleted by Act A827).
(8) The court before approving a composition or scheme shall
hear a report of the Director General of Insolvency as to the terms
of the composition or scheme and as to the conduct of the debtor,
and shall hear any objections which may be made by or on behalf
of any creditor.
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(9) If the court is of opinion that the terms of the composition
or scheme are not reasonable or are not calculated to benefit the
general body of creditors, and in any case in which the court is
required under this Act to refuse a bankrupt his discharge, the
court shall, or if any such facts are proved as would under this Act
justify the court in refusing, qualifying or suspending the discharge,
the court may, in its discretion, refuse to approve the composition
or scheme.
(10) If the court approves the composition or scheme the approval
may be testified by the seal of the court being attached to the
instrument containing the terms of the composition or scheme, or
by the terms being embodied in an order of the court.
(11) A composition or scheme accepted and approved in pursuance
of this section shall be binding on all the creditors so far as relates
to any debts due to them from the debtor and provable in bankruptcy.
(12) A certificate of the Director General of Insolvency that a
composition or scheme has been duly accepted and approved shall,
in the absence of fraud, be conclusive as to its validity.
(13) A composition or scheme under this section may be enforced
by the court on application by any person interested, and any
disobedience of an order of the court made on the application shall
be deemed a contempt of court.
(14) If default is made in payment of any instalment due in
pursuance of the composition or scheme, or if it appears to the
court on satisfactory evidence that the composition or scheme
cannot, in consequence of legal difficulties or for any sufficient
cause, proceed without injustice or undue delay to the creditors or
to the debtor, or that the approval of the court was obtained by
fraud, the court may, if it thinks fit, on application by any creditor,
adjudge the debtor bankrupt and annul the composition or scheme,
but without prejudice to the validity of any sale, disposition or
payment duly made or thing duly done under or in pursuance of
the composition or scheme.
(15) W h e r e  a  debtor  is  adjudged  bankrupt  under
subsection (14), any debt provable in other respects, which has
been contracted before the date of the adjudication, shall be provable
in the bankruptcy.
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Bankruptcy
(16) If under or in pursuance of a composition or scheme a
trustee or assignee is appointed to administer the debtor's property
or manage his business or distribute a composition, Part IV shall
apply to such trustee or assignee as if he were an assignee in a
bankruptcy, and as if the terms "bankruptcy","bankrupt" and "order
of adjudication" included respectively a composition or scheme of
arrangement, a compounding or arranging debtor and an order
approving the composition or scheme.
(17) Part III shall, so far as the nature of the case and the terms
of the composition or scheme admit, apply thereto, the same
interpretation being given to the words "assignee," "bankruptcy"
and "order of adjudication" as in subsection (16).
(18) No composition or scheme shall be approved by the court
which does not provide for the payment in priority to other debts
of all debts directed to be so paid in the distribution of the property
of a bankrupt.
(19) The acceptance by a creditor of a composition or scheme
shall not release any person who under this Act would not be
released by an order of discharge if the debtor had been adjudged
bankrupt.
Effect of composition or scheme
19.  Notwithstanding the acceptance and approval of a composition
or scheme, such composition or scheme shall not be binding on
any creditor so far as regards a debt or liability from which, under
this Act, the debtor would not be discharged by an order of discharge
in bankruptcy unless the creditor assents to the composition or
scheme.
No deed of arrangement valid except under section 18 or 26
unless registered
20.  No deed of arrangement, except a composition or scheme
entered into under section 18 or 26, shall be valid unless the same
has been registered within fourteen clear days after the first execution
thereof by the debtor or any creditor, in accordance with the rules
for the time being in force for the registration of deeds of arrangements
under this Act.
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ACT 360
Penalty for collusive preference
21. (1) Every person who signs or on whose behalf is signed a
deed of arrangement to which section 20 applies, who within two
months before or at any period after signing the same, receives any
secret or collusive preference, gratuity, security, payment or other
consideration, all hereinafter included in the expression "gratuity",
for concurring in or signing such deed of arrangement shall be
guilty of an offence punishable as hereinafter mentioned.
(2) Every gratuity for concurring in or signing, or having concurred
in or signed a deed of arrangement, shall be deemed to be secret
and collusive unless the same or any promise for the same is
disclosed on the face of the deed of arrangement or in a memorandum
annexed to the deed at the time when the person who has received
or is to receive such gratuity signs the deed of arrangement, which
memorandum shall also be signed in acknowledgment of having
seen the same by all the parties to the deed of arrangement before
the registration thereof.
(3) Every person committing an offence under this section shall
be liable to a fine not exceeding five times the amount or value
of the gratuity received by or promised to him, and the court
before which such person is tried may award a part of any such
fine, not exceeding one-half thereof, to the informer through whom
the conviction has been obtained, provided that such informer is
not the debtor.
Power of Minister to make rules
22. (1) The Minister may make rules for the registration of deeds
of arrangement under this Act.
(2) Such rules shall provide for--
(a) the mode of registration;
(b) the form of the registers to be kept for the purpose of
registration of deeds of arrangement under this Act;
(c) the inspection of the registers and deeds registered and
the taking of copies and extracts of the same, and the
custody of the registers and other documents connected
with the business of registration;
(d) the fees to be taken in respect of registration of deeds of
arrangement and in respect of office copies or extracts
and searches.
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Bankruptcy
(3) Until rules are made under this section, the rules for the
registration of deeds of arrangements shall be as set out in
Schedule B.
Rectification of registers
23.  The court, upon being satisfied that the omission to register
a deed of arrangement within the time required by this Act, or that
the omission or mis-statement of the name, residence or description
of any person was accidental or due to inadvertence or to some
cause beyond the control of the debtor and not imputable to any
negligence on his part, may, on the application of any party interested
and on such terms and conditions as are just and expedient, extend
the time for such registration or order such omission or mis-
statement to be supplied or rectified by the insertion in the register
of the true name, residence or description.
Adjudication of Bankruptcy
Adjudication of bankruptcy
24. (1) At the time of making a receiving order the court shall
adjudge the debtor bankrupt unless the debtor can show to the
satisfaction of the court that he is in a position to offer a composition
or make a scheme of arrangement satisfactory to his creditors;
provided that when a receiving order is made against a firm in the
firm's name the court shall not adjudge any person bankrupt as a
member of the firm unless such person is proved to the satisfaction
of the court to be a partner by his own admission or by evidence
on oath.
(2) The court may at any time, on the application of the debtor
himself, by petition in writing, unstamped, to be forthwith filed,
adjudge him bankrupt and at the same time make a receiving order
against him, and such application may be made without notice.
(3) Where a receiving order is made against a debtor, if the
creditors at the first meeting or any adjournment thereof resolve
by ordinary resolution that the debtor be adjudged bankrupt or
pass no resolution, or if the creditors do not meet, or if a composition
or scheme is not accepted or approved in pursuance of this Act
within fourteen days after the conclusion of the examination of the
debtor or such further time as the court allows, the court shall
adjudge the debtor bankrupt.
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ACT 360
(4) When a debtor is adjudged bankrupt his property shall become
divisible among his creditors and shall vest in the Director General
of Insolvency.
(5) Notice of every order adjudging a debtor bankrupt, stating
the name, address and description of the bankrupt and the date of
the adjudication, shall be published in the Gazette and advertised
in a local paper as prescribed, and the date of the order shall for
the purposes of this Act be the date of the adjudication.
Consultative committee
25. (1) The creditors qualified to vote may, at their first meeting
or any adjournment thereof, appoint by resolution from among the
creditors qualified to vote, or the holders of general proxies or
general powers of attorney from such creditors, a committee of
one or more persons, not exceeding three, for the purpose of
advising the Director General of Insolvency on matters relating to
the administration of the property of the bankrupt.
(2) T h e Director General of Insolvency may convene the
committee at such times as he thinks necessary, and the Director
General of Insolvency shall convene the committee whenever
requested in writing to do so by all or a majority of the members
of the committee.
(3) Any member of the committee may resign his office by
notice in writing, signed by him and delivered to the Director
General of Insolvency.
(4) If a member of the committee becomes bankrupt, or compounds
or arranges with his creditors, or is absent for more than two
months from Malaysia his office shall thereupon become vacant.
(5) Any member of the committee may be removed by an ordinary
resolution at any meeting of creditors, of which seven days' notice
has been given stating the object of the meeting.
(6) On a vacancy occurring in the office of a member of the
committee the Director General of Insolvency shall forthwith summon
a meeting of creditors for the purpose of filling the vacancy, and
the meeting may by resolution appoint another creditor or other
person eligible as above to fill the vacancy.
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Bankruptcy
Power to accept composition or scheme after bankruptcy
adjudication
26. (1) Where a debtor is adjudged bankrupt the creditors may,
if they think fit, at any time after the adjudication, by special
resolution, resolve to entertain a proposal for a composition in
satisfaction of the debts due to them under the bankruptcy, or for
a scheme of arrangement of the bankrupt's affairs, and thereupon
the same proceedings shall be taken and the same consequences
shall ensue as in the case of a composition or scheme entertained
at the first meeting of creditors.
(2) If the court approves the composition or scheme it may
make an order annulling the bankruptcy and vesting the property
of the bankrupt in him or in such other person as the court appoints,
on such terms and subject to such conditions, if any, as the court
declares.
(3) If default is made in payment of any instalment due in
pursuance of the composition or scheme, or if it appears to the
court that the composition or scheme cannot proceed without injustice
or undue delay, or that the approval of the court was obtained by
fraud, the court may, if it thinks fit, on application by any person
interested, adjudge the debtor bankrupt and annul the composition
or scheme, but without prejudice to the validity of any sale, disposition
or payment duly made or thing duly done under or in pursuance
of the composition or scheme.
(4) Where a debtor is adjudged bankrupt under subsection (3)
all debts provable in other respects, which have been contracted
before the date of such adjudication, shall be provable in the
bankruptcy.
Control over Person and Property of Debtor
Duties of debtor as to discovery and realization of property
27. (1) Every debtor against whom a receiving order is made
shall, unless prevented by sickness or other sufficient cause, attend
the first meeting of his creditors and any subsequent meeting of
his creditors which the Director General of Insolvency requires
him to attend, and shall submit to such examination and give such
information as the meeting requires.
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ACT 360
(2) He shall give such inventory of his property, such list of his
creditors and debtors and of the debts due to and from them
respectively, submit to such examination in respect of his property
or his creditors, wait at such times and places on the Director
General of Insolvency, execute such powers of attorney, conveyances,
deeds and instruments, and generally do all such acts and things
in relation to his property and the distribution of the proceeds
amongst his creditors as are reasonably required by the Director
General of Insolvency, or are prescribed or directed by the court
by any special order or orders made in reference to any particular
case or made on the occasion of any special application by the
Director General of Insolvency or any creditor or person interested.
(3) He shall, if adjudged bankrupt, aid to the utmost of his
power in the realization of his property, and the distribution of the
proceeds among his creditors, and amongst other things shall, if
required by the Director General of Insolvency so to do, answer
all such questions and shall submit to such medical examination
and do all such other things as are necessary for the purpose of
effecting an insurance on his life.
(4) If a debtor wilfully fails to perform the duties imposed on
him by this section or to deliver up possession of any part of his
property which is divisible amongst his creditors under this Act,
and which is for the time being in his possession or under his
control, to the Director General of Insolvency or to any person
authorized by the court to take possession of it, he shall, in addition
to any other punishment to which he may be subject, be guilty of
a contempt of court and may be punished accordingly.
Arrest of debtor under certain circumstances
28. (1) The court may, by warrant addressed to any police officer
or officer of the court, cause a debtor to be arrested, and any
books, papers, money and goods in his possession to be seized,
and him and them to be safely kept as prescribed until such time
as the court orders if--
(a) after a bankruptcy notice has been issued under this Act,
or after presentation of a bankruptcy petition by or against
him, it appears to the court that there is probable reason
for believing that he is in hiding or has absconded or is
about to abscond, with a view of avoiding payment of the
debt in respect of which the bankruptcy notice was issued,
or of avoiding service of a bankruptcy petition, or of
33
Bankruptcy
avoiding appearance to any such petition, or of avoiding
examination in respect of his affairs, or of otherwise
a v o i d i n g , delaying or embarrassing proceedings in
bankruptcy against him; or
(b) after presentation of a bankruptcy petition by or against
him it appears to the court that there is probable cause
for believing that he is about to remove his goods, with
a view of preventing or delaying possession being taken
of them by the Director General of Insolvency, or that
there is probable ground for believing that he has concealed
or is about to conceal or destroy any of his goods or
any books, documents or writings which might be of use
to his creditors in the course of his bankruptcy; or
(c) after service of a bankruptcy petition on him or after a
receiving order is made against him he removes any
goods in his possession above the value of fifty ringgit
without the leave of the Director General of Insolvency;
or
(d) without good cause shown he fails to attend any examination
ordered by the court; or
(e) after presentation of a bankruptcy petition by or against
him the Director General of Insolvency reports to the
court, or the court is otherwise satisfied that there is
probable reason for believing that the assets will not be
sufficient to pay a dividend of fifty ringgit per centum
on the debts or that there is probable reason for believing
that the debtor has committed any offence punishable
under this Act.
(2) No arrest upon a bankruptcy notice shall be valid and protected
unless the debtor before or at the time of his arrest is served with
such bankruptcy notice.
(3) No payment or composition made or security given after
arrest made under this section shall be exempt from this Act relating
to fraudulent preferences.
Release of debtor on security
29. (1) When a debtor is arrested under section 28 he may be
released by order of the court, either with or without giving security
to the satisfaction of the court that he will not leave Malaysia
without the previous permission in writing of the Director General
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Laws of Malaysia
ACT 360
of Insolvency or of the court, or that he will not remove any of
his goods or conceal or destroy any of his goods or any books,
documents or writings which might be of use to his creditors in
the course of his bankruptcy.
Proceeds of security to fall into the estate of the debtor
(2) The proceeds of the realization of any security given under
this section or under section 9 on breach by the debtor of any of
the conditions of such security shall be deemed to be the property
of the debtor, and when he is adjudged bankrupt shall vest in the
Director General of Insolvency.
Redirection of letters and telegrams
30. Where a receiving order is made against a debtor the court,
on the application of the Director General of Insolvency, may
order that for such time not exceeding three months as the court
thinks fit, telegrams and post letters addressed to the debtor at any
place or places mentioned in the order for redirection shall be
redirected, sent or delivered by the agent of the telegraph company
or by the postal authorities, as the case may be, to the Director
General of Insolvency or otherwise as the court directs, and the
same shall be done accordingly.
Discovery of debtor's property
31. (1) The court may, on the application of the Director General
of Insolvency or of any creditor who has proved his debt at any
time after a receiving order has been made against a debtor, summon
before it the debtor, or any wife of his, or any person known or
suspected to have in his possession any of the estate or effects
belonging to the debtor, or supposed to be indebted to the debtor,
or any person whom the court deems capable of giving information
respecting the debtor, his dealings or property, and the court may
require any such person to produce any documents in his custody
or power relating to the debtor, his dealings or property.
(2) If any person so summoned, after having been tendered a
reasonable sum, refuses to come before the court at the time appointed,
or refuses to produce any such document, having no lawful
impediment made known to the court at the time of its sitting and
allowed by it, the court may by warrant cause him to be apprehended
and brought up for examination.
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Bankruptcy
(3) The court may examine on oath, either by word of mouth
or by written interrogatories, any person so brought before it
concerning the debtor, his dealings or property.
(4) If on the examination of any such person it appears to the
court that he is indebted to the debtor, the court may, on the
application of the Director General of Insolvency, order him to pay
to the Director General of Insolvency, at such time and in such
manner as to the court seems expedient, the amount in which he
is indebted or any part thereof, either in full discharge of the whole
amount in question or not as the court thinks fit, with or without
costs of the examination.
(5) If on the examination of any such person it appears to the
court that he has in his possession any property belonging to the
debtor the court may, on the application of the Director General
of Insolvency, order him to deliver to the Director General of
Insolvency such property or any part thereof at such time and in
such manner and on such terms as to the court seems just.
(6) The powers given to the court under this section may in all
cases be exercised by the Registrar and any order made or act done
by the Registrar shall be deemed the order or act of the court.
Director General of Insolvency to settle list of debtors to the
estate
32. (1) The Director General of Insolvency shall, as soon as may
be after a receiving order has been made against a debtor, prepare
and file in court a list of persons supposed to be indebted to the
debtor, with the amounts in which they are supposed to be so
indebted set opposite to their names respectively.
(2) Before finally settling the name and amount of the debt of
any person on such list the Director General of Insolvency shall
give notice in writing to such person, stating that he has placed
such person upon the list of debtors to the estate in the amount
in the notice specified, and that unless such person on or before
a day in such notice specified gives to the Registrar and to the
Director General of Insolvency notice in writing of his intention
to dispute his indebtedness, he will be deemed to admit that the
amount set opposite his name in such list is due and owing by him
to the debtor and will be settled on such list accordingly.
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Laws of Malaysia
ACT 360
(3) A person included in such list who does not give notice of
his intention to dispute his indebtedness within the time limited
in that behalf shall be settled upon such list, and execution may
issue against him and a bankruptcy notice under this Act may be
served upon him for the amount set opposite his name in such list
in the same way as if judgment had been entered up against him
for such amount in favour of the Director General of Insolvency.
(4) A certificate by the Registrar that the person named therein
has been settled upon such list as a debtor to the estate in the
amount in such certificate specified shall be received as proof of
the facts therein stated.
(5) A person settled upon such list in manner aforesaid may
apply to the court in a summary way for leave to dispute his
indebtedness or the amount thereof, and the court may if it thinks
fit make such order for determining the question as may seem
expedient upon the terms of such persons giving security for costs
and either paying into court or giving security for the whole or
such part of the alleged debt as under the circumstances may seem
reasonable, and may stay all further proceedings.
Discharge of Bankrupt
Discharge of bankrupt by order of court
33. (1) A bankrupt may at any time after being adjudged bankrupt
apply to the court for an order of discharge, and the court shall
appoint a day for hearing the application.
(2) (Deleted by Act A827).
(3) On the hearing of the application the court shall take into
consideration a report of the Director General of Insolvency as to
the bankrupt's conduct and affairs, including a report as to the
bankrupt's conduct during the proceedings under his bankruptcy,
and may either grant or refuse an absolute order of discharge, or
suspend the operation order of discharge subject to any conditions
with respect to any earnings or income which may afterwards
become due to the bankrupt, or with respect to his after-acquired
property.
(4) In all cases where it is proved to the satisfaction of the court
that the bankrupt has committed any offence under this Act or
under any written law repealed by this Act or under section 421,
422, 423 or 424 of the Penal Code [Act 574] the court shall unless
37
Bankruptcy
for special reasons it otherwise determines either refuse the discharge
or suspend the operation of the order until a dividend of not less
than fifty per centum has been paid to the creditors, and on proof
of any of the facts mentioned in subsection (6) the court shall
either--
(a) refuse the order; or
(b) suspend the operation of the order for a specified time;
or
(c) suspend the operation of the order until a dividend of not
less than fifty per centum has been paid to the creditors;
or
(d) grant an order of discharge subject to such conditions as
aforesaid.
The powers of suspending and attaching conditions to a bankrupt's
discharge may be exercised concurrently.
(5) If at any time after the expiration of two years from the date
of any order made under this section the bankrupt satisfies the
court that there is no reasonable probability of his being in a
position to comply with the terms of such order, the court may
modify the terms of the order or any subsequent order in such
manner and upon such conditions as it thinks fit.
(6) The facts hereinbefore referred to are--
(a) that the bankrupt has omitted to keep such books of
account as sufficiently disclose his business transactions
and financial position within the three years immediately
preceding his bankruptcy, or within such shorter period
immediately preceding that event as the court deems
reasonable in the circumstances;
(b) that the bankrupt has continued to trade after knowing or
having reason to believe himself to be insolvent;
(c) that the bankrupt has contracted any debt provable in the
bankruptcy without having at the time of contracting it
any reasonable ground of expectation, proof whereof shall
lie on him, of being able to pay it;
(d) that the bankrupt has failed to account satisfactorily for
any loss of assets or for any deficiency of assets to meet
his liabilities;
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(e) that the bankrupt has brought on or contributed to his
b a n k r u p t c y by rash and hazardous speculations or
extravagance in living, or by recklessness, or gambling
or want of reasonable care and attention to his business
and affairs;
(f) that the bankrupt has delayed or put any of his creditors
to unnecessary expense by a frivolous or vexatious defence
to any action or other legal proceedings properly brought
or instituted against him;
(g) that the bankrupt has brought on or contributed to his
bankruptcy by incurring unjustifiable expense in bringing
any frivolous or vexatious action;
(h) that the bankrupt has within three months preceding the
date of the receiving order, when unable to pay his debts
as they become due, given an undue preference to any
of his creditors;
(i) that the bankrupt has within three months preceding the
date of the receiving order incurred liabilities with a
view to making his assets equal to an amount of fifty
ringgit per centum of the amount of his unsecured liabilities;
(j) that the bankrupt has in Malaysia or elsewhere on any
previous occasion been adjudged bankrupt or made a
composition or arrangement with his creditors;
(k) that the bankrupt has been guilty of any fraud or fraudulent
breach of trust;
(l) that the bankrupt has within three months immediately
preceding the date of the receiving order sent goods out
of Malaysia under circumstances which afford reasonable
grounds for believing that the transaction was not a bona
fide commercial transaction;
(m) that the bankrupt's assets are not of a value equal to fifty
ringgit per centum of the amount of his unsecured liabilities,
unless he satisfies the court that the fact that the assets
are not of a value equal to fifty ringgit per centum of his
unsecured liabilities has arisen from circumstances for or
in respect of which he cannot justly be held blameable.
(7) For the purposes of this section a bankrupt's assets shall be
deemed of a value equal to fifty ringgit per centum of the amount
of his unsecured liabilities when the court is satisfied that the
property of the bankrupt has realized or is likely to realize or with
39
Bankruptcy
due care in realization might have realized an amount equal to fifty
ringgit per centum of the amount of his unsecured liabilities and
a report by the Director General of Insolvency shall be prima facie
evidence of the amount of such liabilities.
(8) For the purposes of this section the report of the Director
General of Insolvency shall be prima facie evidence of the statements
therein contained.
(9) Notice of the appointment by the court of the day for hearing
the application for discharge shall be published as prescribed and
sent fourteen days at least before the day so appointed to each
creditor who has proved, and the court shall hear the Director
General of Insolvency, and may also hear any creditor. At the
hearing the court may put such questions to the debtor and receive
such evidence as it thinks fit.
(10) The court may, as one of the conditions referred to in this
section, require the bankrupt to consent to judgment being entered
against him by the Director General of Insolvency for any balance,
or part of the balance, of the debts provable under the bankruptcy
which is not satisfied at the date of his discharge; but in such case
execution shall not be issued on the judgment without leave of the
court, which leave may be given on proof that the bankrupt has
since his discharge acquired property or income available for payment
of his debts.
(11) (Deleted by Act A1035).
(12) For the purposes of this section the following presumptions
shall be made--
(a) if at any time after the expiration of six months from the
date of the adjudication the Director General of Insolvency
reports to the court that the value of the assets which
have been realized, together with the estimated value of
the assets which are realizable, is insufficient to pay a
dividend of fifty ringgit per centum on the debts proved
in the bankruptcy, it shall be presumed, until the contrary
is proved, that the bankrupt has continued to trade after
knowing or having reason to believe himself to be insolvent;
(b) in determining whether a bankrupt was, or knew, or had
reason to believe himself to be insolvent at any particular
date, every debt owing to him by any person resident out
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of the jurisdiction, which debt had been at such date due
for more than twelve months, shall be excluded from the
computation of the value of the assets, and for the purpose
of such computation shall be deemed not to be an asset;
(c) a bankrupt shall be deemed to have continued to trade
after knowing or having reason to believe himself to be
insolvent if, having continued to trade after he was in
fact insolvent, he--
(i) is unable to satisfy the court that he had reasonable
ground for believing himself to be solvent; or
(ii) fails without reasonable excuse, proof whereof
shall lie on him, to produce a proper balance sheet
for each of the three years immediately preceding
the bankruptcy, every such balance sheet being
made within a reasonable time after the expiration
of the year to which it relates, and showing the
true state of his affairs at the end of such year;
(d) any preference given by the bankrupt to any creditor
within the three months immediately preceding the date
of the receiving order shall, until the contrary is proved,
be deemed to be undue.
Discharge of bankrupt by Certificate of Director General of
Insolvency
33A. (1) The Director General of Insolvency may, in his discretion
but subject to section 33B, issue a certificate discharging a bankrupt
from bankruptcy.
(2) The Director General of Insolvency shall not issue a certificate
discharging a bankrupt from bankruptcy under subsection (1) unless
a period of five years has lapsed since the date the receiving order
and the order by which he was adjudged bankrupt were made.
(3) Notice of every discharge under subsection (1) shall be
given by the Director General of Insolvency to the Registrar and
the Director General of Insolvency shall advertise the notice in a
local newspaper as prescribed.
(4) The Director General of Insolvency shall, upon the application
of any interested person, issue a copy of the certificate of discharge
to the applicant upon payment of the prescribed fee.
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Bankruptcy
Objection by creditor to discharge of bankrupt under
section 33A
33  B . (1) B e f o r e issuing a certificate of discharge under
section 33A, the Director General of Insolvency shall serve on
each creditor who has filed a proof of debt a notice of his intention
to issue the certificate.
(2) A creditor who has been served with a notice under
subsection (1) and who wishes to object to the issuance of a
certificate discharging the bankrupt shall, within twenty-one days
from the date of service of the notice, furnish a notice of the
objection stating the grounds of his objection.
(3) A creditor who does not furnish a notice of his objection and
the grounds of his objection in accordance with subsection (2)
shall be deemed to have no objection to the discharge.
(4) A creditor who has furnished a notice of his objection and
the grounds of his objection in accordance with subsection (2)
may, within twenty-one days of being informed by the Director
General of Insolvency that his objection has been rejected, make
an application to the court for an order prohibiting the Director
General of Insolvency from issuing a certificate of discharge.
(5) Every application under subsection (4) shall be served on
the Director General of Insolvency and on the bankrupt and the
court shall hear the Director General of Insolvency and the bankrupt
before making an order on the application.
(6) On an application made under subsection (4), the court may,
if it thinks it just and expedient--
(a) dismiss the application;
(b) make an order that for a period not exceeding two years
a certificate of discharge shall not be issued by the Director
General of Insolvency.
Fraudulent settlements
In either of the following cases:
34.
(a) in the case of a settlement made before and in consideration
of marriage where the settlor is not at the time of making
the settlement able to pay all his debts without the aid
of the property comprised in the settlement; or
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(b) in the case of any covenant or contract made in consideration
of marriage for the future settlement on, or for the settlor's
wife or children of any money or property wherein he
had not at the date of his marriage any estate or interest,
not being money or property of or in right of his wife,
if the settlor is adjudged bankrupt or compounds or arranges with
his creditors, and it appears to the court that such settlement,
covenant or contract was made in order to defeat or delay creditors,
or was unjustifiable having regard to the state of the settlor's
affairs at the time when it was made, the court may refuse or
suspend an order of discharge, or grant an order subject to conditions,
or refuse to approve a composition or arrangement, as the case
may be, in like manner as in cases where the debtor has been guilty
of fraud.
Effect of discharge
35. (1) Subject to this section and any condition imposed by the
court under section 33, where a bankrupt is discharged, the discharge
shall release him from all his debts provable in the bankruptcy but
shall have no effect--
(a) on the functions (so far as they remain to be carried out)
of the Director General of Insolvency; or
(b) on the operation, for the purposes of the carrying out
those functions, of the provisions of this Act.
(2) A discharge shall not release the bankrupt from--
(a) any debt, due to the Government of Malaysia or of any
State;
(b) any debt with which the bankrupt may be chargeable at
the suit of--
(i) the Government of Malaysia or of any State or
any other person for any offence under any written
law relating to any branch of the public revenue;
or
(ii) any other public officer on a bail bond entered
into for the appearance of any person prosecuted
for any such offence; or
43
Bankruptcy
(c) any provable debt which he incurred in respect of, or
forbearance in respect of which was secured by means
of, any fraud or fraudulent breach of trust to which he
was party; or
(d) any liability in respect of a fine imposed for an offence.
(3) A bankrupt may be discharged from any of the debts excepted
under subsection (2) by a certificate in writing of the Minister of
Finance in the case of a debt due to the Government of Malaysia
or the Menteri Besar or Chief Minister of any State in the case of
a debt due to the State or of the Attorney General in the case of
such bail bond as is referred to in subsection (2).
(4) An order of discharge or a certificate of discharge shall be
conclusive evidence of the bankruptcy and of the validity of the
proceedings therein, and in any proceedings that are instituted
against a bankrupt who has obtained an order of discharge or a
certificate of discharge in respect of any debt from which he is
released by the order or certificate the bankrupt may plead that the
cause of action occurred before his discharge.
(5) A discharge shall not release any person other than the
bankrupt from any liability (whether as partner or co-trustee of the
bankrupt or otherwise) from which the bankrupt is released by the
discharge, or from any liability as surety for the bankrupt or as
a person in nature of such a surety.
Discharged bankrupt to give assistance
35A.  A discharged bankrupt shall, notwithstanding his discharge,
give such assistance as the Director General of Insolvency requires
in the realization and distribution of such of his property as is
vested in the Director General of Insolvency, and if the discharged
bankrupt fails to do so--
(a) he shall be guilty of an offence and shall be liable on
conviction to a fine not exceeding five thousand ringgit
or to imprisonment for a term not exceeding six months
or to both; and
(b) the court may, if it thinks fit, revoke his discharge, but
without prejudice to the validity of any sale, disposition
or payment duly made, or thing duly done subsequent to
the discharge, but before its revocation.
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PART II
DISQUALIFICATION AND DISABILITIES OF BANKRUPT
Disqualification of bankrupt
36. (1) Where a debtor is adjudged bankrupt he shall subject to
this Act, be disqualified for--
(a) being appointed or acting as a Sessions Court Judge or
Magistrate;
(b) being nominated or elected to or holding or exercising
the office of Councillor of a local authority.
(2) The disqualifications to which a bankrupt is subject under
this section shall be removed and cease if and when--
(a) the adjudication of bankruptcy against him is annulled;
or
(b) he obtains from the court his discharge with a certificate
to the effect that his bankruptcy was caused by misfortune
without any misconduct on his part.
(3) The court may grant or withhold such certificate as it thinks
fit, but any refusal of such certificate shall be subject to appeal.
Vacating offices by bankruptcy
37.  If a person is adjudged bankrupt whilst holding the office of
a Sessions Court Judge, Magistrate, or a Councillor of a local
authority, his office shall thereupon become vacant.
Undischarged Bankrupt
Consequences of refusal of discharge
38. (1) Where a bankrupt has not obtained his discharge--
(a) the bankrupt shall be incompetent to maintain any action
(other than an action for damages in respect of an injury
to his person) without the previous sanction of the Director
General of Insolvency;
(b) the bankrupt shall once in every six months render to the
Director General of Insolvency an account of all moneys
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Bankruptcy
and property which have come to his hands for his own
use during the preceding six months, and shall pay and
make over to the Director General of Insolvency so much
of the same moneys and property as have not been expended
in the necessary expenses of maintenance of himself and
his family;
(ba) notwithstanding paragraph (b) , the bankrupt shall
immediately report to the Director General of Insolvency
the receipt of any moneys, property or proceeds in any
form from property the value of which exceeds five hundred
ringgit and which moneys, property or proceeds do not
form part of his usual income and the bankrupt shall, as
soon as may be required by the Director General of
Insolvency, pay or make over such moneys, property or
proceeds to the Director General of Insolvency;
(bb) the bankrupt shall immediately inform the Director General
of Insolvency if there is any change of his home address;
(c) the bankrupt shall not leave Malaysia without the previous
permission of the Director General of Insolvency or of
the court;
(d) the bankrupt shall not, except with the previous permission
of the Director General of Insolvency or of the court,
enter into or carry on any business either alone or in
partnership, or become a director of any company or
otherwise directly or indirectly take part in the management
of any company;
(e) the bankrupt shall not, except with the previous permission
of the Director General of Insolvency or of the court,
engage in the management or control of any business
carried on by or on behalf of, or be in the employment
of, any of the following persons, namely--
(i) his spouse;
(ii) a lineal ancestor or a lineal descendant of his or
a spouse of such ancestor or descendant; or
(iii) a sibling of his or a spouse of such sibling.
(1A) In granting permission under paragraph (c), (d) or (e) of
subsection (1), the Director General of Insolvency or the court
may impose such conditions as he or it may think fit.
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(2) A bankrupt who makes default in performing or observing
this section or a condition imposed pursuant to subsection (1A)
shall be deemed guilty of a contempt of court, and shall be punished
accordingly on the application of the Director General of Insolvency.
Power to prevent bankrupt from leaving Malaysia
38A. (1) The Director General of Insolvency may by notice issued
to any immigration officer request that a bankrupt be prevented
from leaving Malaysia.
(2) Subject to any order issued or made under any written law
relating to banishment or immigration, an immigration officer who
receives a notice under subsection (1) in respect of any bankrupt
shall take or cause to be taken all such measures as may be necessary
to give effect to it.
(3) An immigration officer shall be empowered to seize and
deliver to the Director General of Insolvency any passport or
travel document belonging to any bankrupt who is attempting to
leave Malaysia without the previous permission of the Director
General of Insolvency.
(4) For the purposes of this section, "immigration officer" means
any person appointed under section 3 of the Immigration Act 1959
[Act 155].
List of undischarged bankrupts to be kept
39. (1) The Director General of Insolvency shall keep and maintain
a list of undischarged bankrupts.
(2) The list under subsection (1) shall be available, at all reasonable
times, for inspection by any member of the public at any office
of the Director General of Insolvency.
(3) The name of a deceased bankrupt shall be removed from the
list five years after the end of the administration of his estate in
bankruptcy.
(4) The Director General of Insolvency may issue a copy of the
list to any person upon request by that person and upon payment
of the prescribed fee.
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Bankruptcy
PART III
ADMINISTRATION OF PROPERTY
Proof of Debts
Description of debts provable in bankruptcy
40. (1) Demands in the nature of unliquidated damages arising
otherwise than by reason of a contract, promise or breach of trust
shall not be provable in bankruptcy.
(2) A person having notice of any act of bankruptcy available
against the debtor shall not prove under the receiving order for any
debt or liability contracted by the debtor subsequent to the date
of his so having notice.
(3) Save as provided in subsections (1) and (2) all debts and
liabilities present or future, certain or contingent, to which the
debtor is subject at the date of the receiving order, or to which he
may become subject before his discharge by reason of any obligation
incurred before the date of the receiving order shall be deemed to
be debts provable in bankruptcy.
(4) An estimate shall be made by the Director General of
Insolvency of the value of any debt or liability provable under
subsection (3) which, by reason of its being subject to any contingency
or contingencies, or for any other reason, does not bear a certain
value.
(5) Any person aggrieved by any such estimate may appeal to
the court.
(6) If in the opinion of the court the value of the debt or liability
is incapable of being fairly estimated the court may make an order
to that effect, and thereupon the debt or liability shall for the
purposes of this Act be deemed to be debt not provable in bankruptcy.
(7) If in the opinion of the court the value of the debt or liability
is capable of being fairly estimated, the court may assess the same
and may give all necessary directions for this purpose, and the
amount of the value when assessed shall be deemed to be a debt
provable in bankruptcy.
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Mutual credit and set-off
41. (1) Where there have been mutual credits, mutual debts, or
other mutual dealings between a debtor against whom a receiving
order is made under this Act and any other person proving or
claiming to prove a debt under such order, an account shall be
taken of what is due from the one party to the other in respect of
such mutual dealings, and the sum due from the one party shall
be set-off against any sum due from the other party, and the
balance of the account and no more shall be claimed or paid on
either side respectively.
(2) A person shall not be entitled under this section to claim the
benefit of any set-off against the property of a debtor in any case
where he had at the time of giving credit to the debtor notice of
an act of bankruptcy committed by the debtor and available against
him.
Rules as to proof of debts
42. The rules in Schedule C shall be observed with respect to the
mode of proving debts, the right of proof by secured and other
creditors, the admission and rejection of proofs and other matters.
Priority of debts
43. (1) In the distribution of the property of a bankrupt there shall
be paid in priority to all other debts--
(a) all local rates and land tax due from the bankrupt at the
date of the receiving order and having become due and
payable within twelve months next before that time;
(b) income tax and other assessed taxes assessed on the
bankrupt up to the 31st day of December next before the
date of the receiving order and not exceeding in the
whole one year's assessment;
(c) all wages or salary of any clerk, servant, labourer or
workman not exceeding one thousand ringgit for each
whether payable for time or piece work or whether or not
payable wholly or in part by way of commission in respect
of services rendered to the bankrupt during the period of
five months next before the date of the receiving order
49
Bankruptcy
or the date of the termination of his service if the latter
occurs within twelve months of and precedes the date of
the receiving order:
Provided that, where any clerk, servant, labourer or
workman has entered into a contract for the payment of
his wages or any part thereof in a lump sum at the end
of the year of hiring, the priority under this section shall
extend to the whole of such sum, or a part thereof, as the
court may decide to be due under the contract, proportionate
to the time of service up to the date of the receiving
order;
(d) all amounts due in respect of contributions payable during
the twelve months before the date of the receiving order
by the bankrupt as the employer of any person under any
law relating to provident funds; and
(e) all amounts due in respect of workmen's compensation
under any law relating to workmen's compensation accrued
before the date of the receiving order.
(2) The foregoing debts shall rank equally between themselves,
and shall be paid in full unless the property of the bankrupt is
insufficient to meet them, in which case they shall abate in equal
proportions between themselves.
(3) In the case of partners the joint estate shall be applicable
in the first instance in payment of their joint debts, and the separate
estate of each partner shall be applicable in the first instance in
payment of his separate debts. If there is a surplus of the separate
estates it shall be dealt with as part of the joint estate. 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 right and interest
of each partner in the joint estate.
(4) Subject to this Act all debts proved in the bankruptcy shall
be paid pari passu.
(5) If there is any surplus after payment of the foregoing debts,
the surplus shall not be applied in any payment of interest after
the date of the receiving order to any creditor on any debt proved
in the bankruptcy, except for the payment of interest to a secured
creditor under subsection 8(2A).
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Interest on debts
(6) Where a debt has been proved upon a debtor's estate and
such debt includes interest or any pecuniary consideration in lieu
of interest, such interest or consideration shall for the purposes of
dividend be calculated at a rate not exceeding six per centum per
annum up to the date the receiving order is granted by the court.
(7) This section shall have effect subject to any written law
relating to partnership in force in any part of Malaysia.
(8) Where an interim receiver has been appointed before the
making of the receiving order the date of such appointment shall
for the purposes of this section be deemed to be the date of the
receiving order.
Preferential claim in case of apprenticeship and in respect of
passage money
44. (1) Where at the time of the presentation of the bankruptcy
petition any person is apprenticed or is an articled clerk to the
bankrupt, the adjudication of bankruptcy shall, if either the bankrupt
or apprentice or clerk gives notice in writing to the Director General
of Insolvency to that effect, be a complete discharge of the indenture
of apprenticeship or articles of agreement.
(2) If any money has been paid by or on behalf of the apprentice
or clerk to the bankrupt as a fee, the Director General of Insolvency
may, on the application of the apprentice or clerk or of some
person on his behalf, pay such sum as the Director General of
Insolvency, subject to an appeal to the court, thinks reasonable out
of the bankrupt's property to or for the use of the apprentice or
clerk, regard being had to the amount paid by him or on his behalf
and to the time during which he served with the bankrupt under
the indenture or articles before the commencement of the bankruptcy
and to the other circumstances of the case.
(3) Where it appears expedient to the Director General of
Insolvency he may, on the application of any apprentice or articled
clerk to the bankrupt, or of some person on his behalf, instead of
a c t i n g under subsection (1) or (2) transfer the indenture of
apprenticeship or articles of agreement to some other person.
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Bankruptcy
(4) Where at the date of the receiving order any person is in the
employment of the bankrupt who came to Malaysia for the purpose
of entering into such employment either--
(a) under any contract to serve the bankrupt for a period of
not less than one year, which period has not elapsed three
months before the date of such order; or
(b) under a contract either absolutely or conditionally that
such person shall be provided with a passage to another
country on the determination of his employment,
and such person has not obtained other employment and is desirous
of leaving Malaysia, the court may, if it seems just and expedient
under all the circumstances of the case, direct the Director General
of Insolvency to provide for such person such passage as he is
entitled to under the contract, or if he is not so entitled then a
suitable passage to the country whence he came for the purpose
of entering into such employment, or in either case any other not
more costly passage which such person may desire.
Power to landlord to distrain for rent
45. (1) Subject to any law relating to the recovery of rent by way
of distress, the landlord or other person to whom any rent is due
from the bankrupt may, at any time either before or after the
commencement of the bankruptcy, distrain upon the goods or
effects of the bankrupt for the rent due to him from the bankrupt
with this limitation, that if such distress for rent is levied after the
commencement of the bankruptcy it shall be available only for
three months' rent accrued due prior to the date of the order of
adjudication, but the landlord or other person to whom the rent is
due from the bankrupt may prove under the bankruptcy for the
surplus due for which the distress may not have been available.
(2) This section shall with the necessary modifications apply in
the case of an order for the administration of the estate of a
deceased person who died insolvent and for the purposes of this
section the term "order of adjudication" shall be deemed to include
an order for such administration.
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Postponement of husband's or wife's claims
46. (1) Where a married woman has been adjudged bankrupt her
husband shall not be entitled to claim any dividend as a creditor
in respect of any money or other property lent or entrusted by him
to his wife for the purposes of her trade or business until all claims
of the other creditors of his wife for valuable consideration in
money or money's worth have been satisfied.
(2) Where the husband of a married woman has been adjudged
bankrupt any money or other property of such woman lent or
entrusted by her to her husband for the purpose of any trade or
business carried on by him or otherwise shall be treated as assets
of his estate and the wife shall not be entitled to claim any dividend
as a creditor in respect of any such money or other property until
all claims of the other creditors of her husband for valuable
consideration in money or money's worth have been satisfied.
Property Available for Payment of Debts
Relation back of Director General of Insolvency's title
47. (1) The bankruptcy of a debtor, whether the same takes place
on the debtor's own petition or upon that of a creditor, shall be
deemed to have relation back to and commence at the time of the
act of bankruptcy being committed on which a receiving order is
made against him, or if the bankrupt is proved to have committed
more acts of bankruptcy than one to have relation back to and to
commence at the time of the first of the acts of bankruptcy proved
to have been committed by the bankrupt within six months next
preceding the date of the presentation of the bankruptcy petition.
(2) No bankruptcy petition, receiving order or adjudication shall
be rendered invalid by reason of any act of bankruptcy anterior
to the debt of the petitioning creditor.
Description of bankrupt's property divisible amongst creditors
48. (1) The property of the bankrupt divisible among his creditors,
and in this Act referred to as the property of the bankrupt--
(a) shall not comprise the following:
(i) property held by the bankrupt on trust for any
other person;
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Bankruptcy
(ii) the tools, if any, of his trade and the necessary
w e a r i n g apparel and bedding and other like
necessaries of himself, his wife and children to a
value inclusive of tools and apparel and the other
things aforesaid not exceeding *five thousand ringgit
in the whole;
(b) shall comprise the following:
(i) all such property as belongs to or is vested in the
bankrupt at the commencement of the bankruptcy
or is acquired by or devolves on him before his
discharge;
(ii) the capacity to exercise and to take proceedings
for exercising all such powers in or over or in
respect of property as might have been exercised
b y the bankrupt for his own benefit at the
commencement of his bankruptcy or before his
discharge; and
(iii) subject to the law for the time being in force
relating to bills of sale, all goods being at the
commencement of the bankruptcy in the possession,
order or disposition of the bankrupt by the consent
and permission of the true owner under such
circumstances that he is the reputed owner thereof.
(2) Things in action other than debts due or growing due to the
bankrupt in the course of his trade or business shall not be deemed
goods within the meaning of this section.
Provisions as to second bankruptcy
49. (1) Where a second or subsequent receiving order is made
against a bankrupt, or where an order is made for the administration
in bankruptcy of the estate of a deceased bankrupt, then for the
purposes of any proceedings consequent upon any such order, the
Director General of Insolvency shall be deemed to be a creditor
in respect of any unsatisfied balance of the debts provable in the
last preceding bankruptcy against the property of the bankrupt in
the subsequent bankruptcy.
(2) In the event of a second or subsequent receiving order made
against a bankrupt being followed by an order adjudging him
bankrupt, or in the event of an order being made for the administering
*NOTE--Previously "five hundred ringgit"see the Bankruptcy (Amendment) Act 1992 [Act A827].
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ACT 360
in bankruptcy of the estate of a deceased bankrupt, any property
acquired by him since he was last adjudged bankrupt, which at the
date when the subsequent petition was presented had not been
distributed amongst the creditors in such last preceding bankruptcy,
shall (subject to any disposition thereof made by the Director
General of Insolvency in that bankruptcy, without knowledge of
the presentation of the subsequent petition) vest in the Director
General of Insolvency on account of the subsequent bankruptcy or
administration in bankruptcy as the case may be.
(3) Where the Director General of Insolvency in any bankruptcy
receives notice of a subsequent petition in bankruptcy against the
bankrupt or after his decease of a petition for the administration
of his estate in bankruptcy, the Director General of Insolvency
shall hold any property then in his possession which has been
acquired by the bankrupt since he was adjudged bankrupt until the
subsequent petition has been disposed of, and, if on the subsequent
petition an order of adjudication or an order for the administration
of the estate in bankruptcy is made, he shall hold all such property
or the proceeds thereof (after deducting his costs and expenses)
to the account of the subsequent bankruptcy or administration in
bankruptcy, as the case may be.
Effect of Bankruptcy on Antecedent Transactions
Restriction of rights of creditor under execution or attachment
50. (1) Where a creditor has issued execution against the goods
or lands of a debtor, or has attached any debt due, or property
belonging to him, he shall not be entitled to retain the benefit of
the execution or attachment against the Director General of Insolvency
unless he has completed the execution or attachment before the
date of the receiving order and before notice of the presentation
of any bankruptcy petition by or against the debtor, or of the
commission of any available act of bankruptcy by the debtor.
(2) For the purposes of this Act--
(a) an execution against goods or land is completed by seizure
and sale, or in the case of an equitable interest in land
by the appointment of a receiver;
(b) an attachment of a debt is completed by receipt of the
debt;
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Bankruptcy
(c) an attachment of property is completed by the sale of
such property and the satisfaction out of the proceeds of
such sale of the judgment in execution of which the
attachment was made.
Property taken in execution
51. (1) Where any property of a debtor is taken in execution and
before the sale or realization thereof, or the delivery to the execution
creditor of any moneys seized or paid in order to avoid sale, notice
is served on the Court that a receiving order has been made against
the debtor, the Court shall deliver the property or the possession
thereof and any such moneys to the Director General of Insolvency,
but the costs of and incidental to the execution shall be a first
charge on such property or moneys, and the Director General of
Insolvency may sell the property or an adequate part thereof for
the purpose of satisfying the charge.
Duty as to money received on seizure or subsequently thereto
(2) Where an order of execution has been made in respect of
a judgment for a sum exceeding one hundred ringgit the Court
shall hold all moneys coming to its hands under such writ of
seizure and sale for fourteen days from the receipt thereof, and if
within that time notice is served on it of a bankruptcy petition