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Bankruptcy Act

Chapter 25

Citation
Chapter 25
Date
Language
English
Type
Ordinance
Tanzania

Bankruptcy Act

Chapter 25

  • Published in Tanzania Government Gazette
  • Commenced on 25 February 1930
  • [This is the version of this document at 30 November 2019.]
  • [Note: This legislation has been thoroughly revised and consolidated under the supervision of the Attorney General's Office, in compliance with the Laws Revision Act No. 7 of 1994, the Revised Laws and Annual Revision Act (Chapter 356 (R.L.)), and the Interpretation of Laws and General Clauses Act No. 30 of 1972. This version is up-to-date as at 31st July 2002.]
[Ords. Nos. 9 of 1930; 45 of 1943; 45 of 1947; 36 of 1952; 20 of 1958; 39 of 1960; Acts Nos. 1 of 2008; 1 of 2018; G.Ns. Nos. 231 of 1961; 478 of 1962; 64 of 1966]An Act relating to bankruptcy.

Part I – Preliminary provisions

1. Short title

This Act may be cited as the Bankruptcy Act.

2. Interpretation

In this Act, unless the context requires otherwise—"affidavit" includes statutory declaration, affirmation and at­testation on honour;"available act of bankruptcy" means any act of bankruptcy available for a bankruptcy petition at the date of the presentation of the petition on which the receiving order is made;"bailiff" means any person charged with the execution of any process;"the court" means the court having jurisdiction in bankruptcy under this Act;"debt provable in bankruptcy" or "provable debt" includes any debt or liability by this Act made provable in bankrupt­cy;"gazetted" means published in the Gazette;"general rules" include forms;"goods" includes all chattels personal;"local bank" means any bank in the United Republic;"Official Receiver" means the Administrator-General ap­pointed pursuant to the provisions of the Administrator­-General (Powers and Functions) Act;[Cap. 27]"ordinary resolution" means a resolution decided by a majori­ty in value of the creditors present, personally or by proxy, at a meeting of creditors and voting on the resolution;"prescribed" means prescribed by general rules within the meaning of this Act;"property" includes money, goods, things in action, land, and every description of property whether movable or im­movable and whether situated in Tanzania or elsewhere; also obligations, casements, and every description of es­tate, interest, and profit, present or future, vested or con­tingent, arising out of or incident to property as above defined;"reciprocating country" means any country declared a reci­procating country under section 150 of this Act;"reciprocating court" means a court having jurisdiction in bankruptcy or insolvency in a reciprocating country;"relative by consanguinity or affinity" means a husband, wife, grandparent, parent, son, daughter, brother, sister, uncle, aunt, nephew, niece, cousin or adopted child, and in­cludes any person who is married to any of the fore­going;"resolution" means ordinary resolution;"secured creditor" means a person holding a mortgage charge or lien on the property of the debtor, or any part thereof, as a security for a debt due to him from the debtor;"special resolution" means a resolution decided by a majority in number and three-fourths in value of the creditors present, personally or by proxy, at a meeting of creditors and voting on the resolution;"trustee" means the trustee in bankruptcy of a debtor's estate.[Ord. No. 45 of 1947 s. 2; Act No. 1 of 2018 s. 4; Cap. 27]

Part II – Proceedings from act of bankruptcy to discharge act of bankruptcy

3. Act of bankruptcy

(1)A debtor commits an act of bankruptcy in each of the following cases—
(a)if in Tanzania or elsewhere he makes a con­veyance or assignment of his property to a trustee or trustees for the benefit of his creditors general­ly;
(b)if in Tanzania or elsewhere he makes a fraudulent conveyance, gift, delivery, or transfer of his prop­erty, or of any part thereof;
(c)if in Tanzania or elsewhere he makes any con­veyance or transfer of his property, or any part thereof, or creates any charge thereon. which would under this or any other Act be void as a fraudulent preference if he were adjudged bank­rupt;
(d)if with intent to defeat or delay his creditors he does any of the following things, namely, departs out of Tanzania, or being out of Tanzania remains out of Mainland Tanzania, or departs from his dwelling-house, or otherwise absents himself, or begins to keep house;
(e)if execution against him has been levied by sei­zure of his goods in any civil proceedings in any court, and the goods have been either sold or held by the bailiff for twenty-one days, and that, where an interpleader summons has been taken out in re­gard to the goods seized, the time elapsing be­tween the date at which such summons is taken out and the date at which the proceedings on such summons are finally disposed of, settled, or aban­doned, shall not be taken into account in calculat­ing such period of twenty-one days;
(f)if he files in the court a declaration of his inability to pay his debts or presents a bankruptcy petition against himself;
(g)if a creditor has obtained a final judgment or final order against him for any amount, and, execution thereon not having been stayed, has served on him in Tanzania, or, by leave of the court, elsewhere, a bankruptcy notice under this Act, and he does not within seven days after service of the notice, in case the service is effected in, and in case the ser­vice is effected elsewhere, then within the time limited in that behalf by the order giving leave to effect the service, either comply with the require­ments of the notice or satisfy the court that he has a counter-claim, set-off or cross-demand which equals or exceeds the amount of the judgment debt or sum ordered to be paid, and which he could not set up in the action in which the judgment was ob­tained, or the proceedings in which the order was obtained.
(h)if a debtor gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts.
(1A)For the purposes of paragraph (g) of subsection (1) and section 4 of this Act, any person who is, for the time being, entitled to enforce a final judgment or final order, shall be deemed to be a creditor who has obtained a final judgment or final order;[Cap. 4. s8]
(2)In this Act, the expression "a debtor" unless the context implies otherwise, includes any person, whether do­miciled in Tanzania or not, who at the time when any act of bankruptcy was done or suffered by him—
(a)was personally present in Tanzania;
(b)ordinarily resided or had a place of residence in Tanzania;
(c)was carrying on business in Tanzania, personally, or by means of an agent or manager; or
(d)was a member of a firm or partnership which car­ried on business in Tanzania,
and for the purposes of Part IX hereof includes a person against whom bankruptcy proceedings have been instituted in a reciprocating country and who has property in Tanzania.

4. Bankruptcy notice

A bankruptcy notice under this Act shall be in the prescribed form, and shall require the debtor to pay the judg­ment debt or sum ordered to be paid in accordance with the terms of judgment or order, or to secure or compound for it to the satisfaction of the creditor or the court, and shall state the consequences of non-compliance with the notice, and shall be served in the prescribed manner:Provided that, a bankruptcy notice—
(a)may specify an agent to act on behalf of the credi­tor in respect of any payment or other thing re­quired by the notice to be made to or done to the satisfaction of, the creditor;
(b)shall not be invalidated by reason only that the sum specified in the notice as the amount due ex­ceeds the amount actually due, unless the debtor within the time allowed for payment gives notice to the creditor that he disputes the validity of the notice on the ground of such misstatement; but, if the debtor does not give such notice, he shall be deemed to have complied with the bankruptcy no­tice if within the time allowed he takes such steps as would have constituted a compliance with the notice had the actual amount due been correctly specified therein.

Receiving order

5. Jurisdiction to make receiving order

Subject to the conditions hereinafter specified, if a debtor commits an act of bankruptcy the court may, on a bankruptcy petition being presented either by a creditor or by the debtor, make an order, in this Act called a receiving order, for the protection of the estate.

6. Conditions on which creditor may petition

(1)A creditor shall not be entitled to present a bankruptcy against a debtor unless—
(a)the debt owing by the debtor to the petitioning creditor, or, if two or more creditors join in the pe­tition, the aggregate amount of debts owing to the several petitioning creditors, amounts to one thou­sand shillings;
(b)the debt is a liquidated sum, payable either imme­diately or at some certain future time;
(c)the act of bankruptcy on which the petition is grounded has occurred within three months before presentation of the petition; and
(d)the debtor is domiciled in Tanzania, or within a year before the date of the presentation of the peti­tion has ordinarily resided or had resided, or had a dwelling house or place of business or has carried on business in Tanzania, personally or by means of an agent or manager, or is or within the said pe­riod has been a member of a firm or partnership of persons which has carried on business in Tanza­nia, by means of a partner or partners, or an agent or manager,
nor, where a deed of arrangement has been executed, shall a creditor be entitled to present a bankruptcy petition founded on the execution of the deed, or on any other act committed by the debtor in the course of, or for the purpose of the pro­ceedings preliminary to execution of the deed, in cases where he is prohibited from so doing by any law for the time being in force relating to deeds of arrangement.
(2)Where the petitioning creditor is a secured credi­tor, he must in his petition either state that he is willing to give up his security for the benefit of the creditors in the event of the debtor being adjudged bankrupt, or give an estimate of the value of his security, and in the latter case, he may be ad­mitted as a petitioning creditor to the extent of the balance of the debt due to him, after deducting the value so estimated in the same manner as if he were an unsecured creditor.

7. Proceedings and order on creditor's petition

(1)A creditor's petition shall be verified by affida­vit of the creditor, or of some person on his behalf having knowledge of the facts and served in the prescribed manner.
(2)At the hearing the court shall require proof of the debt of the petitioning creditor, of the service of the petition, and of the act of bankruptcy, or, if more than one act of bank­ruptcy is alleged in the petition, of some one of the alleged acts of bankruptcy and, if satisfied with proof, may make a receiving order in pursuance of the petition.
(3)Where the court is not satisfied with the proof of the petitioning creditor's debt, or of the act of bankruptcy, or of the service of the petition, or is satisfied by the debtor that he is able to pay his debts, or that for another sufficient cause no order ought to be made, the court may dismiss the petition.
(4)When the act of bankruptcy relied on is non­compliance with a bankruptcy notice to pay, secure, or com­pound for a judgment debt, or sum ordered to be paid, the court may, if it thinks fit, stay or dismiss the petition on the ground that an appeal is pending from the judgment or order.
(5)Where the debtor appears on the petition, and de­nies that he is indebted to the petitioner, or that he is indebted to such an amount as would justify the petitioner in presenting a petition against him, the court, on such security (if any) be­ing given as the court may require for payment to the peti­tioner of any debt which may be established against him in due course of law, and of the costs of establishing the debt, may, instead of dismissing the petition, stay all proceedings on the petition for such time as may he required for trial of the question relating to the debt.
(6)Where proceedings are stayed, the court may, if by reason of the delay caused by the stay of proceedings or for any other cause it thinks just, make a receiving order on the petition of some other creditor, and shall thereupon dismiss, on such terms as it thinks just, the petition in which proceed­ings have been stayed as aforesaid.
(7)A creditor's petition shall not, after presentment, be withdrawn without the leave of the court.

8. Debtor’s petition and order thereon

(1)A debtor's petition shall allege that the debtor is unable to pay his debts, and the presentation thereof shall be deemed an act of bankruptcy without the previous filing by the debtor of any declaration of any inability to pay his debts, and the court shall there-upon make a receiving order:Provided however that, such order shall be refused unless the debtor shall have filed with the official receiver his statement of affairs prepared in accordance with the provi­sions of section 16 of this Act.
(2)A debtor's petition shall not, after presentation, be withdrawn without the leave of the court.[Ords. Nos. 45 of 1947 s. 3; 20 of 1958 s. 2]

9. Effect of receiving order

(1)On the making of a receiving order the official receiver shall be thereby constituted receiver of the property of the debtor, and thereafter, except as directed by this Act, no creditor to whom the debtor is indebted in respect of any debt provable in bankruptcy shall have any remedy against the property or person of the debtor in respect of the debt, or shall commence any action or other legal proceedings, unless with the leave of the court and on such terms as the court may im­pose.
(2)This section shall not effect the power of any se­cured creditor to realise or otherwise deal with his security in the same manner as he would have been entitled to realise or deal with it if this section had not been passed.

10. Power to appoint interim receiver

The court may, if it is shown to be necessary for the protection of the estate, at any time after the presentation of a bankruptcy petition, and before a receiving order is made, appoint the official receiver to be interim receiver of the property of the debtor, or of any part thereof, and direct him to take immediate possession thereof or of any part thereof.

11. Power to stay pending proceedings

(1)The court may, at any time after the presenta­tion of a bankruptcy petition, stay any action, execution pro­ceedings or other legal process against the property or person of the debtor, and any court in which are pending against a debtor may, on proof that a bankruptcy petition has been pre­sented by or against the debtor, either stay the proceedings or allow them to continue on such terms as it may think just.
(2)Where the court makes an order staying any action or proceedings, or staying proceedings generally, tile order may be served by sending a copy thereof, under the seal of the court, by post to the address for service of the plaintiff or oth­er party prosecuting such proceeding.

12. Power to appoint special manager

(1)The official receiver of a debtor's estate may, on the application of any creditor or creditors, and if satisfied that the nature of the debtor's estate or business or the inter­ests of the creditors generally require the appointment of a special manager of the estate or business other than the offi­cial receiver, appoint a manager thereof accordingly to act until a trustee is appointed, and with such powers (including any of the powers of a receiver) as may be entrusted to him by the official receiver.
(2)The special manager shall give security and ac­count in such manager as the official receiver may direct.
(3)The special manager shall receive such remunera­tion as the creditors may, by resolution at an ordinary meet­ing, determine or, in default of any such resolution, as may be prescribed.

13. Advertisement of receiving order

Notice of every receiving order, stating the name, residential and business addresses and description of the deb­tor, the date of the order, the court by which the order is made and the date of the petition, shall be gazetted in the prescribed manner.[Ord. No. 45 of 1947 s. 4]

Proceedings consequent on order

14. First meeting of creditors

As soon as may be after the making of a receiving order against a debtor a general meeting of his creditors (in this Act referred to as the first meeting of creditors) shall he held for the purpose of considering whether a proposal for a composition or scheme of arrangement shall be accepted, or whether it is expedient that the debtor shall be adjudged bank­rupt, and generally as to the mode of dealing with the debtors properly.

15. Meetings to be governed by rules

With respect to the summoning of and proceedings at the first and other meetings of creditors, the rules in the First Schedule to this Act shall be observed.

16. Debtor’s statement of affairs

(1)The debtor shall make out and submit to the official receiver a statement of and in relation to his affairs in the prescribed form, verified by affidavit, and showing the particulars of the debtor's assets, debts and liabilities, the names, residences and occupations of his creditors, the securi­ties held by them respectively, the dates when the securities were respectively given, and such further or other information as may be prescribed or as the official receiver may require.
(2)The statement shall be so submitted—
(a)prior to, but not more than three days before the date of the presentation of the debtor's petition, and, upon such submission, the official receiver shall certify to the court under his hand that such statement has been duly submitted to him;
(b)within fourteen days of the date of the receiving order made on the petition of a creditor, but the official receiver may, for special reasons, extend the time.
(3)In the case of a creditor's petition, if the debtor fails without reasonable excuse to comply with the require­ments of this section he shall be guilty of an offence and the court may, on the application of the official receiver, or of any creditor, adjudge the debtor bankrupt, and the debtor shall, in addition to any other punishment to which he may be liable, be guilty of a contempt of court and may be punished accor­dingly.
(4)Any person stating himself in writing to be a credi­tor of the bankrupt may, personally or by agent, inspect the statement at all reasonable times, and take any copy thereof or extract therefrom, but any person untruthfully so stating him­self to be a creditor shall be guilty of a contempt of court, and shall be punishable accordingly on the application of the trus­tee or official receiver.[Ords. Nos. 45 of 1943 s. 5; 20 of 1958 s. 3]

Public examination of the debtor

17. Public examination of debtor

(1)Where the court makes a receiving order, it shall, save as in this Act provided, hold a public sitting, on a day to be appointed by the court, for the examination of the debtor, and the debtor shall attend thereat, and shall be ex­amined as to his conduct, dealings, and property.
(2)The examination shall be held as soon as conve­niently may be after the expiration of the time for the submis­sion of the debtor's statement of affairs.
(3)The court may adjourn the examination from time to time.
(4)Any creditor who has tendered a proof, or his rep­resentative authorised in writing, may question the debtor concerning his affairs and the causes of his failure.
(5)The official receiver shall take part in the examina­tion of the debtor, and for the purpose may employ an advo­cate if he so desires.
(6)Where a trustee is appointed before the conclusion of the examination, he may take part therein.
(7)The court may put such questions to the debtor as it may think expedient.
(8)The debtor shall be examined upon oath, and it shall be his duty to answer all such questions as the court may put or allow to be put to him, and such notes of the examina­tion as the court thinks proper shall be taken down in writing, and shall be read over either to or by the debtor and signed by him, and may thereafter, save as in this Act provided, be used in evidence against him; they shall also be open to the inspection of any creditor at all reasonable times.
(9)Where the debtor refuses to answer or does not an­swer to the satisfaction of the court any question the court may put or allow to be put, the debtor shall be guilty of con­tempt of court and may be punished accordingly.
(10)When the court is of opinion that the affairs of the debtor have been sufficiently investigated, it shall by order declare that his examination is concluded, but such order shall not be made until after the day appointed for the first meeting of creditors.
(11)Where the debtor is a lunatic or suffers from any such mental or physical affliction or disability as in the opi­nion of the court makes him unfit to attend his public exami­nation, the court may make an order dispensing with such ex­amination or directing that the debtor be examined on such terms, in such manner and at such place as to the court seems expedient.[Ord. No. 20 of 1958 s. 7]

Composition or scheme of arrangement

18. Compositions and schemes of arrangement

(1)Where a debtor intends to make a proposal for a composition in satisfaction of his debts, or a proposal for a scheme of arrangement of his affairs, he shall, within four days of submitting his statement of affairs, or within such time thereafter as the official receiver may fix, lodge with the official receiver a proposal in writing, signed by him, embo­dying the terms of the composition or scheme which he is de­sirous of submitting for the consideration of his creditors, and setting out particulars of any sureties or securities proposed.
(2)In such case the official receiver shall hold a meet­ing of creditors, before the public examination of the debtor is concluded, and send to each creditor, before the meeting, a copy of the debtor's proposal, with a report thereon; and if at that meeting a majority in number and three fourths in value of all the creditors who have proved, resolved to accept the proposal, it shall be deemed to be duly accepted by the credi­tors and when approved by the court shall be binding on all the creditors.
(3)The debtor may at the meeting amend the terms of his proposal, if the amendment is, in the opinion of the official receiver, calculated to benefit the general body of creditors.
(4)Any creditor who has proved his debt may assent to or dissent from the proposal by a letter, in the prescribed form, addressed to the official receiver, so as to be received by him not later than the day preceding the meeting, and any such assent or dissent shall have effect as if the creditor had been present and had voted at the meeting.
(5)The debtor or the official receiver may, after the proposal is accepted by the creditors, apply to the court to ap­prove it, and notice of the time appointed for hearing the ap­plication shall be given to each creditor who has proved.
(6)The application shall not be heard until after the conclusion of the public examination of the debtor, and any creditor who has proved, may be heard by the court in opposi­tion to the application, notwithstanding that he may at a meet­ing of creditors have voted for the acceptance of the proposal.
(7)For the purpose of approving a composition or scheme by joint debtors, the court may, if it thinks fit, and on the report of the official receiver that it is expedient so to do, dispense with the public examination of one of the joint deb­tors if he is unavoidably prevented from attending the exami­nation by illness or absence from Tanzania.
(8)The court shall, before approving the proposal, hear a report of the official receiver as to the terms thereof, and as to the conduct of the debtor, and any objections which may be made by or on behalf of any creditor.
(9)Where the court is of opinion that the terms of the proposal are not reasonable, or are not calculated to benefit the general body of creditors, the court shall refuse to approve the proposal.
(10)Where any facts are proved on proof of which the court would be required either to refuse, suspend or attach conditions to the debtor's discharge, were he adjudged bank­rupt, the court shall refuse to approve the proposal, unless it provides reasonable security for the payment of not less than five shillings in the pound on all the unsecured debts provable against the debtor’s estate.
(11)In any other case the court may either approve or refuse to approve the proposal.
(12)Where the court approves the proposal, the ap­proval may be testified by the seal of the court being attached to the instrument containing the terms of the proposed compo­sition or scheme, or by the terms being embodied in an order of the court.
(13)A composition or scheme accepted and approved in pursuance of this section shall be binding on all the credi­tors so far as relates to any debts due to them from the debtor or provable in bankruptcy, but shall not release the debtor from any liability under a judgment against him in an action for seduction or affiliation, or under a judgment against him as a co-respondent in a matrimonial cause, except to such an extent and under such conditions as the court expressly orders in respect of such liability.
(14)A certificate of the official receiver that a compo­sition or scheme has been duly accepted and approved shall, in the absence of fraud, be conclusive as to its validity.
(15)The provisions of a composition or scheme under this section may be enforced by the court on application by any person interested, and any disobedience of an order of the court made on the application shall be deemed a contempt of court.
(16)Where default is made in payment of any instal­ment due in pursuance of the composition or scheme, or if it appears to the court, on satisfactory evidence, that the compo­sition or scheme cannot, in consequence of legal difficulties, or for any sufficient cause, proceed without injustice or undue delay to the creditors or to the debtor, or that the approval of the court was obtained by fraud, the court may, if it thinks fit, on application by the official receiver or the trustee or by any creditor, adjudge the debtor bankrupt, and annul the composi­tion or scheme, but without prejudice to the validity of any sale, disposition or payment duly made or thing duly done, under or in pursuance of the composition or scheme, and where a debtor is adjudged bankrupt under this subsection any debt provable in other respects, which has been contracted before the adjudication, shall be provable in the bankruptcy.
(17)Where under or in pursuance of a composition or scheme a trustee is appointed to administer the debtor's property or manage his business or to distribute the composition, section 28 and Part V of this Act shall apply as if the Trustee were a trustee in a bankruptcy, and as if the terms, "bankrupt­cy," "bankrupt," and "order of adjudication" include respec­tively a composition or scheme of arrangement, a compound­ing or arranging debtor, and an order approving the composi­tion or scheme.
(18)Part III of this Act shall, so far as the nature of the case and the terms of the composition or scheme admit, apply thereto, the same interpretation being given to the words "trustee," "bankruptcy," "bankrupt," and "order of adjudica­tion" as in the last preceding subsection.
(19)No composition or scheme shall be approved by the court which does not provide for the payment in priority to other debts of all debts directed to be so paid in the distribu­tion of the property of a bankrupt.
(20)The acceptance by a creditor of a composition or scheme shall not release my person who under this Act would not be released by an order of discharge if the debtor had been adjudged bankrupt.

19. Effect of composition or scheme

Notwithstanding the acceptance and approval of a composition or scheme, the composition or scheme shall not be binding on any creditor so far as regards a debt or liability from which, under the provisions of this Act, the debtor would not be released by an order of discharge in bankruptcy, unless the creditor assents to the composition or scheme.

Adjudication of bankruptcy

20. Adjudication of bankruptcy where composition not accepted or approved

(1)Where a receiving order is made against a deb­tor, then, if the creditors at the first meeting, or any adjourn­ment thereof by ordinary resolution, resolve that the debtor be adjudged bankrupt, or pass no resolution, or if the creditors do not meet, or if a composition or scheme is not approved in pursuance of this Act within fourteen days after the conclu­sion of the examination of the debtor, or such further time as the court may allow or if the debtor himself with the concur­rence of the official receiver shall consent in writing to be ad­judged bankrupt, the court shall adjudge the debtor bankrupt, and thereupon the property of the bankrupt shall become di­visible among his creditors, and shall vest in a trustee.
(2)Notice of every order adjudging a debtor bankrupt, stating the name, residential and business addresses and de­scription of the bankrupt, and the date of the adjudication, shall be gazetted in the prescribed manner, and the date of the order shall, for the purposes of this Act, be the date of the ad­judication.[Ords. Nos. 45 of 1947 s. 6; 20 of 1958 s. 5]

21. Appointment of trustee

(1)Where a debtor is adjudged bankrupt, or the creditors have resolved that he be adjudged bankrupt, the creditors may by ordinary resolution appoint some fit person, whether a creditor or not, to fill the office of trustee of the property of the bankrupt; or they may resolve to leave his ap­pointment to the committee of inspection hereinafter men­tioned.
(1A)A person shall be deemed not fit to act as trustee of the property of a bankrupt where he has been previously removed from the office of trustee of a bankrupt's property for misconduct or neglect of duty.
(2)The person so appointed (other than the official receiver) shall give security in manner prescribed to the satis­faction of the court, and the court, if satisfied with the securi­ty, shall certify that his appointment has been duly made, un­less the court objects to the appointment on the ground that it has not been made in good faith by a majority in value of the creditors voting, or that the person appointed is not fit to act as trustee, or that his connection with or relation to the bank­rupt, or his estate or any particular creditor makes it difficult for him to act with impartiality in the interests of the creditors generally.
(3)The official receiver may be appointed the trustee by the creditors, and, in such case, there shall be no committee of inspection unless he shall so desire, and, where there is no committee of inspection, the official receiver may do all things which may be done by a trustee with the permission of a committee of inspection.[Ord. No. 45 of 1947 s. 7]
(4)Where the official receiver is so appointed, the court, if satisfied that his appointment has been duly made, shall certify such appointment accordingly.
(5)The appointment of a trustee shall take effect when certified by the court in accordance with the provisions of subsection (2) or subsection (4) of this section.
(6)Where a trustee is not appointed by the creditors within four weeks from the date of the adjudication, or in the event of there being negotiations for a composition or scheme pending at the expiration of those four weeks, then within seven days from the close of those negotiations by the refusal of the creditors to accept. or of the court to approve, the com­position or scheme, the official receiver shall report the matter to the court, and thereupon the court shall appoint some fit person to be trustee of the bankrupt's property, and shall certi­fy the appointment.Provided that, the creditors or the committee of in­spection (if so authorised by resolution of the creditors) may, at any subsequent time, if they think fit, appoint a trustee, and, on the appointment being made and certified, the person ap­pointed shall become trustee in the place of the person ap­pointed by the court.
(7)When a debtor is adjudged bankrupt after the first meeting of creditors has been held, and a trustee has not been appointed prior to the adjudication, the official receiver shall forthwith summon a meeting of creditors for the purpose of appointing a trustee.[Ords. Nos. 45 of 1947 s. 7; 20 of 1958 s. 6; Cap. 4 s. 8]

22. Committee of inspection and procedure of committee

(1)The creditors qualified to vote may. at their first or any subsequent meeting by resolution, appoint a com­mittee of inspection for the purpose of superintending the ad­ministration of the bankrupts property by the trustee:Provided that, if the official receiver has been ap­pointed the trustee by the creditors, the appointment of a committee of inspection shall only be made if the official re­ceiver shall have previously consented thereto.
(2)The committee of inspection shall consist of not more than five nor less than three persons, possessing one or other of the following qualifications—
(a)being a creditor or the holder of a general proxy or general power of attorney from a creditor, provided that no creditor and no holder of a general proxy or general power of attorney from a creditor shall be qualified to act as a member of the com­mittee of inspection until the creditor has provided his debt and the proof has been admitted; or
(b)being a person to whom a creditor intends to give a general proxy or general power of attorney:Provided that, no such person shall be qualified to act as a member of the committee of inspection until he holds such a proxy or power of attorney, and until the creditor has proved his debt and the proof has been admitted.
(3)The committee of inspection shall meet at such times as they shall from time to time appoint, and, failing such appointment, at least once a month; and the trustee or any member of the committee may also call a meeting of the committee as and when he thinks necessary.
(4)The committee may act by a majority of their members present at a meeting, but shall not act unless a ma­jority of the committee are present at the meeting.
(5)Any member of the committee may resign his of­fice by notice in writing signed by him, and delivered to the trustee.
(6)Where a member of the committee becomes bank­rupt or compounds or arranges with his creditors, or is absent from five consecutive meetings of the committee, his office shall thereupon become vacant.
(7)Any member of the committee may be removed by an ordinary resolution at any meeting of creditors of which seven days' notice has been given stating the object of the meeting.
(8)On a vacancy occurring in the office of a member of the committee, the trustee shall forthwith summon a meet­ing of creditors for the purpose of filling the vacancy, and the meeting may by resolution appoint another creditor, or other person eligible as above, to fil the vacancy.
(9)The continuing members of the committee, pro­vided there be not less than two such continuing members, may act notwithstanding any vacancy in their body; and, where the number of members of the committee of inspection is for the time being less than five, the creditors may increase that number so that it does not exceed five.
(10)Where there be no committee of inspection, any act or thing or any direction or permission by this Act, autho­rised or required to be done or given by the committee, may be done or given by the court or the official receiver on the application of the trustee.[Ords. Nos. 45 of 1947 s. 8; 20 of 1958 s. 7]

23. Power to accept composition or scheme after bankruptcy adjudication

(1)Where a debtor is adjudged bankrupt the credi­tors may, if they think fit at any time after the adjudication, by a majority in number and three-fourths in value of all the creditors who have proved, resolve to accept a proposal for a composition in satisfaction of the debts due to them under the bankruptcy, or for a scheme of arrangement of the bankrupt's affairs; and thereupon the same proceedings shall be taken and the same consequences shall ensue as in the case of a composition or scheme accepted before adjudication.
(2)Where the court approves the composition or scheme, it may make an order annulling the bankruptcy and vesting the property of the bankrupt in him or in such other person as the court may appoint, on such terms, and subject to such conditions, if any, as the court may declare.
(3)Where default is made in payment of any instal­ment due in pursuance of the composition or scheme or if it appears to the court that the composition or scheme cannot proceed without injustice or undue delay, or that the approval of the court was obtained by fraud, the Court may, if it thinks fit, on application by any person interested, adjudge the debtor bankrupt, and annual the composition or scheme, but without prejudice to the validity of any sale, disposition or payment duly made, or thing duly done, under or in pursuance of the composition or scheme, and where a debtor is adjudged bank­rupt under this subsection, all debts, provable in other re­spects, which have been contracted before the date of such adjudication, shall be provable in the bankruptcy.

Control over person and property of debtor

24. Duties of debtors as to discovery and realization of property

(1)Every debtor against whom a receiving order is made, shall, unless prevented by sickness or other sufficient cause, attend the first meeting of his creditors, and shall sub­mit to such examination and give such information as the meeting may require.
(2)Every debtor shall give such inventory of his prop­erty, such list of his creditors and debtors, and of the debts due to and from them respectively, submit to such examination in respect of his property or his creditors, attend such other meetings of his creditors, wait at such times on the official receiver, special manager, or trustee, execute such powers of attorney, conveyances, deeds, and instruments and generally do all such acts and things in relation to his property and the distribution of the proceeds amongst his creditors, as may be reasonably required by the official receiver, special manager or trustee, or may be prescribed by general rules, or be di­rected by the court by any special order or orders made in ref­erence to any particular case, or made on the occasion of any special application by the official receiver, special manager, trustee or any creditor or person interested.
(3)Every debtor shall, if adjudged bankrupt, aid, to the utmost of his power, in the realisation of his property and the distribution of the proceeds among his creditors.
(4)Where a debtor wilfully fails to perform the duties imposed on him by this section, or to deliver up possession of any part of his property which is divisible amongst his credi­tors under this Act, and which is for the time being in his pos­session or under his control, to the official receiver or to the trustee, or to any person authorised by the court to take pos­session of it, he shall, in addition to any other punishment to which he may be subject, be guilty of a contempt of court, and may be punished accordingly.

25. Address and particulars of employment to be furnished

(1)Every debtor against whom an order of adjudi­cation is made in Tanzania shall, so long as such order re­mains in force, keep the official receiver or the trustee, as the case may be, informed of his residential and business ad­dresses and shall submit every three months from the date of the said order a return, verified by affidavit, giving full parti­culars as to his employment, salary, earnings and other in­come during the preceding three months.
(2)Any person who fails to comply with the provi­sions of this section commits an offence.[Ords. Nos. 45 of 1947 s. 9; 20 of 1958 s. 8]

26. Arrest of debtor under certain circumstances

(1)The court may, by warrant addressed to any police officer or prescribed officer of the court, cause a debtor to be arrested, and any books, papers, money and goods in his possession to be seized, and to be safely kept as prescribed until such time as the court may order if—
(a)after a bankruptcy notice has been issued under this Act, or after presentation of a bankruptcy peti­tion by or against him, it appears to the court that there is probable reason for believing that he has absconded or is about to abscond, with a view of avoiding payment of the debt in respect of which the bankruptcy notice was issued, or of avoiding service of a bankruptcy petition or of avoiding ap­pearance to any such petition, or of avoiding ex­amination in respect of his affairs, or of otherwise avoiding, delaying or embarrassing proceedings in bankruptcy against him.[Cap 4 s. 8]
(b)after presentation of a bankruptcy petition by or against him, it appears to the court that there is probable cause for believing that he is about to remove his goods with a view of preventing or de­laying possession being taken of them by the offi­cial receiver or trustee, or that there is probable ground for believing that he has concealed or is about to conceal or destroy any of his goods, or any books, documents or writing which might be of use to his creditors in the course of his bank­ruptcy;
(c)after service of a bankruptcy petition on him, or after a receiving order is made against him, he re­moves any goods in his possession above the val­ue of one hundred shillings, without the leave of the official receiver or trustee;
(d)without good cause shown, he fails to attend any examination ordered by the court:
Provided that, no arrest upon a bankruptcy notice shall be valid and protected, unless the debtor before or at the time of his arrest is served with such bankruptcy notice.
(2)No payment or composition made or security given after arrest made under this section shall be exempt from the provisions of this Act relating to fraudulent preferences.

27. Re-direction of debtor’s letters

Where a receiving order is made against a debtor, the court, on the application of the official receiver or trustee, may from time to time order that for such time, not exceeding six months, as the court thinks fit, post letters, telegrams, cablegrams, and other postal articles, addressed to the debtor at any place or places mentioned in the order for re-direction, shall be re-directed, sent or delivered by the Postmaster General of the Tanzania Posts Corporation or the officers act­ing under him, or by any other person in charge of the trans­mission and receipt of telegrams and cablegrams, to the offi­cial receiver, or the trustee, or otherwise as the court directs, and the same shall be done accordingly.

28. Inquiry as to debtor’s conduct dealings and property

(1)The court may on the application of the official receiver or trustee, at any time after a receiving order has been made against a debtor, summon before it the debtor or his wife, or any person known or suspected to have in his posses­sion any of the estate or effects belonging to the debtor, or supposed to be indebted to the debtor, or any person whom the court may deem capable of giving information respecting the debtor, his dealings or property, and the court may require any such person to produce any documents in his custody or power relating to the debtor, his dealings or property.
(2)Where any person so summoned after having been tendered a reasonable sum, refuses to come before the court at the time appointed, or refuses to produce any such documents, having no lawful impediment made known to the court at the time of its sitting and allowed by it, the court may, by warrant, cause him to be apprehended and brought up for examination.
(3)The court may examine on oath; either by word of mouth or by written interrogatories, any person so brought before it concerning the debtor, his dealings, or property.
(4)Where any person on examination before the court refuses to answer or does not answer to the satisfaction of the court any question put to him, he shall be guilty of contempt of court and may be punished accordingly.
(5)Where any person on examination before the court admits that he is indebted to the debtor, the court may, on the application of the official receiver or trustee, order him to pay to the official receiver or trustee, at such time and in such manner as to the court seems expedient, the amount admitted, or any part thereof, either in full discharge of the whole amount in question or not, as the court thinks fit, with or without costs of the examination.
(6)Where any person on examination before the court admits that he has in his possession any property belonging to the debtor, the court may, on the application of the official receiver or trustee, order him to deliver to the official receiver or trustee such property or any part thereof, at such time, and in such manner, and on such terms, as to the court may seem just.
(7)The court may, if it thinks fit order that any person who if in Tanzania would be liable to be brought before it un­der this section shall be examined in any other place of Main­land Tanzania.[Ord. No. 20 of 1958 s. 9]

29. Discharge of bankrupt

(1)A bankrupt may, at any time after being ad­judged bankrupt, apply to the court for an order of discharge and the court shall appoint a day for hearing the application but the application shall not be heard until the public examina­tion of the bankrupt is concluded, and such application shall, except when the court in, accordance with rules under this Act otherwise directs, be heard in open court.
(2)On the hearing of the application the court shall take into consideration a report of the official receiver of Tan­zania or any reciprocating country as to the bankrupt's con­duct and affairs (including a report as to the bankrupt's con­duct during the proceedings under his bankruptcy), and may either grant or refuse an absolute order of discharge, or sus­pend the operation of the order for a specified time, or grant an order of discharge subject to any conditions with respect to any earnings or income which may afterwards become due to the bankrupt, or with respect of his after-acquired property:Provided that, where the bankrupt has committed any offence under this Act or any other offence connected with his bankruptcy whether in Tanzania or any reciprocating country, or where in any case any of the facts hereinafter mentioned are proved to have occurred either in Tanzania or any recipro­cating country the court shall either—
(a)refuse the discharge;
(b)suspend the discharge for such period as the court thinks proper;
(c)suspend the discharge until the debtor shall have paid to his creditors such dividend as the court in its absolute discretion may determine; or
(d)require the bankrupt as a condition of his dis­charge to consent to judgment being entered against him by the official receiver or trustee for any balance or part of any balance of the debts provable under the bankruptcy which is not satis­fied at the date of the discharge, such balance or part of any balance of the debts to be paid out of the future earnings or after-acquired property of the bankrupt in such manner and subject to such conditions as the court may direct; but execution shall not be issued on the judgment without leave of the court, which leave may be given on proof that the bankrupt has since his discharge acquired property or income available towards payment of his debts:
Provided that, if at any time after the expiration of two years from the date of any order made under this section, the bankrupt satisfies the court that there is no reasonable proba­bility of his being in a position to comply with the terms of such order, the court may modify the terms of the order, or of any substituted order, in such manner and upon such condi­tions as it may think fit.
(3)The facts hereinbefore referred to are—
(a)that the bankrupt's assets are not of a value equal to ten shillings in the pound on the amount of his unsecured liabilities, unless he satisfies the court' that the fact that the assets are not of a value equal to ten shillings in the pound on the amount of his unsecured liabilities has arisen from circumstances for which he cannot justly be held responsible;
(b)that the bankrupt has omitted to keep such books of account as are usual and proper in the business carried on by him and as sufficiently disclose his business transactions and financial position within the three years immediately proceeding his bankruptcy:
(c)that the bankrupt has continued to trade after knowing himself to be insolvent;
(d)that the bankrupt has contracted any debt provable in the bankruptcy without having at the time of contracting it any reasonable or probable ground of expectation (proof whereof shall lie on him) of being able to pay it;
(e)that the bankrupt has failed to account satisfactori­ly for any loss of assets or for any deficiency of assets to meet his liabilities;
(f)that the bankrupt has brought on, or contributed to, his bankruptcy by rash and hazardous specula­tions, or by unjustifiable extravagance in living, or by gambling, or by culpable neglect of his busi­ness affairs;
(g)that the bankrupt has put any of his creditors to unnecessary expense by a frivolous or vexatious defence to any action properly brought against him;
(h)that the bankrupt has brought on or contributed to his bankruptcy by incurring unjustifiable expense in bringing any frivolous or vexatious action;
(i)that the bankrupt has, within three months preced­ing the date of the receiving order, when unable to pay his debts as they become due, given an undue preference to any of his creditors;
(j)that the bankrupt has, within three months preced­ing the date of the receiving order, incurred liabili­ties with a view of making his assets equal to ten shillings in the pound on the amount of his unse­cured liabilities;
(k)that the bankrupt has, on any previous occasion, been adjudged bankrupt, or made a composition or arrangement with his creditors;
(l)that the bankrupt has been guilty of any fraud or fraudulent breach of trust;
(m)that the bankrupt has made default in payment of any sum ordered by the court under the provisions of section 55 of this Act.
(4)With a view to removing any legal disqualification on account of bankruptcy which is removed if the bankrupt obtains from the. court his discharge with a certificate to the effect that the bankruptcy was caused by misfortune without any misconduct on his part the court may, if it thinks fit, grant such certificate, but a refusal to grant such certificate shall be subject to appeal.
(5)For the purposes of this section, a bankrupt's assets shall be deemed of a value equal to ten shillings in the pound on the amount of his unsecured liabilities when the court is satisfied that the property of the bankrupt has realised, or is likely to realise, or with due care in realisation might have realised, an amount equal to ten shillings in the pound on his unsecured liabilities, and a report by the official receiver or the trustee shall be prima facie evidence of the amount of such liabilities.
(6)For the purposes of this section, the report of the official receiver shall be prima facie evidence of the state­ments therein contained.
(7)Notice of the appointment by the court of the day for hearing the application for discharge shall be published in the prescribed manner; and sent fourteen days at least before the day so appointed to each creditor who has proved, and the court may hear the official receiver and the trustee, and may also hear any creditor who has proved, or his representative authorised in writing, and at the hearing the court may put such questions to the debtor and receive such evidence as it may think fit.
(8)A discharged bankrupt shall, notwithstanding his discharge, give such assistance as the trustee may require in the realisation and distribution of such of his property as is vested in the trustee, and, if he fails to do so, he shall be guilty of a contempt of court; and the court may also, if it thinks fit, revoke his discharge, but without prejudice to the validity of any sale, disposition or payment duly made or thing duly done subsequent to the discharge but before its revocation.
(9)The powers of suspending and of attaching condi­tions to a bankrupt's discharge may be exercised concurrently.[Ords. Nos. 45 of 1947 s. 10; 20 of 1958 s. 10]

30. Fraudulent settlements

In either of the following cases, that is to say—
(a)in the case of a settlement made before and in con­sideration of marriage where the settlor is not at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settlement; or
(b)in the case of any covenant or contract made in consideration of marriage for the future settlement on or for the settlor's wife or children of any mon­ey or property wherein he had not at the date of his marriage any estate or interest (not being mon­ey or property of or in right of his wife), if the set­tlor is adjudged bankrupt or compounds or ar­ranges with his creditors, and it appears to the court that such settlement, covenant, or contract was made in order to defeat or delay creditors, or was unjustifiable having regard to the state of the settlor's affairs at the time when it was made, the court may refuse or suspend an order of discharge, or grant an order subject to conditions, or refuse to approve a composition or arrangement, as the case may be, in like manner as in cases where the deb­tor has been guilty of fraud.

31. Failure to apply for discharge

Where the bankrupt does not appear on the day fixed for the hearing of his application for discharge or on such subsequent day as the court may direct, he shall be guilty of a contempt of court and may be punished accordingly.[Ords. Nos. 45 of 1947 s. 11; 39 of 1960 s. 2]

32. Effect of order of discharge

(1)An order of discharge shall not release the bankrupt—
(a)from any debt on a recognisance nor from any debt with which the bankrupt may be chargeable at the suit of the United Republic or of any person for any offence against any law relating to any branch of the general revenue of the United Re­public, or at the suit of the bailiff or other public officer on a bail bond entered into for the appear­ance of any person prosecuted for any such of­fence; and he shall not be discharged from such excepted debts unless the Accountant-General of the United Republic certifies in writing his con­sent to the bankrupt being discharged therefrom;
(b)from any debt or liability incurred by means of any fraud or fraudulent breach of trust to which he was a party, nor from any debt or liability whereof he has obtained forbearance by any fraud to which he was a party; or
(c)from any liability under a judgment against him in an action for seduction or affiliation, or under a judgment against him as a correspondent in a ma­trimonial cause, except to such an extent and under such conditions as the court expressly orders in respect of such liability.
(2)An order of discharge shall release the bankrupt from all other debts provable in bankruptcy.
(3)An order of discharge shall be conclusive evidence of the bankruptcy, and of the validity of the proceedings therein, and in any proceedings that may be instituted against a bankrupt who has obtained an order of discharge in respect of any debt from which he is released by the order, the bank­rupt may plead that the cause of action occurred before his discharge.
(4)An order of discharge shall not release any person who at the date of the receiving order was a partner or co­trustee with the bankrupt, or was jointly bound or had made any joint contract with him, or any person who was surety or in the nature of a surety for him.

33. Power of court to annual adjudication in certain cases

(1)Where in the opinion of the court a debtor ought not to have been adjudged bankrupt, or where it is proved to the satisfaction of the court that the debts of the bankrupt are paid in full, the court may, on the application of any person interested, by order annul the adjudication.
(2)Where an adjudication is annulled under this sec­tion, all sales and dispositions of property and payments duly made, and all acts therefore done, by the official receiver, trustee or other person acting under their authority, or by the court, shall be valid, but the property of the debtor who has been adjudged bankrupt shall vest in such person as the court may appoint, or, in default of any such appointment, revert to the debtor for all his estate or interest therein on such terms and subject to such conditions, if any, as the court may dec­lare by order.
(3)Notice of the order annulling an adjudication shall be forthwith gazetted.
(4)For the purposes of this section, any debt disputed by a debtor shall be considered as paid in full if the debtor en­ters into a bond, in such sum and with such sureties as the court approves, to pay the amount to be recovered in any pro­ceeding for the recovery of or concerning the debt, with costs, and any debt due to a creditor who cannot be identified shall be considered as paid in full if paid into court.

34. Restriction on employment of bankrupt

(1)No person who has been adjudged bankrupt shall manage, or assist or take part in the management of, or accept employment in any trade or business owned, either alone or together with any other person by a relative, by con­sanguinity or affinity of the bankrupt unless he shall first have made application to the court for permission so to do and ob­tained such permission.
(2)On the hearing of the application the court shall take into consideration a report of the official receiver as to the bankrupt’s conduct and affairs, and may refuse such per­mission or grant the same either unconditionally or subject to such conditions or limitations as the court in its absolute dis­cretion may think fit.
(3)Where a bankrupt in respect of whom permission as aforesaid has been granted fails to comply with any condi­tions or limitation imposed by the court in pursuance of sub­section (2) of this section, the official receiver shall report the matter to the court and the court having considered such re­ports shall make such order thereupon, including the revoca­tion of its original permission, as to the court may seem just.
(4)Any person to whom subsection (1) applies who manages, assists or takes part in the management of, or ac­cepts employment in, any trade or business as aforesaid with­out obtaining the permission of the court, or after revocation of such permission, commits an offence.[Cap. 4 s. 8]
(5)Where any person to whom subsection (1) applies, manages or assists or takes part in the management of, or ac­cepts employment in, any trade or business owned, either alone or together with any other person, by a relative by con­sanguinity or affinity of the bankrupt without obtaining the permission of the court, or after revocation of such permis­sion, in contravention of subsection (4), such relative commits an offence unless he proves that the offence committed by the bankrupt person under that subsection took place without his knowledge or consent.[Ord. No. 20 of 1958 s. 11]

Part III – Administration of property

Proof of debts

35. Description of debts provable in bankruptcy

(1)Demands in the nature of unliquidated damag­es arising otherwise than by reason of a contract, promise or breach of trust shall not be provable in bankruptcy.
(2)A person having notice of any act of bankruptcy available against the debtor shall not prove under the order for any debt or liability contracted by the debtor subsequently to the date of his so having notice.
(3)Save as aforesaid, all debts and liabilities, present or future, certain or contingent, to which the debtor is subject at the date of the receiving order, or to which he may become subject before his discharge by reason of any obligation in­curred before the date of the receiving order, shall be deemed to be debts provable in bankruptcy.
(4)An estimate shall be made by the trustee of the value of any debt or liability provable as aforesaid, which by reason of its being subject to any contingency or contingen­cies, or for any other reason, does not bear a certain value.
(5)Any person aggrieved by any estimate made by the trustee as aforesaid may appeal to the court.
(6)Where, in the opinion of the court, the value of the debt or liability is incapable of being fairly estimated, the court may make an order to that effect, and thereupon the debt or liability shall, for the purposes of this Act, be deemed to be a debt not provable in bankruptcy.
(7)Where, in the opinion of the court, the value of the debt or liability is capable of being fairly estimated, the court may assess the value, and the amount of the value when as­sessed shall be deemed to be a debt provable in bankruptcy.
(8)"Liability" shall, for the purposes of this Act, in­clude—
(a)any compensation for work or labour done;
(b)any obligation or possibility of an obligation to pay money or money's worth on the breach of any express or implied covenant, contract, agreement, or undertaking, whether the breach does or does not occur, or is or is not likely to occur or capable of occurring, before the discharge of the debtor;
(c)generally, any express or implied engagement, agreement, or undertaking, to pay, or capable of resulting in the payment of, or worth; whether the payment is, as respects amount, fixed or unliqui­dated; as respects time, present or future, certain or dependent on anyone contingency or on two or more contingencies; as to mode of valuation, ca­pable of being ascertained, by fixed rules or as matter of opinion.

36. Mutual credit and set-off

Where there have been mutual credits, mutual debts or other mutual dealings between a debtor against whom a receiving order shall be made under this Act and any other person proving or claiming to prove a debt under the receiving order, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against any sum due from the other party, and the balance of the account, and no more, shall be claimed or paid on either side respectively; but a person shall not be entitled under this section to claim the benefit of any set-off against the property of a debtor in any case where he had, at the time of giving credit to the deb­tor, notice of an act of bankruptcy committed by the debtor and available against him.

37. Rules as to proof of debts

With respect to the mode of proving debts, the right of proof by secured and other creditors, the admission and rejection of proofs, and the other matters referred to in the Second Schedule to this Act, the rules in that Schedule shall be observed.

38. Priority of debts

(1)In the distribution of the property of a bankrupt there shall be paid in priority to all other debts—
(a)all Government taxes and local rates due from the bankrupt at the date of the receiving order, and having become due and payable within twelve months next before that date not exceeding in the whole one year's assessment;
(b)all Government rents not more than five years in arrear;
(c)all wages or salary whether or not earned wholly or in part by way of commission of any clerk or servant in respect of service rendered to the bank­rupt during the four months next before the date of the receiving order, not exceeding four thousand shillings; and
(d)all wages of any workman or labourer not exceed­ing four thousand shillings, whether payable for time or piecework, in respect of service rendered to the bankrupt during the four months next before the date of the receiving order:Provided that, where any workman or labourer has en­tered into a contract for the payment of a portion of his wages in a lump sum at the end of the period or hiring, the priority under this section shall extend to the whole of such sum, or part thereof, as the court may decide to be due under the con­tract, proportionate to the time of service up to the date of the receiving order;
(e)all amounts due in respect of compensation or lia­bility for compensation which are given priority under the provisions section 32 of the Workers' Compensation Act; and[Cap. 263]
(f)all sums of money deposited by with the bankrupt for safe custody, whether the bankrupt held him­self out as a banker or not.
(2)The foregoing debts shall rank equally between themselves, and shall be paid in full, unless the property of the bankrupt is insufficient to meet them, in which case they shall abate in equal proportions between themselves.
(3)Subject to the retention of such sums as may be necessary for the costs of administration or otherwise, the foregoing debts shall be discharged forth as far as the property of the debtor is sufficient to meet them.
(4)In the event of a landlord or other person distrain­ing or having distrained on any goods or effects of a bankrupt within the three months next before the date of the receiving order, the debts to which priority is given by this section shall be a first charge on the goods or effects so distrained on, or the proceeds of the sale thereof:Provided that, in respect of any money paid under any such charge the landlord or other person shall have the same rights of priority as the person to whom such payment is made.
(5)Where a debtor by or against whom a bankruptcy petition has been presented, dies, this section shall apply as if he were a bankrupt, and as if the date of his death were substi­tuted for, the date of the receiving order.
(6)In the case of partners, the joint estate shall be ap­plicable in the first instance in payment of their joint debts and the separate estate of each partner shall be applicable in the first instance in payment of his separate debts, and if there is a surplus of the—
(a)separate estates, it shall be dealt with as part of the joint estate;
(b)joint estate, it shall be dealt with as part of the re­spective separate estates in proportion to the right and interest of each partner in the joint estate.[Cap 4 s. 8]
(7)Subject to the provisions of this Act, all debts proved in the bankruptcy, shall be paid pari passu.
(8)Where there is any surplus after payment of the foregoing debts, it shall be applied in payment of interest from the date of the receiving order at the rate of six pounds percent per annum on all debts proved in the bankruptcy.
(9)Nothing in this section shall prejudice the provi­sions of any enactment relating to deeds of arrangement res­pecting the payment of expenses incurred by the trustee under a deed of arrangement which has been avoided by the bank­ruptcy of the debtor.[Ords. Nos. 45 of 1947 s. 2; 36 of 1952 s. 2; 20 of 1958 s. 12]

39. Preferential claim in case of apprenticeship

(1)Where at the time of the presentation of the bankruptcy petition any person is apprenticed or is an articled clerk to the bankrupt, the adjudication of bankruptcy shall, if either the bankrupt or apprentice or clerk gives notice in writ­ing to the trustee to that effect, be a complete discharge of the indenture of apprenticeship or article of agreement; and, if any money has been paid by or on behalf of the apprentice or clerk to the bankrupt as a fee, the trustee may, on the application of the apprentice or clerk, or of some person on his behalf, pay such sum as the trustee, subject to an appeal to the court, thinks reasonable, out of the bankrupt's property, to or for the use of the apprentice or clerk, regard being had to the amount paid by him or on his behalf, and to the time during which he served with the bankrupt under the indenture or articles before the commencement of the bankruptcy, and to the other cir­cumstances of the case.
(2)Where it appears expedient to a trustee, he may, on the application of any apprentice or articled clerk to the bank­rupt, or any person acting on behalf of such apprentice or ar­ticled clerk, instead of acting under the preceding provisions of this section, transfer the indenture of apprenticeship or ar­ticles of agreement to some person.

40. Landlord’s power of distress in case of bankruptcy

The landlord or other person to whom any rent is due from the bankrupt may at any time, either before or after the commencement of the bankruptcy, distrain upon the goods or effects of the bankrupt for the rent due to him from the bankrupt, with this limitation, that, if such distress for rent be levied after the commencement of the bankruptcy it shall be available only for six month's rent accrued due prior to the date of the order of adjudication and shall not be available for rent payable in respect of any period subsequent to the date when the distress was levied, but the landlord or other person to whom the rent may be due from the bankrupt may prove under the bankruptcy for the surplus due for which the distress may not have been available.

41. Postponement of claims by relatives

Where a receiving order has been made against a debtor, no relative by consanguinity or affinity of such debtor who has a claim against the debtor for salary or wages due or in respect of any money or other estate lent or entrusted to the debtor shall be entitled to claim as a creditor in respect thereof until all claims of the others creditors for valuable considera­tion or money's worth have been satisfied.[Ords. Nos. 45 of 1947 s. 13; 20 of 1958 s. 13]

Property available for payment of debts

42. Relation back to trustee’s title

(1)The bankruptcy of a debtor, whether it takes place on the debtor's own petition or upon that of a creditor or creditors, shall be deemed to have relation back to, and to commence at, the time of the act of bankruptcy being commit­ted on which a receiving order is made against him, or, if the bankrupt is proved to have committed more acts of bankrupt­cy than one, to have relation back to and commence at the time of the first of the acts of bankruptcy proved to have been committed by the bankrupt within three months next preced­ing the date of the presentation of the bankruptcy petition; but no bankruptcy petition, receiving order or adjudication shall be rendered invalid by reason of any act of bankruptcy ante­rior to the debt of the petitioning creditor.
(2)Where a receiving order is made against the judg­ment debtor in pursuance of section 102 of this Act, the bank­ruptcy of the debtor shall be deemed to have relation back to, and to commence at, the time of the order, or if the bankrupt is proved to have committed any previous act of bankruptcy, then to have relation back to, and to commence at, the time of the first of the acts of bankruptcy proved to have been com­mitted by the debtor within three months next preceding the date of the order.

43. Description of bankrupt’s property divisible amongst creditors

The property of the bankrupt divisible amongst his creditors, and in this Act referred to as the property of the bankrupt, shall not comprise the following particulars:
(a)property held by the bankrupt on trust for any oth­er person;
(b)the tools (if any) of his trade and the necessary wearing apparel and bedding of himself, his wife and children, to a value inclusive of tools and ap­parel and bedding, not exceeding five hundred shillings in the whole, except that in any case the court, having regard to the bankrupt's station in life, may in its discretion order that this allowance be increased to any value not exceeding one thou­sand shillings in the whole:
But it shall comprise the following particulars:
(i)all such property as may belong to or be vested in the bankrupt at the commencement of the bankruptcy, or may be acquired by or devolve on him before his discharge; and
(ii)the capacity to exercise and to take proceed­ings for exercising all such powers in or over or in respect of property as might have been exercised by the bankruptcy for his own ben­efit at the commencement of his bankruptcy or before his discharge and;
(iii)all goods, being at the commencement of the bankruptcy in the possession, order or dispo­sition of the bankrupt, in his trade or busi­ness, by the consent and permission of the true owner under such circumstances that he is the reputed owner thereof:
Provided that, things in action other than debts que or growing due to the bankrupt in the course of his trade or busi­ness shall not be deemed goods within the meaning of this section.[Ord. No. 20 of 1958 s. 14]

44. Provisions as to second bankruptcy

(1)Where a second or subsequent receiving order is made against a bankrupt, or where an order is made for the administration in bankruptcy of the estate of a deceased bank­rupt, then for the purposes of any proceedings consequent upon any such order, the trustee in the last preceding bank­ruptcy shall be deemed to be a creditor in respect of any unsa­tisfied balance of the debts provable against the property of the bankrupt in that bankruptcy.
(2)In the event of a second or subsequent receiving order made against a bankrupt being followed by an order ad­judging him bankrupt, or in the event of an order being made for the administration in bankruptcy of the estate of a de­ceased bankrupt, any property acquired by him since he was last adjudged bankrupt, which at the date when the subsequent petition was presented had not been distributed amongst the creditors in such last preceding bankruptcy, shall (subject to any disposition thereof made by the official receiver or trustee in that bankruptcy, without knowledge of the presentation of the subsequent petition, and subject to the provisions of sec­tion 52 of this Act) vest in the trustee in the subsequent bank­ruptcy or administration in bankruptcy as the case may be.
(3)Where the trustee in any bankruptcy receives no­tice of a subsequent petition in bankruptcy against the bank­rupt or after his decease of a petition for the administration of his estate in bankruptcy, the trustee shall hold any property then in his possession which has been acquired by the bank­rupt since he was adjudged bankrupt until the subsequent peti­tion has been disposed of, and, if on the subsequent petition an order of the administration of the estate in bankruptcy is made, he shall transfer all such property or the proceeds the­reof (after deducting his costs and expenses) to the trustee in the subsequent bankruptcy or administration in bankruptcy, as the case may be.

Effect of bankruptcy of antecedent and other transactions

45. Restriction of rights of creditor under execution or attachment

(1)Where a creditor has issued execution against the goods or lands of a debtor, or has attached any debt due to him, he shall not be entitled to retain the benefit of the execution or attachment against the trustee in bankruptcy of the debtor, unless he has completed the execution or attachment before the date of the receiving order, and before notice of the presentation of any bankruptcy petition by or against the deb­tor or of the commission of any available act of bankruptcy by the debtor.
(2)For the purposes of this Act, an execution against goods is completed by seizure and sale; an attachment of a debt is completed by receipt of the debt; and an execution against land is completed by seizure, or, in the case of an equitable interest, by the appointment of a receiver.
(3)An execution levied by seizure and sale on the goods of a debtor is not invalid by reason only of its being an act of bankruptcy, and a person who purchases the goods in good faith under a sale by the bailiff shall, in all cases, acquire a good title to them against the trustee in bankruptcy.

46. Duties of bailiff as to goods taken in execution

(1)Where any goods of a debtor are taken in ex­ecution, and before the sale thereof, or the completion of the execution by the receipt or recovery of the full amount of the levy, notice is served or the bailiff that a receiving order has been made against the debtor, the bailiff shall, on request, de­liver the goods and any money seized or received in part satis­faction of the execution to the official receiver, but the costs of the execution shall be a first charge on the goods or money so delivered, and the official receiver or trustee may sell the goods, or an adequate part thereof, for the purpose of satisfy­ing the charge.
(2)Where, under an execution in respect of a judg­ment for a sum exceeding four hundred shillings, the goods of a debtor are sold or money is paid in order to avoid sale, the bailiff shall deduct his costs of the execution from the proceeds of sale or the money paid, and retain the balance for fourteen days, and if within that time notice is served on him of a bankruptcy petition having been presented by or against the debtor, and a receiving order is made against the debtor thereon or on any other petition of which the bailiff has no­tice, the bailiff shall pay the balance to the official receiver, or, as the case may be, to the trustee, who shall be entitled to retain it as against the execution creditor.
(3)Where any goods in the possession of an execution debtor at the time of seizure by a bailiff are sold by such bai­liff without any claim having been made to the same, the pur­chaser of the goods so sold shall acquire a good title to such goods, and no person shall be entitled to recover against such bailiff or any other person lawfully acting under his authority, for any sale of such goods or for paying over the proceeds the­reof prior to the receipt of a claim to such goods, unless it is proved that the person from whom recovery is sought had no­tice, or might by making reasonable inquiry have ascertained that such goods were not the property of the execution debtor:Provided that, nothing in this subsection contained shall affect the right of any claimant, who may prove that at the time of sale he had a title to such goods, to any remedy to which he may be entitled against any person other than such bailiff.

47. Avoidance of certain settlements

(1)Any settlement of property, not being a set­tlement before and in consideration of marriage, or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration or a settlement made on or for the wife or children of the settlor of property which has accrued to the settlor after marriage in right of his wife, shall if the settlor becomes bankrupt within two years after the date of the set­tlement, be void against the trustee in the bankruptcy, and shall, if the settlor becomes bankrupt at any subsequent time within ten years after the date of the settlement, be void against the trustee in the bankruptcy, unless the parties claim­ing under the settlement can prove that the settlor was, at the time of making the settlement, able to pay all his debts with­out the aid of the property comprised in the settlement, and that the interest of the settlor in such property passed to the trustee of such settlement on the execution thereof.
(2)Any covenant or contract made by any person (he­reinafter called the settlor) in consideration of his or her mar­riage, either for the future payment of money for the benefit of then settlor's spouse, or children, or for the future settlement on or for the settlor's spouse, or children, of property, wherein the settlor had not at the date of the marriage any estate or in­terest, whether vested or contingent, in possession or re­mainder, and not being money or property in right of the set­tlor's spouse, shall, if the settlor is adjudged bankrupt and the covenant or contract has not been executed at the date of the commencement of his bankruptcy, be void against the trustee in the bankruptcy, except so far as it enables the person en­titled under the covenant or contract to claim for dividend in the settlor's bankruptcy under or in respect of the covenant or contract, but any such claim to dividend shall be postponed until all claims of the other creditors for valuable considera­tion in money's worth have been satisfied.
(3)Any payment of money (not being payment of premiums on a policy of life assurance) or any transfer of property made such by the settlor in pursuance of a covenant or contract as aforesaid shall be void against the trustee in the settlor's bankruptcy unless the persons to whom the payment or transfer was made proved either—
(a)that the payment or transfer was made more than two years before the date of the commencement of the bankruptcy;
(b)that at the date of the payment or transfer the set­tlor was able to pay all his debts without the aid of the money so paid or the property so transferred; or
(c)that the payment or transfer was made in pur­suance of a covenant or contract to pay or transfer money or property expected to come to the settlor from or on the death of a particular person named in the covenant or contract and was made within three months after the money or property came in­to the possession or under the control of the set­tlor, but, in the event of any such payment or transfer being declared void, the persons to whom it was made shall be entitled to claim for dividend under or in respect of the covenant or contract in like manner as if it had not been executed at the commencement of the bankruptcy.
(4)"Settlement" shall for the purposes of this section, include any conveyance or transfer of property.

48. Avoidance of unregistered assignments of debts

Where any person makes an assignment, whether by way of security or otherwise, to any other person of any existing or future debts owing or to become owing to him, or any class of such debts, the provisions of section 13 of the Chattels Transfer Act, shall apply.[Ord. No. 45 of 1947 s. 14; Cap. 210]

49. Avoidance of preference in certain cases

(1)Every conveyance or transfer of property. or charge thereon made, every payment made, every obligation incurred, and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor, or of any person in trust for any creditor, with a view of giving such creditor, or any surety or guarantor for the debt due to such creditor, a preference over the other creditors, shall if the person making, taking, paying or suffering the same is adjudged bankrupt on a bankruptcy petition presented within six months after the date of making, taking, paying or suffering the same, be deemed fraudulent and void as against the trustee in the bankruptcy.
(2)This section shall not affect the rights of any per­son making title in good faith and for valuable consideration through or under a creditor of the bankrupt.
(3)Where a receiving order is made against a judg­ment debtor in pursuance of section 102 of this Act, this sec­tion shall apply as if the debtor had been adjudged bankrupt on a bankruptcy petition presented at the date of the receiving order.[Ord. No. 45 of 1947 s. 15]

50. Protection of bona fide transitions without notice

Subject to the foregoing provisions of this Act with respect to the effect of bankruptcy on an execution or attachment, and with respect to the avoidance of certain set­tlements, assignments and preferences, nothing in this Act shall invalidate, in the case of a bankruptcy—
(a)any payment by the bankrupt to any of his credi­tors; and
(b)any payment or delivery to the bankrupt; and
(c)any conveyance or assignment by the bankrupt for valuable consideration; and
(d)any contract, dealing, or transaction by or with the bankrupt for valuable consideration:
Provided that, both the following conditions are com­plied with, namely that the—
(i)payment, delivery, conveyance, assign­ment, contract, dealing or transaction, as the case may be, takes place before the date of the receiving order; and
(ii)person (other than the debtor) to, by, or with whom the payment, delivery, con­veyance, assignment, contract, dealing, or transaction was made, executed, or entered into has not at the time of the payment, delivery, conveyance, assignment, contract, dealing, or transaction, notice of any avail­able act of bankruptcy committed by the bankrupt before that time.

51. Validity of certain payments to bankrupt and assignee

A payment of money or delivery of property to a person subsequently adjudged bankrupt, or to a person claim­ing, by assignment from him, shall, notwithstanding anything in this Act, be a good discharge to the person paying the mon­ey or delivering the property, if the payment or delivery is made before the actual date on which the receiving order is made and without notice of the presentation of a bankruptcy petition, and is either pursuant to the ordinary course of busi­ness or otherwise bonafide.

52. Dealings with undischarged bankrupt

(1)All transactions by a bankrupt with any person dealing with him bona fide and for value, in respect of proper­ty, whether movable or immovable, acquired by the bankrupt after' the adjudication, shall, if completed before any interven­tion by the trustee, be valid against the trustee, and any estate or interest in such property which by virtue of this Act is vested in the trustee shall determine and pass in such manner and to such extent as may he required for giving effect to any such transaction.
(1A)For the purposes of subsection (1), the receipt of any money, security or negotiable instrument from, or by the order or direction of, a bankrupt by his banker, and any pay­ment and any delivery of any security or negotiable instru­ment made to, or by the order or direction of, a bankrupt by his banker, shall be deemed to be a transaction by the bank­rupt with such banker dealing with him for value.[Cap. 4 s. 8]
(2)Where a banker has ascertained that a person hav­ing an account with him is an undischarged bankrupt, then, unless the banker is satisfied that the account is on behalf of some other person, it shall be his duty forthwith to inform the trustee in the bankruptcy or the official receiver of the exis­tence of the account, and thereafter he shall not make any payments out of the account, except under an order of the court or in accordance with instructions from the trustee in the bankruptcy, unless by the expiration of one month from the date giving the information, no instructions have been re­ceived from the trustee or the official receiver.

Realisation of property

53. Possession of property by trustee

(1)The trustee shall, as soon as may be, take pos­session of the deeds, books, and documents of the bankrupt, and all other parts of his property capable of manual delivery.
(2)The trustee shall, in relation to and for the purpose of acquiring or retaining possession of the property of the bankrupt, be in the same position as if he were a receiver of the property appointed by the court, and the court may, on his application, enforce such acquisition or retention accordingly.
(3)Where any part of the property of the bankrupt consists of stock, shares in ships, shares, or any other property transferable in the books of any company, office, or person, the trustee may exercise the right to transfer the property to the same extent as the bankrupt might have exercised it if he had not become bankrupt.
(4)Where any part of the property of the bankrupt consists of things in action, such things shall be deemed to have been duly assigned to the trustee.
(5)Subject to the provisions of this Act with respect to property acquired by a bankrupt after adjudication, any trea­surer or other officer, or any banker, attorney, or agent of a bankrupt, shall pay and deliver to the trustee all money and securities in his possession or power, as such officer, banker, attorney, or agent, which is not by law entitled to retain as against the bankrupt or the trustee and if he does not, he shall be guilty of a contempt of court, and may be punished accor­dingly on the application of the trustee.

54. Seizure of property of bankrupt

Any person acting under warrant of the court may seize any part of the property of a bankrupt or of a debtor against whom a receiving order has been made, in the custody or possession of the bankrupt or the debtor, or of any other person, and with a view to such seizure may break open any house building or room of the bankrupt or the debtor, where the bankrupt or the debtor is supposed to be, or any building or receptacle of the bankrupt or the debtor where any of his property is supposed to be, and where the court is satisfied that there is reason to believe that property of a bankrupt, or of a debtor against whom a receiving order has been made, is concealed in a house or place not belonging to him, the court may, if It thinks fit, grant a search warrant to any police offic­er or officer of the court, who may execute it according to its tenor.

55. Appropriation of proportion of pay or salary to creditors

(1)Where a bankrupt is an officer of the army, navy or air force, or an officer or clerk or otherwise employed or engaged in the civil service of the United Republic, the trustee shall receive for distribution amongst the creditors so much of the bankrupt's pay or salary as the court, on applica­tion of the trustee, with the consent of the head of the depart­ment under which the pay or salary is enjoyed, may direct be­fore making any order under this subsection, the court shall communicate with the head of the department as to the amount, time, and manner of the payment to the trustee, and shall obtain the written consent of the head of the department to the terms of such payment.
(2)Where a bankrupt is in receipt of a salary or in­come other than as aforesaid, the court, on the application of the trustee, shall from time to time make such order as it thinks just for the payment of the salary or income, or of any part thereof, to the trustee to be applied by him in such man­ner as the court may direct.
(3)Where a bankrupt is an employee and earning wages, irrespective of whether payment of such wages is made by the day or any other period of time, the court, on the application of the trustee, shall from time to time make such order as it thinks just for the payment of any part of such wages to the trustee to be applied by him in such manner as the court may direct.
(4)Every order made under subsection (1) of this sec­tion shall he served upon the bankrupt and upon the head of department, and every order made under subsection (2) or (3) of this section shall be served upon the bankrupt and may, at any time after the making thereof, be served upon the person by whom such salary or income of the bankrupt is paid or upon the bankrupt's employer, as the case may be; and if any such order as aforesaid is served upon the head of department, the person paying such salary or income or the employer, as the case may be, the amounts of pay, salary, income or wages specified in such order shall thereafter be paid to the trustee in conformity with the terms thereof.
(5)Nothing in this section shall take away or abridge any power of the President to dismiss a bankrupt.[Ords. Nos. 45 of 1947 s. 6; 20 of 1958 s. 15]

56. Appropriation of income of property restrained from anticipation

Where a married woman who has been adjudged bankrupt has property, the income of which is subject to a re­straint on anticipation, the court shall have power, on the ap­plication of the trustee, to order that, during such time as the court may order, the whole or some part of such income be paid to the trustee for distribution amongst the creditors, and in the exercise of such power the court shall have regard to the means of subsistence available for the woman and her children.[Ord. No. 45 of 1947 s. 17]

57. Vesting and transfer of property

(1)Until a trustee is appointed, the official receiv­er shall be the trustee for the purposes of this Act, and, imme­diately on a debtor being adjudged bankrupt, the property of the bankrupt shall vest in the trustee.
(2)On the appointment of a trustee, the property shall forthwith pass to and vest in the trustee appointed.
(3)The property of the bankrupt shall pass from trus­tee to trustee, including under that term the official receiver when he fills the office of trustee, and shall vest in the trustee for the time being during his continuance in office, without any conveyance, assignment, or transfer whatsoever.
(4)The certificate of appointment of a trustee shall for all purposes of any law in force in any part of Tanzania re­quiring registration or recording of conveyances or assign­ments of property, be deemed to be a conveyance or assign­ment of property, and may be registered and recorded accor­dingly.

58. Disclaimer of onerous property

(1)Where any part of the property of the bankrupt consists of land of any tenure burdened with onerous cove­nants, of shares or stock on companies, of unprofitable con­tracts, or of any other property that is unsaleable, or not readi­ly saleable by reason of its binding the possessor thereof to the performance of any onerous act, or to the payment of any sum of money, the trustee, notwithstanding that he has endea­voured to sell or has taken possession of the property, or exer­cised any act of ownership in relation thereto, but subject to the provisions of this section, may, by writing signed by him, at any time within twelve months after the first appointment of a trustee or such extended period as may be allowed by the court, disclaim the property:Provided that, where any such property has not come to the knowledge of the trustee within one month after such appointment, he may disclaim such property at any time with­in twelve months after he has become aware thereof or such extended period as may be allowed by the court.
(2)The disclaimer shall operate to determine, as from the date of disclaimer, the rights, interests, liabilities of the bankrupt and his property in or in respect of the property dis­claimed, and shall also discharge the trustee from all personal liability in respect of the property disclaimed as from the date when the property was vested in him, but shall not, except so far as is necessary for the purpose of releasing the bankrupt and his property and the trustee from liability, affect the rights or liabilities of any other person.
(3)A trustee shall not be entitled to disclaim a lease without the leave of the court, except in any case which may be prescribed by general rules, and the court may, before or on granting such leave, require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such orders with respect to fixtures, tenant's improvements, and other matters arising out of the tenancy, as the court thinks just.
(4)The trustee shall not be entitled to disclaim any property in pursuance of this section in any case where an ap­plication in writing has been made to the trustee by any per­son interested in the property requiring him to decide whether he will disclaim or not, and the trustee has for a period of twenty-eight days after the receipt of the application, or such extended period as may be allowed by the court, declined or neglected to give notice whether he disclaims the property or not; and, in the case of a contract, if the trustee, alter such ap­plication as aforesaid, does not within the said period or ex­tended period disclaim the contract, he shall be deemed to have adopted it.
(5)The court may, on the application of any person who is, as against the trustee, entitled to the benefit or subject to the burden of a contract made with the bankrupt, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as to the court may seem equitable and any damages payable under the order to any such person may be proved by him as a debt under the bankruptcy.
(6)The court may, on application by any person either claiming any interest in any disclaimed property or under any liability not discharged by this Act in respect of any dis­claimed property, and on hearing such persons as it thinks fit, make an order for the vesting of the property in or delivery thereof to any person entitled thereto, or to whom it may seem just that the same should be delivered by way of compensa­tion for such liability as aforesaid, or a trustee for him, and on such terms as the court thinks just; and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any conveyance or assignment for the purpose:Provided that, where the property disclaimed is of a leasehold nature, the court shall not make a vesting order in favour of any person claiming under the bankrupt, whether as under-lessee or as mortgagee by demise, except upon the terms of making that persons—
(a)subject to the same liabilities and obligations as the bankrupt was subject to under the lease in re­spect of the property at the date when the bank­ruptcy petition was filed; or
(b)if the court thinks fit, subject only to the same lia­bilities and obligations as if the lease had been as­signed to that person at that date,
and in either event (if the case so requires) as if the lease had comprised only the property comprised in the vesting or­der; and any mortgagee or under-lessee declining to accept a vesting order upon such terms shall be excluded from all in­terest in and security upon the property, and, if there is no per­son claiming under the bankrupt who is willing to accept an order upon such terms, the court shall have power to vest the bankrupt's estate and interest in the property in any person liable either personally or in a representative character, and either alone or jointly with the bankrupt to perform the les­see's covenants in the lease, freed and discharged from all es­tates, incumbrances, and interests created therein by the bankrupt.
(7)Where, on the release, removal, resignation or death of a trustee in bankruptcy, an official receiver is acting as trustee, he may disclaim any property which might be dis­claimed by a trustee under the foregoing provisions, notwith­standing that the time prescribed by this section for such dis­claimer has expired, but such power of disclaimer shall be ex­ercisable only within twelve months after the official receiver has become trustee in the circumstances aforesaid, or has be­come aware of the existence of such property, whichever pe­riod may last expire.
(8)Any person injured by the operation of a disclai­mer under this section shall be deemed to be a creditor of the bankrupt to the extent of the injury, and may accordingly prove the same as a debt under the bankruptcy.

59. Powers of trustee to deal with property

Subject to the provisions of this Act, the trustee may do all or any of the following things:
(a)sell all or any part of the property of the bankrupt (including the goodwill of the business, with any, and the book debts due or growing due to the bankrupt), by public auction or private contract, with power to transfer the whole thereof to any person or company, or to sell the same in parcels;
(b)give receipts for any money received by him, which receipts shall effectually discharge the per­son paying the money from all responsibility in re­spect of the application thereof;
(c)prove, rank, claim, and draw a dividend in respect of any debt due to the bankrupt;
(d)exercise any powers, the capacity to exercise which is vested in the trustee under this Act, and execute any powers of attorney, deeds and other instruments, for the purpose of carrying into effect the provisions of this Act;
(e)deal with any property to which the bankrupt is beneficially entitled as tenant in tail in the same manner as the bankrupt might have dealt with it.

60. Powers exercisable by trustee with permission of committee of inspection

(1)The trustee may, with the permission of the committee of inspection, do all or any of following things:
(a)carry on the business of the bankrupt, so far as may be necessary for the beneficial winding up of the same;
(b)bring, institute, or defend any action or other legal proceeding relating to the property of the bank­rupt;
(c)employ an advocate or other agent to take any proceedings or do any business which may be sanctioned by the committee of inspection;
(d)accept as the consideration for the sale of any property of the bankrupt a sum of money payable at a future time subject to such stipulations as to security and otherwise as the committee think fit;
(e)mortgage or pledge any part of the property of the bankrupt for the purpose of raising money for the payment of his debts;
(f)refer any dispute to arbitration, compromise any debts, claims and liabilities, whether present or fu­ture, certain or contingent, liquidated or unliquidated, subsisting or supposed to subsist between the bankrupt and any person who may have in­curred any liability to the bankrupt on the receipt of such sums, payable at such times, and generally on such terms as may be agreed on;
(g)make such compromise or other arrangement as may be thought expedient with creditors, or person claiming to be creditors, in respect of any debts provable under the bankruptcy;
(h)make such compromise or other arrangement as may be thought expedient with respect to any claim arising out of or incidental to the property of the bankrupt, made or capable of being made on the trustee by any person or by the trustee on any person;
(i)divide in its existing form amongst the creditors, according to its estimated value, any property ad­vantageously sold which from its peculiar nature of other special circumstances cannot be readily or advantageously sold.
(2)The permission given for the purpose of this sec­tion shall not be a general permission to do all or any of the above-mentioned things, but shall only be a permission to do the particular thing or things for which permission is sought in the specified case or cases.[Cap. 4 s. 8]

61. Power to allow bankrupt to manage property

The trustee, with the permission of the committee of inspection, may appoint the bankrupt himself to superin­tend the management of the property of the bankrupt or of any part thereof, or to carry on the trade (if any) of the bankrupt for the benefit of his creditors, and in any other respect to aid in administering the property, in such manner and on such terms as the trustee may direct.

62. Allowance to bankrupt for maintenance or service

The trustee may from time to time, with the per­mission of the committee of inspection, make such allowance as he may think just to the bankrupt out of his property for the support of the bankrupt and his family, or in consideration of his services if he is engaged in winding up his estate, but any such allowance may be reduced by the court.

63. Right of trustee to inspect goods pawned, etc.

Where any goods of debtor against whom a receiv­ing order has been made are held by any person by way of pledge, pawn or other security, it shall be lawful for the offi­cial receiver or trustee, after giving notice in writing of his intention to do so, to inspect the goods, and where such notice has been given, such person as aforesaid shall not be entitled to realise his security until he has given the trustee a reasona­ble opportunity of inspecting the goods and of exercising his right of redemption if he thinks fit to do so.

64. Limitation of trustee's powers in relation to copyright

Where the property of a bankrupt comprises the copyright in any work or any interest in such copyright, and he is liable to pay to the author of the work royalties or a share of the profits in respect thereof, the trustee shall not be en­titled to sell, or authorise the sale of any copies of the work, or to perform or authorise the performance of the work, except on the terms of paying to the author such sums by way of royalty or share of the profits as would have been payable by the bankrupt, nor shall he, without the consent of the author or of the court, be entitled to assign the right or transfer the in­terest or to grant interest in the right by licence, except upon terms which will secure to the author payments by way of royalty or share of the profits at rate not less than that which the bankrupt was liable to pay.

65. Protection of official receiver and trustee from personal liability in certain cases

Where the official receiver or trustee has seized or disposed of any goods, chattels, property, or other effects in the possession or on the premises of a debtor against whom a receiving order has been made, without notice of any claim by any person in respect of the same, and it is thereafter made to appear that the said goods, chattels, property, or other effects were not, at the date of the receiving order the property of the debtor, the official receiver or trustee shall not be personally liable for any loss or damage arising from such seizure or dis­posal sustained by any person claiming such property, nor for the costs of any proceeding taken to establish a claim thereto, unless the court is of opinion that the official receiver or trus­tee has been guilty of negligence in respect of the same.

Distribution of property

66. Declaration and distribution of dividends

(1)Subject to the retention of such sums as may be necessary for the costs of administration, or otherwise, the trustee shall, with all convenient speed, declare and distribute dividends amongst the creditors who have proved their debts.
(2)The first dividend, if any, shall be declared and dis­tributed within four months after the conclusion of the first meeting of creditors unless the trustee satisfies the committee of inspection that there is sufficient reason for postponing the declaration to a later date.
(3)Subsequent dividends shall, in the absence of suf­ficient reason to the contrary, be declared and distributed at intervals of not more than six months.
(4)Before declaring a dividend, the trustee shall cause notice of his intention to do so to be gazetted in the prescribed manner, and shall also send reasonable notice thereof to each creditor mentioned in the bankrupt's statement who has not proved his debt.
(5)When the trustee has declared a dividend, he shall send to each creditor who has proved a notice showing the amount of the dividend and when and how it is payable, and a statement in the prescribed form as to the particulars of the estate.

67. Joint and separate dividends

(1)Where one partner of a firm is adjudged bank­rupt, a creditor to whom the bankrupt is indebted jointly with the other partners of the firm, or any of them, shall not receive any dividend out of the separate property of the bankrupt until all the separate creditors have received the full amount of their respective debts.
(2)Where joint and separate properties are being ad­ministered, dividends of the joint and separate properties shall, unless otherwise directed by the court on the application of any person interested, be declared together, and the ex­penses of and incidental to such dividends shall be fairly ap­portioned by the trustee between the joint and separate proper­ties, regard being had to the work done for and the benefit re­ceived by each property.

68. Provisions for creditors residing at a distance etc.

(1)In the calculation and distribution of a divi­dend the trustee shall make provision for debts provable in bankruptcy appearing from the bankrupt's statements, or oth­erwise, to be due to persons resident in places so distant from the place where the trustee is acting that in the ordinary course of communication they have not had sufficient time to tender their proofs, or to establish them, if disputed, and also for debts provable in bankruptcy the subject of claims not yet de­termined.
(2)The trustee shall also make provision for any dis­puted proofs, claims, and for the expenses necessary for the administration of the estate or otherwise.
(3)Subject to the foregoing provisions, the trustee shall distribute as dividend all money in hand.[Cap 4 s. 8]

69. Right of creditor who has not proved debt before declaration of dividend

Any creditor who has not proved his debt before the declaration of any dividend or dividends shall be entitled to be paid out of any money for the time being in the hands of the trustee any dividend or dividends he may have failed to receive before that money is applied to the payment of any future dividend or dividends, but he shall not be entitled to disturb the distribution of any dividend declared before his debt was proved by reason that he has not participated therein.

70. Interest on debts

(1)Where a debt has been proved, and the debt includes interest, or any pecuniary consideration in lieu of in­terest, such interest or consideration shall, for the purposes of dividend, be calculated at a rate not exceeding six per centum per annum, without prejudice to the right of a creditor to re­ceive out of the estate any higher rate of interest to which he may be entitled after all the debts proved in the estate have been paid in full.
(2)In dealing with the proof of the debt, the following rules shall be observed—
(a)any account settled between the debtor and the creditor within three years preceding the date of the receiving order may be examined, and if it ap­pears that the settlement of the account forms sub­stantially one transaction with any debt alleged to be due out of the debtor's estate (whether in the form of renewal of a loan or capitalisation of in­terest or ascertainment of loans or otherwise), the accounts may be re-opened and the whole transac­tion treated as one;
(b)any payments made by the debtor to the creditor before the receiving order, whether by way of bo­nus or otherwise, and any sums received by the creditor before the receiving order from the reali­sation of any security for the debt, shall, notwith­standing any agreement to the contrary, be appro­priated to principal and interest in the proportion that the principal bears to the sum payable as in­terest at the agreed rate;
(c)where the debt due is secured and the security is realised after the receiving order, or the value the­reof is assessed in the proof, the amount realised or assessed shall be appropriated to the satisfac­tion of principal and interest in the proportion that the principal bears to the sum payable as interest at the agreed rate.[Ord. No. 20 of 1958 s. 16; Cap. 4 s. 8]

71. Final dividend

(1)When the trustee has realised all the property of the bankrupt, or so much thereof as can, in the joint opinion of himself and of the committee of inspection, be realised without needlessly protracting the trusteeship, he shall declare a final dividend, but before so doing he shall give notice in the manner prescribed to the persons whose claims to be creditors have been notified to him, but not established to his satisfac­tion, that if they do not establish their claims to the satisfac­tion of the court within a time limited by the notice, he will proceed to make a final dividend, without regard to their claims.
(2)After the expiration of the time so limited, or, if the court on application by any such claimant grants him further time for establishing his claim, then on the expiration of such further time, the property of the bankrupt shall be divided among the creditors who have proved their debts, without re­gard to the claims of any other persons.

72. No action for dividend

No action for dividend shall be instituted against the trustee, but, if the trustee refuses to pay any dividend, the court may, if it thinks fit, order him to pay it, and also to payout of his own money interest thereon for the time that it is withheld, and the costs of the application.

73. Right of bankrupt to surplus

The bankrupt shall be entitled to any surplus re­maining after payment in full of his creditors, with interest, as by this Act provided, and of the costs, charges, and expenses of the proceedings under the bankrupt petition.

Part IV – Official receiver and staff

74. Appointment of official receiver and deputy official receivers

(1)There shall be an official receiver of debtors' estates for the United Republic and as many deputy official receivers as may be required from time to time who shall have jurisdiction in such areas as may be specified.
(2)The deputy official receivers shall be appointed, be removable by and be under the general authority and direc­tions of the Minister responsible for Legal Affairs and they shall also be officers of the court.
(3)A deputy official receiver shall have the same powers, rights and duties within the area for which he is ap­pointed as an official receiver under this Act.[Act No. 1 of 2018 s. 5; G.N. No. 478 of 1962]

75. Status of official receiver

(1)The duties of the official receiver shall have relation both to the conduct of the debtor and to the adminis­tration of his estate.
(2)The official receiver may, for the purposes of affi­davits verifying proofs, petitions, or other proceedings under this Act, administer oaths.
(3)All provisions in this or any other Act, referring to the trustee in a bankruptcy shall, unless the context requires otherwise, or the Act provides otherwise, include the official receiver when acting as trustee.
(4)The trustee shall supply the official receiver with such information, and give him such access to and facilities for inspecting the bankrupt's books and documents, and gen­erally shall give him such aid, as may be requisite for enabling the official receiver to perform his duties under this Act.

76. Duties of official receiver as regards debtor's conduct

As regards the debtor, it shall be the duty of the official receiver to—
(a)investigate the conduct of the debtor and to report to the court, stating whether there is reason to be­lieve that the debtor has committed any act which constitutes an offence under this Act, or any enactment repealed by this Act, or which would justify the court in refusing, suspending or qualify­ing an order for his discharge;
(b)make such other reports concerning the conduct of the debtor as the court may direct;
(c)take such parts as he may deem fit in the public examination of the debtor;
(d)take such part and give such assistance in relation to the prosecution of any fraudulent debtor as the Attorney-General may direct.

77. Duties of official receiver as to debtor's estate

(1)As regards the estate of a debtor, it shall be the duty of the official receiver—
(a)pending the appointment of a trustee, to act as in­terim receiver of the debtor's estate, and, where a special manager is not appointed, as manager the­reof;
(b)to authorise the special manager to raise money or make advances for the purposes of the estate in any ease where, in the interests of the creditors it appears necessary so to do;
(c)to summon and preside at the first meeting of creditors;
(d)to issue forms of proxy for use at the meetings of creditors;
(e)report to the creditors as to any proposal which the debtor may have made with respect to the mode of liquidating his affairs;
(f)to advertise the receiving order, the date of the creditors' first meeting, and of the debtor's public examination, and such other matters as it may be necessary to advertise;
(g)to act as trustee during any vacancy in the office of trustee.
(2)For the purpose of his duties as interim receiver or manager, the official receiver shall have the same powers as if he were a receiver and manager appointed by the court, but shall, as far as practicable, consult the wishes of the creditors with respect to the management of the debtor's property, and may for that purpose, if he thinks it advisable, summon meet­ings of the persons claiming to the creditors, and shall not, unless the court otherwise orders, incur any expense beyond such as is requisite for the protection of the debtor’s property or the disposing of perishable goods:Provided that, when the debtor cannot himself prepare a proper statement of affairs, the official receiver may, subject to any prescribed conditions, and at the expense of the estate, employ some person or persons to assist in the preparation of the statement of affairs.

Part V – Trustees in bankruptcy

Official name

78. Official name of trustee

The official name of a trustee in bankruptcy shall be "the trustee of the property of_______________ a bankrupt" (insert the name of the bankrupt), and by that name the trustee may, in any part of United Republic or elsewhere, hold property of every description, make contracts, sue and be sued, enter into any engagements binding on himself, and his successors in office and do all other acts necessary or expedient to be done in the execution of his office.

Appointment

79. Power to appoint joint or successive trustees

(1)The creditors may, if they think fit, appoint more persons than one to the office of trustee, and when more persons than one are appointed they shall declare whether any act required or authorised to be done by the trustee is to be done by all or any one or more of such persons, but all such persons are in this Act included under the term "trustee", and shall be joint tenants of the property of the bankrupt.
(2)The creditors may also appoint persons to act as trustees in succession in the event of one or more of the per­sons first named declining to accept the office of trustee, or failing to give security, or of the appointment of any such per­son not being certified by the court.

80. Proceedings in case of vacancy in office of trustee

(1)Where a vacancy occurs in the office of a trus­tee, the creditors in general meeting may appoint a person to fill the vacancy, and thereupon the same proceedings shall be taken as in the case of a first appointment.
(2)The official receiver shall, on the requisition of any creditor, summon a meeting for the purpose of filling any such vacancy.
(3)Where the creditors do not, within three weeks after the occurrence of a vacancy, appoint a person to fill the vacancy, the official receiver shall report the matter to the court, and the court may appoint a trustee; but in such case the creditors or committee of inspection shall have the same pow­er of appointing a trustee in the place of the person so ap­pointed by the court as in the case of a first appointment.
(4)During any vacancy in the office of trustee, the official receiver shall act as trustee.

Control over trustee

81. Discretionary powers of trustee and control thereof

(1)Subject to the provisions of this Act, the trustee shall, in the administration of the property of the bankrupt and in the distribution thereof amongst his creditors, have regard to any directions that may be given by resolution of the credi­tors at any general meeting or by the committee of inspection, and any directions so given by the creditors at any general meeting shall, in case of conflict, be deemed to override any directions given by the committee of inspection.
(2)The trustee may from time to time summon general meetings of the creditors for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors, by resolution either at the meeting ap­pointing the trustee or otherwise may direct, and it shall be lawful for any creditor, with the concurrence of one-sixth in value of the creditors (including himself), at any time to re­quest the trustee or official receiver to call a meeting of the creditors, and the trustee or official receiver shall call such meeting accordingly within fourteen days:Provided that, the person at whose instance the meet­ing is summoned shall deposit with the trustee or the official receiver, as the case may be, a sum sufficient to pay the costs of summoning the meeting, such sum to be repaid to him out of the estate if the creditors or the court so direct.
(3)The trustee may apply to the court in the manner prescribed for directions in relation to any particular matter arising under the bankruptcy.
(4)Subject to the provisions of this Act, the trustee shall use his own discretion in the management of the estate and its distribution among the creditors.

82. Appeal to court against trustee

Where the bankrupt or any of the creditors, or any other person, is aggrieved by any act or decision of the trus­tee, he may apply to the court, and the court may confirm, re­verse, or modify the act or decision complained of, and make such order in the premises as it thinks just.

83. Control of official receiver over trustees

(1)The official receiver shall take cognizance of the conduct of trustees, and, in the event of any trustee not faithfully performing his duties, and duly observing all the requirements imposed on him by any Act, rules, or otherwise, with respect to the performance of his duties, or in the event of any complaint being made to the official receiver by any creditor in regard thereto, the official receiver shall inquire into the matter and take such action thereon as may be deemed expedient.
(2)The official receiver may at any time require any trustee to answer any inquiry made by him in relation to any bankruptcy in which the trustee is engaged, and, if the official receiver thinks fit, he may apply to the court to examine on oath the trustee or any other person concerning the bankrupt­cy.
(3)The official receiver may also direct a local inves­tigation to be made of the books and vouchers of the trustee.

Remuneration and costs

84. Remuneration of trustee

(1)Where the creditors appoint any person to be trustee of a debtor's estate, his remuneration (if any) shall be fixed by an ordinary resolution of the creditors, or, if the cred­itors so resolve, by the committee of inspection, and shall be in the nature of a commission or percentage, of which one part shall be payable on the amount realised by the trustee, after deducting any sums paid to secured creditors out of the proceeds of their securities, and the other part on the amount distributed in dividend.
(2)Where one-fourth in number or value of the credi­tors dissent from the resolution, or the bankrupt satisfies the court that the remuneration is unnecessarily large, the court shall fix the amount of the remuneration.
(3)The resolution shall express what expenses the re­muneration is to cover, and no liability shall attach to the bankrupt's estate, or to the creditors, in respect of any ex­penses which the remuneration is expressed to cover.
(4)Where a trustee acts without remuneration, he shall be allowed out of the bankrupt's estate such proper expenses incurred by him in or about the proceedings of the bankruptcy as the creditors may, with the sanction of the court, approve.
(5)A trustee shall not, under any circumstances what­ever, make any arrangements for or accept from the bankrupt, or any advocate, auctioneer, or any other person that may be employed about a bankruptcy, any gift, remuneration, or pe­cuniary or other consideration or benefit whatever beyond the remuneration fixed by the creditors and payable out of the es­tate, nor shall he make any arrangement for giving up, or give up, any part of his remuneration, either as receiver, manager, or trustee, to the bankrupt or any advocate, or other person that may be employed about the bankruptcy.

85. Allowance and taxation of costs

(1)Where a trustee or manager receives remunera­tion for his services as such, no payment shall be allowed in his accounts in respect of the performance by any other person of the ordinary duties which are required by this Act or rules thereunder to be performed by himself.
(2)Where the trustee is an advocate, he may contract that the remuneration for his services as trustee shall include all professional services.
(3)All bills and charges of advocates, managers, ac­countants, auctioneers, brokers, and other persons, not being trustees shall be taxed by the prescribed officer, and no pay­ments in respect thereof shall be allowed in the trustee's ac­counts without proof of such taxation having been made, and the taxing officer shall satisfy himself before passing such bills and charges that the employment of such advocates and other persons, in respect of the particular matters out of which such charges arise, has been duly sanctioned, and the sanction must be obtained before the employment, except in case of urgency, and in such cases it must be shown that no undue delay took place in obtaining the sanction.
(4)Every such person shall, on request by the trustee (which request the trustee shall make a sufficient time before declaring a dividend), deliver his bill of costs or charges to the proper officer for taxation, and, if he fails to do so within sev­en days after the receipt of the request, or such further time as the court, on application, may grant, the trustee shall declare and distribute the dividend without regard to any claim by him and thereupon any such claim shall be forfeited as well against the trustee personally as against the estate.

Receipts, payments, accounts and audit

86. Trustee to furnish list of creditors

The trustee or official receiver shall, whenever re­quired by any creditor so to do, furnish and transmit to him by post a list of the creditors showing the amount of the debt due to each creditor, and shall be entitled to charge for such list the sum of fifty cents per folio of one hundred words, together with the cost of the postage thereof.

87. Trustee to furnish statement of accounts

It shall be lawful for any creditor, with the concur­rence of one-sixth of the creditors (including himself), at any time to call upon the trustee or official receiver to furnish and transmit to the creditors a statement of the accounts up to the date of such notice, and the trustee shall, upon the receipt of such notice, furnish and transmit such statement of the ac­counts:Provided that, the person at whose instance the ac­counts are furnished shall deposit with the trustee or official receiver, as the case may be, a sum sufficient to pay the costs of furnishing and transmitting the accounts, which sum shall be repaid to him out of the estate if the creditors or the court so direct.

88. Books to be kept by trustee

The trustee shall keep, in the manner prescribed, proper books in which he shall from time to time cause to be made entries or minutes of proceedings at meetings, and of such other matters as may be prescribed, and any creditor of the bankrupt may, subject to the control of court, personally or by his agent, inspect any such books.

89. Annual statement of proceedings

(1)Every trustee in a bankruptcy shall from time to time, as may be prescribed, and not less than once in every year during the continuance of the bankruptcy, transmit to the official receiver a statement showing the proceedings in the bankruptcy up to the date of the statement containing the pre­scribed particulars and made out in the prescribed form.
(2)The official receiver shall cause the statements so transmitted to be examined, and shall call the trustee to ac­count for any misfeasance, neglect, or omission, which may appear on the said statements or in his accounts or otherwise, and may require the trustee to make good any loss which the estate of the bankrupt may have sustained by the misfeasance, neglect, or omission.

90. Trustee not to pay into private account

No trustee in a bankruptcy or under any composi­tion or scheme of arrangement shall pay any sums received by him as trustee into his private banking account.

91. Payment of money into prescribed bank

(1)A Bankruptcy Estates Account shall be kept by the official receiver with the prescribed bank, and all moneys received by him in respect of proceedings under this Act shall be paid to that account.
(2)Every trustee in bankruptcy shall, in such manner and at such times as the official receiver shall direct, pay the money received by him to the Bankruptcy Estates Account at the prescribed bank, and the official receiver shall furnish him with a certificate of receipt of the money so paid:Provided that—
(a)if it appears to the committee of inspection that, for the purpose of carrying on the debtor's busi­ness or of obtaining advances, or because of the probable amount of the cash balance, or if the committee shall satisfy the court that for any other reason it is for the advantage of the creditors that the trustee should have an account with the local bank, the court shall, on the application of the committee of inspection, authorise the trustee to make his payments into and out of such local bank as the committee may select;
(b)in any bankruptcy composition or scheme or ar­rangement in which the official receiver is acting as trustee, or in which a trustee is acting without a committee of inspection, the court may, if for spe­cial reasons it thinks fit to do so, upon the applica­tion of the official receiver or other trustee, autho­rise the trustee to make his payments into and out of such local bank as the court may direct.
(3)Where the trustee opens an account in a local bank, he shall open and keep it in the name of the debtor's estate, and any interest receivable in respect of the account shall be part of the assets of the estate, and the trustee shall make his payments into and out of the local bank in the prescribed manner.
(4)Subject to any general rules relating to small bank­ruptcies referred to in seen on 119 of this Act, where the deb­tor at the date of the receiving order has an account at a bank, such accounts shall not be withdrawn until the expiration of seven days from the day appointed for the first meeting of creditors, unless the court, for the safety of the account, or other sufficient cause, orders the withdrawal of the account.
(5)Where a trustee at any time retains for more than ten days a sum exceeding one thousand shillings, or such oth­er amount as the court in any particular case authorises him to retain, then, unless he explains the retention to the satisfaction of the court, he shall pay interest on the amount so retained in excess at the rate of twenty per centum per annum, and shall have no claim to remuneration, and may be removed from his office by the court, and shall be liable to pay any expenses occasioned by reason of his default.

92. Investment of surplus funds

(1)Whenever the cash balance standing to the cre­dit of the Bankruptcy Estates Account is in excess of the amount which in the opinion of the official receiver is re­quired for the time being to answer demands in respect of bankrupts' estates, the official receiver may place the same or any part thereof on fixed deposit with the prescribed bank.
(2)Whenever any money so placed on deposit is, in the opinion of the official receiver, required to answer any demands in respect of bankrupts' estates, the official receiver shall thereupon withdraw such money from fixed deposit and repay the same to the credit of the cash balance of the Bank­ruptcy Estates Account.
(3)All interest accruing from any money so placed on deposit shall be paid by the official receiver to the credit of a separate account entitled the Bankruptcy Contingency Fund at the prescribed bank.
(4)Where it appears that it is in the public interest to do so and that other funds are not available or properly char­geable, the court may, on the application of the official re­ceiver, authorise him to employ money in the Bankruptcy Contingency Fund to defray the cost in whole or in part of any of the following:
(a)the prosecution of any debtor for any bankruptcy offences alleged to have been committed by him;
(b)the institution of proceedings and the payment of expenses of witnesses (if any) for the discovery or recovery of property belonging to any debtor;
(c)the institution of proceedings to set aside an al­leged fraudulent preference;
(d)the employment of counsel in matters connected with an estate which by reason of their difficulty or other good cause cannot be dealt with by the official receiver himself;
(e)the employment of interpreters in cases where the court is unable to provide an interpreter;
(f)the payment of expenses involved in arresting a debtor and bringing him before the court;
(g)any other expenditure which the court may deem fit.
(5)The court may, in its discretion, order that the fund be reimbursed in whole or in part in the event of any money being recovered as a result of the expenditure so authorised.

93. Audit of trustee's accounts

(1)Every trustee shall, at such time as may be pre­scribed, but not less than twice in each year during his tenure of office, send to the official receiver an account of his re­ceipts and payments as such trustee.
(2)The account shall be in a prescribed form, shall be made in duplicate, and shall be verified by a statutory declara­tion in the prescribed form.
(3)The official receiver shall cause the accounts so sent to be audited, and, for the purposes of the audit, the trus­tee shall furnish the auditor with such vouchers and information as the auditor may require, and the auditor may at any time require the production of and inspect any books or ac­counts kept by the trustee.
(4)When any such account has been audited, one copy thereof shall be filed and kept by the official receiver, and the other copy shall be filed with the court, and each copy shall be open to the inspection of any creditor, or of the bankrupt, or of any person interested.

Vacation of office by trustee

94. Release of trustee

(1)When the trustee has realised all the property of the bankrupt, or so much thereof as can, in his opinion, be realised without needlessly protracting the trusteeship, and distributed a final dividend, if any, or has ceased to act by rea­son of a composition having been approved, or has resigned, or has been removed from his office, the court shall, on his application, cause a report on his accounts to be prepared, and, on his complying with all the requirements of the court, shall take into consideration the report, and any objection which may be urged by any creditor or person interested against the release of the trustee, and shall either grant or withhold the release accordingly.
(2)Where the release of a trustee is withheld, the court may, on the application of any creditor or person interested, make such order as it thinks just, charging the trustee with the consequences of any act or default he may have done or made contrary to his duty.
(3)An order of the court releasing the trustee shall discharge him from all liability in respect of any act done or default made by him in the administration of the affairs of the bankrupt, or otherwise in relation to his conduct as trustee, but any such order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.
(4)The foregoing provisions of this section shall apply to the official receiver when he is, or is acting as, trustee, and when the official receiver has been released under this section, he shall continue to act as trustee for any subsequent purposes of the administration of the debtor's estate, but no liability shall attach to him personally by reason of his so continuing in respect of any act done, default made, or liability incurred before his release.
(5)Where the trustee has not previously resigned or been removed, his release shall operate as a removal of him from his office and thereupon the official receiver shall be the trustee.
(6)Where, on the release of a trustee, the official re­ceiver is, or is acting as, trustee, no liability shall attach to him personally in respect of any act done or default made, or lia­bility incurred, by any prior trustee.

95. Office of trustee vacated by insolvency

Where a receiving order is made against a trustee, he shall thereby vacate his office of trustee.

96. Removal of trustee

(1)The creditors may, by ordinary resolution, at a meeting specially called for that purpose, of which seven days' notice has been given, remove a trustee appointed by them, and may, at the same or any subsequent meeting, ap­point another person to fill the vacancy as hereinafter pro­vided in case of a vacancy in the office of trustee.
(2)Where the court is of opinion—
(a)that a trustee appointed by the creditors is guilty of misconduct or fails to perform his duties under this Act;
(b)that his trusteeship is being needlessly protracted without any probable advantage to the creditors;
(c)that he is by reason of lunacy, or continued sick­ness or absence, incapable of performing his du­ties; or
(d)that his connection with or relation to the bankrupt or his estate, or any particular creditor, might make it difficult for him to act with impartiality in the interest of the creditors generally, or where, in any other matter he has been removed from office on the ground of misconduct, the court may re­move him from his office.

Part VI – Constitution, procedure and powers of court

Jurisdiction

97. Jurisdiction in bankruptcy

The court having jurisdiction in bankruptcy shall be the High Court; save that the Chief Justice may by order delegate all or any part of the jurisdiction of the High Court in bankruptcy to any subordinate court, either generally or for the purpose of any particular case or class of cases.

98. Judge may exercise his powers in chambers

Subject to the provisions of this Act, and to gener­al rules, a judge of the court may exercise in chambers the whole or any part of his powers.

99. Official receiver to make payments in accordance with directions of court

Where any moneys or funds have been received by the official receiver under this Act and the court makes an or­der declaring that any person is entitled to such moneys or funds, the official receiver shall make payment accordingly to that person.

100. General powers of court

(1)Subject to the provisions of this Act, the court shall have full the power to decide all questions of priorities, and all other questions whatsoever, whether of law or fact, which may arise in any case of bankruptcy coming within its cognisance, or which the court may deem it expedient or un­necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case.
(2)Where default is made by a trustee, debtor, or other person, in obeying any order or direction given by the official receiver, the court may on the application of the official re­ceiver order such defaulting trustee, debtor, or person to comply with the order or directions so given; and the court may also, if it thinks fit upon any such application, make an immediate order for the committal of such defaulting trustee, debtor or person:Provided that, the power given by, this subsection shall be deemed to be in addition to and not in substitution for any other right or remedy in respect of such default.

101. Disqualification of bankrupt

(1)Where a debtor is adjudged bankrupt, he shall be disqualified for—
(a)being appointed or acting as a justice of the peace; or
(b)being elected to, or holding or exercising the of­fice of mayor or member of a local government authority, school committee or road board.
(2)Where a person is adjudged bankrupt whilst hold­ing the office of justice of the peace, mayor, or member of a local government authority, school committee or road board his office shall thereupon become vacant.
(3)The disqualifications to which a bankrupt is sub­ject under this section shall be removed and cease if and when—
(a)the adjudication of bankruptcy against him is an­nulled;
(b)a period of five years has elapsed from the date of his discharge; or
(c)he obtains from the court his discharge with a cer­tificate to the effect that his bankruptcy was caused by misfortune without any misconduct on his part.
(4)The court may grant or withhold the certificate re­ferred to subsection (3)(c) as it thinks fit, but any refusal of the certificate shall be subject to appeal.

Judgment debtors

102. Power to make receiving order in lieu of committal order

Where application is made by a judgment creditor to the court for the committal of a judgment debtor, the court may, if it thinks fit, decline to commit, and in lieu thereof, with the consent of the judgment creditor and on payment by him of the prescribed fee, make a receiving order against the debtor, and in such a case the judgment debtor shall be deemed to have committed an act of bankruptcy at the time the order is made, and the provisions of this Act shall apply as if for references to the presentation of a petition by or against a person there were substituted references to the making of such a receiving order.[Ord. No. 45 of 1947 s. 18]

Appeals

103. Appeals in bankruptcy

(1)The court may at any time review, rescind or vary any order made by it.
(2)Orders of the court in bankruptcy matters shall, at the instance of the person aggrieved, be subject to appeal but no appeal shall be entertained except in conformity with such general rules as may for the time being be in force in relation to the appeal.
(3)Where, by this Act, an appeal to the court is given against any decision of the official receiver, the appeal shall be brought within twenty-one days from the time when the decision appealed against is pronounced or made.[Ord. No. 20 of 1958 s. 17]

Procedure

104. Discretionary power of court

(1)Subject to the provisions of this Act and to general rules, the costs of and incidental to any proceeding in court under this Act shall be in the discretion of the court.
(2)The court may at any time adjourn any proceedings before it upon such terms, if any, as it may think fit to impose.
(3)The court may at any time amend any written process or proceeding under this Act, upon such terms, if any, as it may think fit to impose.
(4)Where by this Act, or by general rules, the time for doing any act is limited, the court may extend the time either before or after the expiration thereof upon such terms, if any, as it may think fit to impose.
(5)Subject to general rules, the court may in any mat­ter take the whole or any part of the evidence either viva voce, or by interrogatories; or upon affidavit, or, outside Tanzania, by commission.

105. Consolidation of petitions

Where two or more bankruptcy petitions are pre­sented against the same debtor or against joint debtors, the court may consolidate the proceedings, or any of them, on such terms as the court thinks fit.

106. Power to change carriage of proceedings

Where the petitioner does not proceed with due diligence on his petition, the court may substitute as petitioner any other creditor to whom the debtor may be indebted in the amounts required by this Act in the case of the petitioning creditor.

107. Continuance of proceedings on death of debtor

Where a debtor by or against whom a bankruptcy petition has been presented dies, the proceedings in the matter shall, unless the court orders otherwise, be continued as if he were alive.

108. Power to stay proceedings

The court may at any time, for sufficient reason make an order staying the proceedings under a bankruptcy petition, either altogether or for a limited time, on such terms and subject to such conditions as the court may think just.

109. Power to present petition against one partner

Any creditor whose debt is sufficient to entitle him to present a bankruptcy petition against all the partners of a firm may present a petition against anyone or more, partners of the firm without including the others.

110. Power to dismiss petition against some respondents only

Where there are more respondents than one to a petition, the court may dismiss the petition as to one or more of them, without prejudice to the effect of the petition as against the other or others of them.

111. Property of partners to be vested in same trustee

Where a receiving order has been made on a bankruptcy petition by or against one member of a partner­ship, any other bankruptcy petition by or against a member of the same partnership shall be filed with the first-mentioned petition, and, unless the court directs otherwise, the same trus­tee or receiver shall be appointed as may have been appointed in respect of the property of the first-mentioned member of the partnership, and the court may give such directions for consolidating the proceedings as it thinks just.

112. Actions by trustee and bankrupt's partners

Where a member of a partnership is adjudged bankrupt, the court may authorise the trustee to commence and prosecute any action in the names of the trustee and of the bankrupt's partner; and any release by such partner of the debt or demand to which the action relates shall be void; but notice of the application for authority to commence the action shall be given to him, and he may show cause against it, and on his application the court may, if it thinks fit, direct that he shall receive his proper share of the proceeds of the action, and if he does not claim any benefit therefrom, he shall be indemni­fied against costs in respect thereof as the court directs.

113. Actions on joint contracts

Where a bankrupt is a contractor in respect of any contract jointly with any person or persons, such person or persons may sue or be sued in respect of the contract with­out the joinder of the bankrupt.

114. Proceedings in partnership name

Any two or more persons, being in partners, or any person carrying on business under a partnership name, may take proceedings or be proceeded against under this Act in the name of the firm, but in such case the court may, on application by any person interested, order the names of the persons who are partners in such firm or the name of such person to be disclosed in such manner, and verified on oath or otherwise, as the court may direct.

115. Court to be auxiliary to other reciprocating courts

The court of Tanzania and all the officers thereof shall in all matters of bankruptcy, act in aid of every recipro­cating court elsewhere having jurisdiction in bankruptcy or insolvency, and an order of the court seeking aid, with a re­quest to this court shall be deemed sufficient to enable this court to exercise, in regard to the matters directed by the or­der, such jurisdiction as either the court which made the re­quest, or this court could exercise in regard to similar matters within their respective jurisdiction, save that to enable the official receiver of the United Republic to act as the agent of an officer of a reciprocating court or to enable an officer of this court to seek the aid of an official receiver of a reciprocat­ing court in the manner provided in Part IX of this Act, it shall not be necessary for this court or any reciprocating court to make any order or send any request under this section.

116. Commitment to prison

Where the court commits any person to prison, the commitment may be to such convenient prison as the court thinks expedient, and, if the gaoler of any prison refuses to receive any prisoner so committed, he shall on conviction be liable for every such refusal to a fine not exceeding two thou­sand shillings.

Part VII – Supplementary provisions

Application of the Act

117. Married women

(1)Every married woman shall be subject to the bankruptcy laws as if she were femme sole.
(2)Where a final judgment or order of for any amount has been obtained against a married woman, whether or not expressed to be payable out of her separate property, that judgment or order shall be available for bankruptcy pro­ceedings against her by a bankruptcy notice as though she were personally bound to pay the judgment debt or sum or­dered to be paid.[Ord. No. 45 of 1947 s. 19]

118. Exclusion of companies

A receiving order shall not be made against any corporation or against any association or company registered under the Companies Act.[Cap. 212]

119. Application of Act in case of small estates

Where a petition is presented by or against a deb­tor, if the court is satisfied, by affidavit or otherwise, or the official receiver reports to the court, that the property of the debtor is not likely to exceed in value twelve thousand shil­lings, the court may make an order that the debtor's estate be administered in a summary of manner, and thereupon the pro­visions of this Act shall be subject to the following modifica­tions—
(a)if the debtor is adjudged bankrupt the official re­ceiver shall be the trustee in the bankruptcy;
(b)there shall be no committee of inspection, but the official receiver may do all things which may be done by the trustee with the permission of the committee of inspection;
(c)such other modifications may be made in the pro­visions of this Act as may be prescribed by general rules with the view of saving expense and simplifying procedure, but nothing in this section shall permit the modification of the provisions of this Act relating to the examination or discharge of the debtor:
Provided that, the creditors may at any time, by special resolution, resolve that some person other than the official re­ceiver be appointed trustee in the bankruptcy, and thereupon the bankruptcy shall proceed as if an order for summary ad­ministration had not been made.[Ords. Nos. 45 of 1947 s. 20; 20 of 1958 s. 18]

120. Administration in bankruptcy of estate of person dying insolvent

(1)Any creditor of a deceased debtor whose debt would have been sufficient to support a bankruptcy petition against the debtor, had he been alive, may present to the court a petition in the prescribed form praying for an order for the administration of the estate of the deceased debtor, according to the law of bankruptcy.
(2)Upon the prescribed notice being given to the legal personal representative of the deceased debtor, the court may, in the prescribed manner, upon proof of the petitioner's debt, unless the court is satisfied that there is a reasonable proba­bility that the estate will be sufficient for the payment of the debts owing by the deceased, make an order for the adminis­tration in bankruptcy of the deceased debtor's estate, or may, upon cause shown, dismiss the petition with or without costs.
(3)Upon an order being made for the administration of a deceased debtor's estate, the property of the debtor shall vest in the official receiver, as trustee thereof, and he shall forthwith proceed to realise and distribute it in accordance with the provisions of this Act:Provided that, creditors shall have—
(a)the same powers as to appointment of trustees and committees of inspection as they have in other cases where the estate of a debtor is being admi­nistered or dealt with in bankruptcy, and the pro­visions of this Act, relating to trustees and com­mittees of inspection shall apply to trustees and committees of inspection appointed under the power so conferred;
(b)if a trustee other than the official receiver is ap­pointed and no committee of inspection is ap­pointed, any act or thing or any direction or per­mission which might have been done or given by a committee of inspection may be done or given by the court.
(4)The provisions of Part III and IX of this Act and of sections 28, 85, 94(4) and 119 shall, so far as the same are ap­plicable, apply to the administration under the provisions of this section of the estate of a deceased debtor in like manner as they apply in the case of a bankruptcy and in their applica­tion to the administration of the estate of a deceased debtor those provisions shall be read as if—
(a)for references to the presentation of the bankrupt­cy petition, there were substituted references to the presentation of the petition for an order of administration;
(b)for references to the date of the making of the re­ceiving order, there were substituted references to the date of death;
(c)for references to becoming bankrupt and to the bankrupt, there were substituted references to dy­ing insolvent and to the deceased debtor;
(d)for references to a person being adjudged bankrupt and to the making of an order of adjudication, there were substituted references to the making of an order of administration;
(e)for references to the bankruptcy, there were substi­tuted references to the administration;
(f)references to committing an act of bankruptcy in­cluded references to dying insolvent; and
(g)there were added to the list of debts which under the provisions of section 38 are to be paid in prior­ity to all other debts, death-bed charges including fees for medical attendance on the deceased deb­tor, and charges for the board and lodging of the deceased debtor for one month prior to his death.
(5)In the administration of the property of the de­ceased debtor under an order of administration, the official receiver or trustee shall have regard to any claim by the legal personal representative of the deceased debtor to payment of the proper funeral and testamentary expenses incurred by him in and about the debtor's estate, and such claims shall be deemed a preferential debt under the order, and shall, notwith­standing anything to the contrary in the provisions of this Act relating to the priority of other debts, be payable in full, out of the debtor's estate, in priority to all other debts.
(6)Where, on the administration of a deceased deb­tor's estate, any surplus remains in the hands of the official receiver or trustee, after payment in full of all the debts due from the debtor, together with the costs of the administration and interest as provided by this Act in case of bankruptcy, such surplus shall be paid over to the legal personal represent­ative of the deceased debtor's estate, or dealt with in such oth­er manner as may be prescribed.
(7)Notice to the legal personal representative of a de­ceased debtor of the presentation by a creditor of a petition under this section shall, in the event of an order for adminis­tration being made thereon, be deemed to be equivalent to no­tice of an act of bankruptcy, and after such notice no payment or transfer of property made by the legal personal representa­tive shall operate as a discharge to him as between himself and the official receiver or trustee; save as aforesaid nothing in this section shall invalidate any payment made or any act or thing done in good faith by the legal personal representative before the date of the order for administration.
(8)A petition for the administration of the estate of a deceased debtor under this section may be presented by the legal personal representative of the debtor, and, where a peti­tion is so presented by such a representative, this section shall apply subject to such modifications as may be prescribed by general rules made under subsection (10) of this section.
(9)Unless the context requires otherwise, "creditor" means one or more creditors qualified to present a bankruptcy petition as in this Act provided, and of the expressions "prop­erty of the deceased debtor" and "estate of the deceased debtor" shall be deemed to include any property which would have been divisible amongst the creditors had a bankruptcy petition been presented against the deceased debtor imme­diately before his death and the proceedings had been contin­ued as if he were alive.
(10)General rules for carrying into effect the provi­sions of this section may be made in the same manner and to the like effect and extent as in bankruptcy.[Ords. Nos. 45 of 1947 s. 21; 20 of 1958 ss. 10, 19]

General rules

121. Power to make general rules

The Chief Justice, may with the concurrence of the Minister responsible for Legal Affairs, make general rules for carrying into effect the objects of this Act.[G.N.s Nos. 478 of 1962; 64 of 1966]

Fees and salaries

122. Fees

The Chief Justice may, with the concurrence of the Minister responsible for Legal Affairs, prescribe a scale of fees and percentages to be charged for in respect of proceed­ings under this Act.[G.N. No. 478 of 1962]

123. Salaries and remuneration

The Chief Justice shall, with the concurrence of the Minister responsible for Legal Affairs, direct whether any and what remuneration is to be allowed to any person (other than the official receiver or his staff) performing any duties under this Act, and may vary, increase, or diminish such re­muneration, as he may think fit.[G.N. No. 478 of 1962]

Evidence

124. Gazette to be evidence

(1)A copy of the Gazette containing any notice inserted therein in pursuance of this Act shall be evidence of the facts stated in the notice.
(2)The production of a copy of the Gazette containing any notice of a receiving order, or of an order adjudging a debtor bankrupt shall be conclusive evidence in all legal pro­ceedings of the order having been duly made, and of its date.

125. Evidence of proceedings at meetings of creditors

(1)A minute of proceedings at a meeting of cred­itors under this Act, signed at the same or the next ensuing meeting, by a person describing himself as, or appearing to be, chairman of the meeting at which the minute is signed shall be received in evidence without further proof.
(2)Until the contrary is proved, every meeting of cred­itors in respect of the proceedings whereof a minute has been so signed shall be deemed to have been duly convened and held, and all resolutions passed or proceedings had thereat to have been duly passed or had.

126. Evidence of proceedings in bankruptcy

Any petition or copy of a petition in bankruptcy, any order or certificate or copy of an order or certificate made by the court, any instrument or copy of an instrument, affida­vit or document made or used in the course of any bankruptcy proceedings or other proceedings had under this Act, shall if it appears to be sealed with the seal of the court, or purports to be signed by any judge thereof, or is certified as a true copy by any registrar thereof, be receivable in evidence in all legal proceedings whatever.

127. Swearing of affidavits

Subject to general rules, any affidavit to be used in the court may be sworn before any person authorised to administer oaths in the court, or before a magistrate or a jus­tice of the peace for the district where it is sworn, or in the case of a person residing outside the United Republic, before any person qualified to administer oaths in the country where he resides.

128. Death of debtor or witness

In the case of the death of the debtor or his wife, or of a witness whose evidence has been received by the court in any proceeding under this Act, the deposition of the person so deceased, purporting to be sealed with the seal of the court, or a copy thereof purporting to be so sealed, shall be admitted as evidence of the matters therein deposed to.

129. Certificate of appointment of trustee

A certificate of the court that a person has been appointed trustee under this Act shall be conclusive evidence of his appointment.

Miscellaneous provisions

130. Computation of time

(1)Where by this Act any limited time from or after any date or event is appointed or allowed for the doing of any act or the taking of any proceeding, then in the computa­tion of that limited time the same shall be taken as exclusive of the day of that date or of the happening of that event, and as commencing at the beginning of the next following day; and the act or proceeding shall be done or taken at latest on the last day of that limited time as so computed unless the last day is a Sunday or a public holiday or a day on which the of­fices of the court are wholly closed, in which case any act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards which is not one of the days in specified in this section.
(2)Where by this Act the time limited for doing any act or thing is less than six days, a Sunday, public holiday and any other day on which the offices of the court are wholly closed shall be excluded in computing such time.
(3)Where by this Act any act or proceeding is directed to be done or taken on a certain day, then, if that day happens to be one of the days specified in this section, the act or pro­ceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards which is not one of the days specified in this section.

131. Service of notices

All notices and other documents for the service of which no special mode is directed may be sent by post to the last known address of the person to be served therewith.

132. Formal defect not to invalidate proceedings

(1)No proceeding in bankruptcy shall be invali­dated by any formal defect or by any irregularity, unless the court before which an objection is made to the proceeding is of the opinion that substantial injustice has been caused by the defect or irregularity and that the injustice cannot be remedied by any order of the court.
(2)No defect or irregularity in the appointment of election of a receiver, trustee or member of a committee of inspection shall vitiate any act done by him in good faith.

133. Exemption of deeds, etc., from stamp duty

(1)Every deed, conveyance, assignment or other assurance relating solely to freehold or leasehold property, or to any mortgage, charge or other incumbrance on, or any es­tate, right or interest in, any movable or immovable property which is part of the estate of any bankrupt, and which, after the execution of the deed, conveyance, assignment or other assurance, either at law or in equity, is or remains the estate of the bankrupt or of the trustee under the bankruptcy, and every power of attorney, proxy paper, writ, order, certificate, affida­vit, bond or other instrument or writing relating solely to the property of any bankrupt, or to any proceeding under any bankruptcy, shall be exempt from stamp duty, except in re­spect of fees under this Act.
(2)For the purposes of this section "bankruptcy" shall include any proceeding under this Act whether before or after adjudication and "bankrupt" shall include any debtor pro­ceeded against under this Act.

134. Acts of corporations, partners, etc.

For all or any of the purposes of this Act, a cor­poration may act by any of its officers authorised in that be­half under the seal of the corporation, a firm may act by any of its members, and a lunatic may act by his guardian or the appointed manager of his estate.

135. Certain provisions to bind the United Republic

Save as provided in this Act, the provisions of this Act relating to the remedies against the property of a deb­tor, the priorities of debts, the effect of a composition or scheme of arrangement, and the effect of a discharge, shall bind the United Republic.

Unclaimed funds or dividends

136. Unclaimed and undistributed dividends or funds under this Act

(1)Where the trustee, under any bankruptcy composition or scheme, pursuant to this Act, has under his control any unclaimed dividend which has remained un­claimed for more than six months, or where, after making a final dividend, he has in his hands or under his control any unclaimed or undistributed money arising from the property of the debtor, he shall forthwith pay it to the Bankruptcy Estates Account at the prescribed bank, and the official receiver shall furnish him with a certificate of receipt of the money so paid, which shall be an effectual discharge to him in respect thereof.
(2)Where any unclaimed or undistributed funds or dividends in the hands or under the control of any trustee or other person empowered to collect, receive, or distribute any funds or dividends under the Deeds of Arrangement Act have remained or remain unclaimed or undistributed for six months after they become claimable or distributable, or in any other case for two years after the receipt thereof by such trustee or other person, it shall be the duty of such trustee or other per­son forthwith to pay them to the Bankruptcy Estates Account at the prescribed bank, and the official receiver shall furnish such trustee or other person with a certificate or receipt of the money so paid, which shall be an effectual discharge to him in respect thereof:Provided that—
(a)the official receiver may at any time order any such trustee or other person to submit to him an account verified by affidavit of the sums received and paid by him as aforesaid, and may direct and enforce an audit of the account.
(b)the official receiver may from time to time appoint a person to collect and get in all such unclaimed or undistributed funds or dividends, and for the pur­poses of this section the court shall have and, at the instance of the official receiver, may exercise, all the powers conferred by this Act with respect to the discovery and realisation of the property of a debtor, and the provisions of Part II of this Act with respect thereto shall, with any necessary modifications, apply to proceedings under this section.[Cap. 26]
(3)The provisions of this section shall not, except as expressly declared herein, deprive any person of any large or other right or remedy to which he may be entitled against such trustee or other person.
(4)Where any unclaimed dividends or undistributed money paid into the Bankruptcy Estates Account in pursuance of this section shall have remained in that account for a period of two years, the official receiver shall transfer such money to the credit of the Bankruptcy Contingency Fund.
(5)Any person claiming to be entitled to any moneys paid in to the Bankruptcy Estates Account or the Bankruptcy Contingency Fund pursuant to this section, may apply to the official receiver for payment to him of the same, and the offi­cial receiver, if satisfied that the person claiming is so entitled, shall make an order for the payment to such person of the sum due, and if the money claimed has been paid to the credit of the Bankruptcy Contingency Fund and the said fund is insuf­ficient to meet the sum required to be paid, the deficiency shall be met by the Accountant General out of the public rev­enue.
(6)Any person dissatisfied with the decision of the official receiver in respect of his claim may appeal to the court.

Part VIII – Bankruptcy offences

137. Fraudulent debtors

(1)Any person who has been adjudged bankrupt or in respect of whose estate a receiving order has been made shall in each of the following cases commit an offence—
(a)if he does not to the best of his knowledge and be­lief fully and truly discover in the trustee all his property, movable and immovable, and how and to whom and for what consideration and when he disposed of any part thereof, except such part as has been disposed of in the ordinary way of his trade (if any) or laid out in the ordinary expense of his family, unless he proves that he had no intent to defraud;
(b)if he does not deliver up to the trustee, or as he di­rects, all such part of his movable and immovable property as is in his custody or under his control, and which he is required by law to deliver up, un­less he proves that he had no intent to defraud;
(c)if he does not deliver up to the trustee, or as he di­rects, all books, documents, papers and writings relating to his property or affairs, unless he proves that he had no intent to defraud;
(d)if, after the presentation of a bankruptcy petition by or against him, or within two years next before such presentation, he conceals any part of his property to the value of two hundred shillings or upwards, or conceals any debt due to or from him, unless he proves that he had no intent to defraud;
(e)if, after the presentation of a bankruptcy petition by or against him, or within two years next before such presentation, he fraudulently removes any part of his property to the value of two hundred shillings or upwards;
(f)if he makes any material omission in any state­ment relating to his affairs, unless he proves that he had no intent to defraud;
(g)if, knowing or believing that a false debt has been proved by any person under the bankruptcy, he fails for the period of a month to inform the trustee thereof;
(h)if, after the presentation of a bankruptcy petition by or against him, he prevents the production of any book, document, paper, or writing affecting or relating to his property or affairs, and unless he proves that he had no intent to conceal the state of his affairs or to defeat the law;
(i)if, after the presentation of a bankruptcy petition by or against him, or within two years next before such presentation, he conceals, destroys, mutilates, or falsifies, or is privy to the concealment, destruc­tion, mutilation or falsification of any book or document affecting or relating to his property or affairs, unless he proves that he had no intent to conceal the state of his affairs or to defeat the law;
(j)if, after the presentation of a bankruptcy petition by or against him, or within two years next before such presentation, he makes or is privy to the making of any false entry in any book or document af­fecting or relating to his property or affairs, unless he proves that he had no intent to conceal the state of his affairs or to defeat the law;
(k)if, after the presentation of a bankruptcy petition by or against him, or within two years next before such presentation, he fraudulently parts with, al­ters, or makes any omission in, or is privy to the fraudulently parting with, altering, or making any omission in, any document affecting or relating to his property or affairs;
(l)if, after the presentation of a bankruptcy petition by or against him, or at any meeting of his credi­tors within two years next before such presenta­tion, he attempts to account for any part of his property by fictitious losses or expenses;
(m)if, within two years next before the presentation of a bankruptcy petition by or against him, or after the presentation of a bankruptcy petition and be­fore the making of a receiving order, he, by any false representation or other fraud, has obtained any property on credit and has not paid for the same;
(n)if, within two years next before the presentation of a bankruptcy petition by or against him, or after the presentation of a bankruptcy petition and be­fore the making of a receiving order, he obtains under the false pretence of carrying on business, and, if a trader, of dealing in the ordinary way of his trade, any property on credit and has not paid for the same, unless he proves that he had no in­tent to defraud;
(o)if, within two years next before the presentation of a bankruptcy petition by or against him, or after the presentation of a bankruptcy petition and be­fore the making of a receiving order, he pawns, pledges, or disposes of any property which he has obtained on credit and has not paid for, unless, in the case of a trader, such pawning, pledging, disposing is in the ordinary way of his trade, and un­less in any case he proves that he had no intent to defraud;
(p)if he is guilty of any false representation or other fraud for the purpose of obtaining the consent of his creditors or any of them to an agreement with reference to his affairs or to his bankruptcy;
(q)if he makes default in payment for the benefit of creditors of any portion of a salary or other in­come in respect of the payment of which the court is authorised to make an order;
(r)if, within one year preceding the date of the re­ceiving order, he has continued to trade or carry on business after knowing himself to be insolvent;
(s)if, within six months next before the making of a receiving order, he sells goods at a price lower than cost, unless he proves that he had no intention to defraud his creditors;
(t)if he has contracted any debt provable in the bank­ruptcy without having at the time of contracting it any reasonable or probable ground of expectation (proof whereof shall lie on him) of being able to pay it.
(1A)For the purpose of this subsection, the expression "trustee" means the official receiver of the debtor's estate or trustee administering his estate for the benefit of his creditors.[Cap. 4 s. 8]
(2)Any person guilty of an offence in the cases men­tioned in subsection (1) shall be liable on conviction to impri­sonment for any term not exceeding three years except in the cases mentioned respectively in paragraphs (m), (n) and (o) where he shall be liable on conviction to imprisonment for any term not exceeding five years.
(3)Where any person pawns, pledges or disposes of any property in circumstances which amount to an offence under paragraph (o) of subsection (1), every person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged or disposed of in such circumstances aforesaid shall commit an offence and on conviction be liable to improvement for any term not exceeding five years.[Ords. Nos. 45 of 1947 s. 22; 20 of 1965 s. 20]

138. Undischarged bankrupt obtaining credit

Where a person who has been adjudged bankrupt or insolvent in the United Republic or any reciprocating terri­tory and has not obtained his discharge—
(a)either alone or jointly with any other person ob­tains credit to the extent of one hundred shillings or upwards from any person without informing that person that he is an undischarged bankrupt; or
(b)engages in any trade or business under a name other than that under which he was adjudged bankrupt without disclosing to all persons with whom he enters into any business transaction the name under which he was adjudged bankrupt, he commits an offence, and on conviction thereof lia­ble to imprisonment for any term not exceeding five years.[Ord. No. 39 of 1960 s. 3]

139. Frauds by bankrupts, etc.

(1)Where any person who has been adjudged bankrupt or in respect of whose estate a receiving order has been made—
(a)in incurring any debt of liability has obtained cre­dit under false pretences or by means of any other fraud.
(b)with intent to defraud his creditors or any of them, has made or caused to be made any gift or transfer of, or charge on, his property; or
(c)with intent to defraud his creditors, has concealed or removed any part of his property since, or with­in two months before, the date of any unsatisfied judgment or order for payment of money obtained against him,
he commits an offence, and upon conviction is liable to impri­sonment for any term not exceeding five years.
(2)For the purposes of paragraph (b) of subsection (1) of this section, it is hereby declared that if any person who has been adjudged bankrupt, or in respect of whose estate a re­ceiving order has been made, has with intent to defraud his creditors or any of them caused or connived at the levying of any execution against his property he shall be deemed to have made a transfer of or charge on his property.[Ord. No. 39 of 1960 s. 4]

140. Bankrupt guilty of gambling, etc.

(1)Any person who has been adjudged bankrupt, or in respect of whose estate a receiving order has been made, commits an offence, if, having engaged in any trade or busi­ness, and having outstanding at the date of the receiving order any debts contracted in the course and for the purposes of such trade or business:
(a)he has, within two years prior to the presentation of the bankruptcy petition, materially contributed to or increased the extent of his insolvency by gambling or by rash and hazardous speculations, and such gambling or speculations are uncon­nected with his trade or business;
(b)he has, between the date of the presentation of the petition and the date of the receiving order, lost any part of his estate by such gambling or rash and hazardous speculation as aforesaid; or
(c)on being required by the official receiver at any time, or in the course of his public examination by the court, to account for the loss of any substantial part of his estate incurred within a period of a year next preceding the date of the presentation of the bankruptcy petition, or between that date and the date of the receiving order, he fails to give a satis­factory explanation of the manner in which such loss was incurred:
Provided that, in determining for the purposes of this section whether any speculations were rash and hazardous, the financial position of the accused person at the time when he entered into the speculations shall be taken into consideration.
(2)A prosecution shall not be instituted against any person under this section except by order of the court.

141. Bankrupt failing to keep proper accounts

(1)Any person who has been adjudged bankrupt or in respect of whose estate a receiving order has been made commits an offence, if, having been engaged in any trade or business during any period in the three years immediately preceding the date of the presentation of the bankruptcy peti­tion, he has not kept proper books of account throughout that period and throughout any further period in which he was so engaged between the date of the presentation of the petition and the date of the receiving order, or has not preserved all books of account so kept:Provided that, a person who has not kept or has not preserved books of account shall not be convicted of an of­fence under this sections—
(a)if his unsecured liabilities at the date of the receiv­ing order did not exceed, in the case of a person who has not on any previous occasion been ad­judged bankrupt or insolvent or made a composi­tion or arrangement with his creditors in Tanzania or any reciprocating territory, five thousand shil­lings, or in any other case one thousand shillings; or
(b)if he proves that in the circumstances in which he traded or carried on business the omission was honest and excusable.
(2)A prosecution shall not be instituted against any person under this section except by order of the court.
(3)For the purposes of this section, a person shall be deemed not to have kept proper books of account if he has not kept such books or accounts as are necessary to exhibit or ex­plain his transactions and financial position in his trade or business, including a book or books containing entries from day to day in sufficient detail of all cash received and cash paid, and, where the trade or business has involved dealings in goods, statements of annual stock takings, and (except in the case of goods sold by way of retail trade to the actual con­sumer) accounts of all goods sold and purchased showing the buyers and sellers thereof in sufficient detail to enable the goods and the buyers and sellers thereof to be identified.[Ord. No. 45 of 1947 s. 24]

142. Bankrupt absconding

Where any person who is adjudged bankrupt, or in respect of whose estate a receiving order has been made, after the presentation of a bankruptcy petition by or against him, or within six months before such presentation, quits Tan­zania, or attempts to make preparation to quit Tanzania, he shall (unless he proves that he had no intent to defraud) com­mit an offence.[Ord. No. 20 of 1958 s. 21]

143. False claim, etc.

Where any creditor, or any person claiming to be a creditor in any bankruptcy proceedings, makes any false claim, or any proof, declaration or statement of account, which is untrue in any material particular he commits an of­fence, unless he proves that he had no intent to defraud.[Ord. No. 45 of 1947 s. 26]

144. Order by court for prosecution on report of trustee

Where an official receiver or trustee in a bank­ruptcy reports to the court that in his opinion a debtor who has been adjudged bankrupt or in respect of whose estate a receiv­ing order has been made has committed an offence under this Act, or where the court is satisfied upon the presentation of any creditor or member of the committee of inspection that there is ground to believe that the debtor has committed any such offence, the court shall, if it appears to it that there is a reasonable probability that the debtor will be convicted, and that the circumstances are such as to render a prosecution de­sirable, order that the debtor be prosecuted for the offence.

145. Criminal liability after discharge or composition

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

146. General penalty

A person guilty of an offence under this Act in respect of which no special penalty is imposed by this Act shall be liable on conviction to imprisonment for a term not exceeding three years.[Ords. Nos. 45 of 1947 s. 26; 39 of 1960]

147. Form of charge

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

148. Director of Public Prosecutions to act in certain cases

Where the court orders the prosecution of any person for any offence under this Act or for any offence aris­ing out of or connected with any bankruptcy proceedings, it shall be the duty of the Director of Public Prosecutions to in­stitute and carry on the prosecution:Provided that, where the order of the court is made on the application of the official receiver and based on his report, the official receiver may institute the prosecution and carry on the proceedings, if or so long as those proceedings are con­ducted before a subordinate court, unless in the court thereof circumstances arise which render it desirable that the re­mainder of the proceedings should be carried on by the Direc­tor of Public Prosecutions.[Act No. 1 of 2008 s. 32]

149. Evidence as to frauds by agents

A statement or admission made by any person in any compulsory examination or deposition before the court on the hearing of any matter in bankruptcy shall not be admissi­ble as evidence against that person in any proceeding in re­spect of any offence relating to frauds by agents, bankers or factors.

Part IX – Provision for reciprocity with other countries

150. Declaration of reciprocating countries and courts

Where the Minister responsible for legal affairs is satisfied that the legislature of any country has enacted provisions for reciprocity in bankruptcy which in that country have the like effect as the provisions contained in this Part of this Act, the Minister may by order declare that country to be a reciprocating country and the court thereof having jurisdiction in bankruptcy, a reciprocating court for the purposes of this Act, and as from the date of publication of such order in the Gazette the provisions of this Part of this Act shall apply to all bankruptcy proceedings subsequently instituted in the declared country against a debtor having property in Tanzania.[GN. No. 478 of 1962]

151. Local effect of receiving order, etc., made by reciprocating court against debtor having property in Tanzania

Where a receiving order or order of adjudication or any appointment of a special manager or interim receiver made by has been made in any reciprocating country in bankruptcy proceedings against a having property in Tanzania, such order or appointment shall, subject to the other provisions of this Part of this Act, debtor have the like effect as if it had been made in bankruptcy proceedings against the debtor in Tanza­nia, and the debtor and his creditors shall be deemed to be in the same position and have the same rights and privileges, and be subject to the same disqualifications, restrictions, obliga­tions and liabilities in every respect as if such order or ap­pointment had been made under this Act.

152. Vesting of bankrupt's local property in trustee appointed in reciprocating country

Where an order of adjudication is made by a reci­procating court, the property of the bankrupt situated in Tan­zania shall, by virtue of such order, vest in the person from time to time discharging the office of trustee of the property of the bankrupt in the reciprocating country, in the same man­ner as if the order of adjudication and the appointment of trustee had been made in Tanzania, and the superintendence of such trustee shall continue to be exercised by the committee of inspection appointed in the reciprocating country or if there be no such committee, by the reciprocating court.

153. Local powers of official receiver, etc., appointed in reciprocating country

The official receiver, interim receiver, special manager or trustee of a reciprocating country officiating in bankruptcy proceedings against a debtor having property in Tanzania shall, subject to the control of the court by which he is appointed, be solely responsible for conducting those pro­ceedings, and managing the affairs of the debtor or bankrupt within Tanzania, and for such purposes shall, each in his re­spective capacity, have the same powers, rights, duties, obli­gations and liabilities as if he had derived his authority under this Act and in any such proceedings where by this Act a deb­tor, creditor or other person interested is required to do any act at the direction of an official receiver, interim receiver, special manager or trustee, or is permitted by this Act to move in any matter in connection with such proceedings, every such deb­tor, creditor or person interested shall do such act at the direc­tion of, and in all such matters treat and negotiate with or pro­ceed against the official receiver, interim receiver, special manager or trustee as the case may be of the reciprocating country, except in so far as any such official may have dele­gated his authority to the official receiver of the United Re­public as his agent in the manner hereinafter provided.

154. Local official receiver to act as agent of official receiver etc., of reciprocating country

Every official receiver, interim receiver, special manager or trustee of a reciprocating country officiating in bankruptcy proceedings against a debtor having property in the United Republic may require the official receiver of the United Republic to act as his agent either in regard to any spe­cific matter, or generally to take all such steps as may be law­ful under this Act for the discovery, seizure, protection, dis­claimer or realisation of any property of the bankrupt situated within the United Republic, and in such event it shall be the duty of the official receiver of the United Republic to act ac­cordingly.

155. Mode of requesting official receiver to act as agent

(1)Every request to act as agent as aforesaid shall be made in the manner prescribed under this Act, and shall be published as a notice in the Gazette, and as from the date of such request and without further formality or authority the official receiver shall, as regards the debtor or bankrupt and his property and creditors situated in the United Republic and for the purposes for which he is authorised, have the same rights, powers and duties as are conferred under the provisions of this Act upon an official receiver, interim receiver, special manager or trustee as the case may be:Provided that, nothing herein contained shall be taken to confer on the official receiver any interest or title in any such property otherwise than as an agent as aforesaid.
(2)On the receipt of the prescribed request the official receiver shall file with the registrar of the High Court the orig­inal or a properly authenticated copy of the request, and upon such filing the court shall take judicial notice of the appoint­ment as agent under the provisions of this Part of this Act.
(3)Notwithstanding the provisions of subsection (1), the official receiver may in any case, in which it is made to appear to him that immediate action is desirable, commence discharging his duties as agent as aforesaid in any manner ap­plicable to the circumstances, if upon receipt of telegraphic or other information he is satisfied that—
(a)bankruptcy proceedings have been instituted in a reciprocating country against a debtor having property in the United Republic;
(b)the prescribed request for him to act has been signed and dispatched; and
(c)he has been indemnified against all costs, charges and expenses to be incurred by him.
(4)Unless the contrary intention appears, every re­quest to act as agent sent to the official receiver of the United Republic shall be deemed to permit him to delegate at his dis­cretion the powers and duties vested in him as such agent to any deputy official receiver appointed in pursuance of this Act.[Ord. No. 20 of 1958 s. 22]

156. Duties of official receiver acting as agent

It shall he the duty of the official receiver of the United Republic to remit the proceeds of the realisation of the property of the bankrupt and other money of the estate coming into his hands as such agent as aforesaid, to the person for whom he is acting, after deducting such expenses as may have been properly incurred by him; and the distribution among the creditors of all such money shall be carried out in accordance with the law of the reciprocating territory in which the adjudi­cation order was made.

157. Transmission of proofs of local debts

Where a receiving order or an order of adjudica­tion has been made in a reciprocating country and the official receiver of the United Republic is acting as agent in the man­ner hereinbefore provided, proofs of debts contracted by the debtor in the United Republic may be filed with the local offi­cial receiver in the form prescribed by the law of such reci­procating country, and in every such case it shall be his duty to receive, deal with and forward in the manner prescribed by the rules made under this Part of this Act such proofs to the official receiver or trustee, as the case may be, of such reci­procating country.

158. Power of local court to make orders

Where on the application of the official receiver or any creditor or other person interested, it appears to the court that bankruptcy proceedings have been instituted in a reciprocating court against a debtor having property situated in the United Republic, the court may, notwithstanding that no such proceedings have been instituted in the United Republic exercise as regards the person, property and affairs of the deb­tor all the powers conferred by sections 11 and 26 of this Act as may in the circumstances be applicable.

159. Limitation on powers of local court to entertain proceedings

Any order, warrant or search made or issued by a reciprocating court shall be enforced by the court in Tanzania in the same manner in all respects as if such order, warrant or search warrant had been made or issued by itself.

160. Local enforcements of warrants of reciprocating court

Subject to the other provisions of this section, a reciprocating court shall have sole jurisdiction in all matters in or of arising out of any bankruptcy proceedings taken before such court against a debtor having property in the United Re­public, and no court in Tanzania shall entertain any suit, ap­plication or other matter arising in or out of such proceedings except—
(a)upon the institution of any proceedings by or against the local official receiver in respect of any matters within the scope of his authority in the ca­pacity of agent as aforesaid;
(b)in the case of any civil suit or proceedings within the ordinary civil jurisdiction of such court by or against the official receiver, interim receiver, trus­tee of special manager of or appointed in a reci­procating country;
(c)upon the institution of any proceedings affecting the property of the debtor or bankrupt situated in the United Republic;
(d)upon the receipt of a request to act in aid of or be auxiliary to such reciprocating court;
(e)for the public examination of the debtor in regard only to his property situated within the United Re­public or his dealings with any person ordinarily resident or carrying on business in Tanzania:Provided that such public examination shall not be held until the public examination before the reciprocating court shall have been concluded or adjourned sine die;
(f)for the exercise of powers under Part VIII of this Act in relation only to bankruptcy offences alleged to have been committed within Tanzania;
(g)upon the institution of any proceedings for or aris­ing out of the enforcement or execution of any or­der, warrant or search warrant made or issued by a reciprocating court; or
(h)upon an application for the exercise of the powers conferred on the court by sections 11, 26, 27 and 55 of this Act.

161. Concurrent bankruptcies

(1)For the purposes of this section "concurrent bankruptcy proceedings" means bankruptcy or insolvency proceedings instituted concurrently against the same debtor in any two or more reciprocating countries, one of which may or may not be Tanzania.
(2)Where concurrent bankruptcy proceedings have been instituted affecting property in the United Republic, all such property shall vest in the trustee appointed in the country where the order of adjudication first is made; but if two or more such orders bear the same date or if for any reason no such adjudication order is made then such property shall vest in or be administered by the trustee or receiver of the territory where the receiving order is first made.
(3)In any case where concurrent bankruptcy proceed­ings have been instituted in Tanzania and in pursuance of sub­section (2) and (4) hereof the property of the debtor or bank­rupt situated in the United Republic vests in or is administered by a trustee or receiver in a reciprocating country, the court shall rescind its receiving order and annul its order of adjudi­cation, if made, or dismiss the petition upon such terms, if any, as the court may think fit, and the rescission of a receiv­ing order or an annulment of adjudication under this subsec­tion shall not invalidate any acts lawfully done by the receiver or trustee of the United Republic or any other person lawfully acting under the authority of either of them.
(4)Notwithstanding the other provisions of this sec­tion in any case where concurrent bankruptcy proceedings have been instituted in Tanzania the court may, after such inquiry and reference to such reciprocating courts as it deems fit, order that the property of the debtor situated in the United Republic shall vest in or be administered by a trustee or re­ceiver in the United Republic of in some reciprocating coun­try other than that determined under the provisions of subsec­tion (2) hereof if, upon an application by the official receiver or any creditor or other person interested, it appears that a ma­jority of the creditors in number and value are resident in the United Republic or such other reciprocating country, and that from the situation of the property of the debtor or bankrupt or other causes his estate and effects may be more conveniently administered, managed and distributed in Tanzania or such other reciprocating country.[Ord. No. 20 of 1958 s. 23]

162. Power of official receiver, etc., of Tanzania to require official receiver in reciprocating country to act as his agent

(1)Where a receiving order or an order of adju­dication is made in Tanzania against a debtor or bankrupt hav­ing property situated in a reciprocating country and where un­der the provisions of this Act, the property of the debtor or bankrupt is administered by or vested in the official receiver or a trustee of or appointed in Tanzania, it shall be the duty of such official receiver or trustee and any interim receiver or special manager appointed in pursuance of this Act to take all such steps as may be lawful in any reciprocating territory for the proper administration of any property of the debtor or bankrupt situated in such territory and at his discretion and without further authority to request in the prescribed manner any bankruptcy official in such country empowered in that behalf, to act as his agent either generally or for any specific purpose, and to give such directions and to publish such no­tices and to do all such things in the reciprocating country as may be lawful for the administration of the estate, and unless for any reason the contrary intention is expressed, every re­quest sent to a bankruptcy official in a reciprocating country requiring him to act as an agent as aforesaid shall contain a consent that he may assign the powers and duties vested in him as such agent to his deputy or any officer ordinarily au­thorised to act for him in the reciprocating country.
(2)Where in any proceedings mentioned in subsection (1), the official receiver, interim receiver, special manager or trustee shall have completed and dispatched to a reciprocating country a request to a bankruptcy official therein to act as his agent as aforesaid and where the circumstances of the case so require, he may request such bankruptcy official by telegram or otherwise to act as his agent until such time as the pre­scribed request shall arrive in the ordinary course of post, and shall when making any such request undertake to indemnify such bankruptcy official against any costs, charges and ex­penses which the latter may incur in acting as such agent as aforesaid.[Ord. No. 20 of 1958 s. 24]

163. Power to make special rules under this Part

(1)The Chief Justice may, with the approval of the Minister responsible for legal affairs, make rules for the purpose of carrying into effect all or any of the objects of this part of this Act, and in addition and for such purpose, shall have power to make rules extending or varying the time li­mited under this Act or any rules made under section 121 the­reof for the doing of any act or taking any proceeding, in so far as such limitation of time affects persons ordinarily resi­dent or carrying on business in a reciprocating country, who are or may be interested in any bankruptcy proceedings in Tanzania against a debtor having property in such reciprocat­ing country:Provided that, no rules made under the powers con­ferred by this subsection shall come into force until the Chief Justice shall, by notice in the Gazette, declare his satisfaction that the rule making authorities in all reciprocating countries have made rules having the like effect within their respective countries.
(2)Notwithstanding the provisions of subsection (1) hereof, the court may in respect of any particular matter exer­cise its general powers of extension of time under section 104 (4) of this Act, in favour of a person ordinarily residing or car­rying on business in a reciprocating country, who is interested in bankruptcy proceedings instituted in Tanzania against a debtor having property in such reciprocating country.[G.N. No. 478 of 1962]

First Schedule (Section 15)

Meeting of creditors

1. First meeting of creditors

(1)The first meeting of creditors shall be summoned for a day not later than sixty days after the date of the receiving order, unless the court for any special reason deems it expedient that the meeting be summoned for a later day.
(2)The official receiver shall summon the meeting by giving not less than six clear days' notice of the time and place thereof in the Gazette.
(3)The official receiver shall also, as soon as practicable, send to each creditor mentioned in the debtor's statement of affairs, a notice of the time and place of the first meeting of creditors, accompanied by a summary of the debtor's statement of affairs, including the cause of his failure, and any observation thereon, which the official receiver may think fit to make; but the proceedings at the first meeting shall not be invalidated by reason of any such notice or summary not having been sent or received before the meeting.
(4)The meeting shall be held at such place as is in the opinion of the official receiver most convenient for the majority of the creditors.
(5)The official receiver or the trustee may at any time sum­mon a meeting of creditors, and shall do so whenever so directed by the court, or so requested by a creditor in accordance with the provisions of this Act.[Ord. No. 20 of 1958 s. 25]

2. Subsequent meetings

Meetings subsequent to the first meeting shall be summoned by sending notice of the time and place thereof to each creditor at the address given in his proof or if he has not proved, at the address given in the debtor's statement of affairs, or at such other address as may be known to the person summoning the meeting.

3. Chairman

The official receiver, or some person nominated by him, shall be the chairman at the first meeting., and the chairman at subse­quent meetings shall be such person as the meeting may by resolution appoint.

4. Voting

(1)A person shall not be entitled to vote as a creditor at the first or any other meeting of creditors unless he has duly proved a debt provable in bankruptcy to be due to him from the debtor, and the proof has been duly lodged before the time appointed for the meeting.
(2)A creditor shall not vote at any such meeting in respect of any unliquidated or contingent debt, or any debt the value of which is not ascertained.
(3)For the purpose of voting, a secured creditor shall, unless he surrenders his security, state in his proof the particulars of his securi­ty, the date when it was given, and the value at which he assesses it, and shall be entitled to vote only in respect of the balance (if any) due to him, after deducting the value of his security, and If he votes in re­spect of his whole debt he shall be deemed to have surrendered his se­curity unless the court on application is satisfied that the omission to value his security has arisen from inadvertence.
(4)A creditor shall not vote in respect of any debt on or se­cured by a current bill exchange or promissory note held by him, unless he is willing to treat the liability to him thereon of every person who is liable thereon antecedently to the debtor, and against whom a receiving order has not been made, as a security in his hands, and to estimate the value thereof, and for the purposes of voting, but not for the purposes of dividend, to deduct it from his proof.

5. Trustees may redeem security

It shall be competent to the trustee or to the official receiv­er, within twenty-eight days after a proof estimating the value of a secu­rity as aforesaid has been made use of in voting at any meeting, to re­quire the creditor to give up the security for the benefit of the creditors generally on payment of the value so estimated with an addition thereto of twenty per centum:Provided that, where a creditor has put a value on such securi­ty, he may, at any time before he has been required to give up such se­curity as aforesaid, correct such valuation by a new proof and deduct such new value from his debt, but in that case such addition of twenty per centum shall not be made if the trustee requires the security to be given up.

6. Firms

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

7. Power of chairman

The chairman of a meeting shall have power to admit or reject a proof for the purpose of voting, but his decision shall be subject to appeal to the court, and if he is in doubt the proof of a creditor should be admitted or rejected he shall mark the proof as objected to, and shall allow the creditor to vote, subject to the vote being declared invalid in the event of the objection being sustained.

8. Proxies

(1)A creditor may vote either in person or by proxy.
(2)Every instrument of proxy shall be in the prescribed form, and shall be issued by the official receiver of the debtor's estate or by any deputy official receiver, or, after the appointment of a trustee, by the trustee, and every insertion therein shall be in the handwriting of the person giving the proxy, or of any manager or clerk, or other person in his regular employment or of any person authorised to administer oaths in the court.
(3)General and special forms of proxy shall be sent to the creditors, together with a notice summoning a meeting of creditors, and neither the name nor the description of the official receiver, or of any other person, shall be printed or inserted in the body of any instrument of proxy before it is so sent.
(4)A creditor may give a general proxy to his manager or clerk, or any other person in his regular employment, and in such case the instrument of proxy shall state the relation in which the person to act thereunder stands to the creditor.
(5)A creditor may give a special proxy to any person to vote at any specified meeting or adjournment thereof on all or any of the following;
(a)for or against any specific proposal for a composition or scheme of arrangement;
(b)for or against the appointment of any specified person as trustee at a specified rate of remuneration, or as member of the committee of inspection, or for or against the conti­nuance in office of any specified person as trustee or mem­ber of a committee of inspection;
(c)on all questions relating to any matter other than those above referred to, arising at any specified meeting or ad­journment thereof.
(6)A proxy shall not be used unless it is deposited with the official receiver or trustee before the meeting at which it is to be used.
(7)Where it appears to the satisfaction of the court that any solicitation has been used by or on behalf of a trustee or receiver in obtaining proxies, or in procuring the trusteeship or receivership, except by the direction of a meeting of creditors, the court shall have power, if it thinks fit, to order that no remuneration shall be allowed to the person by whom or on whose behalf such solicitation may have been exer­cised, notwithstanding any resolution of the committee of inspection or of the creditors to the contrary.
(8)A creditor may appoint the official receiver to act in man­ner prescribed as his general or special proxy.

9. Adjournment

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

10. Quorum

(1)Except as provided in subrule (2), a meeting shall not be competent to act for any purpose, except the election of a chairman, the proving of debts, and the adjournment of the meeting, unless there are present, or represented thereat, at least three creditors, or all the creditors of their number does not exceed three.
(2)Where within half-an-hour from the time appointed for the meeting a quorum of creditors is not present or represented, the meeting may be adjourned to such other day as the chairman may appoint, being not less than three nor more than twenty-one days later, or if the credi­tors present so resolve, or if no resolution other than that electing a chairman is passed, the meeting shall be concluded.[Ord. No. 20 of 1958 s. 25]

11. Minutes

The chairman of every meeting shall cause minutes of the proceedings at the meeting to be drawn up and fairly entered in a book kept for that purpose, and the minutes shall be signed by him or by the chairman of the next ensuing meeting.

12. Proxy holders not to vote on certain resolutions

(1)No person acting either under a general or special proxy shall vote in favour of any resolution which would directly or indirectly place himself, his partner or employer in a position to receive any re­muneration out of the estate of the debtor otherwise than as a creditor rateably with the other creditors of the debtor:Provided that, where any person holds special proxies to vote for the appointment of himself as trustee he may use the said proxies and vote accordingly.
(2)The vote of the trustee, or of his partner, clerk, advocate, or advocate's clerk, either as creditor, or as proxy for a creditor shall not be reckoned in the majority required for passing any resolution affect­ing the remuneration or conduct of the trustee.

Second Schedule (Section 37)

Proof of debts

Proof in ordinary cases

1. Proof of debts in ordinary cases

(1)Every creditor shall prove his debt as soon as may be after the making of a receiving order.
(2)A debt may be proved by delivering or sending through the post in a prepaid letter to the official receiver, or, if a trustee has been appointed, to the trustee, an affidavit verifying the debt.
(3)The affidavit may be made by the creditor himself, or by some person authorised by or on behalf of the creditor, and if made by a person so authorised it shall state his authority and means of knowledge.
(4)The affidavit shall contain or refer to a statement of ac­count showing the particulars of the debt, and shall specify the vouch­ers, if any, by which the same can be substantiated, and the official receiver or trustee may at any lime call for the production of the vouchers.
(5)The affidavit shall state whether the creditor is or is not a secured creditor, and if it is found at any time that the affidavit made by or on behalf of a secured creditor has omitted to state that he is a secured creditor, the secured creditor shall surrender his security to the official receiver or trustee for the general benefit of the creditors un­less the court on application is satisfied that the omission has arisen from inadvertence, and in that case the court may allow the affidavit to be amended upon such terms as to the repayment of any dividends or otherwise as the court may consider to be just.
(6)A creditor shall bear the cost of proving his debt, unless, the court otherwise specially orders.

2. Inspection of proof by creditors

Every creditor who has lodged a proof shall be entitled to see and examine the proofs of other creditors before the first meeting, and at all reasonable times.

3. Deduction of trade discounts

A creditor proving his debt shall deduct therefrom all trade discounts, but he shall not be compelled to deduct any discount, not exceeding five per centum on the net amount of his claim, which he may have agreed to allow for payment in cash.

Proof by secured creditors

4. Proof by secured creditors

(1)Where a secured creditor realises his security, he may prove for the balance due to him, after deducing the net amount rea­lised.
(2)Where a secured creditor surrenders his security to the official receiver or trustee for the general benefit of the creditors, he may prove for his whole debt.

5. Assessment of security

Where a secured creditor does not either realise or surrend­er his security, he shall, before ranking for dividend, state in his proof the particulars of his security, the date when it was given, and the val­ue at which he assesses it, and shall be entitled to receive a dividend only in respect of the balance due to him after deducting the value so assessed.

6. Redemption of security

(1)Where a security is so valued the trustee may at any time redeem it on payment to the creditor of the assessed value.
(2)Where the trustee is dissatisfied with the value at which a security is assessed, he may require that the property comprised in any security so valued be offered for sale at such times and on such terms and conditions as may be agreed on between the creditor and the trus­tee, or as, in default of such agreement, the court may direct, and if the sale be by public auction the creditor, or the trustee on behalf of the estate may bid or purchase:Provided that, the creditor may at any time, by notice in writ­ing, require the trustee to trustee whether he will or will not exercise his power of redeeming the security or requiring it to be realised, and if the trustee does not within six months after receiving the notice, signify in writing to the creditor his election to exercise the power, he shall not be entitled to exercise it; and the equity of redemption, or any other interest in the property comprised in the security which is vested in the trustee, shall vest in the creditor and the amount of his debt shall be reduced by the amount at which the security has been valued.

7. Amendment of assessment

(1)Where a creditor has so valued his security, he may at any time amend the valuation and proof on showing to the satisfaction of the trustee, or the court, that the valuation and proof were made bona fide on a mistaken estimate or that the security has diminished or increased in value since its previous valuation; but every such amend­ment shall be made at the cost of the creditor, and upon such terms as the court shall order, unless the trustee shall allow the amendment without application to the court.
(2)Where a valuation has been amended in accordance with the foregoing rule, the creditor shall forthwith repay any surplus divi­dend which he may have received in excess of that to which he would have been entitled on the amended valuation, or, as the case may be, shall be entitled to be paid out of any money, for the time being avail­able for dividend, any dividend or share of dividend, which he may have failed to receive by reason of the inaccuracy of the original val­uation, before that money is made applicable to the payment of any future dividend, but shall not be entitled to disturb the distribution of any dividend declared before the date of the amendment.
(3)Where a creditor after having valued his security subse­quently realises it, or if it is realised under the provisions of rule 6, the net amount realised shall be substituted for the amount of any valua­tion previously made by the creditor and shall be treated in all respects as an amended valuation made by the creditor.
(4)Where a secured creditor does not comply with the fore­going rules he shall be excluded from all share in any dividend.
(5)Subject to the provisions of rule 6, a creditor shall in no case receive more than twenty shillings in the pound and interest as provided by this Act.

Proof in respect of distinct contracts

8. Proof in respect distinct contracts

Where a debtor was, at the date of the receiving order, lia­ble in respect of distinct contracts as a member of two or more distinct firms, or as a sole contractor, and also as a member of a firm, the cir­cumstances that the firms are in whole or in part composed of the same individuals, or that the sole contract or is also one against the properties respectively liable to the contracts.

Periodical payments

9. Rent and other periodical payments

When any rent or other payment falls due at stated pe­riods, and the receiving order is made at any time other than one of these periods, the persons entitled to the rent or payment may prove for a proportionate part thereof up to the date of the order as if the rent or payment grew due from day to day.

Interest

10. Interest where it is not agreed for

On any debt or sum certain payable at a certain time or otherwise. whereon interest is not reserved or agreed for, and which is overdue at the date of the receiving order and provable in bankruptcy, the creditor may prove for interest at a rate not exceeding six per cen­tum per annum to the date of the order from the time when the debt or sum was payable, if the debt or sum is payable by virtue of a written instrument at a certain time, and if payable otherwise, then from the time when a demand in writing has been made giving the debtor notice that interest will be claimed from the date of the demand until the time of payment.

Debt payable at a future time

11. Future debts

A creditor may prove for a debt not payable when the debtor committed an act of bankruptcy as if it were payable presently and may receive dividends equally with the other creditors deducting only thereout a rebate of interest at the rate of six per centum per an­num computed from the declaration of a dividend to the time when the debt would have become payable, according to the terms on which it was contracted.

Admission or rejection of proofs

12. Admission or rejection of proofs

(1)The trustee shall examine every proof and the grounds of the debt; and in writing admit or reject it, in whole or in part, or require further evidence in support of it, and if he rejects a proof he shall state in writing to the creditor the grounds of the rejection.
(2)Where the trustee thinks that a proof has been improperly admitted, the court may, on the application of the trustee, after notice to the creditor who made the proof, expunge the proof or reduce its amount.

13. Appeal

(1)Where a creditor is dissatisfied with the decision of the trustee in respect of a proof, the court may, on the application of the creditor, reverse or vary the decision.
(2)The court may also expunge or reduce a proof upon the application of a creditor if the trustee declines to interfere in the mat­ter, or, in the case of a composition or scheme, upon the application of the debtor.
(3)For the purpose of any of his duties in relation to proofs, the trustee may administer oaths and take affidavits.
(4)The official receiver before the appointment of a trustee shall have all the powers of a trustee with respect to the examination, admission, and rejection of proofs, and any act or decision of his in relation thereto shall be subject to the like appeal.
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History of this document

30 November 2019 this version
Consolidation
31 July 2002
Consolidation
Read this version
25 February 1930
Commenced

Cited documents 4

Act 4
1. Companies Act 607 citations
2. Workers' Compesation Act 42 citations
3. Chattels Transfer Act 14 citations
4. Deeds of Arrangement Act 5 citations

Documents citing this one 61

Judgment 44
1. Shell and Bp Tanzania Ltd. vs University of Dar-es- Salaam (Civil Application 68 of 1999) [2000] TZCA 16 (5 October 2000) 10 citations
2. National Insurance Corporation Consolidated Holding Corporation vs Johanes Jeremiah & Others (Civil Appeal No. 61 of 2008) [2016] TZCA 844 (21 July 2016) 3 citations
3. Mukubaganyi Mulumbo vs Tanzania Railways Corporation & Others (Civil Case 300 of 1995) [2003] TZHC 78 (12 May 2003) 2 citations
4. Tafico Mwanza (1998) CO. Ltd vs Presidential Parastatal Sector Reform Commission (Misc. Civil Case 100 of 2003) [2003] TZHC 75 (29 May 2003) 2 citations
5. Mulumeo vs Tanzania Railways Corporations & Others (Civil Case 300 of 1995) [2003] TZHC 8 (12 May 2003) 1 citation
6. National Insurance Corporation of Tanzania Ltd vs Someke Kuwilwa Chanya and Others (Civil Appeal 24 of 2019) [2020] TZHC 1802 (25 June 2020) 1 citation
7. Abubakar S.Marwilo & Others vs National Insurance Corporation & Others (Civil Appeal No. 13 of 2019) [2021] TZCA 269 (1 July 2021)
8. Ahmed Khamis Idd vs Lwila Mohamed Said (Misc. Civil Cause 316 of 2022) [2022] TZHC 12827 (14 September 2022)
9. Assa A. Kayange vs N.I.C & Another (Civil Case 143 of 2004) [2005] TZHC 88 (2 December 2005)
10. Attorney General vs Swiss Singapore Overseas Interprises PTE Ltd & Another (Civil Application No.110/01 of 2019) [2023] TZCA 17355 (22 June 2023)
Act 8
1. Companies Act 607 citations
2. Companies Act, 2002 266 citations
3. Public Corporations Act 72 citations
4. Hire Purchase Act 43 citations
5. Workers' Compesation Act 42 citations
6. Insurance Act 15 citations
7. Chattels Transfer Act 14 citations
8. Deeds of Arrangement Act 5 citations
Government Notice 4
1. Bankruptcy (Delegation of Power and Jurisdiction) Order, 1931
2. Bankruptcy Rules, 1931
3. Order Declaring Uganda a Reciprocating Country and the Court thereof a Reciprocating Court for purposes of Part IX of the Bankruptcy Act, 1932
4. Order Declaring the Colony and Protectorate of Kenya a Reciprocating Country and the Supreme Court thereof a Reciprocating Court for the Purposes of Part IX of the Bankruptcy Act, 1932
Law Reform Report 4
1. Law of Succession/Inheritance
2. Review of the Legal Framework Governing Insolvency in Tanzania
3. Review of the Legal Framework on Consumer Protection in Tanzania
4. Review of the Legal Framework on Social Welfare Services in Mainland Tanzania
JOT Documents and Guidelines 1
1. Gender Bench Book On Women’s Rights