Section 50 deals with the effect of execution orders made against the debtor's property before adjudication. It reenacts, with amendments, section 54 of the 1857 Act, which requires that when a sheriff or county registrar seizes a trader's goods for a sum exceeding £20 he must retain the proceeds of sale of the goods for 14 days. If notified within that period of the trader's bankruptcy he must hold the proceeds after deducting expenses on trust for the assignees. The following changes are being made in existing law.
Firstly, the scope of the section has been extended so as to cover all debtors and not merely traders. The committee recommended this amendment because, as all debtors, and not just traders, can, since 1872, be adjudicated bankrupt, there seems to be no reason to confine this section to traders.
Secondly, as a sheriff has been entitled to seize leasehold property as well as goods, provision has been made for the seizure and sale of property.
Thirdly, the lower limit of £20 on the value of the goods is being abolished. The committee pointed out that as many bankruptcies are unproductive, any money however small, received by the sheriff should be held for payment to the Official Assignee in the event of bankruptcy.
Fourthly, the period for which this money must be retained has been extended from 14 to 21 days. The committee considered this extension of time to be necessary because notification to the sheriff will be of the adjudication and not of the petition. They appear to think that an attempt by the bankrupt to show cause against his adjudication could delay notification, hence the period should be extended.
Fifthly, the new section covers money paid to avoid seizure or sale as well as the proceeds of sale of goods seized. The obligation to retain such money is being imposed on the execution creditor as well as on the sheriff. These two changes have been made because the present provisions of section 54 are being circumvented by a practice of paying instalments either to the sheriff or directly to the execution creditor to avoid seizure or sale. The term "proceeds of sale" in section 54 does not cover such instalments.
