(1) Where there is a dispute as to the title to a Government promissory note in respect of which an application for renewal has been made, the prescribed authority may,-
(a) where any party to the dispute has obtained a final decision from a Court of competent jurisdiction declaring him to be entitled to such note, issue a renewed note in his favour, or
(b) refuse to renew a note until such final decision is made, or
(c) after such inquiry as is hereinafter provided and consideration of the result thereof, declare by order in writing which of the parties is in his opinion, entitled to such note and after the expiration of three months from the date of such order in writing issue a renewed note in his favour in accordance with section 10, unless within that period he has received notice, in writing that a suit or proceeding has been instituted by any person in a Court of competent jurisdiction for the purpose of establishing a title to such note.
Explanation:- For the purposes of this sub-section the expression 'final decision' means a decision which is not appealable or a decision which is appealable but against which no appeal has been filed within the period prescribed by law.
(2) For the purpose of an enquiry referred to in subsection (1), the prescribed authority may himself record or may request the District Magistrate to record or to cause to be recorded such evidence as the parties may desire to produce. When such request has been made to the District Magistrate, he may himself record such evidence or may have it recorded by any Magistrate of the first class or of the second class subordinate to him and shall forward a copy thereof to the prescribed authority.
Explanation:- For the purposes of this sub-section, District Magistrate means the District Magistrate of the district where interest on the promissory note in dispute is payable.
(3) The prescribed authority or any Magistrate recording evidence under this section may, before recording such evidence, administer oath to the witness.
(4) Nothing in this section shall bar a claim against the Government in respect of such note by any person who had no notice of the proceeding under this section or who derives title through such person.