(1) During an inquiry held under section 8 the Collector shall determine in the prescribed manner the amount of encumbrances, if any, lawfully subsisting on the private forest in question, on the appointed day.
(2) (a) If the total amount of encumbrances is less than the amount determined as payable to the owner, the amount of encumbrances shall be deducted from the amount determined as payable to the owner. The balance shall then be paid to the owner and the amount so deducted shall be utilised for payment of the encumbrances; and
(b) if the total amount of encumbrances is equal to or more than the amount determined as payable to the owner, the amount payable to the owner shall be distributed amongst the holders of the encumbrances in proportion to the respective amounts of the encumbrances and having regard to the claims inter se of such holders on the basis of their priorities:
Provided that if any sum of money is due to the State Government by the owner of the private forest in question, such sum of money shall first be adjusted against the amount payable to such owner by the State Government and the surplus alone shall be available as the balance to be paid to the owner under clause (a) or, as the case may be, as the amount to be distributed amongst the holders of encumbrances under clause (b).
(3) If the determination of any issue under this section involves any question of law regarding the validity of any encumbrance or the claim of the holder of any encumbrance or any question regarding the amount due to the holder in respect of the encumbrance, the Collector shall, in the manner prescribed, refer the question for decision to the Civil Judge within the territorial limits of whose jurisdiction the forest concerned is situate. On receipt of such reference the Judge concerned shall, after giving notice to the parties concerned, try the question referred to him and record findings thereon and send the same to the Collector. The Collector shall then give decision in accordance with the said findings.
(4) Nothing in this section shall affect the rights of the holder of any such encumbrances to proceed to enforce against the owner of the private forest his right in any other manner or under any other law for the time being in force.