Bankruptcy Code 1892

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The Bankruptcy Code 1892

c i e
AT 1 of 1892

THE BANKRUPTCY CODE 1892

The Bankruptcy Code 1892 Index


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c i e
THE BANKRUPTCY CODE 1892

Index Section Page

PREAMBLE 9

Preliminary 10

1 Short title ........................................................................................................................ 10
2 Commencement of Act ................................................................................................ 10
3 [Repealed] ...................................................................................................................... 10
4 Interpretation ................................................................................................................. 10
PART I 11

ACTS OF BANKRUPTCY AND PROCEEDINGS CONSEQUENT ON
ADJUDICATION 11
Acts of bankruptcy 11

5 Acts of bankruptcy ....................................................................................................... 11
5A Notice under s 5(ee) ...................................................................................................... 13
6 Bankruptcy proceedings to commence by petition ................................................. 13
Adjudication of Bankruptcy 13

7 Property of a bankrupt to vest in a trustee................................................................ 13
8 Receiving order ............................................................................................................. 14
9 Stay of proceedings against a debtor on presentation of a bankruptcy
petition ........................................................................................................................... 14
10 No priority under execution after presentation of a bankruptcy petition ............ 14
Discharge of Bankrupt 15

11 Discharge of bankrupt.................................................................................................. 15
12 Fraudulent settlements ................................................................................................ 17
13 Effect of order of discharge ......................................................................................... 17
14 Discharge may be annulled if obtained by fraud ..................................................... 18
Composition or Scheme of Arrangement 18

15 Composition or scheme of arrangement in substitution of bankruptcy ............... 18
Index The Bankruptcy Code 1892


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PART II 20

DISQUALIFICATIONS OF BANKRUPT 20
16 Disqualification of bankrupts ..................................................................................... 20
17 and 18 [Repealed] ......................................................................................................... 21
19 Power for Court to annul adjudication in certain cases .......................................... 21
20 Meaning of payment of debts in full ......................................................................... 21
PART III 22

ADMINISTRATION OF PROPERTY 22
Proof of Debts 22

21 Description of debts provable in bankruptcy ........................................................... 22
22 Mutual credit and set-off ............................................................................................. 23
23 Partners and supplementary provisions ................................................................... 23
24 Preferential claim in case of apprenticeship ............................................................. 23
25 Power to landlord to distrain for rent ....................................................................... 24
Property available for Payment of Debts 24

26 Relation back of trustee’s title ..................................................................................... 24
27 Description of bankrupt’s property divisible amongst creditors .......................... 24
Effect of Bankruptcy on Antecedent Transactions 25

28 and 29 Restriction of rights of creditors under execution ........................................ 25
Duties of Coroner as to property taken in execution 26

30 Avoidance of voluntary settlements .......................................................................... 26
31 Avoidance of preferences in certain cases ................................................................ 27
32 Protection of bona fide transactions without notice ................................................ 27
Realisation of Property 28

33 Possession of property by trustee .............................................................................. 28
34 Seizure of property of bankrupt ................................................................................. 29
35 Sequestration of ecclesiastical benefice ..................................................................... 29
36 Appropriation of portion of pay or salary ................................................................ 30
37 Actions by trustee and bankrupt’s partners ............................................................. 30
38 Actions on joint contracts ............................................................................................ 30
39 Proceedings in partnership name .............................................................................. 30
40 Disclaimer of onerous property ................................................................................. 31
41 Powers of trustee to deal with property ................................................................... 33
42 Powers exercisable by trustee with permission of Court ....................................... 33
Distribution of Property 34

43 Declaration and distribution of dividends ............................................................... 34
44 Joint and separate dividends ...................................................................................... 35
45 Provisions for creditors residing at a distance, etc .................................................. 35
46 Right of creditor who has not proved debt before declaration of dividend ........ 35
47 Final dividend ............................................................................................................... 35
48 No action for dividend ................................................................................................ 36
49 Power to allow bankrupt to manage property ......................................................... 36
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50 Right of bankrupt to surplus ....................................................................................... 36
51 Trustee to furnish list of creditors .............................................................................. 36
52 Statement of accounts to be furnished if required ................................................... 36
PART IV 37

Trustees in Bankruptcy 37

53 Clerk of the Rolls to appoint official trustees............................................................ 37
54 Deputy for official receiver .......................................................................................... 37
55 Duties of official trustee as regards the debtor’s conduct ....................................... 37
Remuneration of Trustee 38

56 Remuneration of trustee .............................................................................................. 38
Costs 38

57 Allowance and taxation of costs ................................................................................. 38
Receipts, Payments, Accounts, Audit 39

58 Payment of money into bank ...................................................................................... 39
59 Trustee not to pay into private account ..................................................................... 40
60 Accounts of trustee to be filed and audited .............................................................. 40
61 The trustee to furnish list of creditors ........................................................................ 40
62 Books to be kept by trustees ........................................................................................ 40
63 Annual statement of proceedings ............................................................................... 40
Release of Trustee 41

64 Release of trustee .......................................................................................................... 41
Official Name 41

65 Official name of trustee ................................................................................................ 41
Control over Trustee 42

66 Discretionary powers of trustee and control thereof ............................................... 42
67 Appeal to Court against trustee .................................................................................. 42
68 Court may remove a trustee ........................................................................................ 42
Appeals, etc. 42

69 Appeals in bankruptcy ................................................................................................. 42
PART V 43

General Rules, Etc. 43

70 General rules to be made ............................................................................................. 43
70A Fees and commissions .................................................................................................. 43
Formal Defects 43

71 Formal defect not to invalidate proceedings ............................................................ 43
The Crown 43

72 Certain proceedings to bind the Crown .................................................................... 43
Transitory Provisions 44

73 Transfer of estates on vacancy of office of trustee in liquidation under the
Bankruptcy Act, 1872 ................................................................................................... 44
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74 Transfer of outstanding property on close of bankruptcy or liquidation ............ 44
75 Transfer of estates from registrars of Court to official receiver ............................. 44
76 Proceedings under Bankruptcy Act, 1872, ss 95 and 96 .......................................... 44
PART VI 44

Relief of Imprisoned Debtors 44

77 An imprisoned debtor may be discharged on accounting for and
surrendering his property ........................................................................................... 44
PART VII 46

DEED OF ARRANGEMENT 46
78 Deed of arrangement to which Act applies .............................................................. 46
79 Registration of deed of arrangement ......................................................................... 47
80 Extension of time for registration............................................................................... 47
81 Time for registration .................................................................................................... 47
82 Deed of arrangement to be confirmed by the Court ............................................... 47
83 Jurisdiction of Court as to deed of arrangement ..................................................... 48
84 Provisions as to trustee in Part IV to be applicable to trustees of deeds of
arrangement .................................................................................................................. 48
85 Part III as to administration of property to apply to property administered
under a deed of arrangement ..................................................................................... 48
PART VIII 48

FRAUDULENT DEBTORS 48
86 Offences by debtors ...................................................................................................... 48
87 Undischarged bankrupt obtaining credit to extent of £20 to be guilty of
misdemeanour .............................................................................................................. 50
88 Penalty for fraudulently obtaining credit, etc .......................................................... 50
89 [Repealed] ...................................................................................................................... 50
90 Debts incurred by fraud .............................................................................................. 50
91 Criminal liability after discharge or composition .................................................... 51
92 Form of indictment....................................................................................................... 51
93 A magistrate before whom a person is charged may consider evidence as
to guilty intent .............................................................................................................. 51
94 Power for Court to commit for trial ........................................................................... 51
95 Punishments under this Act cumulative................................................................... 51
SCHEDULE 53

ENDNOTES 55

TABLE OF LEGISLATION HISTORY 55
TABLE OF RENUMBERED PROVISIONS 55
TABLE OF ENDNOTE REFERENCES 55
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The Bankruptcy Code 1892 Section 1


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c i e
THE BANKRUPTCY CODE 1892

Received Royal Assent: 28 June 1892
Promulgated: 5 July 1892
Commenced: 5 January 1893
AN ACT
to amend the Law of Bankruptcy and Insolvency.
GENERAL NOTES

1. References to the High Court of Justice or any Division thereof are to be
construed in accordance with the High Court Act 1991 Sch 4.
2. References to the Rolls Office or office for registry of deeds are to be construed
in accordance with the General Registry Act 1965.
3. References to hard labour are to be construed in accordance with the Custody
Act 1995 Sch 3 para 1.
4. See SD352/09 Rules of the High Court of Justice 2009 Sch 15.1 para 2 reproduced
below:
“2 In any statutory provision a reference (however expressed) to —

(a) the superior jurisdiction or summary jurisdiction of the
court or of the Common Law Division, or
(b) the court or the Common Law Division exercising superior
jurisdiction or summary jurisdiction,
shall be construed as a reference to the Civil Division.”
PREAMBLE

Whereas, it is advisable to make general provisions applicable to the
administration of the law in bankruptcy and insolvency, and to amend such
law.
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Preliminary
1 Short title

This Act may be cited as “The Bankruptcy Code 1892”.
2 Commencement of Act

This Act shall, except as therein otherwise provided, commence and come into
operation on the expiration of six months after the promulgation thereof.
3 [Repealed]
1

4 Interpretation

In this Act, and the general rules to be made under the authority thereof, unless
the context otherwise requires —
“The High Court
” means the High Court of Justice:
“The Court
” means the Court for the time being having jurisdiction in
bankruptcy:
“The Appellate Court
” means the Staff of Government Division of the High
Court:
“Treasury
” means the Commissioners of Her Majesty’s Treasury:
“Affidavit
” includes statutory declarations and affirmations:
“The Bank
” means the bank for the time being having the custody of moneys
paid into the High Court under or subject to the rules or orders of such
Court:
“Bankrupt
” means a person who may be adjudged a bankrupt, and also any
debtor, by or against whom a bankruptcy petition having been
presented, in respect of whose estate a receiving order under this Act
may be made, or who has pursuant to this Act made a composition with
his creditors in satisfaction of the debts due to them by such debtor, or a
scheme of arrangement of his affairs:
“Bankruptcy
” includes insolvency, and also any such composition and scheme
of arrangement:
“Available Act of Bankruptcy
” means any act of bankruptcy available for a
bankruptcy petition, at the date of the presentation of the bankruptcy
petition:
“Bankruptcy petition
” means a petition praying that a debtor may be adjudged
a bankrupt:
“Order of adjudication
” means an order by which a debtor is adjudged a
bankrupt, whether made by the Court, or by the Appellate Court:
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“Debt provable in bankruptcy
” or “provable debt
” includes any debt or
liability by this Act made provable in bankruptcy:
“Creditor
” includes any person who is for the time being entitled to enforce a
judgment for the payment of money, and also the personal
representative of a deceased creditor:
“Deed of arrangement
” means a deed or instrument made in respect of the
affairs of a debtor for the benefit of the creditors generally as described in
Part VII of this Act:
“Goods
” include all chattels personal:
“Property
” includes money, goods, things in action, land, and every description
of property, whether real or personal, and whether situate in this Isle or
elsewhere; also, obligations, and every description of estate, interest, and
profit, present or future, vested or contingent, arising out of or incident
to property, as herein defined:
“Secured creditor
” means a person holding a mortgage, charge, or lien on the
property of the debtor, or any part thereof, as a security for a debt due to
him from the debtor:
“Trustee
” means the trustee in bankruptcy of a debtor’s estate, and includes an
official trustee and a receiver, or manager of the estate, pending the
appointment of a trustee:
“Coroner
” includes lockman and any officer charged with the enforcement of
any execution, or with the execution of any process:
“Indictment
” includes information:
“Prescribed
” means prescribed by general rules to be made as in this Act
provided; but where no such rules apply, as may be prescribed by order
of the Court.
PART I

ACTS OF BANKRUPTCY AND PROCEEDINGS CONSEQUENT ON
ADJUDICATION
Acts of bankruptcy
5 Acts of bankruptcy

[P1914/59/1(g), 2 and 5(4)]
A debtor commits an act of bankruptcy in each of the following cases: —
(a) If, in this Isle or elsewhere, he makes a deed of arrangement:
Section 5 The Bankruptcy Code 1892


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(b) If, in this Isle of elsewhere, he makes a fraudulent conveyance,
gift, delivery, or transfer of his property, or of any part thereof, or
if he fraudulently creates a charge upon his property:
(c) If, in this Isle or elsewhere, he makes any conveyance or transfer
of his property or any part thereof, or creates any charge thereon
which would under this or any other Act be void as a fraudulent
preference if he were adjudged bankrupt:
(d) If, with intent to defeat or delay his creditors, he does any of the
following things, namely, departs out of this Isle, or, being out of
this Isle, remains out of the same, or departs from his dwelling-
house, or otherwise absents himself, or begins to keep house, or
evades the process of any of the Courts thereof:
(e) If, under execution issued against him, his goods have been
seized, and have been either sold or held by the Coroner for
fourteen days, without any proceeding having been taken to
rehear the cause or appeal from the judgment in respect of which
such execution was issued:
(ee) If a creditor has obtained a final judgment or final order against
him for any amount, and, execution thereon not having been
stayed, has served on him in the Isle of Man, or, by leave of the
Court, elsewhere, a notice under section 5A of this Act, and he
does not within 14 days after service of the notice, in case the
service is effected in the Isle of Man, and in case the service is
effected elsewhere, then within the time limited in that behalf by
the order giving leave to effect the service, either comply with the
requirements of the notice or satisfy the Court that he has a
counterclaim, set-off or cross-demand which equals or exceeds the
amount of the judgment debt or sum ordered to be paid, and
which he could not set up in the action in which the judgment
was obtained.
For the purposes of this paragraph and of section 5A of this Act,
any person who is, for the time being, entitled to enforce a final
judgment or final order, shall be deemed to be a creditor who has
obtained a final judgment or final order.2

(f) If, being a prisoner for debt, he presents a petition to any Court
having jurisdiction in the matter seeking to be discharged from
imprisonment, by reason of his inability to maintain himself or
pay the debt:
(g) If he presents a petition to the Court to have himself adjudged a
bankrupt, or files in the Court a declaration of his inability to pay
his debts:
(h) If the debtor gives notice to any of his creditors that he has
suspended, or that he is about to suspend, payment of his debts:
(i) If the debtor be adjudged bankrupt in the United Kingdom.
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5A Notice under s 5(ee)
3

(1) A notice under section 5(ee) of this Act shall require the debtor to pay the
judgment debt or sum ordered to be paid in accordance with the terms of
the judgment or order, or to secure or compound for it to the satisfaction
of the creditor or the Court, and shall state the consequences of non-
compliance with the notice.
(2) Service of a notice under section 5(ee) of this Act shall be in accordance
with section 41 of the Interpretation Act 1976.
(3) A notice under section 5(ee) of this Act —
(a) may specify an agent to act on behalf of the creditor in respect of
any payment or other thing required by the notice to be made to,
or done to the satisfaction of, the creditor,
(b) shall not be invalidated by reason only that the sum specified in
the notice as the amount due exceeds the amount actually due,
unless the debtor within the time allowed for payment gives
notice to the creditor that he disputes the validity of the notice on
the ground of such misstatement; but, if the debtor does not give
such notice, he shall be deemed to have complied with the notice
if within the time allowed he takes such steps as would have
constituted a compliance with the notice had the actual amount
due been correctly specified therein.
6 Bankruptcy proceedings to commence by petition

Proceedings in bankruptcy shall, except where otherwise directed by this Act,
be commenced by petition, in this Act referred to as a “bankruptcy petition”.
Adjudication of Bankruptcy
7 Property of a bankrupt to vest in a trustee

(1) Where the debtor is adjudged bankrupt, the property of the bankrupt
shall become divisible among his creditors and shall vest in a trustee, to
be appointed by the Court; but, until a trustee is appointed, an official
trustee shall be nominated by the Court to act as the trustee for the
purposes of the bankruptcy.
A person shall be deemed not fit to act as trustee where he has been
previously removed from the office of trustee of a bankrupt for
misconduct or neglect of duty.
(2) The property of the bankrupt shall pass from trustee to trustee, and shall
vest in the trustee for the time being during his continuance in office,
without any conveyance, assignment, or transfer whatever.
(3) An office copy of the appointment of the trustee shall, as to the law for
the time being in force as to registration or recording of conveyances or
Section 8 The Bankruptcy Code 1892


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assignments of property, be deemed to be a conveyance or assignment of
property, and may be registered and recorded accordingly.
8 Receiving order

The Court may, if it be shown to be necessary for the protection of the estate, at
any time after the presentation of a bankruptcy petition, and before an order of
adjudication be made, by order (in this Act referred to as a receiving order),
appoint an official trustee to be interim receiver of the property of the debtor, or
of any part thereof, and direct him to take immediate possession thereof, or of
any part thereof.
9 Stay of proceedings against a debtor on presentation of a bankruptcy

petition

(1) On the making of an order of adjudication, no creditor to whom the
debtor is indebted in respect of any debt provable shall have any remedy
against the person or property of the debtor in respect of the debt, or
shall commence any action or other legal proceedings with respect to the
debt, unless with the leave of the Court, and on such terms as the Court
may impose.
(2) The court may, at any time after the presentation of a bankruptcy
petition, and before an order of adjudication be made, stay any action,
judgment, execution, or other legal process against the person or
property of the debtor, and any Court in which proceedings are pending
against a debtor may, on proof that a bankruptcy petition has been
presented by or against the debtor, either stay the proceedings, or allow
them to continue on such terms as it may think just:
(3) But this section shall not affect the power of any secured creditor to
realise, or otherwise deal with his security in the same manner as he
would have been entitled to realise or deal with it if this section had not
been passed.
10 No priority under execution after presentation of a bankruptcy

petition
4

From the time of the presentation of a bankruptcy petition no creditor shall
thereafter, so long as the bankruptcy proceedings under such petition be
pending, gain any priority by reason of his execution having been in the hands
of the coroner of lockman to be executed; and in case the petition be dismissed,
the interval of time between the presentation and dismissal of such petition
shall not be included in the twenty-one days for the purposes of section four of
an Act of Tynwald promulgated upon the 1st day of November 1820, and
intituled “An Act for the better enforcing of common judgments and executions,
and for altering and amending the law relative to bail to actions of debt or
damage, and for the relief of insolvent debtors in the said Island”.
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Discharge of Bankrupt
11 Discharge of bankrupt

(1) A bankrupt may, at any time after being adjudged bankrupt, apply to the
Court for an order of discharge, and the Court shall appointed a day for
hearing the application. The application shall be heard in open Court.
(2) On the hearing of the application the Court shall take into consideration
the bankrupt’s conduct and affairs, and may either grant or refuse an
absolute order of discharge, or suspend the operation of the order for a
specified time, or grant an order of discharge subject to any conditions
with respect to any earnings or income which may afterwards become
due to the bankrupt, or with respect to his after-acquired property, or
grant an order limited to the release of the bankrupt from imprisonment
and liability to imprisonment for any debt provable in bankruptcy, save
any debt or liability from with the bankrupt is not released by an order of
discharge under the provisions in this Act contained: Provided that the
Court shall refuse the discharge in all cases where the bankrupt has
committed any felony or misdemeanour connected with his bankruptcy
under this Act, or any Act for the punishment of fraudulent debtors for
the time being in force; and shall, on proof of any of the facts hereinafter
mentioned, either —
(i) Refuse the discharge; or
(ii) Suspend the discharge for a period of not less than two
years; or
(iii) Suspend the discharge until a dividend of not less than 50p
in the pound has been paid to the creditors; or5

(iv) Require the bankrupt, as a condition of his discharge, to
consent to a judgment being entered against him by the
trustee for any balance or part of any balance of the debts
provable under the bankruptcy which is not satisfied at the
date of the discharge, such balance or part of any balance
of the debts to be paid out of the future earnings or after-
acquired property of the bankrupt, in such manner and
subject to such conditions as the Court may direct; but
execution shall not be issued on the judgment without
leave of the Court, such leave may be given on proof that
the bankrupt has since his discharge acquired property or
income available towards payment of his debts:
Provided, that if at any time after the expiration of two years from the
date of any order made under this section, the bankrupt shall satisfy the
Court that there is no reasonable probability of his being in a position to
comply with the terms of such order, the Court may modify the terms of
the order, or of any substituted order, in such manner and upon such
conditions as it may think fit.
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(3) The facts hereinbefore referred to are —
(a) That the bankrupt’s assets are not of a value equal to 50p in the
pound on the amount of his unsecured liabilities, unless he
satisfies the Court that the fact that the assets are not of a value
equal to 50p in the pound on the amount of his unsecured
liabilities has arisen from circumstances for which he cannot justly
be held responsible:6

(b) That the bankrupt has omitted to keep such books of account as
are usual and proper in the business carried on by him, and as
sufficiently disclose his business transactions and financial
position within the three years immediately preceding his
bankruptcy:
(c) That the bankrupt has continued to trade after knowing himself to
be insolvent:
(d) That the bankrupt has contracted any debt provable in the
bankruptcy, without having at the time of contracting it any
reasonable or probable ground of expectation (proof whereof shall
lie on him) of being able to pay it:
(e) That the bankrupt has failed to account satisfactorily for any loss
of assets, or for any deficiency of assets to meet his liabilities:
(f) That the bankrupt has brought on or contributed to his
bankruptcy by rash and hazardous speculations, or by
unjustifiable extravagance in living, or by gambling, or by
culpable neglect of his business affairs:
(g) That the bankrupt has put any of his creditors to unnecessary
expense by a frivolous or vexatious defence to any action properly
brought against him:
(h) That the bankrupt has, within three months preceding the date of
the receiving order, or order of adjudication, incurred
unjustifiable expense by bringing a frivolous or vexatious action:
(i) That the bankrupt has, within three months preceding the date of
the receiving order, or order of adjudication, when unable to pay
his debts as they become due, given an undue preference to any of
his creditors:
(j) That the bankrupt has, within three months preceding the date of
the receiving order, or order of adjudication, incurred liabilities
with the view of making his assets equal to 50p in the pound on
the amount of his unsecured liabilities:7

(k) That the bankrupt has on any previous occasion been adjudged
bankrupt, or made a composition or arrangement with his
creditors:
(l) That the bankrupt has been guilty of any fraud or fraudulent
breach of trust.
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(4) For the purpose of this section, a bankrupt’s assets shall be deemed of a
value equal to 50p in the pound on the amount of his unsecured
liabilities, when the Court is satisfied that the property of the bankrupt
has realized, or is likely to realize, or with due care in realization might
have realized, an amount equal to 50p in the pound of his unsecured
liabilities.8

(5) The powers of suspending and of attaching conditions to a bankrupt’s
discharge may be exercised concurrently.
(6) A discharged bankrupt shall, notwithstanding his discharge, give such
assistance as the trustee may require in the realization and distribution of
such of his property as is vested in the trustee, and if he fails to do so he
shall be guilty of a contempt of Court, and for such contempt, on the
application of the trustee, shall be liable to imprisonment for a term not
exceeding three months; and, in addition thereto, the Court may, if it
thinks fit, revoke his discharge, but without prejudice to the validity of
any sale, disposition, or payment duly made or thing duly done
subsequent to the discharge, but before its revocation.
12 Fraudulent settlements

In either of the following cases (that is to say): —
(1) In the case of a settlement made before and in consideration of marriage
or the formation of a civil partnership where the settlor is not at the time
of making the settlement able to pay all his debts without the aid of the
property comprised in the settlement; or9

(2) In the case of any covenant or contract made in consideration of marriage
or the formation of a civil partnership for the future settlement on or for
the settlor’s spouse, civil partner or children of any money or property
wherein he had not at the date of his marriage any estate or interest (not
being money or property of or in right of his or her spouse or civil
partner);10

if the settlor is adjudged bankrupt or compounds or arranges with his creditors,
and it appears to the Court that such settlement, covenant, or contract was made
in order to defeat or delay creditors, or was unjustifiable having regard to the
state of the settlor’s affairs at the time when it was made, the Court may refuse
or suspend an order of discharge, or grant an order subject to conditions, or
refuse to approve a composition or arrangement, as the case may be, in like
manner as in cases where the debtor has been guilty of fraud.
13 Effect of order of discharge

(1) An order of discharge shall not release the bankrupt from any debt on a
bond or a recognizance to, or to a person on behalf of, or in trust for, the
Crown, nor from any debt with which the bankrupt may be chargeable at
the suit of the Crown or of any person for any offence against a statute
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relating to any branch of the public revenue; and he shall not be
discharged from such excepted debts unless the Treasury certify in
writing their consent to his being discharged therefrom; neither shall an
order of discharge release the bankrupt from any liability under a
judgment against him in an action for seduction, or under an affiliation
order. An order of discharge shall not release the bankrupt from any
debt or liability incurred by means of any fraud or breach of trust to
which he was a party, nor from any debt or liability whereof he has
obtained forbearance by any fraud to which he was a party.
(1A) Subsection (1) of this section shall have effect as if amounts payable
under confiscation orders made under Part 2 of the Proceeds of Crime Act
2008 were debts excepted under the first sentence of that subsection.11

(2) An order of discharge shall release the bankrupt from all other debts
provable in bankruptcy.
(3) An order of discharge shall be conclusive evidence of the bankruptcy,
and of the validity of the proceedings therein, and in any proceedings
that may be instituted against a bankrupt who has obtained an order of
discharge in respect of any debt from which he is released by the order,
the bankrupt may plead that the cause of action occurred before his
discharge, and may give this Act and the special matter in evidence.
(4) An order of discharge shall not release any person who at the date of the
receiving order was a partner or co-trustee with the bankrupt or was
jointly bound or had made any joint contract with him, or any person
who was surety or in the nature of a surety for him.
14 Discharge may be annulled if obtained by fraud

If, at any time after the discharge of a debtor, it appears to the Court, on the
application of any person interested, that the discharge was obtained by fraud,
the Court may by order annul such discharge.
Composition or Scheme of Arrangement
15 Composition or scheme of arrangement in substitution of bankruptcy

(1) If the debtor, at any time after a receiving order or order of adjudication
has been made, submit to the Court a proposal for a composition in
satisfaction of the debts due to the creditors from the debtor, or a
proposal for a scheme of arrangement of the debtor’s affairs, the Court
may, if it think fit, direct the trustee to summon, in such manner as the
Court may direct, a meeting of the creditors to consider such proposal.
(2) The composition or scheme shall not be binding on the creditors unless it
is confirmed by a resolution passed by creditors representing three-
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fourths in value of all those who have proved their claims, nor unless it
be approved by the Court.
Any creditor who has proved his claim may assent or dissent from such
composition or scheme by a letter addressed to the trustee in the
prescribed form, and attested by a witness, so as to be received by the
trustee not later than the day preceding such meeting, and such creditor
shall be taken as being present and voting thereat.
(3) If the composition or scheme of arrangement is accepted by the creditors
at such meeting, or any adjournment thereof (such acceptance being
embodied in a resolution of the meeting, verified by the trustee), the
trustee or the debtor may apply to the Court to approve it, and notice of
the time appointed for hearing the application shall be given in the
prescribed manner, or, if no manner be prescribed, as the Court may
direct.
(4) The Court shall, before approving a composition or scheme, consider the
terms thereof, and the conduct of the debtor, and also any objections
which may be made by and on behalf of any creditor.
(5) If the Court is of opinion that the terms of the composition or scheme are
not reasonable, or are not calculated to benefit the general body of
creditors, or in any case in which the Court is required under this Act
where the debtor is adjudged bankrupt to refuse his discharge, the Court
shall, or if any such facts are proved as would under this Act justify the
Court in refusing, qualifying, or suspending the debtor’s discharge, the
Court may, in its discretion, refuse to approve the composition or
scheme.
(6) If the Court approve the composition or scheme, the approval shall be
testified by an order of the Court, and, if the debtor has been previously
adjudged bankrupt, the Court may make an order annulling the
bankruptcy, and vesting the property in the debtor, or such other person
as the Court may appoint, on such terms and subject to such conditions,
if any, as the Court may declare.
(7) A composition or scheme accepted and approved in pursuance of this
section shall be binding on all the creditors so far as relates to any debts
due to them from the debtor and provable in the bankruptcy.
(8) The provisions of a composition or scheme under this section may be
enforced by the Court on application by any person interested, and any
disobedience of an order of the Court made on such application shall be
deemed a contempt of court, and shall be punishable, on further
application by such person, with imprisonment for any period not
exceeding three months.
(9) If default is made in the payment of any sum of money, or instalment,
due in pursuance of the composition or scheme, or if it appears to the
Court on satisfactory evidence that the composition or scheme cannot, in
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consequence of legal difficulties, or for any sufficient cause, proceed
without injustice or undue delay to the creditors or to the debtor, or that
the approval of the Court was obtained by fraud, the Court may, if it
thinks fit, on application by any creditor, adjudge the debtor bankrupt,
and annul the composition or scheme, but without prejudice to the
validity of any sale, disposition, or payment duly made, or thing duly
done under or in pursuance of the composition or scheme. Where a
debtor is adjudged bankrupt under this subsection any debt provable in
other respects, which has been contracted before the date of the
adjudication, shall be provable in the bankruptcy.
(10) If under or in pursuance of a composition or scheme, a trustee is
appointed to administer the debtor’s property or manage his business,
Part IV of this Act shall apply to the trustee as if he were a trustee in the
bankruptcy, and as if the terms “bankruptcy”, “bankrupt,” and “order of
adjudication” included respectively a composition or scheme of
arrangement, a compounding or arranging debtor, and order approving
the composition or scheme.
(11) Part III of this Act shall, so far as the nature of the case and the terms of
the composition or scheme admit, apply thereto, the same interpretation
being given to the words “trustee”, “ bankruptcy”, “bankrupt”, and
“order of adjudication”, as in the last preceding sub-section.
(12) No composition or scheme shall be approved by the Court which does
not provide for the payment in priority to other debts of all debts
directed to be so paid in the distribution of the property of a bankrupt.
(13) Notwithstanding the acceptance and approval of a composition or
scheme such composition or scheme shall not be binding on any creditor
so far as regards a debt or liability from which, under the provisions of
this Act, the debtor would not be discharged by an order of discharge in
bankruptcy, unless the creditor assents to the composition or scheme.
(14) The order of the Court approving of a composition or scheme shall be
conclusive evidence of the meeting of the creditors having been duly
held, and of the resolution of such meeting having been duly carried and
passed thereat.
PART II

DISQUALIFICATIONS OF BANKRUPT
16 Disqualification of bankrupts

(1) Where a debtor is adjudged bankrupt he shall, subject to the provisions
of this Act, be disqualified for —
(a) [Repealed]12

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c AT 1 of 1892 Page 21

(b) Being appointed, or acting, as a justice of the peace;
(c) [Repealed]13

(d) [Repealed]14

(2) The disqualifications to which a bankrupt is subject under this section
shall be removed and cease if and when —
(a) the adjudication of bankruptcy against him is annulled; or
(b) he obtains from the Court his discharge, with a certificate to the
effect that his bankruptcy was caused by misfortune without any
misconduct on his part; or
(c) on the expiration of five years from the date of his discharge.
The Court may grant or withhold a certificate under this section as it thinks fit,
but any refusal of such certificate shall be subject to appeal.
17 and 18 [Repealed]
15

19 Power for Court to annul adjudication in certain cases

(1) Where, in the opinion of the Court, a debtor ought not to have been
adjudged bankrupt, or where it is proved to the satisfaction of the Court
that the debts of the bankrupt are paid in full, the Court may, on the
application of any person interested, by order annul the adjudication.
(2) When an adjudication is annulled under this section, all sales and
dispositions of property and payments duly made, and all acts
theretofore done, by the trustee, or other person acting under his
authority, or by the Court, shall be valid; but the property of the debtor
who was adjudged bankrupt shall vest in such person as the Court may
appoint, or in default of any such appointment revert to the debtor for all
his estate, or interest therein, on such terms and subject to such
conditions, if any, as the Court may declare by order.
20 Meaning of payment of debts in full

For the purposes of the last preceding section, any debt disputed by a debtor
shall be considered as paid in full, if the debtor enters into a bond, in such sum
and with such sureties as the Court approves, to pay the amount to be
recovered in any proceeding for the recovery of or concerning the debt, with
costs, and any debt due to a creditor who cannot be identified shall be
considered as paid in full if paid into Court.
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Page 22 AT 1 of 1892 c

PART III

ADMINISTRATION OF PROPERTY
Proof of Debts
21 Description of debts provable in bankruptcy

(1) Demands in the nature of unliquidated damages arising otherwise than
by reason of a contract, promise, or breach of trust, shall not be provable
in bankruptcy.
(2) A person having notice of any act of bankruptcy available against the
debtor shall not prove under the order for any debt or liability contracted
by the debtor subsequently to the date of his so having notice.
(3) Save as aforesaid, all debts and liabilities, present or future, certain or
contingent, to which the debtor is subject at the date of the order of
adjudication, or to which he may become subject before his discharge, by
reason of any obligation incurred before the date of such order, shall be
deemed to be debts provable in bankruptcy.
(4) An estimate shall be made by the trustee, or as the Court may direct, of
the value of any debt or liability provable as aforesaid which, by reason
of its being subject to any contingency or contingencies, or for any other
reason, does not bear a certain value.
(5) If, in the opinion of the Court, the value of the debt or liability is
incapable of being fairly estimated, the Court may make an order to that
effect, and thereupon the debt or liability shall, for the purposes of this
Act, be deemed to be a debt not provable in bankruptcy.
(6) If, in the opinion of the Court, the value of the debt or liability is capable
of being fairly estimated, the Court may direct the value to be assessed
before the Court itself, without the intervention of a jury, and may give
all necessary directions for this purpose and the amount of the value
when assessed shall be deemed to be a debt provable in bankruptcy.
(7) “Liability
” shall, for the purposes of this Act, include any compensation
for work or labour done, any obligation, or possibility of an obligation, to
pay money or money’s worth on the breach of any express or implied
covenant, contract, agreement, or undertaking, whether the breach does
or does not occur, or is or is not likely to occur, or capable of occurring,
before the discharge of the debtor, and generally it shall include any
express or implied engagement, agreement, or undertaking, to pay, or
capable of resulting in the payment of, money, or money’s worth,
whether the payment is, as respects amount, fixed or unliquidated; as
respects time, present or future, certain or dependent on any one
contingency, or on two or more contingencies; as to mode of valuation
capable of being ascertained by fixed rules, or as matter of opinion.
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22 Mutual credit and set-off

Where there have been mutual credits, mutual debts, or other mutual dealings
between a debtor against whom an order of adjudication shall be made under
this Act, and any other person proving or claiming to prove a debt under such
order, an account shall be taken of what is due from the one party to the other in
respect of such mutual dealings, and the sum due from the one party shall be
set off against any sum due from the other party, and the balance of the account,
and no more, shall be claimed or paid on either side respectively; but a person
shall not be entitled under this section to claim the benefit of any set-off against
the property of a debtor in any case where he had, at the time of giving credit to
the debtor, notice of an act of bankruptcy committed by the debtor, and
available against him.
23 Partners and supplementary provisions

(1) [Repealed]16

(2) In the case of partners the joint estate shall be applicable in the first
instance in payment of their joint debts, and the separate estate of each
partner shall be applicable in the first instance in payment of his separate
debts. If there is a surplus of the separate estates it shall be dealt with as
part of the joint estate. If there is a surplus of the joint estate it shall be
dealt with as part of the respective separate estates in proportion to the
right and interest of each partner in the joint estate.
(3) Where a debt includes interest, or any pecuniary consideration in lieu of
interest, such interest or consideration, shall, for the purposes of
dividend, be calculated at a rate not exceeding five per centum per
annum, without prejudice to the right of a creditor to receive out of the
estate any higher rate of interest to which he may be entitled after all the
debts proved in the estate have been paid in full.
(4) If there is any surplus after payment of the debts, it shall be applied in
payment of interest from the date of the receiving order at the rate of
four pounds per centum per annum on all debts proved in the
bankruptcy.
24 Preferential claim in case of apprenticeship

(1) Where, at the time of the presentation of the bankruptcy petition, any
person is apprenticed or is an articled clerk to the bankrupt, the
adjudication of bankruptcy shall, if either the bankrupt or apprentice or
clerk gives notice in writing to the trustee to that effect, be a complete
discharge of the indenture of apprenticeship or articles of agreement; and
if any money has been paid by or on behalf of the apprentice or clerk to
the bankrupt as a fee, the trustee may, on the application of the
apprentice or clerk, or of some other person on his behalf, pay such sum
as the trustee, subject to an appeal to the Court, thinks reasonable, out of
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the bankrupt’s property, to or for the use of the apprentice or clerk,
regard being had to the amount paid by him or on his behalf, and to the
time during which he served with the bankrupt under the indenture or
articles before the commencement of the bankruptcy, and to the other
circumstances of the case.
(2) Where it appears expedient to a trustee, he may, on the application of
any apprentice or articled clerk to the bankrupt, or any person acting on
behalf of such apprentice or articled clerk, instead of acting under the
preceding provisions of this section, transfer the indenture of
apprenticeship or articles of agreement to some other person.
25 Power to landlord to distrain for rent

Nothing in this Act contained, nor any disclaimer under the 39th section of this
Act, shall affect the right of any landlord under the provisions of the Act
intituled “An Act to indemnify Landlords in their Rents,” promulgated in 1753,
to arrest goods and effects for rent, or his right of preference to payment of the
whole of the current year’s rent.
Property available for Payment of Debts
26 Relation back of trustee’s title

The bankruptcy of a debtor, whether the same takes place on the debtor’s own
petition or upon that of a creditor or creditors, shall be deemed to have relation
back to, and to commence at, the time of the act of bankruptcy being committed
on which an order of adjudication is made against him, or, if the bankrupt is
proved to have committed more acts of bankruptcy than one, the bankruptcy
shall be deemed to have relation back to, and to commence at, the time of the
first of the acts of bankruptcy proved to have been committed by the bankrupt
within three months next preceding the date of the presentation of the
bankruptcy petition; but no bankruptcy petition or adjudication shall be
rendered invalid by reason of any act of bankruptcy anterior to the debt of the
petitioning creditor.
27 Description of bankrupt’s property divisible amongst creditors

The property of the bankrupt divisible amongst his creditors, and in this Act
referred to as the property of the bankrupt, shall not comprise the following
particulars —
(1) Such wearing apparel, furniture, bedding and household equipment of
the bankrupt as appear to the trustee to be essential for the domestic
purposes of the bankrupt, his spouse, his civil partner and his
dependents residing with him, or any of them:17

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c AT 1 of 1892 Page 25

(2) The tools and implements of the bankrupt’s trade to the value of £100, or
of such greater amount as may be prescribed in enforcement rules made
under Part II of the Administration of Justice Act 1981:18

(3) Any property held by the bankrupt in trust for, or on behalf of, any other
person or body:19

But it shall comprise the following particulars: —
(i) All such property as may belong to or be vested in the
bankrupt at the commencement of the bankruptcy, or may
be acquired by or devolve on him before his discharge; and
(ii) The capacity to exercise and to take proceedings for
exercising all such powers in or over or in respect of
property as might have been exercised by the bankrupt for
his own benefit at the commencement of his bankruptcy or
before his discharge, except the right of nomination to a
vacant ecclesiastical benefice; and
(iii) All goods being, at the commencement of the bankruptcy,
in the possession, order, or disposition of the bankrupt, in
his trade or business, by the consent and permission of the
true owner, under such circumstances that he is the
reputed owner thereof: Provided that things in action,
other than debts due or growing due to the bankrupt in the
course of his trade or business, shall not be deemed goods
within the meaning of this section.
Effect of Bankruptcy on Antecedent Transactions
28 and 29 Restriction of rights of creditors under execution

(a) Where a creditor has obtained execution which can be enforced
against the property of a debtor, he shall not be entitled to retain
the benefit of the execution against the trustee unless the
execution has been completed by seizure and sale, or by the
receipt or recovery by the coroner or lockman of the full amount
of the levy, and unless such execution has obtained priority in law
before the date of the order of adjudication and before notice of
the presentation of any bankruptcy petition by or against the
debtor or of the commission of any available act of bankruptcy by
the debtor.
(b) Where any property of a debtor is taken in execution, and before
such execution has been completed by the sale of such property,
or by the receipt or recovery of the full amount of the levy, or
when, before such execution has obtained priority in law, notice is
served on the coroner or lockman holding the execution that an
order of adjudication has been made against the debtor, or a
Section 30 The Bankruptcy Code 1892


Page 26 AT 1 of 1892 c

bankruptcy petition presented by or against the debtor, such
coroner or lockman shall, on request, deliver to the trustee the
property seized, or any money received in part satisfaction of the
execution; but the costs of enforcing the execution shall be a first
charge on the property seized or money delivered, and the trustee
may sell the property, or an adequate part thereof, for the purpose
of satisfying the charge.
(c) Where, under an execution in respect of a judgment for a sum
exceeding twenty pounds, the property of a debtor is sold or
money is paid in order to avoid sale, the coroner or lockman shall
deduct his costs of the execution from the proceeds of sale or the
money paid, and retain the balance for fourteen days, and if
within that time notice is served on him of a bankruptcy petition
having been presented against or by the debtor, and an order of
adjudication is made against the debtor thereon, or on any other
petition of which such coroner or lockman has notice, such
coroner or lockman shall pay the balance to the trustee, who shall
be entitled to retain the same as against the execution creditor.
(d) An execution levied by seizure and sale on the property of a
debtor shall not be invalid by reason only of its being an act of
bankruptcy, and a person who purchases the goods in good faith
under a sale by the coroner or lockman shall in all cases acquire a
good title to them against the trustee in bankruptcy.
(e) In paragraphs (a) to (d) above —
(a) “execution” shall have the meaning assigned to “execution
order” in section 26(1) of the Administration of Justice Act
1981; and
(b) references to seizure and sale shall be construed as
references to arrest and sale pursuant to Part II of, and
Schedules 1 and 2 to, that Act.20

Duties of Coroner as to property taken in execution
30 Avoidance of voluntary settlements

(1) Any settlement of property, not being a settlement made before and in
consideration of marriage or the formation of a civil partnership, or
made in favour of a purchaser or encumbrancer in good faith and for
valuable consideration, or a settlement made on or for the spouse or civil
partner and children of the settlor of property which has accrued to the
settlor after marriage or the formation of a civil partnership in right of his
spouse or civil partner, shall, if the settlor becomes bankrupt within two
years after the date of the settlement, be void against the trustee, and
shall, if the settlor becomes bankrupt at any subsequent time within ten
years after the date of the settlement, be void against the trustee unless
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c AT 1 of 1892 Page 27

the parties claiming under the settlement can prove that the settlor was
at the time of making the settlement able to pay all his debts without the
aid of the property comprised in the settlement, and that the interest of
the settlor in such property had passed to the trustee of such settlement
on the execution thereof.21

(2) Any covenant or contract made in consideration of marriage or the
formation of a civil partnership, for the future settlement on or for the
settlor’s spouse or civil partner or children, of any money or property
wherein he had not at the date of his marriage or civil partnership any
estate or interest, whether vested or contingent in possession or
remainder, and not being money or property of or in right of his spouse
or civil partner, shall, on his becoming bankrupt before the property or
money has been actually transferred or paid pursuant to the contract or
covenant, be void against the trustee.22

(3) “Settlement” shall, for the purposes of this section, include any
conveyance or transfer of property.
31 Avoidance of preferences in certain cases

(1) Every conveyance or transfer of property, or charge thereon made, every
payment made, every obligation incurred and every judicial proceeding
taken or suffered by any person unable to pay his debts as they become
due from his own money in favour of any creditor, or any person in trust
for any creditor, with a view of giving such creditor a preference over the
other creditors, shall, if the person making, taking, paying, or suffering
the same is adjudged bankrupt on a bankruptcy petition, presented
within four months after the date of making, taking, paying, or suffering
the same, be deemed fraudulent and void as against the trustee; and, for
the purposes of this section, any such conveyance, transfer, or charge,
shall be deemed to have been made on the day of the actual delivery
thereof to the creditor, or a person in trust for him; or on the day of the
same being recorded, if there has been no previous actual delivery, it
being hereby declared that, as against the trustee, no such conveyance,
transfer, or charge shall be valid by reason only of it being stated in the
attesting clause that such conveyance, transfer, or charge had been
delivered, or of the same having been captioned, or of constructive
delivery merely.
(2) This section shall not affect the rights of a purchaser, payee, or
incumbrancer, or any person making title in good faith and for valuable
consideration through or under a creditor of the bankrupt.
32 Protection of bona fide transactions without notice

Subject to the foregoing provisions of this Act with respect to the effect of
bankruptcy on an execution, and with respect to the avoidance of certain
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Page 28 AT 1 of 1892 c

settlements and preferences, nothing in this Act shall invalidate, in the case of a
bankruptcy —
(a) Any payment by the bankrupt to any of his creditors,
(b) Any payment or delivery to the bankrupt,
(c) Any conveyance or assignment by the bankrupt for valuable
consideration,
(d) Any contract, dealing, or transaction by or with the bankrupt for
valuable consideration,
Provided that both the following conditions are complied with,
namely —
(1) The payment, delivery, conveyance, assignment, contract,
dealing, or transaction, as the case may be, takes place
before the date of the order of adjudication; and
(2) The person (other than the debtor) to, by, or with whom
the payment, delivery, conveyance, assignment, contract,
dealing, or transaction was made, executed, or entered
into, has not, at the time of the payment, delivery,
conveyance, assignment, contract, dealing, or transaction,
notice of any available act of bankruptcy committed by the
bankrupt before that time.
Realisation of Property
33 Possession of property by trustee

(1) The trustee shall, as soon as may be, take possession of the deeds, books,
and documents of the bankrupt, and all other parts of his property
capable of manual delivery.
(2) The trustee shall, in relation to and for the purpose of acquiring or
retaining possession of the property of the bankrupt, be in the same
position as if he were a receiver of the 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 property of the bankrupt consists of stock, shares
in ships, shares, or any other property transferable in the books of any
company, office, or person, the trustee may exercise 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 property of the bankrupt consists of things in
action, such things shall be deemed to have been duly assigned to the
trustee.
(5) Any treasurer or other officer, or any banker, attorney, or agent of a
bankrupt, shall pay and deliver to the trustee all money and securities in
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c AT 1 of 1892 Page 29

his possession or power, as such officer, banker, attorney, or agent,
which he is not by law entitled to retain as against the bankrupt or the
trustee. If he does not he shall be guilty of a contempt of Court, and may
be punished, on the application of the trustee, with imprisonment for any
period not exceeding three months.
34 Seizure of property of bankrupt

Any person acting under warrant of the Court may seize any part of the
property of a bankrupt in the custody or possession of the bankrupt or of any
other person, and, with a view to such seizure, may break open any house,
building, or room of the bankrupt where the bankrupt is supposed to be, or any
building or receptacle of the bankrupt where any of his property is supposed to
be; and where the Court is satisfied that there is reason to believe that property
of the bankrupt is concealed in a house or place not belonging to him, the Court
may, if it thinks fit, grant a search warrant to any constable or officer of the
Court, who may execute it according to its tenor.
35 Sequestration of ecclesiastical benefice

(1) Where a bankrupt is a beneficed clergyman, the trustee may apply for a
sequestration of the profits of the benefice, and an office copy of the
appointment of the trustee shall be sufficient authority for the granting of
sequestration without any writ or other proceeding, and the same shall
accordingly be issued as if founded on a judgment against the bankrupt,
and shall have priority over any other sequestration issued after the
commencement of the bankruptcy in respect of a debt provable in the
bankruptcy, except a sequestration issued before the date of the receiving
order by or on behalf of a person who, at the time of the issue thereof,
had not notice of an act of bankruptcy committed by the bankrupt, and
available for grounding a receiving order against him.
(2) The Bishop may, if he think fit, appoint to the bankrupt such or the like
stipend as he might by law have appointed to a curate duly licensed to
serve the benefice during a vacancy thereof, and the sequestrator shall
pay the sum so appointed out of the profits of the benefice to the
bankrupt, by quarterly instalments, while he performs the duties of the
benefice.
(3) The sequestrator shall also pay, out of the profits of the benefice, the
salary payable to any duly licensed curate of the church of the benefice,
in respect of duties performed by him, as such, during four months
before the date of the receiving order, not exceeding fifty pounds.
(4) Nothing in this section shall prejudice any mortgage or charge duly
created under any Act of Tynwald before the commencement of the
bankruptcy on the profits of the benefice.23

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Page 30 AT 1 of 1892 c

36 Appropriation of portion of pay or salary

(1) Where a bankrupt is an officer of the army or navy, or an officer or clerk
or otherwise employed or engaged in the civil service of the Crown, the
trustee shall receive for distribution amongst the creditors so much of the
bankrupt’s pay or salary as the Court, on the application of the trustee,
with the consent of the chief officer of the department under which the
pay or salary is enjoyed, may direct. Before making any order under this
sub-section the Court shall communicate with the chief officer of the
department as to the amount, time, and manner of the payment to the
trustee, and shall obtain the written consent of the chief officer to the
terms of such payment.
(2) Where a bankrupt is in the receipt of a salary or income other than as
aforesaid, or is entitled to any half-pay, or pension, or to any
compensation granted by the Crown, the Court, on the application of the
trustee, may, from time to time, make such order as it thinks just for the
payment of any part of the salary, income, half-pay, pension, or
compensation to the trustee, to be applied by him in such manner as the
Court may direct.24

(3) Nothing in this section shall take away or abridge any power vested in
any authority to dismiss a bankrupt, or to declare the pension, half-pay,
or compensation of any bankrupt to be forfeited.
37 Actions by trustee and bankrupt’s partners

Where a member of a partnership is adjudged bankrupt, the Court may
authorise the trustee to commence and prosecute any action in the names of the
trustee and of the bankrupt’s partner; and any release by such partner of the
debt or demand to which the action relates, unless given bona fide and before
such authority was given by the Court, shall be void; but notice of the
application for authority to commence the action shall be given to such partner,
and he may show cause against it, and on his application the Court may, if it
thinks fit, direct that he shall receive his proper share of the proceeds of the
action, and if he does not claim any benefit therefrom he shall be indemnified
against costs in respect thereof as the Court directs.
38 Actions on joint contracts

Where a bankrupt is a contractor in respect of any contract jointly with any
person or persons, such person or persons may sue or be sued in respect of the
contract without the joinder of the bankrupt.
39 Proceedings in partnership name

Any two or more persons, being partners, or any person carrying on business
under a partnership name, may take proceedings or be proceeded against under
this Act in the name of the firm, but in such case the Court may, on application
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c AT 1 of 1892 Page 31

by any person interested, order the names of the persons who are partners in
such firm or the name of such person to be disclosed in such manner, and
verified on oath, or otherwise, as the Court may direct.
40 Disclaimer of onerous property

(1) Where any part of the property of the bankrupt consists of land of any
tenure burdened with onerous covenants, of shares or stock in
companies, of unprofitable contracts, or of any other property that is
unsaleable, or not readily saleable, by reason of its binding the possessor
thereof to the performance of any onerous act, or to the payment of any
sum of money, the trustee, notwithstanding that he has endeavoured to
sell or has taken possession of the property, or exercised any act of
ownership in relation thereto, but subject to the provisions of this section,
may, by writing signed by him, at any time within three months after the
first appointment of a trustee, disclaim the property.
Provided that where any such property shall not have come to the
knowledge of the trustee within one month after such appointment, he
may disclaim such property at any time within three months after he first
became aware thereof.
(2) The disclaimer shall operate to determine, as from the date of disclaimer,
the rights, interests, and liabilities of the bankrupt and his property in or
in respect of the property disclaimed, and shall also discharge the trustee
from all personal liability in respect of the property disclaimed as from
the date when the property vested in him, but shall not, except so far as
is necessary for the purpose of releasing the bankrupt and his property
and the trustee from liability, affect the rights or liabilities of any other
person.
(3) A trustee shall not be entitled to disclaim a lease without the leave of the
Court, except in any cases which may be prescribed by general rules, and
the Court may, before or on granting such leave, require such notices to
be given to persons interested, and impose such terms as a condition of
granting leave, and make such orders with respect to fixtures, such
tenant’s improvements, and other matters, arising out of the tenancy, as
the Court thinks just.
(4) The trustee shall not be entitled to disclaim any property in pursuance of
this section in any case where an application in writing has been made to
the trustee by any person interested in the property requiring him to
decide whether he will disclaim or not, and the trustee has, for a period
of twenty-eight days after the receipt of the application, or such extended
period as may be allowed by the Court, declined or neglected to give
notice whether he disclaims the property or not; and in the case of a
contract, if the trustee, after such application as aforesaid, does not,
within the said period or extended period, disclaim the contract, he shall
be deemed to have adopted it.
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Page 32 AT 1 of 1892 c

(5) The Court may, on the application of any person who is, as against the
trustee, entitled to the benefit or subject to the burden of a contract made
with the bankrupt, make an order rescinding the contract on such terms
as to payment by or to either party of damages for the non-performance
of the contract, or otherwise, as to the Court may seem equitable, and
any damages payable under the order to any such person may be proved
by him as a debt under the bankruptcy.
(6) The Court may, on application by any person either claiming any interest
in any disclaimed property, or under any liability not discharged by this
Act in respect of disclaimed property, and on hearing such persons as it
thinks fit, make an order for the vesting of the property in or delivery
thereof to any person entitled thereto, or to whom it may seem just that
the same should be delivered by way of compensation for such liability
as aforesaid, or a trustee for him, and on such terms as the Court thinks
just; and on any such vesting order being made, the property comprised
therein shall vest accordingly, in the person therein named in that behalf,
without any conveyance or assignment for the purpose.
Provided always, that where the property disclaimed is of a leasehold
nature, the Court shall not make a vesting order in favour of any person
claiming under the bankrupt, whether as under-lessee or as mortgagee
by demise, except upon the terms of making such person subject to the
same liabilities and obligations as the bankrupt was subject to under the
lease in respect of the property at the date when the bankruptcy petition
was filed, or the Court may, if it thinks fit, modify such terms so as to
make the person in whose favour the vesting order is made subject only
to the same liabilities and obligations as if the lease had been assigned to
him at the date of the presentation of the bankruptcy petition; and (if the
case so required) as if the lease had comprised only the property in the
vesting order, and any mortgagee or under-lessee declining to accept a
vesting order upon such terms shall be excluded from all interest in
security upon the property, and if there shall be no person claiming
under the bankrupt who is willing to accept an order upon such terms,
the Court shall have power to vest the bankrupt’s estate and interest in
the property in any person liable either personally or in a representative
character, and either alone or jointly with the bankrupt, to perform the
lessee’s covenants in such lease, freed and discharged from all estates,
incumbrances and interests created therein by the bankrupt.
(7) Any person injured by the operation of a disclaimer under this section
shall be deemed to be a creditor of the bankrupt to the extent of the
injury, and may accordingly prove the same as a debt under the
bankruptcy.
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41 Powers of trustee to deal with property

Subject to the provisions of this Act, the trustee may do all or any of the
following things: —
(1) Sell all or any part of the property of the bankrupt (including the
goodwill of the business, if any, and the book debts due or growing due
to the bankrupt) by public auction or (with the consent of the Court) by
private contract, with power to transfer the whole thereof to any person
or company, or to sell the same in parcels:
(2) Give receipts for any money received by him, which receipts shall
effectually discharge the person paying the money from all responsibility
in respect of the application thereof:
(3) Prove, rank, claim, and draw a dividend in respect of any debt due to the
bankrupt:
(4) Exercise any powers the capacity to exercise which is vested in the
trustee under this Act, and execute any powers of attorney, deeds, and
other instruments for the purpose of carrying into effect the provisions of
this Act.
42 Powers exercisable by trustee with permission of Court

The trustee may, with the permission of the Court, do all or any of the following
things —
(1) Carry on the business of the bankrupt, as far as may be necessary, for the
beneficial winding up of the same:
(2) Bring, institute, or defend any action or other legal proceeding relating to
the property of the bankrupt:
(3) Employ an advocate, solicitor, or other agent to take any proceedings or
do any business which may be sanctioned by the Court:
(4) Accept as the consideration for the sale of any property of the bankrupt a
sum of money payable at a future time, subject to such stipulations, as to
security and otherwise, as the Court thinks fit:
(5) Mortgage or pledge any part of the property of the bankrupt for the
purpose of raising money for the payment of his debts:
(6) Refer any dispute to arbitration, compromise all debts, claims, and
liabilities, whether present or future, certain or contingent, liquidated or
unliquidated, subsisting or supposed to subsist between the bankrupt
and any person who may have incurred any liability to the bankrupt, on
the receipt of such sums, payable at such times, and generally on such
terms, as may be agreed on:
(7) Make such compromise or other arrangement as may be thought
expedient with creditors, or persons claiming to be creditors, in respect
of any debts provable under the bankruptcy:
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(8) Make such compromise or other arrangement as may be thought
expedient with respect to any claim arising out of or incidental to the
property of the bankrupt, made or capable of being made on the trustee
by any person or by the trustee on any person:
(9) Divide in its existing form amongst the creditors, according to its
estimated value, any property which, from its peculiar nature or other
special circumstances, cannot be readily or advantageously sold.
The permission given for the purposes of this section shall not be a general
permission to do all or any of the above-mentioned things, but shall only be a
permission to do the particular thing or things for which permission is sought in
the specified case or cases; and the permission given by this section for the
employment of an advocate, solicitor, or other agent must be permission
obtained before the employment, except in cases of urgency, and in such cases it
must be shown that no undue delay took place in obtaining the permission.
Distribution of Property
43 Declaration and distribution of dividends

(1) After making provision for such sum as may be necessary for the costs of
administration or otherwise, the Court shall, on the application of the
trustee, make an order declaring that a dividend shall be paid to such
creditors who have proved their debts, and in pursuance of any such
order the distribution shall be made, as nearly as may be, according to
the practice in the Civil Division of the High Court in matters of
distribution of estates.25

(2) The first dividend, if any, shall be declared and distributed within four
months after the date of the order of adjudication, unless the trustee
satisfies the Court that there is sufficient reason for postponing the
declaration to a later date.
(3) Subsequent dividends shall, in the absence of sufficient reason to the
contrary, be, on the application of the trustee, declared and distributed at
intervals of not more than six months.
(4) Before applying for a distribution the trustee shall cause notice of his
intention to do so to be advertised in the manner the Court may direct,
and shall also send reasonable notice thereof to each creditor mentioned
in the bankrupt’s statement who has not proved his debt.
(5) When a dividend has been declared the trustee shall send to each
creditor who has proved a notice showing the amount of the dividend
and when and how it is payable, and a statement in the prescribed form
as to the particulars of the estate.
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44 Joint and separate dividends

(1) Where one partner of a firm is adjudged bankrupt, a creditor to whom
the bankrupt is indebted jointly with the other partners of the firm, or
any of them, shall not receive any dividend out of the separate property
of the bankrupt until all the separate creditors have received the full
amount of their respective debts.
(2) Where joint and separate properties are being administered, dividends of
the joint and separate properties shall, subject to any order to the
contrary that may be made by the Court on the application of any person
interested, be declared together; and the expenses of and incident to such
dividends shall be fairly apportioned between the joint and separate
properties, regard being had to the work done for and the benefit
received by each property.
45 Provisions for creditors residing at a distance, etc

In the calculation and distribution of a dividend provision shall be made for
debts provable in bankruptcy appearing from the bankrupt’s statements, or
otherwise, to be due to persons resident in places beyond this Isle, that, in the
ordinary course of communication, they have not had sufficient time to tender
their proofs, or to establish them if disputed, and also for debts provable in
bankruptcy, the subject of claims not yet determined. Provision shall also be
made for any disputed proofs or claims, and for the expenses necessary for the
administration of the estate or otherwise, and, subject to the foregoing
provisions, all money in hand should be distributed.
46 Right of creditor who has not proved debt before declaration of

dividend

Any creditor who has not proved his debt before the declaration of any
dividend or dividends shall be entitled to be paid out of any money for the time
being in Court to the credit of the bankruptcy estate available for dividend, any
dividend or dividends he may have failed to receive before that money is
applied to the payment of any future dividend or dividends, but he shall not be
entitled to disturb the distribution of any dividend declared before his debt was
proved by reason that he has not participated therein.
47 Final dividend

When the trustee has realised all the property of the bankrupt, or as much
thereof as can, in the opinion of the Court, be realised without needlessly
protracting the trusteeship, he shall apply to the Court for a final dividend to be
declared, but before so doing he shall give notice in such manner as the Court
may direct to the persons whose claims to be creditors have been notified to
him, but not established to his satisfaction, that if they do not establish their
claims to the satisfaction of the Court within a time limited by the notice, he will
Section 48 The Bankruptcy Code 1892


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apply to have a final dividend made without regard to their claims. After the
expiration of the time so limited, or, if the Court on application by any such
claimant grant him further time for establishing his claim, then, on the
expiration of such further time, the property of the bankrupt shall be divided
among the creditors who have proved their debts, without regard to the claims
of any other persons.
48 No action for dividend

Where money is paid out of Court to the trustee for the payment of dividends,
no action for a dividend shall lie against the trustee, but if the trustee refuses to
pay any dividend the Court may, if it thinks fit, order him to pay it, and also to
pay, out of his own money, interest thereon for the time that it is withheld, and
the costs of the application. Such order shall be enforced by execution.
49 Power to allow bankrupt to manage property

Allowance to bankrupt for maintenance or service
(1) The trustee, with the permission of the Court, may appoint the bankrupt
himself to superintend the management of the property of the bankrupt
or of any part thereof, or to carry on the trade (if any) of the bankrupt for
the benefit of his creditors, and in any other respect to aid in
administering the property in such manner and on such terms as the
trustee may direct.
(2) The trustee may, from time to time, with the permission of the Court,
make such allowance as he may think just to the bankrupt out of his
property for the support of the bankrupt and his family, or in
consideration of his services if he is engaged in winding up his estate.
50 Right of bankrupt to surplus

The bankrupt shall be entitled to any surplus remaining after payment in full of
his creditors, with interest, as by this Act provided, and of the costs, charges,
and expenses of the proceedings under the bankruptcy petition.
51 Trustee to furnish list of creditors

The trustee shall, whenever required by any creditor to do so, furnish and
transmit to such creditor by post a list of the creditors, showing in such list the
amount of the debt due to each of such creditors.
The trustees shall be entitled to charge for such list the sum of 1p per page of
seventy-two words, together with the cost of the postage thereof.26

52 Statement of accounts to be furnished if required

Any creditor, with the concurrence of one-sixth in number of the creditors
(including himself) may at any time call upon the trustee to furnish and
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transmit to the creditors a statement of the accounts up to the date of such
notice, and the trustee shall, upon receipt of such notice, furnish and transmit
such statement of accounts. Provided that the person at whose instance the
accounts are furnished shall deposit with the trustees a sum sufficient to pay the
costs of furnishing and transmitting the accounts, such sum to be repaid him
out of the estate if the Court so direct.
PART IV

Trustees in Bankruptcy
53 Clerk of the Rolls to appoint official trustees

(1) The Clerk of the Rolls shall, at any time before the commencement of this
Act, and from time to time, appoint such persons as he may think fit to
be official trustees of debtors’ estates, and may remove any person so
appointed from such office. Any appointment or removal hereunder
shall be in writing, and shall be filed in the Rolls Office.27

(2) The official trustees shall be officers of the Court, and shall act under its
directions.
(3) Any official trustee may be appointed as official receiver, or manager, or
trustee in any bankruptcy, and he shall give such security to the Crown
as the Court may direct.
54 Deputy for official receiver

The Court may, from time to time, by order, direct that any official trustee shall
be capable of discharging the duties of trustee during any temporary vacancy in
the office, or during the temporary absence of any official trustee through illness
or otherwise.
55 Duties of official trustee as regards the debtor’s conduct

As regards the debtor and his estate, it shall be the duty of the trustee —
(1) To investigate the conduct of the debtor and to report to the Court,
stating whether there is reason to believe that the debtor has committed
any offence under this or any Act for the punishment of fraudulent
debtors for the time being in force, or which would justify the Court in
refusing, suspending, or qualifying an order for his discharge:
(2) To make such other reports concerning the conduct of the debtor as the
Court may direct:
(3) To take such part, and give such assistance, in relation to the prosecution
of any fraudulent debtor as the Court may direct:
Section 56 The Bankruptcy Code 1892


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(4) For the purpose of his duties as interim receiver or manager, the official
receiver shall have the same powers as if he were a receiver or manager
appointed by the High Court, and shall not, unless the Court otherwise
order, incur any expense beyond such as is requisite for the protection of
the debtor’s property or the disposing of perishable goods:
(5) Provided that, when the debtor cannot, in the opinion of the Court,
himself prepare a proper statement of affairs, the official receiver may,
under the direction of the Court, and at the expense of the estate, employ
some person or persons to assist in the preparation of the statement of
affairs:
(6) Every official receiver shall account to the Court and pay over all moneys
and deal with all securities in such manner as the Court from time to
time direct.
Remuneration of Trustee
56 Remuneration of trustee

(1) The remuneration of a trustee in bankruptcy shall be fixed by the Court
by order, and shall be payable out of the amount realised after deducting
any sums paid to secured creditors out of the proceeds of their securities.
(2) The order shall express what expenses the remuneration is to cover, and
no liability shall attach to the bankrupt’s estate, or to the creditors, in
respect of any expenses which the remuneration is expressed to cover.
(3) A trustee shall not, under any circumstances whatever, make any
arrangements for or accept from the bankrupt, or any advocate, solicitor,
auctioneer, or any other person that may be employed about a
bankruptcy, any gift, remuneration, or pecuniary or other consideration
or benefit whatever beyond the remuneration fixed by the Court and
payable out of the estate, nor shall he make any arrangement for giving
up, or give up, any part of his remuneration, either as receiver, manager,
or trustee either to the bankrupt, or any solicitor, or other person that
may be employed about a bankruptcy.
(4) Where a trustee acts without remuneration he shall be allowed out of the
bankrupt’s estate such proper expenses incurred by him in or about the
proceedings of the bankruptcy as the Court may approve.
Costs
57 Allowance and taxation of costs

(1) Where a trustee or manager receives remuneration for his services as
such no payment shall be allowed in his accounts in respect of the
performance by any other person of the ordinary duties which are
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required by statute or rules, or what in the opinion of the Court ought to
be performed by himself.
(2) Where the trustee is an advocate he may arrange with the Court that the
remuneration for his services as trustee shall include all professional
services, and such arrangement shall be set out in the order of the Court.
(3) All bills and charges of advocates shall be taxed in like manner as bills of
costs of advocates are now taxed, and those of trustees, managers,
accountants, auctioneers, brokers, and other persons shall be taxed by the
Court, and no payments in respect thereof shall be allowed in the
trustee’s accounts without proof of such taxation having been made.
The Court shall satisfy itself before passing such bills and charges that
the employment of such advocates and other persons, in respect of the
particular matters out of which such charges arise, has been duly
sanctioned; and, in the case of bills and charges of advocates to be taxed
as aforesaid, the Court shall in each case certify that such bills are
referred for taxation, and whether as costs of a superior or summary
Court, and whether as between attorney and client or party and party.28

(4) Every such person shall, on request by the trustee (which request the
trustee shall make a sufficient time before declaring a dividend), deliver
his bill of costs or charges to the proper officer for taxation, and if he fails
to do so within seven days after receipt of the request, or such further
time as the Court, on application, may grant, the trustee shall declare and
distribute the dividend without regard to any claim by him, and
thereupon any such claim shall be forfeited as well against the trustee
personally as against the estate.
Receipts, Payments, Accounts, Audit
58 Payment of money into bank

(1) Every trustee in bankruptcy shall, in such manner and at such times as
may be prescribed or as the Court may direct, pay, with the privity of a
judge of the Court, the money received by him into the bank to the credit
of an account to be called “The Bankruptcy Account of “, inserting the
name of the bankrupt.
(2) If a trustee at any time retains for more than ten days a sum exceeding
twenty pounds, or such other amount as the Court in any particular case
authorises him to retain, then, unless he explains the retention to the
satisfaction of the Court, he shall pay interest on the amount so retained
in excess at the rate of twenty pounds per centum per annum, and shall
have no claim for remuneration, and may be removed from his office by
the Court, and shall be liable to pay any expenses occasioned by reason
of his default.
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(3) The accounts of moneys paid into Court shall be kept at the Rolls Office,
in like manner as in the case of other moneys paid into the High Court;
but as to the payment of money into Court in bankruptcy proceedings, a
certificate of the judge of the Court shall be substituted for that of the
Clerk of the Rolls, a duplicate of such certificate being in each case
forwarded by the Court to the Rolls Office, and a payment of money
under any such certificate into the bank, shall be deemed to be a
payment made with the privity of the judge.
59 Trustee not to pay into private account

No trustee in a bankruptcy or under any composition or scheme of arrangement
shall pay sums received by him as trustee into his private banking account.
60 Accounts of trustee to be filed and audited

(1) Every trustee shall, at such times as may be prescribed, but not less than
twice in each year during his tenure of office, return to the Court an
account of his receipts and payments as such trustee.
(2) The accounts shall be in a prescribed form, and shall be verified by a
statutory declaration in the prescribed form.
(3) The Court may cause the accounts so sent to be audited, and for the
purposes of the audit the trustee shall furnish the Court with such
vouchers and information as the Court may require, and the Court may,
at any time, require the production of and inspect any books or accounts
kept by the trustee.
61 The trustee to furnish list of creditors

The trustee shall, whenever required by any creditor so to do, and on payment
by such creditor of the prescribed fee, furnish and transmit to such creditor by
post a list of the creditors, showing in such list the amount of the debt due to
each of such creditors.
62 Books to be kept by trustees

The trustee shall keep, in manner prescribed, proper books, in which he shall
from time to time cause to be made entries or minutes of proceedings at
meetings, and of such other matters as may be prescribed, and any creditor of
the bankrupt may, subject to the control of the Court, personally or by his agent
inspect any such books.
63 Annual statement of proceedings

(1) Every trustee in a bankruptcy shall, from time to time, as may be
prescribed, and not less than once in every year during the continuance
of the bankruptcy, transmit to the Court a statement showing the
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proceedings in the bankruptcy up to the date of the statement, containing
the prescribed particulars, and made out in the prescribed form.
(2) The Court may cause the statements so transmitted to be examined, and
shall call the trustee to account for any misfeasance, neglect, or omission
which may appear on the said statements or in his accounts or otherwise,
and may require the trustee to make good any loss which the estate of
the bankrupt may have sustained by the misfeasance, neglect, or
omission.
(3) All expenses connected with the audit and examination under this
section and section 60 shall be paid out of the bankrupt’s estate.
Release of Trustee
64 Release of trustee

(1) When the trustee has realised all the property of the bankrupt, or as
much thereof as can, in his opinion, be realised without needlessly
protracting the trusteeship, or has ceased to act by reason of a
composition having been approved, or has resigned, or has been
removed from his office, the Court shall, on his application, and after
such notice to creditors, or any of them, as the Court may direct, cause a
report on his accounts to be prepared, and, on his complying with all the
requirements of the Court, shall take into consideration the report, and
any objection which may be urged by any creditor or person interested
against the release of the trustee, and shall either grant or withhold the
release accordingly.
(2) Where the release of a trustee is withheld the Court may, on the
application of any creditor or person interested, make such order as it
thinks just, charging the trustee with the consequences of any act or
default he may have done or made contrary to his duty.
(3) Any order of the Court releasing the trustee shall discharge him from all
liability in respect of any act done or default made by him in the
administration of the affairs of the bankrupt, or otherwise in relation to
his conduct as trustee, but any such order may be revoked on proof that
it was obtained by fraud or by suppression or concealment of any
material fact.
Official Name
65 Official name of trustee

The trustee may sue and be sued by the official name of “the trustee of ................
...........................a bankrupt,” inserting the name of the bankrupt, and by that
name may hold property of every description, make contracts, sue and be sued,
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enter into any engagements binding on himself and his successors in office, and
do all other acts necessary or expedient to be done in the execution of his office.
Control over Trustee
66 Discretionary powers of trustee and control thereof

(1) Subject to the provisions of this Act, the trustee shall, in the
administration of the property of the bankrupt and in the distribution
thereof amongst his creditors, have regard to any directions that may be
given by the Court.
(2) The trustee may apply to the Court in manner prescribed for directions
in relation to any particular matter arising under the bankruptcy.
(3) Subject to the provisions of this Act the trustee shall use his own
discretion in the management of the estate and its distribution among the
creditors.
67 Appeal to Court against trustee

If the bankrupt or any of the creditors, or any other person, is aggrieved by any
act or decision of the trustee, he may apply to the Court, and the Court may
confirm, reverse, or modify the act or decision complained of, and make such
order in the premises as it thinks just.
68 Court may remove a trustee

The Court shall have power, on the application of any creditor, and on cause
shown, to remove a trustee of a bankruptcy estate, and to appoint another
trustee in his place.
Appeals, etc.
69 Appeals in bankruptcy

(1) The Court may review, rescind, or vary any order made by it under its
bankruptcy jurisdiction.
(2) Orders in bankruptcy matters shall, at the instance of any person
aggrieved, be subject to appeal as follows: —
(a) An appeal shall lie from the order of the Court to the Appellate
Court:
(b) An appeal shall, with the leave of the Appellate Court, but not
otherwise, lie from the order of that Court to Her Majesty in
Council:
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(c) No appeal shall be entertained except in conformity with such
general rules as may be for the time being in force in relation to
appeals.
PART V

General Rules, Etc.
70 General rules to be made

(1) Subject to the provisions of this Act, the Deemsters may, from time to
time, make, revoke, or alter general rules for carrying into effect the
purposes of this Act, for regulating the practice and proceedings of the
Court in bankruptcy.29

(2) Part III of the High Court Act 1991, shall be applicable to the general rules
to be made under this Act.30

70A Fees and commissions

(1) The Treasury shall by order prescribe the fees and percentages to be
charged for or in respect of proceedings in bankruptcy.
(2) An order under this section shall not have effect unless it is approved by
Tynwald.31

Formal Defects
71 Formal defect not to invalidate proceedings

(1) No proceeding in bankruptcy shall be invalidated by any formal defect
or by any irregularity, unless the Court before which an objection is
made to the proceeding is of opinion that substantial injustice has been
caused by the defect or irregularity, and that the injustice cannot be
remedied by any order of the Court.
(2) No defect or irregularity in the appointment of the trustee shall vitiate
any act done by him in good faith.
The Crown
72 Certain proceedings to bind the Crown

Save as herein provided, the provisions of this Act relating to the remedies
against the property of a debtor, the effect of a composition or scheme of
arrangement, and the effect of a discharge shall bind the Crown; but otherwise
Section 73 The Bankruptcy Code 1892


Page 44 AT 1 of 1892 c

nothing in this Act contained shall affect the rights of the Crown, save as they
are by this Act expressly affected.
Transitory Provisions
73 Transfer of estates on vacancy of office of trustee in liquidation under

the Bankruptcy Act, 1872

[Spent.]
74 Transfer of outstanding property on close of bankruptcy or liquidation

[Spent.]
75 Transfer of estates from registrars of Court to official receiver

[Spent.]
76 Proceedings under Bankruptcy Act, 1872, ss 95 and 96

[Spent.]
PART VI

Relief of Imprisoned Debtors
77 An imprisoned debtor may be discharged on accounting for and

surrendering his property

Any imprisoned debtor may, without taking proceedings in bankruptcy, by
petition to the Court, seek to be discharged from imprisonment under any order
by reason of his inability to pay or secure the debt for which he may be
imprisoned, which petition shall be heard in the usual way with all convenient
speed; and, on the hearing of such petition, or after due notice to the creditors at
whose instance the orders have been made in case they do not appear at such
hearing, the Court may, on being satisfied that the debtor has fully accounted
for all his property of every description, and if the Court so require, on the
debtor executing to the satisfaction of the Court such deed or deeds of
assignment of all property to which he may be entitled in possession or
otherwise in favour of any trustee or trustees to be approved by the Court in
trust for the benefit of the creditors of the debtor according to their respective
rights, order the debtor’s discharge from such his imprisonment.
Provided always —
(1) That on the hearing of any such petition the Court may, on consideration
of the circumstances of the debtor, instead of ordering his absolute
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discharge from imprisonment under any order, suspend the enforcement
of such order on condition that the debtor pay periodically, and in such
manner as the Court may direct, such instalments of the debt as may be
agreed upon by the parties, or fixed by the Court. In case the debtor fail
to pay any such instalment, it shall be lawful again from time to time to
enforce such order, if for a judgment debt, for the amount or balance due
under such order, or where judgment has not been obtained for the debt,
and the order be still in force, to enforce such order for the amount
claimed or for which the debtor might be liable to imprisonment
thereunder had he not been discharged. Where judgment for the debt has
not been obtained, the said instalments shall be paid or secured in such
manner as may be agreed upon by the parties, or as the Court may
direct:
(2) That a general assignment of the debtor’s property, without specification
thereof, made under this section shall be sufficient in law to vest in the
trustee or trustees of such assignment all property of the debtor capable
of being sold or transferred by him:
(3) That, notwithstanding any such assignment, the future property of the
debtor shall, at all times thereafter, be liable to be taken under execution
then or thereafter to be granted for the debt for which he may have been
imprisoned, or for so much as may remain unsatisfied; but, except as
hereinbefore mentioned, he shall not be again liable to imprisonment for
the same debt:
(4) That nothing in this section contained shall prejudice or affect the
proceedings which may be taken by or against a debtor under the law for
the time being in force in relation to bankruptcy or insolvency, or the
right of a debtor to obtain under any such law an absolute discharge of
his future property from liability to his debts; but no assignment of a
debtor’s property under this section shall be in anywise affected or
rendered void or voidable by reason of bankruptcy proceedings being
taken subsequently against the debtor, or of the debtor being
subsequently adjudicated a bankrupt:
(5) That in any case of a debtor seeking relief under this section in respect of
a judgment debt for which execution has not been awarded, the said
Court shall, as heretofore accustomed, on the hearing of the petition
award execution for the amount of the debt and costs, but in this case the
judgment debtor shall not be liable to imprisonment again for the same
debt by reason of the judgment creditor obtaining a return of no effects
to discharge the execution which may be so awarded:
(6) That for the purposes of this section, “debt” shall include damages and
costs whether payable under judgment or claimed in a suit, and also the
amount for which security may be required in an action of arrest in the
High Court against the putative father of a bastard child to obtain
security for unascertained or unliquidated expenses, past or future, in
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connection with the birth, maintenance, clothing, education, or death of
such child; “debtor” shall include the defendant in an action or suit for
debt, and any person imprisoned for debt, and although judgment for
the debt has not been given; “order” shall mean and include an order of
imprisonment, a writ of contempt for non-payment of a debt under a
judgment, and mesne process of arrest for debt; and “execution” shall
mean an order or process under which the property of a debtor is liable
to be attached and sold.
But provided also, that a person imprisoned for —
(a) default in payment of a penalty, or sum in the nature of a penalty,
other than a penalty in respect of any contract, or of any sum of
money for non-payment whereof a fixed term of imprisonment is
awarded:
(b) default by such person as a trustee or acting in a fiduciary
capacity, and ordered to pay any sum in his possession or under
his control:
(c) default by such person as an advocate or solicitor in payment of
costs when ordered to pay costs for misconduct as such, or in
payment of a sum of money when ordered by a Court in his
character of an advocate or solicitor:
(d) default in payment for the benefit of creditors of any portion of a
salary or other income in respect of the payment of which any
Court having jurisdiction in bankruptcy is authorised to make an
order:
shall not be deemed a debtor for the purposes of this section.
PART VII

DEED OF ARRANGEMENT
78 Deed of arrangement to which Act applies

A deed of arrangement shall include any of the following instruments, made by,
for, or in respect of the affairs of a debtor for the benefit of the creditors
generally, otherwise than in pursuance of the provisions of this Act relating to
bankruptcy or any other Act for the time being in force relating to bankruptcy
(that is to say) —
(a) Assignment of property;
(b) A deed of or agreement for a composition;
and in cases where creditors of a debtor obtain any control over his
property or business —
(c) A deed of inspectorship entered into for the purpose of carrying
on or winding up a business;
The Bankruptcy Code 1892 Section 79


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(d) A letter of licence authorising the debtor or any other person to
arrange, carry on, realise, or dispose of a business, with a view to
the payment of debts; and
(e) Any agreement or instrument entered into for the purpose of
carrying on or winding up the debtor’s business, or authorising
the debtor or any other person to manage, carry on, realise, or
dispose of the debtor’s business, with a view to the payment of his
debts.
79 Registration of deed of arrangement

A deed of arrangement shall be void unless the same shall have been registered
in the office for registry of deeds within seven clear days after the first execution
thereof by the debtor or any creditor, or if it is executed in any place out of this
Isle within seven clear days after the time at which it would, in the opinion of
the registrar, in the ordinary course of post, arrive in this Isle, if posted one
week after the execution thereof; and in the latter case there shall be added to
the certificate or memorandum of registration by the registrar a statement that
in his opinion the deed has been duly registered pursuant to this Act.
80 Extension of time for registration

The Court, upon being satisfied that the omission to register a deed of
assignment within the time required by this Act was accidental, or due to
inadvertence, or to some cause beyond the control of the debtor, may, on the
application of any person interested, and on such terms as are just and
expedient, extend the time for such registration.
81 Time for registration

When the time for registering a deed of arrangement expires on a Sunday, or
other day on which the registration office is closed, the registration shall be
valid if made on the next following day on which the office is open.
82 Deed of arrangement to be confirmed by the Court

The trustees appointed by a deed of arrangement shall cease to be trustees
unless their appointment is confirmed by the Court on an application by
petition for such confirmation, to be presented within three days after the
registration of the deed, and on the hearing of such petition the Court shall have
power to appoint trustees other than those named in the deed. Notice of the
hearing of such petition shall be given to the debtor and trustees, if not
petitioners, and to some of the principal creditors, and otherwise if the Court
see fit. If it appear to the Court, on the hearing of the petition, that, in
consequence of difficulties as to the appointment of trustees, or for any
sufficient cause, the deed of arrangement cannot, without injustice or undue
Section 83 The Bankruptcy Code 1892


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delay to the creditors or to the debtor, be carried into effect, the Court may
adjudge the debtor a bankrupt, and proceedings may be had accordingly.
83 Jurisdiction of Court as to deed of arrangement

The Court shall have the like jurisdiction with respect to a deed of arrangement
and the trustees thereof, as the High Court has with respect to the execution of
trusts under any deed or will, and the administration of trust property; and the
Court shall have power summarily, on the application of any trustee of a deed
of arrangement, or of any creditor of the debtor, or of any person interested in
the trust property under such deed, in order to ensure a fair and just
distribution of such property amongst the creditors according to their respective
priorities and rights, to vary, amend, or set aside any of the provisions of a deed
of arrangement which it may deem inequitable or unjust; also to remove
trustees, and to fill up vacancies in the trust; also, if the Court think it advisable,
to order the proceeds of the trust property to be paid into Court for distribution.
84 Provisions as to trustee in Part IV to be applicable to trustees of deeds

of arrangement

Part IV of this Act shall apply to the trustee of a deed of arrangement as if he
were a trustee in bankruptcy, and as if the term “bankruptcy” and “bankrupt”
included respectively a deed of arrangement, and the debtor to whose affairs
such deed relates.
85 Part III as to administration of property to apply to property

administered under a deed of arrangement

Part III of this Act shall, so far as the nature of the case and the terms of the deed
of arrangement admit, apply thereto, the same interpretation being given to the
words “trustee”, “bankruptcy”, and “bankrupt”, as in the last preceding section.
PART VIII

FRAUDULENT DEBTORS
86 Offences by debtors

A bankrupt shall in each of the cases following be deemed guilty of a
misdemeanour, and, on conviction thereof, shall be liable to be imprisoned for
any time not exceeding two years, with or without hard labour (that is to
say): —
If, with intent to defraud —
(1) He does not, to the best of his knowledge and belief, fully and truly
discover to the trustee all his property, real and personal, and how, and
to whom, and for what consideration, and when he disposed of any part
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thereof, except such part as has been disposed of in the ordinary way of
his trade (if any), or laid out in the ordinary expense of his family:
(2) He does not deliver up to the trustee, or as he directs, all such part of his
real and personal property as is in his custody or under his control, and
which he is required by law to deliver up:
(3) He does not deliver up to the trustee, or as he directs, all books,
documents, papers, and writings in his custody or under his control
relating to his property or affairs:
(4) After the presentation of a bankruptcy petition by or against him, or
within four months next before such presentation, he conceals any part
of his property to the value of ten pounds or upwards, or conceals any
debt due to or from him:
(5) After the presentation of a bankruptcy petition by or against him, or
within four months next before such presentation, he fraudulently
removes any part of his property of the value of ten pounds or upwards:
(6) He makes any material omission in any statement relating to his affairs:
(7) Knowing or believing that a false debt has been proved by any person
under his bankruptcy, he fails for the period of a month to inform such
trustee as aforesaid thereof:
(8) After the presentation of a bankruptcy petition by or against him, he
prevents the production of any book, document, paper, or writing,
affecting or relating to his property or affairs:
(9) After the presentation of a bankruptcy petition by or against him, or
within four months next before such presentation, he conceals, destroys,
mutilates, or falsifies, or is privy to the concealment, destruction,
mutilation, or falsification of any book or document affecting or relating
to his property or affairs:
(10) After the presentation of a bankruptcy petition by or against him, or
within four months next before such presentation, he makes or is privy
to the making of any false entry in any book or document affecting or
relating to his property or affairs:
(11) After the presentation of a bankruptcy petition by or against him, or
within four months next before such presentation, he fraudulently parts
with, alters, or makes any omission, or is privy to the fraudulently
parting with, altering, or making any omission in any document affecting
or relating to his property or affairs:
(12) After the presentation of a bankruptcy petition by or against him, or at
any meeting of his creditors within four months next before such
presentation, he attempts to account for any part of his property by
fictitious losses or expenses:
(13 and 14) [Repealed]32

Section 87 The Bankruptcy Code 1892


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(15) Within four months next before the presentation of a bankruptcy petition
by or against him, he pawns, pledges, or disposes of, otherwise than in
the ordinary way of his trade, any property which he has obtained on
credit and has not paid for:
(16) He is guilty of any false representation, or other fraud for the purpose of
obtaining the consent of his creditors, or any of them, to any agreement
with reference to his affairs or his bankruptcy:
(17) After the presentation of a bankruptcy petition by or against him, or
within four months before such presentation, he quits this Isle and takes
with him, or attempts or makes preparations for quitting this Isle, and for
taking with him, any part of his property to the amount of twenty
pounds or upwards, which ought by law to be divided amongst his
creditors.
87 Undischarged bankrupt obtaining credit to extent of £20 to be guilty of

misdemeanour

Where an undischarged bankrupt who has been adjudged bankrupt obtains
credit to the extent of twenty pounds or upwards from any person without
informing such person that he is an undischarged bankrupt, he shall be guilty of
a misdemeanour, and on conviction thereof shall be liable to be imprisoned for
any time not exceeding two years, with or without hard labour.
88 Penalty for fraudulently obtaining credit, etc

Any person shall, in each of the cases following be deemed guilty of
misdemeanour, and on conviction thereof shall be liable to be imprisoned for
any period not exceeding one year, with or without hard labour (that is to
say) —
(1) [Repealed]33

(2) If he has, with intent to defraud his creditors, or any of them, made or
caused to be made any gift, delivery, or transfer of, or any charge on, his
property;
(3) If he has, with intent to defraud his creditors, concealed or removed any
part of his property since or within two months before the date of any
unsatisfied judgment or order for payment of money obtained against
him.
89 [Repealed]
34

90 Debts incurred by fraud

Where a debtor makes any arrangement or composition with his creditors, he
shall remain liable for the unpaid balance of any debt which he incurred or
The Bankruptcy Code 1892 Section 91


c AT 1 of 1892 Page 51

increased, or whereof before the date of the arrangement or composition he
obtained forbearance from a creditor by any fraud.
91 Criminal liability after discharge or composition

Where a debtor has been guilty of any criminal offence he shall not be exempt
from being proceeded against therefor by reason that he has obtained his
discharge, or that a composition or scheme of arrangement has been accepted or
approved.
92 Form of indictment

In an indictment for an offence under this Act, it shall be sufficient to set forth
the substance of the offence charged in the words of this Act, specifying or as
near thereto as circumstances admit, without alleging or setting forth any debt,
act of bankruptcy, trading adjudication, or any proceeding in, or order, warrant,
or document, of any Court; and it shall be sufficient in any indictment under
this Act, where it shall be necessary to allege an intent to defraud, to allege that
the party accused did the act charged with intent to defraud, without alleging
an intent to defraud any particular person; and on the trial of the indictment it
shall not be necessary to prove an intent to defraud any particular person; but it
shall be sufficient to prove that the party accused did the act with an intent to
defraud.
93 A magistrate before whom a person is charged may consider evidence

as to guilty intent

When any person is charged with any offence under this Act before any high-
bailiff or justice of the peace, such high-bailiff or justice shall take into
consideration any evidence adduced before him to show that the act charged
was not committed with a guilty intent.
94 Power for Court to commit for trial

Where there is, in the opinion of the Court, ground to believe that the bankrupt
or any other person has been guilty of any offence which is by statute made a
misdemeanour in cases of bankruptcy, the Court may commit the bankrupt or
such other person for trial, or may direct that such bankrupt or other person be
taken into custody and brought before a high-bailiff or a justice of the peace,
who shall inquire into the offence charged in like manner as in the case of other
indictable offences.
95 Punishments under this Act cumulative

Where any person is liable under any other Act of Tynwald to any punishment
or penalty for any offence made punishable by this Act, such person may be
proceeded against under such other Act of Tynwald, or under this Act, so that
he be not punished twice for the same offence.
The Bankruptcy Code 1892 Schedule



c AT 1 of 1892 Page 53

Schedule
35

The Bankruptcy Code 1892 Endnotes


c AT 1 of 1892 Page 55

ENDNOTES

Table of Legislation History

Legislation Year and No Commencement






Table of Renumbered Provisions

Original Current






Table of Endnote References

1
S 3 repealed by Statute Law Revision Act 1983 Sch 2. 2
Para (ee) inserted by Bankruptcy Act 1988 s 2. 3
S 5A inserted by Bankruptcy Act 1988 s 2. 4
S 10 substituted by Bankruptcy Code Amendment Act 1903 s 15. The reference to the
Act of Tynwald is to the Debtors Act 1820. 5
Para (iii) amended by Decimal Currency (Isle of Man) Act 1970 s 9. 6
Para (a) amended by Decimal Currency (Isle of Man) Act 1970 s 9. 7
Para (j) amended by Decimal Currency (Isle of Man) Act 1970 s 9. 8
Subs (4) amended by Decimal Currency (Isle of Man) Act 1970 s 9. 9
Para (1) amended by Civil Partnership Act 2011 Sch 14. 10
Para (2) amended by Civil Partnership Act 2011 Sch 14. 11
Subs (1A) inserted by Criminal Justice Act 1990 Sch 2 and amended by the Proceeds
of Crime Act 2008 Sch 7. 12
Para (a) repealed by Representation of the People Act 1995 Sch 8. 13
Para (c) repealed by Local Elections Act 1986 Sch 4. 14
Para (d) repealed by Representation of the People Act 1995 Sch 8. 15
Ss 17 and 18 repealed by Representation of the People Act 1995 Sch 8. 16
Subs (1) repealed by Preferential Payments Act 1908 Sch. 17
Para (1) substituted by Bankruptcy Act 1988 s 3 and amended by Civil Partnership
Act 2011 Sch 14. 18
Para (2) substituted by Bankruptcy Act 1988 s 3. 19
Para (3) inserted by Bankruptcy Act 1988 s 3.
Endnotes The Bankruptcy Code 1892


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20
Paras (a) to (d) substituted for ss 28 and 29 by Bankruptcy Code Amendment Act
1903 s 16. Para (e) added to 1903 Act by Administration of Justice Act 1981 Sch 5. 21
Subs (1) amended by Civil Partnership Act 2011 Sch 14. 22
Subs (2) amended by Civil Partnership Act 2011 Sch 14. 23
Subs (4) amended by SD2015/0236. 24
Subs (2) amended by Bankruptcy Code Amendment Act 1903 s 18. 25
Subs (1) substituted by Bankruptcy Code Amendment Act 1903 s 17 and amended by
SD352/09. 26
S 51 amended by Decimal Currency (Isle of Man) Act 1970 s 9. 27
Subs (1) amended by Governor’s General Functions (Transfer) Act 1980 Sch 1. 28
See General Note 4. 29
Subs (1) amended by Governor’s Financial and Judicial Functions (Transfer) Act 1976
Sch 2 and by Transfer of Deemsters’ Functions Act 2003 Sch. 30
Subs (2) amended by High Court Act 1991 Sch 3. 31
S 70A inserted by Transfer of Deemsters’ Functions Act 2003 s 1. 32
Paras 13 and 14 repealed by Theft Act 1981 Sch 2. 33
Para (1) repealed by Theft Act 1981 Sch 2. 34
S 89 repealed by Theft Act 1981 Sch 2. 35
Sch repealed by Statute Law Revision Act 1983 Sch 2.