Mr Randhawa and his wife operated a restaurant during which time he incurred debt. In 2004 he realised the extent of his debt and proposed an IVA to his creditors. The proposal was rejected in June 2004. He was subsequently declared bankrupt in July 2004.
Prior to the making of the bankruptcy order Mr Randhawa withdrew £9,500 from his wife’s credit card and spent it. The majority of the withdrawals took place after the IVA was rejected.
One of the important facts of this case is that Mr Randhawa provided various explanations of what he had done with the money. Initially he did not state the debt on his statement of affairs. Following this he stated various explanations as below:
- The money was used for family living expenses and his children’s school fees
- That he gambled away the money
Finally Mr Randhawa stated that he had given the money to an employee to gamble with. A number of principles were decided in this case including:
- It is for the court to decide whether, having regards to the conduct of the bankrupt, it is appropriate for a bankruptcy restrictions order to be made. If the court concludes that an order should be made then it shall make it for a term not less than two years.
- That the bankrupt persuading the court that he/she is no longer a danger to the public is not enough to avoid an order being made. Such orders are a deterrent to others also and therefore if the bankrupt’s behaviour justifies the making of an order it should be made.
It was the judges decision that a bankruptcy restriction order be made against Mr Randhawa for a period of three years.
The case of Mr Randhawa v Official Receiver also discussed how the court could determine the term that the restrictions should be prolonged for.
Please go to the Official Receiver page or the bankruptcy restrictions order page for more information.
