This Act has been amended by  Bankruptcy (Amendment) Decree No 109 of 1992

Part I

Proceedings from Act of Bankruptcy to discharge

Part II

Administration of property

Part III

Official receiver

Part IV

Trustees in bankruptcy

76. Official name of trustee.

Part V

Constitution, Procedure and Powers of Court

94. General power of Court.

95. Review and appeals in bankruptcy

Part VI

Supplemental Provisions

107. Disobedience to Order of Court.

110. Power to make regulations.

125. Unclaimed and undistributed dividends or funds.

Part VII

Disqualification of Bankruptcy

Part VIII

Bankruptcy offences

Part IX

Supplementary

An Act to make provisions for declaring as bankrupt any person who can not pay his debts of a specified amount and to disqualify him from holding certain elective and other public offices or from practising any regulated profession (except as an employee).

20^th day of April 1979

Part I

Proceedings from act of bankruptcy to discharge

1.     A debtor commits an act of bankruptcy in each of the following cases-

(a)     if a creditor -

(i)     has obtained a final judgment or final order against him for any amount, and execution thereon not having been stayed, has a bankruptcy notice served on him, and

(ii)     does not, within fourteen days after service of the notice, 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,

and for the purposes of this paragraph and of section 4. 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;

(b)     if execution against him has been levied by seizure of his goods under process in an action, or proceedings in the court, and the goods have either been sold or held by the bailiff for twenty-one days:

Provided that, where an inter-pleader 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;

(c)     if he files in the court a declaration of his inability to pay his debts or presents a bankruptcy petition against himself.

2.     A bankruptcy notice under this Act shall be issued to a judgment creditor, or creditor who has obtained a final order, by the Registrar on the filing of a request for that purpose, and shall be in such form as may be prescribed by the general rules, and shall require the debtor to pay the judgment debt or sum ordered to be paid in accordance with the terms of the 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 mis-statement; 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.

3.     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.

4.     (1)     Subject to the provisions of section 7, a creditor shall not be entitled to present a bankruptcy petition 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, is not less than N2,000;

(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 the presentation of the petition; and

(d)     the debtor is ordinarily resident in Nigeria, or within a year before the date of the presentation of the petition, has ordinarily resided or had a dwelling-house or place of business in Nigeria, or has carried on business in Nigeria, 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 Nigeria by means of a partner or partners or an agent or manager.

(2)    If the petitioning creditor is a secured creditor he shall 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; 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.

5.     The following provisions shall have effect in the case of a firm carrying on business in Nigeria -

(a)     a creditor of the firm shall be entitled to present a bankruptcy petition against the firm, and a receiving order may be made against the firm in respect of an act of bankruptcy committed in reference to the business of the firm by any partner of the firm or by any person having control or management of the business of the firm. An act of bankruptcy shall be deemed to be committed in reference to the business of the firm in all cases in which the act relates to the property or creditors of the firm and would be an act of bankruptcy by such partner or person as aforesaid if it related to his property or creditors;

(b)     it shall be sufficient that a receiving order against the firm be made in the firm's name, without mentioning the names of the partners, and such receiving order shall affect the joint and separate property of all the partners;

(c)     the right of a creditor to present a bankruptcy petition against the firm, and the jurisdiction of the court to make a receiving order or an adjudication of bankruptcy against the firm, shall not be affected by the fact, if it is so, that all or any of the partners of the firm are not citizens of Nigeria or are not resident in Nigeria.

6.     (1)     Immediately on the filing of any petition the Official Receiver may in cases where he has reason to believe that any offence under this Act or any fraud has been or is about to be perpetrated, by notice delivered to the debtor in person or by ordinary post, summon the debtor to attend before him to give such information as he requires, and may, either by himself or his agent authorised by him in writing, enter on any premises occupied by the debtor between the hours of 8 a.m. and 6 p.m. for the purpose of inspecting his property, stock in trade and books of account.

(2)    It shall be the duty of the debtor to furnish the Official Receiver with all such information as it is in the debtor's power to give or to obtain.

(3)     If the debtor -

(a)     fails without reasonable cause to attend to the Official Receiver as aforesaid or to furnish him with such information as aforesaid; or

(b)     obstructs the search of the premises or the production of any book or document required in connection therewith; or

(c)    authorises or permits any obstruction, 

the debtor shall be liable on summary conviction to imprisonment for a term not exceeding six months.

(4)    Every person who takes any part in any obstruction mentioned in subsection (3)(b) and (c) of this section, whether authorised or permitted by the debtor or not, shall be liable to the like penalty.

7.     (1)     A creditor's petition shall -

(a)     be verified by affidavit of the creditor or of some person on his behalf, having knowledge of the facts; and

(b)     be served in the same manner as a writ of summons unless some other manner of service be prescribed.

(2)     At the hearing, the court shall require proof of

(a)     the debt of the petitioning creditor;

(b)     the service of the petition; and

(c)     the act of bankruptcy, or if more than one act of bankruptcy is alleged,acts of bankruptcy,

and if satisfied with the proof, may make a receiving order in pursuance of the petition.

(3)     If 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 is not satisfied that the assets for division among the unsecured creditors, after payment of all costs, charges and expenses, and the debts which are preferential under this Act shall be sufficient to pay a dividend of fifteen per cent, or considers that for other sufficient cause no order ought to be made, the court may dismiss the petition.

(4)     When the act of bankruptcy relied on is non-compliance 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 be 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.     (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 inability to pay his debts, and the court shall thereupon make a receiving order:

Provided that it shall be lawful for the court in its discretion to refuse the order if it is not satisfied that the assets for division among the unsecured creditors after payment of all costs, charges and expenses, and the debts which are preferential under this Act, will be sufficient to pay a dividend of fifteen per cent, or if the court considers for other sufficient cause that no order ought to be made.

(2)     In subsection (1) of this section "sufficient cause" includes the non-attendance of the debtor, or in the case of a firm, of at least one of the partners thereof, on the hearing of the petition, the absence of any material book of account, or any fraud or misconduct not amounting to fraud by the debtor in relation to his affairs, or in the case of a firm or person carrying on business under a foreign firm name, the non-production of the partnership book or of the receipt used in connection with the business.

(3)     A debtor's petition shall not after presentment be withdrawn without the leave of the court.

9.     On the hearing of any creditor's or debtor's petition it shall be lawful for the Official Receiver to appear and to call, examine and cross-examine any witness and, if he so thinks fit, to support or oppose the making of a receiving order.

10.       (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 affect the power of any secured creditor to realise or otherwise deal with his security.

11.           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.

12.       (1)        The court may at any time after the presentation of a bankruptcy petition either stay any action, execution or other legal process against the property or person of the debtor or allow it to continue on such terms as it may think just.

    (2)        Where the court makes an order staying any action or proceeding, or staying proceedings generally, the 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 and any other party to the proceedings or to the address of the legal practitioner of such party.

    (3)        Without prejudice to the provisions of subsection (1) of this section if the court orders the release of any debtor who is under execution for a civil debt, it may impose such conditions as it thinks fit, and in particular it may require as a condition of such release that the debtor finds security to attend in the subsequent bankruptcy proceedings and to abide by all orders of the court relating to the said proceedings.

13.       (1)       The court may, on the application of the Official Receiver or of any creditor or creditors, and if satisfied that special the nature of the debtor's estate or business or the interests manager. 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 manner as the court may direct.

    (3)         The special manager shall receive such remuneration as may be prescribed.

14.           Notice of every receiving order, stating the name, address and description of the debtor, the date of the order, and the date of the petition, shall be published in the Federal Gazette by the Official Receiver.

15.       (1)        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 be 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 debtor's property.

    (2)         The Chief Judge of the court may, with the approval of the National Council of Ministers, make rules providing for the summoning of and proceedings at the first and other meetings of creditors.

16.       (1)        Where a receiving order is made against a debtor, he 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--

    (a)         showing the particulars of the debtor's assets, debts and liabilities, whether in Nigeria or elsewhere;

    (b)        showing the securities held by them respectively. and the dates when the securities were respectively given:

    (c)        giving such further or other information as may be prescribed or as the Official Receiver may require: and

    (d)        giving details of all property held by him in a name or under any alias, or by his wife or his children, or by any person in trust for him or them, with full particulars as to the manner and date of its being acquired.

    (2)         The statement shall be submitted within the following times, namely--

    (a)         if the order is made on the petition of the debtor, within seven days from the date of the order;

    (b)         if the order is made on the petition of a creditor, within fourteen days from the date of the order,

but the court may in either case for special reasons extend the time.

    (3)         If the debtor fails without reasonable excuse to comply with the requirements of this section, he may be punished for a contempt of court and the court may, on the application of the Official Receiver or of any creditor. adjudge him bankrupt.

    (4)        Any person stating himself to be a creditor of the bankrupt may, on payment of the prescribed fee, 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 contempt of court and shall be punishable accordingly on the application of the trustee or Official Receiver.

17.       (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 avoidance of doubt no legal practitioner shall be allowed to take part in the examination of the debtor or appear on his behalf at such examination.

    (6)         If 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.

    (9)         Such notes of the examination as the court thinks proper shall be taken down either in shorthand or longhand and they or a transcript thereof 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 upon payment of the prescribed fee.

    (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 suffers from any mental or physical disability as in the opinion of the court makes him unfit to attend his public examination, or is absent from Nigeria, the court may make an order dispensing with such examination or direction that the debtor be examined on such terms, in such manner and at such place as to the court seems expedient.

Compositions and Schemes of Arrangement

18.       (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 seven 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 pubic 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 the meeting a majority in number and not less than two thirds in value of all the creditors who have proved resolve 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 addressed to the Official Receiver so as to be received by him not later than three days 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 any of the joint debtors if they are or any one of them is prevented from attending the examination by illness or other sufficient cause or absence from Nigeria but one at least of such joint debtors shall be publicly examined.

    (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)        If 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)       If 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 where he is adjudged bankrupt, the court shall refuse to approve the proposal unless it provides reasonable security for the payment of not less then twenty-five per cent 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)       If 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 it relates to any debts due to them from the debtor and provable in bankruptcy.

    (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)       If 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, procee