PENALTIESCentral

Section 103 of THE PRESIDENCY-TOWNS INSOLVENCY ACT, 1909

–Any person adjudged insolvent who ––

(a)fraudulently with the intent to conceal the state of his affairs or to defeat the objects of this Act, ––
1. (i)has destroyed or otherwise willfully prevented or purposely withheld the production of any book, paper or writing relating to such of his affairs as are subject to investigation under this Act, or
2. (ii)has kept or caused to be kept false books, or
3. (iii)has made false entries in , or withheld entries from, or willfully altered or falsified, any book, paper or writing relating to such of his affairs as are subject to investigation under this Act, or
(b)fraudulently with intent to diminish the sum to be divided amongst his creditors or of giving an undue preference to any of the said creditors, ––
1. (i)has discharged or concealed any debt due to or from him, or
2. (ii)has made away with , charged, mortgaged or concealed any part of his property of what kind so ever, shall on conviction be punishable with imprisonment for a term which may extend to two years. 3[103A. Disqualifications of insolvent .–– (1) Where a debtor is adjudged or read judged insolvent under this Act, he shall, subject to the provisions of this section, be disqualified from—
(a)being appointed or acting as a Magistrate;
(b)being elected to any office of any local authority where the appointment to such office is by election, or holding or exercising any such office to which no salary is attached; and
(c)being elected or sitting or voting as a member of any local authority.

(2)The disqualifications which an insolvent is subject to under this section shall be removed, and shall cease if— 1. For s.101A, applicable to Bombay only, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1939 (Bom.15 of 1939), s.2.
1. (a)the order of adjudication is annulled under sub-section (1) of section 21, or
2. (b)he obtains from the Court an order of discharge, whether absolute or conditional, with a certificate that his insolvency was caused by misfortune without any misconduct on his part.
(3)The Court may grant or refuse such certificate as it thinks fit.] 1 [104. Procedure on charge under section 103.––(1) Where the Court is satisfied, after such preliminary inquiry, if any, as it thinks necessary, that there is ground for inquiring into any offence referred to in section 103 and appearing to have been committed by the insolvent, the Court may record a finding to that effect and make a complaint of the offence in writing to a Presidency Magistrate or a Magistrate of the first class having jurisdiction, and such Magistrate shall deal with such complaint in the manner laid down in the Code of Criminal Procedure, 1898 (5 of 1898).
(2)Any complaint made by the Court under sub-section (1) may be signed by such officer of the Court as the Court may appoint in this behalf.]

↩2.Ins. by Act 3 of 1950, s. 5.

↩3.Ins. by Act 11 of 1920, s. 2.

Summary

–Any person adjudged insolvent who –– (a) fraudulently with the intent to conceal the state of his affairs or to defeat the objects of this Act, –– (i) has destroyed or otherwise willfully prevented or purposely withheld the production of any book, paper or writing relating to such of his affairs.

Practical examples

1Vikram was declared insolvent by the court. Knowing his financial books would show he was hiding money, he threw his business ledgers into a bonfire. He did this to hide his true financial situation. Vikram can be imprisoned for up to two years under this rule.

2Deepa wanted to make sure her favorite brother got paid before other creditors. She fabricated false entries in her business ledger, showing she owed him ten thousand rupees when she did not. Deepa has committed a fraudulent act by falsifying her books.

3Rajesh hid three gold necklaces in his garden so that the official assignee, who is the court officer in charge of distributing his property, would not find them and sell them to pay his creditors. Rajesh did this to reduce the property available for his creditors.

FAQ

1. What is the maximum imprisonment term for an insolvent who hides or destroys books under THE PRESIDENCY-TOWNS INSOLVENCY ACT, 1909?

Under Section 103 of THE PRESIDENCY-TOWNS INSOLVENCY ACT, 1909, an insolvent who fraudulently destroys, conceals, or falsifies books or documents can be punished with imprisonment for a term of up to two years.

2. What constitutes a book-related offence by an insolvent under Section 103 of the Presidency-towns Insolvency Act, 1909?

Under Section 103 of the Presidency-towns Insolvency Act, 1909, it is an offence to fraudulently destroy, willfully prevent, or purposely withhold production of books, keep false books, make false entries, withhold entries, or alter or falsify writings relating to affairs under investigation.

3. Is hiding property from creditors punishable under Section 103 of the Presidency Insolvency law?

Yes, under Section 103 of the Presidency Insolvency law, fraudulently making away with, charging, mortgaging, or concealing any part of one's property with intent to diminish the sum divided among creditors is punishable by up to two years of imprisonment.

Test yourself

Q1.What is the maximum prison sentence that can be given to an insolvent convicted of fraudulently keeping false books under Section 103 of the Presidency-towns Insolvency Act, 1909?

Q2.Under Section 103 of the 1909 Presidency Insolvency law, which of the following acts is considered an offence if done fraudulently to diminish the sum divisible among creditors?

Q3.To convict a person under Section 103 of the Presidency-towns Insolvency Act, 1909 for altering or falsifying accounting papers, what specific mental state or intent must be proven?

Q4.Under Section 103 of the 1909 Presidency Insolvency law, which of the following property-related transactions is illegal if done with the intent to give an undue preference to a creditor?

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