(1) Every cred itor submitting a statement of the debt, K1b':~ owed to him in compliance with a notice issued unde r sub-section state- (1) of sectio n 8 shall furnish, along with such stat ement, full debts particulars of all such debts and shall at th e same time produce all documents, including entries in books of account, on which be relies to suppor t his claims, together with a tr ue copy of every such document.
(2) The Board shall, after marking for the purpose of ide nti fication every origina l document so produced and verifyi~ the correctness of the copy, retain the copy and return the onginal to the creditor.
(3) If an y document, which is in the possession, or under the control, of the creditor, i, not produced by him as required by sub-section (1 1, the document shall not be ad missible in evidence against the deb tor in any suit brought by the creditor or by any person claiming under him, to 10. The Board shall then call upon the debtor and each creditor , respectively , to explain hi' CMe regarding each debt, and shall endeavour to induce them to arrive at an amicab le settlement.
~f 11. (1) Subj ect to any rules prescribed, the Board may a.t~ exercise all such PO""UI connected with the summoning and of examining of parties and witneu etl and with the production of ActV of and documents as are conferred On a Ci\~1 Court by the Cod e of t908.
to of Civil Procedure, 1908.
to <Vis e n :.
le a it (2} Any penon present may be required by a 1 evidence or to produce any document then and ~ possession or power.
of amk~bJ. 12. (1) If the creditors. to whom not less than fOJ set tlemeer, of the total amou nt of the debtor's subsisting d ebts i~.lI rqinra- come to an amicable settlement with the debtor, tiffiD e and ment shall forthwith be reduced to writing in the e ec . agreement recordin g the immoveable properties of with parrieulars of any mortgage, lien or charge subsis on, a~d th e amo unts payable to such creditors and tl In which and the limes a t which they are to be p.
agreement shall be read out and explained ( 0 the p cerned, and shall be sign ed or otherwise authenticat Board and the par ties :
Provid ed tha t, when a Co-operative Society is or creditors, no settlement, in so far as it affects the del)H such Society, shall be valid without the previous ap;
writing of the Registrar of Co-operative Societies.
(2} An agreement thus made shall, within 14 days date of its making, be registered under the Indian R,,!
Act , 1908, by the Chairman of the Board. in such rnanne be proscribed, a nd it shall then take effect as if it were , of the Civil Court.
(3) For the purpose of registration of an agreemei sub -section (2). th e Chairman of the Board shall be de em an officer of Government empowered to e-xecute such ar ment within the m eani ng of section 88 of the Indian Regi . . Act , 1908.
E>ci"mg (4) Where an agreemen t registered under sub-see i::~~erelates t? a debt which is secured by a mortgage, lien or to su~ut. on any Immovable property of the debtor, such mortgag or charge shall subsist to the extent of the amount payable credi tor in respect of such debt in accord ance with the It the agreement until such amount has been paid or the pr R t has been sold for the satisfaction of such debt.
1U",,="e;j~e 13. (i } Ifa debtor defaults in paying a ny amount.
undo- agree- accordance with the term. of an agreement registered men! . and sub-section (2) of section 12, such amount shall be recoverat=uoa an arrear of land revenue on appli cat ion to the Deputy Cor t • siener- made hy the credito r within 90 days from the da default .
(2J Wherr the Deputy Commissioner has under sub-se
(1) recovered any amount which wa c; payable in accorc with the terms of the agreement , he shall proceed to make ments as follows :-
(a) he shall, in the first instance, a pply the sum rea from the sale of a ny portion of the immovable pre ty referred to in section 12(4) to the payment of amount payable under the agreement on aceour
(i) rent in respect of the propert y sold ; (ii) any ( which is secured b~' a mortgage s li-n or charge sud! property ill order of priority determined accordance wir h rhe provisions of the Transfer Propert y Act, 18P2 , and , ifthr said sum is insuffici to meet such paymen ts, the amounts which ht remained unpaid shal l rank equally with unsecui debt ;
.176 - DEBT CONClLIATJO:'i ACT 475DEBT Cm'CZLlA1l0N ACTx0. i936] of the debtor to submit a statement of debts owed to such creditor by the deb tor, Such statement shall be signed and verified A, V of in the manner prescribed in the Code of Civil Procedure, 19118, 190/;.
for signing and verifying plaints, and lhall be submitted to the Board in writing within 30 days from the date of ser...ice or publication of the notice 35 the case may be :
Provided that if the Board is satisfied th at any creditor for good and sufficient cause was unaole to comply writh such directions, it may extend the period for the submission of his sta tement of the debts owed to him.
(2) Every debt of which a statement is not submitted to the Board in complianc e with the provisions of sub-section I , shall of be deemed for ail purposes and all occasions to have been duly pli- discharged :
Provided tha t, if a creditor proves to the satisfaction of the Board that the notice was not served on him and that he had no knowledge of its pu blication , the Board may revive the debt ( n application made within 30 da y. of the da te on which he first had knowl edge of the order of di sc harge :
Provided' also, that in any area in which a Board has been dissolved, the Civil Cour t may entertain an application for revi val of the debt on the same conditions.
(3) I f a ny question as to the j urisdiction of a Board aris es after submission of the statement of debts made under sub-section • decl- (I) the Board shall not pass any order without hearing the ", '0 debtor and creditor. The decision of the Board with regard to "'" jurisdiction under section 7 or section 8 shaIl be final and sha ll not be questioned in any Civil Court.
9. (I) Every creditor submittin g a statement of the debt, JUb':~ owed to him in compli ance with a notice issued under sub-section state- (I ) of section 8 shall furnish , a long with such statement, full • deb" particulars of all such debts and shall at the same time produce all documents, including entries in books of account, on which he relies to suppor t hi> claims, together with a tru e copy of every such document.
(2) The Board shall, after marking for the purpose of identi fication ever y ori gin al document so) produced and verifyi~ the correctness of the copy, retain the copy and return the original to the creditor .
(3) I f any document, which is in the possession, or under the contro l, of the creditor, i, not produced by him a' required by sub-section ( I ,. the document Ihalillol be admissible in evidence against the debtor in any suit brought by the creditor or by an y person claim ing under him.
to 10. T he Board shan then call upon the debtor and each creditor, respectively, to explain his case regarding each debt, t , and shall endeavour to induce them to arrive at an amicable settlement.
~f 11. ( I) Subject to an y ru le. prescribed, the Board may at~ exercise all such po....ers connected with the summoning and of examining of parties a.nd witnc!,!:e! and with the production of ActV oI and documen ts as are conferred On a Civil Court by the Cod e of 1908.
.. of Civil Procedure, 1908.
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te a it r :
X OF 1936] DEBT CO"n LIAn o" ACT 477 {b} if there i~ a , uf I'h" ;"Ifl r T' th~ paym'>nh have- been made UUde-I clause I f.l • th~ Deputy Commissioner sha ll apply to the payment of any other amount!
payable under the agreement the sum of the surplus and of the proceed, realised from the sale of such portion of an y other property of the debtor as will, together with the surplus, be sufficient to meet the payment of such amounts ;
(e) if the sum of the surplus and sale proceeds referred to in clause (b) is insufficient to meet the payment of other amou nts referred to therein, such other amounts and any amount payable on account of any unsecured debt for the recovery of which a decree has been passed by a Civil Cour t an d of which details are given in the agreement shall rank equally bet ween th emselves fer the pUfJlO'Cs of payment ;
(d) any further surplus remain•.lg after the payments hav e been made under clauses fa" (bJ and «) shall be paid by the Deputy Commissioner to the debtor.
(3) Where the Deputy Commissioner fails to recover as an arrear of land revenue any part of such amount, he shall certify that it is irrecoverable and thereupon the agreement ' hall cease to subsist.
(4) Where an agreement ceases to subsist, any amount, which was payable under au- h agreement, but has not been paid , shall be recovera ble as if a decree of a Civil Court had then been passed for it! payment.
Wet' of 14. If no amicable settlement is arrived at under subd to?io- section (1) of section 12, the Board shall dismiss the application.
appltca- 15. (I ) Wbere, durir.g th e hea ring of an y application made ant of unde r section -i, any creditor refuses to agree to an amicable te by settlement, the Board may, if it u ofopinion that the debto r has ~ made such creditor a fai r offer which th - creditor ought reason debt~ ably to accept , grant the de btor, in such form as may be , prescribed, a certificate including the partic ulars of the fair off~r in respect of the debt owed by him to such creditor.
of (2) Where any creditor sues in any Civil Court for the reco to very of a debt in respec t of which a cert iricate has been granted to a under sub-section fI ), the Court, notwithstanding the previsions offer. of an }' law for the time being in force, may, if it thi nks fit refuse to grant a decree for any sum in excess of the sum specified in the certificate aa a fair offer, and shall no t allow the plaintiff any COlts in such suit, or any interest on the debt after the date of such certificate in excess of simple interest at 6 per cent. per annum on th~ principal amount due on the date of such certi ficate.
(3 Where aft", the registration of an agrtement under sub section (2 r:L section l~ any creditor ~Ue5 for the recovery of a debt in respec t of VI hich no settlement hal been made though it was included in the applicarion under section 6 or in the statement of debt! under section 8 or an) creditor SUe! fOT the recovery of a debt incurred alter th e dace of such registra tion, any decree passed in such suit shall, notwithstanding anything contained in the Code of Civil Proced ure , 1908, not be exe- Aet\ cured uJ/lil all amounts recorded as parable under such agree DJenT hare been paid or such agr~ment has ceased Co subsiJI:
Provided that the provIsion III this sub-section shall not " , appJ" to tb« execution ofa rent decree.
Bar or C1\'iJ I . • suir ex: pro- 16. No Civil Cour t shall ~n le:tam- f.
ce<ding, (a) any suit or proceeding' 10 respeelBoard
(i) any matter pend rng before a 0 , or I Ii of any
(ii) the vali dity of any proced~re or the ega ly agre<me nt made u nd er thblS Act , ~ed as wholly or (" ') the recovery of any de t reco istered til a able under an agreement regrater ~~~~~ s;'b:section (2) of section 12 fror:: :gnl::':~ who as a debtor, was party to sue , whether such agreement IS subsisting or not, or d liD) the recovery of an y d eb t which has been ~eeme to h ..~ been duly discherged under sub-.JeetJon (2) of section 8, except a d ebt which is revived under the proviso to that sub-section ; .
(b) any application to execute a decree, t he execution of which is suspended under sub-section (3) of section IS , Avoidant:"e' of certam 17, Every transfer of property made with intent to defeat or transfers of delay the creditors of the debtor shall be voidable at the option debtee's pro- of the cred itor !IO defeated or delayed , I:'~i appeal 18, No appeal or a pplication for revision sha ll lie against or revision. any order passed by a Board.
Power of 19. A Board may, on an application from any penon interest- Board to f.e. ed made within ninety days of the passing of an Older, review:dw 'Is any order passed by it and pass such order in reference thereto <T. as It thinks fit:
Provided that no ord er , hall be varied or reversed unless notice has been given to the persons interested to appear and be heard in support of such order.
tpp·a,ran:- 20, In any proceed ings before a Board any pa rty may be foJ""'1oard permitted to a ppear by an agen t authorised in writing, but not by agent but by a legal practitioner.
DOt b}' , lc:gal pracnt loner.
Suspension 21. (1) "'''en an a pplication has bee n made to a Board under of I' pending seciton 4, any suit or other proceedings then pending before a ~~~c::t1on Civil Court in respect of any debt for the settlement of which application hal been made shall be suspended until the disposal of the application.
(2) If the deb t referred to in sub-secti on (1) is" not recorded in the agreement registered} a decree, if subsequently passed therefor, or a previous decree for that debt execution whereof is suspended, shall no t be executed until all amo unts recorded as payable under sucb agreement have been paid or such agreement has ceased to subsist :
Provided that the provision in this sub-sec tion shall not apply to tbe execution of a rent decree.
4i8 D EBT CONCILIA T ION A CT [kMY ACT •',;
419 DUT COSCIUAnoN ACT x or 1936] '.
22. In raleulatin/( the peri. ,J of limitation fO I any suit or Manc. proce eding regarding a deb t which h" been the subject of any , for prOCeeding, under this Act, nOt" 'it bslJndmg anyth ing contained au. In any other Act, the time during which such proceedill/ll continued and the time dUrin" which the person interested in ' uch debt was debarred by an y pro\l sion of this Act from imti.
tuling the suit Orproceeding, mall be excluded.
TI of 23. The members of a Board shall be dr"med to be PllbJic :0 be "'rvant. within the meaning of the Indian Penal Code. Act XLV set- 24. In addition to any powe" Specially conferred by this Act, of 1860.
t o the [Provincial Govern ment] ' mar make rules_
(a) preSCribing the qUOIum for. and regula ting the pro cedure before, a Board ;
(h) prescribing Ihe [onn. of application un der section 4 and 01 stah we nt ofdebts under section 6 ;
(e) prescribing the manner in which noti ce! shaJJ be iuued and served or publi!hed und er sub-.ection (I) ofsection 8 ;
(d) prescribing the charges to be made by a Board for anythin/( done under this Act and the P"rsons by whom and the manner in which such charg.,. shall bepaid ;
(t ) prescribing the record. to be kept and th" return, to be made by a Board ;
( f ) f'N'SCribing the allowances, if an r , to be p"id 10 the Chairman and mrmben of aBoard:
(g) regulating the POwer of a Board to summon Parties and Witnnses under section II and the grant ofexpenses to Witnc5Ses ;
(4) prescribing the place at which and th. manner in which an agreement shall be r,.gist<red under subsection (2) of section 12 ;
(I) prescribing the form of certificate to be granted under sub-section (2) or"ction 13 Or sub-.ection(l) ofsection 15; and such other forms a. Ill'll' be required for the purpose of carrying in to effect the provisions ofthia Act; a nd ( j ) Providin g for the reprC'Semation of mino,". lunatics an d other disabled p.nolU ;
(l) and generally for the purpose of carrying into effect the provisions of this Act.
25. ( I) All rul es shall be ou1tier t to the condition of previous'ublication.
(2) In making a n)' rule th~ [PfO\'i n~i,1 G()\'''~nment] ' "'!"l' irCCt that a breach thereof .haIl be punlsh, bl.....Ilh fine ....hich lay extend to /ift)' rupees, and wh"'e the breach i. a continuing ne, with further fine which may extend to ten rufl"es for every .yafter the first dUring which the brea rh hao been peni$t<d in.
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