The Bankruptcy Act

The official receiver must carry out listed bankruptcy administration tasks for a debtor’s estate, and may ask others for help in limited circumstances.

A trustee in bankruptcy must use the stated official name and may, under that name, hold property, make contracts, sue and be sued, and do other acts needed for the office.

Creditors may appoint more than one trustee, and may appoint substitute trustees in succession if needed.

If a trustee vacancy occurs, creditors may appoint someone, the official receiver must help convene meetings and report delays, and the official receiver acts as trustee meanwhile.

The trustee must follow creditor directions in administering and distributing the bankrupt estate, may call creditor meetings, and must call a meeting within 14 days when properly requested; the requester must also deposit the meeting costs.

An aggrieved bankrupt, creditor, or other person may apply to the court about a trustee’s act or decision, and the court may confirm, reverse, or modify it.

The official receiver must monitor trustees and may investigate, require answers, apply to court, and order a local investigation when needed.

Trustee pay is set by the creditors, with possible court fixing in some disputes, and the trustee must not take extra gifts or benefits.

This section limits how trustees and related professionals can be paid, requires taxation and sanction for bills and charges, and sets a deadline for delivering cost bills after a trustee’s request.

If a creditor asks, the trustee or official receiver must mail that creditor a list of creditors showing each debt amount, and may charge for it plus postage.

A creditor may, with support from one-sixth of the creditors, require the trustee or official receiver to provide and send out an account statement. The requester must also deposit enough money to cover the cost, unless it is later repaid out of the estate if directed by creditors or the court.

The trustee must keep proper books and record meetings and other prescribed matters. A bankrupt’s creditor may inspect those books, but only subject to the court’s control and either personally or through an agent.

Trustees in bankruptcy must send the official receiver a proper statement at least once a year, and they must not pay trustee money into a private bank account.

Trustees must pay bankruptcy funds into the Bankruptcy Estates Account, and the official receiver keeps that account and issues a receipt certificate.

The official receiver may invest surplus bankruptcy estate cash in a fixed deposit, must move it back when needed, and must pay the interest into the Bankruptcy Contingency Fund. The court may also authorise use of that fund for specified expenses and may order reimbursement if money is later recovered.

Trustees must send their receipts-and-payments accounts to the official receiver at least twice a year, in the prescribed form, and the accounts must then be audited and filed.

The court may release a trustee after the trustee applies and the required conditions are met; if release is withheld, the court can also make orders about the trustee’s liability.

If a receiving order is made against a trustee, the trustee must vacate the office of trustee.

Creditors may remove a trustee by ordinary resolution at a specially called meeting with seven days’ notice, and may appoint a replacement at that meeting or a later one. The court may also remove the trustee on specified grounds.

Bankruptcy jurisdiction is assigned to the High Court, but the Chief Justice may delegate it to a subordinate court by order; a judge may also exercise powers in chambers.

A judge of the court may exercise powers in chambers, subject to this Act and general rules.

If the court says a person is entitled to money or funds held by the official receiver, the official receiver must pay that person.

The court has broad power in bankruptcy cases to decide issues, order compliance with the official receiver’s directions, and, if it thinks fit, order immediate committal of a defaulting person.

A bankrupt is disqualified from being appointed or acting as a justice of the peace, or from being elected to or holding certain local offices.

A court may, instead of committing a judgment debtor, make a receiving order if the judgment creditor agrees and pays the prescribed fee.

The court may review, rescind, or vary its own orders at any time, and bankruptcy orders may be appealed by an aggrieved person subject to the applicable rules.

The court has discretion over costs, may adjourn or amend proceedings, extend limited time periods, and decide how evidence is taken, subject to the Act and general rules.

If two or more bankruptcy petitions are filed against the same debtor or joint debtors, the court may consolidate the proceedings.

If the petitioner does not act with due diligence, the court may replace the petitioner with another creditor.

If a debtor dies after a bankruptcy petition has been presented, the proceedings continue as if the debtor were still alive, unless the court orders otherwise.

The court may stay proceedings under a bankruptcy petition if there is sufficient reason, either completely or for a limited time, on terms the court considers just.

A qualifying creditor may file a bankruptcy petition against one or more partners of a firm without naming all partners.

If a petition has more than one respondent, the court may dismiss it as to one or more of them, while the petition continues against the others.

If a bankruptcy petition and receiving order involve one partner, related petitions must be filed together, and the court may consolidate the proceedings.

If a partnership member is bankrupt, the court may let the trustee sue in the names of the trustee and the bankrupt partner.

If a bankrupt is jointly involved in a contract, the other joint parties may sue or be sued without joining the bankrupt.

Partners or a person using a partnership name may bring or face proceedings in the firm name, and the court can require the partners’ names to be disclosed.

Tanzania’s court and its officers must assist reciprocating bankruptcy or insolvency courts, and a request/order is generally enough to let the court act on the matter.

A court may commit a person to a convenient prison it considers expedient. If a gaoler refuses to receive a prisoner so committed, the gaoler may be fined up to 2,000 shillings on conviction.

Married women are subject to the bankruptcy laws as if they were unmarried, and judgments or orders against them can be used in bankruptcy proceedings by bankruptcy notice.

A receiving order must not be made against a corporation or a company or association registered under the Companies Act.

If the debtor’s property is unlikely to exceed 12,000 shillings, the court may order summary administration of the estate, with special rules applying.

A creditor of a deceased debtor may ask the court to administer the estate in bankruptcy, and the court may make an order or dismiss the petition.

The Chief Justice may make general rules to carry out this Act, with the Minister responsible for Legal Affairs concurring.

The Chief Justice may set fees and percentage charges for proceedings under this Act, but only with the Minister responsible for Legal Affairs’ concurrence.

The Chief Justice may decide and change the remuneration paid to people performing duties under this Act, with the Minister responsible for Legal Affairs concurring.

A Gazette copy containing a notice inserted under the Act is evidence of the facts stated in the notice, and a Gazette copy containing a receiving order or bankruptcy adjudication order is conclusive evidence in legal proceedings that the order was duly made and of its date.

A signed minute of a creditors’ meeting must be accepted as evidence without further proof, and the meeting and its proceedings are presumed valid unless proved otherwise.

Bankruptcy-related petitions, orders, certificates, instruments, affidavits, and documents can be used as evidence in legal proceedings if they are sealed, signed by a judge, or certified by a registrar.

An affidavit used in court may be sworn before certain authorised officials, subject to general rules.

If a debtor, the debtor’s wife, or a witness who already gave evidence dies, a court may admit that person’s sealed deposition or a sealed copy as evidence.

A court certificate is conclusive evidence that a person has been appointed trustee under this Act.

This section explains how to count time under the Act, excluding the day of the triggering event and shifting deadlines when the last day falls on Sunday, a public holiday, or a day court offices are closed.

If no special method is required, notices and other documents may be sent by post to the recipient’s last known address.

Bankruptcy proceedings are not invalidated by formal defects or irregularities unless the court finds substantial injustice that cannot be fixed by court order.

Certain bankruptcy-related deeds and writings are exempt from stamp duty, except for fees under the Act.

Corporations, firms, and lunatics may act through specified representatives for the purposes of the Act.

Certain provisions of the Act bind the United Republic, subject to any saving provision in the Act.

Trustees and certain other holders of unclaimed dividends or funds must pay them into the Bankruptcy Estates Account, and the official receiver must issue a receipt and later transfer dormant money to the Bankruptcy Contingency Fund.

Bankrupt persons or people with a receiving order commit offences if they hide, dispose of, falsify, or fail to disclose property and related information, with prison terms up to 3 years or 5 years for some cases.

An undischarged bankrupt must not obtain credit of 100 shillings or more without disclosing that status, or trade under another name without telling business counterparts the bankrupt name.

A bankrupt person or a person with a receiving order against their estate commits an offence if they obtain credit by fraud, transfer or charge property to defraud creditors, or hide or remove property in the stated period before or after an unsatisfied money judgment.

A bankrupt person or a person with a receiving order may commit an offence if insolvency was worsened by gambling or rash speculation, if estate was lost that way, or if required explanations are not given.

A bankrupt person who had been in business in the relevant period commits an offence if they did not keep or preserve proper books of account.

A bankrupt person, or a person whose estate is under a receiving order, commits an offence if they leave Tanzania or prepare to leave Tanzania within the stated bankruptcy window unless they prove there was no intent to defraud.

A creditor, or someone claiming to be a creditor in bankruptcy proceedings, commits an offence if they make a false claim or an untrue proof, declaration, or statement of account, unless they prove there was no intent to defraud.

If a trustee, official receiver, creditor, or inspection committee member brings the matter to court and the court thinks conviction is likely and prosecution is desirable, the court must order the debtor to be prosecuted.

A debtor who has committed a criminal offence cannot avoid being proceeded against just because they obtained a discharge or because a composition or scheme of arrangement was accepted or approved.

If a person is convicted of an offence under the Act and no special penalty applies, the person may be imprisoned for up to three years.

A charge for an offence under this Act is enough if it states the substance of the offence in the Act’s words, or as close as possible.

If a court orders a prosecution under this Act or related to bankruptcy proceedings, the Director of Public Prosecutions must conduct it; in some subordinate-court cases, the official receiver may do so instead.

A statement or admission made in a compulsory bankruptcy examination or deposition cannot be used as evidence against that person in a proceeding about frauds by agents, bankers, or factors.

The Minister responsible for legal affairs may declare a country and its bankruptcy court reciprocating if that country has equivalent reciprocity provisions in bankruptcy.

A qualifying bankruptcy order or appointment made in a reciprocating country is treated in Tanzania as if it were made under this Act.

If a reciprocating court makes an adjudication order, the bankrupt’s property in Tanzania vests in the trustee of the bankrupt’s property in the reciprocating country, and that trustee is supervised by the committee of inspection there or, if none exists, by the reciprocating court.

A reciprocating-country official in bankruptcy proceedings over a debtor with property in Tanzania is responsible for conducting the proceedings and managing the debtor’s affairs, subject to the appointing court’s control.

Certain bankruptcy officials from a reciprocating country may require the Tanzanian official receiver to act as their agent, and the Tanzanian official receiver must comply.

A request for the official receiver to act as agent must follow the Act’s prescribed form and be published in the Gazette.

The official receiver must send the bankrupt estate money to the person he is acting for, after deducting properly incurred expenses.

If a reciprocal insolvency order exists and the United Republic’s official receiver is acting as agent, local debt proofs may be filed with the local official receiver, who must receive, handle, and forward them as prescribed.

A court may act on an application and use certain bankruptcy powers over a debtor’s person, property, and affairs if bankruptcy proceedings exist in a reciprocating court and the debtor has property in the United Republic.

A court in Tanzania must enforce orders, warrants, and search warrants issued by a reciprocating court.

A reciprocating court has sole jurisdiction over certain bankruptcy matters, and courts in Tanzania generally may not hear related suits or applications except in listed situations.

This section defines concurrent bankruptcy proceedings and sets rules for which trustee, receiver, or court order controls property when there are overlapping bankruptcy cases in Tanzania and other reciprocating countries.

Certain insolvency officers must take lawful steps in reciprocating countries to administer a debtor’s property, and may urgently ask a bankruptcy official there to act as agent.

The Chief Justice may make bankruptcy rules, with ministerial approval, and may also extend or vary time limits for certain persons connected to bankruptcy cases involving reciprocating countries.

The official receiver must summon the first meeting of creditors within 60 days of the receiving order, give Gazette notice, and send creditors a notice and summary as soon as practicable.

For meetings after the first meeting, the person calling the meeting must notify each creditor of the time and place.

The official receiver, or someone he nominates, chairs the first meeting. Later meetings use a chairman appointed by the meeting itself through a resolution.

Creditors may vote at meetings only if their bankruptcy proof is duly lodged on time, and secured creditors must disclose and value their security to vote only on the unsecured balance.

The trustee or official receiver may require a creditor to surrender security within 28 days after its value has been used in voting, on payment of the estimated value plus 20%.

If a receiving order is made against one partner of a firm, a creditor owed jointly by that partner and the other partners may prove the debt to vote at creditors’ meetings, and is entitled to vote there.

The meeting chairman can admit or reject a proof for voting; if unsure, the proof is marked objected to and the creditor may vote, but that vote can later be invalidated if the objection is upheld.

Creditors may vote in person or by proxy, and proxies must be deposited with the official receiver or trustee before use.

The chairman of a meeting may adjourn the meeting, but only with the meeting’s consent.

A meeting cannot act unless quorum rules are met, with limited exceptions; if no quorum appears within half an hour, the meeting may be adjourned.

The chairman of each meeting must have minutes prepared and fairly entered in a book, and the minutes must be signed by the chairman or the chairman of the next meeting.

A person voting under a general or special proxy must not support a resolution that would let them, their partner, or employer receive remuneration from the debtor’s estate, except that special proxies may be used to vote for appointing oneself as trustee.

Creditors must prove their debts after a receiving order, using an affidavit sent to the official receiver or trustee.

A creditor who has lodged a proof may see and examine other creditors’ proofs before the first meeting and at all reasonable times.

A creditor proving a debt must deduct all trade discounts, but need not deduct a cash discount of up to five per centum on the net amount of the claim.

A secured creditor may prove only for the balance due after realising security, or for the whole debt if the security is surrendered for the creditors’ general benefit.

A secured creditor who has not realised or surrendered the security must disclose the security details in the proof before ranking for dividend, and may receive a dividend only on the balance due after deducting the assessed value.

The trustee may redeem a valued security by paying the creditor the assessed value, and may also require a sale if dissatisfied with the assessed value.

A creditor who has valued security may amend that valuation and proof if the trustee or court is satisfied it was made on a mistaken estimate or the security’s value has changed.

This section addresses a debtor’s liability under distinct contracts involving multiple firms, or both a sole contract and membership in a firm.

If rent or another payment falls due at set periods and the receiving order is made between those periods, the person entitled may claim a proportionate amount up to the date of the order.

A creditor may claim interest on an overdue provable debt in bankruptcy, up to 6% per year, if the stated conditions are met.

A creditor may prove a debt that was not yet payable when the debtor committed an act of bankruptcy, and may share in dividends, subject to a rebate of interest.

The trustee must examine each proof of debt, admit or reject it in writing, or ask for more evidence. If the trustee rejects a proof, the trustee must tell the creditor in writing why.

The court may change decisions about proofs on a creditor’s application, and the trustee or official receiver has powers relating to proofs.