Dishonest or fraudulent removal or concealment of property to prevent distribution among creditors
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Summary
Dishonestly or fraudulently removing, hiding, giving away, or transferring property without adequate payment, with the intention or knowledge that this will prevent its lawful distribution among creditors, is an offence. It applies when someone acts to keep property out of reach of creditors. Punishment is imprisonment up to two years, or fine, or both.
Example
Ravi owes money to several creditors. He secretly transfers his shop stock to a friend without payment to keep it from being used to pay his creditors. He can be prosecuted and, if convicted, face up to two years imprisonment, a fine, or both.
Bare Act
Enacted textWhoever dishonestly or fraudulently removes, conceals or delivers to any person, or transfers or causes to be transferred to any person, without adequate consideration, any property, intending thereby to prevent, or knowing it to be likely that he will thereby prevent the distribution of that property according to law among his creditors or the creditors of any 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.
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