Protection of family residence and restrained insolvency sale, while accepting revised purchase of partnership machinery.

The Bombay High Court declined to permit the Official Assignee to take physical possession of the insolvent's family flat or sell it merely because insolvency had been declared, stressing protection of shelter and family welfare while preserving the insolvent's share as part of the estate and restraining any alienation without leave of court. It also accepted the revised offer for the partnership's paper punching machine, directing payment within one week and transfer of the asset, with sale proceeds to be credited to the insolvent estate account for investment until further orders.

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Issues: (i) Whether the Official Assignee should be permitted to take physical possession of the insolvent's residential flat and sell it to realise the insolvent's share; (ii) whether the paper punching machine belonging to the partnership estate should be sold to the insolvent's brother on the revised offer.

Issue (i): Whether the Official Assignee should be permitted to take physical possession of the insolvent's residential flat and sell it to realise the insolvent's share.

Analysis: The flat was occupied by the insolvent and his family, and the Court declined to order physical possession and sale merely because the insolvent had been adjudicated insolvent. The Court emphasised the need to protect shelter and family welfare, while recognising that the insolvent's 50% interest remained part of the estate and could not be alienated without leave of the Court. To secure that position, the Court required undertakings and directed a complete restraint on disposal, alienation, or parting with possession.

Conclusion: The request for physical possession and sale of the residential flat was rejected, but the insolvent's interest in the flat was placed under a restraint against alienation.

Issue (ii): Whether the paper punching machine belonging to the partnership estate should be sold to the insolvent's brother on the revised offer.

Analysis: The machine had already been identified as partnership property in the custody of the insolvent's brother, and valuation had been dispensed with. The Court accepted the revised offer and directed payment within one week, upon which the machine was to be handed over and the sale proceeds credited to the insolvent estate account for investment until further orders.

Conclusion: The revised offer for purchase of the machine was accepted.

Final Conclusion: The order granted limited relief by approving the sale of the movable asset, while refusing coercive possession and sale of the family residence and imposing protective restraints in relation to the flat.

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