Indian Penal Code, 1860
Section 422
repealedDishonestly or fraudulently preventing debt being available for creditors
Whoever dishonestly or fraudulently prevents any debt or demand due to himself or to any other person from being made available according to law for payment of his debts or the debts of such other person, shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both.
Why this exists
This section complements Section 421 by covering situations where, instead of hiding physical property, a debtor dishonestly blocks money or debts owed to them from being collected and used to satisfy their own creditors. It closes a gap that would otherwise let debtors escape their obligations by manipulating claims or receivables rather than tangible assets. Under the Bharatiya Nyaya Sanhita, 2023, this corresponds to Section 320.
How courts read it
Courts examine whether the accused had genuine dishonest or fraudulent intent to keep money owed to them, or someone else, out of reach of creditors, distinguishing this from ordinary delays or disputes in debt collection that lack such intent.
Common misconceptions
- Myth: This section only applies to hiding physical property like houses or cars.
Fact: This section specifically covers preventing debts or amounts owed from being made legally available for paying creditors, which is different from hiding physical property, covered instead by Section 421.