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Insolvency Act, 2013 (Act 4 of 2013)
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This is the latest version of this legislation commenced on 01 Jun 2020.
akn-sc-act-2013-4-eng-2020-06-01.pdf
Insolvency Act, 2013
Act 4 of 2013
There are multiple commencements:
Part I, section 1(1); Part IX (section 353–355); Part X (section 356–379); Part XI (section 380–391)
commenced on 22 July 2013.
Part I, section 1(2), section 2; Part II (section 3–86); Part III (section 87–94); Part IV (section 95–174); Part V (section 175–202); Part VI (section 203–279); Part VII (section 280–348); Part VIII (section 349–352)
not yet commenced.
[This is the version of this document at 1 June 2020.]
[Act 4 of 2013; Act 5 of 2015]
Part I – Preliminary
1. Short title and commencement
(1)This Act may be cited as the Insolvency Act, 2013.
(2)Part VIII of this Act shall come into operation on such date as the Minister may, by notice in the Gazette, appoint.
In this Act, unless the context otherwise requires—"administrator" means the person appointed as administrator of a company in reorganisation under section 206(1);"articles" has the meaning assigned to it under the Companies Act;"assets" means any property in which a person has an interest or over which the person has any rights;"attorney" means an attorney-at-law as defined under the Legal Practitioners Act;"bankrupt" means a person who has been declared bankrupt;"bankruptcy demand" means a demand referred to under section 5;"charge"—(a)means a right or interest in relation to property owned by a debtor by virtue of which a creditor of the debtor is entitled to claim payment in priority to other creditors; and(b)includes a fixed or a floating charge;"Civil Code" means the Civil Code of Seychelles Act;"Court" means the Supreme Court of Seychelles;"contributory" has the meaning assigned to it by section 127;"commencement of winding up" has the meaning assigned to it by sections 101 and 148;"Companies Act" means the Companies Act, 1972;"company" has the meaning assigned to it under the Companies Act;"composition" means a post bankruptcy composition referred to in section 81;"creditors' voluntary winding up" has the meaning assigned to it by section 146(1)(a);"debtor" means—(a)a person against whom a bankruptcy petition has been filed under Part II; or(b)a company in the course of being wound up by the Court or by way of creditors' voluntary winding up;"Deputy Official Receiver" means the Deputy Official Receiver appointed under section 353(1)(b);"director" in relation to a company, has the meaning assigned to it under the Companies Act;"financial institution" has the meaning assigned to it under the Financial Institutions Act;"Land Registrar" includes—(a)the Land Registrar appointed under the Land Registration Act; or(b)the Registrar of Deeds appointed under the Mortgage and Registration Act;"members' voluntary winding up" has the meaning assigned to it by section 146(1)(b);"Minister" means the Minister responsible for Finance;"officer" in relation to a company, has the meaning assigned to it under the Companies Act;"Official Receiver" means the Official Receiver appointed under section 353(1)(a);"promoter" means any person engaged in the formation of a company, or in raising money to enable a company to be formed or to acquire any assets or an existing business, or in negotiating the acquisition of any assets or an existing business by or for a company, but does not include a person who acts only in a professional capacity on behalf of a promoter;"provable debt" has the meaning assigned to it by section 293;"Provisional Receiver" means the Provisional Receiver appointed under section 18;"prescribed" means prescribed by way of regulations;"property" means land, movables, whether tangible or not, debts, claims, rights of action, licences, concessions, patents, copyright, trademarks, designs, knowledge and information which has been confidentially communicated or which is protected by law similarly to intangible movables, all other choses in action of any kind whatsoever, and the capital of a company which has not been called or paid up or credited as paid up;"Registrar" means the Registrar of Companies;"relative", in relation to a person, means—(a)his or her parent, spouse, child, brother or sister;(b)the parent, child, brother or sister of his or her spouse,and includes a nominee or trustee of a person referred to in paragraph (a) or (b);"secured creditor" means a person holding a charge on or over property owned by a debtor;"Securities Act" means the Securities Act, 2007;"special manager" has the meaning assigned to it by section 130;"spouse", in relation to a person, includes a person with whom the person has a relationship in the nature of marriage;"undistributed money" means any money—(a)received by the Official Receiver or a liquidator from the realisation of the assets of a debtor; and(b)required to be paid to any person under sections 338 to 343,but which cannot be distributed for any reason."usher" means an usher of the Court;"winding up resolution" has the meaning assigned to it by section 146(11);
Part II – Bankruptcy
Sub-Part I – Declaration of bankruptcy
3. Declaration of bankruptcy
A person, other than a company, may be declared bankrupt by a bankruptcy order made by the Court on the petition of the person or creditors of the person in accordance with the provisions of this Part.
4. Creditor's petition
(1)A person referred to in subsection (2) may apply to the Court for a bankruptcy order where—
(a)the debtor owes the creditor SCR25,000 or more or, where two or more creditors joined in the same petition, the debtor owes a total of SCR25,000 or more;
(b)one of the grounds referred to in subsection (3) exists;
(c)the debt is for a specific sum; and
(d)the debt is payable immediately or at a specified future time.
(a)Subject to paragraph (b), a petition for a bankruptcy order may be made by—
(i)a creditor;
(ii)where there are two or more creditors, the creditors jointly; or
(iii)the duly authorised representative of the creditors.
(b)A secured creditor may petition the Court for a bankruptcy order where—
(i)the petition contains a statement that he or she is willing, in the event of a bankruptcy order being made, to give up his or her security for the benefit of all the bankrupt's creditors; or
(ii)the petition is expressed not to be made in respect of the secured part of the debt and contains a statement of the estimated value of the security for the secured part of the debt at the date of the petition, and the creditor has established that the amount of the debt exceeds the value of the security claimed by the creditor by at least SCR25,000.
(a)The Court shall not make a bankruptcy order on a creditor's petition unless the Court is satisfied that one of the following grounds is established—
(i)failure of the debtor to comply with a bankruptcy demand;
(ii)debtor's departure from Seychelles with intent to defeat or delay payment to a creditor;
(iii)notification in writing by the debtor to a creditor or creditors that he or she has suspended, or proposes to suspend, payment of his or her debts; or
(iv)admission to creditors that the debtor is unable to pay his or her debts due.
(b)There shall be an admission for the purposes of subsection (3) (a) (iv) where the debtor, at a meeting of creditors, admits that he or she is unable to pay his or her debts due and—
(i)a majority in number and value of the creditors present at the meeting require the debtor to file a petition for a declaration of bankruptcy; and
(ii)the debtor having agreed to file a petition for a declaration of bankruptcy fails to do so within 2 working days after the meeting.
(4)A debtor against whom a bankruptcy order may be made shall be domiciled in Seychelles, and—
(a)be present in Seychelles on the day on which the application for a bankruptcy order is presented; or
(b)have, at any time during the period of 3 years preceding the day on which the petition for a bankruptcy order is presented—
(i)been ordinarily resident, or had a place of residence, in Seychelles; or
(ii)carried on business in Seychelles.
(5)For the purposes of subsection (4) (b) (ii), "carrying on business" includes the carrying on of business by—
(a)a partnership of which the debtor is a member; and
(b)an agent or manager of the debtor or of such partnership referred to in paragraph (a).
(6)A petition by a creditor for a bankruptcy order shall—
(a)be supported by affidavit of the creditor or some other person having knowledge of the facts;
(b)be served on the debtor; and
(c)call on the debtor to show cause at the hearing of the petition as to why the debtor should not be declared bankrupt.
(7)A petition under this section shall not be withdrawn except with leave of the Court on such terms as it may determine.
5. Bankruptcy demand
(1)A bankruptcy demand referred to in section 4(3) (a) (i) shall—
(a)require the debtor, in relation to the judgment debt or the sum ordered to be paid under a final order or the amount otherwise claimed to be owing, to—
(i)pay the amount owing, including any interest to the date of payment of a debt that carries interest, plus costs;
(ii)give security for the amount owing that satisfies the creditor or the Court; or
(iii)compromise the amount owing on terms that satisfy the Court or the creditor;
(b)state the consequences if the debtor fails to comply with the bankruptcy demand; and
(c)be served on the debtor in Seychelles or, with the Court's permission, outside Seychelles.
(2)The bankruptcy demand may authorise an agent to act on behalf of the creditor where the demand requires—
(a)any payment to be made to the creditor; or
(b)any other step to be taken that involves the creditor.
(3)A bankruptcy demand shall not be invalidated by reason that the amount owing by the debtor has been overstated unless—
(a)the debtor notifies the creditor in writing that he or she disputes the validity of the demand because it overstates the amount owing; and
(b)the debtor makes that notification within the time specified in the demand for the debtor to comply with the demand.
6. Failure to comply with bankruptcy demand
(1)There shall be a failure to comply with a bankruptcy demand where—
(a)a creditor has obtained a final judgment or a final order against the debtor for any amount;
(b)execution of the judgment or order has not been stayed by a Court;
(c)the debtor has, within 42 days prior to the date of the petition for a bankruptcy order, been served with a bankruptcy demand;
(d)the debtor has not, within the period specified in subsection (2),—
(i)complied with the requirements of the bankruptcy demand; or
(ii)satisfied the Court that he or she has a cross-claim against the creditor;
(e)the debtor is indebted to the creditor in relation to a provable debt; and
(f)the bankruptcy demand notifies the debtor that if the debtor disputes the debt or claims that any indebtedness on the part of the debtor to the creditor is less than SCR25,000, the debtor may appear before the Court in opposition to any petition filed by the creditor to have the debtor declared bankrupt and show cause that—
(i)he or she is not indebted to the creditor; or
(ii)the amount owed to the creditor is less than SCR25,000.
(2)The period referred to in subsection (1)(d) is—
(a)where the debtor is served with the bankruptcy demand in Seychelles, 14 days after service; or
(b)where the debtor is served with the bankruptcy demand outside Seychelles, the time specified in the order of the Court permitting service outside Seychelles.
(3)In this section,—
(a)a creditor who has obtained a final judgment or a final order includes a person who is for the time being entitled to enforce a final judgment or final order;
(b)where a Court has given permission for enforcing an arbitration award that the debtor pay money to the creditor—
(i)final order includes the arbitration award; and
(ii)proceedings includes the arbitration proceedings in which the award was made;
(c)a "cross-claim" means a counter-claim, set-off or cross-demand that—
(i)is equal to, or greater than, the judgment debt or the amount that the debtor has been ordered to pay; and
(ii)the debtor could not use as a defence in the action or proceedings in which the judgment or the order, as the case may be, was obtained.
7. Adjournment of creditor's petition or refusal to declare bankruptcy
(1)The Court may stay or adjourn the hearing of a petition conditionally or unconditionally—
(a)for the purpose of obtaining further evidence;
(b)to direct the Official Receiver to prepare a report under section 15 on whether the debtor should make an offer to the creditor; or
(c)for any other just cause.
(2)The Court may refuse to declare the debtor bankrupt where—
(a)the creditor has failed to establish any one of the grounds referred to in section 4(3)(a);
(b)the creditor has failed to establish that the debtor has been served with the bankruptcy demand;
(c)the debtor satisfies the Court that he or she is able and willing to pay his or her debts; or
(d)it is just and equitable or there is other sufficient cause that the debtor should not be declared bankrupt.
8. Judgment under appeal
Where the creditor's petition for a bankruptcy order is based on the ground that the debtor failed to comply with a bankruptcy demand, and the debtor has appealed the judgment or order underlying the bankruptcy demand, and the appeal is still to be determined, the Court may—
(a)stay the creditor's petition for a bankruptcy order; or
(b)refuse the petition.
9. Underlying debt not determined
(1)Where the debtor appears in opposition to a creditor's petition and avers that he or she does not owe a debt to the creditor or owes a debt to the creditor which is less than SCR25,000, the Court may, instead of refusing the petition, stay the petition so that the question of the existence or amount of the debt can be determined at a trial.
(2)Where the petition is based on the ground set out in section 6(1)(e) and (f), the Court shall have jurisdiction for the trial of any question in relation to the existence or amount of the debt.
(3)Where the petition is based on any ground other than the grounds set out in section 6(1)(e) and (f), the trial in relation to a debt of less than SCR25,000 shall, unless the Court orders otherwise, be heard in the Magistrate's Court.
(4)The Court may, prior to making an order to stay the hearing of the petition, require the debtor to give security to the creditor for any debt that may be established as owing by the debtor to the creditor, and for the costs of establishing the debt.
10. Court's power where more than one petition or more than one debtor
(1)Where there is more than one petition for a bankruptcy order, and one petition has been stayed or adjourned by the Court, the Court may, for good cause shown, make a bankruptcy order on the petition that has not been stayed or adjourned.
(2)Where the Court makes a bankruptcy order under subsection (1), the Court shall dismiss the petition as has been stayed or adjourned on such terms as the Court thinks appropriate.
(3)Where a creditor's petition for a bankruptcy order relates to more than one debtor, the Court may refuse to make an order in relation to one or more of the debtors without affecting the petition in relation to the remaining debtor or debtors.
11. Order on offer to creditors
(1)Where the debtor has made an offer to his or her creditors under section 88, the debtor or the representative of the debtor's creditors or any creditor may apply to the Court for an order on the offer made by the debtor.
(2)On hearing the application under subsection (1), the Court may—
(a)order that the offer is not a ground for making a bankruptcy order;
(b)stay or refuse the petition for a bankruptcy order;
(c)order that any other petition for a bankruptcy order shall not be filed;
(d)make any order as to costs as the Court thinks appropriate; or
(e)where it orders that costs shall be paid to the creditor who has applied for the bankruptcy order, order that the costs shall be paid out of the debtor's estate.
12. Substitution of creditor
(1)The Court may substitute the creditor who filed the petition for a bankruptcy order by another creditor, where—
(a)the creditor who filed the petition has not proceeded with due diligence or at the hearing of the petition offers no evidence; and
(b)the debtor owes the other creditor SCR25,000 or more.
(2)The creditor who has been substituted under subsection (1), shall file another petition for a bankruptcy order and may rely on the grounds for the declaration of bankruptcy on which the first petition was based.
13. Debtor's petition
(1)Subject to subsection (2), a debtor may file a petition with the Court for a bankruptcy order on the ground that he or she is unable to pay his or her debts where he or she has combined debts of SCR25,000 or more.
(2)The Court shall not accept a petition by a debtor for a bankruptcy order unless it is accompanied by a statement of the affairs of the debtor which is not, in the Court's opinion, incorrect or incomplete.
(3)A debtor shall not withdraw his or her petition after presentation without leave of the Court.
(4)The statement of affairs referred to in subsection (2) shall show the particulars of the debtor's assets, debts, liabilities, creditors, securities held by, or privileges to which, the creditors are entitled and such other information as the Court may require.
14. Bankruptcy order on debtor's petition
(1)Where the ground set out in section 13(1) is established, the Court shall make a bankruptcy order against the debtor unless it is of the opinion that it would be appropriate in the circumstances to direct the Official Receiver to prepare a report under section 15 on whether the debtor should make an offer to his or her creditors, in which case the Court shall adjourn the petition.
(2)A bankruptcy order made on a debtor's petition shall have the same effect as a bankruptcy order made on a creditor's petition.
15. Report of Official Receiver
(1)Where the Court directs the Official Receiver to prepare a report under sections 7(1)(b) or 14(1), the Official Receiver shall, within 14 days submit to the Court a report as to whether the debtor is willing to make an offer to his or her creditors in accordance with section 88.
(2)A report referred to in subsection (1) shall state—
(a)whether, in the opinion of the Official Receiver, a meeting of the debtor's creditors should be summoned to consider the debtor's offer; and
(b)where in the Official Receiver's opinion such a meeting should be summoned, the date, time and place for the meeting.
(3)In considering a report under this section, the Court may—
(a)where it feels that it is appropriate to do so for the purpose of facilitating the consideration and implementation of the debtor's offer, make an order for the appointment of the Official Receiver as Provisional Receiver under section 18; or
(b)where it feels it would be inappropriate to make an order under paragraph (a), make a bankruptcy order.
(4)An order made under subsection (3)(a) shall cease to have effect at the expiry of such period as the Court may specify for the purpose of enabling the debtor's offer to be considered by his or her creditors.
(5)Where a report referred to under subsection (1) states that a meeting of the debtor's creditors should be summoned, the Official Receiver shall, unless the Court otherwise directs, summon the meeting for the date, time and place proposed in his or her report.
16. Debtors' joint petition where partnership exits
(1)Two or more debtors, who are carrying on a business as partners, may file a joint petition for a bankruptcy order.
(2)When a petition under subsection (1) is filed, the debtors shall be declared bankrupt jointly and severally.
17. Expeditious administration
(1)Where the Court makes a bankruptcy order, the Court may, if the conditions referred to under subsection (2) are satisfied, issue a certificate for the expeditious administration of the bankrupt's estate.
(2)The conditions under which a certificate for expeditious administration of the bankrupt's estate may be issued are that—
(a)the aggregate amount of the bankruptcy debts so far unsecured would be less than SCR25,000; and
(b)the debtor has not, within the period of 5 years preceding the date on which the petition for a bankruptcy order is filed, been declared bankrupt or made a composition with his or her creditors in satisfaction of his or her debts or an offer to his or her creditors.
(3)The Court may revoke a certificate for expeditious administration of the debtor's estates where it appears to it that, on any ground existing at the time the certificate was issued, the certificate should not to have been issued.
(4)Where a certificate for expeditious administration of the bankrupt's estates is issued—
(a)the Official Receiver may dispense with the first meeting of creditors provided for in section 24;
(b)no fee shall be allowed to any attorney except on the certificate of the Court that the presence of an attorney was necessary; and
(c)the bankrupt shall be discharged after 6 months.[section 17(4)(c) amended by section 2(a) of Act 5 of 2015 w.e.f 8 July 2015]
Sub-Part II – Provisional Receiver
18. Appointment of Official Receiver as Provisional Receiver
(1)Where a creditor's petition for a bankruptcy order has been filed but not yet considered by the Court, a creditor of the debtor may apply to the Court for an order appointing the Official Receiver as Provisional Receiver of all or part of the debtor's property.
(2)The Court may make an order under subsection (1) at any time before it makes a bankruptcy order.
(3)As part of the order under subsection (1) or, on the subsequent application of a creditor or the Official Receiver, the Court may authorise the Official Receiver to—
(a)take possession of any property;
(b)sell any perishable property or property that is likely to fall rapidly in value;
(c)control the debtor's business or property as directed by the Court; or
(d)exercise any of the powers vested in him or her by section 65 or 66.
(4)An order for the Official Receiver to control the debtor's business shall be confined to the extent necessary, in the Court's opinion, for conserving the debtor's property.
(a)The appointment of the Official Receiver as Provisional Receiver of the debtor's property shall be advertised by the Official Receiver in such manner as may be prescribed.
(b)A creditor shall not commence or continue any execution process against the property of the debtor after the appointment of the Official Receiver as Provisional Receiver has been advertised.
(c)A creditor or any other interested person may apply to the Court for an order allowing the commencement or continuation of an execution process, and the Court may make an order on such terms as it thinks appropriate.
Sub-Part III – Effect of declaration of bankruptcy
19. Date of declaration of bankruptcy and disqualification of bankrupt
(1)The date and time of a declaration of bankruptcy, and the commencement of a bankruptcy, shall be the date and time when the Court made the bankruptcy order.
(2)The Court shall record on the bankruptcy order the date and time when the order was made.
(3)The Court shall notify the Official Receiver as soon as practicable after a bankruptcy order is made.
(4)It shall be presumed that an act was done, or a transaction was entered into or effected, after the date of a declaration of bankruptcy, unless anything to the contrary is proved.
(5)Except where a declaration of bankruptcy is the subject of an appeal—
(a)a person may not later assert that the declaration of bankruptcy was not valid or that a prerequisite for declaration of bankruptcy was absent; and
(b)the declaration of bankruptcy shall be binding on every person.
(6)Where a debtor is declared bankrupt, he or she shall, subject to this Act, be disqualified from being elected or appointed to any public office.
(7)The disqualification referred to in subsection (2) shall be removed and shall cease when the declaration of bankruptcy is cancelled, or the debtor obtains his or her discharge with a certificate from the Court to the effect that his or her bankruptcy was caused by misfortune without any misconduct on his or her part.
(8)The Court may grant or refuse to grant a discharge certificate as it thinks fit and a debtor may appeal the Court's decision refusing such certificate.
20. Procedure following declaration of bankruptcy
(1)On a declaration of bankruptcy by the Court—
(a)the Official Receiver shall advertise the declaration of bankruptcy under subsections (2);
(b)the bankrupt shall file with the Official Receiver a statement of his or her affairs under section 23(1), if the bankrupt has not already done so;
(c)the Official Receiver shall call a meeting of the bankrupt's creditors under section 24;
(d)proceedings to recover certain debts are stayed under section 21; and
(e)execution process may not be commenced or continued after the declaration of bankruptcy is advertised under section 22.
(2)Subject to subsection (3), the Official Receiver shall, advertise the declaration of bankruptcy of a bankrupt in the prescribed manner.
(3)The Court may order that the Official Receiver shall not advertise the declaration of bankruptcy if the bankrupt has appealed the bankruptcy order.
21. Stay of proceedings
(1)Subject to subsection (2), upon a declaration of bankruptcy all proceedings to recover any debt provable in the bankruptcy shall be stayed.
(2)On the application of any creditor or other person interested in the bankruptcy, the Court may allow proceedings commenced prior to the date of the declaration of bankruptcy to continue on such terms as the Court thinks appropriate.
22. Execution process after declaration of bankruptcy
(1)A creditor shall not commence or continue an execution, attachment or other process and shall not have any remedy against the bankrupt's property or person, for the recovery of a debt provable in the bankruptcy, after the Official Receiver has—
(a)advertised the bankruptcy order under section 20(2); or
(b)given notice of the bankruptcy order to the creditor.
(2)After advertisement of the declaration of bankruptcy or notice by the Official Receiver to the creditor, a creditor shall not seize or sell any property by way of distress for rent due by the bankrupt, but he or she may continue with the distress procedure if it has started.
23. Statement of affairs
(1)After a declaration of bankruptcy, the bankrupt shall file with the Official Receiver a statement of his or her affairs in accordance with section 13(4) except where he or she has filed a statement under section 13(2).
(2)Where no statement of affairs has been filed or the statement of affairs filed is incomplete or incorrect, the Official Receiver shall, as soon as practicable after a declaration of bankruptcy, send to the bankrupt a notice stating—
(a)that the bankrupt shall file a statement of affairs in accordance with section 13(4); and
(b)the time when the statement of affairs shall be filed.
(3)The Official Receiver shall send the notice to the address of the bankrupt stated in the petition for a bankruptcy order or the bankrupt's last known address.
(4)The bankrupt shall file his or her statement of affairs with the Official Receiver within 14 days of the declaration of bankruptcy or, as the case may be, after receiving the Official Receiver's notice under subsection (2).
(5)At any time after filing a statement of affairs with the Official Receiver, the bankrupt may file additional or amended statement of affairs.
24. First meeting of creditors
(1)Subject to section 17(4), the Official Receiver shall, after a declaration of bankruptcy, call a first meeting of the bankrupt's creditors, unless there are special circumstances, not less than 5 weeks after the declaration of bankruptcy, by sending a notice of the time and place of the meeting by ordinary post to—
(a)the bankrupt, at the bankrupt's address stated in the application for a bankruptcy order or his or her last known address;
(b)each creditor named in the bankrupt's statement of affairs, at the address given in the statement of affairs or at any other address that the Official Receiver believes is the creditor's address; and
(c)any other creditor known to the Official Receiver.
(2)The Official Receiver shall advertise the time and place of the meeting in such manner as may be prescribed.
(3)The Official Receiver may not call the first meeting of the creditors where he or she—
(a)decides that the meeting should not be called; or
(b)sends to each creditor named in the bankrupt's statement of affairs, and any other creditor known to the Official Receiver, a notice in accordance with subsection (5); and
(c)does not receive, within 10 working days after the Official Receiver's notice was sent, written notice from a creditor requiring the Official Receiver to call the meeting.
(4)In deciding whether the meeting should not be called, the Official Receiver shall consider—
(a)the bankrupt's assets and liabilities;
(b)the likely result of the bankruptcy; and
(c)any other relevant matter.
(5)The Official Receiver's notice to creditors under subsection (3) (b) shall state—
(a)that the Official Receiver considers that the first creditors' meeting should not be called;
(b)the reasons for not calling the meeting; and
(c)that the Official Receiver will not call the meeting unless a creditor gives the Official Receiver written notice, within 10 working days after the Official Receiver's notice was sent, requiring the Official Receiver to call the meeting.
(6)Subject to subsection (7), the Official Receiver may call subsequent meetings of creditors after the first meeting of creditors.
(7)The Official Receiver shall call a subsequent meeting of creditors if required to do so by one-quarter in number and value of the creditors who have proved their debts.
(8)Sections 282 to 294 shall, to the extent applicable, apply to meetings of creditors under this section.
(9)A meeting of creditors and the resolutions passed at the meeting are valid notwithstanding that some creditors did not receive the notice of the meeting, unless the Court otherwise orders.
25. Appointment of expert or committee to assist Official Receiver
(1)The creditors at a meeting held in pursuance of section 24 (1) or (6) may pass a resolution—
(a)appointing an expert to assist the Official Receiver in the administration of the bankrupt's estate; and
(b)providing for the expert's remuneration out of the bankrupt's estate.
(2)The creditors at a meeting of creditors, held in pursuance of section 24(1) or (6) may, pass a resolution appointing a committee to assist the Official Receiver in the administration of the bankrupt's estate and the Court may approve any remuneration of the members of the committee out of the bankrupt's estate.
26. Access to information regarding debtor's estate
A creditor or an attorney or accountant acting for the creditor, who has lodged a proof of debt may at any reasonable time inspect and take extracts or copies of—
(a)the bankrupt's accounting records;
(b)the bankrupt's answers to questions;
(c)the bankrupt's statement of affairs;
(d)all proofs of debt; and
(e)the minutes of any creditors' meeting.
27. Bankrupt's death after declaration of bankruptcy
Where a bankrupt dies after a declaration of bankruptcy, the bankruptcy continues in all respects as if the bankrupt were alive.
Sub-Part IV – Bankrupt's estate
28. Bankrupt's estate
(1)Subject to subsections (2) and (3), a bankrupt's estate shall comprise of—
(a)all property belonging to or vested in the bankrupt at the commencement of the bankruptcy; and
(b)any property which, pursuant to this Part, forms part of the bankrupt's estate or is treated as forming part of his or her estate.
(2)Subsection (1) shall not apply to—
(a)such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him or her in his or her employment, business or vocation up to a maximum value assessed by the Official Receiver of SCR10,000 or such other amount as may be prescribed or agreed to by resolution of the creditors;
(b)such clothing, bedding, furniture, household equipment and provisions as are necessary to satisfy the basic domestic needs of the bankrupt and his or her family, up to a maximum value assessed by the Official Receiver of SCR10,000 or such other amount as may be prescribed or agreed by resolution of the creditors; and
(c)property held by the bankrupt on trust for any other person.
(3)Property—
(a)in relation to a bankrupt, includes reference to any power exercisable by the bankrupt over or in respect of property in or outside Seychelles for the bankrupt's benefit;
(b)which forms part of the bankrupt's estate shall be subject to the rights of any person other than the bankrupt, and a secured creditor may take possession of and realise or otherwise deal with property over which he or she has a charge, disregarding any rights the secured creditor has given up under section 4 (2) (b) (i) and any rights which have otherwise been given up in accordance with section 302 or in such manner as may be prescribed.
29. Vesting in Official Receiver
On a declaration of bankruptcy by the Court, the bankrupt's estate shall vest in the Official Receiver without the need for any conveyance, assignment or transfer.
30. Property acquired by debtor after declaration of bankruptcy
Subject to section 31, during the period from the date of presentation of a bankruptcy petition up to the discharge of the bankrupt—
(a)all property in or outside Seychelles that the bankrupt acquires or that passes to the bankrupt shall vest in the Official Receiver; and
(b)the powers that the bankrupt could have exercised in, over, or in respect of that property for the bankrupt's benefit shall vest in the Official Receiver.
31. Transaction in good faith and for value
(1)A transaction between the bankrupt and any other person under which, after declaration of bankruptcy, the bankrupt acquires property, or property passes to the bankrupt shall be valid against the Official Receiver where—
(a)the other person deals with the bankrupt in good faith and for value; and
(b)the transaction is completed without an intervention by the Official Receiver.
(2)Where the other person is the bankrupt's bank, a transaction dealing with the bankrupt for value includes—
(a)the receipt by the bank of any money, security, or negotiable instrument from the bankrupt or by the bankrupt's order or direction;
(b)a payment by the bank to the bankrupt or by the bankrupt's order or direction; and
(c)the delivery by the bank of a security or negotiable instrument to the bankrupt or by the bankrupt's order or direction.
(3)A payment of money or delivery of property by a legal representative to, or under direction of, the bankrupt is a transaction for value under subsection (2).
32. Rights under execution or attachment
(1)Where a creditor has commenced execution against movable property of a debtor, or has attached any debt due to him or her, the creditor shall not be entitled to retain the benefit of the execution or attachment against the Official Receiver, unless the execution or attachment is completed prior to the declaration of bankruptcy and the notice of the presentation of any petition for a bankruptcy order by or against the debtor.
(2)For the purposes of this section, an execution against goods is completed by seizure and sale, and an attachment of a debt is completed by receipt of the debt.
33. Duties of usher as to goods seized
(a)Where movables of a debtor are taken in execution and prior to their sale notice is served on the usher that a bankruptcy order has been made against the debtor, the usher shall, on request, deliver the goods to the Official Receiver who may sell the goods or part thereof for the purpose of satisfying the charge.
(b)The costs of execution shall be a charge on the goods delivered.
(a)Where movables of a debtor are sold in execution of a judgment for a sum exceeding SCR10,000, the usher shall deduct the costs of the execution from the proceeds of the sale, and pay the balance to the cashier of the Court who shall retain it for a period of 14 days.
(b)Where during the period referred to in paragraph (a), the cashier of the Court is served with a notice of a bankruptcy petition having been presented against or by the debtor, the cashier of the Court shall hold the proceeds on trust to pay to the Official Receiver.
(c)Where no such notice of a bankruptcy petition is served on the cashier of the Court within the period referred to in paragraph (a) or where notice having been served, the debtor is not declared bankrupt on such petition or on any other petition of which the cashier of the Court has notice, the cashier of the Court may deal with the proceeds as if no notice had been served on him or her.
(3)A person who purchases the goods in good faith from the usher shall acquire a good title against the Official Receiver.
34. Bona fide transaction without notice
Subject to sections 318 to 336, nothing in this Act shall, in the case of a bankruptcy, invalidate—
(a)any payment by the bankrupt to any of his or her creditors;
(b)any payment or delivery to the bankrupt;
(c)any conveyance or assignment by the bankrupt for valuable consideration; or
(d)any contract, dealing or transaction by or with the bankrupt for valuable consideration,
(i)the payment, delivery, conveyance, assignment, contract, dealing, or transaction, as the case may be, takes place before declaration of bankruptcy; and
(ii)the person to, by or with whom the payment, delivery, conveyance, assignment, contract, dealing, or transaction was made, executed, or entered into, had no notice of the presentation of a petition for a bankruptcy order, at the time of the payment, delivery, conveyance, assignment, contract, dealing or transaction.
35. Interest in immovable property
(1)Any interest of the bankrupt in any immovable property shall on a declaration of bankruptcy vest in the Official Receiver without any need for conveyance, assignment or transfer.
(2)The sale of any immovable property or interest in immovable property which vests in Official Receiver shall be effected in accordance with section 65 and the Immovable Property (Judicial Sale) Act shall not apply to the sale.
36. Transfer of shares and other securities
(1)The Official Receiver may transfer the following property belonging to the bankrupt in the same manner as the bankrupt could have transferred it had the bankrupt not been declared bankrupt—
(a)securities in a company;
(b)securities of the Government;
(c)securities issued by a local authority;
(d)shares in ships; and
(e)any other property transferable in the records of a company, office, or person.
(2)A person whose act or consent is required for the transfer of the property referred to in subsection (1) (a) to (e) shall, on the Official Receiver's request, do such act or give such consent required to complete the transfer.
(3)In the case of a transfer by the Official Receiver of securities in a company, a shareholder to whom the securities is to be offered for sale under the memorandum and articles of the company and who agrees to purchase shall pay reasonable price for the securities, whether or not the memorandum and articles provides a procedure for fixing the price.
(4)The Official Receiver may disclaim any liability under shares owned by the bankrupt in any company if the transaction is set aside in accordance with sections 324 and 325.
37. Goods on hire purchase
(1)Where a bankrupt purchased goods under a hire purchase agreement before declaration of bankruptcy and a creditor—
(a)took possession of the goods within 21 days before declaration of bankruptcy, and is still in possession of the goods after declaration of bankruptcy; or
(b)takes possession of the goods after declaration of bankruptcy,
the creditor shall not sell, dispose or part with the possession of the goods, until 28 days after the date of declaration of bankruptcy, unless the Official Receiver consents in writing to the creditor selling or disposing or parting with the possession of the goods before the expiry of that period.
(2)The Official Receiver may, notwithstanding any provision of the hire purchase agreement—
(a)within 28 days from the date of declaration of bankruptcy, introduce a buyer for the goods and the bankrupt's indebtedness to the creditor shall be reduced to the extent of the amount paid by the buyer to the creditor for the goods; or
(b)at any time before the creditor sells or agrees to sell the goods following the expiry of the period of 28 days from the date of declaration of bankruptcy, settle the bankrupt's obligations as debtor and retain the goods as part of the bankrupt's estate.
(3)Where—
(a)a creditor has taken possession of goods purchased under a hire purchase agreement, whether before or after declaration of bankruptcy of the debtor; and
(b)the Official Receiver has not taken any action under subsection (2),
the creditor may prove in the bankruptcy for the amount that the creditor was entitled to recover from the bankrupt as debtor.
(a)a bankrupt purchased goods under a hire purchase agreement before declaration of bankruptcy; and
(b)at the time of declaration of bankruptcy the creditor—
(i)has not taken possession of the goods; or
(ii)has taken possession of the goods and has not sold or disposed of or parted with possession of the goods,
the creditor may assign the goods to the Official Receiver, and, if he or she does so, may prove in the bankruptcy for the net balance due to the creditor under the agreement.
Sub-Part V – Duties of bankrupt
38. General duties of bankrupt
A bankrupt shall, to the extent possible, assist in the realisation of his or her property and the distribution of the proceeds amongst his or her creditors, and shall—
(a)provide a complete and accurate list of his or her property, creditors and debtors and such other information regarding his or her property as the Official Receiver may require;
(b)appear before the Official Receiver whenever called upon to do so and, if required by the Official Receiver, confirm any statement by affidavit;
(c)disclose to the Official Receiver as soon as practicable any property which may be acquired by him or her before his or her discharge and which would be divisible amongst his or her creditors;
(d)furnish to the Official Receiver such information as may be required regarding his or her expenditure and sources of income after declaration of bankruptcy;
(e)execute such power of attorney, transfer or other instrument, in relation to his or her property and the distribution of the proceeds amongst his or her creditors, as may be required by the Official Receiver, prescribed or directed by the Court;
(f)deliver, on demand, to the Official Receiver any of his or her property in his or her possession and control that is divisible amongst his or her creditors;
(g)deliver, on demand, to the Official Receiver any property that is acquired by him or her before his or her discharge; and
(h)immediately notify the Official Receiver in writing of any change of his or her address, employment or name.
39. Financial information to be provided
(1)A bankrupt shall provide the Official Receiver with the information and details that are necessary to prepare a statement of the financial position of the bankrupt's estate.
(2)Where required by the Official Receiver, the bankrupt shall, within a reasonable time of declaration of bankruptcy, prepare and deliver to the Official Receiver full, true and detailed accounts and statements of his or her financial position showing particulars of—
(a)trading and stocktaking; and
(b)profit and losses during the period of 3 years preceding his or her declaration of bankruptcy.
(3)For the purposes of subsection (2),—
(a)the Official Receiver shall give the bankrupt full access to the bankrupt's books and papers in the Official Receiver's possession; and
(b)where the Official Receiver thinks it necessary, the bankrupt shall be assisted by an accountant at the expense of the bankrupt's estate.
Sub-Part VI – Control of bankrupt
40. Financial contribution to payment of debts
(1)Where required by the Official Receiver, a bankrupt shall pay an amount or periodic amounts during the bankruptcy as a contribution towards payment of the bankrupt's debts on such terms and conditions as the Official Receiver may direct.
(2)The Official Receiver shall, before requiring a bankrupt to make a payment under subsection (1),—
(a)have regard to all the circumstances of the bankruptcy and the bankrupt's conduct, earning power, responsibilities and prospects; and
(b)make reasonable allowance for the maintenance of the bankrupt and his or her dependents.
(3)The Court may, on the application of the bankrupt or any creditor,—
(a)vary, suspend or cancel the bankrupt's obligations to make a payment under subsection (1); or
(b)remit any arrears owed by the bankrupt.
(4)Where the bankrupt defaults in making any payment required under subsection (1), the burden shall be on the bankrupt in any proceedings arising out of the default to show that the default was not malicious.
41. Bankrupt may not enter business
An undischarged bankrupt shall not, without the consent of the Official Receiver or the Court, directly or indirectly—
(a)enter into, carry on, or take part in the management or control of any business;
(b)be employed by a relative of the bankrupt; or
(c)be employed by a company, trust, trustee, or any partnership or unincorporated association that is carrying on a business that is managed or controlled by a relative of the bankrupt.
42. Search and seizure of property
(1)Notwithstanding any other enactment, the Court may issue a search warrant to the Official Receiver where there is reason to believe that any relevant property is concealed in any premises or place.
(2)The warrant under subsection (1) may authorise the Official Receiver as well as any person required to assist him or her, to—
(a)enter and search any premises or place;
(b)seize and take possession of any relevant property; and
(c)where necessary, use reasonable force to enter the locality, premises or place.
(3)Where authorised by a warrant issued by the Court, the Official Receiver as well as any other person required to assist him or her, may—
(a)seize any of the bankrupt's property in the custody or possession of the bankrupt or of any other person;
(b)with a view to seize the bankrupt's property—
(i)break open any building or room of the bankrupt where the bankrupt is believed to be found;
(ii)break open any building or receptacle of the bankrupt where the bankrupt's property is believed to be found; and
(iii)take possession of the bankrupt's property found in the building, room or receptacle.
(4)Where the Official Receiver is satisfied that a person, other than the bankrupt, is entitled to any relevant property, the Official Receiver may retain possession of the property for a period of 28 days from the date on which he or she first receives notice that the person claims to be entitled to the property, or such further period as the Court may allow.
(5)The Official Receiver may copy or extract any information relating to the property, conduct or dealings of the bankrupt from any document, computer, facsimile machine or other electronic equipment containing such information.
43. Vacate property vested in Official Receiver
Notwithstanding any other enactment, the Official Receiver may require a bankrupt and any of his or her relatives to vacate any land or building that is part of the property vested in the Official Receiver, and the bankrupt and any of his or her relatives shall comply with the request.
44. Right to inspect document
A bankrupt may, at any convenient time, inspect and take extracts or copies of—
(a)his or her accounting records;
(b)his or her answers to questions put to him or her by the Official Receiver;
(c)his or her statement of affairs;
(d)all proofs of debt;
(e)the minutes of any creditors' meeting; and
(f)the record of any examination of the bankrupt.
45. No power of recovery of property or release or discharge
Subject to sections 30 and 31, after declaration of bankruptcy, a bankrupt and any person, other than the Official Receiver, who claims through or under the bankrupt, shall not recover, or give release or discharge in relation to, any property forming part of the bankrupt's estate.
46. Defeating beneficial interest
(1)After a declaration of bankruptcy, a bankrupt shall not execute a power of appointment, or any other power vested in the bankrupt, where the result is to defeat or destroy any contingent or other estate or interest in any property to which the bankrupt may otherwise be entitled at any time before his or her discharge.
(2)The restriction imposed on the bankrupt by subsection (1) shall, subject to sections 30 and 31 apply before and after the bankrupt is discharged.
47. Bankrupt's bank accounts
(1)Where a bank ascertains that a customer of the bank is an undischarged bankrupt, it shall—
(a)as soon as praticable, notify the Official Receiver of any account that the bankrupt holds with the bank; and
(b)not pay any money out of the account, except as provided under subsection (2).
(2)The bank may pay money out of the account where—
(a)the bank is authorised by an order of the Court or directed by the Official Receiver to do so; or
(b)the bank has notified the Official Receiver that the bank holds such an account and has not, within 1 month of such notice, received any instructions from the Official Receiver.
48. Allowance to bankrupt
(1)After a declaration of bankruptcy, the Official Receiver may make an allowance out of the property of a bankrupt to the bankrupt, or any dependent of the bankrupt, for the support of the bankrupt and his or her dependents.
(2)After a declaration of bankruptcy, the Official Receiver may allow a bankrupt to retain, for the immediate maintenance of the bankrupt and his or her dependents, any money up to a maximum of SCR10,000 or such sum as may be prescribed that the bankrupt has in his or her possession or in a bank account at the time of declaration of bankruptcy.
49. Examination of bankrupt and others
(1)The Official Receiver may at any time, before or after a bankrupt's discharge—
(a)summon any of the persons specified in subsection (2) to appear before him or her to be examined on oath; and
(b)require that person to produce and surrender to the Official Receiver any document in his or her possession or control that relates to the bankrupt's property or dealings.
(2)The persons referred to in subsection (1) are—
(a)the bankrupt;
(b)the bankrupt's spouse;
(c)a person known or suspected to possess any of the bankrupt's property or any document relating to the affairs or property of the bankrupt;
(d)a person believed to owe the bankrupt money;
(e)a person believed to be able to give information regarding—
(i)the bankrupt; or
(ii)the bankrupt's trade, dealings, property, income from any source, or expenditure; and
(f)a trustee of a trust of which the bankrupt is a settlor or of which the bankrupt is or has been a trustee.
(3)The examination of a person under this section shall be recorded in writing and signed by the person examined.
(4)Where a person summoned under subsection (1) does not appear at the appointed time and has no reasonable excuse for his or her non-appearance, the Court may—
(a)on the Official Receiver's application, by warrant, have him arrested and brought for examination before the Court; and
(b)where the Court thinks that his or her evidence is necessary for the purposes of the bankrupt's estate, order him or her to pay all the expenses arising out of his or her arrest and examination.
(5)Subject to subsection (4), a person who is summoned by the Official Receiver for examination shall be paid such expenses for attending the examination as may be prescribed.
(6)A person shall not, without the Court's permission, publish a report of—
(a)any examination of a person summoned by the Official Receiver; or
(b)any matter arising in the course of that examination.
(7)On the Official Receiver's application, the Court may permit publication of a report on such conditions as the Court may impose.
(8)Subsections (1) to (7) shall apply where the Official Receiver has been appointed as the Provisional Receiver of all or part of a debtor's property under section 18, and references in those sections to the bankrupt shall be read as if they were references to the debtor.
50. Public examination of bankrupt
(1)The Court shall hold a public examination of a bankrupt where, at any time before an order for the bankrupt's discharge is made, there is filed with the Court a statement by the Official Receiver, or a copy of a creditors' ordinary resolution, requiring that the bankrupt should be publicly examined.
(2)A copy of the resolution referred to in subsection (1) shall be certified by the Official Receiver or the chairperson of the meeting at which it was passed.
(3)Every public examination of the bankrupt shall be conducted in accordance with the provisions of sections 51 to 63.
51. Notice of public examination
(1)If a public examination of the bankrupt is required under section 50, the Official Receiver shall serve the bankrupt with a notice stating—
(a)that the Official Receiver's statement or the creditor's resolution has been filed with the Court;
(b)that the bankrupt is required to be publicly examined; and
(c)the time and place of the examination.
(2)The Official Receiver shall, at least 7 days prior to the date of the public examination—
(a)advertise the examination in a daily newspaper; and
(b)send a notice of the examination to each creditor.
52. Time for holding public examination
The Court shall hold the public examination of the bankrupt at least 7 days after service of the notice on the bankrupt under section 51(1).
53. Official Receiver to file report before public examination
Prior to the public examination of the bankrupt, the Official Receiver shall file with the Court a report on—
(a)the bankrupt's estate;
(b)the bankrupt's conduct; and
(c)all other matters of which the Court should be informed.
54. Conduct of public examination
(1)The bankrupt shall attend the public examination, and may be examined as to his or her conduct, dealings, and property.
(2)The bankrupt shall, in a public examination, be examined under oath and shall answer all questions that the Court may ask or allow to be asked.
(3)The following persons may examine the bankrupt—
(a)the Official Receiver or attorney for the Official Receiver; and
(b)any creditor who has proved a claim or attorney for the creditor.
55. Record of public examination
(1)The public examination of the bankrupt shall be recorded in writing in such manner as the Court directs.
(2)The record of the examination shall be—
(a)read over to, and signed by, the bankrupt;
(b)available for inspection by any creditor or the creditor's attorney at all reasonable times.
56. When public examination ends
The public examination of a bankrupt shall end when the Court is satisfied that the bankrupt's conduct, dealings and property have been sufficiently investigated and makes an order that the examination has been completed.
57. Bankrupt's failure to attend public examination
If the bankrupt does not appear for the examination at the appointed time and has no reasonable excuse for his or her non-appearance, the Court may—
(a)on the Official Receiver's application, by warrant, cause the bankrupt to be arrested and brought before the Court for examination, and
(b)where the Court is of the opinion that the bankrupt's evidence was necessary for the purposes of the bankrupt's estate, order the bankrupt to pay all the expenses arising out of the arrest and examination.
58. Bankrupt's expenses in attending public examination
Subject to section 57(b), a bankrupt who attends a public examination shall be paid such expenses for attending the examination as may be prescribed.
59. Official Receiver may examine company documents, personnel, and shareholders
(1)If authorised by the Court, the Official Receiver or a person appointed by the Official Receiver may, in relation to a company that is controlled by the bankrupt or an associate examine—
(a)the documents of the company;
(b)any person who is or has been a director, employee, or shareholder of the company, under oath about the company's affairs.
(2)The examination of a person under subsection (1)(b) shall be recorded in writing and signed by the person examined
60. Company controlled by bankrupt or associate
For the purposes of section 59,—
(a)a company is controlled by the bankrupt if the bankrupt or his or her nominee has the power to appoint or remove all the directors of the company or such number of directors holding together a majority of the voting rights at meetings of directors of the company;
(b)associate means any of the following—
(i)the spouse of the bankrupt;
(ii)a relative of the bankrupt;
(iii)the spouse of a lineal ancestor or descendant of the bankrupt.
61. Person to answer all questions during public examination
A person who is examined or questioned under this Act shall answer all questions relating to the bankrupt's conduct, dealings, and property.
62. Non-admissibility of statements in criminal proceedings
(1)Subject to subsection (2), a statement made by a person examined or questioned in a public examination of the bankrupt shall not be admissible in criminal proceedings against the person.
(2)A statement made by a person examined or questioned in a public examination of the bankrupt shall be admissible if—
(a)the person was examined or questioned under oath and is charged with perjury in relation to the statement; or
(b)in the case of the bankrupt, the bankrupt is charged with an offence under section 359 (1)(c).
(1)A person who is examined under this Act may be represented by an attorney.
(2)The person may be examined by his or her attorney, and any answers provided shall form part of the examination.
64. Documents and other records
(1)The Official Receiver may, by notice in writing, require a bankrupt, the bankrupt's spouse, or any other person to deliver to him or her any document relating to the dealings or property of the bankrupt in his or her possession or control.
(2)A person may not, as against the Official Receiver, withhold possession of, or claim a privilege or lien over—
(a)a deed or instrument that belongs to the bankrupt; or
(b)accounting records, accounts, receipts, bills, invoices, or other papers relating to the bankrupt's accounts, trade, dealings, or business.
Sub-Part VII – Powers and duties of Official Receiver
65. Official Receiver's powers in relation to bankrupt's property
(1)The Official Receiver may, on such terms as he or she thinks appropriate,—
(a)sell the bankrupt's property by public auction or public tender or by private contract;
(b)buy in at an auction of the bankrupt's property; or
(c)rescind or vary a contract for the sale of the bankrupt's property.
(2)The Official Receiver shall not sell the bankrupt's property prior to the first creditors' meeting, except where—
(a)the property is perishable or likely to diminish in value;
(b)in the Official Receiver's opinion, the sale of the property may be prejudiced by delay; or
(c)expenses are likely to be incurred due to any delay, and prior to selling the property the Official Receiver consults a creditor or creditors whom the Official Receiver considers to be representative of the interests of creditors.
(3)Where the Official Receiver sells the bankrupt's property by public auction or public tender, the Official Receiver—
(a)may instruct a licensed auctioneer to conduct the sale; and
(b)shall ensure that the sale is advertised at least twice at an interval of 7 days between the advertisements in two daily newspapers and notice of the sale is given to the bankrupt in each case not less than 14 days prior to the date of the sale.
(4)Subject to the provisions of this Act, the Official Receiver may sell the following property of the bankrupt by private contract—
(a)perishable property or property that is likely to diminish in value;
(b)property that is unsold after being offered for sale by public auction or public tender;
(c)property that the Official Receiver considers unnecessary or inadvisable to sell by public auction or public tender, because of its nature, situation, value or other special circumstance;
(d)property authorised by a resolution of creditors to be sold by private contract in accordance with the authority given by the creditors; and
(e)company securities, Government securities and local authority securities, if sold on a securities market operated by a securities exchange licensed under the Securities Act.
(5)A sale of a bankrupt's property by the Official Receiver under this section shall not be—
(a)challenged except on the ground of fraud; and
(b)affected by lack of authority to sell, the improper or irregular exercise of the power of sale.
66. Official Receiver's general powers in relation to bankruptcy
The Official Receiver shall have the power to—
(a)hold property;
(b)commence, continue, discontinue and defend legal proceedings;
(c)with the leave of the Court, continue in the Official Receiver's name legal proceedings commenced by the bankrupt before declaration of bankruptcy;
(d)refer a dispute to arbitration;
(e)compromise debts, claims and liabilities, present or future, actual or contingent, ascertained or not, subsisting or believed to subsist between the bankrupt and any person, on whatever terms as agreed;
(f)make a compromise or an arrangement with creditors, or persons claiming to be creditors, in respect of debts provable in the bankruptcy;
(g)accept as consideration for the sale of any of the bankrupt's property money to be paid in the future, on terms, including security, that the Official Receiver thinks appropriate;
(h)make a compromise or an arrangement in respect of a claim that arises out of or is incidental to, the bankrupt's property, whether it is a claim by the Official Receiver or a claim by a person against the Official Receiver;
(i)carry on the bankrupt's business if it is necessary or advantageous in order to dispose of it, and for that purpose may employ and pay any person, including the bankrupt;
(j)use money in the bankrupt's estate for the repair, maintenance, upkeep or renovation of the bankrupt's property, whether or not the work is necessary to salvage the property;
(k)borrow money whether with or without providing security over the bankrupt's property;
(l)employ any person to do anything that must be done in the course of the administration of the bankruptcy, including the receipt and payment of money;
(m)appoint an attorney;
(n)prove and draw a dividend in respect of any debt due to the bankrupt;
(o)if any of the bankrupt's property cannot be readily or advantageously sold because of its peculiar nature or other special circumstances, divide it in its existing form among the creditors according to its estimated value;
(p)give receipts and sign discharges and releases for any money that the Official Receiver receives, so that the person who pays the money is effectively discharged from any responsibility for how the money is used;
(q)execute a power of attorney, deed or any other document for the purpose of carrying into effect the provisions of this Act;
(r)exercise any authority or power or do any act in relation to the bankrupt's property that the bankrupt could have exercised or done if he or she was not bankrupt; or
(s)in respect of any particular estate of the bankrupt—
(i)appoint an agent to act for the Official Receiver;
(ii)delegate to that agent any or all of the powers conferred by this section;
(iii)revoke the agent's appointment; and
(iv)fix the agent's remuneration, which shall be paid out of the bankrupt's estate.
67. Bank account and investment
(1)The Official Receiver shall have a bank account and pay into such account all money that he or she receives in the capacity of Official Receiver.
(2)The Official Receiver may invest money that is not immediately required to be paid out in the administration of an estate in an investment of a type approved by the Minister, and shall credit to that estate the interest or dividends that accrue on the investment.
68. Official Receiver's discretion
(1)The Official Receiver shall, in exercise of his or her powers in the administration of a bankrupt's property, have regard to the resolutions of the creditors passed at the creditors' meetings.
(2)The Official Receiver or a creditor may apply to the Court for directions where the Official Receiver or creditor believes that a resolution of the creditors—
(a)conflicts with the provisions of this Act or any other enactment; or
(b)is unjust or unfair.
Sub-Part VIII – End of bankruptcy
69. Discharge from bankruptcy
(1)Subject to section 17(4)(c) and this section, a bankrupt is discharged from bankruptcy 1 year from the date of declaration of bankruptcy.
(2)A bankrupt shall not be discharged under subsection (1) where—
(a)the Official Receiver or a creditor has objected under subsection (4) and the objection has not been withdrawn at the expiry of 1 year after declaration of bankruptcy;
(b)the bankrupt has to be publicly examined under section 50 and that examination has not taken place; or
(c)the bankrupt is undischarged from an earlier bankruptcy.
(3)The discharge of a bankrupt under this section shall have the same effect as if the Court made an order for the bankrupt's discharge.
(4)The Official Receiver or a creditor may, with the permission of the Court, object to the discharge of a bankrupt under this section.
(a)An objection to the discharge of a bankrupt may be withdrawn.
(b)A bankrupt is discharged on the withdrawal of an objection—
(i)at the expiry of 1 year after declaration of bankruptcy; and
(ii)where there is no other objection to the discharge that has not been withdrawn.
[section 69(1), (2)(a), and 5(b)(i) amended by section 2(b) of Act 5 of 2015 w.e.f 8 July 2015]
70. Application for discharge
(1)A bankrupt may, at any time, apply to the Court for an order of discharge, unless the Court has previously refused an application for a discharge, and specified the date when the bankrupt may apply again.
(2)The Official Receiver shall, as soon as practicable after the expiry of 1 year from the date of declaration of bankruptcy, summon the bankrupt to be publicly examined by the Court concerning his or her discharge, and the Court shall conduct the examination where—
(a)the Official Receiver or a creditor has objected to the bankrupt's automatic discharge;
(b)the bankrupt is due for automatic discharge but is still undischarged from an earlier bankruptcy; or
(c)the bankrupt has been required to be publicly examined under section 50 and that examination has not taken place.
[section 70(2) amended by section 2(c) of Act 5 of 2015 w.e.f 8 July 2015]
71. Official Receiver's report
(1)The Official Receiver shall prepare a report and file it with the Court where—
(a)the bankrupt has applied for a discharge; or
(b)the Official Receiver has summoned the bankrupt to be examined under section 59(1).
(2)The report of the Official Receiver under subsection (1) shall include—
(a)the bankrupt's affairs;
(b)the causes of the bankruptcy;
(c)the bankrupt's performance of his or her duties under this Act;
(d)the manner in which the bankrupt has complied with an order of the Court;
(e)the bankrupt's conduct before and after declaration of bankruptcy; and
(f)any other matter that would assist the Court in making a decision as to the bankrupt's discharge.
72. Notice of opposition to discharge
(1)Where a creditor intends to oppose to the discharge of the bankrupt on a ground that is not stated in the Official Receiver's report, the creditor shall give notice of opposition to the Official Receiver and the bankrupt.
(2)The notice under subsection (1) shall—
(a)set out the ground for opposing the discharge; and
(b)be given within the prescribed time.
73. Grant or refusal of discharge
(1)Where the Court hears an application for discharge, or conducts the examination of the bankrupt under section 59(1), the Court may, having regard to all the circumstances of the case,—
(a)discharge the bankrupt immediately;
(b)discharge the bankrupt on such conditions as it thinks appropriate;
(c)discharge the bankrupt and suspend the order for a period of time;
(d)discharge the bankrupt, with or without conditions, at a specified future date; or
(e)refuse an order of discharge, in which case the Court may specify the earliest date when the bankrupt may apply again for discharge.
(2)Where the Court discharges the bankrupt on the condition that the bankrupt consents to any judgment, and the bankrupt consents, the Court may vary the judgment as it thinks appropriate.
74. Engaging in business after discharge
(1)The Court may, where it makes an order of discharge or at any earlier time, prohibit the bankrupt from doing any of the following acts after discharge without the Court's permission—
(a)entering into, carrying on, or taking part in the management or control of any business or class of business;
(b)being a director of, or being concerned in, or taking part, directly or indirectly in, the management of any company;
(c)being employed by a relative of the bankrupt; or
(d)being employed by a company, trust or trustee, or a partnership or incorporated association carrying on any business that is managed or controlled by a relative of the bankrupt.
(2)The Court may make an order under subsection (1) for a specified period or otherwise and may at any time vary or cancel the order.
75. Rescission of order of discharge
(1)The Court may, on the application of the Official Receiver or a creditor, rescind the discharge of a bankrupt at any time before the expiry of 2 years after—
(a)in the case of an absolute discharge, the discharge;
(b)in the case of a discharge that is conditional or suspended, the discharge takes effect.
(2)The Court may rescind a discharge of a bankrupt under subsection (1), where—
(a)the bankrupt has been given notice of the application; and
(b)the Court is satisfied that facts have been established that—
(i)were not known to the Court when it made the order of discharge; and
(ii)had the Court known of them, it would have been justified in refusing a discharge or discharging the bankrupt conditionally.
(3)The Court shall not rescind a discharge where the facts relied on in the application, at the time when the Court made an order discharging the bankrupt—
(a)were known to the applicant; or
(b)could have been known if the applicant had inquired with reasonable diligence.
(4)The rescission of a discharge shall not prejudice or affect any right or remedy that any person, other than the bankrupt, would have had if the discharge had not been rescinded.
(5)Any property that has been acquired by the bankrupt after discharge and that is vested in the bankrupt at the date of the rescission shall—
(a)vest in the Official Receiver subject to any encumbrance; and
(b)be applied by the Official Receiver to pay debts that the bankrupt has incurred since the date of the discharge.
(6)Where the Court rescinds a discharge, the Court may, at any time, make a new order of discharge, whether absolute, suspended, or conditional.
76. Absolute discharge
(1)A bankrupt who is unable to comply with the condition of his or her discharge may apply to the Court for an absolute discharge.
(2)The Court may discharge the bankrupt absolutely where it is satisfied that the bankrupt's inability is due to circumstances for which the bankrupt should not reasonably be held responsible.
77. Release from debts
(1)On discharge of a bankrupt, the bankrupt is released from all debts provable in the bankruptcy except those listed in subsection (2).
(2)The bankrupt shall not be released from—
(a)a debt or liability incurred by fraud or breach of trust to which the bankrupt was a party;
(b)a debt or liability for which the bankrupt has obtained forbearance through fraud to which the bankrupt was a party;
(c)an amount payable for which the bankrupt is liable under section 40 or 73; or[section 77(2)(c) amended by section 2(d) of Act 5 of 2015 w.e.f 8 July 2015]
(d)an amount payable under a maintenance order.
78. Other consequences of discharge
(1)A discharge of a bankrupt shall be conclusive evidence of the bankruptcy and of the validity of the proceedings in the bankruptcy.
(2)A discharge of a bankrupt shall not release any person who, at the date of declaration of bankruptcy, was—
(a)a business partner of the bankrupt;
(b)a co-trustee with the bankrupt;
(c)jointly bound or had made any contract with the bankrupt; or
(d)a surety or in the nature of surety for the bankrupt.
(3)A discharged bankrupt shall assist the Official Receiver, as required by the Court or the Official Receiver, in the realisation and distribution of the bankrupt's property that is vested in the Official Receiver.
(4)Where the Court has refused to discharge a bankrupt or discharged a bankrupt or suspended the discharge, that information shall be entered in the public register maintained by the Official Receiver.
(5)The Official Receiver shall not be sued in relation to any publication made under this section in good faith and with reasonable care.
79. Cancellation of declaration of bankruptcy
(1)The Court may, on the application of the Official Receiver or any interested person, cancel a declaration of bankruptcy where the Court—
(a)considers that the bankrupt should not have been declared bankrupt;
(b)is satisfied that the bankrupt's debts have been fully paid or satisfied;
(c)considers that the liability of the bankrupt to pay his or her debts should be reviewed because there has been a substantial change in the bankrupt's financial circumstances since the date of declaration of bankruptcy; or
(d)has approved a post-bankruptcy composition under sections 81 to 86.
(2)In the case of an application on one of the grounds referred to in subsection (1) (a) to (c) by an applicant other than the Official Receiver—
(a)a copy of the application shall be served on the Official Receiver in such manner and within such time as the Court may direct; and
(b)the Official Receiver may appear at the hearing of the application as a party to the proceedings.
(3)A declaration of bankruptcy shall be cancelled—
(a)in the case of an application on the ground specified in subsection (1)(a), from the date of declaration of bankruptcy;
(b)in the case of an application on one of the grounds specified in subsection (1)(b) to (d), from the date of the Court's order of cancellation.
(4)In the case of an application for cancellation on the ground that the declaration of bankruptcy should not have been made because of a defect in form or procedure, the Court may, in addition to cancelling the declaration of bankruptcy, correct the defect and order a new hearing of the application for declaration of bankruptcy.
(5)Where the Court cancels the declaration of bankruptcy on one of the grounds specified in subsection (1)(a) to (c), the Court may, on the Official Receiver's application, fix an amount as reasonable remuneration for the Official Receiver's services and order that it be paid, in addition to any costs that may be awarded.
80. Consequences of cancellation
(1)On the cancellation of a declaration of bankruptcy, all property of the bankrupt vested in the Official Receiver on bankruptcy and not sold or disposed of by the Official Receiver shall revest in the bankrupt without the need for any conveyance, transfer, or assignment.
(2)Any contract, sale, disposition, or payment duly made or anything duly done by the Official Receiver before the cancellation of a declaration of bankruptcy—
(a)shall not be affected by the cancellation; and
(b)shall have effect as if it had been made or done by the bankrupt while no declaration of bankruptcy was in force.
Sub-Part IX – Post bankruptcy composition
81. Resolution to accept composition
(1)The creditors of a bankrupt may accept a post-bankruptcy composition in satisfaction of the debts due to them from the bankrupt by passing a special resolution that contains the terms of the composition.
(2)The notice of the meeting to pass the special resolution shall—
(a)state the terms of the composition; and
(b)be accompanied by a report of the Official Receiver.
82. Procedure for approval of composition
(1)The Court may, on being satisfied with the terms of the composition, approve the composition.
(2)A composition approved by the Court shall bind all the creditors in respect of provable debts due to them by the bankrupt.
(3)The Court may refuse to approve a composition where it considers that—
(a)section 81 has not been complied with;
(b)the terms of the composition are not reasonable or are not calculated to benefit all the creditors;
(c)the bankrupt is guilty of misconduct that justifies the Court in refusing, qualifying, or suspending the bankrupt's discharge;
(d)the composition does not provide for the payment, before any other debts are paid, of debts that have priority under section 340; or
(e)there are other reasons for not approving composition.
(4)The bankrupt or the Official Receiver may apply to the Court to approve a composition.
(5)Notice of the application under subsection (4) shall be given to each creditor.
(6)Prior to approving a composition the Court shall—
(a)obtain a report from the Official Receiver as to the terms of the composition and the bankrupt's conduct; and
(b)hear any objection by or on behalf of a creditor.
(7)The Court may, where it approves a composition, correct or supply any formal or accidental error or omission without altering the substance of the composition.
(8)As soon as practicable after the Court has approved a composition, the bankrupt and the Official Receiver shall execute the terms of the composition.
(9)The Court shall, where it has approved the composition, on payment to the Official Receiver of such commission as may be prescribed—
(a)direct that the composition is entered and filed with the Court; and
(b)cancel the declaration of bankruptcy.
(10)A cancellation of a declaration of bankruptcy under subsection (9)(b) shall not revest the bankrupt's property in the bankrupt in accordance with section 80(1).
(11)Where the Court has approved the composition and cancelled the declaration of bankruptcy, the bankrupt's property to which the composition relates vests and shall be dealt with as provided for in the composition.
83. Unpaid balance of debt obtained by fraud
(1)A bankrupt who makes a composition with his or her creditors remains liable for the unpaid balance of a debt where—
(a)the bankrupt, by means of fraud—
(i)incurred or increased the debt; or
(ii)on or before the date of the composition, obtained forbearance on the debt; and
(b)the creditor has not agreed to the composition.
(2)In subsection (1) (b), a creditor does not agree to the composition solely by proving the debt and accepting payment of a distribution of the assets in the estate.
84. Time for approval and execution of composition
(a)The Court shall approve the composition under section 81 (1) within 1 month after the special resolution referred to in section 81 is passed.
(b)The bankrupt shall execute the deed of composition within 10 working days after the Court approves the composition or within such time as the Court may allow.
(2)Where a composition is not approved or executed within the time referred to in subsection (1)—
(a)immediately on the expiry of the period referred to in subsection (1), the proceedings in the bankruptcy shall resume as if there had been no special resolution in terms of section 81 accepting a composition; and
(b)the period referred to in subsection (1) shall not be taken into account in the calculation of any period of time specified for any purpose of this Act.
85. Endorsement of composition by Court
(1)The Court shall, after the deed of composition has been entered on the file of the Court,—
(a)endorse on the deed that it has been entered and filed with the Court; and
(b)if requested by the Official Receiver, deliver the deed to the Official Receiver.
(2)The Official Receiver shall, as soon as practicable after the deed of composition has been entered in the file of the Court—
(a)take all steps necessary to have any vesting provided for in the deed registered or recorded in the appropriate registry or office, and then return the deed to the file of the Court; and
(b)subject to the provisions of the deed, give possession to the bankrupt or the trustee under the composition, as the case may be, of—
(i)the bankrupt's property; or
(ii)so much of the bankrupt's property as the Official Receiver possesses and that, under the composition, revests in the bankrupt or the trustee.
86. Enforcement of composition
The Court may—
(a)on the application of a creditor, order that default in payment of any composition approved by the Court be remedied; or
(b)on the application of an interested person, enforce the provisions of any composition approved by the Court.
Part III – Alternative to formal bankruptcy
For the purposes of this Part—
(a)"debt" means a debt provable in an insolvent's bankruptcy;
(b)"insolvent" means a person who has not been formally declared bankrupt, but who is unable to pay his or her debts as they become due.
88. Offer by insolvent
(1)An insolvent may make an offer to his or her creditors for the payment or satisfaction of his or her debts.
(2)The offer under subsection (1) may include an offer—
(a)to assign all or any of the insolvent's property to a representative for the benefit of the creditors;
(b)to pay the insolvent's debts by installments;
(c)to compromise the insolvent's debts at less than 100 cents in the rupee;
(d)to pay the insolvent's debts at a future time; or
(e)for any other arrangement for the satisfaction of the insolvent's debts.
(3)The offer under subsection (1) may include any condition for the benefit of the creditors and be accompanied by a security or guarantee.
(4)The offer under subsection (1) shall be—
(a)in the prescribed form; and
(b)accompanied by a statement of affairs that complies with section 13(4);
(c)signed by the insolvent; and
(d)endorsed by the person who is willing to act as representative for the creditors, and include a statement by the person that he or she is willing to act as representative.
89. Filing of offer with Court
(1)The offer shall be filed with the Court and the creditors' representative referred to in section 88(4)(d) shall become the Provisional Receiver.
(2)The insolvent shall not, while waiting for the decision of the creditors and the Court, withdraw the offer or any security or guarantee tendered, unless he or she obtains the prior permission of the Court.
(3)The time when the offer is filed with Court shall be the time when the claims of creditors are determined for the purposes of an offer under this Part.
90. Meeting of creditors to consider offer
(1)The Provisional Receiver shall, as soon as practicable, call a meeting of creditors by posting to every known creditor at the creditor's last known address—
(a)a notice of the date, time, and place of the meeting;
(b)a summary of the insolvent's assets and liabilities;
(c)a copy of the offer and particulars of any security or guarantee;
(d)a form of proof of debt; and
(e)a postal vote in the prescribed form.
(2)A creditor who has proved a claim in the prescribed manner may vote on the offer by sending a postal vote to the Provisional Receiver prior to or at the meeting of creditors.
(3)Where the Provisional Receiver receives a postal vote prior to or at the meeting, the postal vote shall have effect as if the creditor had been present and voted at the meeting.
(4)The Provisional Receiver shall be the chairperson of the meeting of creditors.
(5)The creditors may, at the meeting of creditors,—
(a)examine the insolvent;
(b)accept the offer with or without amendment by passing a resolution that sets out the offer in its final form; and
(c)confirm the Provisional Receiver as receiver, or appoint another person who is willing to act as receiver, in which case that person becomes the receiver.
(6)The resolution accepting the offer shall be decided by a majority in number and 75 per cent in value of the creditors who—
(a)vote; and
(b)are personally present or are represented at the meeting by proxy.
(7)Where the insolvent consents, the creditors may include in the offer terms for the supervision of the insolvent's affairs.
(8)Where the creditors at a meeting under this section do not accept the offer—
(a)the Provisional Receiver shall return the offer to the Court with his or her signed endorsement "Not accepted by creditors"; and
(b)the Court shall cancel the offer.
91. Court to approve offer after acceptance by creditors
(1)After the offer has been accepted by the creditors, the receiver shall, as soon as practicable—
(a)apply to the Court for approval of the offer; and
(b)send notice of the hearing of the application to the insolvent and to every known creditor.
(2)The Court shall, prior to approving an offer to the insolvent's creditors, hear any objection that is made by or on behalf of a creditor.
(3)The Court may refuse to approve the offer where it considers that—
(a)any provision of this Part has not been complied with;
(b)the terms of the offer are not reasonable or are not calculated to benefit the creditors; or
(c)for any other reason it is not expedient that the offer be approved.
(4)The Court shall not approve an offer to the insolvent's creditors where it does not provide for the payment, before any other debts are paid, of—
(a)the debts having priority under section 340 if the insolvent was declared bankrupt;
(b)the receiver's fees and expenses that are properly incurred by the receiver in respect of the offer; and
(c)costs incurred by a person other than the insolvent in organising and conducting a meeting of creditors for the purpose of voting on an offer to the insolvent's creditors.
(5)When approving the offer, the Court may correct or supply any formal or accidental error or omission, without altering the substance of the offer.
(6)An offer to an insolvent's creditors that is approved by the Court is binding on all the creditors whose debts are provable under this Part and are affected by the terms of the offer.
92. Enforcement
(1)Subject to subsection (3), a creditor whose debt is provable under this section shall not take any of the steps listed in subsection (2) in respect of the debt—
(a)after the Court has approved the offer; and
(b)when the offer is in force.
(2)The steps referred to in subsection (1) are—
(a)filing a creditor's application for the insolvent's declaration of bankruptcy;
(b)proceeding with a creditor's application for the insolvent's declaration of bankruptcy that was filed before the offer was filed;
(c)enforcing any civil remedy against the insolvent or his or her property; and
(d)commencing any legal proceedings in respect of the debt.
(3)A creditor may take any of the steps listed in subsection (2) with the permission of the Court on such terms as the Court thinks appropriate.
93. Duties of insolvent and receiver
(1)After the Court has approved the offer,—
(a)the insolvent shall take all steps necessary to put the offer into effect; and
(b)the receiver shall—
(i)take control of the property that is the subject of the offer;
(ii)administer and distribute the property according to the terms of the offer; and
(iii)generally, give effect to the offer.
(2)The receiver may sell the property that is the subject of the offer—
(a)where the offer specifies the mode of sale, according to the terms of the offer; or
(b)where the offer does not specify the mode of sale, according to section 65.
(3)The receiver shall file with the Court a summary of receipts and payments—
(a)for each period of 6 months following the Court's approval of the offer, within 1 month after the expiry the period; and
(b)for the period between the last period of 6 months and the date when the receiver ceases to act, within 1 month after the receiver ceased to act.
94. Cancellation or variation of offer
(1)The Court may, at any time after it has approved an offer to an insolvent's creditors, where it is satisfied that a ground referred to in subsection (2) applies—
(a)on the application of the receiver or any creditor, vary or cancel the offer;
(b)if asked to do so by the applicant or any other creditor, declare the insolvent bankrupt.
(2)The grounds referred to in subsection (1) are—
(a)the insolvent's statement of affairs accompanying the offer did not substantially set out the true position or the insolvent gave wrong or misleading answers at his or her examination, and it was unlikely that the offer would have been accepted if the insolvent had disclosed the true facts;
(b)the insolvent has failed to carry out or comply with the terms of the offer;
(c)the creditors generally will suffer injustice or undue delay if the offer proceeds; and
(d)for any other reason the offer should be varied or cancelled.
(3)On cancellation of the offer, unless the Court otherwise orders, all property of the insolvent vested in the receiver and not sold or disposed of by the receiver shall vest, without the need for any conveyance, transfer, or assignment—
(a)in the insolvent; or
(b)if the Court cancels the offer and declares the insolvent bankrupt, in the Official Receiver.
(4)An order cancelling the offer, or cancelling the offer and declaring the insolvent bankrupt, shall not prejudice or affect the validity of any contract, sale, disposition, or payment duly made or anything duly done under the offer when it was in force.
(5)Where the insolvent files an application for his or her own declaration of bankruptcy, the offer shall be cancelled as if it was cancelled by the Court.
Part IV – Winding up of companies
Sub-Part I - General
95. Modes of winding up
(1)The winding up of a company may be—
(a)by an order of the Court; or
(b)voluntary.
Sub-Part II - Winding up by the Court
96. Grounds for winding up by the Court
A company may be wound up by the Court if—
(a)the company has by special resolution resolved that the company be wound up by the Court;
(b)the company does not commence its business within a year from its incorporation or suspends its business for a whole year;
(c)the company is unable to pay its debts;
(d)the company is a proprietary company and a ground exists on which the Court may make an order expelling a member, other than the petitioner, from membership of the company;
(e)the directors have acted in the affairs of the company in their own interests rather than in the interests of the shareholders as a whole, or in any other manner which is unfair or unjust to other shareholders;
(f)the directors or managers of the company have acted to conceal the assets of the company or remove the assets of the company outside the jurisdiction with intent to defeat the creditors;
(g)the period, if any, fixed for the duration of the company by its memorandum and articles has expired or the event, if any, on the occurrence of which the memorandum and articles provides that the company is to be dissolved, has occurred; or
(h)the Court is of opinion that it is just and equitable that the company should be wound up.
97. Meaning of inability to pay debts
A company shall be deemed to be unable to pay its debts if—
(a)a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding SCR 10,000 then due, has served on the company, by leaving it at the registered office of the company, a demand under his or her hand requiring the company to pay the sum so due, and the company has for three weeks thereafter neglected to pay the sum, or to secure or compound for it to the reasonable satisfaction of the creditor; or
(b)execution or other process issued on a judgment, decree or order of the Court in favour of a creditor of the company is returned unsatisfied in whole or in part; or
(c)it is proved to the satisfaction of the Court that—
(i)the debts of the company immediately due exceed in total the value of the company's readily realisable assets, that is to say, its holdings of cash, bank notes, treasury bills, securities quoted on a securities exchange in Seychelles or on a recognised overseas securities exchange, and money deposited at a bank in Seychelles being money which is repayable on demand or upon not more than 14 days' notice; or
(ii)the present value of all the debts and liabilities of the company after discounting the amount of those which are not immediately due at the rate of five per cent per annum from the date when they will or may become due exceeds the value of the company's readily realisable assets plus the present value of its other assets after discounting the realisable value of those assets at the rate of five per cent per annum from the earliest date when it is likely that they would be realised if the company were wound up; or
(d)the Court, taking into account the contingent and prospective liabilities of the company, is satisfied that the company is unable to pay its debts.
98. Petitioners
(1)A petition for the winding up of a company, whether or not it is being wound up voluntarily, shall be presented to the Court in accordance with the provisions of this section, by—
(a)the company;
(b)any creditor or creditors including any contingent or prospective creditor or creditors;
(c)any shareholder;
(d)any contributory or any person who is the heir of a deceased contributory or representative in bankruptcy of the estate of a contributory;
(e)any debenture holder;
(f)a liquidator;
(g)where the company is in reorganisation, an administrator under section 220(2)(b);
(h)two or more persons referred to in paragraphs (a) to (g) above; or
(i)the Registrar under section 190(3) of the Companies Act.
(2)The petition for the winding up of a company on the ground set out in section 96(d) shall be presented by a shareholder of the company.
(3)Where a petition for the winding up of a company is presented by a contingent or prospective creditor, or a contributory who is not a shareholder or a member of the company, the Court shall not fix the petition for hearing until—
(a)such security for cost has been given as the court thinks reasonable; and
(b)a prima facie case for the winding up has been established to the satisfaction of the court.
(4)Where a company is being wound up voluntarily and a liquidator has not been appointed, a winding up petition may be presented by the Official Receiver or by any other person authorised under the provisions of this section, but the Court shall not make a winding up order on the petition unless it is satisfied that the voluntary winding up cannot be continued with due regard to the interests of the creditors or contributories.
(5)The person who applied to the Court for the winding up of a company may have a caution stating the date of the winding up petition and the name of the petitioner entered against every parcel of land of which the company is the registered proprietor under the Land Registration Act.
(6)The holder of a power of attorney of a person referred to in subsection (1) (b), (c) and (d), may present the petition accompanied by a copy of the power of attorney and a certificate signed by the attorney certifying that the power of attorney is current and has not been revoked.
99. Preliminary costs
(1)Where a person, other than a company, a liquidator or an administrator, presents a petition under section 98 and a winding up order is made, that person shall at his or her own cost prosecute all proceedings in the winding up until a liquidator is appointed.
(2)The liquidator shall, unless the Court otherwise directs, reimburse the petitioner out of the assets of the company, the reasonable costs incurred by the petitioner under subsection (1).
(3)Where a winding up order is made on the petition of a company, a liquidator or an administrator, the costs incurred under subsection (1) shall, unless the Court otherwise directs, be paid out of the assets of the company as if they were the costs of any other petitioner.
100. Power of Court on presentation of petition for winding up
(1)On hearing a winding up petition, the Court may—
(a)allow the petition and make a winding up order;
(b)dismiss the petition;
(c)adjourn the hearing of the petition conditionally or unconditionally;
(d)in the case of a company in reorganisation, adjourn the petition under section 244(2); or
(e)make any order it thinks fit.
(2)The Court shall not refuse to make a winding up order on the ground that the assets of the company have been mortgaged or charged, or are subject to privileges under articles 2101, 2102 or 2103 of the Civil Code, to a total amount equal to, or in excess of, the value of those assets, or that the company has no assets.
(3)Subject to subsection (4), where the winding up petition is presented by a creditor, shareholder, contributory or debenture holder of the company on the ground that it is just and equitable that the company should be wound up, or by a shareholder of the company on the ground set out in section 96(d), the Court shall make a winding up order if it is of the opinion that—
(a)the petitioner is entitled to relief either by winding up the company or by some other means; and
(b)in the absence of any other remedy it would be just and equitable that the company should be wound up.
(4)The Court shall not make a winding up order in the circumstances referred to in subsection (3), if it is of the opinion that some other remedy is available to the petitioner and that he or she is acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy.
(5)The Court may at the hearing of a winding up petition, adjourn the petition for not more than 14 days and direct the Official Receiver to prepare a report for the Court, with a copy being provided to the company and the petitioner, as to whether it is appropriate in the circumstances for the company to be placed in reorganisation under Part VI.
(6)Where the Court dismisses a winding up petition and considers that the petition is frivolous or vexatious and should not to have been brought, it may award costs against the petitioner.
101. Commencement of winding up by the Court
(1)Where, prior to the presentation of a winding up petition to the Court, a resolution has been passed by the company for voluntary winding up, the winding up of the company shall be deemed to have commenced at the time of the passing of the resolution, and unless the Court otherwise directs, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken.
(2)In any other case, the winding up of a company by the Court shall be deemed to commence at the time of presentation of the winding up petition.
102. Stay of proceedings
(1)At any time after the presentation of a winding up petition, and before a winding up order is made, the company, or the petitioner or any of the petitioners, or any creditor, shareholder, contributory, liquidator, administrator or debenture holder, may, if any action or proceeding is pending against the company, apply to the Court to restrain further proceedings in the action or proceeding, and the Court may stay or restrain the proceedings on such terms as it thinks fit.
(2)When a winding up order has been made, or a provisional liquidator has been appointed, no action or proceeding shall be continued or commenced against the company except by leave of the Court, and subject to such terms as the Court may impose.
103. Avoidance of disposition of company's property
(1)Any disposition of the assets of the company and any transfer of shares, or alteration in the status of the members or shareholders of the company, made after the commencement of the winding up, shall, unless the Court otherwise orders, be void.
(2)An application may, prior to or after the making of a winding up order, be made to the Court to sanction a transaction to which this section relates.
104. Lodging and service of winding up order
(1)The petitioner shall, within 7 days after the making of a winding up order—
(a)deliver a copy of the order to the Official Receiver;
(b)cause a copy of the order to be served on the secretary of the company or on such other person or in such manner as the Court directs; and
(c)deliver a copy of the order to the liquidator with a statement that the requirements of this section have been complied with.
(2)The company shall forward a copy of the winding up order to the Registrar, who shall make a minute thereof in the records relating to the company.
(3)A winding up order shall contain as part thereof an inhibition upon all dispositions of and dealings with land of which the company is the registered proprietor under the Land Registration Act, except dispositions and dealings by the liquidator in exercise of the powers conferred on him or her by this Act, and upon production of a copy of the winding up order, the officer responsible for keeping the land register shall enter the inhibition contained therein against every parcel of land of which the company is the registered proprietor.
105. Custody and control or vesting of company's assets
(1)Where a winding up order has been made or where a provisional liquidator has been appointed, the liquidator, or the provisional liquidator, as the case may be, shall take into his or her custody, or under his or her control, all the assets to which the company is or appears to be entitled.
(2)Where a company is being wound up, the Court may on the application of the liquidator by order direct that all or any part of the assets of whatsoever description belonging to the company or held by trustees, agents or other persons on its behalf shall vest in the liquidator by his or her official name, and thereupon the assets to which the order relates shall vest accordingly, and the liquidator may, after giving such indemnity, if any, as the Court may direct, bring or defend in his or her official name any action or other legal proceeding which relates to those assets or which it is necessary to bring or defend for the purpose of effectually winding up the company and recovering its assets.
(3)On the service of an order appointing a provisional liquidator or liquidator on any financial institution, issuer of securities or any other person holding property or securities on behalf of or in the name of the company, institution, issuer of securities or person shall hold the property for and at the discretion of the provisional liquidator or liquidator, as the case may be.
(4)Where an order is made under subsection (2), the liquidator shall, within 7 days after the order is made—
(a)lodge with the Registrar a copy of the order; and
(b)where the order relates to immovable property, deliver a copy of the order to the Land Registrar.
(5)An order under subsection (2) shall not have the effect of transferring or otherwise vesting immovable property until the appropriate entries are made with respect to the vesting by the Land Registrar.
106. Statement of affairs
(1)Where the Court has made a winding up order or appointed a provisional liquidator, the persons referred to under subsection (2) shall, unless the Court otherwise orders prepare and submit to the Official Receiver a statement of affairs of the company showing the particulars of its assets, debts, and liabilities, the names, residences, and occupations of its creditors, the securities held by them respectively, the dates when the securities were respectively given, the privileges to which they are respectively entitled, and such other information as the Official Receiver may require.
(2)The statement under subsection (1) shall be made and supported by affidavit by one or more persons who are at the relevant date directors and by the secretary of the company, or by such of the following persons as the Official Receiver may, subject to the direction of the Court, require, being a person who—
(a)is or has been an officer of the company;
(b)has taken part in the formation of the company at any time within 1 year prior to the relevant date;
(c)is or has been in the employment of the company, or has been in the employment of the company within the said period, and is in the opinion of the Official Receiver capable of giving the information required; or
(d)is or has been within the said period an officer of or in the employment of a company, which is, or within the said period was, an officer of the company to which the statement relates.
(3)The statement under subsection (1) shall be submitted within 14 days from the relevant date, or within such time as the Official Receiver or the Court may for special reasons appoint.
(4)The Official Receiver shall cause a copy of the statement referred to in subsection (1) to be delivered to the liquidator, if one has been appointed.
(5)Any person making or concurring in making the statement and declaration required by this section shall be allowed, and shall be paid by the Official Receiver, liquidator or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and declaration as the Official Receiver may consider reasonable, subject to an appeal to the Court.
(6)Any person stating himself or herself, in writing, to be a creditor, shareholder, contributory or debenture holder of the company shall be entitled by himself or herself or by his or her agent at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of this section and to obtain a copy thereof or extract therefrom.
(7)In this section the expression "the relevant date" means in a case where a provisional liquidator is appointed, the date of his or her appointment, and, in a case where no such appointment is made, the date of the winding up order.
107. Report by the Official Receiver
(1)Where a winding up order is made, the Official Receiver shall, as soon as practicable after receipt of the statement of affairs or, in the case where the Court orders that no statement shall be submitted, as soon as practicable after the date of the order, submit a preliminary report to the Court—
(a)as to the amount of capital issued, subscribed, and paid up of the company, and the estimated amount of its assets and liabilities; and
(b)if the company has failed, as to the causes of the failure; and
(c)whether in his or her opinion further inquiry is desirable as to any matter relating to the promotion, formation, or failure of the company, or the conduct of its business.
(2)The Official Receiver may, if he or she thinks fit, make a further report, or further reports, stating the manner in which the company was formed, and whether in his or her opinion any fraud or breach of duty has been committed by any person in its promotion or formation, or by any director or other officer of the company or by any other person in relation to the company since its formation, and any other matters which in his or her opinion it is desirable to bring to the notice of the Court.
108. Documents in possession of receiver
(1)A receiver shall not be required to hand over to a liquidator any record or document that the receiver requires for the purpose of exercising any power or performing any function as receiver in relation to property of a company in winding up.
(2)A liquidator may, by notice in writing, require a receiver to—
(a)make such record and document available for inspection at any reasonable time; and
(b)provide copies, or extracts from, such record and document.
(3)The liquidator shall pay to the receiver reasonable expenses incurred in complying with a requirement of the liquidator under subsection (2).
(4)A receiver shall not, as against the liquidator of a company, claim or enforce a lien over a record or document of the company.
(5)This section shall not apply to a company in a members' voluntary winding up, unless the winding up has been converted into a creditors' voluntary winding up or a winding up by the Court.
109. Documents creating charge over property
(1)A person may be required to give a document to a liquidator under section 108 even where possession of the document creates a charge over property of a company.
(2)Production of the document to the liquidator shall not prejudice the existence or priority of the charge, but the liquidator shall make the document available to the person entitled to it for the purpose of dealing with or realising the charge or the secured property.
110. Duty to identify and deliver property
A present or former director or employee of a company in winding up shall—
(a)forthwith after the commencement of winding up, give the liquidator details of any property of the company in his or her possession or under his or her control; and
(b)on being required to do so by the liquidator, forthwith or within such time as may be specified by the liquidator, deliver the property to the liquidator or such other person as the liquidator may direct, or dispose of the property in such manner as the liquidator may direct.
111. Provision of essential services
(1)For the purposes of this section – "essential service" means—
(a)the retail supply of electricity;
(b)the supply of water; or
(c)telecommunications services.
(2)Notwithstanding any other enactment, a provider of an essential service shall not—
(a)refuse to provide the service to a liquidator, or to a company in winding up, by reason of the company's default in paying charges due for the service in relation to a period prior to the commencement of the winding up; or
(b)make it a condition of the provision of the service to a liquidator, or to a company in winding up, that payment be made of outstanding charges due for the service in relation to a period prior to the commencement of the winding up.
(3)The charges incurred by a liquidator for the provision of an essential service consist in expenses incurred by the liquidator for the purposes of section 341.
112. Provisional liquidator
(1)The Court may appoint the Official Receiver or any other qualified person as provisional liquidator at any time after the presentation of a winding up petition, if—
(a)there are reasonable grounds to believe that the company is unable to pay its debts; or
(b)any of the property of the company available to meet its debts is at risk of being removed from Seychelles.
(2)Where a provisional liquidator is appointed by the Court under subsection (1), the Court may restrict his or her powers in such manner as it thinks fit by the order appointing him or her or by a subsequent order, subject to any restriction so imposed, the provisional liquidator shall have the same powers and be subject to the same liabilities as a liquidator appointed after the making of a winding up order.
113. Appointment of liquidator
(1)The Court may appoint a liquidator or liquidators for the purpose of conducting the proceedings in winding up a company and performing such duties in relation to the winding up as are specified in this Act and such additional duties as the Court shall impose.
(2)If prior to making a winding up order in respect of a company the Court has appointed a provisional liquidator, he or she shall upon the making of the order continue to be the liquidator of the company unless and until the Court orders otherwise, and any restrictions on his or her powers imposed by the Court when he or she was the provisional liquidator shall cease to be operative.
(3)Where a winding up order is made—
(a)the Official Receiver shall by virtue of his or her office become the provisional liquidator, and shall continue to act as such until he or she or another person becomes liquidator and is capable of acting as such;
(b)unless the Court otherwise orders, the Official Receiver shall summon separate meetings of the creditors and shareholders of the company for the purpose of determining whether or not an application is to be made to the Court for appointing a liquidator in the place of the Official Receiver;
(c)the Court may make any appointment and order required to give effect to any such determination, and, if there is a difference between the determinations of the meetings of the creditors and shareholders, the Court shall decide the difference and make such order as the Court may think fit;
(d)where the court does not appoint a liquidator, the Official Receiver shall be the liquidator of the company;
(e)the Official Receiver shall by virtue of his or her office be the liquidator during any vacancy.
(4)A liquidator shall be described—
(a)where a person other than the Official Receiver is liquidator, by the style of "the liquidator"; and
(b)where the Official Receiver is liquidator, by the style of "the Official Receiver and liquidator",
of the particular company in respect of which he or she is appointed, and not by his or her individual name.
(5)A meeting of creditors under this section shall be called and conducted in accordance with section 126 and sections 282 to 294.
(6)Where the names and addresses of all creditors are not known to the Official Receiver, public notice of the meeting shall be advertised in at least one daily newspaper.
(7)The Official Receiver shall not be required to call a meeting of creditors under subsection (3) (b) where—
(a)he or she considers, having regard to the assets and liabilities of the company, the likely result of the winding up of the company and any other relevant matters, that no such meeting should be held; and
(b)he or she gives notice in writing to the creditors stating—
(i)that he or she does not consider that a meeting should be held;
(ii)the reasons for his or her views; and
(iii)that no such meeting will be called unless a creditor gives notice in writing to the liquidator, within 28 days after receiving the notice, requiring a meeting to be called; and
(c)no notice requiring the meeting to be called is received by the Official Receiver within that period.
(8)A notice under subsection (7)(b) shall be given to every known creditor at the time the Official Receiver would have been required to send the report and notice referred to in that subsection if it were applicable.
114. Provisions as to liquidator other than the Official Receiver
(1)Where a person other than the Official Receiver is appointed liquidator, the person shall—
(a)not act as liquidator until he or she has given—
(i)written notice of his or her appointment to the Registrar;
(ii)security for the proper performance of his or her duties in the prescribed manner to the satisfaction of the registrar of the Court; and
(iii)satisfactory evidence to the Official Receiver that he or she holds professional indemnity insurance; and
(b)shall give the Official Receiver such information and such access to and facilities for inspecting the books and documents of the company, and generally such aid as the Official Receiver may require for the performance of his or her duties under this Act.
(2)Subsection (1) shall not apply to a provisional liquidator unless he or she continues to be the liquidator of the company after the winding up order is made.
115. General provisions as to liquidators
(1)A person other than the Official Receiver who is appointed provisional liquidator or liquidator shall not be qualified for appointment where he or she—
(a)is or has been an officer, auditor or employee of the company or any related corporation during the preceding 2 years;
(b)is a minor, a bankrupt or a person under any mental impairment; or
(c)has been a receiver of the company during the preceding 2 years.
(2)For the purposes of subsection (1)(a), an auditor means the auditor or partner of the audit firm appointed as auditor of the company.
(3)A liquidator appointed by the Court may resign or, on cause shown, be removed by the Court.
(4)A vacancy in the office of a liquidator appointed by the Court, shall be filled by the Court.
(5)If more than one liquidator is appointed by the Court, the Court shall declare whether any act required or authorised to be done by the liquidator under the provisions of this Act is to be done by all or any one or more of the persons appointed.
(6)Every liquidator shall pay all money received by him or her into such bank as the Court may direct, and shall not pay any sums received by him or her as liquidator into his or her private bank account.
(7)If any liquidator at any time retains for more than 10 days a sum exceeding SCR5000, or such other amount as the Court in any particular case authorises him or her to retain, then, unless he or she explains the retention to the satisfaction of the Court, he or she shall pay interest on the amount so retained in excess at the rate of twenty per cent per annum, and shall be liable to disallowance of all of such or part of his or her remuneration as the Court may think just, and to be removed from his or her office by the Court, and shall be liable to pay any expenses incurred by reason of his or her default.
(8)Sections 38 and 39 of the Companies Act shall apply to a liquidator, or to each of two or more liquidators, as though he or she or each of them were a managing director of the company.
116. Remuneration of liquidator
(1)A provisional liquidator or liquidator other than the Official Receiver shall be entitled to receive remuneration approved by the Court on presentation of a claim, whether provisional or final, at such rates and intervals as may be determined.
(2)A liquidator other than the Official Receiver shall be entitled to receive such remuneration at such rates as may be determined—
(a)subject to subsection (2)(b), by agreement between the liquidator and the committee of inspection;
(b)failing such agreement or where there is no committee of inspection, but subject to subsection (4), by a resolution, passed at a meeting of creditors, by a majority of not less than 75 per cent in value and one half in number of the creditors present in person or by proxy and voting at the meeting and whose debts have been admitted for the purpose of voting, convened by the liquidator by a notice to each creditor accompanied by a statement of all expenses incurred by the liquidator and the amount of remuneration sought by him or her.
(3)Where the remuneration of a liquidator is determined in the manner specified in subsection (2)(a), the Court may, on the application of a shareholder or shareholders whose shareholding represents not less than 10 per cent of the issued capital of the company made within 14 days of determination, confirm or vary the determination.
(4)Where the remuneration of a liquidator is determined in the manner specified in subsection (2)(b) the Court may, on the application of the liquidator or a shareholder referred to in subsection (3), made within 14 days of determination, confirm or vary the determination.
117. Main duty of liquidator
(1)Subject to section 118, the main duty of the liquidator is to act in a reasonable and efficient manner so as to—
(a)take possession of, protect, realise, and distribute the assets, or the proceeds of the realisation of the assets, of the company to its creditors in accordance with this Act; and
(b)where there are surplus assets remaining, distribute them, or the proceeds of the realisation of the surplus assets, in accordance with sections 347 to 348.
[Note: There is no section 117(2) in the Act as Gazetted.]
118. Liquidator not required to act in certain circumstances
Notwithstanding anything to the contrary in this Part—
(a)except where a charge is surrendered or taken to be surrendered, a liquidator may carry out any duty or exercise any power in relation to property that is subject to a charge; and
(b)where—
(i)a company is wound up by order of the Court; and
(ii)has no assets available for distribution to creditors of the company,
the liquidator shall not, without the consent of the Registrar, carry out any duty or exercise any power in connection with the winding up which is likely to involve incurring any expense.
119. Powers of liquidator
(1)The liquidator shall have power with the sanction of the Court or the committee of inspection to—
(a)bring or defend any action or other legal proceeding in the name and on behalf of the company;
(b)carry on the business of the company, so far as may be necessary for the beneficial