Dishonestly or fraudulently preventing debt being available for creditors
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Summary
Dishonestly or fraudulently stopping a debt or claim that should legally be available to pay creditors is an offence. It applies when someone hides, transfers, or otherwise blocks money or a legal claim that ought to be used to satisfy their own or another person’s debts. Punishment can be up to two years imprisonment, or a fine, or both.
Example
Arjun sells his shop and receives money that should be used to pay his creditors. To stop creditors from claiming it, he moves the cash into a relative's account and hides the sale documents. Under this section, Arjun can be prosecuted and face up to two years in prison, or a fine, or both.
Bare Act
Enacted textWhoever dishonestly or fraudulently prevents any debt or demand due to himself or to any other person from being made available according to law for payment of his debt or the debts of such other person, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.
BNSS Classification
- Imprisonment for 2 years, or fine, or both.
- Non-cognizable
- Bailable
- Triable by Any Magistrate.
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