Report No. 151
11. Distribution of sale proceeds.-
(1) Wherein an action in rem the Court has ordered the property proceeded against to be sold, any party who has obtained or obtains a decree or order against the said property or the proceeds of sale thereof may after obtaining judgment apply to the Court by a notice of motion for an order determining the order of priority of the claims against the proceeds of sale of the said property.
(2) Wherein an action in rem the Court orders the property proceeded against to be sold and the property has been, sold, the Court shall order that a notice be given in one international and one national newspaper as the Court may specify that the property has been sold by the order of the Court in an action in rem giving the number of the action and the names of the parties thereto and that the gross sale proceeds, specifying the amount thereof, have been paid into the Court and that the order of priority of the claims of the said proceeds will be determined only after the expiration of a period of ninety days from the date of the publication of the said notice and that any party having a claim against the property or the proceeds of sale thereof, should apply to the Court for leave to intervene and prove its claim before the Court by filing an action before it or filing a suit before any other appropriate court before the expiration of that period.
(3) The Court may extend the period of ninety days on the application of any party who has instituted proceedings before the Court as provided in sub-section (2) or before any other Court of competent jurisdiction in India for obtaining a decree against the property or proceeds of sale and the court shall not disburse the sale proceeds and/or determine priority until thirty days after the disposal of the said suit or action or any appeal filed therefrom.
(4) Notwithstanding the provisions contained in sub-section (3) above, the Court may determine priority and direct payment out of the sale proceeds on an application by any party who has obtained a decree or order against the property or the sale proceeds if the Court is of the opinion that the claim of the applicant is in any event entitled to priority over the claim for which a suit or action has been instituted:
Provided that the Court shall hear all parties who may have made claims and filed suit or action against the property or sale proceeds within the prescribed period of 90 days before determining priority and directing disbursement out of the sale proceeds.