77. Restrictions on dispositions of property by bankrupt
Feedback & supportLast amended by an amending law of 2005.
Where a person is adjudged bankrupt, any disposition of property made by him during the period beginning with the day of the making of the bankruptcy application and ending with the making of the bankruptcy order shall be void except to the extent that such disposition has been made with the consent of, or been subsequently ratified by, the court.
bankrupt
“bankrupt” means —(a)the individual debtor who has been adjudged bankrupt by a bankruptcy order; or(b)where a bankruptcy order has been made against a firm, each of the partners in the firm;
For the purpose of this section, a disposition of property shall include any payment (whether in cash or otherwise) made to any person by the bankrupt and accordingly, where any payment is void by virtue of this section, the person to whom the payment was made shall hold the sum paid for the bankrupt as part of his estate.
property
“property” includes money, goods, things in action, land and every description of property wherever situated and also obligations and every description of interest, whether present or future or vested or contingent, arising out of or incidental to, property;
Nothing in this section shall give a remedy against any person in respect of —
any property or payment which he received from the bankrupt before the commencement of the bankruptcy in good faith, for value and without notice that the bankruptcy application had been made; or
any interest in property which derives from an interest in respect of which there is, by virtue of this subsection, no remedy.
Where, after the commencement of his bankruptcy, the bankrupt has incurred a debt to a banker or any other person by reason of the making of a payment which is void under this section, that debt shall be deemed for the purposes of this Act to have been incurred before the commencement of the bankruptcy unless —
debt
“debt” means any debt, or any liability to pay money, which is unsecured, present, certain, and of an amount that is fixed or liquidated;
that banker or person had notice of the bankruptcy before the debt was incurred; or
it is not reasonably practicable for the amount of the payment to be recovered from the person to whom it was made.
A disposition of property shall be void under this section notwithstanding that the property is not or, as the case may be, would not be comprised in the bankrupt’s estate, but nothing in this section shall affect any disposition made by a person of property held by him on trust for any other person.