Report No. 26
51. Property in possession of insolvent.-(1) Where a person claims any property, or interest therein, in the possession of the insolvent, at the time of the insolvency, he shall file with the Official Assignee a proof of claim verified by affidavit giving the grounds on which the claim is based and sufficient particulars to enable the property to be identified.
(2) The Official Assignee with whom a proof of claim is filed under sub-section (1) shall within fifteen days thereafter or within 15 days after the first meeting of creditors, whichever is the later, either admit the claim and deliver possession of the property to the claimant or give notice in writing to the claimant that the claim is disputed with his reasons therefor, and, unless the claimant appeals therefrom to the court within thirty days after the sending of the notice of dispute, he shall be deemed to have abandoned or relinquished all his right to or interest in the property to the Official Assignee who thereupon may sell or dispose of the property free of any lien, right, title or interest of the claimant thereon or therein.
(3) The onus of establishing a claim to or in property under this section shall lie on the claimant.
(4) The Official Assignee may give notice in writing to any person to prove his claim to or in any such property or interest as is referred to in sub-section (1), arid, unless that person files with the Official Assignee a proof of claim in the prescribed form within thirty days after the sending of the notice, the Official Assignee may thereupon with the leave of the court sell or dispose of the property free of any lien, right, title or interest of that person thereon or therein.
(5) No proceedings shall be instituted to establish a claim to, or to recover any right or interest in, any property in the possession of an insolvent at the time of the insolvency, except as provided in this section.
(6) The Official Assignee shall have a power to take possession of any such property or interest as is referred to in sub-section (1), notwithstanding that a claim thereto may be or has been filed under this section.
[Section 28(3), P.A. modified] [Cf. section 52(2)(c), first add second proviso, P.T.A. modified, See section 50, Canadian Act.]
(7) Where the property referred to in sub-section (1) is movable property subject to speedy and natural decay, or where the expense of looking after it is likely to exceed its value, the Official Assignee may sell it at once, notwithstanding that a claim thereto may be or has been filed under this section.
(8) Nothing in this section shall be construed as extending the rights of any person other than the Official Assignee.
[Cf. Order 21, R. 43, C.P.C.]
Effect of insolvency on antecedent transactions
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