(1) Where a mortgage is executed in favour of a Land Development Bank for payments of prior debts of the mortgager, such bank shall, notwithstanding anything contained in the Transfer of Property Act, 1882 (Central Act 4 of 1882), by notice in writing, require any person to whom any such debt is due, to receive payment of such debt or part thereof from the bank at its registered office, within such period as may be specified in the notice.
(2) Where any such person fails to accept such notice, or to receive such payments, such debts or part thereof, as the case may be, shall cease to carry interest from the expiry of the period specified in the notice:
Provided that where there is a dispute as regards the amount of any such debt, the person to whom such debt is due shall be bound to receive payment of the amount offered by the Land Development Bank towards the debt, but such receipt shall not prejudice the right, if any, of such person to recover the balance claimed by him