Section 320 BNS: Fraudulent Removal or Concealment of Property to Prevent Creditor Distribution (Formerly Section 421 IPC)

Section 320 of Bharatiya Nyaya Sanhita: Fraudulent Removal or Concealment of Property to Prevent Creditor Distribution

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

Whoever dishonestly or fraudulently removes, conceals or delivers to any person, or transfers or causes to be transferred to any person, without adequate consideration, any property, intending thereby to prevent, or knowing it to be likely that he will thereby prevent, the distribution of that property according to law among his creditors or the creditors of any other person, shall be punished with imprisonment of either description for a term which shall not be less than six months but which may extend to two years, or with fine, or with both.

Legal Commentary & Landmark Judgments: Section 320

Section 320 penalises dishonestly or fraudulently removing, concealing, or transferring property to prevent its distribution among creditors according to law.

Insolvency or Insolvency Threat: Debtor facing insolvency, debt recovery, or creditor claims.
Fraudulent Transfer: Removing, concealing, or transferring property to benamidars or fictitious trusts.
Prevention of Distribution: Done with intent to prevent equitable distribution among legitimate creditors.

Key Landmark Precedents:

S.P. Chengalvaraya Naidu v. Jagannath (1994) 1 SCC 1: The Supreme Court ruled that clandestine diversion of debtor assets to defeat execution creditors constitutes criminal fraud.
Kameswaramma v. Radhakrishna Murthy (1963) 3 SCR 359: Affirmed that fraudulent conveyances executed to shield property from insolvency liquidators are void and criminally actionable.

Courtroom Practice & Strategic Litigation Guidance:

In corporate debt and IBC proceedings, forensic audit trails showing preferential or undervalue transfers immediately prior to moratorium provide conclusive evidence under Section 320.

Section 320: Fraudulent Removal or Concealment of Property to Prevent Creditor Distribution

Section 320 of Bharatiya Nyaya Sanhita: Fraudulent Removal or Concealment of Property to Prevent Creditor Distribution

Legal Commentary & Landmark Judgments: Section 320