Report No. 26
Taking accounts of property mortgaged, and of the sale thereof
18. Inquiry into mortgage, etc.-(1) Upon application by any person claiming to be a mortgagee of any part of the insolvent's estate1 and whether such mortgage is by deed or otherwise, and whether the same is of a legal or equitable nature, or upon application by the Official Assignee with the consent of such person claiming to be a mortgagee as aforesaid, the court shall proceed to inquire whether such person is such mortgagee, and for what consideration and under what circumstances; and if it is found that such person is such mortgagee, and if no sufficient objection appears to the title of such person to the sum claimed by him under such mortgage, the court shall direct such accounts and inquiries to be taken as may be necessary for ascertaining the principal, interest and costs due upon such mortgage, and of the rents and profits, of dividends, interest or other proceeds received by such person, or by any other person by his order or for his use in case he has been in possession of the property over which the mortgage extends, or any part thereof, and the court, if satisfied that there ought to be a sale, shall direct notice to be given in such newspapers as the court thinks fit, when and where, and by whom and in what way, the said premises or property, or the interest therein so mortgaged, are to be sold, and that such sale be made accordingly, and that the Official Assignee (unless it is otherwise ordered) shall have the conduct of such sale; but it shall not be imperative on any such mortgagee to make such application.
(2) At any such sale the mortgagee may bid and purchase.
1. The words "real or leasehold" before "estate" are omitted.
[Cf. Sch. II, rule 18, P.T.A.]
19. Conveyance.-All proper parties shall join in the conveyance to the purchaser, as the court directs.
[Cf. Sch. II, rule 19, P.T.A.]
20. Proceeds of sale.-(1) The monies to arise from such sale shall be applied, in the first place, in payment of the costs, charges and expenses of and occasioned by the application to the court, and of such sale and the commission (if any) of the official assignee, and in the next place in payment and satisfaction, so far as the same extend, of what shall be found due to such mortgagee, for principal, interest and costs, and the surplus of the sale monies (if any) shall then be paid to the Official Assignee.
(2) But if the monies to arise from such sale are insufficient to pay and satisfy what is so found due to such mortgagee, then he shall be entitled to prove as a creditor for such deficiency, and receive dividends thereon rateably with the other creditors, but so as not to disturb any dividend then already declared.
[Cf. Sch. II, rule 20, P.T.A.]
21. Proceedings on inquiry.-For the better taking of such inquiries and accounts, and making a title to the purchaser, all parties may be examined by the court upon interrogatories or otherwise as the court thinks fit, and shall produce before the court upon oath all deeds, papers, books and writings in their respective custody or power relating to the estate or effects of the insolvent as the court directs.
[Cf. Sch. II, rule 21, P.T.A.]