Section 381: Failure to keep proper record

381. Failure to keep proper record (1) (a) Any bankrupt who, for any period during the 3 years before his adjudication, might reasonably be expected, because of his occupation or transactions for the period, to keep a record of those transactions and has failed to keep and preserve a proper record of the transactions, shall commit an offence and shall, on conviction, be liable to imprisonment for a term not exceeding 12 months and to a fine not exceeding 50,000 rupees. (b) An information for an offence under this subsection may be laid against a bankrupt at any time within 2 years after the date of his adjudication. (2) Any bankrupt who, with intent to conceal the true state of his affairs, fails to keep and preserve a proper record of his transactions, shall commit an offence and shall, on conviction, be liable to imprisonment for a term not exceeding 3 years and to a fine not exceeding 200,000 rupees. (3) For the purposes of subsections (1) and (2), a bankrupt shall be deemed not to have kept a proper record of his transactions if, being engaged in any trade or business, he has not kept the necessary books and accounts. (4) In subsection (3), “necessary books and accounts” means the books and accounts that are necessary to explain his transactions and financial position in his trade or business, and include— (a) a book or books containing entries from day to day in sufficient detail of all cash received and cash paid; and (b) if his trade or business has involved dealing in goods— (i) a record of all goods sold and purchased; I14 – 207 [Issue 3] Insolvency Act (ii) detailed stock sheets of annual and other stock takings showing the quantity and the valuation he made of each item of stock on hand; and (c) if his trade or business has involved his services, details of those services. (5) For the purposes of subsections (1) and (2), a bankrupt shall be deemed not to have preserved a proper record of his transactions if he has not preserved— (a) the records listed in subsection (4), if applicable; (b) a record of all goods purchased in the course of his business, with the original invoices; and (c) a daily record of all goods sold on credit.