-,"-":: .~~- --,- i

~CAP. 5. .

~

CYPRUS-BANKRUPTCY

CHAPTER 5 OF THE LA WS

1959 EDITION

8'

PRINTED BY

C. F. ROWORTH LIMITED, 54, GRAFTON WAV, LONDON, W.l

[A ppmmed by the Government of Cyprus the Government Printerslof this Editionof Laws within the meaning of the Evidence (Colonial Statutes) Act, 1907.]

1959

D "'~UD"D'Trv ",. D .1 1BANKRUPTCY. [CAP. 5. 1 i; , .

CHAPTER 5. ~

BANKRUPTCY.

ARRANGEMENT OF SECTIONS.Section Page

..1 Short title 4.2 Interpretation 4

PART I.

PROCEEDINGS FROM ACT OF BANKRUPTCY TO DISCHARGE

3 What constitutes an acý of bankruptcy 5

Receiving Order4 ]urisdiction to make receiving order 75 Conditions on which creditor may petition 76 Proceedings and order on creditor's petition 87 Creditor's petition cannot be withdrawn 98 Debtor's petition 99 Effect of receiving order 0.0 ..0 9

10 Power to appoint interim receiver 1011 Power to stay pending proceedings 1012 Power to appoint special manager 1013 Advertisement of receiving order 11

Proceedings Consequent on Order14 First and other meetings of creditors o.. 1115 Debtor's statement of affairs 11

Public Examination of Debtor16 Public examination of debtor 12

Composition of Scheme of Arrangement17 Compositions and schemes of arrangements 1318 Effect of composition or scheme 16

Adjudication of Bankruptcy19 AdjudicatioIl; of bankruptey where composition not accepted or

approved 1620 Appointment of trustee 1621 Committee of inspection 1722 Power to accept composition or scheme af ter bankruptcy adjudication 19

8 Controlover Person and Property of Debtor23 Duties of debtor as to discovery and realisation of property ...1924 Arrest of debtor under certain circumstances 2025 Re-direction of debtor's letters, ete. 2126 Inquiry as to debtor's conduct, dealings and property 2227 Discharge of bankrupt 2328 Procedure on failure of bankrupt to apply for discharge ...2629 Duties of discharged bankrupt 2630 Effect of order of discharge 2631 Power for Court to annul adjudication in certain cases ...27

PART II.

DISQUALIFICATIONS OF BANKRUPT32 Disqualifications of undischarged bankrupt 2833 Office vacated by bankruptey of holder thereof 28

2 CAP. 5.] BANKRUPTCYol

ý PART III. .~ ADMINISTRATION OF PROPERTY

~~ P"ovable DebtsSection Page

34 Description of debts provable in bankruptcy 2835 Mutua! credit and set off 29

App"op,.iation of Assets36 Payment ofpreliminary expenses 3037 Rulesastoproofofdebts 3038 Priority ofdebts 000 ...3139 Postponement of husband's and wife's claims 32

P"operly Available fO1' Payment of Debts 840 Relation back of trustee's title 3241 Description of bankrupt's property divisible amongst creditors ...3342 Property not divisable amongst creditors 3343 Provisions as to second bankruptcy and dea!ings with persons

adjudged bankrupts 34

Effect of Bank"uptcy on Antecedent T"ansactions44 Restriction of rights of creditors under execution or attachment ...3545 Duties of sheriff as to goods taken in execution 3646 Avoidance of certain settlements 3747 Avoidance ofpreferences in certain cases 3848 Protection of bana Ifde transactions without notice 38

Realization of P"ope"ty49 Vesting and transfer of property 3950 Possession of property by trustee 3951 Seizure of the property of bankrupt 4052 Appropriation of portian of pay or salary to creditors 4053 Disclaimer of onerous property 4154 Powers of trustee to dea! with property 4355 Powers exercisable by trustee with permission of committ~ of

inspection... 4456 Right of trustee to inspect goods pawned, etc. 4557 Protection of officia! receivers and trustees from personal liability in

certain cases 45

Dist"ibution of P"OPe1'ty58 Declaration and distribution of dividends 4559 Joint and separate dividends 4660 Provision for creditors residing at a distance, etc. 4661 Right of creditor who has not proved debt before declaration of a

dividend 4762 Interest on debts '" 4763 Final dividend 4764 No action for dividend ,. 4765 Power to allow bankrupt to manage property 4866 Right of bankrupt to surplus 48

8PART ýv.

OFFICIAL RECEIVERS67 Appointment by Governor of officia! receivers of debtor's estates ...4868 Status of officia! receiver 4969 Duties of officia! receiver as regards the debtor's conduct ...4970 Duties of officia! receiver as regards debtor's estate 49

PART V.

TRUSTEES IN BANKRUPTCY71 Officia! name of trustee 5072 Power to appoint joint or successive trustees 5173 Proceedings in case of vacancy in office of trustee 5174 Discretionary powers of trustee and control thereof 5175 Appeal to Court against trustee 52~

BANKRUPTCY. [CAP. 5. 3 i.--

Section Page.76 Officia! rec~iver to inquire inm the conduct of the trustee o.. 52 r77 Remuneratýon of trustee 000 0'0 o.. 00. 5278 Al1owance and taxation of costs 000 ...00. 5379 Trustee not to pay money into private account o o. o.. 5480 Accounts oftrusteeo Payments 0.0 000 o" 548l Returns of accounts to officia! receiver .0 o o o o o.. 5482 Release of trustee 000 0'0 0.0 000 5583 Power of the Court to grant or withhold release of trustee o ..5584 Effect of release of trustee o .o 5585 Trustee becoming bankrupt .0. 000 '00 5686 Creditors may remove trustee 0.0 000 000 56

PART VIo

8 JURISDICTION, PROCEDURE AND POWERS OF,COURTo

87 J urisdiction to be exercised by District Courts o ..o ..5688 Petition where to be presented 000 0.0 0'0 5689 Case stated for the opinion of the Supreme Court 000 000 5790 General powers and jurisdiction of Courts in bankruptcy o o o 579l Courts of bankruptcy in Cyprus to be auxiliary to other British Courts

of Bankruptcy 000 000 000 000 5792 Appeal 000 000 o.. 000 000 5893 Discretionary powers of the Court ..o o o o O' o 5894 Consolidation of petitions 000 00. 000 000 5895 Power to change carriage of proceedings 00' 00' 5896 Continuance of proceedings on death of debtor 000 000 5997 Power to stay proceedings 000 000 0.0 5998 Power to present petition against one partner 000 000 5999 Actions by trustee and bankrupt's partners 000 000 59

ýoo Proceeding in partnership name ...000 '000 59ýoý Actionsonjointcontractsooo "0 00. 0.0 59102 Formal defect not to invalidate proceedings 000 000 60l03 Summary administration in smaIl cases ..0 0'0 000 60

, PART Vii.

SUPPLEMENTAL PROVISIONS.l04 Exclusion of partnership and companies 000 o.. 60l05 Application to limited partnerships o. o ...o o o 60l06 Who ýnay be adjudged bankrupt ..0 000 000 6ll07 Administration in bankruptcy of estate of person dying insolvent o o o 6ll08 Power to make general rules 00. 0.0 000 62l09 Fees, charges, etc., of officia! receiver 000 000 000 62ýýo Gazette to be evidence 000 000 000 000 63III Evidence of proceedings at meetings of creditors o o o o o. 63ll2 Evidence of proceedings in bankruptcy 000 .00 000 63113 Swearing of affidavits o.. '00 0.0 000 64114 Death of debtor or wituess 000 0.0 0.0 64115 Disposa! of unclaimed funds or dividends 000 000 64116 Punishment of fraudulent debtors o o o o o o o o o 64117 Undischarged bankrupts obtaining credit 0.0 000 678 118 Frauds by bankrupts 0.0 000 000 000 68119 Punishment of persons removing, etco, property of bankrupt .o o 68l20 Fa1se claims, declarations, etco, against bankrupt o.. 000 68l2l Punishment of trustee for concealment, etc., of affairs of bankiupt o o o 69l22 Bankrupt failing to keep proper accorints o. .o o. 69l23 Bankrupt guilty of gambling, etc. o .o o .o o o o 70l24 Bankrupt absconding with property .o o o. o o o o 7ll25 Prosecution of offences 0'0 000 000 000 7ll26 Criminalliabi1ity after discharge or composition .,.0 000 7l

SCÝiEDULEso

FIRST SCHEDULEoMEETINGS OF CREDITORSo

SECOND SCHEDULEoPROOF OF DEBTSo

4 CAP.5.]. BANKRUPTCY, ,~-- i

To AMEND AND CONSOLIDATE THE LAW OF BANKRUPTCY.

r1949 Cap. 6. [1st ] anuary, 1931.].

Short title. 1. This Law may be cited as the Bankruptcy Law.

I~terpreta. 2 In this Law-týon. .tt available act of bankruptcy" means any act of

bankruptcy available for a bankruptcy petition at thedate of the presentation of the petition on which the

8receiving order is made ;tt the Court " means the Court having jurisdiction in

bankruptcy under this Law;tt debt provablein bankruptcy " or tt provable debt "

includes any debt or liability by this Law madeprovable in bankruptcy ;

tt gazetied" means published in the Gazette;tt general rules " ÝncIlide forms ;tt goods " ÝncIlide all chattels personal and movable

property ;tt ordinary resolution" means aresolution decided

by a majority in value of the creditors present, person-ally or by proxy, at a meeting of creditors and votingon the resolution;

tt prescribed" means prescribed by general rules

within the meaning of this Law;tt property " includes money, goods, things in action,

land, and every description of property whethermovable or immovable, and whether situate in Cyprusor elsewhere; also, obligations, easements, and everydescription of estate, interest and profit, present orfuture, vested or contingent~ arising out of or incidentto property as above defýned ;

tt resolutian " means ordinary resolution; att secured creditor" means a person holding a .

mortgage, pledge, charge or lien on the property of thedebtor, or any part thereof, as a security for a debtdile to him from the debtor ;

t t sheriff " includes any offiter charged with theexecution of a writ or other process; .

tt special resolutian " means aresolution decided by

a majority in number and three-fourths in value ofthe creditors present, personally or by proxy, at ameeting of creditors and voting on the resolution;

BANKRUPTCY. [CAP. 5. 5 ir "-

ii tnýstee" means the tnýstee in bankruptey of a

rdebtor's estate.

PART I.

PROCEEDINGS FROM ACT OF BANKRUPTCY TO DýSCHARGE.

3. (1) A debtor commits an act of bankruptey in each of Whati~t t.cons u esthe followýng cases:- an acý of(a) if in Cyprus or elsewhere he makes a conveyance or bankru~tcy.

8 assignment of his property to any person for thebenefit of his creditors generally ;

(b) if in Cypnýs or elsewhere he makes a fraudulentconveyance, gift, delivery or transfer of hisproperty or of any part thereof ;

(C) if in Cypnýs or elsewhere he makes any conveyanceor transfer of his property or any part thereof,or creates any charge thereon, which wouldunder this or any other Law be void as afraudulent preference if he were adjudgedbanknýpt ;

(d) if with intent to defeat or detay his creditors hedoes any of the following things, namely-

(i) departs or makes preparation for departing,out of Cypnýs, or being out of Cypnýs, remainsout of Cypnýs; or

(ii) departs from his dwelling house or other-wise absents himseli; or

(iii) begins to keep house;(e) if execution against him has been levied by seizure

of his goods under process in action in any Court,and the goods seized have either been sold orheld by the sheriff tor twenty-one days, providedthat, where an interpleader application has been

8 made in regard to the goods seized, the timeelapsing between the date at which such applica-tion has been made and the date at which theproceedings on such application are finallydisposed of, settled, or abandoned, shall not betaken into account in calculating 'such periodof twenty-one days ;

(f) if he files in the Court a declaration of his inabilityto pay his debts or presents a bankrupteypetition against himself ;

(g) if a creditor has obtained a final judgment or final

6 CA,P. 5.] BANKRUPTCY. i~

order. against him for any amount., and, execu- -tion thereon not having beenstayed, has served

ron him in Cyprus, or, by leave of the Court,elsewhere, a bank~p~cy notice under this La.w,and he does not, wýthin seven days af ter servýceof the notice, in case the service is effected inCyprus, and in cage the service is effected else- iwhere, then within the time limited in thatbehalf by the order giving leave to effect theservice, either comply with the requirements of Athe notice or satisfy the Courf that he has a ..counterclaim, set-off or cross demand whichequals or exceeds the amount of the judgmentdebt or sum ordered to be paid, and which hecould not set up in the action in which thejudgment was obtained, or the proceedings inwhich the order was obtained.

For the purpose of this section any person whois, for the time being entitled, to enforce a finaljudgment or final order, shall be deemed to bea creditor who has obtained a final judgment orfinal order;

(h) it being indebted to a creditor in virtue of a debtprovable in bankruptcy, he fai1s to pay, orsecure, or coÝnpound for, such debt, within suchtime as shall be allowed by an order made by theCourt upon the application of the creditor,provided always no such appIication shall beentertained by the Court, unless a bankruptcynotice, req Iliring payment of such debt, hasfirst been served upon him, and he has hadnotice of such appIication and has been calledupon to show cause against the same ;

(i) if he has admitted to any of his creditors that he isunable to meet his engagements or that he has 8suspended or is about to suspend the payment ofhis debts.

(2) In this Law, the expression tt a debtor," unless thecontext otherwise implies, includes any person, who at thetime when any act of bankruptcy waS done or suffered byhim-

(a) was personally present in Cyprus ; or(b) ordinarily resided or had a place of residence in

Cyprus; or

--

", BANKRUPTCY. [CAP. 5. 7 i

.-(c) was carrying on business in Cyprns, personally, or -

by means of an agent or manager; or~(d) was a. member Ü;f a ~rm or partnership which

carned on bu~ýness ýn Cyprns.

(3) A bankrnptcy notice under this Law shall be in theprescribed form, and shall require the debtor to pay thejudgment debi or sum ordered to be paid in accordance withthe terms of the judgment or order, or to secure or com-

8 pound for it to the satisfaction of the creditor or the Court,

.and" shall state the consequences of non-compIiance with

t.he notice, and shall be served in the presoribed manýýer :Provided that a bankrnptcy notice-

(a) may specify an agent to act on behalf of thecreditor in respect of any payment or other thingrequired by the notice to be made to, or done tothe satisfaction of, the creditor ;

(b) shall not be invalidated by reason only that "thesum specifýed in the notice as the amount dueexceeds the amount actually due, unless thedebtor within the time allowed for paymentgives notice to the creditor that he disputes thevalidity of the notice on the ground of suchmisstatement ; bui, if the debtor does not givesuch notice, he shall be deemed to have compIiedwith the bankrnptcy notice if within the timeallowed he takes such steps as would haveconstituted a compliance with the notice hadthe actual amount due been correctly specifýedtherein.

Receiving Order...

4. Subject to the conclitiofis hereinafter specifýed, if a jurisdiction-debtor commits an act of bankrnptcy the Court may, on a to ~a.ke..bankrnptcy petition being presented either by a creditor or ~~~e;lng

by the debtor, make an order. in this Law called tt a

receiving order," for the protection of the debtor's estate.

5. (1) A creditor shall not be entitled to preseni a bank- Condi~onsrnptcy petition against a debtor unless- ~:ed'Tt~~~y

(a) the debi owing by the debtor to the petitioning petition.creditor, or, iftwo or more creditors join in thepetition, the aggregate amount of debts owingto the several petitioning cteditors amounts tofýfty polinds, and

c_-"-

8 GAP, 5] BANKRUPTCY. i.

(b) the debt is a liquidated sum, payable either rj immediately or at some certain future time, and

(C) the act of bankruptcy on which the petition isgrounded has occurred within three monthsbefore the presentation of the petition, and

(d) the debtor is domiciled in Cyprus or, within a yearbefore the date of the presentation of thepetition, has ordinarily resided or had a dwellinghouse or place of business in Cyprus or hascarried on business in Cyprus, personally, or by 8means of an agent or manager, or is or withinthe said period has been a member of a firm orpartnership of persons which has carried onbusiness in Cyprus by means of a partner orpartners or an agent or manager.

(2) If the petitioning creditor is a secured creditor, hemust, in his petition, either state that he is willing to giveup his security for the benefit of the creditors in the event ofthe debtor being adjudged bankrupt, or give an estimate ofthe value of his security. In the latter cage he may beadmitted as a petitioning creditor to the extent of thebalance of the debt due to him, af ter deducting the value soestimated in the same manýýer as if he were an unsecuredcreditor. .

Proceedings 6. (1) A creditor's petition shall be verified by affýdavitand order on fh d. f h , b h If h . creditor's O t e cre ýtor, or o some person on ýs e a avýng

petition. knowledge of the facts, and served in the prescribed manner.(2) At the hearing of the petition, the Court shall require

proof of the debt of the petitioning creditor, of the serviceof the petition, and of the act of bankruptcy, or, if more thanone act of bankruptcy isalleged in the petition, of some oneof the alleged acts of bankruptcy, and, if satisfied with suchproof, shall make a receiving order in pursuance of thepetition. 8

(3) The Court may adjoum the hearing of the petitioneither conditionally or unconditionally, for obtainingfurther evidence, or for any other just cause or may dismiss

': co.. the petition with or without costs, as the Court thinks just.": (4) When the act of bankruptcy relied on is non'"

eompliance with a bankruptcy notice to pay, secure orcompound for a judgment debt or sum ordered to be paid,the Courtmay, if it thinks fit, stay or dismiss the petitionon the ground that an appeal is pending from the judgmentor order.

BANKRUPTCY. -[CAP. 5. 9 i-

(5) If there are more respondents than one to the petition, .~~ the Court may dismiss the petition as to one or more of

them, and may order the case to be proceeded with againstthe other or others ofthem.

(6) Where the debtor appears on the petition, and deniesthat he is indebted to the petitioner, or that he is indebtedto such an amount as would justify the petitioner inpresenting a petition against him, the Court, on such security(if any) being given as the Court may require for payment

18 to the petitioner of any debt which may be establishedagainst him in due course of law, and of the costs ofestablishing the debt, may, instead of dismissing thepetition, stay all proceedings on the petition for such timeas may be required for tria! of the question relating to thedebt.

(7) Where the debtor appears on the petition, and deniesthat he is indebted to the petitioner, or that he is indebtedto such an amatint as would justify the petitioner inpresenting a bankruptcy petition against him, the Court shallhave jurisdiction for the trial of the question relating to suchdebt, subject to an appeal before the Supreme Court asherein provided and in the meantime all proceedings on thepetition shall be stayed pending the result of such trial asaforesaid.

(8) Where proceedings are stayed, the Court may, if byreason of the delay caused by the stay of proceedings or forany other cause if it thinks just, make a receiving order on

.the petition of some other creditor, and shall thereupondismiss, on such terms as it thinks just, the petition in whichproceedings have been stayed as aforesaid.

7. A creditor's petition shall not, af ter presentment be Cre.d~torswithdrawn without the le~ve of the Court. ~:~~o~nbe

..withdrawn.,., S. (1) A debtor's petition shall allege that the debtor is Deý;ýt.or's

unable to pay his debts, and the presentation theroof sha!l petýtýon.be deemed an act of bankruptcy without the previous filing

.by the debtor _of any declaration of inabi.lityto pay his debts,and the Court shall thereJlpon make areceiving order.

-.-(2) A debtor'þ petition shall not, af ter ptesentment, be

withdrawn without the leave of the Court.

9. (1) On the making of a receiving order, an officÝal Eff~t.ofreceÝver shall be thereby constÝtutedreceÝver of the property ~~~~;ýng

10CAP. 5.] BA~KRiUPTCY. iof thed.ebtor and thereafter, exc.e~t as direc!ed by this Law, -no credýtor to whom the debtorýs ýndebted ýn respect of any

rdebt probablein bankruptcy shallhave any remedy against

the property or person of the debtor in respect of the debt,

or shall commence any action or other legal proceedings,unless with the leave of the Court and on such terms as theCourt may impose.

(2) But this section shall not affect the power of anysecured creditor to realize or otherwise deal with his securityin the same manner as he would have been entitled to -realize or dea! with it, if this section had not been passed. ..

Powý;r:o 10. The Court may, if it is shown to be necessary for the~~~ protection of the debtor's estate, at any time af ter thereceiver. presentation of a bankruptcy petition, and before a receiving

order is made, appoint the officia! receiver to be interimreceiver of the property of the debtor, or of any partthereof, and direct him to take immediate possession of thesame or any part thereof.

Power 11. (1) The Court may, at any time af ter the presentationto stay f b k ... t. pending o a an ruptcy petýtýon, stay any actýon, execu ýon, or

proceedings. other legal process against the property or person of thedebtor, and any Court in which proceedings are pendingagainst a debtor may, on proof that a bankruptcy petitionhas been presented by or against the debtor, either stay theproceedings or allow them to continue upon such terms asit may think just.

(2) Where the Court makes an order staying any actionor proceeding, or staying proceedings generally, the ordermay be served by sending a copy thereof, under the seatof the Court, by post to the address for service of the plaintiffor other party prosecuting such proceeding.

Powý;r to 12. (1) The offýcial receiver of a debtor's estate may, on~E~ci~~t the application of any creditor ,or creditors, an~ if satisfýed 8manager. that the nature of the debtor s estate or busýness of the

jnterests of the creditors generally require the appointmentof a specia! manager of the estate or business other than theofficia! receiver, appoint, subject to the approva! of theCourt, a manager thereof accordingly to act until a trustee isappointed, and with such powers (including any of thepowers of a receiver} as may be entrusted to him by theofficia! receiver.

(2) The special manager shall give such security andaccount in such manýýer as may be direct ed by the Court.

-

BANKRUPTCY. [CAP. 5. 11 i~

(3) The special manager sha11 receive such remuneration .as shall be fixed by the creditors by resolution at an ordinary

~meeting subject to the approval of the Court or in defaultof any such resolution as the Court maydetermine.

13. Notice of every receiving order stating the name, Adv~rt~se-address, and description of the debtor, the date of the :iv?ngorder, the Court by which the order is made, and the date of order.the petition, sha11 be gazetted and advertised in two local

a. papers, that is to say, one of which is published in the..Turkish and the other in the Greek language in the pre-

scribed manner.

Proceeding Consequent on Order.14. (1) As soon as may be af ter the making of a receiving F:r;t and

order against a debtor, a general meeting of his creditors (in ~e:~ngs ofthis Law referred to as the fýrst meeting of creditors) sha11 be creditors.held for the purpose of considering whether a proposal fora composition or scheme of arrangement sha11 be acceptedor whether it is expedient that the debtor sha11 be adjudgedbankrupt, and genera11y as to the mode of dealing with thedebtor's property.

(2) With respect to the summoning of and proceedings §~td 1as to meetings of creditors, the rules in the First Schedule c e u e.

to this Law sha11 be observed.

15. (1) Where a receiving order is made against a debtor, ~e~tor'sthe sha11 make out and submit to the official receiver a ~faa~~~.statement of and in relation to his affairs in the prescribedform, verifýed by affidavit, and showing the particulars ofthe debtor's assets, debts, and liabilities, the names,residences and occupations of his creditors, the securitiesheld by them respectively, the dates when the securitieswere respectively given, and such further or other informa-

8 tion .as may be prescribed or as the official receiver mayrequýre.

(2) The statement sha11 be so submitted within thefollowing times, namely :-

(a) if the order is made on the petition of the debtor,within three days from the date of the order;

(b) if the order is made on the petition of a creditor,within seven days from the date of the order.

But the Court may, in either cage for special reasons,extend the time.

c. e

;1

~

12CAP.5.] BANKRUPTCY. i(3) if the d"ebtor fails without reasonable excuse to -

comply with the requirements of this section, the Court may,r-

on the application of the officia! receiver, or of any creditor,adjudge him bankrupt.

(4) Any person stating himseli in writing to be a creditorof the bankrupt may, personally or by agent, inspect thestatement at all reasonable times, and take any copythereof.or e~tract therefrom, but. any person untruthfullyso statýng himseli to be a creditor shall be guilty of a ,contempt of Court, and shall be punishable accordingly on -the application of the trustee or officia! receiver. ..

Public Examination of Debtor.

Publi~ ti 16. (1) Where the Court makes a receiving order, it shaU,~~~~b~~.on save as in this Law provided, hold a public sitting, on aday

to be appointed by the Court, for the examination of thedebtor, and the debtor shall attend thereat, and shall beexamined as to his conduct, dealings and property.

(2) The examination shall be held as soan as convenientlymay be af ter the expiration of the time for the submissionof the debtor's statement of affairs.

(3) The Court may adjoum the examination from timeto time.

(4) Any creditor who has tendered a proof, or his represen-tative authorized in writing, may, subject to the discretionof the Court, question the debtor conceming his affairs andthe causes of his failure.

(5) The officia! receiver shall take part in the examinationof the debtor; and for the purpose thereof, if speciallyauthorized by the Court, may emplay an advocate.

(6) if a trustee is appointed before the conclusion of the aexamination, he may take part therein. ..

(7) The Court may put such questions to the debtor as itmay think expedient.

(8) The debtor shall be examined upon oath, and it shallbe his duty to answer all such questions as the Court mayput or allow to be put to him. Such notes of the examinationa$ the Court thinks proper shall be taken down in writingand shall be read over to and signed by the debtor, or in thecase of an illiterate debtor his mark shall be affixed thereto,

BANKRUPTCY.. [GAP. 5. 13 i-and may thereafter, save as in this Law provided, be used inevidence against him; they shall also be open to theinspection of any creditor at all reasonable times..

(9) When the Court is of opinion that the affairs of thedebtor have been suffýciently investigated, it shall by orderdeclare that his examination is concluded; but such ordershall not be made until af ter the day appointed for the fýrstmeeting of creditors..a.

(10) Where t~e debt~r i~ a luna~ic o~ ~uffers !rom any..s~ch.., mental or physýcal afflýctýon or disability as ýn the opýnýonof the Court makes him unfýt to attend his public examina-tion, the Court may make an order dispensing with suchexamination, or directing that the debtor be examined onsuch terms, in such manner, and at such place as to the Courtseems expedient..

Composition or Scheme of Arrangement..

ý 7. (1) Where a debtor intends to make a proposal for Compositionaf .. f h .. d bt al f and schemesa composýtýon ýn satýs actýon O ýs e s, or a propos or a of arrange-

scheme of arrangement of his affairs, he shall, within four ment.days of submitting his statement of affairs, or within suchtime thereafter as the offýcial receiver may fýx, lodge withthe offýcial receiver a proposal in writing, signed by him, oron his behalf embod~g the terms of the composition orscheme which he is desirous of submitting for the considera-tion of his creditors, and setling out particulars of anysu~eties or securities proposed..

(2) In such case the offýcial receiver shall hold a meetingof creditors, before the public examination of the debtor isconcluded, and send to each creditor, before the meeting, acopy of the debtor's proposal with areport thereon ; and ifat that meeting a majority in number and three-fourths invalue of all the creditors who have proved, resolve to accept

8 the proposal, it shall be deemed to be duJy accepted by thecreditors, and when approved by the Court shall be bindingon all the creditors..

(3) The debtor may at the meeting amend the terms ofhis proposal, if the amendment is, in the opinion of theoffýcial receiver, calculated to benefýt the general body ofcreditors..

(4) Any creditor who has proved his debt may assent toor dissent from the proposal by aletter, in the prescribedform, addressed to the offýcial receiver so as to be received

e (2)

14 CAP. 5.] BANKRUPTCY. iby him not later than the day preceding the meeting, andrany such assent or dissent shall have effect as if the creditor had been present and had voted at the meeting.(5) The debtor or the offýcial receiver may, af ter theproposal is accepted by the creditors, apply to the Court toapprove it, and notice of the time appointed for hearing theapplication shall be given to each creditor who has proved.(6) The application shall not be heard until af ter theconclusion of the public examination of the debtor. Anycreditor who has proved may be heard by the Court in 8opposition to the application, notwithstanding that he mayat a meeting of creditors have voted for the acceptance of theproposal.(7) For the purpose of approving a composition or schemeby joint debtors, the Court may, if it thinks fýt, and on thereport of the offýcial receiver that it is expedient so to do,dispense with the public examination of one of the jointdebt.ürs if he is unavoidably prevented from attending theexamination by illness or absence from Cyprus.(8) The Court sha11, before approving the proposal, heara report of the offýcial receiver as to the terms thereof, and asto the conduct of the debtor, and any objections which maybe made by or on behalf of any creditor.(9) if the Court is of apiýýion that the terms of theproposal are not reasonable, or are not calculated to benefýtthe general body of creditors, or in any cage in which theCourt is required where the debtor is adjudged bankruptto refuse his discharge, the Court sha11 refuse to approve thepropogaý.(10) if any facts are proved on proof of which the Courtwould be required either to refuse, suspend, or attach con-ditions to the debtor's discharge were he adjudged bankrupt,the Court shall refuse to approve the propogaý, unless it8provides reasonable security for the payment of not lessthan fýve shillings in the pound on all the unsecured debtsprovable against the debtor's estate.(11) In any other cage the Court may either approve orrefuse to approve the propogaý.(12) if the Court approves the proposal, the approval maybe testifýed by the seat of the Court being attached to theinstrument containing the terms of the proposed composi-tion or scheme, or by the terms being embodied in an orderof the Court.

BANKRUPTCY. [CAP.5. 15 1

(13) A composition or scheme accepted and approved inr-

pursuance of this section shal1 be binding on all the creditorsso far as relates to any debts due to them from the debtorand provable in bankruptcy.

(14) A certificate of the official receiver that a compositionor scheme has been duly accepted and approved shall, inthe absence of fraud, be conclusive as to its validity.

8 (15) The provisions of a composition or scheme under thissection may be enforced by the Court on appIication byanyperson interested, and any disobedience of an order of theCourt made on the appIication shal1 be deemed a contemptof Court.

(16) if default is made in payment of any instalrnent duein pursuance of the composition or scheme, or if it appearsto the Court, on satisfactory evidence, that the compositionor scheme cannot, in consequence of legal difficulties, or forany sufficient cause, proceed without injustice or unduedetay to the creditors or to the debtor, or that the approvalof the Court was obtained by fraud, the Court may, if itthinks fit, on appIication by the official receiver or thetrustec, or by any creditor, adjudge the debtor bankrupt,and annul the composition or scheme, but without prejudiceto the vaIidity of any sale, dispositian, or payment dulymade, or thing duly done, under or in pursuance of thecomposition or scheme.. Where a debtor is adjudgedbankrupt under this sub-section, any debt provable in otherrespects, which has been contraClted before the adjudication,shal1 be provable in the bankruptcy.

(17) if under or in pursuance of a composition or scheme8 a trustee is appointed to administer the debtor's propertyor manage his business, or to distribute the composition,section 26 and Part V. of this Law shall apply as if thetrustee were a trustee in bankruptcy, and as if the termstt bankruptcy," tt bankrupt," and tt order of adjudication,"

included respectively a composition or scheme of arrange-ment, a compounding or arranging debtor, and orderapproving the composition or scheme.

(18) Part III. of this Law shall, so far as the nature of thecage and the terms of the composition or scheme admit,apply thereto, the same interpretation being given to the

16 CAP. 5.] BANKRUPTCY. i

words, ýý trustee," ýý bankruptcy," ýý bankrupt " and ýý order ~of adjudication " as in the last preceding subsection.

r(19) No composition or scheme shall be approved by theCourt which does not provide for the payment in priority toother debts of all debts direct ed to be so paid in the distribu-tion of the property of a bankrupt.

(20) The acceptance by a creditor of a composition orscheme shall not release any person who under this Lawwould not be released by an order of discharge if the debtor 8~ad been adjudged bankrupt.

Effect ':ýf. ýs. Notwithstanding the acceptance and approval of acomposttian . t O h h ..

h hallor scheme. composý ýon or sc erne, suc composýtýon or sc erne snot be binding on any creditor so far as regards a debt orliability from which, under the provisions of this Law thedebtor would not be discharged by an order of discharge inbankruptcy, unless the creditor assents to the compositionor schemeo

Adjudication of BankruptcyoAdjudication 19. (1) Where a receiving order is made against a debtor,~p~~;k- then if the creditors at the fýrst meeting or any adjoummentwhý:r~ com- thereof by ordinary resolution resolve that the debtor beposýtion not d Od d b k t I o Of h d.accepted or a Ju ge an rup " or pass no reso utýon, or i t e cre ýtorsapproved. do not meet, or if a composition or scheme is not approved

in pursuance of this Law within fourteen days af ter theconclusion of the examination of the debtor or such furthertime as the Court may allow the Court shall adjudge thedebtor bankrupt; and thereupon the property of thebankrupt shall become divisible among his creditors andshall vest in a trustec.

(2) Notice of every order adjudging a debtor bankrupt,stating the name, address, and description of the bankrupt, Athe date of the adjudication and the Court by which the .,adjudication is made, shall be gazetted and advertised intwo local papers, that is to say, one of which is published inthe Turkish and the other in the Greek language in theprescribed manner, and the date of the order shall for thepurpose of this La,\! be the date of the adjudication.

Appoint- 20. (1) Where a debtor is adjudged bankrupt or the~~i~f creditors have resolved that he be adjudged bankrupt, the

creditors may by ordinary resolution appoint some fýtperson, whether a creditor or not, to fýll the office of trustee

/ BANKRUPTCY. [CAP.5. 17 i

.of the property of the bankrupt; or they may resolve to -

~leave his appointment to the committee of inspection

hereinafter mentioned.

(2) A person shaIl be deemed not fýt to act as trustee ofthe property of a bankrupt vvhen he has been previouslyremoved from the office of trustee of a bankrupt's propertyfor misconduct or neglect of duty.

(3) The person so appointed shaIl give security in such~ amount as shall be fýxed by the Court and the Court if., satisfýed vvith the seourity shaIl certify that his appointment

has been duty made, uruess the debtor or a creditor objectsto the appointment, and the Court is satisfýed that suchappointment has not been made in good faith by a majorityin value of the oreditors voting, or that the person appointedis not fýt to act as trustee, or that his connection vvith orrelation to the bankrupt or his estate or any particularcreditor makes it diffýcult for him to act vvith impartiality inthe interests of the creditors generaIlyo

(4) The appointment of a trustee shaIl take effect as fromthe date of the certifýcate.

(5) if a trustee is not appointed by the creditors vvithinfour vveeks from the date of the adjudication, or in the eventof there being negotiations for a oomposition or schemepending at the expiration of those four vveeks, then vvithinseven days from the close of those negotiations by therefusal of the creditors to accept, or of the Court to approve,the oomposition or scheme, the offýcial receiver shall reportthe matter to the Court and thereupon the Court mayappoint some fýt person to be trustee of the bankrupt'sproperty or may order the offýcial receiver to act as trustee.

(6) When a debtor is adjudged bankrupt after the fýrstmeeting of creditors has been held, and a trustee has notbeen appointed prior to the adjudication, the offýcial

8 receiver shaIl forthvvith summon a meeting of creditors forthe purpose of appointing a trustee.

21. (1) The creditors qualifýed to vote may, at their fýrst cro.ýnmi~eor any subsequent meeting by resolution, appoint a com- o ýnspec on.

mittee of inspection for the purpose of superintending theadministration of the bankrupt's property by the trustee.

(2) The committee of iýispection shall consist of not morethan fýve nor less than three persons, possessing one orother of the follovving qualifýcations-

(a) that of being a creditor or the holder of a general~

18 GAP. 5.] BANKRUPTCY. 1

power of attorney from a creditor, provided that rno creditor and no holder ot a general proxy orgeneral power of attorney from a creditor shal1be qualifýed to act as a member of the committeeof inspection until the creditor has proved hisdebt and the proof has been admitted; or

(b) that of being a person to whom a creditor intends togiving a general proxy or general power ofattorney; provided that no such person shal1 bequalifýed to act as a member of the committee A,of inspection until he holds such a proxy or ..power of attorney, and unill the creditor hasproved his debt and the proof has been admitted.

(3) The committee of inspection shal1 meet at such timesas they shal1 from time to time appoint and failing suchappointment, at least once a month ; and the trustee or anymember of the committee may also call a meeting of thecommittee as and when he thinks necessary.

(4) The committee may act by a majority of theirmembers present at a meeting, bui shal1 not act unless amajority of the committee are preseni at the meeting.

(5) Any member of the committee may resign his office bynotice in writing signed by him, and delivered to thetrustee..

(6) if a member of the committee becomes bankrupt orcompounds or arranges with his creditors, or is abseni fromfýve consecutive meetings of the committee, his office shal1thereupon become vacant.

(7) Any member of the committee may be removed by anordinary resolution at any meeting of creditors of whichseven day's notice has been given, stating the object of themeeting.

(8) On a vacancy occurring in the office of a member of 8the committee, the trustee shal1 forthwith summon ameeting of creditors for the purpose of fýl1ing the vacancyand the meeting may, by resolution, appoint anothercreditor or other person eligible as above to fýll the vacancy.

(9) The continuing members of the committee, providedthere be not less than two such continuing members, mayact notwithstanding any vacancy in their body ; and wherethe number of members of the committee of inspection isfor the time being less than fýve, the creditors may increasethat number so that it does not exceed fýve.

--

BANKRUPTCY. [CAP.5. 19

(10) If there be no committee of inspection, any act orthing or any direction or permission by this Law authorizedor required to be done or given by the committee may bedone or given by the Court on the application of the trustee.

22. (1) Where a debtor is adjudged bankrupt the Power tocreditors may, if they think fýt, at any time af ter the ~~rE~:oý::ý-adjudication, by a majority in number and three-fourths scheme afterin value of all the creditors who have proved, resdIye to ~~fu~~~cyaccept a proposal for a composition in satisfaction of the tion.debts due to them under the bankruptcy, or for a scheme ofarrangement of the bankrupt's affairs; and thereupon thesame proceedings shall be taken and the same consequencesshall ensue as in the cage of a composition or schemeaccepted before adjudication.

(2) If the Court approves the composition or scheme itmay make an order annulling the bankruptcy and vestingthe property of the bankrupt in him or in such other personas the Court may appoint, on such terms, and subject tosuch conclitjang if any, as the Court may declare.

(3) if default is made in payment of any instalment duein pursuance of the composition or scheme, or if it appears tothe Court that the composition or scheme cannot proceedwithout injustice or undue delay, or that the approval ofthe Court was obtained by fraud, the Court may, if it thinksfýt, on application by any person interested, adjudge thedebtor bankrupt, and annul the composition or scheme,but without prejudice to the validity of any sale, dispositian,or payment duly made, or thing duly done, under or inpursuance of the composition or scheme. Where a debtoris adjudged bankrupt under this subsection, all debts,provable in other respects, which have been contractedbefore the date of such adjudication shall be provable inthe bankruptcy.

Controlover Person and Property of Debtor.

23. (1) Every debtor against whom a receiving order is Duties ofmade shall, unless prevented by sickness or other su:fficent ~fs~~:e:; tocause, attend the fýrst meeting of his creditors, and shall a.nd realiza-submit to such examination and give such information as ;~o;eo:ýy.the meeting may require.

(2) He shall give such inventory of his property, such list

20 CAP. 5.] BANKRUPTCY. i

of his creditors and debtors, and of the debts due to and -from them respectively, submit to such examination in

~respect of his property or his creditors, attend such othermeetings of his creditors, wait at such times on the offýcialreceiver, special manager, or trustee, execute such powersof attorney, conveyances, deeds, and instruments and,generally do all such acts and things in relation to hisproperty and the distribution of the proceeds amongst hiscreditors as may be reasonably required by the offýcialreceiver, special manager, or trustee, or may be prescribed 8by general rules, or be directed by the Court by any specialorder or orders made in reference to any particular case,or made on the occasion of any special application by theoffýcial receiver, special manager, trustee, or any creditor orperson interested.

(3) He shall, if adjudged bankrupt, aid to the utmost ofhis power, in the realization of his property and the distribu-tion of the proceeds among his creditors.

(4) if a debtor wilfully fai1s to perform the duties imposedon him by this section or to deliver up possession of any partof his property, which is divisible amongst his creditorsunder this Law, and which is for the time being in hispossession or under his control, to the offýcial receiver orto the trustee, or to any person authorized by the Court totake possession of it, he shall, in addition to any otherpunishment to which he may be subject, be guilty of acontempt of Court, and may be punished accordingly.

~ft of d 24. (1) The Court may, by warrant addressed to anyc:~~ un er police offýcer or prescribed offýcer of the Court, cause a

cfcum- debtor to be arrested, and any books, papers, money, ands ances. goods in his possession to be seized, and him and them to

be safely kept in such places and until such time as the aCourt may order under the following circumstances :- -

(a) if, af ter a bankruptcy notice has been issued underthis Law, or af ter presentation of a bankruptcypetition by or against him, it appears to theCourt that there is probable reason for believingthat he has been guilty of any offence punishableunder this Law or that he has absconded or isabout to abscond with a view of avoiding~ payment of the debt, in respect of which

bankruptcy notice was issued, or of avoidingservice of a bankruptcy petition or of avoiding~,..'

BANKRUPTCY. [CAP. 5., 21 i.-

appearance to any such petition or of avoiding .~examination in respect of his affairs, or of

otherwise avoiding, delaying or embarrassingproceedings in bankruptcy against him ;

(b) if, af ter presentation of a bankruptcy petition by oragainst him, it appears to the Court that there isprobable cause for believing that he is about toremove his goods with a view of preventing ordelaying possession being taken of them by the

8 offýcial receiver or trustee, or that there isprobable ground for believing that he hasconcealed or is about to conceal or destroy anyof his goods, or any books, documents, orwritings, which might be of use to his creditorsin the course of his bankruptcy;

..(c) if, af ter service of a bankruptcy petition on him,or af ter a receiving order is made against him,he removes any goods in his possession abovethe value of fýve pounds without the leave of theoffýcial receiver or trustee;

(d) if, without good cause shown, he fails to attend anyexamination ordered by the Court:

Provided that no arrest upon a bankruptcy notice shall bevalid and protected unless the debtor before or at the time ofhis arrest is served with such bankruptcy notice.

(2) The Court may, at any time af ter the arresi of thedebtor order his release on his filmÝshing security to thesatisfaction of the Court not to quit the Colony without theleave of the Court.

(3) No payment or composition made or security givenaf ter arrest made under this section sha11 be exempt from

8 the provisions of this Law relating to fraudulent preferences.

25. Where a receiving order is made against a debtor, the Re-direc~onCourt on the application of the offýcial receiver or trustee, f::e~to:t~.may from time to time order that for such time, not .

exceeding three months as the Court thinks fýt, post letters,telegrams and other postal packets addressed to the debtorat any place, or places mentioned in the order for re-direction sha11 be re-directed, sent or delivered by thePostmaster-General or the offýcers acting under him, to theoffýcial receivev or the trustee, or otherwise as the Courtdirects, and the same sha11 be done accordingly. The.

22 CAF. 5.] BANKRUPTCY. i

signature of the' officia! receiver or the trustee on any moneyrorder payable to such debtor sha11 be a sufficient acquittance

thereof.

InQduiryb a.s 26. (1) The Court may, on the application of the officialto e tor s .. ft .. d hconduct, receýver or trustec, at any tIme a er a receývýng or er asdealings and been made against a debtor, summon before it the debtorproperty, or his wife, or any person known or suspected to have in his

possession any of the estate or effects belonging to the debtoror supposed to be indebted to the debtor, or any person awhom the Court may deem capable of giving information .respecting the debtor, his dealings or property, and theCourt may require any such person to produce anydocuments in his custody or power relating to the debtor,his dealings or property.

(2) if any person so summoned af ter having been tendereda reasonable sum, refuses to come before the Court at thetime appointed, or refuses to produce any such document,having no lawful impediment made known to the Court atthe time of its sitting and a!lowed by it, the Court may, bywarrant, cause him to be apprehended and brought up forexamination.

(3) The Court may examine on oath, either by word ofmouth or by written interrogatories, any person so broughtbefore it conceming the debtor, his dealings or property.

(4) if any person on examination before the Court admitsthat he is indebted to the debtor, the Court may, on theapplication of the official receiver or trustee, order him topay the officia! receiver or trustee, at such time and suchmanner as the Court deems expedient, the amount-admitted,or any part thereof, either in full discharge of the wholeamount in question or not, as the Court thinks fýt, with orwithout costs of the examination.

(5) if any person on examination before the Court .admits that he has in his possesion any property belongingto the debtor, the Court may, on the application of the officia!receiver or trustee, order him to deliver to the officialreceiver or trustee such property, or any part thereof, atsuch time, and in such manner, and on such terms as to theCourt may seem just.

(6) The Court may, if it thinks fýt, order that any personwho if in Cyprus would be liable to be brought before itunder this section sha!l be examined in any other place outof Cyprus.

-BANKRUPTCY. [C AP. 5.~ ý

27. (1) A bankrupt may; at any time af ter be~ng adjudged ~;~:~~~ofbankrupt, apply to the Court for an order of dýscharge, andthe Court shall appoint a day for hearing the application,but the application sh all not be he ard until the publicexamination of the bankrupt is concluded. The applicationshall, except when the Court in accordance with rules underthis Law otherwise directs, be heard Ýn open Court.

(2) On the hearing of the application the Court shall8 ' take into consideration areport .of t~e offi,cial receiver as to

the bankrupt's conduct and affaýrs (ýncludýng a report as tothe bankrupt's conduct during the proceedings under hisbankruptcy), and may either grant or refuse an absoluteorder of discharge, or suspend the operation of the orderfor a specified time, or grant an order of discharge subjectto any conditions with respect to any eamÝngs or Ýncomewhich may afterwards become due to the bankrupt, or withrespect to his af ter-acquired property :

Provided that where the bankrupt has committed anymisdemeanour under this Law, or any enactment repealedby this Law, or any other misdemeanour connected with hisbankruptcy or any felony connected with his bankruptcy, orwhere in any case any of the facts hereinafter mentioned areproved, the Court shall either-

(a) reflise the discharge ; or(b) suspend the discharge for such period as it deems

fit ~ or(c) suspend the discharge until a dividend of not less

than five hundred mils in the pound has been paid tothe creditors; or

(d) require the bankrupt as a condition of his dischargeto consent to judgment being entered againsthim by the official receiver or trustee for any

'8 balance or part of any balance of the debts provableunder the bankruptcy which is not satisfied at thedate of the discharge, such balance or part of anybalance of the debts to be paid out of the futureeamings or af ter-acquired property of the bankruptin such manýýer and subject to such conditions as theCourt may direct; but execution shall not be issuedon the judgment without leave of the Court, whichleave may be given on proof that the bankrupt hassince his discharge acquired property or incomeavailable towards payment of his debts :

24C~. 5.]. B,ANKR(J~T~Y. 1.-~ Provideð that; if; at any time aft{Jr the date of any order .

rnade underthis sedtion the bankrupt satisfies the;Collvt that rthereis n9:reasonable probability of his beingin a position.tocompir wýth the tenns of such order, the'Cüurt may modýfythe tenns of the order, ot of any substituted order, in suchmanýýer and upon such conditions as it may think fir:

(3) The facts hereinbefore r~ferred to 3:!e-:--

(a) that the bankrupt's assets are not of a value equal tofive hundredmils in the pound on the amount of his eunsecured liabilities, unless he satisfies the Courtthat the fact that the assets are not of a value equalto five hundred mils in the pound on the amount ofhis unsecured liabilities has arisen from cÝrcum-

,.. ,") stances foý: which he cannot justly be held respon-sible;

(b) that the bankrupt has omitted to keep such books of;ýccount as, are usuat and proper in the busin~sscarried on by him and as sufficiently disclose hisbusiness transactions and financial position withinthe three years 'Ýmmediately preceding his bank-ruptcy :

",., '(c) that 'the bankÝ-upt has continued to trade af ter knowing

himself to be insolvent ;

(d) that the ban~pt has contracted any debt provablein the bankruptcy without having at the time ofcontracting it any reasonable or probable ground of

~ expe;ctatioÝl (proof whereof shalllie on him) of being" ;ýble to pay it ;

(e) that the bankrupt has failed to account satisfactorilyfoi: any loss of assets or for any deficiency of assetsto meet his liabilities ;

(f) th~t the bankrupt has brought o~, or contribute.d to .hýs bankruptcy by rash and hazardolis speculatýons,or by unjustifiable extravagance in living, or bygambling, or by culpable neglect of his businessaffairs ;

(g) that the bankrtlpt has put any of his creditors tounnecessary expense by a frivololis or vexatiousdefence to any action properly brought against him ;

(h) that the bankrupt has brought on or contributed tohis bankruptcy by incurring unjustifiable expensein bringing any frivololiS or \-exatious action ;

, .-,#'f"t -

BANKRUP~CY. ICAP. 5. 25 i

-(i) that the bankrupt'has, within three months precedin.g- -the date of ýpe rece.iving order, ,when unable to pay rhis debts as they become due, given an unduepreference to any of his creditors ;

(j) that the bankrupt has, within three months precedin~the date of the receiving order, incurred liabi,litieswith a view of making his assets equal to five hundredmils in the p<:>und on the amount of his unsecuredliabilities ;

O (k) that the bankrupt. has on any previous occa~ion-whether under thýs Law or any Law for the týme

being in force in Cyprus been adjudged bankrupt, ormade a composition or arrangement with hiscreditors ; "

'(1) that the bankrupt has been guilty of any fraud orfraudulent breach of trust. .

, (4) With a view to removin.g- any statutory disqualification<>n account of bankruptcy which is removed if the bankrupt<>btains from the Court his discharge with a certificate to the-effect that the bankruptcy was caused by misfortune withoutany misconduct on his part, the Court may, if it thinks fit,grant such a certificate, but a refusal to grant such a certificateshall be subject to appeal. ~

(5) For the purposes of this section a bankrupt's assets shallDe deemed of a value equal to five hundred mil s in the pound-on the amount of his unsecured liabilities when the Couri issatisfied that the property of the bankrupt has realized, or islikely to realize, or with due care in realizatiön might haverealized, an amount equal to five hundred mils in the pound oýýhis unsecured liabilities, and a report by the official receiver'or the trustee shall be prima facie evidence of the amount of'such liabilities.

(6) For the purposes of this section the report of the officia1receiver shall be prima facie evidence of the statements therein'contained.

(7) Notice of the appointment by the Court of the day fornearin.g- the application for dischar.g-e shall be published in theprescribed manner, and sent fourteen days at least before the,day so appointed to each creditor whö has proved, and theCourt may hear the official receiver and the trustee, and mayalso he ar any creditor. At the hearing the Court may put:such questions ,00 the debtor and receive such evidence as it-may think fit.

~ ~,ccc

26 CAP. 5.J BA1VKRUPTCY. 1i

(8) The powers of suspending and of attacbing conditions -to a bankrupt's discharge may be exercised coocmrently.

~Procý;dure f 28. In the event of a bankrupt failing to appfy for his:on faýlure o. bankrupt to dýscharge as ýn the last precedýng sectýon hereof mentýoned

d~~a~~~. the official receiver shall, as soon as may be af ter the grantingof the trustee's release by the Court but not fater rhan twoyears af ter the close of the public examination if the trustee-has not been released by that time, appIy to the Court forthe considerati°ý.ý by them of such bankrupt's discharge.. ~he- O .Court may requýre the bankrupt to be present for examýnatýonat any hearing convened in pursuance of the provisions of thissection, and may make such order as seems just having regardto all the cÝrcumstances.

~uties old 29. A discharged bankrupt shaII, notwithstandÝng his dis-dýscharge h . h . h .. hbankrupt. C arge, gýve suc assýstance as t e trustee may requIre ýn t e

realization and distribution of such of his property as is vestedin the trustee, and if he faiIs to do so he shaIl be guilty of acontempt of Court ; and the Court may, if it thinks fit, revokehis discharge, but without prejudice to the validity of any sale,disposition, or payment duty made or thing duly done sub-sequent to the discharge, but before Ýts revocation.

Effect of 30. (1) An order of discharge shaIl not reIease the bankruptdf~eha~~e. from any debt on a recognizance nar from any fine or debt

with which the bankrupt may be chargeabIe at the suÝt of theCrown (or of any person) for any offence against any Law, oron a baiI bond entered info for the appearance of any personprosecuted for any offence; and he shaII not be dischargedfrom such excepted debts unless the Governor certify inwriting under the han d of the Administrative Secretary hisconsent to his being discharged therefrom.

(2) An order of dÝscharg-e shaII not release the bankrupt efrom any debt or Iiability incurred by means of any fraud orfraudulent breach of trust to which he was a party, nor fromany debt or Iiability whereof he has obtaÝned forbearance byany fraud to which he was a party .

(3) An order of discharge shaII not reIease any person whoat the date of the receiving order was a partner or co-trustcewith the bankrupt or was jointly bound or had any joint con-tract wÝth him, 01 any person who was surety or in the natureof a surety for him.

-~ -

BANKRUPTCY. [CAP. 5. 27 i--(4) An order of discharge shall Telcage the bankrupt from -r.all other debts provable in bankruptcy.

(5) An order of discharge shall be conclusive evidence ofthe bankruptcy and of the validity of the proceedingstherein, and in any proceedings that may be institutedagainst a bankrupt who has obtained an order of dischargein respect of any debt from which he is released by the order,the bankrupt may plead that the cause of action occurredbefore his discharge.

8 31. (1) Where in the apiýýion of the Court a debtor ought ~ow:ýr;ornot to have been adjudged bankrupt, or where it is proved a~~ul o

to the satis~ac~ion of the Court that the debts of ~he ?ank- f~j~~c:Ý~onrupt are paýd ýn full, the Court may, on the appIicatýon of cases.any person interested, by order annul the adjudication.

(2) Where an adjudication is annulled under this section,all sales and dispositions of property and payments dulymade, and all acts theretofore done, by the official receiver,trustec, or other person acting under theirauthority, or by theCourt, shall be valid, but the property of the debtor whowas adjudged bankrupt shaR vest in such person as theCourt may appoint, or, in default of any such appointment,revert to the debtor for all his estate or interest therein onsuch terms and subject to such conditions, if any, as theCourt may declare by order.

(3) Notice of the order annu1ling an adjudication shall beforthwith gazetted and published in two local papers one ofwhich is published in the Turkish and the other in the Greeklanguage.

(4) For the purposes of this section, any debt disputedby a debtor shall be considered as paid in full if the debtorenters into a bond, in such sum and with such sureties as the

..Court approves, to pay the amatint to be recovered in any

..proceeding for the recovery of or conceming the debt, withcosts, and any debt due to a creditor who cannot be fonndor cannot be identifýed shall be considered as paid in full ifpaid into Court.

c. f

2Þ ÇAP. 5.] B:ANKRUPTCY. i-'---e_o' '. ~

.PART ll. -

DýSQUALIFICATIONS OF BANKRUPT.

rI?isqualifica- 32. (1) Where a debtor is adjudged bankrupt, he shall,~l~~c~arged subject to the provisions of this Law, be disqualified forbankrupt. being elected or holding or exercising the office of:-

(a) member of Legislative Council;(b) mayor or member of a Municipal Council;(c) member of a District Council (Medjlis Idare) ; At(d) mukhtar. '.ý

(2) The disqualifications to which a bankrupt is subjectunder this section shall be removed and cease if and when:-

(a) the adjudication in bankruptcy is annulled; or(b) he obtains from the Court his discharge with a

certificate to the effect that his bankruptcy wascaused by misfortune without any misconducton his part.

The Court may grant or withhold such certificate as itthinks fit, but any refusal of such certificate shall be subjectto appeal.

~~~~ed b 33. if the debtor is a~jud~ed bank.rupt w~ilst be~ngbankruptc~ elected member of the Legýslatýve Councýl or whilst holdýng~~hol~er the office of mayor or member of a Municipal Council orereo .whilst being a member of a District Council (Medjlis Idare)

or whilst holding the office of mukhtar, his seat. or officeshall thereupon become vacant.

PART III.

ADMINISTRATION OF PROPERTY.

Provable Debts. /8~e~c~ftion 34. (1) Demands in the nature of unliquidated damages~ro:ab~ in arising otherwise than by reason of a contract, promise, orbankruptcy. breach oÝ trust shall not be provable in bankruptcy.

(2) A person having notice of any act of bankruptcyavailable against the debtor shall not prove under the orderfor any debt or liability contracted by the debtor sub-sequently to the date of his so having notice.

(3) Save as aforesaid, all debts and liabilities, present orfuture, certain or contingent, to which the debtor is subject

iBANKRUPTCY. [CAP.. 5. 29 ~at the date of the receiving order, or to which he may become -

r~ubject before his discharge by reas?n. of any obligationýncurred before the date ot the receývýng order, shall bedeemed to be debts provable in bankruptcy.

(4) An estimate shallbe made by the trustee of the valueof any debt or liability provable as aforesaid, which byreason of its being subject to any contingency, or for anyother reason does not bear a certain value.

..(5) Any person aggrieved by any estimate made by the

..trustee as aforesaid may appeal to the Court.

(6) If, in the opinion of the Court, the value of the debtor liability is incapable of being fairly estimated, the Courtmay make an order to that effect, and thereupon the debt orliability shall for the purposes of this Law, be deemed to bea debt not provable in bankruptcy.

(7) If, in the opinion of the Court, the value of the debt orliability is capable of being fairly estimated, the Court maydirect the value to be assessed before the Court itself, andmay give all necessary directions for this purpose, and theamount of the value when assessed shall be deemed to be adebt provable in bankruptcy.

(8) "Liability" shall, for the purposes of this Law,include-

(a) any compensation for work or labour done;(b) any obligation or PQssibility of an obligation to pay

money or money's worth on the breach of anyexpressed or implied covenant, contract, agree-ment, or undertaking, whether the breach doesor does not occur, or is or is not likel y to occur orcapable of occurring, before the discharge of thedebtor;

(c) generally, any expressed or implied engagement,8 agreement, or undertaking, to pay, or capable of

resulting in the payment of money or money'sworth; whether the payment is, as respectsamount, fýxed oý unliquidated; as respects time,present or future, certain or dependent on anyone contingençy or on two or more contingencies;as to mode of valuation, capable of beingascertained by fýxed rules or as matterof opinion.

35. Where there have been mutual credits, mutual debts, Mu:aý dor other mutual dealings between a debtor against whom ~~~ o~.an

f (2)

..,-,"-,-"~

30 CAP. 5.] l3ANKRUPTCY. 1-~

a receiving order shall be made under this Law, and any .other person proving or claiming to prove a debt under the rreceiving order, an account shall be taken of what is duefrom the one party.to the other in respect of such mutualdealings, and the sum due from the one party shall be setoff against any sum due from the other party, and thebalance of the account, and no more, shall be claimed orpaid on either side respectively; but a person shall not beentitled under this section to claim the benefýt of any set offagainst the property of a debtor in any cage where he had

8at the time of giving credit to the debtor, notice of an act ofbankruptcy committed by the debtor, and available againsthim.

Appropriation of Assets.~;Y:fi~t 36. (1) .The ass~ts re~a~ing af ter payment of the actualmÝEary expenses Jncurred ýn realýzýng any of the assets of the debtorexpenses. shall, subject to any order of the Court, be liable to the

following payments, which shall be made in the following .

order of priority, namely-(a) the actual expenses incurred by the offýcial receiver

in protecting the property or assets of the debtoror any part thereof and any expenses or outlayincurred by him or by his authority in carryingon the business of the debtor;

(b) the fees, percent ages , and charges payable to, orcosts, charges, and expenses incurred or autho-rized by the offýcial receiver;

(c) the remuneration of the special manager, if any; and(d) thetaxed costs of the petitioning creditor so far as

the same may not have been disallowed by theCourt.

(2) Whenever the Court is satisfýed that property of adebtor in respect of whose estate a receiving order has been amade has been preserved for the benefýt of the creditors by .means of legal proceedings brought by a creditor against thedebtor without notice of any available act of bankruptcycommitted by the debtor, the Court may, in its discretion,order the payment of the costs of such legal proceedingsor any part of them out of the estate with the same priorityas to payment as is herein provided in respectof the taxedcosts of the petitioner.

Rules a: 37. With respect to the mode of proving debts, the right of

: a~~~s. proofs by secured and other creditors, the admission and

'1..."i;'~'i"'!"~-~ Ic :~;:".,"',".;.,.,"; ,-' ", ,c';!;",

BANKRUPTCY. [GAP. 5. 31 -~

rejection of proofs, and the othermatters referred to in the -Second Schedule, the rulesin thatSchedule shall be observed. ~~~~~~le.

r38. (1) In the distribution of the property of a bankrupt ~Ority ofthere shall be paid in priority to allother debts but af ter e ts.payment of the preliminary expenses in section 36 herein- i

before mentioned-(a) all Govemment taxes and duties, Municipal or

Ý-. village rates due from the bankrupt at the date..of the receiving order and having fýrst become

due and payable within twelve months nextbefore that time;

(b) all wages or salary of any clerk or servant, whetheror not eamed wholly or in part by way of com-mission, in respect of services rendered to thebankrupt during the four months next precedingthe date of the receiving order, not exceedingfýfty pounds;

(c) all wagesof any labourer or workman not exceedingtwenty-fýve pounds, whether payable for time orfor piecework, in respect of .services rendered tothe bankrupt during two months before the dateof the receiving order;

(d) such part of any premium paid by or on behalf ofany apprentice under service to the bankrupt asthe Court may order;

(e) all amounts, not exceeding in any individual cageone hundred pounds, due in respect of compen-sation under the Workmen's Compensation Law, Cap.188.the liability wherefore accrued before the date ofthe receiving order, subject nevertheless to theprovisions of section 31 of that Law;

(j) all rent accrued due to the landlord during the four18 .months next preceding the date of the receiving

order.

(2) The foregoing debts shall rank equally between them-selves and shall be paid in full, unless the property of thebankrupt is insuffýcient to meet them, in which cage theyshall abate in equal proportions between themselves.

(3) Subject to the retention of such sums as may benecessary for the costs of administration or otherwise, theforegoing debts shall be discharged forthwith so far as theproperty-of the debtor, is suffýcient to meet them.

32 GAP. 5.] BANKRUPTCY, ~" 1

(4) The joint estate of partners shall be appIicable in therfýr.st.instance in -payment of their joint debts, and the

-?eparate ~state of each par~ner shall be appIicable in the ?rstýnstance ýn payment of hýs þeparate debts. if there ýs asurplus of the separate estates it shall be dealt with as part ofthe joint estate. if there is a surplus of the joint estate itshall be dealt with as part of the respective separate estates !in proportion to the right and interest of each partner in thejoint estate. ;

(5) Subject to the provisions of this Law, all debts proved 8in the bankruptcy shall be paid pari passu.

(6) if there is any surplus af ter payment of the debts itshall be appIied in payment of interest from the date of thereceiving order at the rate of nine pounds per centum perannum on all debts proved in the bankruptcy.

(7) Nothing in this section shall alter the effect of section 7Cap. ll6. of the Partnership and Business N ames Law, or the order of

the liquidation of the debts of a deceased person under theCap. l89. provisions of the Administration of Estates Law.

Postpo~e- 39. (1) Where a married woman has been adjudged~::a~d's bankrupt, her husband shall not be entitled to claim anyaf<;Ý wife's dividend as a creditor in respect of any money or otherc aýms. estate lent or entrusted by him to his wife for the purposes

of her trade or business until all claims of the other creditorsof his wife for valuable consideration in money or money'sworth have been satisfýed.

(2) Where the husband of a married woman has beenadjudged bankrupt, any money or other estate of suchwoman lent or entrusted by her to her husband for thepurpose of any trade or business carried on by him or other-wise, shall be treated as assets of his estate, and the wifeshall not be entitled to claim any dividend as a creditor inrespect of any such money or other estate until all claims ofthe other creditors of her husband for valuable consideration 8in money or money's worth have been satisfýed.

(3) The provisions of thissection shall not apply to claimsin respect of any money or other estate lent or entrusted bya husband to his wife or by a wife to her husband before thecommencement of this Law.

Property Available for Payment of Debts.Relation 4O Th b k f d b h h hback of .e an ruptcy o a e tor, w et er t e same takest~ustee's place on the debtor's own petition or upon that of a creditortýtle.

-~--

BANKR1ÝPTCY. [CAP. 5. 33 i.-or creditors, shall be deemed to have relation back to, and to .commence at, the time of the act of bankrnptcy being

~committed on which a receiving order is made against him,or, if the bankrupt is proved to have committed more actsof bankruptcy than one, to have relation back to, and tocommence at, the time of the fýrst of the acts of bankruptcyproved to have been committed by the bankrupt withinthree months next preceding the date of the presentation ofthe bankruptcy petition; but no bankruptcy petition,

8 receiving order, or adjlidication shall b~ rendered invalid byreason of any act of bankruptcy antenor to the debt of thepetitioning creditor,

41. The property of the bankrupt divisible among his Description,d ' . h. L f d h f h of bankrupt scre ýtors ýn t ýs aw re erre to as t e property O t e propertybankru pt shall comprise the followin g Particulars:- divisible

, amongbt(a) all such property as may belong to or be vested in creditors.

the bankrupt at the commencement of thebankruptcy or may be acquired by or devolveonhim before his discharge;

(b) the capacity to exercise and to take proceedings forexercising all such powers in and over or inrespect of property as might have been exercisedby the bankrupt for his own benefýt at thecommencement of his bankruptey or before hisdischarge;

(c) all goods being, at the commencement of thebankruptcy, in the possession, order, or dis-position of the bankrupt, in his trade or business,by the consent and permission of the true owner,under such circumstances that he is the reputedowner thereof: Provided that things in actionother 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 ofthis section,

42. The following shall not form part of the bankrupt's ~o.P~r;:y not/property divisible among his creditors, namely:- a:~~gs~

creditors.(a) property held by the bankrupt on trust for any

other person;(b) aýý property as would be exempt from execution

under any Law for the tin:e being in force inCyprus, :

---~

34 CAP. 5.] BANKRUPTCY. i

Pr~visions d 43. (1) Where a second or subsequent receiving order isr:n~:~~~~y made against a bankrupt, or where an order is made for the

a~ tdh dealings administration in bankruptcy of the estate of a deceasedwl persons .adjudged bankrupt, then for the purposes of any proceedings con-bankrupts. sequent upon any such order, the trustee in the last preced-

ing bankruptcy shall be deemed to be a creditor in respect ofany unsatisfýed balance of the debts provable against theproperty of the bankrupt in that bankruptcy.

(2) In the event of a second or subsequent receiving order amade against a bankrupt beingfollowed by an order adjudg- -ing him bankrupt, or in the event of an order being made forthe administration in bankruptcy of the estate of a deceasedbankrupt, any property acquired by him since he was lastadjudged bankrupt~ which at the date when the subsequentpetition was presented had not been distributed amongst thecreditors in such last preceding bankruptcy, shall (subject toany disposition thereof made by the offýcial receiver ortrustee in that bankruptcy, without knowledge of the pre-sentation of the subsequent petition, and subject to the pro-visions of subsection (5) and subsection (6) of this section)vest in the trustee in the subsequent bankruptcy or adminis-tration in bankruptcy as the case may be.

(3) Where the trustee in any bankruptcy receives notice ofa subsequent petition in bankruptcy against the bankrupt oraf ter his decease of a petition for the administration of hisestate in bankruptcy, the trustee shall hold any propertythen in his possession which has been acquired by the bank-rupt since he was adjudged bankrupt until the subsequentpetition has been disposed of, and, if on the subsequentpetition an order of adjudication or an order for the adminis-tration of the estate in bankruptcy is made, he shall transferall such propertY or the proceeds thereof (after deducting hiscosts and expenses) to the trustee in the subsequent bank-ruptcy or administration in bankruptcy, as the case may be. 8

(4) A payment of money or delivery of property to aperson subseq l1ently adjudged bankrupt, or to a personclaiming by assignment from him, shaJl, notwithstandinganything in this Law, be a good discharge to the personpaying the money or delivering the property, if the paymentor delivery is made before the actual date on which thereceiving order is made and without notice of the presen-tation of a bankruptcy petition and is either pursuant to theordinary course of business or otherwise bona fide.

BANKRUPTCY. [CAP. 5. 35 i~

(5) All transactions by a bankrupt with any person .dealing with him bond fide and for value, in respect of

~property, whether movable or immovable, acquired by theban~rupt aft~r the adj udication, sha~, if cO;mpleted beforeany ýnterventýon by the trustee, be valýd agaýnst the trustee,and any estate or interest in such property which by virtueof this Law is vested in the trustee-sha11 determine and passin such manýýer and to such extent as may be required forgiving effect to any such transaction.

8 For the purpose of this subsection, the receipt of anymoney, security, or negotiable instrument, from, or by theorder or direction of, a bankrupt by his banker, and anypayment and any delivery of any security or negotiableinstrument made to, or by the order or direction of, abankrupt by his banker, shal1 be deemed to be a transactionby the bankrupt with such bankeT dealing with him forvalue.

(6) Where a bankeT has ascertained that a person havingan account with him is an undischarged bankrupt, then,unless the bankeT is satisfý~d that the account is on behalf ofsome other person, it shall be his duty forthwith to informthe trustee in the bankruptcy or the official receýver of theexistence of the account, and thereafter he shal1 not makeany payments out of the account, except under an order ofthe Court or in accordance with instructions from thetrustee in the bankruptcy, unless by the expiration ot onemonth from the date of giving the information no instruc-tions have been received from the trustee.

Effect of Bankruptcy on Antecedent Transactions.-44. (1) Where a creditor has issued execution against the Res~riction

goods or immovable property of a debtor, or has attached ~~eý;;i~~~: ofany debt due to him, he sha11 not be entitled to retain the under.

A benefýt of the execution or attachment against the trustee in ~~e~~~~~-..bankruptcy of the debtor, unless he has completed the ment.

execution or attachment before the date of the receivingorder, and before notice of the presentation of any bank-ruptcy petition by or against the debtor, or of the commissionof any available act of bankruptcy by the debtor.

(2) For the purposes of this Law, an execution or attach-ment shall be deemed to be completed-

(a) in the case of goods, chattels, or other movableproperty in the possession of the debtor or ofnego.tiable instruments., ~seizure and sale;

--

36 CAP. 5.] BANKRUPTCY. .i.

(b) in the case of go?ds, chattels, <?r ot~er mov8;ble rproperty to whých the debtor ýs entýtled subjectto alien or right of some person to the immediatepossession thereof, by attachment by prohibitionorder and sale;

.(c) in the case of lands, houses or other immovableproperty or any interest therein by attachmentand due registration thereofat the Land RegistryOffice;'

(d) in the case of an attachment of a debt notbeing a 8negotiable instromeýýt, by receipt of the debt.;

(e) in the case of shares in any public company or cor-poration, by attachment by prohibition order;

(i) in the case of property in the custody or uncler thecontrol of any public officer in his official capacityor in Court, by attachment by prohibition orderduly obtained and served.

(3) An execution levied by seizure and sale on the goods,chattels or other movable property of a debtor is notinvalid by reason only of its being an act of bankruptcy, anda person who purchases the goods, chattels or other movableproperty under a sale by the sheriff shall, in all cases., acquirea good title to them against the trustee in bankruptcy.

~ut~~ of 45. (1) Where any goods of a debtor are taken in execu-

~oe;~OdaSs tion and before the sale thereof, or the completion of thetakenti? execution by the receipt or recovery of the full amount of theexecu ýan. levy, notice is served on the sheriff that a receiving order has

been made against the debtor, the sheriff shall, on request,deliver the goods and any money seized or received in partsatisfaction of the execution to the official receiver, but thecosts of the execution shall be a fýrst charge on the goods ormoney so delivered, and the official receiver or trustee maysell the goods or an adequate part thereoi, for the purpose ofsatisfying the charge. 8

(2) Where under an execution in respect of a judgment fora sum exceeding twenty polinds, the goods of a debtor aresold or money is paid in order to avoid sale, the sheriff shalldeduct his costs of the execution from the proceeds of sale orthe money paid, and retain the balance for fourteen days,and if within that time notice is served on him of a bank-ruptcy petition having been presented by or against thedebtor, and a receiving order is made against the debtorthereon, or on any other petitionof which the sheriff hasnotice, the sheriffshall paythe balance to the official receiver

~

BANKRU:CY. [CAP.5. 37 i~or to the tnýstee, as the case may be, who shall be entitIed to .retain the same as against the execution creditor.

~46. (1) Any settlement of property, not being a settIe- ~voi~cement made before and in consideration of marriage, or made ~et~l~m:~ts.in favour of a purchaser or incumbrancer in good faith andfor valuable consideration,or a settIement made on or for thewife orohildren of the settlor of property which has accnýedto the settlor af ter marriage in right of his wife, shall, if the

8 settlor becomes banknýpt within two years af ter the date ofthe settlement, be void against the tnýsteein the banknýptcy,and sha1l, if the settlor becomeþ banknýpt at any subsequenttime within ten years af ter the dat~ of the settIement, bevoid against the tnýstee in the banknýptcy, unless the partiesclaiming under the settIement can prove that the settIor was,at the time of making the settIement, able to payall his debtswithout the aid of the property comprised in the settlementand that the interest of the settlor in such property passed tothe tnýstee of such settlement on the execution thereof.

(2) Any covenant or coIÝtract made by any person (herein-af ter caUed the settlor) in consideration of his or hermarriage, either for the future payment of money for thebenefýt of the settlor's wife or husband or children, or for thefuture settIement on or for the settlor's wife or husband orchildren, of property, wherein the settIor had not at the dateof the marriage any estate or interest, whether vested or con-tingent, in possession or remainder, and not being money orproperty in right of the settIor's wife or husband, shall, ifthe settIor is adjudged banknýpt and the covenant or con-tract has not been executed at the date of the commencementof his bankruptcy, be void against the tnýstee in the bank-nýptcy except so far as it enables the persons entitled underthe covenant or contract to claim for dividend in the settIor'sbankruptcy under or in respect of the "covenant or contract,

8 bu~ any such claim to diyidend sha1l be postpo~ed u~til ~llclaýms of the other credýtors for valuable consýderatýon ýnmoney or money's worth have been satisfýed.

(3) Any payment of money (not being payment ofpremiums on a policy of life assurance) or any transfer ofproperty made by the settIor in pursuance of such a covenantor contract as aforesaid shall be void against the tnýstee inthe settIor's banknýptcy, unless the persons to whom thepayment or transfer was made prove either-

(a) that the payment or transfer was m~de more than

38 CAP. 5.] BANKRUPTCY, i.

two years before the date of the commencement rof the bankruptcy; or(b) that at the date of the payment or transfer the

settlor was able to payallhis debts without theaid of the money so paid or the property sotransferred; or

(c) that the payment or transfer was made in pursuanceof a covenant or contract to pay or transfermoney or property expected to come to the

.settlor from or on the death of a particularperson 8named in the covenant or contract andwasmadewithin three months af ter the money or propertycame into the possession or under the control ofthe settlor,

but, in the event of any such paymeDt or transfer beingdeclared void, the persons to whom it was made shall beentitled to claim for dividend under or in respect of thecovenant or contract in Iike manýýer as if it had not beenexecuted at the commencement of the bankruptcy,

(4) "SettIement" shall, for the purpose of this section,incI~de any conveyance or transfer of property~

Avoidance 47. (1) Every conveyance or transfer of property, orof preferen- h th d t d bl ' t 'ces in certain C arge ereon ma e, every paymen ma e, every o ýga toncases. incurred and every judiciaI proceeding taken or suffered by

any person unable to pay his debts as they become due fromhis own money in fa your of any creditor, or of any person intrust for any creditor, with a view of giving such creditor apreference over the other creditors, shall, if the personmaking, taking, paying, or suffering the same, is adjudgedbankrupt on a bankruptcy petition presented within threemonths af ter the date of making, taking, paying, or sufferingthe same, be deemed fraudulent and void as agajnst thetrustee in the bankruptcy,

(2) This section shall not affect the rights of any person 8making title in good faith and for valuable considerationthrough or under a creditor of the bankrupt.

Protection 48. Subject to the foregoing provisions of this Law with~:a~:~C:s respect to the effect of bankruptcy on an execution or attach-wit~out meDt, and with respect to the avoidance of certain settle-notýce. ments, assignments and preferences, nothing in this Law

shall invalidate in the case of a bankruptcy:-(a) any paymeDt .by the bankrupt to any of hiscreditors; _:.: ..:. ---: :- .-

--

BANKRU~CY. [CAP. 5. 39 i~

(b) any payment or dellvery to the bankrupt; -(c) any conveyance or assignment by the bankrupt for

~valuable consideration;(d) any contract, dealing, or trans.actio~ by or with the

bankrupt for valuable consýderatýon:Provided that both the following conditions are complied

with, namely- .

(a) that the payment, delivery, conveyance, assign-..ment, contract, dealing, or transaction as the..cage may be, takes place before the date of the

receiving order; and(b) that the person (other than the debtor) to, by or

with whom the payment, delivery, conveyance,assignment, contract, dealing or transaction wasmade, exeouted, or entered into, has not at thetime of the payment, delivery, conveyance,assignment, contract, dealing or transaction,notice of any available act of bankruptcycommitted by the bankrupt before that time.

Realization of Property.49. (1) Immediately on a debtor being adjudged bank- Vesting and

t th rt f th b k h II . h transfer ofrup, e prope y o e an rupt s a vest ýn t e trUStce. property.Until a trustee is appointed the official receiver shalJ be thetrustee for the purposes of this section.

(2) On the appointment of a trustee the property shallforthwith pass to and vest in the trustee appointed.

(3) The property of the bankrupt sha11 pass from thetrustee, including under that term the official receiver whenhe fi11s the office of trustee for the time being during hiscontinüance in office, without any conveyance, assignment,or transfer whatever.

8 50. (1) The trustee sha11, as soon as may be, take posses- Possessionsion of the deeds, books, and documents of the bankrupt, ~~ ~~~~:~yand allother parts of his property capable of manual .

delivery .(2) The trustee sha11, in relation to and for the purpose ofacquiring or retaining possession of the property of the .

bankrupt, be in the same position as if he were a receiver ofthe property appointed by the Court, and the Court may,on his application, enforce such acquisition or retentionaccordingir.

40 CAP. 5.] HA~RUPTCY. i(3) Where any part of the property of the bankrupt con-

rsistsof stock, shares in ships, shares, or any other propertytransferable in the books of any company, office, or person,the trustee may exercise the right to transfer the property tothe same extent as the bankrupt might have exercised itif he had not become bankrupt.

(4) Where any part of the property of the bankrupt con-sists ot things in action, such things shal1 be deemed to havebeen duly assigned to the trustee.

(5) Any treasurer or other officer, or any banker, attorney, 8or agent of a bankrupt, shal1 payand deliver to the trusteeall money and securities in his possession or power, as suchofficer, banker, attorney, or agent, which he is not by lawentitled to retain as against the bankrupt or the trustee. Ifhe does not he shall be guilty of a contempt of Court, and maybe punished accordingIyon the application' of the trustee.

~;i:~:e 51. Any person acting under warrant of the Court mayproperty of seize any part of the property of a bankrupt, or of a debtorbankrupt. against whom a receiving order has been made. in the ,

custody or possession of the bankrupt or the debtor. or of anyother person, and with a view to such seizure may break openany house, buildÝýýg, or room of the bankrupt or the debtorwhere the bankrupt or the debtor is supposed to be, or anybui1ding or receptacle of the bankrupt or the debtor whereany of his property is supposed to be; and where the Courtis satisfýed that there is reason to believe that property of abankrupt or a debtor against whom a receiving order hasbeen made is concealed in a house or place not belonging tohim, the Court may, if it thinks fýt, grant a search warrantto any constable or offýcer of the Col1rt, who may execute itaccording to its tenor.

A;ppropria- 52. (1) Where a bankrupt is an offýcer or clerk employed;~~i~~ of or engaged in the civil service of the Government, the 8pay or trustees shal1 receive for distribution among the creditors so~~~~Jo:. much ot the bankrupt's pay or salary as the Court, on the

application of the trustee, with the consent of the chiefoffýcer of the Department under which the pay or salary isenjoyed, may direct.

(2) Where a bankrupt is in receipt of a salary or incomeother than as aforesaid, or is entitled to any half-pay, orpension, or to any compensation granted by the Departmentof the Accountant-General, the Court, on the application ofthe trustee, shall from time to time make such, order as it

BANK=CY, [CAP.5. -41 i-

thinks just for the paymentof the salary, income, half-pay, -~pension or compensatjon, or of any part thereof, to the

trustee, to be applied by him in such manýýer as the Court

may direct,

53,. (1) Where any part of the ,property of the bankrupt ~i~~:~e:consýsts of land of any tenure wýth onerous covenants, of property.shares or stock in companies, of unprofitable contracts, or ofany other property that is unsaleable, or not readily saleable

a by reason of its binding the possessor thereof to the perfor-., mance of any onerous act, or to the payment of any sum of

money, the trustee, notwithstanding that he has endea-voured to sell or has taken possession of the property, orexercised any act of ownership in relation thereto, buisubject to the provisions ot this section, may, by writingsigned by him, at any time within twelve months af ter thefirst appointment of a trustee, disclaim the property:

Provided that where any such property shall not havecome to the knowledge of the trustee within one month af tersuch appointment, he may disclaim such property at anytime within twelve months af ter he first became awarethereof or such extended period as ma y be a1lowed by theCourt,

(2) The disclaimer shall operate to determine, as from thedate of disclaimer, the rights, interesis, and liabilities of thebankrupt and his property in or in respect of the propertydisclaimed, and shall also discharge the trustee from allpersonal liability in respect of the property disclaimed, asfrom the date when the property vested in him, bui sha1l not,except so far as is necessary for the purpose of releasing thebankrupt and his property and the trustee from liability,affect the rights or liabilities of any other person,

(3) A trustee shall notbe entitled to disclaÝm a lease with-8 out the leave of the Court, except in any cases which may be

prescribed by general rules, and the Court may, before or ongranting such leave, require such notices to be given topersons interested, and impose such terms as a condition ofgranting leave, and make such orders with respect to fixtures,tenant's imptovefnents, and other matters arising out of thet,enancy as the Court thinks just,

'(4) The trustee shaU not be entitled to disclaÝm anyproperty in pursuance of this section in any case where anapplication in writing has been made to the trustee by any

42 GAP. 5.] BA::'PTCY. -ic

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 af ter the receipt of the applica-tion, or such extended period as may be allowed by theCourt, declined or neglected to give notice whethet hedisclaims the property or not; and, in the case of a contract,if the trustee, af ter such application as aforesaid, does notwithin the said period or extended period disclaim thecontract, he shall be deemed to have adopted it.

.(5) Th,e Court may, on th~ application of any perso? who 8ýs, as agaýnst the trustee, entýtled to the benefýt or subject tothe burden of a contract made with the bankrupt, make anorder rescinding the contract on such terms as to paymentby or to either party of damages for the non-performance ofthe contract, or otherwise, as to the Court may seem equi-table, and any damages payable under the order to any such'person may be proved by him as a debt under the bank-ruptcy.

(6) The Court. may, on application by any person eitherclaiming any interest in any disclaimed property, or underany liability not discharged by this Law in respect of anydisclaimed property, and on hearing such persons as it thinksfýt, make an order for the vesting of the property in or deli-very thereof to any person entitled thereto, or to whom itmay seem just that the same should be delivered by way ofcompensation for such liability as aforesaid, or a trustee forhim, and on such terms as the Court thinks just; and on anysuch vesting order being made, the property comprisedtherein shall vest accordingly in the person therein named inthat behalf without any conveyance or assignment for thepurpose:

Provided always, where the property disclaimed is of aleasehold nature, the Court shall not make a vesting order Ýnfavour of any person claiming under the. bankrupt, whether aas under lessee or as mortgagee by demýse except upon the ..terms of making that person-

(a) subject to the same liabilities and obligations as thebankrupt was subject to under the lease inrespect of the property at the date when thebankruptcy petition was fýled; or

(b) if the Court thinks fýt, subject only to the sameliabilities and obligations as if the lease had beenassigned to that person at that date;

and in either event (if the case so requires) as if the lease had

-BANKRUPTCY. [CAP.5. 43 i-

comprised only the property comprised in the vesting order; =and any mortgagee or under-Iessee declining to accept a .

~vesting order upon such terms shall be excluded from allinterest in and security upon the property, and if there is noperson claiming under the bankrupt who is willing to acceptan order upon such terms, the Court shall have power tovest the bankrupt's estate and interest in the property inany person liable either personally or in a representa tivecharacter, and either alone or joinlly with the bankrupt toperform the lessee's covenants in such lease, freed and dis-

Ý- charged from all estates, incumbrances, and interests createdtherein by the bankrupt.

(7) Where, on the release., removal, resignation or death ofa trustee in bankruptcy an official receiver is acting astrustee, he may disclaim any property which might be dis-claimed by a trustee under the foregoing provisions, not-withstanding that the time prescribed by this section forsuch disclaimer has expired but such power of disclaimershall be exercisable only within twelve months af ter theofficial receiver has become trustee in the circumstancesaforesaid, or has become aware of the existence of suchproperty, whichever period may last expire.

(8) Any person injured by the operation of a disclaimerunder this section shall be deemed to be a creditor of thebankrupt to the extent of the injury, and may accordinglyprove the same as a debt under the bankruptcy.

54. Subject to provisions of this Law, the trustee may do Powers ofII f h f II . th .trustee

a or any o t e o owýng ýngs:- to dea! with(a) selI all or any part of the property of the bankrupt property.

(including the goodwill of the business, if any,and the book debts due or growing due to thebankrupt) , by public auction or private contract, \

~ with power to transfer the whole thereof to any-person or company, or to selI the same in parcels;

(b) give receipts for any money received by him, whichreceipts shall effectually discharge the personpaying the money from all responsibility inrespect of the application thereof;

(c) prove, rank, claim, and draw a dividend in respect ofany debt due to the bankrupt ;

~ (d) exercise any powers the capacity to exercise which

is vested in the trustee under this Law, andc. g

44 ~.] BANKRUPTCY- ~1-execrite any powers of attorney, deeds and other =instruments for the purpose of carrying into

reffect the provisions of this Law.

Powe~s bl 55. (1) The trustee may with the permission of the com-~;ertC:US:te: mittee oi inspection, do all or any of the following things:-:~~i~er~f (a) carry on the business of the bankrupt, so far as may?ommit;tee of be necessary for the beneficial winding up of theýnspection. same .,

(b) bring, institute, or defend any action or other legal8proceedings relating to the property of the

bankrupt;(C) employ an advocate or other agent to take any

proceedings or do any business which may besanctioned by the committee of inspection;

(d) accept as the consideration for the sale of anyproperty of the bankrupt a sum of money pay-able at a fýýture time subject to such stipulationsas to security and otherwise as the committeethinks fit;

(e) mortgage or pledge any part of the property of thebankrupt for the purpose of raising money for thepayment of his debts;

(f) refer any dispute to arbitration, compromise anydebts, claims, and liabilities, whether present orfuture, certain or contingent, liquidated or un-liquidated, subsisting or supposed to subsistbetween the bankrupt and any person who mayhave incurred any liability to the bankrupt, onthe receipt of such sums, payable at such times,and generallyon such terms as may be agreed on;

(g) make such comprise or other arrangement as maybe thought expedient with creditors, or personsclaiming to be creditors, in respect of any debts ý-.provable under the bankruptcy; -

(h) make such compromise or other arrangement asmay be thought expedient with respect to anyclaim arising out of or incidental to the propertyof the bankrupt, made or capable of being madeon the trustee by any person or by the trustee onany person;

(ýý divide in its existing form amongst the creditors,according to its estimated value, any propertywhich from its peculiar fiatlife or other special

, BANKRUPTCY. [CAP. 5. 4~ i

circumstances .cannot be readily or advan- ..tageously sold.

~(2) The permission given for the purposes of this sectionshalI not be a general permission to do aLI or any of the abovementioned things, but shaU only be a permission to do theparticular thing or things for which permission is sought inthe specified cage or cases.

56. Where any goods of a debtor against whom a receiving Right of8 order has been made are held by any person by way of pledge, ~~~~~ ;~OdS

pawn, or other security, it shall be lawful for the offýcial pawned, etc.receiver or trustee, af ter giving notice in writing of hisintention to do so, to inspect the goods, and, where suchnotice has been given such person as aforesaid shalI not beentitled to realise his security until he has given the trustee areasonable opportunity of inspecting the goods and ofexercising his right of redemption if he thinks fit to do so.

57. Where the offýcial receiver or trustee has seized or Protectiondisposed of any goods, chattels, property, or other effects in ~:C~~~~Lthe possession or on the premises of a debtor against whom a and trusteesreceiving order has been made, without notice of any claim ~:nalby any person in respect of the same, and it is thereafter !iability.made to appear that the said goods, chattels, property, or ~~sc:s~aýnother effects were not, at the date of the receiving order, theproperty of the debtor, the offýcial receiver or trustee shalInot be personalIy liable for any loss or damage arising fromsuch seizure or disposal sustained by any person claimingsuch property, nor for the costs of any proceedings taken toestablish a claim thereto, unless the Court is of opinion thatthe offýcial receiver or trustee has been guilty of negligencein respect of the same.

8 Distribution of Property.58. (1) Subject to the retention of such sums as may be Decýa:ati?n

necessary for the costs of administration, or otherwise, the :i~~ ~fstribU-trustee shall, with all convenient speed, declare and dis- dividends.tribute dividends amongst the creditors who have provedtheir debts.

(2) The first dividend, if any, shall be declared and dis-tributed within four months af ter the conclusion of the firstmeeting of the creditors, unless the trustee satisfies thecommittee of inspection that there is suffýcient reason forpostponing the declaration to alater date.

g (2)

46 GAP. 5.] BANKRUPTCY. i~(3) Subsequent dividends shall, in the absenc.e o~ suffýcient r- reason to the contrary, be declared and dýstnbuted at

intervals of not more than six months.

(4) Before declaring a dividend the trustee shall causenotice of his intention to do so to be gazetted in the pre-scribed manner, and shall also send reasonable notice thereofto each creditor mentioned in the bankrupt's statement whohas not proved his debt.

(5) When the trustee has declared a dividend he shall send Ý-to each creditor who has proved his debt a notice showingthe amount of the dividend and when and how it is payable,and a statement in the prescribed form as to the particularsof the estate.

]oint and 59. (1) Where one partner of a fýrm is adjudged bankrupt,ili~~:~~s a creditor to whom the bankrupt is indebted jointly with the

.other partners of the fýrm, or any of them shall not receiveany dividend out of the separate property of the bankruptunill all the separate creditors have received the full amountof their respective debts.

(2) Where joint and separate properties are being ad-ministered, dividends of the joint and separate propertiesshall, subject to any order to the contrary that may be madeby the Court on the appIication of any person interested, bedeclared together; and the expenses of and incident to suchdividends shall be fairly apportioned by the trustee betweenthe joint and separate properties, regard being had to thework done for and the benefýt received by each property.

Provision 60. (1) In the calculation and distribution of a dividendfor creditors h h II k .. f d bt b bl . b kresiding at a t e trustee s a ma e provýsýon or e s pro a e ýn an-

distance, etc. ruptcy appearing from the bankrupt's statements, or other-wise, to be due to persons resident in places so distant fromthe place where the trustee is acting that in the ordinary 8course of communication they have not had suffýcient timeto tender their proofs, or to establish them if disputed, andalso for debts probable in bankruptcy. the subject of claimsnot Jet determined.

(2) He shall also make provision for any disputed proofsor claims, and for the expenses necessary for the adminis-tration of the estate or otherwise.

(3) Subject to the foregoing provisions, he shall distributeas dividend all money in hand.

BANKRUPTCY. [CM. 5. 47 i61. Any creditor who has not proved his debi before the Rig~t of ~.

declaration of any dividend or dividends shall be entitled to c;:~ý~o:sbe paid out of any money for the time being in the hands of not provedthe trustee any dividend or dividends he may have failed to ~:~:aý::~~r:receive before that money is applied to the payment of any of a divi-future dividend or dividends, bui he shall not be entitled to dend.

disturb the distribution of any dividend declared before hisdebi was proved by reason that he has not participatedtherein.

8 62. Where a debi has been proved, and such debi includes ~nterest oninterest, or any pecuniary consideration in lieu of interest, ebts.

such interest or consideration shall. for the purposes of divi-dend, be calculated at a rate not exceeding iline per centumper annum, without prejudice to the right of a creditor toreceive out of the estate any higher rate of interest to whichhe may be entitled af ter all the debts proved in the estatehave been paid in full.

63. (1) When the trustee has converted into money all the Fina! divi-property of the bankrupt, or so much thereof as can, in the dend.

joint opinion of himself and of the committee of inspection,be realized without needlessly protracting the trusteeship, heshall declare a final dividend bui before so doing he shall givenotice in manýýer prescribed to the persons whose claims to becreditors have been notified to him, bui not established to hissatisfaction that if they do not establish their claims to thesatisfaction of the Court within a time limited by the notice,he will proceed to declare a final dividend without regard totheir claims.

(2) Af ter the expiration of the tim,e so limited, or if theCourt, on application by any such creditor, grants himfurther time for establishing his claim, then on the expirationof such further time, the final dividend shall be distributed

8 among the creditors who have proved, without regard to theclaims of an y other persons.

(3) if the Court admits any claim which may have been re-jected by the trustee, the holder of such claim shall beentitled to be paid out of all available property in the handsof the trustee, any dividend to which he would have beenentitled if his claim had not been rejected by the trustee.

64. No action for a dividend shalllie against the trustee, ~o.~ti~nfOrbui if the trustee refuses to pay any dividend the Court may, ývý en .

on application being made if it thinks fit, order him to pay it,

48 CAP. 5.] BANKRUPTCY. iand also to payout of his own money interest thereon for the ~time that it is withheld, and the costs of the appIication.

~ro~r 65. (1) The trustec, with the permission of the committeeb~~~t of inspection, may appoint the bankrupt himseli to superin-to ma~e tend the management of the property of the bankrupt or ofprope. any part thereof, or to carry on the trade (if any) of the

bankrupt for the benefýt of his creditors, and in any otherrespect to aid in administering the property in such manýýerand on such terms as the trustee may direct. 8

(2) The trustee may from time to time, with the per-mission of the committee of inspection, make such allowanceas he may think just to the bankrupt out of his property forthe support of the bankrupt and his family, or in considera-tion of his services if he is engaged in winding up his estate,but any such allowance may be reduced by the Court.

Right of 66. The bankrupt sha11 be entitled t.o any surplus re-~~~f:s. maining af ter payment in full of his creditors, with interest,.as by this Law provided, and of the costs, charges, and

expenses of the proceedings under the bankruptcy petition.

PART LV.

OFFICIAL RECEIVERS.

Appoint- 67. (1) The Governor may, at any time af ter the passing of~~:~~r this Law, and from time to time, appoint to be officialof of?cial receivers of debtors' estates such persons and at such salaries~f~:~:r's as he thinks fýt and may remove any person so appointedestate. from such office. The fýnancia! part of the duties of official

receivers sha11 be entirely under the direct control and super-vision of the Accountant-General in the fýrst instance and ofthe Director of Audit, but such official receivers sha11 be 8officers of the Conrts to which theyare respectively attached.

(2) The Governor may determine the number of officia!receivers to be appointed, the security to be given by anofficial receiver so appointed, and the judicial Districts tobe assigned to them. The same person may be appointedto act for more than one judicial District.

(3) Whenever an official receiver sha11 be absent tem-porarily through illness or otherwise, the President of theDistrict Court to which such official receiver is attached mayif the Governor has not made a provisiona! appointment~

-~

BANKRUPTCY. [CAP.5. 49 i

appoint anather officer of the Court to discharge during the ~. time of such absence the duties of such official receiver.

Such officer of the Court shall give security as may be deter-mined by the President of the District Court.

68. (1) The duties of the official receiver shal1 have Sffitat~sý of.o cýa

relatýon both to the conduct of the debtor and to the ad- receiver.ministration of his estate.

a (2) An official receiver may, for the purpose of affidavits..verifying proofs, petitions, or other proceedings under this

Law, administer oaths. '-(3) All expressions referring to the trustee under a bank-

ruptcy shall, unless the context otherwise requires, or theLaw otherwise provides,' include the official receiver whenacting as trustee.

(4) The trustee shal1 supply the official receiver with suchinformation, and give him such access to, and facilities forinspecting the bankrupt's books and documents, and gener-al1y shall give him such aid, as may be requisite for enablingthe official receÝver to perform his duties under this Law.

69. As regards the debtor, it shal1 be the duty of the ~~~~~ of

official receiver- receiver(a) to investigate the conduct of the debtor and to ::1e~tor's

report to the Court, stating whether there is conduct.reason to believe that the debtor has committedany act which constitutes an offence under thisLaw, or which would justify the Court in retusing,suspending or qualifying an order for his dis-charge;

(b) to make such other reports concemillg the conduct ofthe debtor as the Court may direct;

...(c) to take such part as may be directed by the Court

..in the public examination of the debtor;(d) to take such part, and give such assistance, in

relation to the prosecution of any fraudulentdebtor as the Attorney-General may direct.

70. (1) As reg.ards th.e estate of a debtor, it shall be the ~~~~ of

duty of the officýal receýver- receiver aýý(a) pending the appointment of a trustce, to act as ~~ý~~~~~

interim receiverofthe debtor's estate, and, where e~~te,a special ~anager is not appoint~d~ ~ ffiarýagerthereof;

,

~~

SO CAFe 5.] BANKRUPTCY. 1

(b) to authorize the special manager to raise money ?rrmake advances for the puýposes of the estate ýn

any cage where, in the inteýests of the creditors,it appears necessary so to do;

(c) to summon and preside at the fýrst meeting ofcreditors:

(d) to issue forms of proxy for use at the meetings ofcreditors;

(e) to report to the creditors as to any proposa! which Ý-the debtor may have made with respect to the ..mode of liquidating his affairs;

(1) to advertise the receiving order, the date of thecreditors' fýrst meeting and of the debtor'spublic examination, and such other matters asit may be necessary to advertise;

(g) to act as trustee during any vacancy in the office oftrustec.

(2) For the puýpose of his duties as interim receiver ormanager the official receiver sha!l have the same powers asif he were a receiver and manager appointed by the Courtbut shall, as far as practicable, consult the wishes of thecreditors with respect to the management of the debtor'sproperty, and may for that puýpose, if he thinks it advisable,

-summon meetingsofthepersons claiming to be creditors, andshall not, unless the Court otherwise order, incur any expensebeyond such as is requisite for the protection of the debtor'sproperty or the disposing of perishable goods:

Provided that, when the debtor cannot himself prepare aproper statement of affairs, the officia! receiver may, subjectto any prescribed conditions, and at the expense of theestate, employ some person or persons to assist in the pre-paration of the statement of affairs.

(3) Every officia! receiver shall account to the Court and8payover all moneys and deal with all securities in such'

manner as the Court from time to time directs.

PART V.

TRUSTEES IN BANKRUPTCY.

Official 71. The official name of a trustee in bankruptcy shall bename of

h f h ftrustee. "t e trustee o t e property oa bankrupt" (inserting the name o/the bankrupt), and by that---

iBANKRUPTCY~ [CAP. 5. 51 ~

.

name the trustee may, in Cyprus or elsewhere, hold property~.

of every description, make contracts, sue and be sued, enterinto any engagements binding on himseli and his successorsin office, and do all other acts necessary or expedient to bedone in the execution of his office,

72. (1) The creditors may, if they think fýt, appoint more r:,:erOintpersons than one to the office of trustee, and when more joinf~r8 persons than one are appointed they shall declare whether sucressiyeany act required or authorized to be done by the trustee is trustees.

to be done by all or any one or more of such persons, but allsuch persons are in this Law included under the term"trustee," and shall be joint tenants of the property of the

bankrupt,(2) The creditors may also appoint persons to act as

trustees in succession in the event of one or more of thepersons fýrst named declining to accept the office of trustee,or failing to give security, or of the appointment of any suchperson not being certifýed by the Court,

73. (1) if a vacancy occurs in the office of a trustee, the ~oceedingsd ' t ' 1 .. fýll h ýn case of

cre ý ors ýn genefa meetýng may appomt a person to t e vacancyinvacancy, and thereupon the same proceedings shall be taken office ofas in the case of a fýrst appointment, .trustee.

(2) The official receiver shall, on the requisition of anycreditor, summon a meeting for the purpose of fýlling anysuch vacancy,

(3) if the creditors do not, within three weeks af ter theoccurrence of a vacancy, appoint a person to fýll thevacancy, the official receiver shall report the matter to theCourt and the Court may appoint a trustee,

(4) During any vacancy in the office of trustee the official8 receiver shall act as trustee,

74. (1) Subject to the provisions of this Law, the trustee Discretion-shall, in the administration of the property of the bankrupt :rS~~:~~dOfand in the distribution thereof amongst his creditors, have control

d t di t ' th b , b 'A 1 I thereof. regar O any rec ýons at may e gýven y specý<ý.ý reso u-

tion of the creditors at any general meeting or by the com-mittee of inspection and any directions so given by thecreditors at any general meeting shall, in case of conflict, bedeemed to override any directions given by the committeeof inspection.

(2) The trustee may summon general meetings ofcreditors

i.52 CAP. 5.] BANKRUPTCY. ~.

for the putpose of ascertaining their wishes, he may also -

rapply to the Court, for directions in relation to any particular

matter arising under the bankruptcy.

(3) Subject to the provisions of this Law, the trusteeshall use his own discretion in the management of the estateand its distribution among the creditors.

tEP:tl to 75. if the bankrupt or any creditor, debtor or other personag:inst is aggrieved by any act or decision of the trustee he may

8trustee. apply to the Court, and the Court may confýrm, reverse, ormodify the act or decision complained ot, and make suchorder in the premises as it thinks just.

Offiý;ial 76. (1) The official receiver shall take cognizance of thereceýver d f h .to inquire con uct o t e trustee, and ýn the event of any trustee notintodtlýe f faithfully performing his duties, and duly observing all the~~: ~~:e. requirements of the law with respect to the performance of

his duties, or in the event of any complaint being made bythe bankrupt or any creditor in regard thereto, the officialreceiver shall inquire into the matter and may move theCourt accordingly and the Court may make such order asmay be deemed expedient.

(2) The official receiver may at any time require anytrustee to answer any inquiry made by him in relation toany bankruptcy in which the trustee is engaged, and may, ifthe official receiver thinks fýt, apply to the Court to examineon oath the trustee or any other person concerning thebankruptcy.

(3) The official receiver may also direct a local investi-gation to be made of the books and vouchers of the trustee.

~emunera- 77. (1) Where the creditors appoint a.ny person to be~~~ý:. trustee ot a debtor's estate, his remuneration (if any) shall

be fýxed by an ordinary resolution of the creditors or, if the 8creditors so resolve, by the committee of inspection, andshall be in the nature ot a commission or percentage, of whichone part shall be payable on the amou.nt realized by thetrustee af ter deducting any sums paid to secured creditorsout of the proceeds ot their securities, and the other part outof the amount distributed in dividend. -

(2) If one fourth in number or value of the creditors dis-seni from the resolution, or the bankrupt satisfies the Courtthat the remuneration is unnecessarily large, the Court shallfýx the amount of the remuneration.

BANKRUPTCY. [CAP. 5. 53 i~(3) The resolution shall express what expenses the re- -

muneration is to cover, and no liability sha11 attach to the~bankrupt's estate, or to the creditors, in respect of any

expenses which the remune~ation is express~d to cover.

(4) Where a trustee acts wýthout remuneratýon, he sha11 beallowed out of the bankrupt's estate such proper costs andexpenses incurred by him in or about the proceedings of thebankruptcy as the creditors may, with the sanction of theCouri, approve.

8 (5) A trustee sha11 not, under any circumstances whatever,make any arrangement for or accept from the bankrupt, orany advocate, auctioneer, or any other person that may beemployed about a bankruptcy, any gift, remuneration, orpecuniary or other consideration, or benefýt whatever beyondthe remuneration fýxed by the creditors and payable out ofthe estate, nor sha11 he make any arrangement for giving upor give up any part of his remuneration, either as receiver,manager, or trustee to the bankrupt or any advocate or otherperson that may be employed ab out a bankruptcy.

78. (1) Where a trustee or manager receives remuneration Allowance.f h.. h t hall b II d . h.and taxatýonor ýs servýces as suc, no paymen s e a owe ýn ýs of costs.

accounts in respect of the performance by any other personof the ordinary duties which are required by this Law orrules to be performed by himseli.

(2) Where the trustee is an advocate he may contract thatthe renumeration for his services as trustee shall Ýnciýýde allprofessional services.

(3) All bills and charges of advocates, managefs, accoun-tants, auctioneers, brokers, and other persons, not beingtrustees, sha11 be taxed by the prescribed offýcer, and nopayments in respect thereof shall be allowed in the trustee'saccounts without proof of such taxation having been made.

8 The taxing offýcer sh~ll satisfy himseli before passing suchbills and charges that the employment of such advocatesand other persons, in respect of the particular matters out ofwhich such charges arise, has been duly sanctioned. Thesanction must be obtained before the employment, except incases of urgency, and in such cases it must be shown that noundue rlelay took place in ohiaining the sanction.

(4) Every such person sha11, on request by the trustee(which request the trustee shall make a sufficient time beforedeclaring a dividend) deliver his bill of costs or charges tothe proper officer for taxation, and if he fai1s to do so within

ýý-~!I",..,~,,~!';:~~-,,~,.",c I1,"":"

54 CAP. 5.] BANKRUPTCY.

seven days af ter receipt of the request, or such further time .as the Court, on application, may grant, the trustee shall

rdeclare and distribute the dividend without regard to anyclaim by him, and thereupon any such claim shall be for-feited as well against the trustee personatir as against theestate.

Trustee not 79. The trustee shall not pay sums received by him asto pay tt . t h.. t b k.money into rus ee ýn o ýs pnva e an ýng account.privatet He shall have at such local bank as the commi ttee of aaccoun .inspection or in default of appointmen1ý the Court shall ..

appoint, a separate and distinct account in the name of theestate administered by him, in which bank all sums receivedby him shall be paid to the credit of the estate; and if he,at any time, keeps in his hands any sum exceeding fýftypounds for more than ten days he shall be subject to thefollowing liabilities, that is to say-

(a) he shallpayinterest at the rate of twenty per centumper annum on the excess of such sum abovefýfty pounds as he may retain in his hands;

(b) unless he can prove to the satisfaction of the Courtthat his reason for retaining the money wassufficient, he shall, on the application of theofficial receiver or of any creditor, be dismissedfrom his office by the Court, and shall have noclaim for remuneration, and be liable to anyexpenses to which the creditors may be put byor in consequence of his dismissal.

Accounts of 80. The trustee shall open and keep proper books of;:;~:~ts. accounts and of other matters relating to his trusteeship

and shall make his payments, in the prescribed manner.

~~~ur::s oto 81. (1) The trustee shall ~ause hi~ accou~ts to be al1ditedofficia! every month by the commýttee of ýnspectýon and he shall, ..receiver. every three months, forward a certifýed copyof such accounts ý-

to the official receiver.(2) He shall transmit to the official receiver on his applica-

tion, a statement showing the proceedings in such bank-ruptcy up to the date of the statement containing theprescribed particulars, and made out in the prescribed form.

(3) The trustee, for the purposes of the examination ofsuch accounts and statement, shall furnish the officialreceiver with such vol1chers and information as shall berequired.

i

.BANKRUPTCY, [CAP.5. 55 i(4) if the trustee fails to transmit any of the accounts and -

~statements above referred to or to fumish the vouchers andinformation required, the Court may on the application ofthe offýcial receiver deal with the trustee as provided inparagraph (b) of section 79.

82. (1) When the trustee has realized al] the property of ~el~ase ofthe bankrupt or so much thereof as can in his opinion be us re.

realized without needlessly protracting the trusteeship,a and distributed a final div.idend, if any, or has resigned, or..has been removed from hýs office, or has ceased to acý by

reason of a composition having been approved, he mayrequestthe offýcial receiver to call a meeting of the creditorsto consider an application to be made to the Court for hisrelease.

(2) At such meeting the trustee shall lay before thecreditors an account showing the manýýer in which thebankruptcy has been conducted, with a list of the unclaimeddividends, if any, and of the property, if any, outstanding,and shall inform the meeting that he proposes to apply to theCourt for his release.

(3) The creditors assembled at the meeting may expresstheir opinion on the conduct of the trustee, and they or anyof them may appear before the Court and oppose the releaseof the trustee.

83. The Court, af ter hearing what, if anything, can be P?wer ofurged against the release of the trustee, shall grant or with- ~~e :a:~ orhold the release accordingly, and if it withholds the release withholdshall make such order as it thinks just, charging the trustee ~~~:.ofwith the consequences of any act or default he may havedone or made contrary to his duty, and shall suspend hisrelease unill such charging order has been complied with,and the Court thinks just, to grant the release of the trustee.

ý-. 84. (1) The order of the Court releasing the trustee shall E~ect off..discharge him from allliability in respect of any acý done or ~~ues~:"o

default made by him in the administration of the "affairs ofthe bankrupt or otherwise in relation to his conduct astrustee but such order may be revoked by the Court onproof that it was obtained by fraud or by suppression orconcealment of any material fact.

(2) When the trustee has not previously resigned or beenremoved, his release shall operate as a removal of him fromhis office, and thereupon the offýcial receiver shall be thetrustee.

56 GAP. 5.] BANKRUPTCY. i(3) When on the Telcage of a trustec, an official receiver -

is, or is acting as, trustec, no liability shall attach to him~personally in respect of any act done or default made, or

liability incurred by any pnor trustec.

~:::~~g 85. if a receiving order is made against a trustee he sha!lbankrupt. thereby vacate his office of trustec.

~::Ý:~::ove 86. (1) The creditors may by ordinary resolution at a ..trustee. meeting specially called for that purpose, of which notice ..

shall be given in the prescnbed manner, remove a trusteeappointed by them and appoint another one in his stead.

(2) If, on the application of the officia! receiver or, anyinterested person, the Court is of opinion-

(a) that a trustee is guilty of misconduct, or fails toperform his duties under this Law; or

(b) that his trusteeship is being protracted without anyprobable advantage to the creditors; or

(c) that he is, byreason of lunacy, or continued sickness,or absence, incapable of performing his duties; or

(d) that his connection with or relation to the bank-rupt, or his estate, or any particular creditor,might make it diffýcult for him to act withimpartiality in the interest of the creditorsgenerally; or

(e) where in any other matter he has been removed fromoffice on the ground of misconduct,

the Court may remove him from his office.

PART VI. 8

jURISDICTION, PROCEDURE, AND POWERS OF COURT.

jurisdiction 87. The Courts having jungdiction in bankruptcy shall beto be. d b the ilistnct Courts and in the exercise of such jungdiction~~~~: Y shall subject to the provisions of this Law have all the powersConrts. conferred on ilistnct Courts as in the tnal of a civil action.

Petition 88. (1) A bankruptcy petition against a debtor sha!l bewhere to be d h D.. C f h di .. hi h hpresented. presente to t e ýstnci ourt or t e stnct ýn w c t e

", BAN KR UPTCY. [CAP. 5. 57 i

, ~

debtor has resided or carried on business för the longest .period during the six months immediately preceding the

~presentation of the petition.

(2) N othing in this section shall invalidate a proceeding byreason of its being taken in a wrong Court.

89. if any question of lawarises in any bankruptey pro- ~ :tatedceeding in a District Court, which all parties to the proceed- o~~:Ýo~ings desire, or which one of them and the judges of the ~f the

8 pistrict ~ourt may desire, to have ~et~rmined in the first ~~~~eýnstallee ýn the Supreme Court, the Dýstnct Court shall statethe facts, in the form of a special case, for the opinion of theSupreme Court. The special case and the proceedings, orsuch of them as may be required, shall be transmitted to theSupreme Court for the purposes of the determination.

90.. (1) Subject to the provisions of this Law every Court Generalh ... di . d h. L h II h f II powers andavýng Juns ctýon un er t ýs aw s a ave u power to juri~diction

decide all questions of priorities, and all other questions of Conrts inwhatsoever, whether of law or fact, which may arise in any bankruptcy.case of bankruptcy coming within the cognizance ot theCourt, or which the Court may deem it expedient or neces-sary to decide for the purpose of doing complete justice ormaking a co:mPlete distribution of property in any such case.

(2) The Court shall have jurisdiction to try and adjudicateupon all questions of ownership relating to goods and im-movable property claimed by or from the trustee, whethersuch property be in the possession of the trustee or not, andto decide and adjudicate upon any debt or claim due to orfrom the bankrupt.

(3) Where default is made by any trustee, debtor or otherperson in obeying any order or direction of the Court, underany power conferred by this Law, or when any person isgui1ty of contempt of Court, the Court may af ter hearing

8 such person, or af ter proof of his having been duly summonedto attend the Court, commit such person to prison for anyterm not exceeding one month. And the Court may at anytime rescind any such order provided that the power givenby this subsection shall be deemed to be in addition to andnot in substitution for any other right or remedy in respectof such default.

91. The Courts having jurisdiction in bankruptey in ~u:ý o~Cyprus and the officers of those Courts respectively shall i:~YP~8 yact in aid of and be auxi1i~ry to British Courts elsewhere :~

--

58 GAP. 5..] BANKRUPTCY.

~ ~h:r having jurisdiction in bankruptcy, and an order of such =cr:u~s of British Court situated elsewhere as aforesaid seeking aid, rBankruptcy. with a request to a Court in Cyprus having jurisdiction in

bankruptcy, shall be deemed suffýcient to enable the latterCourt to exercise, in regard to the matters directed by theorder, such jurisdiction as either the Court which made therequest, or the Court to which such request is made, cowdexercise in regard to similar matter within their jurisdictions.

Appeal. 92. (1) Every Court having jurisdiction in bankruptcyunder this Law may review, rescind or vary any order made 8by it under its bankruptcy jurisdiction.

(2) Any judgment or order of the Court given or anyquestion other than a mere question of form or procedure orof costs, sha11 be subject to appeaý before the Supreme Court.

(3) No such appeal shall be entertained except in con-formity with such general rules as may for the time being bein force in relation to appeals in civil actions.

Discretion- 93. (1) Subject to the provisions of this Lawand to~~':~~ of ge~eral rules, the costs of and incidental to any proceeding in

Court under this Law shall be in the discretion of the Court.(2) The Court may at any time adjoum any proceedings

?efore it upon such terms, if any, as it may think fit toýmpose.

(3) The Court may at any time amend any writtenprocess or proceeding under this Law upon such terms, ifany, as it may think fit to impose.

(4) Where by this Law or by general rwes, time for doinganything is limited, the Court may extend the time eitherbefore or af ter the expiration thereof, upon such terms, ifany, as the Court may think fit to impose.

(5) Subject to general rules, the Court may, in any matter,take the whole or any part of the evidence either viva voce, -or by interrogatories or upon affýdavit or by commission ,.abroad.

~nso~ida- 94. Where two or more bankruptcy petitions are pre-;:ti~ns. sented against the same debtor or against joint debtors, the

Court may consolidate the proceedings, or any of them, onsuch terms as the Court thinks fýt.

P::wer to 95. Where the petiiiüner does not proceed with due~::ý::e of diligence on his petition, the Court may substitute asproceedings.

BANKRUPTCY. [CAP. 5. 59 i~

petitioner any other creditor to whom the debtor may be -rindebted in the amount required by this Law in the case of

thepetitioning creditor.

96. if a debtor by oragainst whom a bankruptcy petition Continuance... hall of proceed- has been presented dýes, the proceedýngs ýn the matter s ,ings on death

unl~ss the Court otherwise order, be continued as if he were of debtor.alive.

8 97. The Court may at any time, for sufficient reason make Power toan order staying the proceedings under a bankruptcy ~~~~i~;~~petition either altogether or for a limited time, on such termsand subject to such conditions as the Court may think just.

98. Any creditor whose debt is sufficient to entitle him to Powerb k ... t all th t f to presentpresent a an ruptcy petýtýon agaýns e par ners o a petitionfirm may present a petitionagainst any one or more partners against oneof the firm without including the others. partner.

99. Where a member of a partnership is adjudged bank- t~~~e~s ~!drupt, the Court may authorize the trustee to commence and bankrupt'sprosecute any action in the names of the trustee and of the partners.bankrupt's partner; and any release by such partner of thedebt or demand to which the action relates shall be void, butnotice of the application for authority to commence theactionshall be given to him, 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 proceedsof the action, and if he does not claim any benefýt therefrom,he shall be indemnified against costs in respect thered! asthe Court directs.

100. Any two or more persons, being partners, or any rnro;~~~~-person carrying on business under a partnership name, may ship name

8 take proceedings or be proceeded against under this Law inthe name of the firm, but in such case the Court may, onapplication by any person interested, order the names ofthe persons who are partners in such fýrýn or the name of suchperson to be disclosed in such manner, and verified on oath,or otherwise, as the Court may direct.

101. Where a bankrupt is a contractorin respect of any AC~o.ýý~contract jointly with any person or persons, such person or ~~~Ý:cts.persons may sue or be sued in respect of the contract with-out the joinder of the bankrupt.

c. lý

C~C i~ CAP. ~.]., ~~NKRUPTCY~_~:~f~ not to 102. (1) No pröceeding Ýn baý:ýkruptcy: þhall be invalidated r- invalidate by any form al defect or by any ýrregulanty, unless the Court

proceedings. before which an objection is made to the proceeding is ofapiýýion that substantial injustice has been caused by thedefect or irregularity and that the injustice cannot beremedied by any order of that Court.

(2) No defect or irregularity in the appointment orelection of a receiver, trustee, or member of a committee ofinspection shall vitiate any act done by him in good faith.

S~m~~ 103. (1) When a petition is presented by or against a 8~ioý:li~S ra- debtor, if the Court is satisfied by affýdavit or otherwise, orsmaIl cases the offýcial receiver reports to the Court that the property of

the debtor is not likely to exceed two hundred polinds, theCourt may make an order that the debtor's estate be admini-stered in a summary manner. and thereupon the provisionsof this Law shall be subject to the following modifications:-

(a) if the debtor is adjudged bankrupt, the offýcialreceiver shall be trustee in bankruptcy;

(b) there shall be no comrnittee of inspection, but theoffýcial receiver may do with the permission ofthe Court all things which may be done by thetrustee with the permission of the committee ofinspection;

(c) no advocates' tees shall be allüwed in any such cageexcept upon a certificate of the Court that thepresence of an advocate as aforesaid wasnecessary,

(2) Such other modifications may be made in the pro-visions of this Law as may be prescribed by general ruleswith a view of saving expense and simplifying procedure;but nothing in this section shall permit the modification ofthe provisions of this Law relating to the examination ordischarge of the debtor, 8

PART VII,

SUPPLEMENTAL PROVISIONS,

Exclusion. of 104. A receiving order shall not be made against any cor-partnershýp., " ,and. com- paratýon or agaýnst any partnershýp or assocýatýon, orpanýes. company registered under the Companies Law,Cap. 1ý3.

APl?li<:ation ..105. Subject to such modifications as may be made byto lýmýted L L d h , L h ' , f h , Lpartnershipg. genefa ru es un er t ýs aw, t e provýsýons o t ýs aw

iBANKRUPTCY. [CAP. 5. 61 ~.

shal1 apply to limited partnerships in like manýýer as ifrlimited partnerships were ordinary partnershipg, and, on all

the general partners of a limited partnership being adjudged

bankrupt, the assets of the limited partnership shall vest inthe trustec.

106. ~ny debtor, whether tra~er or not, against whom ~~dý:ej beproceedings can be legally taken ýn Cyprus for the recovery ba~krupt.of a debt shall be liable to be adjudged a bankrupt as in this

8 Law pr?vided: .Provýded always that no debtor, not bemg a trader or

farmer at the time of the commencemerýt of this Law, shallbe adjudged bankrupt in respect of a debt incun-ed beforethe commencement of this Law or of a debt incurred beforeand renewed af ter the commencemenf. of this Law, or inconsequence of proceedings legally taken for the tecovery ofsuch debt.

l07. (1) Any creditor of a deceased debtor whose debt ~d~nistra-would have been sufficient to support a bankrýýptcy petition b~:k~~ptcyagainst such debtor had he been alive, may present to the of esta~ ?fCourt a petition in the prescribed form praying for an order r::f:enrngfor the administration of the estate of the deceased debtor,according to the Law of Bankruptcy.

(2) Upon the prescribed notice being given to the executorof the deceased debtor or if there is none to the adminis-trator of his estate, the Court may, in the prescribedmanner,upon proof of the petitioner's debt, unless the Court issatisfýed that there is a reasonable probability that the estatewill be sufficient for the payment of the debts owing by thedeceased, make an order for the administration in bank-ruptcy of the deceased debtor's estate, or may upon causeshown dismiss such petition with or without costs.

8 (3) Upon an order being made for the administration of adeceased debtor' s estate, the property of the debtor shall vestin the official receiver of the Court, as trustee thereof, and heshall forthwith proceed to realize and distribute the same inaccordance with the provisions of this Law.

(4) With the modifýcations, hereinafter mentioned, all theprovisions of Part iLI of this Law, relating to the adminis-tration of the property of a bankrupt, shall, so far as thesame are applicable, apply to the case of an administrationorder under this section in like manýýer as to an order ofadjudication under this Law.

lý (2)

62 CAP. 5.] BANKRUPTCY. i'"

(5) Provided always that nothing inthis section shall alter ~

the order of the liquidation of the debts of a deceased person rCap. ý89. under the provisions of the Administration of Estates Law.

(6) In the administration ot the property of the deceaseddebtor under an order of administration, the offýcial receivershall have regard to any claim by the executor or adminis-trator of the estate of the deceased debtor to payment of theproper funeral and testamentary expense incurred by him inand about the debtor's estate, and such claims shall bedeem.ed a p~eferential. debt under the o!der, and .sý.ýall, 8notwýthstanding anythýng to the contrary ýn the provýsýonsof this Law relating to the priority of other debts be payablein full, out of the debtor's estate, in priority to all otherdebts.

(7) If, on the administration of the deceased debtor'sestate, any surplus remains in the hands of the offýcialreceiver, af ter payment in full of all the debts dile from thedebtor, together with the costs of the administration andinterest as provided by this Law in case of bankruptcy, suchsurplus shall be paid over to the executor or administrator

i of the deceased debtor's estate, or dealt with in such othermanýýer as may be prescribed.

(8) Notice of the presentation of a petition under thissection shall, in the event of an order for administrationbeing made thereon, be deemed to be equivalent to notice ofan act of bankruptcy, and any transfer, disposition, charge,delivery, contract, or payment made, relating to, or affectingthe property to be administered under the order, and anyexecution or attachment had against the said property or anypart thereot, af ter notice of the presentation of such petition,shall be void as against the offýcial receiver. Save as afore-said, nothing in this section shall invalidate any paymentmade or any act or thing done or suffered in good faith beforethe making of the order for administration. 8

Power 108. The Goveroor, with the advice and assistance of the~~n~e Chiet Justice, may from time to time by writingunder the.rules. hand and offýcial seal of the Governor and the hand of the

Chief J ustice make, revoke, and alter general rules to begazetted for carrying into effect the objects of this Lawandprescribing the fees, charges and percentages to be charges'or taken for or in respect of proceedings thereunder.

Fees,charges, 109. (l) The fees, charges and percentages of the offýcial~~~i~f receiver fixed as in section l08 hereof mentioned and all otherreceiver.

BANKRUPTCY. [CAP. 5. 63 i.costs or expenses of the official receiver shall be levied by theofficial receiver out of the debtor's estate and shall be paid

~.into the Department of the Accountant-General. Such fees,charges, percentages and other costs or expenses shall be

paid by privilege as provided in section 36 hereof.

(2) All necessary disbursements made by the officialreceiver when acting under this Law (the amount of whichdisbursements shall be settled by the Court) shall be paidout of the estate, if sufficient, and otherwise shall be payable

8 by the petitioning creditor and recoverable upon a certificateof the Registrar of the amount allawed by the Court:

Provided that it shall be lawful for the Governor to remitthe whole or part of the costs payable by the petitioningcreditor under this section.

110. (1) A copy of ~he Gazette containing any notice Ga;zettetobeinserted therein in pursuance ot this Law shall be evidence eVldence.

of the facts stated in the notice.

(2) The production of a copy of the Gazette containingany notice of a receiving order, or of an order adjudging adebtor bankrupt, shall be conclusive evidence in allIega! pro-ceedings of the order having been duly made, and of its date.

lll. (1) A minute of proceedings at a meeting of creditors Eviden<;e ofunder this Law, signed at the same or the next ensuing ~~~::ý~~~meeting, by a person describing himself as, or appearing to be, of creditors.chairman of the meeting at which the minute is signed, shallbe received in evidence without further proof.

(2) Until the contrary is proved,every meeting of creditorsin respectof the proceedings whereof a minute has been sosigned shall be deemed to have been duly convened andheld, and all resolutions passed or proceedings had thereatto have been duly passed or had.

8 112. Any petition or copy of a petition in bankruptcy, any Eviden<;e oforder or certificate or copy of an order or certificate made by f:~~:~~gsany Court having jurisdiction in bankruptcy, anyinstrument kruptcy.or copy of an instrnment, affidavit, or document made or .used in the course of any bankruptcy proceedings, or otherproceedings had under this Law shall, if it appears to besea!ed with the seal of any Court having jurisdiction in bank-ruptcy, or purports to be signed by any judge thereof, or iscertified as atrue copy by any Registrar thereof, be re-ceivable in evidence in allIega! proceedings whatever.

"C-'~,_.-

~C:AP. ~._] BANKRUP~CY, -i~;~a::t~.of 113. Subject to g7nera! rilles any affidavit to be used in -

rbankruptcyproceedýngs may be swom before suchpersons

who are authorized to administer oaths in civil proceedings

beforethe DistriGt Court,

Death of 114. In cage of the death of the debtor or his wife, or of adebtor or , h 'd h b . d b C t 'witness. wýtness W ose evý ence as -een receýve y an your ýn

any proceedings under this Law, the depositian of the personso deceased, purporting to be sea!ed with the seal of theCou~, or a c°p,Y thereof purporting to be,so sealed, sha11 be 8admýtted as evýdence of the matters thereýn deposed to.

DisPo.salof 115. (1) Where the trustee has under his control any un-~:~~~ý:ýnn~d claimed dividend which has remained unclaimed for moredividends. than six months, or where, af ter making a final dividend,the

trustee has in his hands or under his control any unclaimed oruýidistributed money arising from the property of the debtor,he sha!l forthwith pay the same to the RegistraL of theCourt, who shall carry the same to an account to be termed"The Bankruptcy Estates Accounts," The Registrar'sreGeipt tar the money so paid shall be s~fficient discharge tothe trustee in respect thereof,

(2) The trustee, whether he has obtained his release or not,may be called upon by the Court to account for any un-claimed funds or dividends, and any failure to comply withthe requisitions of the Court in this behalf may be dealtwith as a contempt of Court.

(3) Any person claiming to be entitled to any moneyspaid into the Bankruptcy Estates Account may, within fiveyears of the date when the same was so paid in, apply tothe Registrar tor payment to him ot the þame, and theRegistrar, if satisfied that the person claiming is entitled,shall make an order for the payment to such person of thesum due. Any person dissatisfied with the decision of theRegistrar may appeal to the Court, 8

(4) Af ter anymoney has remained unclaimed in the Bank-.ruptcy Estates Account for a period of five years, the Regis-trar shall pay the same over to the Accountant-General foruse of the Crown, and all claims thereon shall bethenceforthbarred,

Punishment 116. Any person who has been adjudged bankrupt or in~~~:~Ulent respect of whose estate a receiving order has been made

shall, in each of the cases following, be deemed gui1ty of anoffence, and on Gonvictio:n thereof, .hall be liable to be~

BANKRUPTCY. [CAP. 5. 65-

imprisoned for any term not exceeding fýve years, that is to -

say-r(a) if he does not to the best ot his knowledge and Failure

belief, fully and truly discover to the trustee all ;~ýF~~:-his property movable and immovable, and how covery to

; and to whom and for what consideration and trustee." when he disposed of a:ny part thereof, and what

sums he has annually spent for his personalexpenses and the ordinary expenses of his family,unless the Court is satisfýed that he had nointent to defraud;

(b) if he does not deliver up to the trustee, or as he may Fai.lure todirect, all such part of his movable and im- ~~~;:~~~movable property as is in his custody or under hiscontrol, and which by law constitutes the assetsdivisible amongst his creditors, unless the Courtis satisfýed that he had no intent to defraud;

(c) if he does not deliver up to the trustee, or as he may Failur.ed. II b k d d .t ' to delýverýrect, a 00 S, ocuments, papers an wn mgs books etc.in his custody or under his control relating to his .

property or affairs, unless the Court is satisfýedthat he had no intent to defraud;

(d) if, af ter the presentation of a bankruptcy petition by Conceal-or against him, or within twelve months next :~~&ation,before such presentation, he conceals, destroys, falsification,mutilates or .falsifýes, or is privy to the conceal- ~~~Ýý:~fetc.ment, destruotion, mutilation or falsifýcation of '

any book or document affecting or relating tohis property or affairs, unless the Court issatisfýed that he had no intent to conceal thestate of his affairs or otherwise to defraud;

(e) if, af ter th.e pres~ntation of a bankruptcy petit~on by f~:ve:~~~~-or agamst hým, he prevents the productýon of tion~fany book, document, paper or writing affecting books, etc.

-or relating to his property or affairs~ unless the..Court is satisfýed that he had no intentto conceal

the state of his affairs or otherwise to defraud;(f) if, af ter the presentation of a bankruptcy petition by False entries.

or against him, or within twelve months nextbefore such presentation, he makes or is privy tothe making of any false entry in any book ordocun:ent affecting or relating to hisproperty oraffairs, unless the Court is satisfýed that he hadno intent to conceal the state of his affairs orotherwise to defraud; .

66 CAP. 5..] BANKRUPTCY" i

~~gwith, (g) if, af ter the presentation.ofa. bankruptcypetition -~::rý::ý~nts. by or against him, or within twelve months

rnext be!ore such presentation, he ~ra;~du~entlyparts wýth, alters or makes any omýssýon ýn, oris privy to the fraudulently parting with,altenflg, or making any omission in any docu-ment affecting or relating to his property oraffairs;

Omission in (h) if he makes any material omission in any statementstatements. ff t " I t " t h" rt ff . a ec ýng or re a ýng o ýs prope y or a aýrs, -

unless the Court is satisfied that he had no intent .,to defraud;

~fo~~6;erl;t (i) if, af ter the prese~tation ?f ~ bankruptey petitionor debts, or by or agaýnst hým, or wýthýn twelve months nextdisposition of before such presentation he conceals any part ofproperty for .' f h "less than hýs property or any debt due to or rom ým, ormarket value disposes of any part of his goods or property for

any consideration which is substantia11y less invalue than the usual market value of such goodsor property, unless the Court is satisfied that hehad no intent to defraud;

Removal of (j) if, af ter the presentation of a bankruptey petition byproperty. or against him, or within twelve months next

before such presentation, he fraudulentlyremoves any part of his property;

foa?:f~~m (k) if, kn?wing ör believing that a false debt has beentrustee of claýmed or proved by any person under thefalse debts. bankruptey he iai1s for the period of one month

from the date of such knowledge or belief tobring the matter to the notice of the trustfe;

~~~~ioe~~ (l) if, after the presentation of a bankruptey petition by, .or against him, or at any meeting of his creditors

within twelve months next before such presen-tation he attempts to account for any part of hisproperty by fictitious losses or expenses; 8

~~~~~g (m) if, wi~hin twelve months next. ?efore the pre~en-false repre- tatýon of a bankruptey petýtýon by or agaýnstsentation. him or af ter the presentation of such a petition

and before the making of a receiving order, he,by any false representation or other fraud, hasobtained any property on credit and has not paidfor the same;

~~~~ng (n) if, within twelve months next before the presen-o~e~~es of ta;tion of a bankruptey pc;-tition by or ag~~st~arrying on hým, or af ter the presentatýon of such a petýtýonbu$iness.

BANKRUPTCY. [CAP. 5. 67 iand before the making of a receiving order, he -

:.- obtains underthe false pretence ofcarrying onrbusiness, and, if a trader, of dea1ing in the

ordinary way of his trade, anyproperty on creditand he has not paid for the same, unless theCourt is satisfýed that he had no intent to defraud;

(O) if, within twelve months next before the presen- Pawning:.tation of a bankruptcy petition by or against ~~~gagýng,him or af ter the pre~entation of ~u.ch a petition ~~~~r:~

a --and before the makýng of a receývýng order, he on credit....1:'- pawns, pledges, mortgages, or disposes of other-

.;.~. c wise than in the ordinary way of his trade anyproperty which he has obtained on credit andhas not paid for, unless the Court is satisfýed thathe had no intent to- defraud;

(P) if, after the presentation of a bankruptcy petition ~akingby or against him, or ~thin twelve months next ~~~~~~~,before such presentatýon, he has made any gift, etc., ofsale, delivery, transfer, mortgage of, or any property.

charge on his property, unlessthe Court is satis-fýed that he had no intent to defraud;

(q) if he is guilty of any false representation or other Obtainingfraud for the purpose of obtaining the consent of ~~::Ýt~;sofhis creditors or any of thern to any agreement by false.thf t h. ff . b k representa-wý re erence o ýs a aýrS or an ruptcy; tion.

(r) if, af ter the presentation of any bankruptcy petition Quitting: orb . t h. h ..attemptýngy or agaýns ým, e quýts or attempts to quýt to quitthe Colony, unless the Court is satisfýedthat he Colony.had no intent to defraud;

(5) if, knowing his insolvency., he shall havepermitted Permittingor suffered the whole or substantially the whole ~S;l~:J~o~eof his assets to be seized by, or appIied for the the ben~fýtb fýt f d ' t di . h d .of certaýn

eýýe O a cre ý or or cre tors to t e etn- creditors.

ment of and with intent to defraud other8 creditors,

For the purpose of this section, the expression "trustee" Trusteemeans the offýcial receiver of the debtor's estate or trustee derýned.

administering his estate for the benefýt of his creditors,

117. Where an undischarged bankrupt- U:n-( ) ' th al .. tl . h h b .dýscharged'a eý er one or ]oýn y wýt anyot er person o taýns bankrupts c

credit to the extent of ten pounds or upwards obt;fingfrom any person without informing that person cre ý .

th~t he is an undischarged bankrupt; or(b) engages in any trade or business under.anameother

---

68 CAP. 5.~ BANKRUPTCY. -i.than that under wrnch he was adjudicated bank- ~

rupt without disclosing to all persons with whomrhe enters into any busi~ess transaction the name

under wmch he was adjudicated bankrupt,he sh~ll be guilty of an offence and on conviction thereof,liable to be imprisoned for any term not exceeding three

years,

{ra~ds ~Y 118. li any person who has been adjudged bankrupt oran rup s. in respect of whose esta~e ~ receiving or~er has been made- 8

(a) in incurring any debt or liability, has obtainedcredit under false pretences or by means of anyother fraud;

(b) with intent to defraud his creditors or any of them,has made or caused to be made any gift,delivery, or transfer of or any charge on his

property;(c) with intent to defraud ms creditors, has concealed or

removed any part of his property since or withintwo months befoýe the date of any unsatisfiedjudgment or order for payment of moneyobtained against mm,

he shall be guilty of an offence, and on conviction thereof,, shall be liable to be imprisoned for any term not exceeding

five years.

Punishment 119. if any person, af ter the presentation of a bank-~~!;~~~;,s ruptcy petition by or against any qebtor who is subsequentlyetc., pro- adjudged bankrupt, or within twelve months next beforeE~~r~~t. such presentation, removes or conceafs or canses to be

removed or concealed or receives either for his own benefitor for the benefit of such debtor or of any other person, anypart of the property of such debtor which ought by law to bedivided amongst his creditors, such person shall be guilty?f an, offence, and on convi~tion the~eof, shal1 be liable to be 8ýmpnsoned for any term not exceeding fiveyears; unless theCourt is satisfied that he had no intent to defraud.

False cl~ims, 120. if any creditor or any person claiming to be adeclaratýons d ' t ' bk di .lf II d . hetc., against cre ý or ýn any an ruptcy procee ng wý u y an wýt

bankrupt. intent t? defraud makes any false cl~im~ or any .proof,.declaratýon or statement of account whých ýs untrue ýn anymaterial particUlar, he shall be guilty of an offence and onconviction thereof, shall be liable to be imprisoned for anyteý:m not exçeeding one year. .

~

BANKRUPTCY. [CAP.5. 69 i121. Whoever being a trustee shall, in any report or Pfu::Shý;:ýe~t .

~statement relating to the affairs of any person who has been ~onc~:l:en~:adjudged bankrupt, wilfully make any materia! omission, e~.~ of for conceal or withhold any information or matter tending to ~a:~u~t.show the true condition of the affairs of such person or thecircumstances of the bankruptcy, or sha!l in any way assistany person to commit any of the offences in this Law men-tioned, then in every such case such trustee shal1 be guiltyof an offence and on conviction thereof, shall be liable to be

8 imprisoned for any term not exce:eding three years.

122. (1) if any person is adjudgedbankrupt or has made B~ý:ýkrupta c~~position ?r arran{?ement with ~is creditors, or if a :~l~~~preceýVlng order ýs made ýn respect of his estate, he shall be properguilty of an offence, if, having during the whole or any part accounts.

of the two years immediately preceding the date of thepresentation of the bankruptcy petition been engaged inanytrade or business, he has not kept proper books of accountthroughout those two years or such part thereof as aforesaid,and, if so engaged at the date of presentationof the petition,thereafter, whilst so engaged, up to the dat~of the receivingorder, or has not preserved all books of account so kept:

Provided that a person who has not kept or has not pre-served sl:1ch books of account shall not be convicted of anoffence under this sectýon if his unsecured liabilities at thedate of the receiving order did not exceed one hundredpolinds, or it he proves that in the circumstances in which hetraded or carried on business the omission was honest andexcýýsable.

(2) Any person found guilty of an offence under the pro-visions of this section shall be liable to be imprisoned for anyterm not exceeding three years:

Provided always that a prosecution shal1 not be institutedagainst any person under this section except by order of the

8 Court.

(3) For the purposes of this 'section, a person shall bedeemed not to have kept proper books of account if he hasnot kept such books or accounts as are necessary to exhibitor explain his' transactions and financial position in histrade, business or. profession, including a book or books con-tainiýýg entries from day to day in sufficient detail of all cashreceived and ca~h paid and, where the trade or business hasinvolved dealings in goods, alsa accounts of all goods soldinclti<Ýing a descriptioýý in sufficient detail ofall goods soldand purchased whether forcaþh Qr çredit 1 as will enable such

70?AP.5.] BANKRUPTCY.. igoodsto be identifiable and also particulars of the name and

raddress ot the supplier or purchaser of such goods, and state-ments of ann~al stocktakings sho~ingthe basisliFon whichsuch stocktakl1)gs are made: ProVlded that a person engagedin any retaýl trade in which it would be a hardship or againstthe usual custom of the trade to enter such details as arehereinbefore required, then and in such cases, the omissionshall be deemed to be excusable.

(4) Paragraphs{d), (j), and (g) of section 116 of this Law(which relate to the destruction, mutilation, and falsifýtation 8and other fraudulent dealing with books and documents) ,shali in their application to such books as aforesaid, haveeffect as if "two years next before the presentation of thebankruptcy petition" were substituted for the time men-tioned in those paragraphs as the time prior to the presen-fation within which the acts or omissions specifýed in thoseparagraphs constitute an offence.

Ba.nltkruPf t 123. (1) Any person who has been adjudged bankrupt,guý yo . f h .. d h b dgambling. or ýn respect o w ose estate a recelVlng or er as een ma e,

ete. shal1 be guilty of an offence and on conviction thereof, liableto be imprisoned for any term not exceeding three years,if having been engaged in any trade or business, and havingoutstanding at the date of the receiving order any debtscontracted in the course and for the purposes of such trade orbusiness-

(a) he has, within two years priorto thepresentatio1) ofthe bankruptcy petition, materially contributedto or increased the exteýý.t ot his insolvency bygambling or by rash and hazardous speculations,and such gambling or speculations are uncon-nected with his trade or business; ori (b) he has, between the date of the presentation of the

petition and the date of the receiving order, lostany part of his estate by such gambling or rash 8and hazardolis speculations as aforesaid; or

(c) on being required by the official receiver at any time,or in the course of his public examination by theCourt, to account for the lass of any substantialpart of his estate incurred within a period of ayear next preceding the date of the presentationof the bankruptcy petition, or between that datedate and the date of the receiving order, he failsto give a satisfactory explanation of thernaDiler

:.;::.. in-which such ioss was inclirred: ,:.. " :.\

BANKRUPTCY. [CAP.5. 711-~

Provided that, in determining for the purposes of this .section whether any speculations were rash and hazardous,

~the fýnancial. position of the ac.cused person at the t~me whenhe entered mto thespeculatýons shall be taken mto con-sideration.

(2) A prosecution sha11 not be instituted against anyperson under this section except by order of the Court.

124. If any person who is adjudged bankrupt, or in Bankru~tf h t t .. d h b d abscondýng8 respect o w ose es a e a receývmg or er as fen ma e, withaf ter the presentation of a bankruptcy petition by or against property.him, or within six months before such presentation, quitsCyprus and takes with him, or attempts or makes preparationto quit Cyprus and take with him, any part of his propertyto the amount of twenty pounds or upwards, which ought bylaw to be divided amongst his creditors, he sha11 (unless heproves that he had no inteni to defraud) be guilty of anoff~nce and on conviction thereof, be liable to be imprisonedfor any term not exceeding three years.

125. If, in the course of any proceedings taken under any Prosecutionbankruptcy petition or on the representation of the official of offences.receiver, the trustfe, or of any creditor, it appears to theCourt that there is reason to suppose that any person hasbeen guilty of an offence under this Law, the Court sha11, if itappears to the Court that there is a reasonable probabilitythat the debtor will be convicted and that the circumstancesare such. as to render a prosecution desiralýle order the pro-secution of such person accordingly and in any such caseinay order the person to be prosecuted into custody, ifpreseni, or, if not preseni, may grant a warrant for his arresiand detention until he can be taken before a magistrate tobe dealt withaccording to law.

126. Where a debtor has been guilty ot a criminal offence, Çri~~al8 he shall not be exempt from being proceeded against therefor ~t~~ýzs-by reason that he has obtained his discharge or that a com- charge?ý:position or scheme of arraÝýgement has been accepted or composýtion.

approved.

FIRST SCHEDULE..(Section 14.)

MEETINGS OF CREDITORS.

1. The fýrst meeting of creditors shall be summoned for a day not laterthan fourteen days af ter the date of the receiving order, unless the Courtforany special reason deem it expedient that the meeting be summonedfor alater day.

~2 C~~.5.~ BANKRUPTCY. i2. The officialreceiver sha11 summon the meeting by giving not less than

rseven day";:' notice of the time and place thereof in the Gazette and in alocal paper.

3. The official receiver sha11 also, as soon as practicable, send to eaçhcreditor mentionedin the debtor's statement of affairs a notice of the timeand place of the first meeting of creditors, accompanied by a summaryof the debtor's statement of affairs, including the cause of his failure, andany observations thereon which theofficial receiver may think fit to make;but the proceedings at the first meeting shall not be invalidated by reasonof any such notice or summary not having been sent or received beforethe meeting.

4.. The ~eeting shall be h~ldat such pla~e ~ is in the op~ion of the 8officýalreceýver most convenýent for the ma]onty of the creditors.

5. The official receiver or the trustee may at any time summon a meetingof creditors, and shall do so whenever so directed by the Court, or so re-quested in writing by one-fourth in value of the creditors.

6. Meetings subsequent to the first meeting shall be summoned bysending notice of the time and place thereof to each creditor at the addressgiven in his proof, or if he has notproved, at the address given in thedebtor's statement of affairs, or at such other address as may be knownto the person summoning the meeting.

7. The official receiver, or some person nominated by him, sha11 be thechairman at the fýrst meeting. The chairman at subsequent meetingsshall be such person as the meeting by resolution appoint.

8. Aperson shall not be entitled to vote as a creditor at the first or anyother meeting of creditors unless he has duly proved a debt provable inbankruptcy to be due to him from the debtor, and the proof has been dulylodged before the time appointed for the meeting.

9. A creditor sha11 not vote at any such meeting in respect of any un-liquidated or contingent debt, or any debt the value of which is notascertained.

10. For the purpose of voting, a secured creditor sha11, unless he sur-renders his security, state in his proof the particulars of his security, thedate when it was given,and the value at which he assesses it, and sha11 beentitled to vote only in re~pect of the balance (if any) due to him af terdeducting the value of his security. if he votes in respect of his wholedebt he sha11 be deemed to have surrenderedhis security unless the Courton application is satisfied that the omission to value the security hasarisen from inadvertence.

11. A c~editor shall not vote in ~espect of any debt on, or secured by.a 8current bill of exchange or promýs!?ory note held by hým, unless he ýswilling to treat theliability to him thereon of every person who is liablethereon antecedently to the debtor, and against whom a receiving orderhas not been made, as a security in his hands, and to estimate the valuethereof, and for the purposes of voting, but not for the purposes of divi~dend, to deduct it from his proof.

12. It shall be competent to the trustee or to the official receiver,within twenty~eight daysafter a proof estimating the value of a security asaforesaid has been made use of in voting at any meeting, to require thecreditor to give up the security for the benefit of the creditors generallyonpaymeDt of the value so estimated, withan addition thereto of twenty percentum: Provided, that where a creditor has put a value on such security

BANK:RUPTCY" [CAP.. 5. 73 i~,

be may, at my time before h~has been ~equired to give up such security .as aforesaid, correct such valuation by a new proof, and deduct such

~new value from his debt, but in that case such addition of twenty percentum shall not be made if the trustee requires the security to begiven up.

13. If a receiving order is made against one partner of a firm, anycreditor to whom that partner is indebted jointly with the other partnersof the firm, or any of them, may prove his debt for the purpose of voting iat any meeting of creditors, and shall be entitled to vote thereat.

14. The Chairman of a meeting shall have power to admit or rejectproof for the purpose of voting, but his decision shall be subject to the

-Conrto If he is in doubt whether the proof of a creditor should be admitted...or rejected he shall mark the proof as objected to, and shall allow the

creditor to vote, subject to the vote being declared invalid in the event ofthe objection being sustained.

15. A creditor may vote either inperson or by proxy.16. (1) Every instrument of proxy shall be in the prescribed form, and

shall be issued by the official receiver of the debtor's estate, or, af ter theappointment of a trustee, by the trustee, and every insertion thereinshall be in the handwriting of the person giving the proxy, or of anymanager or clerk or other pt:rson in his re~lar employment, or of anycommissioner of oaths.

(2) General and special forms of proxy shall be sent to the creditors,together with a notice summoning a meeting of creditors, and neither thename nor the description of the official receiver, or of any other person,shall be printed or inserted in the body of any instrument of proxy beforeit is so sent.

(3) A creditor may give a special proxy to any person to vote at anyspecified meeting or adjournment thereof on all or any of the followingmatters:-

(a) for or against any .specific proposal for a composition or schemeof arrangement;

(b) for or against the appointme~t of any specified person as trusteeat a specified rateor remuneration, or as member of the com-mittee of inspection, or for or against the continuance in officeöfany specified person as trustee or member of a coýnmittee ofinspection ; -

(c) on all questions relating to any matter, otherthan those abovereferred to, arising at any specified meeting or adjournment8 thereof.

17. A creditor may give a general proxy to his manager or clerk, or anyother person in his re~lar employment. In such case the instrument ofproxy shall state the relation in which the person to act therenDrler standsto the creditor.

ýs. A proxy shall not be used unless it is deposited with the officialreceiver or trustee before the meeting at which it is to be used.

19. A creditor may appoint theofÝ'icial receiver of thedebtor's estate toact in manýýer prescribed as his general or special proxy.

20. The chairman of a meeting may with the consent of the meeting,adjoum the meeting from time to time, and from place to place.

21. A meeting shall not be competent to act for any purpose, except

74 GAP. 5.] BANKRUPTCY. ithe election of a chainnan, the proving of debts, and the adjournment of

rthe x:neeting, unless there. are ~resen~ or represented thereat, at least threecredýtors, or all the creditors ýf thelf number does not exceed three~

22. if within half an hour from the time appointed for the meeting aquorum of creditors is not present or represented, the meeting shall beadjourned to the same day in the foijowing week at the same time andplace, or to suchother day as the chairman may appoint, not being lessthan seven or more than twenty-one days.

23. The chaÝrman of every meeting shall cause minutes of the proceed-ings at the ineetillg to be drawn up, and fairly entered in a bookkept forthat purpose, and the minutes shall be signed by hirn or by the chairman 8of the next ensuing meeting.

24. No person acting either under a general or special proxy shall votein favour of any resolution which would directly or indirectly placehimself, his partner or employer, in a position to receive any remunerationo~t of the estate of the debtor otherwise than as a creditor rateably withthe other creditors of the debtor: Provided that where ariy person holdsspecial proxies to vote for the appointment ofhimself as a trustee he mayuse the said prQxies and vote accordingly.

25. As soon as may be af ter a meeting of creditors, the official receivershall fýle in Court a copy of the minutes of proceedings and resolutions hadand taken at such meeting.

26. The vote of the trustee, or of his partner, clerk, advocate oradvocate's clerk, either as creditor or as proxy for a creditor, shall not bereckoned in the majority required for passing any resolution affecting theremuneration or conduct of the trustee.

SECOND SCHEDULE.(Section 37.)

PROOF OF DEBTS.

Proof in Ordinary Cases.1. Every creditor shall prove his debt as soon as may be af ter the

making of a receiving order.2. A debt may be proved by delivering or sending through the post in a

prepaid letter to the official receiver, or, if a trustee has been appointed, tothe trustee, an affidavit verifying the debt.

83. The affidavit may be made by the creditor himself, or by some personauthorized by or on behalf of the creditor. if made by a person so autho-rized, it shall state his authority and means of knowledge.

4. The affidavit shall contain or refer to a statement of account showingthe particulars of the debt, and shall specify the vouchefs, if any ,by whichthe same can be substantiated. The official receiver or trustee may at anytime call for the producti<;>n of the vouchefs.

5. The affidavit shall þtate whether the credit6r Ýs or is not a securedcreditor and if it is found at any time that the affidavit made by or onbehalf of a secured creditor has oriýitted to state that he is a securedcreditor, the secured creditor shall surrender his security to the officialreceiver or trustee for the general benefýt of the creditors unless the Cöurt

B-ANKRUPTCY. [CAP. 5. 75 i~

on appIication is satisfied that the omission has arisen from inadvertence, -and in that case the Court may allow the affidavit to be amended upon _

ýsuch tenns as to the repayment of any dividends or othe~se as theCourt may consider to be just.

6. A creditor shall bear the cost of proving his debt, unless the Courtothe~se specially orders.

7. Every creditor who has lodged a proof shall be entitled to see andexamine the proofs of other creditors before the first meeting, and at allreasonable times.

8. A creditor proving his debt shall deduct therefrom all trade discounts,but he shall not be compelled to deduct any discount, not exceeding five

..per centum on the net amount of his claim, which he may have agreed to

..allow for payment in cash.

Proof by Secured Credilorso

9. if a secured creditor realizes his security, he may prove for thebalance due to him, af ter deducting the net amount realized.

10. if a secured creditor surrenders his security to the otfýcial receiveror trustee for the general heDefit of the creditors, he may prove for hiswhole debt.

11. if a secured creditor does not either realize or surrender his security,he shall, before ranking for dividend, state in his proof the particulars ofhis security, the date when it was given, and the value at which he assessesit, and shall be entitled to receive a dividend only in respect of the balancedue to him af ter deducting the value so assessed.

12. (1) Where a security is so valued the trustee may at any time redeemit on payment to the creditor of the assessed value.

(2) if the trustee is dissatisfied with the value at which a security isassessed, he may require that the property comprised in any security sovalued be offered for sale at such times and on such tenns and conditionsas may be agreed on between the creditor and the trustee, or as, in defaultof such agreement, the Court may direct. if the sale be by pubIic auctionthe creditor, or the trustee on behalf of the estate, may bid or purchase:

Provided that the creditor may at any time, by notice in writingrequire the trustee to elect whether he wi1l or wi1l not exercise his power ofredeeming the security or requiring it to be realized, and if the trusteedoes not, within six months af ter receiving the notice, signify in writingto the creditor his election to exercise the power, he shall not be entitledto exercise it; and the equity of redemption, or any other interest in theproperty comprised in the security which is vested in the truste~, shall

8 vest in the creditor, and the amount of his debt shall be reduced by theamount at which the security has been valued.

13. Where a creditor has so valued his security, he may at any timeamend the valuation and proof on showing to the satisfaction of the trustee,or the Court, that the valuation and proof were made bana fide on amistaken estimate, or that the security has diminished or increased invalue since its previous valuation; but every such amendment shall bemade at the cost of the creditor, and upon such tenns as the Court shallorder, unless the trustee shall allow the amendment without appIicationto the Court.

14. Where a valuation has been amended in accordance with the fore-going rnle, the creditor shall forthwith repay any surplus dividend which

c. i

~~ CAP. 5.] BANKRUPTCY.. ihe may have received in excess of that to which he wonld have been ~entitled on the amended valuation, or, as the case may be, shall be entitled rto be paid out of any money for the time being available for dividend anydividend or share of dividend which he may have fai1ed to receive byreason of the inaccuracy of the original valuation, before that money ismade applicable to the payment of any future dividend, but he shall notbe entitled to disturb the distribution of any dividend declared beforethe date of the amendment.

f 15. if a creditor af ter having valued his security subsequently realizesit, or if it is realized under the provisions of rnle 1Z, the net amountrealized shall be substituted for the amount of any valuation previously

l made ý;>y the creditor, and s~all be treated in all respects as an amendedÝ-r valuatýon made by the .creditor. ..i

16. if a secured creditor does ~ot comp~y. wýth the foregoýng rnles, hei s\ýall be excluded from all share ýn any dývýdend.

L 17. Subject to the provisions of rule 1Z, a creditor shall in no case, receive more than twenty shillings in the pound, and interest as provided:

by this Law.:

Proof in respect of Distinct Contracts.18. if a debtor was at the date of the receiving order liable in respect of

distinct contracts as a member of two or more distinct fýrms, or as a solecontractor, and also as a member of a fýrm, the circumstance that thefýrms are in whole or in part composed of the same individuals, or that thesole contractor is also one of the joint contractors, shall not prevent proofin respect of the contracts, against the properties respectively liable onthe contracts.

Periodical Payments.19. Where any rent or other payment falls due at stated periods, and

the receiving order is made at any time other than one of those periods,the person entitled to the rent or payment may prove for a proportionatepart thereof up to the date of the order as if the rent or payment grew duefrom day to day.

Interest.zo. On any debt or sum certain, payable at a certain time or otherwise,

whereon interest is not reserved or agreed for, and which is overdue atthe date of the receiving order and provable in bankruptcy, the creditormay prove for interest at a rate not exceeding nine per centum per annumto the date of the order from the time when the debt or sum was payable,

.i~ the debt ?r sum is payable ~y virtue of a writte~ instrement at a cert~n8tIme, and ýf payable otherwýse, then from the týme when a demand ýn

writing has been made giving the debtor notice that interest will be claimedfrom the date of the demand unill the time of payment.

Zl. On any debt or sum certain, payable at a certain time or otherwise,whereon interest is not reserved or agreed for, and which is overdue at thedate of the receiving order and provable in bankruptcy, the creditor mayprove for interest at a rate not exceeding four per centum per annum tothe date of the ord~r from the time when the debt or sum was payable, ifthe debt or sum is payable by virtue of a written instrement at a certaintime, and if payable otherwise, then from the time when a demand inwriting has been made giving the debtor notice that interest will beclaimed from the date of the demand until the time of payment.

BANKRUPTCY. [CAP. 5. 77 ~

Debt payable at a Furtlýer Time. .22. A creditor may prove for a debt not payable when the debtor com..

~mitted an act of bankruptcy as if it were payable presently, and mayreceive dividends equally with the other creditors, deducting only thereouta rebate of interest at the rate of nine pounds per centum per annumcomputed from the declaration of a dividend to the time when the debt :would have become payable, according to the terms on which it W3.scontracted.

Admission or Rejection of Proofs.23. The trustee shall examine every proof and the grounds of the debt,

8 and in writing admit or reject it, in whole or in part, or require furtherevidence in support of it. if he rejects a proof he shall state in writing tothe creditor the grounds of the rejection.

24. if the trustee thinks that a proof has been improperly admitted,the Court may, on the application of the trustee, af ter notice to thecreditor who made the proof, expunge the proof or reduce its amount.

25. if a creditor is dissatisfied with the decision of the trustee in respectof a proof, the Court may, on the application of the creditor, reverse orvary the decision.

26. The Court may also expunge or reduce a proof upon the applicationof a creditor if the trustee declines to interfere in the matter, or in the caseof a composition or scheme, upon the application of the debtor.

27. For the purpose of any of his duties in relation to proofs, the trusteemay administer oaths and take affidavits.

28. The official receiver, before the appointment of a trustee, shall haveall the powers of a trustee with respect to the examination, admission, andrejection of proofs, and any act or decision of his in relation thereto shallbe subject to the like appealo

8

i (2)