252. Interim order of court Moratorium for insolvent debtor
253. Application for interim order(1) In the circumstances specified below, the court may in the case of a debtor (being an individual) make an interim order under this section.
(2) An interim order has the effect that, during the period for which it is in force;
(a) no bankruptcy petition relating to the debtor may be presented or proceeded with, and
(b) no other proceedings, and no execution or other legal process, may be commenced or continued against the debtor or his property except with the leave of the court.
254. Effect of application(1) Application to the court for an interim order may be made where the debtor intends to make a proposal to his creditors for a composition in satisfaction of his debts or a scheme of arrangement of his affairs (from here on referred to, in either case, as "voluntary arrangement").
(2) The proposal must provide for some person ("the nominee") to act in relation to the voluntary arrangement either as trustee or otherwise for the purpose of supervising its implementation.
(3) Subject as follows, the application may be made;
(a) if the debtor is an undischarged bankrupt, by the debtor, the trustee of his estate, or the official receiver, and
(b) in any other case, by the debtor.
(4) An application shall not be made under subsection (3)(a) unless the debtor has given notice of his proposal (that is, the proposal to his creditors for the voluntary arrangement) to the official receiver and, if there is one, the trustee of his estate.
(5) An application shall not be made while a bankruptcy petition presented by the debtor is pending, if the court has, under section 273 below, appointed an insolvency practitioner to inquire into the debtor's affairs and report.
255. Cases in which interim order can be made(1) At any time when an application under section 253 for an interim order is pending, the court may stay any action, execution or other legal process against the property or person of the debtor.
(2) Any court which proceedings are pending against an individual may, on proof that an application under that section has been made in respect of that individual , either stay the proceedings or allow them to continue on such terms as it thinks fit.
256. Nominee's report on debtor's proposal(1) The court shall not make an interim order on an application under section 253 unless it is satisfied;
(a) that the debtor intends to make such a proposal as is mentioned in that section;
(b) that on the day of the making of the application the debtor was an undischarged bankrupt or was able to petition for his own bankruptcy;
(c) that no previous application has been made by the debtor for an interim order in the period of 12 months ending with that day; and
(d) that the nominee under the debtor's proposal to his creditors is a person who is for the time being qualified to act as an insolvency practitioner in relation to the debtor, and is willing to act in relation to the proposal.
(2) The court may make an order if it thinks that it would be appropriate to do so for the purpose of facilitating the consideration and implementation of the debtor's proposal.
(3) Where the debtor is an undischarged bankrupt, the interim order may contain provision as to the conduct of the bankruptcy, and the administration of the bankrupt's estate, during the period for which the order is in force.
(4) Subject as follows, the provision contained in an interim order by virtue of subsection (3) may include provision staying proceedings in the bankruptcy or modifying any provisions in this Group of Parts, and any provision of the rules in their application to the debtor's bankruptcy.
(5) An interim order shall not, in relation to a bankrupt, make provision relaxing or removing any of the requirements of provisions in this Group of Parts, or of the rules, unless the court is satisfied that provision is unlikely to result in any significant diminution in, or the value of, the debtor's estate for the purposes of the bankruptcy.
Subject to the following provisions of this Part, an interim order made on application under section 253 ceases to have effect at the end of the period of 14 days beginning with the day after the making of the order.
257. Summoning of creditors' meeting(1) Where an interim order has been made on an application under section 253, the nominee shall, before the order ceases to have effect, submit a report to the court stating;
(a) whether, in his opinion, a meeting of the debtor's creditors should be summoned to consider the debtor's proposal, and;
(b) if in his opinion such a meeting should be summoned, the date on which, and time and place at which, he proposes the meeting should be held.
(2) For the purpose of enabling the nominee to prepare his report the debtor shall submit to the nominee;
(a) s document setting out the terms of the voluntary arrangement which the debtor is proposing, and
(b) a statement of his affairs containing;
(i) such particulars of his creditors and of his debts and other liabilities and of his assets as may be prescribed, and
(ii) such other information as may be prescribed.
(3) The court may, on an application made by the debtor in a case where the nominee has failed to submit the report required by this section, do one or both of the following namely;
(a) direct that the nominee shall be replaced as such by another person qualified to act as an insolvency practitioner in relation to the debtor;
(b) direct that the interim order shall continue, or (if it has ceased to have effect) be renewed, for such further period as the court may specify in the direction.
(4) The court may, on the application of the nominee, extend the period for which the interim order has effect so as to enable the nominee to have more time to prepare his report.
(5) If the court is satisfied on receiving the nominee's report that a meeting of the debtor's creditors should be summoned to consider the debtor's proposal, the court shall direct that the period for which the interim order has effect shall be extended, for such further period as it may specify in the direction, for the purpose of enabling the debtor's proposal to be considered by his creditors in accordance with the following provisions of this Part.
(6) The court may discharge the interim order if it is satisfied, on the application of the nominee;
(a) that the debtor has failed to comply with his obligations under section (2), or
(b) that for any other reason it would be inappropriate for a meeting of the debtor's creditors to be summoned to consider the debtor's proposal.
(1) Where it has been reported to the court under section 256 that a meeting of the debtor's creditors should be summoned, the nominee (or his replacement under section 256 (3)(a) shall, unless the court otherwise directs, summon that meeting for the time, date and place proposed in his report.
(2) The persons to be summoned to the meeting are every creditor of the debtor of whose claim and address the person summoning the meeting is aware.
(3) For this purpose the creditors of a debtor who is an undischarged bankrupt include;
(a) every person who is a creditor of the bankrupt in respect of a bankruptcy debt, and
(b)every person who would be such a creditor if the bankruptcy had commenced on the day on which notice of the meeting is given.
258. Decisions of creditors' meeting Consideration and implementation of debtor's proposal
259. Report of decisions to court(1) A creditors' meeting summoned under section 257 shall decide whether to approve the proposed voluntary arrangement.
(2) The meeting may approve the proposed voluntary arrangement with modifications, but shall not do so unless the debtor consents to each modification.
(3) The modifications subject to which the proposed voluntary arrangement may be approved may include one conferring the functions proposed to be conferred on the nominee on another person qualified to act as an insolvency practitioner in relation to the debtor.
But they shall not approve any modifications by virtue of which the proposal ceases to be a proposal such as is mentioned in section 253.
(4) The meeting shall not approve any proposal or modification which affects the right of a secured creditor of the debtor to enforce his security, except with the concurrence of the creditor concerned.
(5) Subject as follows, the meeting shall not approve any proposal or modification under which;
(a) any preferential creditor of the debtor is to be paid otherwise than in priority to such of his debts as are not preferential debts, or
(b) a preferential creditor of the debtor is to be paid an amount in respect of a preferential debt that bears to that debt a smaller proportion than is borne to another preferential debt by the amount that is to be paid in respect of that other debt.
However, the meeting may approve such a proposal or modification with the concurrence of the preferential creditor concerned.
(6) Subject as above, the meeting shall be conducted in accordance with the rules.
(7) In this section "preferential debt" has the meeting given by section 386 in Part XII; and "preferential creditor" is to be constructed accordingly.
260. Effect of approval(1) After the conclusion in accordance with the rules of the meeting summoned under section 257, the chairman of the meeting shall report the result of it to the court and, immediately after so reporting, shall give notice of the result of the meeting to such persons as may be prescribed.
(2) If the report is that the meeting has declined (with or without modifications) to approve the debtor's proposal, the court may discharge any interim order which is in force in relation to the debtor.
261. Effect where debtor an undischarged bankrupt(1) This section has effect where the meeting summoned under section 257 approves the proposed voluntary arrangement (with or without modifications).
(2) The approved arrangement;
(a) takes effect as if made by the debtor at the meeting, and
(b) binds every person who in accordance with the rules had notice of, and was entitled to vote at, the meeting (whether or not he was present or represented at it) as if he were a party to the arrangement.
(3) The Deeds of Arrangement Act 1914 does not apply to the approved voluntary arrangement.
(4) Any interim order in force in relation to the debtor immediately before the end of the period of 28 days beginning with the day on which the report with respect to the creditors' meeting was made to the court under section 259 ceases to have effect at the end of that period.
This subsection applies except to such extent as the court may direct for the purposes of any application under section 262 below.
(5) Where proceedings on a bankruptcy petition have been stayed by an interim order which ceases to have effect under subsection (4), that petition is deemed, unless the court otherwise orders, to have been dismissed.
262. Challenge of meeting's decisions(1) Subject as follows, where the creditors' meeting summoned under section 257 approves the proposed voluntary arrangement (with or without modifications) and the debtor is an undischarged bankrupt, the court may do one or both of the following, namely;
(a) annual the bankruptcy order by which he was adjudged bankrupt;
(b) give such directions with respect to the conduct of the bankruptcy and the administration of the bankrupt's estate as it thinks appropriate for facilitating the implementation of the approved voluntary arrangement.
(2) The court shall not annul a bankruptcy order under subsection (1);
(a) at any time before the end of the period of 28 days beginning with the day on which the report of the creditors' meeting was made to the court under section 259, or
(b) at any time when an application under section 262 below, or an appeal in respect of such an application is pending, or at any time in the period within which such an appeal may be brought.
263. Implementation and supervision of approved voluntary arrangement(1) Subject to this section, an application to the court may be made, by any of the persons specified below, on one or both of the following grounds, namely;
(a) that a voluntary arrangement approved by a creditors' meeting summoned under section 257 unfairly prejudices the interests of a creditor of the debtor;
(b) that there has been some material irregularity at or in relation to such a meeting.
(2) The persons who may apply under this section are;
(a) the debtor;
(b) a person entitled, in accordance with the rules, to vote at the creditors' meeting;
(c) the nominee (or his replacement under section 256(3)(a) or 258(3); and
(d) if the debtor is an undischarged bankrupt, the trustee of his estate or the official receiver.
(3) An application under this section shall not be made after the end of the period of 28 days beginning with the day on which the report of the creditors' meeting was made to the court under section 259.
(4) Where on an application under this section the court is satisfied as to either of the grounds mentioned in subsection (1), it may do one or both of the following, namely;
(a) revoke or suspend any approval given by the meeting;
(b) give a direction to any person for the summoning of a further meeting of the debtor's creditors to consider any revised proposal he may make or, in a case falling within subsection (1)(b), to reconsider his original proposal.
(5) Where at any time after giving a direction under subsection (4)(b) for the summoning of a meeting to consider a revised proposal the court is satisfied that the debtor does not intend to submit such a proposal, the court shall revoke the direction and revoke or suspend any approval given at the previous meeting.
(6) Where the court gives a direction under subsection (4)(b), it may also give a direction continuing or, as the case may require, renewing, for such period as may be specified in the direction, the effect in relation to the debtor of the interim order.
(7) In any case where the court, on an application made under this section with respect to a creditors' meeting, gives a direction under subsection (4)(b) or revokes or suspends an approval under subsection (4)(a) or (5), the court may give such supplemental directions as it thinks fit and, in particular, directions with respect to;
(a) things done since the meeting under voluntary arrangement approved by the meeting, and
(b) such things done since the meeting as could not have been done if an interim order had been in force in relation to the debtor when they were done.
(8) Except in pursuance of the preceding provisions of this section, an approval given at a creditors' meeting summoned under section 257 is not invalidated by any irregularity at or in relation to the meeting.
(1) This section applies where a voluntary arrangement approved by a creditors' meeting summoned under section 257 has taken effect.
(2) The person who is for the time being carrying out, in relation to the voluntary arrangement, the functions conferred by virtue of the approval on the nominee (or his replacement under section 255(3)(a) or 258(3) shall be known as the supervisor of the voluntary arrangement.
(3) If the debtor, any of his creditors or any other person is dissatisfied by any act, omission or decision of the supervisor, he may apply to the court; and on such an application the court may;
(a) confirm, reverse or modify any act or decision of the supervisor,
(b) give him directions, or
(c) make such other order as it thinks fit.
(4) The supervisor may apply to the court for directions in relation to any particular matter arising under the voluntary arrangement.
(5) The court may, whenever;
(a) it is expedient to appoint a person to carry out the functions of the supervisor, and
(b) it is inexpedient, difficult for impractical for an appointment to be made without the assistance of the court.
Make an order appointing a person who is qualified to act as an insolvency practitioner in relation to the debtor, either in substitution for the existing supervisor or to fill a vacancy.
This is without prejudice to section 41(2) of the Trustee Act 1925 (power of court to appoint trustees of deeds of arrangement).
(6) The power conferred by subsection (5) is exercisable so as to increase the number of persons exercising the functions of the supervisor or, where there is more than one person exercising those functions, so as to replace one or more of those persons.
264. Who may present a bankruptcy petition265. Conditions to be satisfied in respect of debtor(1) A petition for a bankruptcy order to be made against an individual may be presented to the court n accordance with the following provisions of this Part -
(a) by one of the individual's creditors or jointly by more than one of them,
(b) by the individual himself,
by the supervisor of, or any person (other than the individual) who is for the time being bound by, a voluntary arrangement proposed by the individual an approved under Part VIII, or
(d) where a criminal bankruptcy order has been made against the individual, by the Official Petitioner or by any person specified in the order in pursuance of section 39(3)(b) of the Powers of Criminal Courts Acts 1973.
(2) Subject to those provisions, the court may make a bankruptcy order on any such petition.
266. Other preliminary conditions(1) A bankruptcy petition shall not be presented to the court under section 264(1)(a) or (b) unless the debtor -
(a) is domiciled in England and Wales,
(b) is personally present in England and Wales on the day on which the petition is presented, or
at any time in the period of 3 years ending with that day -
(i) has been ordinarily resident, or has had a place of residence, in England and Wales, or
(ii) has carried on business in England and Wales.
(2) The reference in subsection (1)(c) to an individual carrying on business includes -
(a) the carrying on of business by a firm or partnership of which the individual is a member, and
(b) the carrying on of business by an agent or manager for the individual or for such a firm or partnership.
(1) Where a bankruptcy petition relating to an individual is presented by a person who is entitled to present a petition under two or more paragraphs of section 264(1), the petition is to be treated for the purposes of this Part as a petition under such one of those paragraphs as may be specified in the petition.
(2) A bankruptcy petition shall not be withdrawn without the leave of the court.
(3) The court has a general power, if it appears to it appropriate to do so on the grounds that there has been a contravention of the rules or for any other reason, to dismiss a bankruptcy petition or to stay proceedings on such a petition; and, where it stays proceedings on a petition, it may do so on such terms and conditions as it thinks fit.
(4) Without prejudice to subsection (3), where a petition under section 264(1)(a), (b) or in respect of an individual is pending at a time when a criminal bankruptcy order is made against him, or is presented after such an order has been so made, the court may on the application of the Official Petitioner dismiss the petition if it appears to it appropriate to do so.
Creditor's petition 267. Grounds of creditor's petition
268. Definition of "inability to pay", etc; the statutory demand(1) A creditor's petition must be in respect of one or more debts owed by the debtor, and the petitioning creditor or each of the petitioning creditors must be a person to whom the debt or (as the case may be) at least one of the debts is owed.
(2) Subject to the next three sections, a creditor's petition may be presented to the court in respect of a debt or debts only if, at the time the petition is presented -
(a) the amount of the debt, or the aggregate amount of the debts, is equal to or exceeds the bankruptcy level,
(b) the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, either immediately or at some certain, future time, and is unsecured.
the debt, or each of the debts, is a debt which the debtor appears to be unable to pay or to have no reasonable prospect of being able to pay, and
(d) there is no outstanding application to set aside a statutory demand served (under section 268 below) in respect of the debt or any of the debts.
(3) A debt is not to be regarded for the purposes of subsection (2) as a debtor for a liquidated sum by reason only that the amount of the debt is specified in a criminal bankruptcy order.
(4) "The bankruptcy level" is œ750; but the Secretary of State may by order in a statutory instrument substitute any amount specified in the order for that amount or (as the case may be) for the amount which by virtue of such an order is for the time being the amount of the bankruptcy level.
(5) An order shall not be made under subsection (4) unless a draft of it has been laid before, and approved by a resolution of, each House of Parliament.
269. Creditor with security(1) For the purposes of section 267(2) (c), the debtor appears to be unable to pay a debt if, but only if, the debt is payable immediately and either -
(a) the petitioning creditor to whom the diet is owed has served on the debtor a demand (known as "the statutory demand") in the prescribed form requiring him to pay the debt or to secure or compound for it to the satisfaction of the creditor, at least 3 weeks have elapsed since the demand was served and the demand has been neither complied with nor set aside in accordance with the rules, or
(b) execution or other process issued in respect of the debt of a judgment or order of any court in favour of the petitioning creditor, or one or more of the petitioning creditors to whom the debt is owed, has been returned unsatisfied in whole or in part.
(2) For the purposes of 267(2)(c) the debtor appears to have no reasonable prospect of being able to pay the debt if, but only if, the debt is not immediately payable and -
(a) the petitioning creditor to whom it is owed has served on the debtor a demand (also known as "the statutory demand") in the prescribed form requiring him to establish to the satisfaction of the creditor that there is a reasonable prospect that the debtor will be able to pay the debt when it falls due.
(b) at least 3 weeks have elapsed since the demand was served, and
the demand has been neither complied with nor set aside in accordance with the rules.
(1) A debt which is the debt, or one of the debts, in respect of which a creditor's petition is presented need not be unsecured if either -
(a) the petition contains a statement by the person having the right to enforce the security that he is willing, in the event of a bankruptcy order being made, to give up his security for the benefit of all the bankrupt's creditors, or
(b) the petition is expressed not to be made in respect of the secured part of the debt and contains a statement by that person of the estimated value at the date of the petition of the security for the secured part of the debt.
(2) In a case falling within subsection (1)(b) the secured and unsecured parts of the debt are to be treated for the purposes of sections 267 to 270 as separate debts.
270. Expedited petition271. Proceedings on creditor's petitionIn the case of a creditor's petition presented wholly or partly in respect of a debt which is the subject of a statutory demand under section 268, the petition may be presented before the end of the 3-week period there mentioned if there is a serious possibility that the debtor's property or the value of any of his property will be significantly diminished during that period and the petition contains a statement to that effect.
(1) The court shall not make a bankruptcy order on a creditor's petition unless it is satisfied that the debt, or one of the debts, in respect of which the petition was presented is either -
(a) a debt which, having been payable at the date of the petition or having since become payable, has been neither paid nor secured or compounded for, or
(b) a debt which the debtor has no reasonable prospect of being able to pay when it falls due.
(2) In a case in which the petition contains such a statement as is required by section 270, the court shall not make a bankruptcy order until at least 3 weeks have elapsed since the service of any statutory demand under section 268.
(3) The court may dismiss the petition if it is satisfied that the debtor is able to pay all his debts or is satisfied -
(a) that the debtor has made an offer to secure or compound for a debt in respect of which the petition is presented,
(b) that the acceptance of that offer would have required the dismissal of the petition, and
that the offer has been reasonably refused;
and, in determining for the purposes of this subsection whether the debtor is able to pay all his debts, the court shall take into account his contingent and prospective liabilities.
(4) In determining for the purposes of this section what constitutes a reasonable prospect that a debtor will be able to pay a debt when it falls due, it is to be assumed that the prospect given by the facts and other matters known to the creditor at the time he entered into the transaction resulting in the debt was a reasonable prospect.
(5) Nothing in sections 267 to 271 prejudices the power of the court, in accordance with the rules, to authorise a creditor's petition to be amended by the omission of any creditor or debt and to be proceeded with as if things done for the purposes of those sections had been done only by or in relation to the remaining creditors or debts.
Debtor's petition 272. Grounds of debtor's petition
273. Appointment of insolvency practitioner by the court(1) A debtor's petition may be presented to the court only on the grounds that the debtor is unable to pay his debts.
(2) The statement shall be accompanied by a statement of the debtor's affairs containing -
(a) such particulars of the debtor's creditors and of his debts and other liabilities and of his assets as may be prescribed, and
(b) such other information as may be prescribed.
274. Action on report of insolvency practitioner(1) Subject to the next section, on the hearing of a debtor's petition the court shall not make a bankruptcy order if it appears to the court -
(a) that if a bankruptcy order were made the aggregate amount of the bankruptcy debts, so far as unsecured, would be less than the small bankruptcies level,
(b) that if a bankruptcy order were made, the value of the bankrupt's estate would be equal to or more than the minimum amount.
that within the period of 5 years ending with the presentation of the petition the debtor has neither been adjudged bankrupt nor made a composition with his creditors in satisfaction of his debts or a scheme of arrangement of his affairs, and
(d) that it would be appropriate to appoint a person to prepare a report under section 274.
"The minimum amount" and "the small bankruptcies level" mean such amounts as may for the time being be prescribed for the purposes of this section.
(2) Where on the hearing of the petition, it appears to the court as mentioned in subsection (1), the court shall appoint a person who is qualified to act as an insolvency practitioner in relation to the debtor -
(a) to prepare a report under the next section, and
(b) subject to section 258(3) in Part VIII, to act in relation to any voluntary arrangement to which the report relates either as trustee or otherwise for the purpose of supervising its implementation.
275. Summary administration(1) A person appointed under section 273 shall inquire into the debtor's affairs and, within such period as the court may direct, shall submit a report to the court stating whether the debtor is willing, for the purposes of Part VIII, to make a proposal for a voluntary arrangment.
(2) A report which states that the debtor is willing as abovce mentioned shall also state -
(a) whether, in the opinion of the person ,making the report, a meeting of the debtor's creditors should be summonedto consider the proposal, and
(b) if in that person's opinion such a meeting should be summoned, the date on which, and time and place at which, he proposes the meeting should be held.
(3) On considering a report under this section thje court may -
(a) without any application, make an interim order under section 252, if it thinks that it is appropriate to do so for the purpose of facilitating the consideration and implementation of the debtor's propsal, or
(b) if it thinks it would be inappropriate to make such an order, make a bankruptcy order.
(4) An interim order made by virtue of this section ceases to have effect at the end of such period as the court may specify for the purpose of enabling the debtor's proposal to be considered by his creditors in accordance with the applicable provisions of Part VIII.
(5) Where it has been reported to the court under this section that a meeting of the debtor's creditors should be summoned, the person making the report shall, unless the court otherwise directs, summon that meeting for the time, date and place proposed in his report.
The meeting is then deemed to have been summoned under section 257 in Part VIII, and subsections (2) and (3) of that section, and sections 258 to 263 apply accordingly.
(1) Where on the hearing of a debtor's petition the court makes a bankruptcy order and the case is as specified in the next subsection, the court shall, if it appears to it appropriate to do so, issue a certificate for the summary administration of the bankrupt's estate.
(2) That case is where it appears to the court -
(a) that if a bankruptcy order were made the aggregate amount of the bankruptcy debts so far as unsecured would be less than the small bankruptcies level (within the meaning given by section 273), and
(b) that within the period of 5 years ending with the presentation the debtor has neither been adjudged bankrupt nor made a composition with his creditors in satisfaction of his debts or a scheme of arrangement of his affairs.
Whether the bankruptcy order is made because it does not appear to the court as mentioned in section 273(1)(b) or (d), or it is made because the court thinks it would be inappropriate to make an interim order under section 252.
(3) The court may at any time revoke a certificate issued under this section if it appears to it that, on any grounds existing at the time the certificate was issued, the certificate ought not to have been issued.
276. Default in connection with voluntary arrangement277. Petition based on criminal bankruptcy order(1) The court shall not make a bankruptcy order on a petition under section 264(1)(c) (supervisor, of, or person bound by, voluntary arrangement proposed and approved) unless it is satisfied -
(a) that the debtor has failed to comply with his obligations under the voluntary arrangement, or
(b) that information which was false or misleading in any material particular or which contained material omissions -
(i) was contained in any statement of affairs or other document supplied by the debtor under Part VIII to any person, or
(ii) was otherwise made available by the debtor to his creditors at or in connection with a meeting summoned under that Part, or
(c) that the debtor has failed to do all such things as may for the purposes of the voluntary arrangement have been reasonably required of him by the supervisor of the arrangement.
(2) Where a bankruptcy order is made on a petition under section 264 (1)(c), any expenses properly incurred as expenses of the administration of the voluntary arrangement in question shall ne a fist charge on the bankrupt's estate.
(1) Subject to section 266(3), the court shall make a bankruptcy order on a petition under section 264(1)(d) on production of a copy of the criminal bankruptcy order on which the petition is based.
This does not apply if it appears to the court that the criminal bankruptcy order has been rescinded on appeal.
(2) Subject to the provisions of this Part, the fact that an appeal is pending against any conviction by virtue of which a criminal bankruptcy order was made does not affect any proceedings on a petition under section 264(1)(d) based on that order.
(3) For the purposes of this section, an appeal against a conviction is pending -
(a) in any case, until the expiration of the period of 28 days beginning with the dat of conviction;
(b) if notice of appeal to the Court of Appeal is given during that period and during that period the appellant notifies the official receiver of it, until the determination of the appeal and thereafter for so long as an appeal to the House of Lords is pending within the meaning of section 40(5) of the Powers of Criminal Courts Act 1973.
Commencement and duration of bankruptcy; discharge 278. Commencement and continuance
279. DurationThe bankruptcy of an individual against whom a bankruptcy order has been made -
(a) commences with the day on which the order is made, and
(b) continues until the individual is discharged under the following provisions of this Chapter.
280. Discharge by order of the court(1) Subject as follows, a bankrupt is discharged from bankruptcy -
(a) in the case of an individual who was adjudged bankrupt on a petition under section 264(1)(d) or who had been an undischarged bankrupt at any time in the period of 15 years ending with the commencement of the bankruptcy, by an order of the court under the section next following, and
(b) in any other case, by the expiration of the relevant period under this section.
(2) That period is as follows -
(a) where a certificate for the summary administration of the bankrupt's estate has been issued and is not revoked before the bankrupt's discharge, the period of 2 years beginning with the commencement of the bankruptcy, and
(b) in any other case, the period of 3 years beginning with the commencement of the bankruptcy.
(3) Where a court is satisfied on the application of the official receiver that an undischarged bankrupt in relation to whom subsection (1)(b) applies has failed or is failing to comply with any of his obligations under this Part, the court may order that the relevant period under this section shall cease to run for such period, or until the fulfilment of such conditions (including a condition requiring the court to be satisfied as to any matter), as may be specified in the order.
(4) This section is without prejudice to any power of the court to annul a bankruptcy order.
281. Effect of discharge(1) An application for an order of the court discharging an individual from bankruptcy in a case falling within section 279(1)(a) may be made by the bankrupt at any time after the end of the period of 5 years beginning with the commencement of the bankruptcy.
(2) On an application under this section the court may -
(a) refuse to discharge the bankrupt from bankruptcy,
(b) making an order discharging him absolutely, or
make an order discharging him subject to such conditions with respect to any income which may subsequently become due to him, or with respect to property developing upon him, or acquired by him, after his discharge, as may be specified in the order.
(3) The court may provide for an order falling within subsection (2)(b) or to have immediate effect or to have its effect suspended for such period, or until the fulfilment of such conditions (including a condition requiring the court to be satisfied as to any matter), as may be specified by the order.
282. Court's power to annul bankruptcy order(1) Subject as follows, where a bankrupt is discharged, the discharge releases him from all the bankruptcy debts, but has no effect -
(a) on the functions (so far as they remain to be carried out) of the trustee of his estate, or
(b) on the operation, for the purposes of the carrying out of those functions, of the provisions of this Part;
and, in particular, discharge does not affect the right of any creditor of the bankrupt to prove in the bankruptcy for any debt from which the bankrupt is released.
(2) Discharge does not affect the right of any secured creditor of the bankrupt to enforce his security for the payment of a debt from which the bankrupt is released.
(3) Discharge does not release the bankrupt from any bankruptcy 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 a party.
(4) Discharge does not release the bankrupt from any liability in respect of a fine imposed for an offence or from any liability under a recognisance except, in the case of a penalty imposed for an offence under an enactment relating to the public revenue or of a recognisance, with the consent of the Treasury.
(5) Discharge does not, except to such extent and on such conditions as the court may direct, release the bankrupt from any bankruptcy debt which -
(a) consists of a liability to pay damages for negligence, nuisance or breach of a statutory, contractual or other duty, being damages in respect of personal injuries to any person, or
(b) arises under any order made in family proceedings or in domestic proceedings.
(6) Discharge does not release the bankrupt from such other bankruptcy debts, not being debts provable in his bankruptcy, as are prescribed.
(7) Discharge does 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 the nature of such a surety.
(8) In this section -
"domestic proceedings" means domestic proceedings within the meaning of the Magistrates' Courts Act 1980 and any proceedings which would be such proceedings but for section 65(1)(ii) of that Act (proceedings for variation of order for periodical payments);
"family proceedings" means the same as in Part V of the Matrimonial and Family Proceedings Act 1984;
"fine" means the same as in the Magistrates' Courts Act 1980; and
"personal injuries" includes death and any disease or other impairment of a person's physical or mental condition.
(1) The court may annul a bankruptcy order if it at any time appears to the court -
(a) that, on any grounds existing at the time the order was made, the order ought not to have been made, or
(b) that, to the extent required by the rules, the bankruptcy debts and the expenses of the bankruptcy have all, since the making of the order, been either paid or secured for the satisfaction of the court.
(2) The court may annul a bankruptcy order made against an individual on a petition under paragraph (a), (b) or of section 264(1) if it at any time appears to the court, on an application by the official receiver -
(a) that the petition was pending at a time when a criminal bankruptcy order was made against the individual or was presented after such an order was so made, and
(b) no appeal is pending (within the meaning of section 277) against the individual's conviction of any offence by virtue of which the criminal bankruptcy order was made;
and the court shall annul a bankruptcy order made on a petition under section 264(1)(d) if at any time appears to the court that the criminal bankruptcy order on which the petition was based been rescinded in consequence of an appeal.
(3) The court may annul a bankruptcy order whether or not the bankrupt has been discharged from the bankruptcy.
(4) Where the court annuls a bankruptcy order (whether under this section or under section 261 in Part VIII) -
(a) any sale or other disposition of property, payment made or other thing duly done, under any provision in this Group of Parts, by or under the authority of the official receiver or a trustee of the bankrupt's estate or by the court is valid, but
(b) if any of the bankrupt's estate is then vested, under any such provision, in such a trustee, it shall vest in such person as the court may appoint or, in default of any such appointment, revert to the bankrupt on such terms (if any) as the court may direct;
and the court may include in its order such supplemental provisions as may be authorised by the rules.
(5) In determining for the purposes of section 279 whether a person was an undischarged bankrupt at any time, any time when he was a bankrupt by virtue of an order that was subsequently annulled is to be discharged.
283. Definition of bankrupt's estate(1) Subject as follows, a bankrupt's estate for the purposes of any of the Group of Parts comprises -284. Restrictions on dispositions of property(a) all property belonging to or vested in the bankrupt at the commencement of the bankruptcy, and
(b) any property which by virtue of any of the following provisions of this Part is comprised in that estate or is treated as falling within the preceding paragraph.
(2) Subsection (1) does not apply to -
(a) such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation ;
(b) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family.
This subsection is subject to section 308 in Chapter IV (certain excluded property reclaimable by trustee).
(3) Subsection (1) does not apply to -
(a) property held by the bankrupt on trust for any other person, or
(b) the right of nomination to a vacant ecclesiastical benefice.
(4) References in any of this Group of Parts to property, in relation to a bankrupt, include references to any power exercisable by him over or in respect of property not for the time being comprised in the bankrupt's estate and -
(a) is so exercisable at a time after either the official receiver has had his release in respect of that estate under section 299(2) in Chapter III or a meeting summoned by the trustee of that estate under section 331 in Chapter IV has been held, or
(b) cannot be so exercised for the benefit of the bankrupt ;
and a power exercisable over or in respect of property is deemed for the purposes of any of this Group of Parts to vest in the person entitled to exercise it at the time of the transaction or event by virtue of which it is exercisable by that person (whether or not it becomes so exercisable at that time).
(5) For the purposes of any such provision in this Group of Parts, property comprised in a bankrupt's estate is so comprised subject to the rights of any person other than the bankrupt (whether as a secured creditor of the bankrupt or otherwise) in relation thereto, but disregarding -
(a) any rights in relation to which a statement such as is required by section 269(a) was made in the petition on which the bankrupt was adjudged bankrupt, and
(b) any rights which have been otherwise given up in accordance with the rules.
(6) This section has effect subject to the provisions of any enactment not contained in this Act under which any property is to be excluded from a bankrupt's estate.
(1) Where a person is adjudged bankrupt, any disposition of property made by that person in the period to which this section applies is void except to the extent that it is or was made with the consent of the court, or it or was subsequently ratified by the court.285. Restriction on proceedings and remedies(2) Subsection (1) applies to a payment (whether in cash or otherwise) as it applies to a disposition of property and, accordingly, where any payment is void by virtue of that subsection, the person paid shall hold the sum paid for the bankruptcy as part of his estate.
(3) This section applies to the period beginning with the day of the presentation of the petition for the bankruptcy order and ending with the vesting, under Chapter IV of this Part, of the bankrupt's estate in a trustee.
(4) The preceding provisions of this section do not give a remedy against any person -
(a) in respect of any property or payment which he received before the commencement of the bankruptcy in good faith, for value and without notice that the petition had been presented, or
(b) in respect of any interest in property which derives from an interest in respect of which there is, by virtue of this subsection, has no remedy.
(5) Where after the commencement of his bankruptcy the bankrupt has incurred a debt to banker or other person by reason of the making of a payment which is void under this section, that debt is deemed for the purposes of any of this Group of Parts to have been incurred before the commencement of the bankruptcy unless -
(a) that banker or person had notice of the bankruptcy before the debt was incurred, or
(b) it is not reasonably practicable for the amount of the payment to be recovered from the person to whom it was made.
(6) A disposition of property is void under this section not- withstanding that the property, is not or, as the case may be, would not be comprised in the bankrupt's estate ; but nothing in this section affects any disposition made by a person of property held by him on trust for any other person.
(1) At any time when proceedings on a bankrupt petition are pending or an individual has been adjudged bankrupt the court may stay any action, execution or other legal process against the property or person of the debtor or, as the case may be, of the bankrupt.286. Power to appoint interim receiver(2) Any court in which proceedings are pending against any individual may, on proof that a bankruptcy petition has been presented in respect of that individual or that he is an undischarged bankrupt, either stay the proceedings or allow them to continue on such terms as it thinks fit.
(3) After the making of a bankruptcy order no person who is a creditor of the bankrupt in respect of a debt provable in the bankruptcy shall -
(a) have any remedy against the property or person of the bankrupt in respect of that debt, or
(b) before the discharge of the bankrupt, commence any action or other legal proceedings against the bankrupt except with the leave of the court and in such terms as the court may impose.
This is subject to sections 346 (enforcement procedures) and 347 (limited right to distress).
(4) Subject as follows, subsection (3) does not affect the right of a secured creditor of the bankrupt to enforce his security.
(5) Where any goods of the discharged bankrupt are held by any person by way of pledge, pawn or other security, the official receiver may, after giving notice in writing of his intention to do so, inspect the goods.
Where such a notice has been given to any person, that person is not entitled, without leave of the court, to realise his security unless he has given the trustee of the bankrupt's estate a reasonable opportunity of inspecting the goods and of exercising the bankrupt's right of redemption.
(6) References in this section to the property or goods of the bankrupt are to any of his property or goods, whether or not comprised in his estate.
(1) The court may, if it is shown to be necessary for the protection of the debtor's property, at any time after the presentation of a bankrupt's petition and before making a bankruptcy order, appoint the official receiver to be interim receiver of the debtor's property.287. Receivership pending appointment of trustee(2) Where the court has, on a debtor's petition, appointed an insolvency practitioner under section 273 and it is shown to the court as mentioned in subsection (1) of this section, the court may, without making a bankruptcy order, appoint that practitioner, instead of the official receiver, to be interim receiver of the debtor's property.
(3) The court may by an order appointing any person to be an interim receiver direct that his powers shall be limited or restricted in any respect ; but, save as so directed, an interim receiver has, in relation to the debtor's property, all the rights, powers, duties and immunities of a receiver and manager under the next section.
(4) An order of the court appointing any person to be an interim receiver shall require that person to take immediate possession of the debtor's property or, as the case may be, the part of it to which his powers as interim receiver are limited.
(5) Where an interim receiver has been appointed, the debtor shall give him such inventory of his property and such other information, and shall attend on the interim receiver at such times, as the latter may for the purpose of carrying out his functions under this section reasonably required.
(6) Where an interim receiver is appointed, section 285(3) applies for the period between the appointment and the making of a bankruptcy order on the petition relating to the debtor is dismissed, if a bankruptcy order on the petition, or the dismissal of the petition, as if the appointment were the making of such an order.
(7) A person ceases to be interim receiver of a debtor's property if the bankruptcy petition relating to the debtor is dismissed, if a bankruptcy order is made on the petition or if the court by order otherwise terminates the appointment.
(8) References in this section to the debtor's property are to all his property, whether or not it would be comprised in his estate if he were adjudged bankrupt.
(1) Between the making of a bankruptcy order and the time of which the bankrupt's estate vests in a trustee under Chapter IV of this part, the official receiver is the receiver and (subject to section 370 (special manager)) the manager of the bankrupt's estate and is under a duty to act as such.288. Statement of affairs(2) The function of the official receiver while acting as receiver or manager of the bankrupt's estate under this section is to protect the estate ; and for this purpose -
(a) he has the same powers as if he were a receiver or manager appointed by the High Court, and
(b) he is entitled to sell or otherwise dispose of any perishable goods comprised in the estate and any other goods so comprised the value of which is likely to diminish if they are not disposed of.
(3) The official receiver while acting as receiver or manager of the estate under this section -
(a) shall take all such steps as he thinks fit for protecting any property which may be claimed for the estate by the trustee of that estate,
(b) is not, except in pursuance of directions given by the Secretary of State, required to do anything that involves his incurring expenditure,
(c) may, if he thinks fit (and shall, if so directed by the court) at any time summon a general meeting of the bankrupt's creditors.
(4) Where -
(a) the official receiver acting as receiver or manager of the estate under this section seizes or disposes of any property which is not comprised in the estate, and
(b) at the time of the seizure or disposal of the official receiver believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,
the official receiver is not to be liable to any person in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by his negligence ; and he has a lien on the property, or the proceeds of its sale, for such of the expenses of the bankruptcy as were incurred in connection with the seizure or disposal.
(5) This section does not apply where by virtue of section 297 (appointment of trustee ; special cases) the bankrupt's estate vests in a trustee immediately on the making of the bankruptcy order.
(1) Where a bankruptcy order has been made otherwise than on a debtor's petition, the bankrupt shall submit a statement of his affairs to the official receiver before the end of the period of 21 days beginning with the commencement of the bankruptcy.289. Investigatory duties of official receiver(2) The statement of affairs shall contain -
(a) such particulars of the bankrupt's creditors and of his debts and other liabilities and of his assets as nay be prescribed, and
(b) such other information as may be prescribed.
(3) The official receiver may, if he thinks fit -
(a) release the bankrupt from his duty under subsection (1), or
(b) extend the period specified in that subsection ;
and where the official receiver has refused to exercise a power conferred by this section, the court, if it thinks fit, may exercise it.
(4) A bankrupt who--
(a) without reasonable excuse fails to comply with the obligation imposed by this section, or
(b) without reasonable excuse submits a statement of affairs that does not comply with the prescribed requirements,
is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).
(1) Subject to subsection (5) below, it is the duty of the official receiver to investigate the conduct and affairs of every bankrupt and to make such a report (if any) to the court as he thinks fit.290. Public examination of bankrupt(2) Where an application is made by the bankrupt under section 280 for his discharge from bankruptcy, it is the duty of the official receiver to make a report to the court with respect to the prescribed matters ; and the court shall consider that report before determining what order (if any) to make under that section.
(3) A report by the official receiver under this section shall, in any proceedings, be prima facie evidence of the facts stated in it.
(4) In subsection (1) the reference to the conduct and affairs of a bankrupt includes his conduct and affairs before the making of the order by which he was adjudged bankrupt.
(5) Where a certificate for the summary administration of the bankrupt's estate is for the time being in force, the official receiver shall carry out an investigation under subsection (1) only if he thinks fit.
(1) Where a bankruptcy order has been made, the official receiver may at any time before the discharge of the bankrupt apply to the court for the public examination of the bankrupt.291. Duties of bankrupt in relation to official receiver(2) Unless the court otherwise orders, the official receiver shall make an application under subsection (1) if notice requiring him to do so is given to him, in accordance with the rules, by one of the bankrupt's creditors with the concurrence of not less than one-half, in value, of those creditors (including the creditor giving notice).
(3) On an application under subsection (1), the court shall direct that a public examination of the bankrupt shall be held on a day appointed by the court ; and the bankrupt shall attend on that day and be publicly examined as to his affairs, dealings and property.
(4) The following may take part in the public examination of the bankrupt and may question him concerning his affairs, dealings and property and the causes of his failure, namely -
(a) the official receiver and, in the case of an individual adjudged bankrupt on a petition under section 264(1)(d), the Official Petitioner,
(b) the trustee of the bankrupt's estate, if his appointment has taken effect,
(c) any person who has been appointed as special manager of the bankrupt's estate or business,
(d) any creditor of the bankrupt who has tendered a proof in the bankruptcy.
(5) If a bankrupt without reasonable excuse fails at any time to attend his public examination under this section he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).
(1) Where a bankruptcy order has been made, the bankrupt is under a duty -(a) to deliver possession of his estate to the official receiver, and
(b) to deliver up to the official receiver all books, papers and other records of which he has possession or control and which relate to his estate and affairs (including any which would be privileged from disclosure in any proceedings).
(2) In the case of any part of the bankrupt's estate which consists of things possession of which cannot be delivered to the official receiver, and in the case of any property that may be claimed for the bankrupt's estate by the trustee, it is the bankrupt's duty to so all such things as may reasonably br required by the official receiver for the protection of those things or that property.
(3) Subsections (1) and (2) do not apply where by virtue of the bankrupt's estate vests in a trustee immediately on the making of the bankruptcy order.
(4) The bankrupt shall give the official receiver such inventory of his estate and such other information, and shall attend on the official receiver at such times, as the official receiver may for any of the purposes of this Chapter reasonably require.
(5) Subsection (4) applies to a bankrupt after his discharge.
(6) If the bankrupt without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).
292. Power to make appointments Tenure of Office as trustee
293. Summoning of meeting to appoint first trustee(1) The power to appoint a person as trustee of a bankrupt's estate (whether the first such trustee or a trustee appointed to fill any vacancy) is exercisable -
(a) except at a time when a certificate for the summary administration of the bankrupt's estate is in force, by a general meeting of the bankrupt's creditors;
(b) under section 295(2), 296(2) or 300(6) below in this Chapter, by the Secretary of State; or
(c) under section 297, by the court.
(2) No person may be appointed as trustee of a bankrupt's estate unless he is, at the time of the appointment, qualified to act as an insolvency practitioner in relation to the bankrupt.
(3) Any power to appoint a person as trustee of a bankrupt's estate includes power to appoint two or more persons as joint trustees; but such an appointment must make provision as to the circumstances in which the trustees must act together and the circumstances in which one or more of them may act for the others.
(4) The appointment of any person as trustee takes effect only if that person accepts the appointment in accordance with the rules. Subject to this, the appointment of any person as trustee takes effect at the time specified in his certificate of appointment.
(5) This section is without prejudice to the provisions of this Chapter under which the official receiver is, in certain circumstances, to be trustee of the estate.
294. Power of creditors to requisition meeting(2) Where a bankruptcy order has been made and no certificate for the summary administration of the bankrupt's estate has been issued, it is the duty of the official receiver, as soon as practicable in the period of 12 weeks beginning with the day on which the order was made, to decide whether to summon a general meeting of the bankrupt's creditors for the purpose of appointing a trustee of the bankrupt's estate.
This section does not apply where the bankruptcy order was made on a petition under section 264(1)(d) (criminal bankruptcy); and it is subject to the provision made in sections 294(3) and 297(6) below.
(2) Subject to the next section, if the official receiver decides not to summon such a meeting, he shall, before the end of the period of 12 weeks above mentioned, give notice of his decision to the court and to every creditor of the bankrupt who is known to the official receiver or is identified in the bankrupt's statement of affairs.
(3) As from the giving of the court of a notice under sub-section (2), the official receiver is the trustee of the bankrupt's estate.
295. Failure of meeting to appoint trustee(1) Where in the case of any bankruptcy -
(a) the official receiver has not yet summoned, or has decided not to summon, a general meeting of the bankrupt's creditors for the purpose of appointing the trustee, and
(b) a certificate for the summary administration of the estate is not for time being in force,
any creditor of the bankrupt may request the official receiver to summon such a meeting for that purpose.
(2) If such a request appears to the official receiver to be made with the concurrence of not less than one-quarter, in value, of the bankrupt's creditors (including the creditor making the request), it is his duty of the official receiver to summon the requested meeting.
(3) Accordingly, where the duty imposed by subsection (2) has arisen, the official receiver is required neither to reach a decision for the purposes of section 293(1) nor (if he has reached one) to serve any notice under section 293(2).
296. Appointment of trustee by Secretary of State(1) If a meeting summoned under section 293 or 294 is held but no appointment of a person as trustee is made, it is the duty of the official receiver to decide whether to refer the need for an appointment to the Secretary of State.
(2) On a reference made in pursuance of that decision, the Secretary State shall either make an appointment or decline to make one.
(3) If
(a) the official receiver decides not to refer the need for an appointment to the Secretary of State, or
(b) on such a reference the Secretary of State declines to make an appointment,
the official receiver shall give notice of his decision or, as the case may be, of the Secretary of State's decision to the court
(4) As from the giving of the notice under subsection (3) in a case in which no notice has been given under section 293(2), the official receiver shall be trustee of the bankrupt's estate.
297. Special Cases(1) At any time when the official receiver is the trustee of a bankrupt's estate by virtue of any provision of this Chapter (other than section 297(1) below) he may apply to the Secretary of State for the appointment of a person as trustee instead of the official receiver.
(2) On an application under subsection (1) the Secretary of State shall either make an appointment or decline to make one.
(3) Such an application may be made notwithstanding that the Secretary of State has declined to make an appointment either on a previous application under subsection (1) or on a reference under section 295 or under section 300(4) below.
(4) Where the trustee of a bankrupt's estate has been appointed Secretary of State (whether under this section or otherwise), the trustee shall give notice to the bankrupt's creditors of his appointment or, if the court so allows, shall advertise his appointment in accordance with the court's directions.
(5) In that notice or advertisement the trustee shall
(a) state whether he proposes to summon a general meeting of the bankrupt's creditors for the purpose of establishing a creditors' committee under section 301, and
(b) if he does not propose to summon such a meeting, set out the power of the creditors under this Part to require him to summon one.
298. Removal of trustee; vacation of office(1) Where a bankruptcy order is made on a petition under section 264(1)(d) (criminal bankruptcy), the official receiver shall be trustee of the bankrupt's estate.
(2) Subject to the next subsection, where the court issues a certificate for the summary administration of a bankrupt's estate the official receiver shall, as from the issue of that certificate, be the trustee.
(3) Where such a certificate is issued or is in force, the court may, if it thinks fit, appoint a person other than the official recever as trustee.
(4) Where a bankruptcy order is made in a case in which an insolvency practitioner's report has been submitted to the court under section 274 but no certificate for the summary administration of the estate is issued, the court, if it thinks fit, may on making the order appoint the person who made the report as trustee.
(5) Where a bankruptcy order is made (whether or not on a petition under section 264(1)(c) at a time when there is a supervisor of a voluntary arrangement approved in relation to the bankrupt under Part VIII, the court, if it thinks fit, may on making the order appoint the supervisor of the arrangement as trustee.
(6) Where an appointment is made under subsection (4) or
(5) of this section, the official receiver is not under the duty imposed by section 293(1) (to decide whether or not to summon a meeting of creditors).
(7) Where the trustee of a bankrupt's estate has been appointed by the court, the trustee shall give notice to the bankrupt's creditors of his appointment or, if the court so allows, shall advertise his appointment in accordance with the directions of the court.
(8) In that notice or advertisement he shall -
(a) state whether he proposes to summon a general meeting of the bankrupt's creditors for the purposes of establishing a creditors' committee under section 301 below, and
(b) if he does not propose to summon such a meeting, set out the power of the creditors under this Part to require him to summon one.
299. Release of trustee(1) Subject as follows, the trustee of a bankrupt's estate may be removed from office only by an order of the court or by a general meeting of the bankrupt's creditors summoned specially for that purpose in accordance with the rules.
(2) Where the official receiver is trustee by virtue of section 297(1), he shall not be removed from office under this section.
(3) A general meeting of the bankrupt's creditors shall not be held for the purposes of removing the trustee at any time when a certificate for the summary administration of the estate is in force.
(4) Where the official receiver is trustee by virtue of section 293(3) or 295(4) or a trustee is appointed by the Secretary of State or (otherwise than under section 297(5) by the court, a general meeting of the bankrupt's creditors shall be summoned for the purpose of replacing the trustee only if -
(a) the trustee thinks fit, or
(b) the court so directs, or
(c) the meeting is requested by one of the bankrupt's creditors with the concurrence of not less then one-quarter, in value, of the creditors (including the creditor making the request).
(5) If the trustee was appointed by the Secretary of State, he may be removed by a direction of the Secretary of State.
(6) The trustee (not being the official receiver) shall vacate office if he ceases to be a person who is for the time being qualified to act as an insolvency practitioner in relation to the bankrupt.
(7) The trustee may, in the prescribed circumstances, resign his office by giving notice of his resignation to the court.
(8) The trustee shall vacate office on giving notice to the court that a final meeting has been held under section 331 in Chapter IV and of the decision (if any) of that meeting.
(9) The trustee shall vacate office if the bankruptcy order is annulled.
300. Vacancy in office of trustee(1) Where the official receiver has ceased to be the trustee of the bankrupt's estate and a person is appointed instead, the official receiver shall have his release with effect from the following time, that is to say -
(a) where that person is appointed by a general meeting of the bankrupt's creditors or by the Secretary of State, the time at which the official receiver gives notice to the court that he has been replaced, and
(b) where that person is appointed by the court, such time as the court may determine.
(2) If the official receiver while he is the trustee gives notice to the Secretary of State that the administration of the bankrupt's estate in accordance with Chapter IV of the Part is for practical purposes complete, he shall have his release with effect from such time as the Secretary of State may determine.
(3) A person other than the official receiver who has ceased to be the trustee shall have his release with effect from the following time, that is to say -
(a) in the case of a person who has been removed from office by a general meeting of the bankrupt's creditors that has not been resolved against his release or who has died, the time at which notice is given to the court in accordance with the rules that person has ceased to hold office;
(b) in the case of a person who has been removed from office by a general meeting of the bankrupt's creditors that has resolved against his release, or by the court, or by the Secretary of State, or who has vacated office under section 298(6), such time as the Secretary of State may, on an application by that person, determine;
(c) in the case of a person who has resigned, such time as may be prescribed;
(d) in the case of a person who has vacated office under section 298(8) -
(i) if the final meeting referred to in that subsection has resolved against that person's release, such time as the Secretary of State may, on an application by that person, determine; and
(ii) if that meeting has not yet resolved, the time at which the person vacated office.
(4) Where a bankruptcy order is annulled, the trustee at the time of the annulment has his release with effect from such time as the court may determine.
(5) Where the official receiver or the trustee has his release under this section, he shall, with effect from the time specified in the preceding provisions of this section, be discharged from all liability both in of acts or omissions of his in the administration of the estate and otherwise in relation to his conduct as trustee.
But nothing in this section prevents the exercise, in relation to a person who has had his release under this section, of the court's powers under section 304.
(1) This section applies where the appointment of any person as trustee of a bankrupt's estate fails to take effect or, such an appointment having taken effect, there is otherwise a vacancy in the office of trustee.
(2) The official receiver shall be trustee until the vacancy is filled.
(3) The official receiver may summon a general meeting of the bankrupt's creditors for the purpose of filling the vacancy and shall summon such a meeting if required to do so in pursuance of section 314(7) (creditors' requisition).
(4) If at the end of the period of 28 days beginning with the day on which the vacancy first came to the official receiver's attention has not summoned, and is not proposing to summon, a general meeting of creditors for the purpose of filling the vacancy, he shall refer the need for an appointment to the Secretary of State.
(5) Where a certificate for the summary administration of the estate is for the time being in force -
(a) the official receiver may refer the need to fill any vacancy to the court or, if the vacancy arises because a person appointed by the Secretary of State has ceased to hold office, to the court or the Secretary of State, and
(b) subsections (3) and (4) of this section do not apply.
(6) On a reference to the Secretary of State under subsection (4) or (5) the Secretary of State shall either make an appointment or decline to make one.
(7) If on a reference under subsection (4) or (5) no appointment is made, the official receiver shall continue to be trustee of the bankrupt's estate, but without prejudice to his power to make a further reference.
(8) References in this section to a vacancy include a case where it is necessary, in relation to any property which is or may be comprised in a bankrupt's estate, to revive the trustee-ship of that estate after the holding of a final meeting summoned under section 331 or the giving by the official receiver of notice under section 299(2).
301. Creditors' Committee Control of Trustee
302. Exercise by Secretary of State of functions of creditors' committee(1) Subject as follows, a general meeting of a bankrupt's creditors (whether summoned under the preceding provisions of this Chapter or otherwise) may, in accordance with the rules, establish a committee (known as "the creditors' committee") to exercise the functions conferred on it by or under this Act.
(2) A general meeting of the bankrupt's creditors shall not establish such a committee, or confer any functions on such a committee, at any time when the official receiver is the trustee of the bankrupt's estate, except in connection with an appointment made by that meeting of a person to be trustee instead of the official receiver.
303. General control of trustee by the court(1) The creditors' committee is not to be able or required to carry out its functions at any time when the official receiver is trustee of the bankrupt's estate; but at any such time the functions of the committee under this Act shall be vested in the Secretary of State, except to the extent that the rules otherwise provide.
(2) Where in the case of any bankruptcy there is for the time being no creditors' committee and the trustee of the bankrupt's estate is a person other than the official receiver, the functions of such a committee shall be vested in the Secretary of State, except to the extent that the rules otherwise provide.
304. Liability of trustee(1) If a bankrupt or any of his creditors or any other person is dissatisfied by any act, omission or decision of a trustee of the bankrupt's estate, he may apply to the court; and on such an application the court may confirm, reverse or modify any act or decision of the trustee, may give him directions or may make such other order as it thinks fit.
(2) The trustee of a bankrupt's estate may apply to the court for directions in relation to any particular matter arising under the bankruptcy.
(1) Where on an application under this section the court is satisfied -
(a) that the trustee of a bankrupt's estate has misapplied or retained, or become accountable for, any money or other property comprised in the bankrupt's estate, or
(b) that a bankrupt's estate has suffered any loss in consequence of any misfeasance or breach of fiduciaryy or other duty by a trustee of the estate in the carrying out of his functions
the court may order the trustee, for the benefit of the estate, to repay, restore or account for money or other property (together with interest at such rate as the court thinks just) or, as the case may require, to pay such sum by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just.
This is without prejudice to any liability arising apart from this section
(2) An application under this section may be made by the official receiver, the Secretary of State, a creditor of the bankrupt or (whether or not there is, or is likely to be, a surplus for the purposes of section 330(5) (final distribution) the bankrupt himself.
But the leave of the court is required for the making of an application if it is to be made by the bankrupt or if it is to be made after the trustee has had his release under section 299.
(3) Where -
(a) the trustee seizes or disposes of any property which is not comprised in the bankrupt's estate, and
(b) at the time of the seizure or disposal the trustee believes, and has reasonable grounds for believing, that he is entitled (whether in pursuance of an order of the court or otherwise) to seize or dispose of that property,
the trustee is not liable to any person (whether under this section or otherwise) in respect of any loss or damage resulting from the seizure or disposal except in so far as that loss or damage is caused by negligence of the trustee; and he has lien on the property, or the proceeds of its sale, for such of the expenses of the bankruptcy as were incurred in connection with the seizure or disposal
305.General functions of trustee(1) This Chapter applies in relation to any bankruptcy where either -
(a) The appointment of a person as trustee of a bankrupt's estate takes effect, or
(b) the official receiver becomes trustee of a bankrupt's estate.
(2) The function of the trustee is to get in, realise and distribute the bankrupt's estate in accordance with the following provisions of this Chapter; and in the carrying out of that function and in the management of the bankrupt's estate the trustee is entitled, subject to those provisions, to use his own discretion.
(3) It is the duty of the trustee, if he is not the official receiver -
(a) to furnish the official receiver with such information,
(b) to produce to the official receiver, and permit inspection by the official receiver of, such books, papers and other records, and
(c) to give the official receiver such other assistance, as the official receiver may reasonably require for the purpose of enabling him to carry out his functions in relation to the bankruptcy.
(4) The official name of the trustee shall be "the trustee of the estate of a bankrupt" (inserting the name of the bankrupt) ; but he may be referred to as "the trustee in bankruptcy" of the particular bankrupt.
306. Vesting of bankrupt's estate in trustee Acquisition, control and realisation of bankrupt's estate
307. After-acquired property(1) The bankrupt's estate shall vest in the trustee immediately on his appointment taking effect or, in the case of the official receiver, on his becoming trustee.
(2) Where any property which is, or is to be, comprised in the bankrupt's estate vests in the trustee (whether under this section or under any other provision of this Part), it shall so vests without any conveyance, assignment or transfer.
308. Vesting in trustee of certain items of excess value(1) Subject to this section and section 309, the trustee may by notice in writing claim for the bankrupt's estate any property which has been acquired by, or has developed upon, the bankrupt since the commencement of the bankruptcy.
(2) A notice under this section shall not be served in respect of -
(a) any property falling within subsection (2) or (3) of section 283 in Chapter II.
(b) any property which by virtue of any other enactment is excluded from the bankrupt's estate, or
(c) without prejudice to section 280(2)(c) (order of court on application for discharge), any property which is acquired by, or developes upon, the bankrupt after his discharge.
(3) Subject to the subsection, upon the service on the bankrupt of a notice under this section the property to which the notice relates shall vest in the trustee as part of the bankrupt's estate; and the trustee's title to that property has relation back to the time at which the property was acquired by, or developed upon, the bankrupt.
(4) Where, whether before or after service of a notice under this section -
(a) a person acquires property in good faith, for value and without notice of the bankruptcy, or
(b) a banker enters into a transaction in good faith and without such notice,
the trustee is not in respect of that property or transaction entitled by virtue of this section to any remedy against that person or banker, or any person whose title to any property derives from that person or banker.
(5) References in the section to property do not include any property which, as part of the bankrupt's income, may be the subject of an income payments order under section 310.
308A. Vesting in trustee of certain tenancies(1) Subject to section 309, where -
(a) property is excluded by virtue of section 283(2) (tools of trade, household effects, etc) from the bankrupt's estate, and
(b) it appears to the trustee that the realisable value of the whole or any part of that property exceeds the cost of a reasonable replacement for that property or that part of it,
the trustee may by notice in writing claim that property, or as the case may be, that part of it for the bankrupt's estate.
(2) Upon the service on the bankrupt of a notice under this section, the property to which the notice relates vests in the trustee as part of the bankrupt's estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee's title to that property has relation back to the commencement of the bankruptcy.
(3) The trustee shall apply funds comprised in the estate to the purchase by or on behalf of the bankrupt of a reasonable replacement for any property vested in the trustee under this estion; and the duty imposed by this subsection has priority over the obligation of the trustee to distribute the estate.
(4) The purposes of this section property is a reasonable replacement for other property if it is reasonably adequate for meeting the needs met by the other property.
309. Time limit for notice under Section 307 or 308Upon the service on the bankrupt by the trustee of a notice in writing under this section, any tenancy -
(a) which is excluded by virtue of section 283(3A) from the bankrup's estate, and
(b) to which the notice relates,
vests in the trustee as part of the bankrupt's estate; and, except against a purchaser in good faith, for value and without notice of the bankruptcy, the trustee's title to that tenancy has relation back to the commencement of the bankruptcy.
310. Income payments orders(1) Except with the leave of the court, a notice shall not be served -
(a) under section 307, after the end of the period of 42 days beginning with the day on which it first came to the knowledge of the trustee that the property in question had been acquired by, or had devolved upon, the bankrupt;
(b) under section 308, after the end of the period of 42 days beginning with the day on which the property in question first came to the knowledge of the trustee.
For the purposes of this section -
(a) anything which comes to the knowledge of the trustee is deemed in relation to any successor of his as trustee to have come to the knowledge of the successor at the same time; and
(b) anything which comes (otherwise than under parapgraph (1) to the knowledge of a person before he is the trustee is deemed to come to his knowledge on his appointment taking effect or, in the case of the official receiver, on his becoming trustee.
311. Acquisition by trustee of control(1) The court may, on the application of the trustee, make an order ("an income payments order") claiming for the bankrupt's estate so much of the income of the bankrupt during the period of which the order is in force as may be specified in the order.
(2) The court shall not make an income payments order the effect of which would be to reduce the income of the bankrupt below what appears to the court to be necessary for meeting the reasonable domestic needs of the bankrupt and his family.
(3) An income payments order shall, in respect of any payments of income to which it is to apply, either -
(a) require the bankrupt to pay the trustee an amount equal to so much of that payment as is claimed by the order, or
(b) require the person making the payment to pay so much of it as is so claimed to the trustee, instead of to the bankrupt.
(4) Where the court makes an income payments order it may, if it thinks fit, discharge or vary any attachment of earnings order that is for the time being in force to secure payments by the bankrupt.
(5) Sums received by the trustee under an income payments order form part of the bankrupt's estate.
(6) An income payments order shall not be made after the discharge of the bankrupt, and if made before, shall not have effect after his discharge except -
(a) in the case of a discharge under section 279(1)(a) (order by court), by virtue of a condition imposed by the court under section 280(2)(c) (income, etc. after discharge), or
(b) in the case of a discharge under section 279(1)(b) (expiration of relevant period), by virtue of a provision of the order requiring it to continue in force for a period ending after the discharge but no later than 3 years after the making of the order.
(7) For the purposes of this section the income of the bankrupt comprises every payment in the nature of income which is from time to time made to him or to which he from time to time becomes entitled, including any payment in respect of the carrying on of any business or in respect of any office or employment and any payment under a pension scheme but excluding any payment to which subsection (8) applies.
(8) This subsection applies to to -
(a) payments by way of guaranteed minimum pension; and
(b) payments giving effect to the bankrupt's protected rights as a member of a pension scheme
(9) In this section, "guaranteed minimum pension" and "protected rights" have the same meaning as in the Pension Schemes Act 1993
312. Obligation to surrender control to trustee(1) The trustee shall take possession of all books, papers and other records which relate to the bankrupt's estate or affairs and which belong to him or are possession or under his control (including any which would be privileged from disclosure in any proceedings).
(2) In relation to, and for the purpose of acquiring or retaining possession of, the bankrupt's estate, the trustee is in the same position as if he were a receiver of property appointed by the High Court; and the court may, on his application, enforce such acquisition or retention accordingly.
(3) Where any part of the bankrupt's estate consists of stock or shares in a company, shares in a ship or any other property transferable in the books of a company, office or person, the trustee may exerice the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt.
(4) Where any part of the estate consists of things in action, they are deemed to have been assigned to the trustee; but notice of the deemed assignment need not be given except in so far as it is necessary, in a case where the deemed assignment is from the bankrupt himself, for protecting the priority of the trustee.
(5) Where any goods comprised in the estate are held by any person by weay of pledge, pawn or other security and no notice has been served in respect of those goods by the official receiver under subsection (5) of section 285 (restriction on realising security), the trustee may serve such a notice in respect of the goods; and whether or not a notice has been served under this subsection or that subsection, the trustee may, if he thinks fit, exercise the bankrupt's right of redemption in respect of any such goods.
(6) A notice served by the trustee under subsection (5) has the same effect as a notice served by the official receiver under section 285(5).
313. Charge on bankrupt's home(1) The bankrupt shall deliver up to the trustee possession of any property, books, papers or other records of which he has possession or control and of which the trustee is required to take possession.
This is without prejudice to the general duties of the bankrupt under section 333 in this Chapter.
(2) If any of the following is in possession of any property, books, papers or other records of which the trustee is required to take possession, namely -
(a) the official receiver,
(b) a person who has ceased to be trustee of the bankrupt's estate, or
(c) a person who has been the supervisor of a voluntary arrangement approved in relation to the bankrupt under Part VII,
the official receiver, as the case may be, that person shall deliver up possession of the property, books, papers or records to the trustee.
(3) Any banker or agent of the bankrupt or any other person who holds any property to the account of, or for, the bankrupt shall pay or deliver to the trustee all property in his possession or under his control which forms part of the bankrupt's estate and which he is not by law entitled to retain as against the bankrupt or trustee.
(4) If any person without reasonable excuse fails to comply with any obligation imposed by this section, he is guilty of a contempt of court and liable to be punished accordingly (in addition to any other punishment to which he may be subject).
314. Powers of trustee(1) Where any property consisiting of an interest in a dwelling house which is occupied by the bankrupt or by his spouse or former spouse is comprised in the bankrupt's estate and the trustee is, for any reason, unable for the time being to realise that property, the trustee may apply to the court for an order imposing a charge on the property for the benefit of the bankrupt's estate.
(2) If on an application under this section that court imposes a charge on any property; the benefit of that charge shall be comprised in the bankrupt's estate and is enforceable, up to the value from time to time of the property secured, for the payment of any amount which is payable otherwise than to the bankrupt out of the estate and of interest on that amount at the prescribed rate.
(3) An order under this section made in respect of property vested in the trustee shall provide, in accordance with the rules, for the property to cease to be comprised in the bankrupt's estate and, subject to the charge (and any prior change), to vest in the bankrupt.
(4) Subsections (1) and (2) and (4) to (6) of section 3 of the Charging Orders Act 1979 (supplemental provisions with respect to charging orders) have effect in relation to orders under this section as in relation to charging orders under that Act.
(1) The trustee may -
(a) with the permission of the creditors' committee or court, excercise any of the powers specified in Part I of Schedule 5 to this Act, and
(b) without that permission, exercise any of the general powers specified in Part II of that Schedule.
(2) With the permission of the creditors' committee or the court, the trustee may appoint the bankrupt -
(a) to superintend the management of his estate or any part of it,
(b) to carry on his business (if any) for the benefit of his creditors, or
(c) in any other respect to assist in administering the estate in such manner and on such terms as the trustee may direct.
(3) A permission given for the purposes of subsection (1)(a) or (2) shall not be a general permission but shall relate to a particular proposed exercise of the power in question; and a person dealing with the trustee in good faith and for value is not to be concerned to enquire whether any permission required in either case has been given.
(4) Where the trustee has done anything without the permission required by subsection (1)(a) or (2), the court or the creditors' committee may. for the purpose of enabling him to meet his expenses out of the bankrupt's estate, ratify what the trustee has done.
But the committee shall not do so unless it is satisfied that the trustee has acted in a case of urgency and has sought its ratification without undue delay.
(5) Part III of Shedule 5 to this Act has effect with respect to the things which the trustee is able to do for the purposes of, or in connection with, the exercise of any of his powers under any of this Group of Parts.
(6) Where the trustee (not being the official receiver) in exercise of the powers conferred on him by any provision in this Group of Parts -
(a) disposes of any property comprised in the bankrupt's estate to an associate of the bankrupt, or
(b) employs a solicitor,
he shall, if there is for the time being a creditors' committee, give notice to the committee of that exercise of his powers.
(7) Without prejudice to the generality of subsection (5) and Part III Schedule 5, the trustee may, if he thinks fit, at any time summon a general meeting of the bankrupt's creditors.
Subject to the preceding provisions in this Group of Parts, he shall summon such a meeting if he is requested to do so by concurrence of not less then one-tenth, in value, of the bankrupt's creditors (including the creditor making the request).
(8) Nothing in this Act is to be constuted as restricting the capacity of the trustee to exercise any of his powers outside England and Wales.
315. Disclaimer (general power)316. Notice requiring trustee's decision(1) Subject as follows, the trustee may, by the giving of the prescribed notice, disclaim any onerous property and may do so notwithstanding that he has taken possession of it, endeavoured to sell it or otherwise exercised rights of ownershipin relation to it.
(2) The following is onerous property for the purposes of this section, that is to say -
(a) any unprofitable contract, and
(b) any other property comprised in the bankrupt's estate which is unsaleable or not readily saleable, or is such that it may give rise to a liability to pay money or perform any other onerous act.
(3) A disclaimer under this section -
(a) operates so as to determine, as from trhe date of the disclaimer, the rights, interests and liabilities of the bankrupt and his estate in or in respect of the property disclaimed, and
(b) discharges the trustee from all personal liability in respect of that property as from the commencement of his trusteeship,
but does not, except so far as is necessary for the purpose of releasing the bankrupt, the bankrupt's estate and the trustee from any liability, affect the rights or liabilities of any other person.
(4) A notice of disclaimer shall not be given under this section in respect of any property that has been claimed for the estate under section 307 (after-acquired property) or 308 (personal property of bankrupt exceeding reasonable replacement value), except with the leave of the court.
(5) Any person sustaining loss or damage in consequence of the operation of a disclaimer under this section is deemed to be a creditor of the bankrupt to the extent of the loss or damage and accordingly may prove for the loss and damage as a bankruptcy debt.
(1) Notice of disclaimer shall not be given under section 315 in respect of any property if -317. Disclaimer of leaseholds(a) a person interested in the property has applied in writing to the trustee or one of his predecessors as requiring the trustee or that predecessor to decide whether he will disclaim or not, and
(b) the period of 28 days beginning with the day on which that application was made has expired without a notice of disclaimer having been given under section 315 in respect of that property.
(2) The trustee is deemed to have adopted any contract which by virtue of this section he is not entitled to disclaim.
(1) The disclaimer of any property of a leasehold nature does not take effect unless a copy of the disclaimer has been served (so far as the trustee is aware of their addresses) on every person claiming under the bankrupt as underlessee or mortgagee and either -318. Disclaimer of dwelling house(a) no application under section 320 below is made with respect to the property before the end of the period of 14 days beginning with the day on which the last notice served under this subsection was served, or
(b) where such an application has been made, the court directs that the disclaimer is to take effect.
(2) Where the court gives a direction under subsection (1)(b) it may also, instead of or in addition to any order it makes under section 320, make such orders with respect to fixtures, tenant's improvements and other matters arising out of the lease as it thinks fit.
Without prejudice to section 317, the disclaimer of any property in a dwelling house does not take effect unless a copy of the disclaimer has been served (so far as the trustee is aware of their addresses) on every person in occupation of or claiming a right to occupy the dwelling house and either -319. Disclaimer of land subject to rentcharge(a) no application under section 320 is made with respect to the property before the end of the period of 14 days beginning with the day on which the last notice served under this section was served, or
(b) where such an application has been made, the court directs that the disclaimer is to take effect.
(1) The following applies where, in consequence of the disclaimer under section 315 of any land subject to a rent charge, that land vests by operation of law in the Crown or any other person (referred to in the next subsection as "the proprietor").320. Court orders vesting disclaimed property(2) The proprietor, and the successors in title of the proprietor, are not subject to any personal liability in respect of any sums becoming due under the rentcharge, except sums becoming due after the proprietor, or some person claiming under or through the proprietor, has taken possession or control of the land or has entered into occupation of it.
(1) This section and the next apply where the trustee has disclaimed property under section 315.321. Order under Section 320 in respect of leaseholds(2) An application may be made to the court under this section by -
(a) any person who claims an interest in the disclaimed property,
(b) any person who is under any liability in respect of the disclaimed property, not being a libaility discharged by the disclaimer, or
(c) Where the disclaimed property is property in a dwelling house, any person who at the time when the bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house.
(3) Subject as follows in this section and the next, the court may, on an application under this section, make an order on such terms as it thinks fit for the vesting of the disclaimed property in, or for its delivery to -
(a) a person entitled to it or a trustee for such a person,
(b) a person subject to such a liability as is mentioned in subsection (2)(b) or a trustee for such a person, or
(c) where the disclaimed property is property in dwelling house, any person who at the time when the bankruptcy petition was presented was in occupation of or entitled to occupy the dwelling house.
(4) The court shall not make an order by virtue of subsection (3)(b) except where it appears to the court that it would be just to do so for the purposes of compensating the person subject to the liability in respect of the disclaimer.
(5) The effect of any order under this section shall be taken into account in assessing for the purposes of section 315(5) the extent of any loss or damage sustained by any person in consequence of the disclaimer.
(6) An order under this section vesting property in any person need not to be completed by any conveyance, assignment or transfer.
(1) The court shall not make an order under section 320 vesting property of a leasehold nature in any person, except on terms making that person -(a) subject to the same liabilities and obligations as the bankrupt was subject to under the lease on the day the bankruptcy petition was presented, or
(b) if the court thinks fit, subject to the same liabilities and obligations as that person would be subject to if the lease had been assigned to him on that day.
(2) For the purposes of an order under section 320 relating to only part of the property comprised in a lease, the requirements of sub- section (1) apply as if the lease comprised only the property to which the order relates.
(3) Where subsection (1) applies and no person is willing to accept an order under section 320 on the terms required by that subsection, the court may (by order under section 320) vest the estate or interest of the bankrupt in the property in any person which is liable (whether personally or in a representative capacity and whether alonew or jointly with the bankrupt) to perfom the lessee's covenants in the lease.
The court may by virtue of this subsection vest that estate and interest in such a person freed and discharged from all estates, incumbrances and interests created by the bankrupt.
(4) Where subsection (1) applies and a person declines to accept any order under section 320, that person shall be excluded from all interest in the property.
322. Proof of debts323. Mutual credit and set-off(1) Subject to this section and the next, the proof of any bankruptcy debt by a secured or unsecured creditor of the bankrupt and the admission or rejection of any proof shall take place in accordance with the rules.
(2) Where a bankruptcy debt bears interest, that interest is provable as part of the debt except in so far as it is payable in respect of any period after the commencement of the bankruptcy.
(3) The trustee shall estimate the value of any bankruptcy debt which, by reason of its being subject to any contingency or contingencies or for any other reason, does not bear a certain value.
(4) Where the value of a bankruptcy debt is estimated by the trustee under subsection (3) or, by virtue of section 303 in Chapter III, by the court, the amount provable in the bankruptcy in respect of the debt is the amount of the estimate.
(1) This section applies where before the commencement of the bankruptcy there have been mutual credits, mutual debts or other mutual dealings between the bankrupt and any creditor of the bankrupt proving or claiming to prove a bankruptcy debt.324. Distribution by means of dividend(2) An account shall be taken of what is due from each party to the other in respect of the mutual dealings and the sums due from one party shall be set off against the sums due from the other.
(3) Sums due from the bankrupt to another party shall not be included in the account taken under subsection (2) if that other party had notice at the time they became due that a bankruptcy petition relating to the bankrupt was pending.
(4) Only the balance (if any) of the account taken under subsection (2) is provable as a bankruptcy debt or, as the case may be, to be paid to the trustee as part of the bankrupt's estate.
(1) Whenever the trustee has sufficient funds in hand for the purpose he shall, subject to the retention of such sums as may be necessary for the expenses of the bankruptcy, declare and distribute dividends among the creditors in respect of the bankruptcy debts which they have respectively proved.325. Claims by unsatisfied creditors(2) The trustee shall give notice of his intention to declare and distribute a dividend.
(3) Where the trustee has declared a dividend, he shall give notice of the dividend and of how it is proposed to distribute it; and a notice given under this subsection shall contain the prescribed particulars of the bankrupt's estate.
(4) In the calculation and distribution of a dividend the trustee shall make provision -
(a) for any bankruptcy debts which appear to him to be due to persons who, by reason of the distance of their place of residence, may not have had sufficient time to tender and establish their proofs,
(b) for any bankruptcy debts which are the subject of claims which have not yet been determined, and
(c) for disputed proofs and claims.
326. Distribution of property in specie(1) A creditor who has not proved his debt before the declaration of any dividend is not entitled to disturb, by reason that he has not participated in it, the distribution of that dividend or any other dividend declared before his debt was proved, but -
(a) when he has proved that debt he is entitled to be paid, out of any money for the time being available for the payment of any further dividend, any dividend or dividends which he has failed to receiver; and
(b) any dividend or dividends payable under paragraph (1) shall be paid before that money is applied to the payment of any such further dividend.
(2) No action lies against the trustee for a dividend, but if the trustee refuses to pay a dividend the court may, if if thinks fit, order him to pay it and also to pay, out of his own money -
(a) interest on the dividend, at the rate for the time being specified in section 17 of the Judgments Act 1838, from the time it was withheld, and
(b) the costs of the proceedings in which the order to pay is made.
327. Distribution in criminal bankruptcy(1) Without prejudice to sections 315 to 319 (disclaimer), the trustee may, with the permission of the creditors' committee, divide in its existing from amongst the bankrupt's creditors, according to its estimtaed value, any property which from its peculiar nature or other special circumstances cannot be readily or advantageously sold.
(2) A permission given for the purposes of subsection (1) shall not be a general permission but shall relate to a particular proposed exercise of the power in question; and a person dealing with the trustee in good faith and for value is not to be concerned to enquire whether any permission required by subsection (1) has been given.
(3) Where the trustee has done anything without the permission required by subsection (1), the court or the creditors' committee may, for the purpose of enabling him to meet his expenses out of the bankrupt's estate, ratify what the trustee has done.
But the committee shall not do so unless it is satisfied that the trustee acted in a case of urgency and has sought its ratification without undue delay.
(1) Where the bankruptcy order was made on a petition under section 264(1)(d) (criminal bankruptcy), no distribution shall be made under sections 324 to 326 so long as an appeal is pending (within the meaning of section 277) against the bankrupt's conviction of any offence by virtue of which the criminal bankruptcy order on which the petition was based was made.328. Priority of debts(1) In the distribution of the bankrupt's estate, his preferential debts (within the meaning given by section 386 in Part XII) shall be paid in priority to other debts.(2) Preferential debts rank equally between themselves after the expenses of the bankruptcy and shall be paid in full unless the banrupt's estate is insufficient for meeting them, in which case they abate in equal proportions between themselves.
(3) Debts which are neither preferential debts nor debts to which the next section applies also rank equally between themselves and, after the preferential debts, shall be paid in full unless the bankrupt's estate is insufficient for meeting them, in which case they abate in equal proportions between themselves.
(4) Any surplus remaining after the payment of the debts that are preferential or rank equally under subsection (3) shall be applied in repaying interest on those debts in respect of the periods during which they have been outstanding since the commencement of the bankruptcy; and interest on preferential debts ranks equally with interest on debts other than preferential debts.
(5) The rate of interest payable under subsection (4) in respect of any debt is whichever is the greater of the following:
(a) the rate specified in section 17 of the Judgments Act 1838 at the commencement