Requirements for non-permission of discharge under Article 346 subparagraph 2 of the Bankruptcy Act

[1] Article 346 subparagraph 2 of the Bankruptcy Act

Gangseo-gu (Attorney Kim Jong-hoon, Counsel for defendant-appellant)

Daegu District Court Order 2004Ra60 dated July 16, 2004

The order of the court below is reversed, and the case is remanded to the Daegu District Court Panel Division.

1. The judgment of the court below

According to the reasoning of the order of the court below, the court below acknowledged the fact that the re-appellant (the applicant and the bankrupt; hereinafter referred to as the "trustee") made an unreasonable investment without considering the income that may occur in the future around 1998 and the debt has rapidly increased due to the failure in the Internet content business. According to the above facts, the bankrupt committed a credit transaction by a fraudulent act that makes the bankrupt believe that there is no fact despite the existence of the cause of bankruptcy. Thus, the court below determined that the bankrupt committed a credit transaction under the fraudulent act that makes the bankrupt believe that there is no fact.

2. Judgment of the Supreme Court

However, we cannot accept the above decision of the court below for the following reasons.

Article 346 of the Bankruptcy Act provides, "The court may decide not to grant the immunity only in cases falling under any of the following subparagraphs," and subparagraph 2 of Article 346 of the Bankruptcy Act provides, "When the bankrupt has acquired the property through a credit transaction by using any deceitful means in order to believe that there is no fact which is the cause of the bankruptcy within one year prior to the declaration of the bankruptcy, even though there is a fact which is the cause of the bankruptcy," so that the act of acquiring the property falls under the cause of non-permission of immunity under Article 346 subparagraph 2 of the Bankruptcy Act, first, the act of acquiring the property must be done within one year prior to the declaration of the bankruptcy, second, in order to believe that there is no fact which is the cause of the bankruptcy, and third, the property should have been acquired through the credit transaction.

Therefore, in order to determine that Article 346 subparagraph 2 of the Bankruptcy Act constitutes the grounds for non-permission of exemption, it is necessary to carefully examine whether the above requirements are met and to affirm all of them. The above facts of the judgment of the court below are sufficient to determine whether the above acts were committed within one year prior to the date of adjudication of bankruptcy against the bankrupt, and whether the bankrupt has written a letter in order to believe that there was no fact despite the existence of the fact that the bankrupt was the grounds for bankruptcy, and it is not clear whether the bankrupt acquired property due to credit transaction, and it is not the grounds for non-permission of exemption under Article 346 subparagraph 2 of the Bankruptcy Act.

Nevertheless, the court below held that the above facts alone did not allow the bankrupt to grant immunity under Article 346 subparagraph 2 of the Bankruptcy Act. In so doing, the court below erred by failing to exhaust all necessary deliberations as to whether it constitutes grounds for non-permission of immunity under Article 346 subparagraph 2 of the Bankruptcy Act, which affected the decision.

3. Conclusion

Therefore, without examining the remaining grounds for reappeal, the order of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Hong-hoon (Presiding Justice)