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BANKRUPTCY AMENDMENT ACT 1980 No. 12 of 1980 - SECT 55

Execution by creditor against property of debtor who becomes a bankrupt, &c.
55. (1) Sections 118 and 119 of the Principal Act are repealed and the
following sections are substituted:



"118. (1) Subject to sub-section (2), where-

   (a)  a creditor has, within 6 months before the presentation of a petition,
        or after the presentation of a petition, against a debtor-

        (i)    received moneys as a result of execution having been issued by
               him, or on his behalf, against property of the debtor, being
               moneys that are the proceeds of the sale of property of the
               debtor that has been sold in pursuance of the process or that
               were seized, or paid to avoid seizure or sale of property of
               the debtor, in pursuance of the process; or

        (ii)   received moneys as a result of the attachment by him, or on his
               behalf, of a debt due to the debtor; and

   (b)  the debtor subsequently becomes a bankrupt on, or by virtue of the
        presentation of, the petition, the creditor shall pay to
        the trustee of the estate of the bankrupt the amount by which the
        amount of those moneys exceeds the taxed costs of the execution or
        attachment, as the case may be.



"(2) Sub-section (1) does not apply in relation to a creditor who has received
moneys as a result of execution having been issued by him, or on his behalf,
against property of a debtor, or as a result of the attachment by him, or on
his behalf, of a debt due to the debtor, in respect of any liability of the
debtor under a maintenance agreement or maintenance order (whether entered
into or made, as the case may be, before or after the commencement of this
section).



"(3) Where a creditor has, in pursuance of sub-section (1), paid the proceeds
of the sale of property or other moneys to the trustee of the estate of a
bankrupt, the creditor may prove in the bankruptcy for his debt as an
unsecured creditor as if the execution or attachment, as the case may be, had
not taken place.



"(4) Where-

   (a)  a creditor has, in pursuance of sub-section (1), paid to the trustee
        of the estate of a bankrupt the proceeds of the sale of property or
        other moneys that were received as a result of execution having been
        issued by him, or on his behalf, against property of the bankrupt or
        of the attachment by him, or on his behalf, of a debt due to the
        bankrupt; and

   (b)  that property or debt would not have been property divisible amongst
        the creditors of the bankrupt if the bankrupt had become a bankrupt
        immediately before the execution was issued or the debt was attached,
        as the case may be, the trustee shall pay those proceeds or other
        moneys to the bankrupt or to a person authorized by the bankrupt in
        writing for the purpose.



"(5) Subject to this section, where notice in writing of the presentation of a
creditor's petition against a debtor is given to a creditor-

   (a)  the creditor shall not take any action or further action, as the case
        may be, to attach a debt due to the debtor until the petition has been
        dealt with by the Court or has lapsed; and

   (b)  if a debt due to the debtor has been attached by the creditor-

        (i)    the creditor shall forthwith give notice of the presentation of
               the petition, being a notice in accordance with the prescribed
               form, to the person liable to pay that debt; and

        (ii)   the attachment of the debt is suspended until the petition has
               been dealt with by the Court or has lapsed.



"(6) Subject to this section, where notice in writing of the reference to the
Court of a debtor's petition against a debtor is given to a creditor-

   (a)  the creditor shall not take any action or further action, as the case
        may be, to attach a debt due to the debtor until the Court has dealt
        with the petition; and

   (b)  if a debt due to the debtor has been attached by the creditor-

        (i)    the creditor shall forthwith give notice of the presentation of
               the petition, being a notice in accordance with the prescribed
               form, to the person liable to pay that debt; and

        (ii)   the attachment of the debt is suspended until the Court has
               dealt with the petition.



"(7) Nothing in this section shall be taken to prevent a person liable to pay
a debt to a debtor from paying the debt or a part of the debt to the debtor
during the suspension, in accordance with sub-section (5) or (6), of an
attachment of that debt.



"(8) A creditor who contravenes, or fails to comply with, sub-section (5) or
(6) is guilty of contempt of court.



"(9) Subject to sub-section (10), where

   (a)  a creditor has, within 6 months before the presentation of a petition,
        or after the presentation of a petition, against a debtor obtained a
        charge or charging order against property of the debtor; and

   (b)  the debtor subsequently becomes a bankrupt on, or by virtue of the
        presentation of, the petition, the charge or charging order, as the
        case may be, is void as against the trustee in the bankruptcy.



"(10) Sub-sections (5), (6) and (9) do not apply in relation to the attachment
of a debt due to a debtor, or to a charge or charging order against property
of a debtor, in respect of any liability of the debtor under a maintenance
agreement or maintenance order (whether entered into or made, as the case may
be, before or after the commencement of this section).



"(11) Notwithstanding anything contained in this Act, a person who purchases
property in good faith-

   (a)  under a sale by a sheriff in consequence of the issue of execution
        against property of a debtor who, after the sale, becomes a bankrupt;
        or

   (b)  under a sale in consequence of the enforcement by a creditor of a
        charge or a charging order against property of a debtor who, after the
        sale, becomes a bankrupt, acquires a good title to it as against
        the trustee of the estate of the bankrupt .



"(12) In this section-

'charge' means a charge created by a law of the Commonwealth or of a State or
Territory of the Commonwealth upon registration of a judgment in any registry;

'charging order' means a charging order made by a court in respect of a
judgment. Duties of sheriff after receiving notice of presentation of
petition, &c.

"119. (1) Subject to this section, where notice in writing of the presentation
of a creditor's petition against a debtor is given to a sheriff, the sheriff-

   (a)  shall refrain-

        (i)    from taking any action to sell property of the debtor in
               pursuance of any process of execution issued by or on behalf of
               a creditor; and

        (ii)   from taking any action on behalf of a creditor to attach a debt
               due to the debtor; and

   (b)  shall not-

        (i)    pay to the creditor by whom, or on whose behalf, the process of
               execution was issued, or to any person on his behalf, the
               proceeds of the sale of property of the debtor that has been
               sold in pursuance of any such process or any moneys seized, or
               paid to avoid seizure or sale of property of the debtor, in
               pursuance of any such process; or

        (ii)   pay to the creditor, or to any person on his behalf, any moneys
               received as a result of the attachment of the debt due to the
               debtor, until the petition has been dealt with by the Court or
               has lapsed.



"(2) Subject to this section, where notice in writing of the reference to the
Court of a debtor's petition against a debtor is given to a sheriff, the
sheriff-

   (a)  shall refrain-

        (i)    from taking any action to sell property of the debtor in
               pursuance of any process of execution issued by or on behalf of
               a creditor; and

        (ii)   from taking any action on behalf of a creditor to attach a debt
               due to the debtor; and

   (b)  shall not-

        (i)    pay to the creditor by whom, or on whose behalf, the process of
               execution was issued, or to any person on his behalf, the
               proceeds of the sale of property of the debtor that has been
               sold in pursuance of any such process or any moneys seized, or
               paid to avoid seizure or sale of property of the debtor, in
               pursuance of any such process; or

        (ii)   pay to the creditor, or to any person on his behalf, any moneys
               received as a result of the attachment of the debt due to the
               debtor, until the Court has dealt with the petition.



"(3) Where notice of the presentation of a creditor's petition against a
debtor has been given under sub-section (1) to a sheriff or notice of the
reference to the Court of a debtor's petition against a debtor has been given
under sub-section (2) to a sheriff, a creditor who has issued a process of
execution, or on whose behalf a process of execution has been issued, against
property of the debtor, or who has taken action, or on whose behalf action has
been taken, to attach a debt due to the debtor, in respect of a liability of
the debtor under a maintenance agreement or maintenance order (whether entered
into or made, as the case may be, before or after the commencement of this
section) may give to the sheriff a notice in accordance with the prescribed
form, being a notice in the form of a statutory declaration, specifying such
particulars of the maintenance agreement or maintenance order as are required
by the form, and, upon the giving of the notice, sub-section (1) or (2), as
the case may be, ceases to apply in relation to the process of execution or
attachment, as the case may be.



"(4) Subject to this section, where notice in writing of the presentation of a
creditor's petition against a debtor is given to the registrar or other
appropriate officer of a court-

   (a)  to which the proceeds of the sale of property of the debtor or other
        moneys have been paid by a sheriff in pursuance of a process of
        execution issued, by or on behalf of a creditor, against property of
        the debtor; or

   (b)  to which moneys have been paid in pursuance of proceedings instituted,
        by or on behalf of a creditor, to attach a debt due to the debtor, any
        of those proceeds or moneys not paid out of court shall not be paid to
        the creditor or to any person on his behalf until the petition has
        been dealt with by the Court or has lapsed.



"(5) Subject to this section, where notice in writing of the reference to the
Court of a debtor's petition against a debtor is given to the registrar or
other appropriate officer of a Court-

   (a)  to which the proceeds of the sale of property of the debtor or other
        moneys have been paid by a sheriff in pursuance of a process of
        execution issued, by or on behalf of a creditor, against property of
        the debtor; or

   (b)  to which moneys have been paid in pursuance of proceedings instituted,
        by or on behalf of a creditor, to attach a debt due to the debtor, any
        of those proceeds or moneys not paid out of court shall not be paid to
        the creditor or to any person on his behalf until the Court has dealt
        with the petition.



"(6) Where notice of the presentation of a creditor's petition against a
debtor has been given under sub-section (4) to the registrar or other
appropriate officer of any court or notice of the reference to the Court of a
debtor's petition against a debtor has been given under sub-section (5) to the
registrar or other appropriate officer of any court, a creditor who has issued
a process of execution, or on whose behalf a process of execution has been
issued, against property of the debtor, or who has taken action, or on whose
behalf action has been taken, to attach a debt due to the debtor, in respect
of a liability of the debtor under a maintenance agreement or maintenance
order (whether entered into or made, as the case may be, before or after the
commencement of this section) may give to the registrar or other officer a
notice in accordance with the prescribed form, being a notice in the form of a
statutory declaration, specifying such particulars of the maintenance
agreement or maintenance order as are required by the form, and, upon the
giving of the notice, sub-section (4) or (5), as the case may be, ceases to
apply in relation to the process of execution or attachment, as the case may
be.



"(7) Where a sheriff, in pursuance of sub-section (1) or (2), refrains from
taking action to sell property of a debtor (being real property), the debtor
becomes a bankrupt and the property vests in the trustee in the bankruptcy,
the costs of the execution are a first charge on that property.



"(8) A failure by a sheriff to comply with a provision of this section does
not affect the title of a person who purchases property of a bankrupt in good
faith under a sale by the sheriff in pursuance of a process of execution
issued by or on behalf of a creditor.



"119A. (1) Where a debtor has become a bankrupt (whether on a creditor's
petition or otherwise and whether before or after the commencement of this
section), the trustee may give to the sheriff or to the registrar or other
appropriate officer of a court notice in writing of that fact and, upon the
giving of the notice-

   (a)  the sheriff shall deliver or pay to the trustee-

        (i)    any property of the bankrupt in his possession under a process
               of execution issued by or on behalf of a creditor;

        (ii)   any proceeds of the sale of property of the bankrupt or other
               moneys in his possession, being proceeds of the sale of
               property sold, whether before or after the bankrupt became
               a bankrupt, in pursuance of any such process or moneys seized,
               or paid to avoid seizure or sale of property of the bankrupt,
               whether before or after the bankrupt became a bankrupt, in
               pursuance of any such process; and

        (iii)  any moneys in his possession as a result of the attachment, by
               or on behalf of a creditor, of a debt due to the bankrupt; or

   (b)  the registrar or other officer of the court shall pay to the trustee-

        (i)    any proceeds of the sale of property of the bankrupt or other
               moneys in court, being proceeds of sale or other moneys paid
               into court, whether before or after the bankrupt became
               a bankrupt, by a sheriff in pursuance of a process of execution
               issued, by or on behalf of a creditor, against property of the
               bankrupt; and

        (ii)   any moneys in court that have been paid into court, whether
               before or after the bankrupt became a bankrupt, in pursuance of
               proceedings instituted, by or on behalf of a creditor, to
               attach a debt due to the bankrupt, as the case requires.



"(2) Where property is, or the proceeds of the sale of property or other
moneys are, required by sub-section (1) to be delivered or paid to the
trustee, the costs of the execution or attachment, as the case may be, are a
first charge on that property or those proceeds of sale or other moneys, as
the case may be.



"(3) For the purpose of giving effect to the charge referred to in sub-section
(2), the sheriff, registrar or other officer of a court may retain on behalf
of the creditor entitled to the benefit of the charge, such amount from the
proceeds of sale or other moneys referred to in that sub-section as he thinks
necessary for the purpose.



"(4) Where a sheriff, registrar or other officer of a court has, in pursuance
of sub-section (1), delivered property or paid moneys to the trustee, the
creditor who issued the process of execution or instituted the attachment
proceedings, or on whose behalf the process was issued or the proceedings
instituted, as the case may be, may prove in the bankruptcy for his debt as an
unsecured creditor as if the execution or attachment , as the case may be, had
not taken place.



"(5) Where-

   (a)  a sheriff, registrar or other officer of a court has, in pursuance of
        sub-section (1), delivered to the trustee property that was seized, or
        paid to the trustee the proceeds of the sale of property or other
        moneys that were received, as a result of the issue of execution
        against property of a bankrupt or the attachment of a debt due to
        a bankrupt; and

   (b)  that property or debt would not have been property divisible amongst
        the creditors of the bankrupt if the bankrupt had become a bankrupt
        immediately before the execution was issued or the debt attached, as
        the case may be, the trustee shall deliver that property, or pay those
        proceeds or other moneys, as the case requires, to the bankrupt or to
        a person authorized by a bankrupt in writing for the purpose.



"(6) Where-

   (a)  property has been delivered by a sheriff, or the proceeds of the sale
        of property or other moneys have been paid by a sheriff, registrar or
        other officer of a court, to the trustee of the estate of a bankrupt
        in pursuance of sub-section (1); and

   (b)  the property was in the possession of the sheriff, or the proceeds of
        the sale of the property or the other moneys were in the possession of
        the sheriff or paid into court, as the case may be, under or in
        pursuance of a process of execution issued, or proceedings to attach a
        debt instituted, by or on behalf of a creditor in respect of a
        liability of the bankrupt under a maintenance agreement or maintenance
        order (whether entered into or made, as the case may be, before or
        after the commencement of this section), the trustee shall deliver
        that property, or pay those proceeds or other moneys, as the case
        requires, to that creditor.



"(7) A failure by a sheriff to comply with a provision of this section does
not affect the title of a person who purchases property of a bankrupt in good
faith under a sale by the sheriff in pursuance of a process of execution
issued by or on behalf of a creditor.".

(2) Sub-sections 118 (1), (2), (3), (4), (9), (10) and (11) of the Principal
Act as amended by sub-section (1) of this section apply in relation to a
debtor who becomes a bankrupt after the commencement of this section on, or by
virtue of the presentation of, a petition presented either before or after the
commencement of this section.

(3) Notwithstanding the repeal of section 118 of the Principal Act effected by
sub-section (1) of this section, the provisions of sub-sections 118 (3), (4),
(5) and (6) of the Principal Act continue to apply, after the commencement of
this section, but subject to sub-section (4) of this section, to a creditor to
whom notice of the presentation of a creditor's petition against a debtor was
given under sub-section 118(3) of the Principal Act before the commencement of
this section as if section 118 of the Principal Act had not been repealed.

(4) The provisions of sub-section 118(3) of the Principal Act have effect,
after the commencement of this section, in accordance with sub- section (3) of
this section, in relation to a creditor referred to in sub- section (3) of
this section as if the following sub-section were inserted after sub-section
(4) of section 118 of the Principal Act:



"(4A) Sub-section (3) does not apply, after the commencement of this
sub-section, in relation to the attachment of a debt due to a person, or to a
charge or charging order against property of a person, in respect of any
liability of the person under a maintenance agreement or maintenance order
(whether entered into or made, as the case may be, before or after the
commencement of this sub-section).".

(5) Where notice of the presentation of a creditor's petition has been given
to a sheriff or to the registrar or other appropriate officer of a court under
section 119 of the Principal Act before the commencement of this section and
the petition has not been been dealt with by the Court, and has not lapsed,
before the commencement of this section, the notice has effect after the
commencement of this section, for the purposes of the Principal Act as amended
by this Act, as if the notice had been a notice given to the sheriff or to the
registrar or other officer of the court, as the case requires, under section
119 of the Principal Act as amended by sub-section (1) of this section.

(6) Notwithstanding the repeal of section 119 of the Principal Act effected by
sub-section (1) of this section, where the trustee of the estate of a bankrupt
has, before the commencement of this section, served notice of the fact of the
bankruptcy on the sheriff or the registrar or other appropriate officer of a
court under sub-section 119(3) of the Principal Act, the provisions of
sub-sections 119 (3), (4) and (5) of the Principal Act continue to apply,
after the commencement of this section, in relation to the bankrupt as if
section 119 of the Principal Act had not been repealed. 


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