Appointment of Director General of Insolvency and other officers
(1) The Minister shall appoint a Director General of Insolvency and a Deputy Director General of Insolvency from amongst the members of the Judicial and Legal Service.
(2) The Minister may appoint such number of Directors of Insolvency, Deputy Directors of Insolvency, Senior Assistant Directors of Insolvency, Assistant Directors of Insolvency, Insolvency Officers and other officers, as he deems fit, to assist the Director General of Insolvency in carrying out the purposes of this Act.
(3) The Deputy Director General of Insolvency, Directors of Insolvency, Deputy Directors of Insolvency, Senior Assistant Directors of Insolvency, Assistant Directors of Insolvency and Insolvency Officers shall be subject to the general direction, control and supervision of the Director General of Insolvency and shall exercise such powers of the Director General of Insolvency as the Director General of Insolvency may assign except all the powers expressly stated in this Act to be exercisable by the Director General of Insolvency personally.
Duties
Status of Director General of Insolvency
(1) The duties of the Director General of Insolvency shall have relation both to the conduct of the bankrupt and to the administration of his estate.
(2) The Director General of Insolvency, Deputy Director General of Insolvency, Directors of Insolvency, Deputy Directors of Insolvency, Senior Assistant Directors of Insolvency, Assistant Directors of Insolvency, Insolvency Officers and other officers may administer oaths for the purposes of any matters or proceedings under this Act or for the purpose of taking affidavits.
(3) The Director General of Insolvency, Deputy Director General of Insolvency and every Director of Insolvency, Deputy Director of Insolvency, Senior Assistant Director of Insolvency, Assistant Director of Insolvency, Insolvency Officer and other officer shall be deemed to be a public servant within the meaning of the Penal Code.
Duties of Director General of Insolvency as regards the bankrupt’s conduct
As regards the bankrupt, the Director General of Insolvency shall—
(a) investigate the conduct of the bankrupt, and report to the court stating whether there is reason to believe that the bankrupt has committed any act which constitutes an offence under this Act or under section 421, 422, 423 or 424 of the Penal Code or which would justify the court in refusing, suspending or qualifying an order for his discharge;
(b) make such other reports concerning the conduct of the bankrupt as the court directs or as may be prescribed;
(c) take such part as may be directed by the court or prescribed in the public examination of the bankrupt;
(d) take such part and give such assistance in relation to the prosecution of any fraudulent bankrupt or any other person charged with an offence under this Act, as the Public Prosecutor may direct.
Duties of Director General of Insolvency as to bankrupt’s estate
(1) As regards the estate of a bankrupt, the Director General of Insolvency shall—
(a) act as the receiver of the bankrupt’s estate, and act as manager thereof where a special manager has not been appointed;
(b) raise money or make advances for the purposes of the estate, and authorize the special manager to raise money or make advances for the like purposes in any case where in the interests of the creditors it appears necessary so to do;
(c) summon and preside at all meetings of creditors held under this Act;
(d) issue forms of proxy for use at the meetings of creditors;
(e) report to the creditors as to any proposal which the bankrupt makes with respect to the mode of liquidating his affairs;
(f) advertise the bankruptcy order, the date of the bankrupt’s
public examination and such other matters as it is necessary to advertise.
(2) For the purpose of his duties as receiver or manager the Director General of Insolvency shall have the same powers as if he were a receiver and manager appointed by the court, but shall as far as practicable consult the wishes of the creditors with respect to the management of the bankrupt’s property, and may for that purpose, if he thinks it advisable, summon meetings of the persons claiming to be creditors.
(3) The Director General of Insolvency shall account to the court and pay over all moneys and deal with all securities in such manner as, subject to this Act, the court directs.
Protection of Director General of Insolvency and person acting under hisdirection or control
The Director General of Insolvency or any person acting under his direction or control shall not be liable personally in any action or proceeding in respect of anything done or intended or omitted to be done under this Act but any person aggrieved by anything so done or intended or omitted to be done may apply to the court for directions in the matter and the court may thereupon give such directions or make such order as it thinks fit.
Costs
Allowance and taxation of costs
(1) No payment shall be allowed in the accounts of the Director General of Insolvency, or of any special manager, in respect of the performance by any other person of the ordinary duties which are required by this Act or any rules made thereunder to be performed by himself.
(2) All bills and charges of solicitors, managers, accountants, auctioneers, brokers and other persons shall be taxed by the prescribed officer, and no payments in respect thereof shall be allowed in the accounts of the Director General of Insolvency without leave of the court, until after such taxation has been made.
(3) Every such person shall on request by the Director General of
Insolvency, which request the Director General of Insolvency shall make a sufficient time before declaring a dividend, deliver his bill of costs or charges to the prescribed officer for taxation, and if he fails to do so within seven days after receipt of the request, or such further time as the court on application grants, the Director General of Insolvency shall declare and distribute the dividend without regard to any claim by him, and thereupon any such claim shall be forfeited as well against the Director General of Insolvency personally as against the estate.
Receipts, Payments, Accounts, Audit
Bankruptcy Estates Account
(1) An account, to be called the Bankruptcy Estates Account, shall be kept by the Director General of Insolvency with such Bank as the Minister of Finance shall direct and, subject to the other provisions of this Act, all moneys received by the Director General of Insolvency in respect of proceedings under this Act shall be paid to that account.
(2) Before the Minister of Finance makes any direction under subsection (1) the Bankruptcy Estates Account may be kept—
(a) with the Treasury in the case of bankruptcy proceedings in *Peninsular Malaysia; and
(b) with the Treasury of Sabah or Sarawak in the case of bankruptcy proceedings in either State.
(3) All payments out of moneys standing to the credit of the Director General of Insolvency in the Bankruptcy Estates Account shall be made in the prescribed manner.
Investment of surplus funds
(1) Whenever the cash balance standing to the credit of a Bankruptcy Estates Account is in excess of the amount which, in the opinion of the Director General of Insolvency, is required for the time being to answer demands in respect of insolvent estates the Director
* NOTE—All references to “West Malaysia” shall be construed as reference to “Peninsular Malaysia”–see the Interpretation (Amendment) Act 1997 [Act A996].
General of Insolvency shall pay over such excess to the Minister who shall invest the same in trustee securities to be placed to the credit of the said account.
(2) When any part of the money so invested is in the opinion of the Director General of Insolvency required to answer any demands in respect of insolvent estates, the Director General of Insolvency shall notify to the Minister the amount so required and the Minister shall thereupon pay to the Director General of Insolvency such sum as may be required to the credit of the Bankruptcy Estates Account and for that purpose the Minister may direct the sale of such part of the said securities as may be necessary.
(3) Any profits on the sale of any of the securities placed to the credit of a Bankruptcy Estates Account shall be credited to the Insolvency Assistance Fund and the Insolvency Assistance Fund shall be liable to make good any loss arising out of the sale of such securities.
(4) The dividends on investments made under this section shall be credited to the Insolvency Assistance Fund and regard shall be had to the amount thus derived in fixing the fees payable in respect of proceedings in bankruptcy.
Insolvency Assistance Fund
(1) A fund to be known as the “Insolvency Assistance Fund” is established and shall be administered and controlled by the Director General of Insolvency.
(2) The Fund shall consist of—
(a) the profit of the investment under section 77; and
(b) all costs, fees, charges and moneys recovered by the Director General of Insolvency in any proceedings taken under this Act in which moneys from the Fund were applied.
(3) Subject to subsection (4), the Fund may be applied by the Director General of Insolvency for all or any of the following purposes:
(a) for the payment of all costs, fees and allowances to
advocates or other persons in any proceedings on behalf of a bankrupt’s estate or to recover assets of the estate;
(b) for the payment of such costs and fees in the administration of a bankrupt’s estate as the Director General of Insolvency may determine;
(c) for the payment of any expenses to provide an efficient and effective administration of a bankrupt’s estate that meets an appropriate standard of service; or
(d) for such other purposes as may be prescribed.
(4) No moneys from the Fund shall be applied for any proceedings where, in the opinion of the Director General of Insolvency, there is no reasonable ground for taking, defending, continuing or being a party to the proceedings or where there are sufficient moneys for such purpose in the bankrupt’s estate.
Inspection and audit of Director General of Insolvency’s accounts
(1) The Director General of Insolvency shall keep in the prescribed form an account of his receipts and payments as Director General of Insolvency, and shall permit inspection thereof by the bankrupt or by any creditor who has proved his debt or by any other person interested, subject to payment of the prescribed fee.
(2) All such accounts shall be audited not less than twice in each year by the Auditor General, and for the purposes of such audit the Director General of Insolvency shall produce to the auditing officer such books and shall furnish him with such vouchers and information as he requires.
Director General of Insolvency to furnish list of creditors
The Director General of Insolvency shall, whenever required by any creditor so to do, and on payment by such creditor of the prescribed fee, furnish and transmit to such creditor a list of the creditors, showing in such list the amount of the debt due to each of such creditors.
Books to be kept by Director General of Insolvency
The Director General of Insolvency shall keep as prescribed proper books, in which he shall cause to be made entries or minutes of proceedings at meetings and of such other matters as are prescribed, and any creditor of the bankrupt may, subject to control of the court, personally or by his agent inspect any such books.
Official examination of Director General of Insolvency’s records
The Director General of Insolvency shall, on the demand of any officer authorized by the Attorney General in that behalf in writing, produce for the inspection of such officer all records and documents in his possession relating to any bankruptcy, and such officer may examine the same and report thereon to the Attorney General.
Release
Release of Director General of Insolvency
(1) When the Director General of Insolvency has realized all the property of the bankrupt, or so much thereof as can in his opinion be realized without needlessly protracting the proceedings in bankruptcy, and distributed a final dividend, if any, or has ceased to act by reason of a composition having been approved, or has resigned or has vacated or been removed from his office, the court shall, on his application, cause a report on his accounts to be prepared, and, on his complying with all the requirements of the court, shall take into consideration the report and any objection which is urged by any creditor or person interested against the release of the Director General of Insolvency, and shall either grant or withhold the release accordingly.
(2) (Repealed by Act A364).
(3) An order of the court releasing the Director General of Insolvency shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the bankrupt or otherwise in relationto his conduct as Director General of Insolvency, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.
Official Name
Official name of Director General of Insolvency
The Director General of Insolvency may sue and be sued by the official name of “The Director General of Insolvency of the property of …………….…., bankrupt,” inserting the name of the bankrupt, or in a case under section 122 by the official name of “The Director General of Insolvency of the property of ………………… a deceased insolvent”, inserting the name of the deceased, and by such name may hold property of every description, make contracts, sue and be sued, enter into any engagements binding on himself and his successors in office, and do all other acts necessary or expedient to be done in the execution of his office.
Vacation of Office on Insolvency
Office of Director General of Insolvency vacated by insolvency
If a bankruptcy order is made against the Director General of Insolvency or against a Deputy Director General of Insolvency, Director of Insolvency, Deputy Director of Insolvency, Senior Assistant Director of Insolvency, Assistant Director of Insolvency, Insolvency Officer or other officer he shall thereby vacate his office of Director General of Insolvency, Deputy Director General of Insolvency, Director of Insolvency, Deputy Director of Insolvency, Senior Assistant Director of Insolvency, Assistant Director of Insolvency, Insolvency Officer or other officer, as the case may be.
Additional Powers
Additional powers of Director General of Insolvency
(1) In addition to, and without prejudice to the powers, duties and functions conferred under this Act, the Director General of Insolvency shall, for the purposes of this Act and sections 421, 422, 423 and 424 of the Penal Code, have all the powers of a Commissioner of Police under the Police Act 1967 [Act 344] and the Criminal Procedure Code [Act 593].
(2) The powers exercisable by the Director General of Insolvency in subsection (1) shall be exercisable by the Director General of
Insolvency personally.
(3) The Director General of Insolvency may appoint fit and proper persons to be investigation officers who shall, for the purposes of this Act and sections 421, 422, 423 and 424 of the Penal Code, have all the powers of a police officer under the Police Act 1967 and the Criminal Procedure Code.
(4) Notwithstanding any provision in this Act to the contrary, the Director General of Insolvency shall have the power to direct any creditor to render such assistance in the administration of the bankrupt’s estate as he deems necessary.
Control
Discretionary powers of Director General of Insolvency and control thereof
(1) Subject to this Act, the Director General of Insolvency shall, in the administration of the property of the bankrupt, have regard to any directions that are given by resolution of the creditors at any general meeting, and to any advice given by the consultative committee, but so that any directions so given by the creditors at any general meeting shall in case of conflict override any advice given by the consultative committee.
(2) The Director General of Insolvency may summon general meetings of the creditors for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the court directs, or whenever requested in writing so to do by at least one-fourth in value of the creditors or by the consultative committee.
(3) The Director General of Insolvency may apply to the court as prescribed for directions in relation to any particular matter arising under the bankruptcy.
(4) Subject to this Act, the Director General of Insolvency shall use his own discretion in the administration of the property of the bankrupt.
Appeal to court against Director General of Insolvency
If the bankrupt or any of the creditors or any other person is aggrieved by any act or decision of the Director General of Insolvency,
he may apply to the court, and the court may confirm, reverse or modify the act or decision complained of and make such order in the premises as it thinks just.
Control of court over Director General of Insolvency
(1) The court shall take cognizance of the conduct of the Director General of Insolvency, and in the event of the Director General of Insolvency not faithfully performing his duties and duly observing all the requirements imposed on him by any statute, rules or otherwise with respect to the performance of his duties, or in the event of any complaint being made to the court by any creditor in regard thereto, the court shall inquire into the matter and take such action thereon as is deemed expedient.
(2) The court may at any time require the Director General of Insolvency to answer any inquiry made by it in relation to any bankruptcy in which he is engaged, and may examine on oath him or any other person concerning the bankruptcy.
(3) The court may also direct a local investigation to be made of the books and vouchers of the Director General of Insolvency.
(4) All sums required to discharge any liability which the Director General of Insolvency is not entitled to pay out of the estate of the bankrupt shall be charged upon the Consolidated Fund except where the liability is one to which neither the Director General of Insolvency as such nor any of his officers has in any way contributed and which neither he nor any of his officers could by the exercise of reasonable diligence have averted and in that case the Director General of Insolvency shall not, nor shall Malaysia, be subject to any liability.
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).
