(1) If any debtor and any or all of his creditors, before the making of any application under section 6 arrive at a settlement in respect of any debt due by the debtor to the creditor, the debtor or any of the creditors may, within thirty days from the date of such settlement, make an application to the Tribunal for recording such settlement .
Application for settlement of debt.
A s s i g n e e from nondebtor not entitled to benefit of this Act.
Application for recording settlement.
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(2) Every such application shall be in the prescribed form and shall be signed and verified in the prescribed manner.
(3) On receipt of such application the Tribunal shall, after giving notice to the creditor or the debtor, as the case may be, and after making such enquiry as it thinks fit, if it is satisfied that the settlement arrived at is bonafide and voluntary and is not made with intent to defeat or delay any of the creditors of the debtor, and is in the interest of the debtor, record such settlement and certify the same. Every such settlement so recorded and certified shall be binding upon the parties thereto and shall not be reopened.
(4) After the Tribunal has recorded and certified a settlement under sub-section (3), the Tribunal shall call upon the debtor to make a declaration whether there are any other debts due by the debtor which are not included in the settlement. If the debtor makes a declaration that there are no such debts, the Tribunal shall pass orders in terms of such settlement.
(5) If the Tribunal is satisfied, after recording such settlement, that there are other debts due from the debtor which are not included in the settlement, the Tribunal shall treat the application made under sub-section (1) as an application for settlement of debts under section 6.
9. Notwithstanding anything contained in the proceeding sections, if during the pendency of proceedings before the Tribunal or the Appellate Authority, as the case may be, a settlement is arrived at between a debtor and all his creditors and if the Tribunal or the Appellate Authority, as the case may be, is satisfied that the settlement has been made by the debtor voluntarily and is for his benefit, such Tribunal or Appellate Authority, as the case may be, may pass orders in terms of such settlement.
10. Where two or more applications for settlement of debts under section 6 are presented by or against same debtor, all such applications shall be consolidated. Where such separate applications are presented by or against joint debtors, all such applications shall be heard together.
11. On receipt of the application under section 6, the Tribunal shall--
(a) give notice to the debtor (unless the debtor is himself an applicant) and to every creditor (other than the creditor who is himself an applicant) whose name and address are given in the application , and Settlement during pendency of proceedings before Tribunal.
Consolidation of applications.
Service of notice on debtors and creditors to submit statement or debts.
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(b) cause the copies of the notice to be affixed on the notice board of the offices of Tribunal Tahasildar and Gram Panchayat having jurisdiction over the respective areas in which the debtor and each of the creditors ordinarily reside, requiring the debtor and all creditors to submit a statement in the prescribed form within one month from the date of the service of the notice or affixation of the notice on the Notice board whichever is later :
Provided that if the Tribunal is satisfied that the debtor or the creditor is for good and sufficient cause unable to comply with the notice within the time specified therein, it may extend the period for the submission of the statement.
12. Every debt due from a debtor in respect of which no application has been made under section 6 within the time prescribed under the said section 6 or in respect of which no application for recording a settlement is made under section 8 within the period specified in the said section 8 and every debt due from such debtor in respect of which a statement is not submitted to the Tribunal by the creditor in compliance with the provisions of section 11, shall be extinguished.