Section 421 of IPC : Section 421: Dishonest or fraudulent removal or concealment of property to prevent distribution among creditor

Explanation using Example

Example 1:

Rajesh runs a small business and has taken loans from several creditors to keep his business afloat. However, his business starts failing, and he realizes he won't be able to repay his debts. To avoid his creditors from claiming his assets, Rajesh transfers his expensive car and some valuable machinery to his brother without any payment or consideration. Rajesh's intention is to prevent his creditors from seizing these assets to recover their dues. Under Section 421 of the Indian Penal Code, Rajesh can be prosecuted for dishonestly transferring property to prevent its distribution among his creditors.

Example 2:

Meena owes a significant amount of money to various creditors. Knowing that she is about to be declared bankrupt, Meena decides to hide her gold jewelry and some cash by giving them to her friend, Priya, for safekeeping. Meena does this to ensure that her creditors cannot claim these assets during the bankruptcy proceedings. By concealing her property with the intent to prevent its lawful distribution among her creditors, Meena is committing an offense under Section 421 of the Indian Penal Code and can face imprisonment or a fine, or both.

Example 3:

Vikram is heavily in debt and is aware that his creditors are about to take legal action to recover their money. To avoid this, Vikram sells his house to his cousin at a price significantly lower than its market value. The sale is made without adequate consideration, and Vikram's intention is to prevent his creditors from claiming the house as part of the debt recovery process. This act of transferring property without adequate consideration to prevent its distribution among creditors is punishable under Section 421 of the Indian Penal Code.

Example 4:

Anita is the director of a company that is on the verge of bankruptcy. To protect the company's assets from being seized by creditors, she instructs her employees to move valuable office equipment and inventory to a secret warehouse. Anita's actions are aimed at concealing the property to prevent its distribution among the company's creditors. Under Section 421 of the Indian Penal Code, Anita can be held liable for dishonestly concealing property to prevent its lawful distribution among creditors.