(1) The 94[Mamlatdar] shall in an inquiry held under section 18C, determine any encumbrances lawfully subsisting on the land on the tillers’ day.
(2) If the total amount of the encumbrances is less than the purchase price determined under that section,—
(i) where the purchase price is paid in lumpsum, it shall be deducted from the purchase price and the balance paid to the former landlord;
(ii) where the purchase price made payable in installments, the 95[Mamlatdar] shall deduct such amount from such installments towards the payment of such encumbrances:
Provided that where under any agreement, award, decree or order of a court or under any law, the amount of the encumbrances is recoverable in installments, the 96[Mamlatdar] shall deduct such amount as he deems reasonable from the installments so payable.
(3) If the total amount of the encumbrances is more than the amount so determined, the purchase price in lumpsum or the installments, as the case may be, shall be distributed in the order of priority and if any person has a right to receive maintenance or alimony from the profits of the land the 97[Mamlatdar] shall also make deductions for payment out of the purchase price.
(4) Nothing in this section shall affect the rights of the holder of any such encumbrance to proceed against the former landlord in any other manner or under any other law for the time being in force.