Insolvency Act 1967 Part VII — Fraudulent debtors and creditors

Punishment of fraudulent debtors

s 109

(1) Any person who has been adjudged bankrupt shall in each of the cases following be punished with imprisonment, which may extend to two years, or with fine or with both: (a) if he does not to the best of his knowledge and belief fully and truly discover to the Director General of Insolvency all his property, and how, and to whom, and for what consideration, and when he disposed of any part thereof, except such part as has been disposed of in the ordinary way of his trade, if any, or laid out in the ordinary expenses of his family, unless he proves that he had no intent to defraud; (b) if he does not deliver up to the Director General of Insolvency or as he directs all such part of his property as is in his custody or under his control, and which he is required by law to deliver up, unless he proves that he had no intent to defraud; (c) if he does not deliver up to the Director General of Insolvency or as he directs all books, documents, papers and writings in his custody or under his control relating to his property or affairs, unless he proves that he had no intent to defraud; (d) if after the presentation of a bankruptcy petition by or against him or within twelve months next before such presentation he conceals any part of his property to the value of one hundred ringgit or upwards or conceals any debt due to or from him, unless he satisfies the court that he had no intent to defraud; (e) if after the presentation of a bankruptcy petition by or against him or within twelve months next before such presentation he fraudulently removes any part of his property of the value of one hundred ringgit or upwards; (f) if he makes any material omission in any statement relating to his affairs, unless he proves that he had no intent to defraud; (g) if, knowing, or believing, or having reason to believe, that a false debt has been proved by any person under the bankruptcy, he fails for the period of one month to inform the Director General of Insolvency thereof; (h) if after the presentation of a bankruptcy petition by or against him he prevents the production of any book, document, paper or writing affecting or relating to his property or affairs, unless he proves that he had no intent to conceal the state of his affairs or to defeat the law; (i) after the presentation of a bankruptcy petition by or against him or within twelve months next before such presentation or service he conceals, destroys, mutilates or falsifies or is privy to the concealment, destruction, mutilation or falsification of any book or document affecting or relating to his property or affairs, unless he proves that he had no intent to conceal the state of his affairs or to defeat the law; (j) if after presentation of a bankruptcy petition by or against him or within twelve months next before such presentation or service he makes or is privy to the making of any false entry in any book or document affecting or relating to his property or affairs, unless he proves that he had no intent to conceal the state of his affairs or to defeat the law; (k) if after the presentation of a bankruptcy petition by or against him or within twelve months next before such presentation or service he fraudulently parts with, alters or makes any omission in, or is privy to the fraudulently parting with, altering or making any omission in, any document affecting or relating to his property or affairs; (l) if after the presentation of a bankruptcy petition by or against him, or at any meeting of his creditors within twelve months next before the presentation thereof, he attempts to account for any part of his property by fictitious losses or expenses; (m) if being an undischarged bankrupt— (i) either alone or jointly with any other person he obtains credit to the extent of *one thousand ringgit or upwards, unless he proves that before obtaining the credit he informed the person giving the credit that he was an undischarged bankrupt; or (ii) either alone or jointly with any other person he engages in any trade or business or enters into any contract in furtherance of any trade or business, unless he proves thatbefore engaging in the trade or business or before entering into the contract he informed the person with whom he engages in the trade or business or with whom he entered into the contract that he was an undischarged bankrupt; (n) if within twelve months next before the presentation of a bankruptcy petition by or against him or after the presentation of a bankruptcy petition and before the * NOTE—Previously “one hundred ringgit”–see the Bankruptcy (Amendment) Act 2003 [Act A1197]. making of a bankruptcy order, he by any false representation or other fraud has obtained any property on credit and has not paid for the same; (o) if within twelve months next before the presentation of a bankruptcy petition by or against him or after the presentation of a bankruptcy petition and before the making of a bankruptcy order, he obtains, under the false pretence of carrying on business and if a trader of dealing in the ordinary way of his trade, any property on credit and has not paid for the same, unless he provesthat he had no intent to defraud; (p) if within twelve months next before the presentation of a bankruptcy petition by or against him or after the presentation of a bankruptcy petition and before the making of a bankruptcy order he pawns, pledges or disposes of or sends out of Malaysia any property which he has obtained on credit and not paid for unless in the case of a trader he proves that such pawning, pledging, disposal of or sending out of Malaysia is in the ordinary way of his trade and that in any case he had no intent to defraud; (q) if he is guilty of any false representation or other fraud for the purpose of obtaining the consent of his creditors or any of them to any agreement with reference to his affairs or his bankruptcy; (r) if having been engaged in any trade or business, and having outstanding at the date of the bankruptcy order any debt contracted in the course and for the purposes of such trade or business— (i) he has, within two years prior to the presentation of the bankruptcy petition, materially contributed to or increased the extent of his insolvency by gambling or by rash and hazardous speculation, and such gambling or speculation is unconnected with his trade or business; (ii) he has, between the date of the presentation of the petition and the date of the bankruptcy order, lost any part of his estate by such gambling or rash and hazardous speculation; or (iii) on being required by the Director General of Insolvency at any time, or in the course of this public examination by the court, to account for the loss of any substantial part of his estate incurred within a period of a year next preceding the date of the presentation of the bankruptcy petition, or between that date and the date of the bankruptcy order, he fails to give a satisfactory explanation of the manner in which such loss was incurred: Provided that, in determining for the purpose of this paragraph whether any speculation was rash and hazardous, the financial position of the accused person at the time when he entered into the speculation shall be taken into consideration. (2) A person who has sent out of Malaysia any property which he has obtained on credit and not paid for shall, until the contrary is proved, be deemed to have disposed of the same otherwise than in the ordinary way of his trade, if such property not having been paid or accounted for at the date of the bankruptcy order by the person to whom the same was sent, such last-mentioned person cannot be found, or does not pay or account for the same within a reasonable time after being called upon so to do by the Director General of Insolvency. (3) Where any person pawns, pledges or disposes of any property in circumstances which amount to an offence under paragraph (1)(p), every person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged or disposed of in such circumstances shall be guilty of an offence and shall be liable on conviction to be punished with imprisonment which may extend to two years or with fine or with both. (4) (Deleted by Act A1197).

Bankrupt failing to keep proper account

s 110

(1) Any person who has been adjudged bankrupt or in respect of whose estate a bankruptcy order has been made shall be punished with imprisonment which may extend to two years or with fine or with both if having been engaged in any trade or business during any period in the two years immediately preceding the date of the presentation of the bankruptcy petition, he has not kept proper books of account throughout that period and throughout any further period in which he was so engaged between the date of the presentation of the petition and the date of the bankruptcy order, or has not preserved all books of account so kept: Provided that a person who has not kept or has not preserved such books of account shall not be convicted of an offence under this section— (a) if his unsecured liabilities at the date of the bankruptcy order did not exceed, in the case of a person who has not on any previous occasion been adjudged bankrupt or made a composition or arrangement with his creditors, four thousand ringgit, or in any other case one thousand ringgit; or (b) if he proves that in the circumstances in which he traded or carried on business the omission was honest and excusable. (2) (Deleted by Act A1197). (3) For the purposes of this section a person shall be deemed not to have kept proper books of account if he does not furnish the Director General of Insolvency with trading and profit and loss accounts for such period not exceeding three years prior to the date of the bankruptcy order and if he has not kept such books of account as are necessary to exhibit or explain his transaction and financial position in his trade or business, including a book or books containing entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or business has involved dealings in goods, statements of annual stock-takings, and (except in the case of goods sold by way of retail trade to the actual consumer) accounts of all goods sold and purchased showing the buyers and sellers thereof in sufficient details to enable the goods and the buyers and sellers thereof to be identified.

Bankrupt incurring debt without reasonable ground of expectation of paying it

s 111

Any person who has been adjudged bankrupt or in respect of whose estate a bankruptcy order has been made shall be punished with imprisonment which may extend to two years or with fine or with both— (a) if within twelve months next before the presentation of a bankruptcy petition by or against him he incurs any debt provable in bankruptcy unless he proves to the satisfaction of the court that he had reasonable ground of expectation of being able to pay it; (b) if having been engaged in carrying on any trade or business, he continues to trade or carry on business, by incurring any debt or indebtedness provable in bankruptcy within twelve months next before the date of a bankruptcy petition by or against him, unless he proves to the satisfaction of the court that he was solvent at the date of incurring such debt or, in the case of indebtedness, at the date of the incurring of the first item of such indebtedness, that he had reasonable ground of expectation of being able to pay it.

Penalty for absconding with property

s 112

If after the presentation of a bankruptcy petition by or against him, or the service of a debtor’s summons upon him, or within four months next before such presentation or service, any person against whom a bankruptcy order is made, quits Malaysia and takes with him or attempts or makes preparation to quit Malaysia and to take with him any part of his property to the amount of fifty ringgit or upwards which ought by law to be divided amongst his creditors, he shall, unless he proves that he had no intent to defraud, be punished with imprisonment, which may extend to two years or with fine or with both.

Penalty for absconding in order to avoid service of bankruptcy process or embarrass bankruptcy proceedings

s 113

(1) Any person against whom a bankruptcy order is made who quits or before the making of such order has quitted Malaysia, with intent to avoid service of any petition or other process in bankruptcy, or to avoid examination in respect of his affairs, or otherwise to defeat, embarrass or delay any proceedings against him in bankruptcy, shall be punished with imprisonment,which may extend to one year or with fine not exceeding one thousand ringgit,or with both. (2) Any person who after the presentation of a bankruptcy petition by or against him, or the service of a debtor’s summons upon him, or within three months next before such presentation or service, quits Malaysia, shall until the contrary is proved be deemed to quit Malaysia with such intent as in this section is mentioned.

Penalty on fraudulently obtaining credit, etc.

s 114

(1) Any person who has been adjudged bankrupt shall in each of the cases following be punished with imprisonment, which may extend to one year, or with fine or with both: (a) if in incurring any debt or liability he has obtained credit under false pretences or by means of any other fraud; (b) if he has, with intent to defraud his creditor or any of them, made or caused to be made any gift, delivery or transfer of or any charge on his property or caused or connived at the levying of any execution against his property; (c) if he has, with intent to defraud his creditors or any of them, concealed or removed any part of his property since or within two months before the date of any unsatisfied judgment or order for payment of money obtained against him. (2) A person who having an unsatisfied judgment for a sum exceeding two hundred and fifty ringgit entered up against him obtains credit shall, until the contrary is proved, be deemed to have obtained such credit under false pretences or by means of fraud.

Penalty on false claims, etc.

s 115

(1) Any creditor or person claiming to be a creditor in any bankruptcy, composition or arrangement with creditors who makes any claim, proof, declaration or statement of account which is untrue in any material particular shall, unless he satisfies the court that he had no intent to defraud, be punished with imprisonment which may extend to one year or with fine or with both. (2) Any creditor who obtains or receives any money or property, or security from any person as an inducement for forbearing to oppose, or for consenting to, the discharge of a bankrupt shall be punished with a fine, which may extend to three times the amount or value of such money, property or security. (3) Any person who, knowing that a bankruptcy order has been made against a bankrupt, removes, conceals, receives or otherwise deals with or disposes of any part of the property of such bankrupt, with intent to defeat the order, shall be punished with a fine, which may extend to double the amount or value of such property, or imprisonment which may extend to three years or with both. (4) Fines imposed and levied under this section shall be deemed part of the property of the bankrupt and shall vest in the Director General of Insolvency.

Debts incurred by fraud

s 116

Where a bankrupt makes any composition or arrangement with his creditors he shall remain liable for the unpaid balance of any debt which he incurred or increased by any fraud, or whereof before the date of the arrangement or composition he obtained forbearance by any fraud, provided the defrauded creditor has not assented to the arrangement or composition otherwise than by proving his debt and accepting dividends.

s 117

(Deleted by Act A1197).

Sessions Court to have full jurisdiction to try offences

s 117A

Notwithstanding any written law to the contrary, a Sessions Court shall have jurisdiction to try all offences against this Act or rules made thereunder and to impose the full punishment provided therefor.

Criminal liability after discharge or composition

s 118

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

Form of charge

s 119

In a charge for an offence under this Act it shall be sufficient to set forth the substance of the offence charged in the words of this Act, specifying the offence or as near thereto as circumstances admit, without alleging or setting forth any debt, act of bankruptcy, adjudication, or any proceedings in, or order, warrant or document of any court acting under this Act.