LexThe Telangana Jagirdars Debt Settlement Act, 1952.
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Open in Lexace · Ask the AI about this actTHE TELANGANA JAGIRDARS DEBT SETTLEMENT ACT, 1952.
(ACT NO. XII OF 1952.)
ARRANGEMENT OF SECTIONS
Sections
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.
2. Definitions.
3. Savings.
CHAPTER II
CONSTITUTION AND POWERS OF BOARD
4. Constitution of the Board.
5. Removal of Board or member.
5-A. Temporary arrangement for exercise of functions
of Board.
5-B. Transfer of pending proceeding.
6. Power of Board to decide all questions arising on
settlement of debts.
7. Procedure before Board.
8. Proceedings deemed to be judicial proceedings.
9. Control over Board.
10. Power of Board to extend time.
CHAPTER III
PROCEDURE FOR SETTLEMENT OF DEBTS
11. Application for settlement of debts.
12. Every creditor and debtor to file a true and correct
statement before Board.
13. Application by debtor jointly and severally liable.
2 [Act No. XII of 1952]
14. Assignees from non-debtor not entitled to benefit
of this Act.
15. Application for recording settlement.
16. Settlement during pendency of proceedings
before Board or Court in appeal.
17. Certain settlements to be void.
18. Application under section 11 or 15 to be made
only in respect of debtor whose debts are not
less than Rs.5,000.
19. Withdrawal of applications.
20. Consolidations of applications.
21. Service of notice on debtors and creditors to
submit statements of debts.
22. Debts in respect of which no application for
adjustment or settlement is made to be void.
23. Duties of debtors and creditors.
24. Preliminary issues.
25. Transfer of pending suits, appeals, applications
and proceedings to the Board.
26. Taking of accounts.
27. Examination of creditor and debtor.
28. Mode of taking accounts.
29. In certain cases rent may be charged in lieu of
profits.
30. Notice to Jagir Administrator, Co-operative
Societies, Registrar, Local authorities and other.
31. Board's duty to determine particulars, value, etc.
of property.
32. Fraudulent alienations or encumbrances void.
[Act No. XII of 1952] 3
33. Value of property of debtor to be determined by
Board in prescribed manner.
34. Paying capacity.
35. Debts payable by debtors to be scaled down.
36. Award.
37. Procedure for further scaling down of debts.
38. No recovery of amount in excess of debts scaled
down.
39. Debts not to be scaled down in case of collusion.
40. Ex parte proceedings if any party does not
appear.
41. Reopening of award and resettlement of debts.
42. Award to be registered; how to be executed.
43. Postponement of payment of instalment.
44. No alienation by debtor before discharge of debts
valid.
45. Board may order sale of debtor's property in
liquidation of his debt.
46. Pleaders etc., excluded from appearance.
47. Appeals.
48. Grounds of appeal.
49. Court-fees.
50. Notice how served.
51. Provisions of Civil Procedure Code to apply to
proceedings.
4 [Act No. XII of 1952]
CHAPTER IV.
INSOLVENCY PROCEEDINGS.
52. Board to declare debtor insolvent in certain
circumstances.
53. Procedure in insolvency proceedings.
54. Distribution of assets of insolvent.
55. Bar to application in insolvency in other Courts.
56. Appeals barred.
CHAPTER V.
MISCELLANEOUS
57. Period of proceedings before Board under this
Act to be excluded.
58. Alienation of property before repayment of loan
prohibited.
59. Power of Government to authorise any person to
advance loans to debtors.
60. Rules.
61. Operation of Act XVI of 1956 excluded from debts
to which the present Act applies.
THE TELANGANA JAGIRDARS DEBT SETTLEMENT
ACT, 1952.1
ACT No. XII OF 1952.
CHAPTER I
Preliminary.
1. (1) This Act may be called 2[the Telangana Jagirdars
Debt Settlement Act, 1952].
(2) It extends to the whole of 2the State of Telangana.
(3) It shall come into force on the date of its publication
in the 3[Official Gazette].
2. In this Act, unless there is anything repugnant in the
subject or context-
(a) “award” means an award made under the
provisions of this Act;
(b) “Board” means a Board constituted under section 4
for the settlement of debts;
(c) “Collector” means the chief officer in charge of the
revenue administration of a district and includes any officer
appointed as Collector under this Act;
1. The Andhra Pradesh (Telangana Area) Jagirdars Debt Settlement Act,
1952, applicable to the Telangana area of the State and in force in the
combined State, as on 02.06.2014, has been adapted to the State of
Telangana, under section 101 of the Andhra Pradesh Reorganisation
Act, 2014 (Central Act 6 of 2014) vide. the Telangana Adaptation of Laws
(No.2) Order, 2016, issued in G.O.Ms.No.46, Law (F) Department, dated.
01.06.2016.
2. Substituted by G.O.Ms.No.46, Law (F) Department, dated 01.06.2016.
3. Substituted for the word “Jarida” by the Andhra P radesh Adaptation
of Laws Order (A.P.A.O.), 1957.
Short title, extent
and
commencement.
Definitions.
2 [Act No. XII of 1952]
(d) “Co-operative Society ” means a Society registered
4[or deemed to be registered] under the provisions of 5[the
Andhra Pradesh (Telangana Area) Co -operative Socities
Act, 1952];
(e) “debt” means any liability in cash or kind, whether
secured or unsecured, due from a Jagirdar, whether
payable under a decree or order of any Civil Court or
otherwise and “debtor” shall be construed accordingly;
(f) “Jagirdar” includes a Guzarayab and a Hissedar as
defined in clauses (c) and (e) respectively of section 2 of
6[the Telangana (Abolition of Jagirs) Regulation, 1358 F.];
(g) “local authority ” means a Municipal Committee, a
District Board or other authority legally entitled to or
entrusted by Government with control or management of a
municipal or local fund;
(h) “prescribed” means prescribed by rules;
(i) “rule” means rule made under this Act;
(j) “scheduled bank ” means a bank included in the
Second Schedule to the Reserve Bank of India Act, 1934;
(k) words and expressions used in this Act but not
defined, have the meanings assigned to them in the Code of
4. The words “or deemed to be reg istered” were inserted by the Andhra
Pradesh Adaptation of Laws Order, 1957.
5. Substituted for the short title “the Hyderabad Co -operative Societies
Act, 1952 ” by A.P. Act IX of 1961 and the said Act XVI of 1952 was
repealed by the Telangana Co -operative Societies Act, 1964 (Act 7 of
1964).
6. Adapted by G.O.Ms.No.46, Law (F) Department, dated 01.06.2016.
Act XVI of 1952.
Regulation LXIX of
1358 F.
[Act No. XII of 1952] 3
Civil Procedure, 1908, or 7[the Telangana Land Revenue
Act, 1317 F.], as the case may be.
3. 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 tax payable to Government or any
other sum due to it by way of loan or otherwise,
(ii) any tax payable to a Local authroity or any other
sum due to it by way of loan or otherwise,
(iii) any sum due to a co-operative society,
(iv) any sum due under a decree or order for
maintenance passed by a competent Court, and
(v) any sum due to a scheduled bank.
CHAPTER II
Constitution and Powers of Board
4. (1) The Government may, by notification in the 8[Official
Gazette] from time to time establish one or more Boards for
the settlement of debts or any class of debts and the
notification shall specify the extent of the j urisdiction of the
Board or Boards so established.
(2) The Board shall consist of a Chairman and two
other members.
7. Adapted by G.O.Ms.No.46, Law (F) Department, dated 01.06.2016.
8. Substituted for the word “Jarida” by the A.P.A.O., 1957.
Savings.
Constitution of the
Board.
Central Act 5 of 1908.
Act VIII of 1317 F.
4 [Act No. XII of 1952]
(3) The Chairman and other members o f the Board
shall be appointed by Government and the Chairman shall
possess such judicial qualifications as may be prescribed.
(4) The quorum of the Board shall be two except in
respect of the final decision of the Boa rd at whic h all the
members shall be present.
(5) Where the Chairman and other members of the
Board are not unanimous in their decision, the opinion of
the majority shall prevail. If the decision of each of them on
any point is differe nt, the opinion of the Chairman on that
point shall prevail.
(6) The Government shall by order direct which of the
two members of the Board shall, in the absence of the
Chairman, act as Chairman.
(7) No member of a Board who has directly or
indirectly by himself or by his partner or near relation any
share or interest in any transaction which is tbe subject -
matter of any proceedings before the Board or any Jagirdar
or any creditor of a Jagirdar or a professional money-lender
shall act as a member of the Board in respect of such
proceedings:
Provided that the proceedings of a Board shall not be
called in question on the ground that a member has acted in
contravention of this sub -section unless by reason of such
contravention there has been a failure of justice.
5. (1) Notwithstanding anything contained in section (4),
the Government may, after such enquiry as it thinks fit, at
any time by notification in the 9[Official Gazette]-
9. Substituted for the word “Jarida” by the A.P.A.O., 1957.
Removal of Board
or member.
[Act No. XII of 1952] 5
(a) dissolve any Board and establish in its place a
fresh Board; or
(b) remove all or any of the members of the Board
and appoint in their place new members.
(2) The dissolution of a Board or the occurrence of any
vacancy on the Board through death, resignation or removal
of its members under clause (b) of subsection (1) shall not
save to the extent, if any, directed by Government, in any
way affect the validity of any proceeding pending before the
Board and the said proceedings shall be continued before
the said Board or before any other Board established in
place of the said Board, as the case may be, as if there has
been no dissolution of the Board or the occurrence of any
such vacancy.
(3) Save as otherwise provided in this Act, the
proceedings pending before any Board which has been
dissolved under sub -section (1) and in place of which no
other Board has been established shall be deemed to be
civil proceedings for the purposes of the 10Indian Limitation
Act, 1908, and the period during which such proceedings
were pending before the Board shall be excluded in
computing their period of limitation in regard to any suit or
application which may be instituted in any civil court to
enforce any claim which was the subject matter of the
proceedings pending before the Board so dissolved.
11[5-A. Notwithstanding anything contained in the foregoing
sections, if in view of the reorganisation of States under the
States Reorganisation Act, 1956 (Central Act 37 of 1956), a
Board is not or cannot for any reason, be reconstituted on
the first day of Nove mber, 1956, in accordance with the
10. Since repealed by Central Act 36 of 1963.
11. Section 5-A inserted by A.P.A.O., 1957.
Temporary
arrangement for
exercise of
functions of
Board.
6 [Act No. XII of 1952]
provisions of section 4, for the area to which this Act
extends, then until such Board is so reconstituted, the
Government may appoint such authority possessing such
qualification as it may by general or special order spe cify, to
exercise the functions of the Board under this Act.]
12[5-B. Notwithstanding anything in this Act, the Board shall
stand dissolved with effect from the commencement of the
Andhra Pradesh (Telangana Area) Jagirdars Debt
Settlement (Amendment) Act, 1963 and all the proceedings
pending before the Board at such commencement, shall
stand transferred to, and be disposed of by, the Court of the
First Additional Chief Judge of the City Civil Court ,
Hyderabad in accordance with the provisions of this Act, as
if it were a Board constituted under section 4 for the
settlement of debts.]
6. (1) Subject to the provisions of this Act, the Board shall
have full power to decide all questions, whether of title or
priority or of any nature whatsoever, and whether involving
matters of law or fact, which may arise in any case within the
cognizance of the Board or which the Board may deem it
expedient or necessary to decide for the purpose of doing
complete justice or making a complete settlement of debts
in any such case.
(2) Subject to the provisions of this Act and
notwithstanding anything contained in any other law for the
time being in force, every such decision shall be final and
binding for all purposes on all parties and all other persons
claiming through or under such persons who are parties to
the proceedings in which such decision is given.
7. (1) Subject to the provisions of this Act and any rules
made thereunder, the Board shall have the same powe rs as
12. Section 5-B inserted by Act 21 of 1963.
Transfer of
pending
proceeding.
Act 21 of 1963.
Power of Board to
decide all
questions arising
on settlement of
debts.
Procedure before
Board.
[Act No. XII of 1952] 7
are vested in civil courts under the Code of Civil Procedure,
1908, when trying a suit and in particular in respect of the
following matters:-
(a) joining any necessary or proper parties;
(b) summoning and enforcing the attendance of any
persons and examining him on oath;
(c) compelling the production of documents;
(d) issuing commissions for the examination of
witnesses; and
(e) proof of facts by affidavits.
(2) Subject to the provisions of this Act and any rules
made thereunder, the Board may direc t any of its members
to inspect any site or to examine any witnesses. On the
inspection of such site by a member and the examination by
him of witnesses, a report shall be made to the Board which
shall be evidence in the case.
8. All proceedings under this Act before the Board shall
be deemed to be judicial proceedings for the purposes of
sections 193 and 228 of the Indian Penal Code.
9. (1) A Board shall in all proceedings under this Act be
subject to the control of the High Court.
(2) The High Court or any person authorised by the
High Court in this behalf may inspect or cause to be
inspected any property, books or documents in possession
of or under the control of the Board and require the Board to
furnish such statements, accounts, r eports, copies of
documents or such other information relating to the
proceedings and duties of the Board and may pass such
Proceedings
deemed to be
judicial
proceedings.
Control over
Board.
8 [Act No. XII of 1952]
orders thereon as the High Court or the person authorised,
as the case may be, thinks fit.
10. Where any period is fixed or granted by the Board for
the doing of any act prescribed or allowed by this Act, the
Board may, in its discretion, from time to time, extend such
period, even though the period originally fixed or granted
may have expired.
CHAPTER III
PROCEDURE FOR SETTLEMENT OF DEBTS
11. (1) Any Jagirdar ordinarily residing in any part of 13[the
area to which this Act extends] or his creditor may make an
application to a Board of competent jurisdiction on or before
such date as the Government may notify in the 14[Official
Gazette] for settlement of debts due by the Jagirdar.
(2) Every application made under sub -section (1) shall
be in writing in the prescribed 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 also the
amounts and particulars of all debts specified in that section
due by the debtor.
12. (1) Notwithstanding the fact that no application has
been filed under section 11-
(a) eve ry creditor, on being required to do so by
notice in writing by any of his debtors, shall, within one
month from the date of the receipt of such notice, file before
the Board concerned a true and correct statement of all his
13. Substituted for the words “the State of Hyderabad ” by the A.P.A.O.,
1957.
14. Substituted for the word “Jarida” by A.P.A.O., 1957.
Power of Board to
extend time.
Application for
settlement of
debts.
Every creditor and
debtor to file a
true and correct
statement before
Board.
[Act No. XII of 1952] 9
claims against such debtor, and shall at the same time send
a copy thereof to such debtor, and
(b) every debtor, on being required to do so by notice
in writing by any of his creditors, shall, within one month
from the date of the receipt of such notice, file before the
Board a true and correct statement-
(i) of all the debts owed by such debtor; and
(ii) of his income 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 Board may, for sufficient cause,
extend, f rom time to tim e, the period within which the
creditor or the debtor, as the case may be, may file such
statement.
(2) Every debtor or creditor givin g a notice under sub -
section (1) shall at the same time send a copy thereof to the
Board concerned.
(3) In awarding the costs of any proceedings in respect
of any application made under section 11 the Board may,
on being satisfied that the statement required to be filed
under sub-scction (1) was, without sufficient cause, not filed
within the time specified therein or within the extended
period under the proviso to that sub -section or incorrectly
filed, direct the party in default to bear the whole or any
portion of the costs of such proceeding.
13. (1) If the payment of a debt due by a debtor is
guranteed by a surety or if a debtor is otherwise jointly and
severally liable for any debt along with any other person and
Application by
debtor jointly and
severally liable.
10 [Act No. XII of 1952]
if the surety or such other person is not a debtor, the debtor
may make an application under section 11 for relief in
respect of such debt and the Board may after consideration
of the facts and circumstances of the case proceed with the
settlement of debts 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 settled under sub -section (1 ),
the surety shall be discharged from liability in respect of the
debts or portion of the debts of such debtor which are
extinguished under sub -section (1) of section 22, sub -
section (5) of section 30, section 38 or clause (2) of section
39; and the surety shall not be entitled to proceed against
the debtor in respect of such debts or portion.
14. No application shall lie under section 11 for settlement
of any debts due from a debtor to whom such debt has
been transferred or assigned after the 1 st January, 1941 by
any person who is not himself a debtor.
15. (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
creditor, the debtor or any of the cred itors may, within thirty
days from the date of such settlement, make an application
to the Board 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 Board 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
Assignees from
non-debtor not
entitled to benefit
of this Act.
Application for
recording
settlement.
[Act No. XII of 1952] 11
debtor, and that the debtor is a person who fulfils the
conditions referred to in clauses (a) and (b) of sub -section
(1) of section 24, record such settlement and certify the
same. Every such settlement so recorded and certified shall
be binding upon the parties thereto and shall not, save as
otherwise hereinafter provided be reopened.
(4) After the Board has recorded and certified a
settlement under sub -section (3), the Board shall call upon
the debtor to make a declaration whether there are any
other debts due by the debtor which are not included in the
settlement. If the debtor makes a declaration that there are
no such debts, the Board shall make an award in terms of
such settlement.
(5) If the Board is satisfied, after recording such
settlement, that there are other debts due from the debtor
which are not included in the settlement the Board shall
treat the application made under sub -section (1) as an
application for settlement of debts under section 11.
16. Notwithstanding anything contained in the pre ceding
sections, if during the pendency of proceedings before the
Board or the Court in appeal, as the case may be, a
settlement i s arrived at between a debtor and all h is
creditors an d i f such Board or Court is satisfied that the
settlement has been made by the debtor voluntarily and is
for his benefit, such Board or Court may make
an award in terms of such settlement.
17. Every settlement by co nsent of a debt due from a
debtor to any creditor, which is not certified by the Boar d
under section 15, or in terms of which no awar d has been
made under section 16, shall be void and shall not be
recognised by any Court or Tribu nal for any purpose
whatsoever.
Settlement during
pendency of
proceedings
before Board or
Court in appeal.
Certain
settlements to be
void.
12 [Act No. XII of 1952]
18. No application under section 11 or 15 shall be
entertained by the Board 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 less than Rs.5,000.
19. An application for settlement of debts under section 11
or an application for recording a settlement under section 15
shall not be withdrawn without the leave of the Board.
20. Where two or more applications for settlement of debts
under section 11 are presented by or ag ainst the same
debtor, all such applications shall be consolidated. Where
such separate applications are presented against joint
debtors, all such applications shall be heard together.
21. On receipt of an application for settlement of debts, the
Board 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 applicant) 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 Board is satisfied that the debtor or
any other 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.
Application under
section 11 or 15
to be made only
in respect of
debtor whose
debts are not less
than Rs.5,000.
Withdrawal of
applications.
Consolidations of
applications.
Service of notice
on debtors and
creditors to
submit statements
of debts.
[Act No. XII of 1952] 13
22. (1) Every debt due from a debtor in respect of which no
application has been made under section 11 within the
period specified in the said section 11 or in respect of which
no application for recording a settlement is made under
section 15 within the period specified in the said section 15
or in respect of which an application made to the Board is
withdrawn under section 19 and no fresh application is
made under section 11 and every debt due from such
debtor in respect of which a statement is not submitted to
the Board by the creditor in compliance with the provisions
of section 21 shall be extinguished.
(2) Nothing contained in sub-section (1) shall apply-
(a) to any debt in respect of which the debtor and
creditor agre e in writing before the Board that the s aid
sub-section shall not apply thereto, or
(b) to any 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 Act or that no application under section
11 can be entertained in re spect of any debt owed by such
person to such creditor by reason of the provisions of
section 18.
23. (1) Every debtor by or against whom an application is
made under section 11 or who is a party to an application
made under section 15 shall produce all books of accounts
and shall give such inventories of his property and such lists
of his property or his cred itors 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 Board and generally do all such things as may be
required by the Board or as may be prescribed.
Debts in respect
of which no
application for
adjustment or
settlement is
made to be void.
Duties of debtors
and creditors.
14 [Act No. XII of 1952]
(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 respect of the debt due to him
by the debtor and the securities held by him, as may be
required by the Board or as may be prescribed.
24. (1) On the date fixed for the hearing of an application
made under section 11, the Board shall decide the following
points as preliminary issues:-
(a) whether the person for the settlement 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 is or exceeds
Rs. 5,000/-
(2) If the Board 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 less than Rs. 5,000/ - the Board
shall dismiss the application forthwith.
25. (1) All suits, appeals, applications for execution and
proceedings other than revisional in respect of any debt
pending in any civil or revenue court shall, if they involve the
questions whether the person f rom whom such debt is due
is a debtor and whet her the total amount of debts due from
him on the date of the application is less than Rs. 5,000 be
transferred to the Board.
(2) When an application for adjustment of debts made
to a Board under section 11 or a statement submitted to a
Board under section 21 includes a debt in respect of which
a suit, appeal, application for execution or proceeding other
than revisional is pending before a civil or revenue court, the
Board shall give notice thereof to such other court. On
receipt of such notice, such other court shall transfer the
Preliminary
issues.
Transfer of
pending suits,
appeals,
applications and
proceedings to
the Board.
[Act No. XII of 1952] 15
suit, appeal, application or proceeding, as the case may be,
to the Board.
(3) When any suit, appe al, application or proceeding is
transferred t o the Board under sub -section (1 ) or
sub-section (2), the Board shall proceed as if an application
under section 11 had been made to it.
(4) If the Board, to which any suit, appeal, application
or proceeding is transferred und er sub-section (1) or sub -
section (2), decides the preliminary issue mentioned in
clause (a) of sub-section (1) of section 24 in the negative or
that mentioned in clause (b) of the said sub-section (1) in the
negative, it shall retransfer the suit, appeal, application or
proceeding to the court 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 u nder sub -section (4), the said
court shall proceed with the same.
26. If the Board finds that the person making an application
under section 11 or the person against whom an application
is made under the said section 11 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 less than Rs. 5,000 the Board
shall proceed to take accounts in the manner hereinafter
provided.
27. In an application for the settlement of debts if the
amount of the creditor ’s claim is disputed the Board shall,
when taking accounts, examine both the creditor and the
Taking of
accounts.
Examination of
creditor and
debtor.
16 [Act No. XII of 1952]
debtor as witnesses, unless for reasons to be recorded the
Board deems it unnecessary so to do.
28. Notwithstanding any agreement between the parties or
the persons (if any) through whom they claim, as to allowing
compound interest or setting of the profits of mortgaged
property without an account in lieu of interest, or otherwise
determining the manner of taking the account, and
notwithstanding any statement or settlement of account, or
any co ntract purporting to close previous dealings and
create a new obligation, the Board shall enquire into the
history and merits of the case 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 which the claim has arisen
and determine the amount due to each of the creditors at
the date of the application made under section 11,
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 amount whether paid in cash or kind
as may from time to time have been actually received
by him or on his account from the creditor.
(c) In the accounts of principal and interest there shall
also be debited the amount, 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 s uch decree or order does not specify
the amount of principal and interest separately or does not
contain any material 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
Mode of taking
accounts.
[Act No. XII of 1952] 17
amount awarded on account of principal (including costs)
and interest, respectively.
(2) In the case of transactions which commenced
before the 1st January 1934 the Board shall take the
account up to the date of the institution of the ap plication
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 to such extent not exceeding
40 per cent as to the Board, having regard to all the
circumstances of the case, appears fair and reasonable,
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.
(3) In the case of transactions which commenced on or
after the 1 st January 1934 but before the 1 st January 1943 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 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 to such
extent not exceeding 30 per cent as to the Board, havin g
regard to all the circumstances of the case appears fair and
reasonable, 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
18 [Act No. XII of 1952]
the amounts d ue in respect of principal and interest on the
date of the institution of the application.
(4) In the case of transactions which commenced on or
after the 1 st January 1943, 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 th e parties, or at a 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, services or
other advantages of every description received by the
creditor in the course of the transactions (estimated, if
necessary, at such money value as the Board 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 sub -sections (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 shall be
made up to the date of the institution of the application, and
the aggregate of the balance. if any, appearing due on both
such accounts against the debtor on that date shall be
deemed to be the amount due at that date except when the
balance appearing due on the interest account exceeds that
appearing on the principal account, in which case double
the latter balance shall be deemed to be the amount then
due:
Provided that where transactions between the parties
have commenced more than 30 years before the 30 th
January 1943, any settlement of accounts which has been
last arrived at between the parties before the said period of
[Act No. XII of 1952] 19
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 enquiry into the history and merits of the case shall
be made prior to the date of such settlement.
29. Where any mo rtgaged property is in the pos session of
the mortgagee or his tenants other than the mortgagor and
the Board is unable to determine what profits have actua lly
been rece ived, it may fix a fa ir rent for such property and
charge to the mortgagee such rent as profits for the purpose
of section 28.
30. (1) On receipt of an application for settle ment of debts,
the Board shall give notice to the Jagir Administrator
requiring him to state to the Board within such time as may
be fixed by it the amount of the debt due by the debtor to
Government.
(2) The Board shall also give similar notice to any local
authority, co-operative society or scheduled 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 Board 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 Jagir Administrator,
the local authority, the co-operative society or the scheduled
bank, or the person entitled to maintenance, as the case
may be, shall, within such time as, may, from time to time,
be fixed by the Board, submit a statement to the Board
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.
In certain cases
rent may be
charged in lieu of
profits.
Notice to Jagir
Administrator
Co-operative
Societies,
Registrar Local
authorities and
other.
20 [Act No. XII of 1952]
(4) The Jagir Administrator, the Co -operative Society
and the scheduled bank shall also furnish a statement to the
Board showing the amount of remission which the
Government, the co -operative society or the scheduled
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 Board otherwise directs any debt other
than a debt due to Government or portion thereof in respect
of which no statement is submitted under sub -section (3),
shall be extinguished.
31. After taking accounts under section 28 the Board shall
in the manner hereinafter provided determine-
(1) the particulars of the property belonging t o the
debtor,
(2) the value ,of the said property,
(3) the particulars of any encumbrances on the said
property, and
(4) the paying capacity of the debtor.
32. (1) If in the course of the hearing of an application
under section 11, the Board finds that the debtor has made
an alienation of property or created any encumbrances
thereon with intent to defeat or delay any of his creditors,
the Board shall by notice, summon the debt or and the
person in whose favour the alienation or encumbrance 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 Board shall hear
Board’s duty to
determine
particulars, value,
etc. of property.
Fraudulent
alienations or
encumbrances
void.
[Act No. XII of 1952] 21
the parties and if it is satisfied that the alienation was made
or the encumbrance was created with intent to defeat or
delay any of the creditors of the debtors, the Board shall
declare the alienation or encumbrance to be void.
(3) Nothing in this section shall impair the rights of an
alienee or the h older of an encumbrance in good faith and
for valuable consideration.
33. (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 ascertaning the paying capacity
of the debtor under section 31 shall be determined by the
Board in the prescribed manner.
(2) The property or assets which are exempt from
attachment in execution of a decree of a civil court under the
Code of Civil Procedure, 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 un der any law
for the time being in force, are not transferable or alienable
except with the previous sanction of the Collector or the
Government, shall be calculated in such manner as may be
prescribed
34. The paying capac ity 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.
Value of property
of debtor to be
determined by
Board in
prescribed
manner.
Paying capacity.
22 [Act No. XII of 1952]
35. (1) N otwithstanding any law, cust om, contract, award
or decree of a Court to the contrary the amounts found due
under section 28 from a debtor shall be further scaled down
in the manner hereinafter provided.
(2) If all the debts f ound due by a debto r after taking
accounts under secti on 28 are unsecured, such debt shall
be further scaled down pro rata to the paying capacity of the
debtor.
(3) If all the debts f ound due by a debto r after taking
accounts under secti on 28 are unsecured, and the total
amount of such debts is m ore than sixty per cent of the
value of the pr operty belonging to the debt or, such debts
shall be further scaled do wn pro rata to the paying capacity
of the debtor.
(4) If the debts fo und due by a debt or after taking
accounts under section 28 are both secured and unsecured,
and if the t otal amo unt of the secured debts is more than
sixty per cent of the value of the pro perty on which such
debts are secured, the secured debts shall be further scaled
down pro rata to sixty per cen t of the value of the pr operty
on which debts are secured and the unsecured debts shall
be further scaled down pro rata to sixty per cent of the value
of the property belonging to the debtor over which no debts
are secured.
36. (1) After determining the am ount of debts scaled down
in the manner provided in secti on 35 the B oard shall, save
as otherwise provided in section 37 make an award.
(2) The award shall be in the prescribed f orm and shall
be drawn up subject to the foIIowing provisions:-
Debts payable by
debtors to be
scaled down.
Award.
[Act No. XII of 1952] 23
(i) the amount of the secured debts scaled down shall
be charged on the properties on which they may have been
secured;
(ii) subject to clause (i) the amount of unsecured
debts shall be charged on all the properties of the debtor;
(iii) in fixing the priority in which debts shall be paid
the following order shall be followed:-
(a) debts due to Government which are charged on
the immovable property belonging to the debtor or which
are recoverable as the current year’s land revenue,
(b) debts due to local authorities, which are
charged on the immovable property belonging to the debtor
or which are recoverable as the current year’s dues,
(c) secured debts in order of priority,
(d) debts due to Government, local authorities and
other bodies including co -operative societies, and
recoverable as arrears of land revenue,
(e) other debts due to co-operative societies,
(f) unsecured debts:
Provided that in the case of unsecured debts they shall
be paid pro rata;
(iv) the total annual instalments shall not exceed
twenty:
Provided that in fixing the amount of instalments in
which the debts shall be paid the Board shall ascertain the
net annual income of the debtor and the annual instalments
24 [Act No. XII of 1952]
payable by the debtor shall not exceed his net annual
income.
Explanation:- For the purposes of this clause, the net
annual income of the debtor shall mean the balance of his
annual income after deducting (i) such sum as may be
considered necessary for the payment of the liability, if any,
imposed on the debtor under a decree or order for
maintenance passed by a competent court, (ii) suc h sum as
may be considered necessary for the maintenance of the
debtor and his dependents, and (iii) the sum required by the
debtor to pay the assessment and taxes in respect of the
current year to Government and to local authorites;
(v) the Board may pass an order for the delivery of
possession of any property notwithstanding any law or
contract to the contrary;
(vi) the rate of interest shall not exceed 6 percent per
annum or such less rate as may be notified in this behalf by
the Government or the rate agreed upon between the
parties when the debt was originally incurred or the rate
allowed by the decree in respect of such debt whichever is
the lowest.
37. Where the amount of debts of the deExcerpt shown. Open the full act in Lexace.