Insolvency interrogations : an investigation into sections 64, 65, 66 and 152 of the Insolvency Act 24 of 1936

Abstract

This dissertation is the analysis of sections 64, 65, 66 and 152 of the Insolvency Act 24 of 1936. Sections 414 to 418 of the Companies Act 61 of 1973 are also touched upon in so far as they relate to these sections of the Insolvency Act. These sections entail the compulsory attendance of the creditors 'meetings by the insolvent. At these meetings the interrogation of the insolvent regarding his insolvent estate is conducted. Its purpose is to ensure that the insolvent accounts for the assets of his estate and supply reasons for his bankruptcy. The information gathered thereat will assist in the due and fair distribution of his assets amongst his creditors. The purpose of this research is to examine whether the application of these sections to the insolvent person (juristic or natural) is in compliance with the Constitution of the Republic of South Africa, 1996. The provisions provided for by this sections appears to be good, however there is another viewpoint. The fact that the insolvent and any other person interrogated may be compelled to divulge certain privilege information, even to the extent of incriminating himself (themselves)in the process seems to be violating certain rights of the person interrogated, for example, one's right not to incriminate himself This right especially comes to mind when one considers the fact that information divulged at the interrogations may be used against the person giving it in subsequent proceedings relating to perjury, administration of the insolvent estate, taking of oath and so forth. These sections also provides for the detention of the person who fails to comply with the provisions of this Act. The detention is said to be a mechanism that the legislature needs to ensure compliance and is not regarded as detention without trial. However, the detention has to be ordered by a judicial officer presiding over the meeting of creditors and not a person from the executive organ of the state. Case law has however indicated that there is nothing unconstitutional about these sections as long as they are applied with precautionary measures, taking into consideration the rights of the interrogatee or person examined as entrenched in the Bill of Rights. The principles of justice also require that every one shall be entitled to fair proceedings.