LexThe Maharashtra Agricultural Debtors Relief Act.
Maharashtra · state statute
Open in Lexace · Ask the AI about this act1947 : XXVIII] 1
THE MAHARASHTRA AGRICULTURAL DEBTORS RELIEF ACT
[Text as on 28th March 2025]
__________
CONTENS
PREAMBLE.
SECTIONS.
CHAPTER I
PRELIMINARY
1. Short title and extent.
2. Definitions.
3. Savings.
CHAPTER II
PROCEDURE FOR ADJUSTMENT OF DEBTS
4. Application for adjustment of debts.
5. Every creditor and debtor to file a true and correct statement before Court.
6. Application by debtor jointly and severally liable.
7. Assignees from non-debtor not entitled to benefit of this Act.
8. Application for recording settlement.
9. Settlement during pendency of proceedings before Court.
10. Certain settlements to be void.
11. Application under section 4 or 8 to be made only in respect of debtor whose debts are not
more than Rs. 15,000.
12. Withdrawal of applications.
13. Consolidation of applications.
13A. Power of Civil Judge to refer for disposal certain applications to Joint Civil Judge.
14. Service of notice on debtors and creditors to submit statement of debts.
15. Debts in respect of which no application for adjustment or settlement is made to be void.
16. Duties of debtors and creditors.
17. Preliminary issues.
18. [Repealed].
19. Transfer of pending suits, appeals, applications and proceedings to the Court.
20. Taking of accounts.
21. Examination of creditor and debtor.
22. Mode of taking accounts.
23. In certain cases rent may be charge in lieu of profits.
24. Power of Court to declare transfer purporting to be sale to be in nature of mortgage.
25. Provisions of section 24 not to apply to certain transfers and transferees.
26. Notice to Collector, Co-operative Societies, Registrar, local authorities and others.
2 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
27. Court’s duty to determine particulars, value, etc., of property.
28. Fraudulent alienations or incumbrances void.
29. Value of property of debtor to be determined by Court in prescribed manner.
30. Paying capacity.
31. Debts payable by debtors to be scaled down.
32. Award.
33. Court to prepare scheme for adjustment of debts through Provincial Land Mortgage Bank.
34. No recovery of amount in excess of debts scaled down.
35. Debts not to be scaled down in case of collusion.
36. Ex parte proceedings if any party does not appear.
37. Re-opening of award and re-adjustment of debts.
38. Award to be registered: how executed.
39. Postponement of payment of instalment in case of remissions, etc.
40. No alienation by debtor before discharge of debts valid.
41. Court may order sale of debtor’s property in liquidation of his debt.
42. Pleaders, etc., excluded from appearance.
43. Appeals.
43A. Power of District Judge to refer for disposa l certain appeals to Assistant Judge or Civil
Judge empowered to hear appeals.
44. Court-fees.
45. Notice how served.
46. Provisions of Civil Procedure Code to apply to proceedings.
CHAPTER IIA
REGISTRATION OF AWARDS
46A. Debt Adjustment Register and Index.
46B. Court to send awards and memorandums to Registrars and Sub-Registrars.
46C. Notice of appeals to Registrars.
46D. Registration.
46E. Registration of awards under repealed Act.
46F. Notice of awards.
46G. Application of Indian Registration Act.
CHAPTER III
INSOLVENCY PROCEEDINGS
47. Court to declare debtor insolvent in certain circumstances.
48. Procedure in insolvency proceedings.
49. Distribution of assets of insolvent.
50. Bar to application in insolvency in other courts.
51. Appeals barred.
1947 : XXVIII] The Maharashtra Agricultural Debtors Relief Act 3
CHAPTER IV
MISCELLANEOUS
51A. Bar of civil suits or proceedings.
52. Period of proceeding before Courts under this Act to be excluded.
53. Alienation of standing crops, etc., before repayment of loan prohibited.
54. Power of State Government to authorize any person to advance loans to debtors.
55. Rules.
56. Repeal of Act XVII of 1879 and Bom. XXVIII of 1939.
57. Special provision for application under section 4 in resp ect of debts due to creditor in
merged territory.
58. Special provision for application under section 24 in respect of land situate in merged
territories.
4 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
1947 : XXVIII] The Maharashtra Agricultural Debtors Relief Act 5
LIST OF AMENDMENT ACTS
1. Amended by Bom. 70 of 1948
2. Adapted and modified by the Adaptation of Laws Order, 1950.
3. Amended by Bom. 37 of 1950
4. Amended by Bom. 41 of 1951
5. Amended by Bom. 19 of 1952
6. Amended by Bom. 18 of 1953
7. Amended by Bom. 22 of 1953
8. Amended by Bom. 37 of 1955
9. Amended by Mah. 24 of 2012
6 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
1947 : XXVIII] The Maharashtra Agricultural Debtors Relief Act 7
ACT No. XXVIII OF 19471
[THE MAHARASHTRA AGRICULTURAL DEBTORS RELIEF ACT.]
[This Act received the assent of the Governor on the 22nd May 1947; assent was first published
in the Bombay Government Gazette, Part IV, on the 27th May 1947.]
An Act to consolidate and amend the law for the Relief of Agricultural
Debtors in the Province of Bombay.
WHEREAS it is expedient to consolidate and amend the law for the relief of agricultural debtors
in the Province of Bombay and for certain other purposes specified herein; I t is hereby ena cted as
follows :—
CHAPTER I
PRELIMINARY
1. Short title and extent. — (1) This Act may be called the 2[Maharashtra Agricultural Debtors
Relief Act.]
(2) It extends to the whole of the 3[State] of Bombay except the City of Bombay.
2. Definitions.— In this Act, unless there is anything repugnant in the subject or context,—
(1) “award” means an award made under sub -section (4) of section 8 or section 9, 32 or 33
or as confirmed or modified by the Court in appeal;
(2) “Co-operative society” means a society re gistered under the provisions of the Bombay
Co-operative Societies Act, 1925 (Bom. VII of 1925);
(3) “Court” means the court of the Civil Judge (Senior Division), having ordinary
jurisdiction in the area where the debtor ordinarily resides an d if there is no such Civil Judge, the
court of the Civil Judge (Junior Division), having such jurisdiction 4[and includes any court to
which an application may be referred to for disposal under section 13A];
(4) “debt” means any liability in cash or kind, whether secur ed or unsecured , due from a
debtor whether payable under a decree or order of any civil court or otherwise 5[and includes
mortgage money the payment of which is secured by the usufructuary mortgage of immov able
property] but does not include arrears of wag es payable in respect of agricultural or manual
labour;
(5) “debtor” means
(a) an individual—
(i) who is indebted;
(ii) who holds land used for agricultural purposes or has held such land at any
time not more than 30 years before the 30 th January 1940, which has been transferred
whether under an instrument or not and which transfer is in the nature of a mortgage
although not purporting to be so;
(iii) who has been cultivating land personally for the cultivating seasons in the
two years immediately precedin g the date of the coming into operation of this Act or
of the establishment of the Board concerned under the repealed Act; and
1 For Statement of Objects and Reasons, see Bombay Government Gazette , 1947, Part V, page 65; for Proceedings in
Assembly, see Bombay Legislative Assembly Debates, 1947, Vol. X; and for Proceedings in Council, see Bombay
Legislative Council Debates, 1947, Vol. XII.
2 Short title “Bombay Agricultural Debtors Relief Act, 1947” has been changed as “Maharashtra Agricultural Debtors
Relief Act” by Mah. 24 of 2012, s. 2, Schedule, entry 26, w.e.f. 1st May 1960.
3 This word was substituted for the word “Province” by the Adaptation of Laws Order, 1950.
4 These words were added by Bom. 70 of 1948, s. 2(1).
5 These words were inserted by Bom. 70 of 1948, s. 2(2).
8 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
(iv) whose annual income from sources other than agriculture and manual labour
does not exceed 33 per cent. of his total annual i ncome or does not exceed Rs. 500,
whichever is greater;
(b) an undivided Hindu family—
(i) which is indebted;
(ii) which holds land used for agricultural purposes or has held such land at any
time not more than 30 years before the 30 th January 1940, which land has been
transferred whether under an instrument or not and which transfer is in the nature of a
mortgage although not purporting to be so;
(iii) which has been cultivating land personally for the cultivating seasons in the
two years immediately prec eding the date of the coming into operation of this Act or
of the establishment of the Board concerned under the repealed Act; and
(iv) the annual income of which from sources other than agricultural and manual
labour does not exceed 40 per cent. of its to tal annual income and the aggregate of
such incomes of the members of which does not exceed Rs. 1,500.
Explanation 1[I].— For the purposes of this clause “agriculture” includes horticulture,
the raising of crops or garden produce, dairy farming, poultry farming, stock breeding and
grazing, but does not include leasing of land or cutting only of wood;
2[Explanation II.— In the case of—
(a) any person who dies leaving as his heir, a widow or a minor or a person who
is subject to physical or mental disability, or
(b) an undivided Hindu family, in which t here are no adult male co -parceners
capable of cultivating the land personally,
the income derived by such heir or family by th e lease of land for an agricul tural
purpose shall, notwithstanding anything contain ed in Explanation I, be deemed to be
income from agriculture.]
3[(6) “financing of crops” means advancing of loans for the raising of crops during the
ploughing season or later for ploughing, sowing, harrowing, weeding, harvesting, purchase of
seeds, manure or for such other purposes as may be prescribed, such loans being repayable during
the season when the crops for which the loans were advanced are harvested];
(7) “holder” means a holder as defined in clause ( 11) of section 3 of the Bombay Land
Revenue Code, 1879 (Bom. V of 1879), and includes a holder of land held for the performance of
service useful to Government or village community which service is actually being performed but
does not include a holder of any land held on behalf of a religious or cha ritable institution; an d
the expression “to hold land” shall be construed accordingly;
4[(7a) “merged state bank” means a bank incorporated as such in merged territories and
notified by the State Government in the Official Gazette for the purposes of this Act as a merged
State bank;]
(8) “prescribed” means prescribed by rules;
(9) “repealed Act” means the Bombay Agricultural Debtors Relief Act, 1939 (Bom. XXVIII
of 1939);
(10) “resource society” shall have the same meaning as it has in the Bombay Co-operative
Societies Act, 1925 (Bom. VII of 1925);
(11) “rules” means rules made under section 55;
1 This Explanation was numbered as Explanation I by Bom. 70 of 1948, s. 2(3).
2 This Explanation was added by Bom. 70 of 1948, s. 2(3).
3 This clause was substituted for the original by Bom. 70 of 1948, s. 2(4).
4 Clause (7a) was inserted by Bom. 37 of 1950, s. 2.
1947 : XXVIII] The Maharashtra Agricultural Debtors Relief Act 9
(12) “scheduled bank” means a bank included in the Second Schedule to the Reserve Bank
of India Act, 1934 (II of 1934);
(13) “Seasonal finance” means advancing of loans for such purposes as may be prescribed,
such loans being repayable on or before the 15th May following;
(14) “to cultivate personally” means to cultivate by one's own labour or by the labour of any
member of one’ s family or by servant s or hired labo ur under one's personal supervision or the
personal supervision of any member of one’s family.
Explanation I.— If a person who was cultivating personally dies leaving as his heir a widow
or a minor or a person who is subject to physical or mental disabili ty, such heir shall be deemed
to cultivate the land personally notwithstanding the fact that the land is cultivated on behalf of
such heir by servants or hired labour or by tenants.
Explanation II.— In the case of an undivided Hindu family, the land shall be deemed to
have been cultivated personally if it is cultivated by any member of such family. If there are no
adult male co -parceners in such family capable of cultivating the land personally, such family
shall be deemed to be cultivating the land person ally if the land is cultivated on behalf of such
family by servants or hired labour or by tenants.
(15) Words and expressions used in this Act, but not defined, have the meanings assigned to
them in the Code of Civil Procedure, 1908 (V of 1908) , or the Bom bay Land Revenue Code,
1879 (Bom. V of 1879), as the case may be.
3. Savings.— Save as otherwise expressly provided, nothing in this Act shall affect the debts and
liabilities of a debtor falling under the following heads, namely :—
(i) any revenue or ta x payable to Government or any other sum due to it by way of loan or
otherwise,
(ii) any tax payable to a local authority or any other sum payable to such authority by way
of loan or otherwise,
(iii) any sum due to a co-operative society,
(iv) any sum adv anced solely for the purpose of financing of crops as provided in the
repealed Act or for the purpose of seasonal finance as provided in this Act,
(v) any sum due under a decree or order for maintenance passed by a competent Court, 1[**]
(vi) any sum due to a scheduled bank, 2[and
(vii) any sum due to a merged State bank.]
CHAPTER II
PROCEDURE FOR ADJUSTMENT OF DEBTS
4. Application for adjustment of debts. — (1) Any debtor ordinarily residing in any local area
for which a Board was established under section 4 of the repealed Act on or after the 1st February 1947,
or his creditor may make an application before the 1 st August 1947 to the Court for the adjustment of
his debts.
(2) Every application made under sub -section (1) shall be in writing in the prescri bed form and
shall be signed, verified and presented in the prescribed manner.
(3) Notwithstanding anything contained in section 3 an application made under this section shall
contain the amounts and particulars of all debts specified in that section due by the debtor.
5. Every creditor and debtor to file a true and correct statement before Court. —
(1) Notwithstanding the fact that no application has been filed under section 4—
1 The word “and” was deleted by Bom. 37 of 1950, s. 3.
2 This word and clause (vii) were added by Bom. 37 of 1950, s. 3.
10 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
(a) every creditor, on being required to do so by notice in writing by any of his debtors,
shall, within two months from the date of t he receipt of such notice, file before the Court a true
and correct statement of all his claims against such debtor, and shall at the same time send a copy
thereof to such debtor, and
(b) every debto r, on being required to do so by notice in writing by any of his creditors,
shall, within two months from the date of the receipt of such notice, file before the Cou rt a true
and correct statement—
(i) of all the debts owned by such debtor;
(ii) whether he holds any land used for agricultural purposes and whether he has been
cultivating land personally;
(iii) of his income from agriculture and from sources other than agriculture in the year
preceding the date of the notice.
The debtor shall at the same time send a copy of such statement to such creditor:
Provided that the Court may, for sufficient cause, extend, from time to time, the period within
which the creditor or the debtor, as the case may be, may file such statement.
(2) Every debtor or creditor gi ving a notice under sub -section (1) shall at the same time send a
copy thereof to the Court.
(3) In awarding the costs of any proceeding in respect of any application made under section 4 the
Court may, on being satisfied that the statement required to be filed under sub-section (1) was, without
sufficient cause, not filed within the time specified therein or within the period extended under the
proviso to sub -section ( 1) or incorrectly filed, direct the party in default to bear the whole or any
portion of the costs of such proceeding.
6. Application by debtor jointly and severally liable.— (1) If the payment of a debt due by a
debtor is guaranteed by a surety or if a debtor is otherwise jointly and severally liable for any debt
along with any other person and if the surety or such other person is not a debtor, the debtor may make
an application under section 4 for relief in respect of such debt and the Court may after consideration
of the facts and circumstances of the case proceed with the adjustment of de bts under this Act in so far
as such applicant is concerned.
(2) Whenever the debts due by a debtor which are guaranteed by a surety are adjusted under
sub-section (1), the surety shall be discharged from liability in respect of the debts or portion of th e
debts of such debtor which are extinguished under sub -section ( 1) of section 15, sub -section ( 3) of
section 17, sub -section (5) of section 26, section 34 or sub -section (2) of section 35; and the surety
shall not be entitled to proceed against the debtor in respect of such debts or portion.
7. Assignee s from non-debtor not entitled to benefit of this Act. — No application shall lie
under section 4 for adjustment of any debt due from a debtor to whom such debt has been transferred
or assigned after the 1st January 1938 by any person who is not himself a debtor.
8. Application for recording settlement. — (1) If any debtor and any or all of his creditors
arrive at a settlement in respect of any debt due by the debtor to the cred itor, the debtor or any of the
creditors may, within thirty days from the date of such settlement, make an application to the Court for
recording such settlement.
(2) Every such application shall be in the prescribed form and shall be signed and verified in the
prescribed manner.
(3) On receipt of such application the Court shall, after giving notice to the creditor or the debtor,
as the case may be, and after making such enquiry as it thinks fit, if it is satisfied that the settlement
arrived at is bona fide and voluntary and is not made with intent to defeat or delay any of the creditors
of the debtor, and is in the interest of the debtor, 1[* * *] record such settlement and certify the same.
1 The words, brackets, letters, and figures “and that the debtor a person who fulfils the conditions referred to in clauses ( a)
and (b) of sub-section (1) of section 17” were deleted by Bom. 37 of 1955, s. 2.
1947 : XXVIII] The Maharashtra Agricultural Debtors Relief Act 11
Every such settlement so recorded and certified shall be binding upon the parties thereto and shall not,
save as otherwise hereinafter provided, be re-opened.
(4) After the Court has recorded and certified a settlement under sub -section (3) the Court shall
call upon the debtor to make a declaration whether there are any other debts due by the debto r which
are not included in the settlement. If the debtor makes a declaration that there are no such debts, the
Court shall make an award in terms of such settlement.
(5) If the Court is satisfied, after recording such settlement, that there are other debts due from the
debtor which are not included in the settlement, the Court shall treat the application made under
sub-section (1) as an application for adjustment of debts under section 4.
9. Settlement during pendency of proceedings before Court. — Notwithstanding anything
contained in the preceding sections, if during the pendency of proceedings before the Court or the
Court in appeal, as the case may be a settlement is arrived at between a debtor and all his creditors and
if such Court is satisfied that t he settlement has been made by the debtor voluntarily and is for his
benefit, such Court may make an award in terms of such settlement.
10. Certain settlement to be void. — Every settlement of a debt due from a debtor to any
creditor, which is not certifie d by the Court under section 8, or in terms of which no award has been
made under section 9, shall be void and shall not be recognised by any Court for any purpose
whatsoever.
11. Application under section 4 or 8 to be made only in respect of debtor whose debts are
not more than Rs. 15,000.— No application under section 4 or 8 shall be entertained by the Court on
behalf of or in respect of any debtor, unless the total amount of debts due from him on the date of the
application is not more than Rs. 15,000.
12. Withdrawal of applications.— An application for adjustment of debts under section 4 of an
application for recording a settlement under section 8 shall not be withdrawn without the leave of the
Court.
13. Consolidation of applications. — Where two or m ore applications for adjustment of debts
under section 4 are presented by or against the same debtor, all such applications shall be consolidated.
Where such separate applications are presented 1[by or] against joint debtors, all such applications shall
be heard together.
2[13A. Power of Civil Judge to refer for disposal certain applications to Joint Civil Judge.— A
Civil Judge may refer for disposal any application filed under section 4 or 8 to a Joint Civil Judge].
14. Service of notice on debtors and c reditors to submit statement of debts. — On receipt of
an application for adjustment of debts, the Court shall—
(a) give notice to the debtor (unless the debtor is himself an applicant) and to every creditor
(other than the creditor who is himself an applic ant) whose name and address are given in the
application, and
(b) publish a general notice, requiring the debtor and all creditors to submit a statement in
the prescribed form within one month from the date of the service of the notice or the publication
of the general notice, whichever is later:
Provided that if the Court is satisfied that the debtor or any creditor is for good and sufficient
cause unable to comply with the notice within the time specified therein it may extend the period for
the submission of the statement.
1 These words were inserted by Bom. 70 of 1948, s. 3.
2 This section was inserted by Bom. 70 of 1948, s. 4.
12 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
15. Debts in respect of which no application for adjustment or settlement is made to be
void.— (1) Every debt due from a debtor in respect of which no application has been made under
section 4 within the period specified in the said s ection 4 or in respect of which no application for
recording a settlement is made under section 8 within the period specified in the said section 8 or in
respect of which an application made to the Court is withdrawn under section 12 and no fresh
application is made under section 4 and every debt due from such debtor in respect of which a
statement is not submitted to the Court by the creditor in compliance with the provisions of section 14
shall be extinguished.
(2) Nothing in this section shall apply to a ny debt due from any person who has by his
declaration, act or omission intentionally caused or permitted his creditor to believe that he is not a
debtor for the purposes of this A ct or that no application under section 4 can be entertained in respect
of any debt owed by such person to such creditor by reason of the provisions of section 11.
16. Duties of debtors and creditors. — (1) Every debtor by or against whom an application is
made under section 4 or who is a party to an application made under section 8 shall produce all books
of accounts and shall give such inventories of his property and such lists of his creditors and debtors
and of the debts due from and to him, submit to such examination in respect of his property or his
creditors, attend at such time before the Court, and generally do all such things as may be required by
the Court or as may be prescribed.
(2) It shall be the duty of every creditor to produce such books of accounts, to submit to such
examination and to supply such information in r espect of the debt due to him by the debtor and the
securities held by him, as may be required by the Court or as may be prescribed.
17. Preliminary issues. — (1) On the date fixed for the hearing of an application made under
section 4, the Court shall decide the following points as preliminary issues :—
(a) whether the person for the adjustment of whose debts the application has been made is a
debtor;
(b) whether the total amount of debts due from such person on the date of the application
exceeds Rs. 15,000.
(2) If the Court finds that such person is not a debtor or that the total amount of debts due from
such person on the date of the application is more than Rs. 15,000 the Court shall dismiss the
application forthwith:
Provided that before the applicat ion is so dismissed the creditors or any of them may remit any
specific portion of their claim so as to reduce the total amount of the debts of all the creditors due from
such person on the date of the application to a sum not exceeding Rs. 15,000. In such case the Court
shall not dismiss the application but shall proceed further with the same.
(3) The portion of the debts in respect of which the claim is remitted under su b-section (2) shall
be extinguished.
1[Explanation.— For the purposes o f this section, the expression “the date of the application”
shall mean the date of an application which has been made within the period prescribed under section 4
and where there are two or more applications made for adjustment of debts of the same debtor, the date
of the last of such applications.]
18. [Court-fee to be refunded to creditor.] Rep. by Bom. 70 of 1948, s. 8.
19. Transfer of pending suits, appeals , applications and proceedings to the Court.— (1) All
suits, appeals, applications for execution and proceedin gs 2[including revisional proceedings pending
before a District Judge under section 53 of the Dekkhan Agriculturists ’ Relief Act, 1879 (XVII of
1879)] in respect of any debt pending in any civil or revenue court shall, if they involve the questions
1 This Explanation was added by Bom. 70 of 1948, s. 5.
2 These words and figures were substituted for the words “other than revisional” by Bom. 70 of 1948, s. 7(1).
1947 : XXVIII] The Maharashtra Agricultural Debtors Relief Act 13
whether the persons from whom such debt is due is a debtor and whether the total amount of debts due
from him 1[* *] exceeds Rs. 15,000, be transferred to the Court.
(2) When an application for adjustment of debts made to a Court under section 4 or a statement
submitted to a Court under section 14 includes a debt in respect of which a suit, appeal, application for
execution or proceeding 2[liable to be transferred under sub -section (1)] is pending before a civil or
revenue court, the Court shall give notice thereo f to such other court. On receipt of such notice, su ch
other court shall transfer the suit, appeal, application or proceeding, as the case may be, to the Court.
(3) When any suit, appeal, application or proceeding is transferred to the Court under sub -section
(1) or sub-section (2), the Court shall proceed as if an application under section 4 had been made to it.
(4) If the Court, to which any suit, appeal, appl ication or proceeding is trans ferred under
sub-section (1) or sub-section (2), decides the preliminary issue mentioned in clause ( a) of sub-section
(1) of section 17 in the negative or that mentioned in clause ( b) of the said sub -section ( 1) in the
affirmative, it shall retransfer the suit, appeal, application or proceeding to the cour t from which it had
been transferred to itself after the disposal and subject to the result of the appeal where an appeal is
filed, and after the expiry of the period prescribed for an appeal where no appeal is filed.
(5) When any suit, appeal, application or proceeding is retransferred to the court under
sub-section (4), the said court shall proceed with the same.
3[(6) When such s uit, appeal, application or pro ceeding involves the determina tion of any issue
entirely unconnected with the adjustment of debts, the transfe r of such suit, appeal, application or
proceeding under this section shall not empower the Court to determine the said issue and the
determination of such issue shall be made as if the transfer of the suit, appeal, application or
proceeding was not made under this section.
(7) When any question arises regarding the validity of the transfer or retransfer under this section
of any suit, appeal, application or proceeding or if any question arises whether any issue is or is not
entirely unconnected with the adj ustment of debts, the Court before which such question arises, if it is
not the District Court, may refer the question for decision of the District Court. If such question arises
before the District Court, the District Court itself shall decide the same. T he decision of the District
Court in either case shall be final].
20. Taking of accounts.— If the Court finds the person making an application under section 4 or
the person against whom an application is made under the said section 4 to be a person—
(a) who is a debtor, and
(b) the total amount of debts due from whom on the date of the application is not more than
Rs. 15,000,
the Court shall proceed to take accounts in the manner hereinafter provided.
21. Examination of creditor and debtor. — In an application for the adjustment of debt s if the
amount of the creditor’ s claim is disputed, the Court shall, when taking accounts, examine both the
creditor and the debtor as witnesses, unless for reasons to be recorded the Court deems it unnecessary
so to do.
22. Mode of taking accounts. — Notwithstanding any agreement between the parties or the
persons (if any) through whom they claim, as to allowing compound interest or setting off the profits of
mortgaged property without an account in lieu of interest, or oth erwise determining the manner of
taking the account, and notwithstanding any statement or settlement of account, or any contract
purporting to close previous dealings and create a new obligation, the Court shall inquire into the
history and merits of the c ase and take account between the parties from the commencement of the
transactions subsisting between the parties and the persons (if any) through whom they claim, out of
1 The words “on the date of the application” were deleted by Bom. 70 of 1948 s. 7(1)(b).
2 These words, brackets and figure were substituted for the words “other than revisional” by Bom. 70 of 1948, s. 7(2).
3 Sub-sections (6) and (7) were added by Bom. 70 of 1948, s. 7(3).
14 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
which the claim has arisen and determine the amount due to each of the creditors at t he date of the
application made under section 4, according to the following rules, namely :—
(1) (a) Separate accounts of principal and interest shall be taken;
(b) In the account of principal there shall be debited to the debtor only such money as
may from time to time have been actually received by him or on his account from the creditor,
and the price of goods, if any, sold to him by the creditor;
(c) In the accounts of principal and interest there shall also be debited the amounts, if
any, respectively due for principal (including costs) and interest under any decree or order
passed by a competent court in respect of any debt:
Provided that , if such decree or order does not specify the amount of principal and interest
separately or does not contain any m aterial for determining the same, two -third and one -third of the
amount awarded by such decree or order shall for purposes of this clause, be deemed to be the amount
awarded on account of principal (including costs) and interest, respectively.
(2) In the case of transactions which commenced before the 1st January 1931 the Courts shall take
the account up to the date of the institution of the application and in the account of interest there shall
be debited to the debtor, simple interest on the balance of principal for the time being outstanding at the
rate agreed upon between the parties or at the rate allowed under any decree passed between the
parties, or at a rate not exceeding 12 per cent. per annum, whichever is the lowest. The amount found
due in respect of principal as well as in respect of interest shall, each separately, be reduced by 40 per
cent notwithstanding that a decree or order of a civil court was passed in respect of any such amount or
portion thereof. The amounts so reduced shall be taken t o represent the amounts due in respect of
principal and interest on the date of the institution of the application.
(3) In the case of transactions which commenced on or after the 1st January 1931 but before the
1st January 1940 in the account of interes t there shall be debited to the debtor, simple interest on the
balance of principal for the time being outstanding at the rate agreed upon between the parties, or at the
rate allowed, under any decree passed between the parties, or at a rate not exceeding 9 per cent . per
annum, whichever is the lowest. The amount found due on the date of the institution of the application
in respect of principal as well as interest shall each separately be reduced by 30 per cent .,
notwithstanding that a decree or order of a civil court was passed in respect of any such amount or
portion thereof. The amounts so reduced shall be taken to represent the amounts due in respect of
principal and interest on the date of the institution of the application.
(4) In the case of transact ions which commenced on or after the 1 st January 1940, in the account
of interest there shall be debited to the debtor simple interest on the balance of principal for the time
being outstanding at the rate agreed up on between the parties, or at the rate al lowed under any decree
passed between the parties, or at rate not exceeding 6 per cent., per annum, whichever is the lowest.
(5) All money paid by or on account of the debtor to the creditor or on his account and all profits,
service or other advantages o f every description received by the creditor in the course of the
transactions (estimated, if necessary, at such money-value as the Court in its discretion may determine)
shall be credited first in the account of interest, and when any payment is more than sufficient to
discharge the balance of interest due at the rate specified in rule ( 2), (3) or (4), as the case may be, the
residue of such payment shall be credited to the debtor in the account of principal.
(6) The accounts of principal and interest shal l be made up to the date of the institution of the
application, and the aggregate of the balance, if any, appear ing due on both such accounts against that
debtor on the date shall be deemed to be the amount due at that date, except when the balance
appearing due on the interest -amount exceeds that appearing due on the principal -account, in which
case, double the latter balance shall be deemed to be the amount then due:
Provided that where the transactions between the parties have commenced more than 30 year s
before the 30 th January 1940 any settlement of accounts which has been last arrived at between the
parties before the said period of 30 years and which is in writing and bears the signature of the debtor
or the person through whom the liability is derived shall be accepted as binding between the parties and
no inquiry into the history and merits of the case shall be made prior to the date of such settlement.
1947 : XXVIII] The Maharashtra Agricultural Debtors Relief Act 15
23. In certain cases rent may be charged in lieu of profits.— Where any mortgaged property
is in the possession of the mortgagee or his tenants other than the mortgagor and the Court is unable to
determine what profits have actually been received, it may fix a fair rent for such property and charge
the mortgagee such rent as profits for the purpose of section 22:
Provided that, if it be proved that in any year there was any suspension or remission of rent or
land revenue of such land under section 84A of the Bombay Land Revenue Code, 1879
(Bom. V of 1879), an abatement of the whole or part of such amount may be allowed for the year.
24. Power of Court to declare transfer purporting to be sale to be in nature of mortgage. —
(1) Notwithstanding anything to the contrary contained in any law, custo m or contract, whenever it is
alleged during the course of the hearing of an application made under section 4 that any transfer of land
by a person whose debts are being adjusted u nder this Act or any other person through whom he
inherited it was a transfer in the nature of a mortgage; the Court shall declare the transfer to be a
mortgage, if the Court is satisfied that the circumstances connected with that transfer showed it to be in
the nature of a mortgage.
(2) Any agricultural labourer may make an application before the 1 st August 1947 to the Court
that any transfer of land by him or any other person through whom he inherited it was a transfer in the
nature of a mortgage. On hearing the application, the Court shall, notwithstanding anything to the
contrary contained in any law, custom, or contract, declare the transfer to be a mortgage, if it is
satisfied that the circumstances connected with the transfer showed it to be in the nature of a mortgage.
When the Court makes any such declaration, the applicant shall, notwithstanding anything contained in
the definition of “debtor” in sub-section (5) of section 2, be deemed to be a debtor for the purposes of
this act and the Court shall proceed as if an application under section 4 had been made to it.
25. Provisions of section 24 not to apply to certain transfers and transferees.— Nothing in
section 24 shall apply to—
(i) Any transfer which has been 1[finally] adjudged to be a transfer other than a mortgage by
a decree of a court of competent jurisdiction or by a Board established under section 4 of the
repealed Act; and
(ii) any bona fide transferee for value without notice of the real nature of such transfer or his
representative where such transferee or representative holds under a registered deed executed on
or before the 15th day of February 1939.
26. Notice to C ollector co -operative societies, Registrar, local authorities and others. —
(1) On receipt of an application for adjustment of debts, the Court shall give notice to the Collector
requiring him to state to the Court within such time as may be fixed by it the amount of the debt due by
the debtor to Government.
(2) The Court shall also give similar notice to any local authority, co -operative s ociety
2[scheduled bank or merged State bank] to which any debt may be due by the debtor and also to any
person who is entitled to maintenance from the debtor, under a decree or order passed by a competent
Court. In the case of any debt due to a co -operative society, the Court shall also give notice to the
Registrar of Co-operative Societies or to such officer as the Registrar may nominate in this behalf.
(3) On receipt of such notice the Collector, the local authority, the co -operative society
3[the scheduled bank or the merged State bank] or the person entit led to maintenance, as the case may
be, shall, within such time as may be fixed by the Court, from time to time submit a statement to the
Court showing the total amount of the debt due by the debtor as also any recurring liability against
such debtor in respect of the liability for maintenance under the decree or order.
1 This word was inserted by Bom. 70 of 1948, s. 8.
2 These words were substituted for the words “or scheduled bank” by Bom. 37 of 1950, s. 4(a).
3 These words were substituted for the words “or the scheduled bank” by Bom. 37 of 1950, s. 4(b).
16 The Maharashtra Agricultural Debtors Relief Act [1947 : XXVIII
(4) The Collector 1[the co-operative society, the scheduled bank and the merged State bank] shall
also furnish a statement to the Court showing the amount of remission which the 2[State] Government,
the co-operative society, 3[the scheduled bank or the merged State bank], as the case may be, is willing
to give in respect of the debt.
(5) The portion of any debt remitted under sub -section (4), and unless the Court otherwise directs
any debt or portion thereof in respect of which no statement is submitted under sub-section (3), shall be
extinguished.
27. Court’s duty to determi ne particulars, value, etc., of property.— After taking accounts
under section 22 the Court shall in the manner hereinafter provided determine—
(1) the particulars of the property belonging to the debtor,
(2) the value of the said property,
(3) the particulars of any incumbrances on the said property, and
(4) the paying capacity of the debt or
28. Fraudulent alienations or incumbrances void .— (1) If in the course of the hearing o f an
application made under section 4, the Court finds that the debtor has made an alienation of property or
created any incumbrance thereon with intent to defeat or delay any of his creditors, the Court shall, by
notice, summon the debtor and the person i n whose favour the alienation or incumbrance is made or
created to appear before it on a day to be specified in the notice.
(2) On the day specified in the notice or such other day to which the hearing may be adjourned
the Court shall hear the parties 4[and record evidence as may be produced] and if it is satisfied that the
alienation was made or the incumbrance was created with intent to defeat or delay any of the creditor s
of the debtor, the Court shall declare the alienation or incumbrance to be void.
(3) Nothing in this section shall impair the rights of an alienee or the holder of an incumbrance in
good faith and for valuable consideration.
29. Value of property of debtor to be determined by Court in prescribed manner. —
(1) Subject to the provisions of sub-sections (2), (3) and (4), the value of the property and other assets
of a debtor for the purposes of ascertaining the paying capacity of the debtor under section 27 shall be
determined by the Court in the prescribed manner.
(2) The property or asse ts which are exempt from attachment in execution of a decree of a civil
court under the Code of Civil Procedure, 1908 (V of 1908), shall not be taken into account.
(3) The amount of the debts mentioned in section 3 shall be deducted.
(4) The market value of the lands, which under any law for the time being in force, are not
transferable or alienable except with the previous sanction of the Collector or the 5[State] Government,
shall be calculated in such manner as may be prescribed.
30. Paying capacity.— The paying capacity of the debtor, shall, for the purposes of this Act, be
deemed to be sixty per cent. of the value of all the property of the debtor:
Provided that , when any portion of such property yields income but the market value of such
portion cannot be determined, the value of such portion shall be the amount of the income capitalized
at six per cent. per annum.
1 These words were substituted for the words “the Co -operative Society and the scheduled bank” by Bom. 37 of 1950,
s. 4(c).
2 This word was substituted for the word “Provincial” by the Adaptation of Laws Order, 1950.
3 These words were substituted for the words “or scheduled bank” by Bom. 37 ofExcerpt shown. Open the full act in Lexace.