Category Archive Property Law

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The Requisitioning and Acquisition of Immovable Property Act, 1952

An Act to provide for the requisitioning and acquisition of immovable property for the purposes of the Union.

BE it enacted by parliament as follows :-

[a] For Statement of  Objects and Reasons, see Gazette of India, 1952, Pt.II, section 2,p.55.

This Act has been applied to the Union territory of Pondicherry – See the Requisitioning and Acquisition of Immovable Property (Application to the State of Pondicherry) Order,1960, Gaz of Ind., 1961,Pt.II,Section 3(I), Page 6.

It has been extended to the Union territory of Goa, Daman and Diu by G.S.R. 388, dated 15-3-1967, published under section 6 of Act 1 of 1962, in Gaz. of Ind.,25-3-1967, Pt.II, section3(I),page471.

It has been applied to the Union Territory of Dadra and Nagar Haveli by Regn.6 of 1963 (1-7-1965).

The Act has been extended to Sikkim – See S.O., 208 (E)/1975 – Gaz. of Ind.,16-5-1975,Pt.II, section 3(ii),Ext., p.1213

Section 1. Short title, extent and duration

(1) This Act may be called the Requisitioning and Acquisition of Immovable Property Act, 1952.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3)[ * * * * * *]

[a] Sub-section (3),which was earlier substituted by Act 48 of 1963 has been omitted by the Requisitioning and Acquisition of Immovable Property (Amendment) Act,1970 (1 to 1970), section 2(11-3-1970).

Note – The Act was extended up to 14-5-1970 in Kerala by Kerala Act 6 of 1968, Section 2.

Section 2. Definitions

In this Act, unless the context otherwise requires,-

(a) “award” means any award of an arbitrator made under section 8;

(b) “competent authority” means any person or authorised by the Central Government, by notification in the Official Gazette, to perform the functions of the competent authority under this Act for such area as may be specified in the notification.

(c) “landlord” means any person who for the time being is receiving or is entitled to receive, the rent of any premises, whether on his own account, or on account or on behalf of for the benefit, of any other person or as a trustee, guardian or receiver for any other person, or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant ;

(d) the expression “person interested”, in relation to any property, includes all persons claiming, or entitled to claim, an interest in the compensation payable on account of the requisitioning or acquisition of that property under this Act;

(e) “premises” means any building or part of a building and includes –

the garden, grounds and outhouses, if any, appertaining to such building or part of a building;

(i) any fittings affixed to such building of part of a building for the more beneficial enjoyment thereof;

(f) “prescribed” means prescribed by rules made under this Act ;

(g) “property” means immovable property of every king and includes any rights in or over such property :

(h) “tenant” means any person by whom or on whose account rent is payable for any premises and includes such sub-tenants and other persons as have derived title under the tenant under any law for the time being in force.

Section 3. Power to requisition immovable property

(1) Where the competent authority is of opinion that any property is needed or likely to be needed for any public purpose, being a purpose of the Union, and that the property should be requisitioned, the competent authority –

(a) shall call upon the owner or any other person who may be in possession of the property by notice in writing (specifying therein the purpose of the requisition) to show cause, within fifteen days of the date of the service of such notice on him, why the property should not be requisitioned ; and

(b) may, by order, direct that neither the owner of the property nor any other person shall, without permission of the competent authority, dispose of, or structurally alter, the property or let it out to a tenant until the expiry of such period, not exceeding two months, as may be specified in the order.
(2) If, after considering the cause, if any, shown by any person interested in the property or in possession thereof, the competent authority is satisfied that it is necessary or expedient so to do, it may, by order in writing, requisition the property and may make such further orders as appear to it to be necessary or expedient in connection with the requisitioning:

Provided that no property or part thereof –

(a) which is bonafide used by the owner thereof as the residence of himself or his family, or

(b) which is exclusively used either for religious worship by the public or as a school, hospital, public library or an orphanage or for the purpose of accommodation of person connected with the management of such place of worship or such school, hospital, library, or orphanage, shall be requisitioned :

Provided further that where the requisitioned property consists of premises which are being used as a residence by a tenant for not less than two months immediately preceding the date of the service of notice under sub-section (1), the competent authority shall provide such tenant with alternative accommodation which, in its opinion, is suitable.

Section 4. Power to take possession of requisitioned property

(1) Where any property has been requisitioned under section 3, the competent authority may, by notice in writing order the owner as well as any other person who may be in possession of the property to surrender or deliver possession thereof to the competent authority or any person duly authorised by it in this behalf within thirty days of the service of the notice.

Section 5. Rights over requisitioned property

(1) All property requisitioned under section 3, shall be used for such purposes as may be mentioned in the notice of requisition.

(2) Where any premises are requisitioned under section 3, the competent authority may order the landlord to execute such repairs as may be necessary and are usually made by landlords in that locality and as may be specified in the notice, within such reasonable time as may be mentioned therein, and if the landlord fails to execute any repairs in pursuance of such order, the competent authority may cause the repairs specified in the order to be executed at the expense of the landlord and the cost thereof may, without prejudice to any other mode of recovery, be deducted from the compensation payable to the landlord.

Section 6. Release from requisitioning

(1) The Central Government may at any time release from requisition any property requisitioned under this Act and shall, as far as possible, restore the property in as good a condition as it was when possession thereof was taken subject only to the changes caused by reasonable wear and tear and irresistible force:

Provided that where the purposes for which any requisitioned property was being used cease to exits, the Central Government shall, unless the property is acquired under section 7, release that property, as soon as may be, from requisition.

“(I-A) Notwithstanding anything contained in sub-section (1), the Central Government shall release from requisition.-

(a) any property requisitioned or deemed to be requisitioned under this Act before the commencement of Requisitioning and Acquisition of Immovable Property (Amendment) Act,1970, on or before the expiry of a period of [Five years] from such commencement ;

(b) any property requisitioned under this Act after such commencement, on or before the expiry of a period of [Five years] from the date on which possession of such property was surrendered or delivered to, or taken by, the competent authority under section 4, unless such property is acquired under section 7 within the period of [five years] aforesaid.

(2) Where any property is to be released from requisition, [under sub-section (1) or under sub-section (I-A) the competent authority may, after such inquiry, if any, as it may in any case consider necessary to make or cause to be made, specify by order in writing the person to whom possession of the property shall be given and such possession shall, as far as practicable, be given to the person from whom possession was taken at the time of the requisition or to the successors-in-interest of such person.

(3) The delivery of possession of the property to the person specified in an order under sub-section (2) shall be a full discharge of the Central Government from all liability in respect of the property, but shall not prejudice any rights in respect of the property which any other person may be entitled by due process of law to enforce against the person to whom possession of the property is given.

(4) Where any person to whom possession of any requisitioned property is go be given is not found and has no agent or other person empowered to accept delivery on his behalf, the competent authority shall cause a notice declaring that the property is released from requisition to be affixed on some conspicuous part of the property and shall also publish the notice in the Official Gazette.

(5) When a notice referred to in sub-section (4) is published in the Official Gazette, the property specified in such notice shall cease to be subject to requisition on and from the date of such publication and shall be deemed to have been delivered to the person entitled to possession thereof and the Central Government shall not be liable for any compensation or other claim in respect of the property for any period after the said date.

(6) Where any property requisitioned under this Act or any material part thereof is wholly destroyed or rendered substantially and permanently unfit for the purpose for which it was requisitioned by reason of fire, earthquake, tempest, flood or violence of any army or of a mob or other irresistible force, the requisition shall, at the option of the Central Government, be void :

Provided that the benefit of this sub section shall not be available to the Central Government where the injury to such property is caused by any wrongful act or default of that Government.

Section 7. Power to acquire requisitioned property

(1) Where any property is subject to requisition, the Central Government may, if it is of opinion that it is necessary to acquire the property for a public purpose, at any time acquire such property by publishing in the Official Gazette a notice to the effect that the Central Government has decided to acquire the property in pursuance of this section :

Provided that before issuing such notice, the Central Government shall call upon the owner of, or any other person who, in the opinion of the Central Government, may be interested in, such property to show cause why the property should not be acquired; and after considering the cause, if any, shown by any person interested in the property and after giving the parties an opportunity of being heard, the Central Government may pass such orders as it deems fit.

(2) When a notice as aforesaid is published in the Official Gazette, the requisitioned property shall, on and from the beginning of the day on which the notice is so published, vest absolutely in the Central Government free from all encumbrances and the period of requisition of such property shall end.

(3) No property shall be acquired under this section except in the following circumstances, namely :-

(a) Where any works have, during the period of requisition, been constructed on, in or over, the property wholly or partially at the expense of the Central Government and the Government decides that the value of, or the right to use, such works should be secured or preserved for the purposes of Government; or

(b) where the cost of restoring the property to its condition at the time of its requisition would, in the determination of the Central Government, be excessive and the owner declines to accept release from requisition of the property without payment of compensation for so restoring the property.

(4) Any decision or determination of the Central Government under sub-section (3) shall be final and shall not be called in question in any Court.

(5) For the purposes of clause (a) of sub-section (3) “works” includes buildings, structures and improvements of every description.

Section 8. Principles and method of determining compensation

(1) Where any property is requisitioned or acquired under this Act, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say,-

(a) where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement ;

(b) where no agreement can be reached, the Central Government shall appoint as arbitrator a person who is, or has been, or is qualified for appointment as, a judge of a High Court;

(c) the Central Government may, in any particular case, nominate a person having expert knowledge as to the nature of the property requisitioned or acquired to assist the arbitrator and where such nomination is made, the person to be compensated may also nominate an assessor for the same purpose;

(d) at the commencement of the proceedings before the arbitrator, the Central Government and the person to be compensated shall state what in their respective opinion is a fair amount of compensation.

(e) the arbitrator shall, after hearing the dispute, make an award determining the amount of compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid; and in making the award, he shall have regard to the circumstances of each case and the provisions of sub-sections (2) and (3), so far as they are applicable;

(f) when there is any dispute as to the person or persons who are entitled to the compensation the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are, entitled to compensation, he shall apportion the amount thereof amongst such persons;

(g) nothing in the Arbitration Act,1940 shall apply to arbitration under this section.

(2) The amount of compensation payable for the requisitioning, of any property shall, consist of subject to the provisions of sub-sections (2A) and (2B), consist of -]

(a) a recurring payment, in respect of the period of requisition, of a sum equal to the rent which would have been payable for the use and occupation of the property, if it had been taken on lease for that period; and

(b) such sum or sums, if any, as may be found necessary to compensate the person interested for all or any of the following matters, namely :-

(i) pecuniary loss due to requisitioning ;

(ii) expenses on account of vacating the requisitioned premises;

(ii) expenses on account of reoccupying the premises upon release from requisition; and

(iii) damages (other than normal wear and tear) caused to the property during the period of requisition, including the expenses that may have to be incurred for restoring the property to the condition in which it was at the time of requisition.

(2A) The recurring payment, referred to in clause (a) of sub-section (2), in respect of any property shall, unless the property is sooner released from requisition under section 6 or acquired under section 7, be revised in accordance with the provision of sub-section (2B)-

(a) in a case where such property has been subject to requisition under this Act for the period of five years or a longer period immediately preceding the commencement of the Requisitioning and Acquisition of Immovable property (Amendment) Act,1975-

(i) first with effect from the date of such commencement, and

(ii) secondly with effect from the expiry of five years, thirdly with effect from the expiry of ten years, from such commencement;]

(b) in a case where such property has been subject to requisition under this Act immediately before such commencement for a period shorter than five years and the maximum period within which such property shall, in accordance with the provision of sub-section (1A) of section 6, be released from requisition or acquired, extends beyond five years from such commencement,-

(i) first with effect from the date of expiry of five years from the date on which possession of such property has been surrendered or delivered to, or taken by, the competent authority under section 4, and

(ii) secondly with effect from the date of expiry of five years, and thirdly with effect from the date of expiry of ten years, from the date on which the revision made under sub-clause (I) takes effect;]

(c) in any other case,-

(i) first with effect from the date of expiry of five years from the date on which possession of such property has been surrendered or delivered to, or taken by, the competent authority under section 4, and

(ii) secondly with effect from the date of expiry of five years, and thirdly with effect from the date of expiry of ten years, from the date on which the revision under sub-c1. (I) takes effect.]

(2B) The recurring payment in respect of any property shall be revised by re-determining such payment in the manner and in accordance with the principles set out in sub-section (1) read with clause (a) of sub-section (2), as if such property had been requisitioned under this Act on the date with effect from which the revision has no be made under sub-section (2A).]

(3) The compensation payable for the acquisition of any property under section 7 shall be the price which the requisitioned property would have fetched in open market, if it had remained in the same condition as it was at the time or requisitioning and been sold on the date of acquisition.]

Section 9. Payment of compensation

The amount of compensation payable under an award shall, subject to rules made under this Act, be paid by the competent authority to the person or persons entitled thereto in such manner and within such time as may be specified in the award.

Section 10. Appeals from orders of requisitioning

(1) Any person aggrieved by an order of requisition made by the competent authority under sub-section (2) of section 3 may, within twenty-one days from the date of service of the order, prefer an appeal to the Central Government :

Provided that the Central Government may entertain the appeal after the expiry of the said period of twenty-one days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

(2) On receipt of an appeal under sub-section (1), the Central Government may, after calling for a report from the competent authority and giving an opportunity to the parties of being heard and after making such further inquiry, if any, as may be necessary, pass such orders as it thinks fit and the order of the Central Government shall be final.

(3) Where an appeal is preferred under sub-section (1), the Central Government may stay the enforcement of the order of the competent authority for such period and on such condition as it thinks fit.

Section 11. Appeals from awards in respect of compensation

Any person aggrieved by an award of the arbitrator made under section 8 may, within thirty days from the date of such award, prefer an appeal to the High Court within whose jurisdiction the requisitioned or acquired property is situate:

Provided that the High Court may entertain the appeal after the expiry of the said period of thirty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

Section 12. Competent authority and arbitrator to have certain powers of civil courts

The competent authority and the arbitrator appointed under section 8, while holding an inquiry or, as the case may be arbitration proceeding under this Act, shall have all the powers of a civil court, while trying a suit, under the Code of Civil Procedure, 1908 in respect of the following matters, namely :-

(a) summoning and enforcing the attendance of person and examining him on oath;

(b) requiring the discovery and production of any document;

(c) reception of evidence of affidavits;

(d) requisitioning any public record from any court or office;

(e) issuing commissions for examination of witnesses.

Section 13. Power to obtain information

The Central Government or the competent authority may, with a view to carrying out the purposes of section 3 or section 6, or section 7, or section 8, by order require any person to furnish to such officer, as may be specified in the order, such information in his possession as may be specified relating to any property which is requisitioned or acquired, or intended to be requisitioned or acquired, under this Act.

Section 14. Power to enter and inspect

The competent authority or any officer, empowered in this behalf by such authority by general or special order, may enter and inspect any property for the purposes of determining whether, and if so, in what manner, an order this Act should be made in relation to such property or with a view to securing compliance with an order made under this Act.

Section 15. Service of notice and orders

(1) Subject to the provisions of this section and any rules that may be made under this Act, every notice or order issued or made under this Act shall,-

(a) in the case of any notice or order of a general nature or affecting a class of persons, be published in the Official Gazette; and

(b) in the case of any notice or order affecting an individual, corporation or firm be served in the manner provided for the service of summons in Rule 2 of Order XXIX or Rule 3 of Order XXX, as the case may be, in the First Schedule of the Code of Civil Procedure, 1908; and

(c) in the case of any order affecting an individual person (not being a corporation or firm), be served on such person-

(i) by delivering or tendering it to that person; or

(ii) if it cannot be so delivered or tendered, by delivering or tendering it to any officer or such person or any adult male member of the family or such person, or by affixing a copy thereof on the outer door or on some conspicuous part of the premises in which that person is known to have last resided or carried on business or personally worked for gain; or failing service by these means,

(iii) by post.

(2) Where the ownership of the property is in dispute or where the persons interested in the property are not readily traceable and the notice or order cannot be served without undue delay, the notice or order may be served by publishing it in the Official Gazette, and where possible, by affixing a copy thereof on any conspicuous part of the property to which it relates.

Section 16. Easement not to be disturbed

No person interested in any property requisitioned or acquired under this Act shall, without the previous written consent of the competent authority or except for the purpose of effecting repairs or complying with a municipal requirement, willfully disturb any convenience or easement attached to such property or remove, destroy or render unserviceable any thing provided for permanent use therewith or discontinue or cause to be discontinued any supply or service provided for the property.

Section 17. Delegation of powers

(1) The Central Government may, by notification in the Official Gazette, direct that the powers exercisable by it under this Act shall, in such circumstances and under such conditions, if any, as may be specified in the notification, be exercisable also by an officer subordinate to that Government or [by the State Government or by an officer subordinate to the State Government.]

(2) All notifications issued under sub-section (1) shall be laid, as soon as may be, before Parliament.

Section 18. Protection of action taken in good faith

(1) No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of this Act or any order made thereunder.

(2) No suit or other legal proceeding shall lie against the Central Government or the competent authority for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or any order made thereunder.

Section 19. Bar of jurisdiction of civil courts

Save as otherwise expressly provided in this Act, no civil court shall have jurisdiction in respect of any matter which the competent authority or arbitrator is empowered by or under this Act to determine, and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

Section 20. Penalty for offences

Whoever contravenes any provision of this Act, or any rule made thereunder, or any order made or direction given under this Act, or obstructs the lawful exercise of any power conferred by or under this Act, shall be punishable with fine which may extend to one thousand rupees.

Section 21. Certain persons to be public servants

The competent authority, every arbitrator and every officer empowered by the Central Government or the competent authority, while exercising any power or performing any duty under this Act, shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.(Act XLV of 1860)

Section 22. Power to make rules

(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :-

(a) the procedure to be followed by the competent authority in making inquires under section 3 or section 6;

(b) the procedure to be followed in arbitration proceedings and appeals under this Act;

(c) the principles to be followed in determining the amount of compensation and method of payment of such compensation;

(d) the principles to be followed in apportioning the cost or proceedings before the arbitrator and on appeal under this Act;

(e) the manner of service of notices and orders;

(f) any other matter which has to be, or may be, prescribed.

(3) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive session, and, if before the expiry of the session immediately following the session or the successive session aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made the rule shall thereafter have effect only in such modified from or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

Section 23. Validation of certain requisitions and acquisitions

(1) All immovable property which purports to have been requisitioned by a State Government for any public purpose, being a purpose of the Union, under any Provincial or State Act which, immediately before the 25th day of January,1952, was used or occupied by the Central Government or by an officer or authority subordinate to that Government shall, as from that date, be deemed to be property duly requisitioned under section 3 of this Act, and every such requisition shall, notwithstanding any judgment, decree or order of any Court, be deemed always to have been valid as if this Act had been in force on and from the date of the requisition and the requisition had been duly made by a competent authority under this Act, and all the provisions of this Act shall apply accordingly :

Provided that all agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the 25th day of January, 1952 and in force immediately before that date shall be valid and shall be deemed always to have been valid and shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition after that date.

(2) Every acquisition of immovable property purporting to have been made before the commencement of this Act by a State Government for any public purpose, being a purpose of a Union, under any enactment for the time being in force in that State and which, immediately before such commencement, was used or occupied by the Central Government or by an officer or authority subordinate to that Government shall, notwithstanding any defect in, or invalidity of, the enactment or order under which the acquisition was made, be deemed for all purposes to have been validly made as if the provisions of the said enactment or order had been included and enacted in this section and this section had been in force on and from the date of the acquisition.

Section 24. Repeals and savings

(1) The Requisitioned land (Continuance of Powers) Act, 1947, the Delhi Premises (Requisition and Eviction) Act,1947 and the Requisitioning and Acquisition of Immovable Property Ordinance, 1952 are hereby repealed.

(2) For the removal of doubts, it is hereby declared that any property which immediately before such repeal was subject to requisition under the provisions of either of the said Acts or the said Ordinance shall, on the commencement of this Act, be deemed to be property requisitioned under section 3 of this Act, and all the provisions of this Act shall apply accordingly :

Provided that –

(a) all agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the commencement of this Act and in force immediately before such commencement, shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition after such commencement;

(b) anything done or any action taken (including any orders, notifications or rules made or issued) in exercise of powers conferred by or under either of the said Acts or the said Ordinance shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act was in force on the day on which such thing was done or action was taken.

Section 25. Special provision as to certain requisitions under Act 51 of 1962

1) Notwithstanding anything contained in this Act, any immovable property requisitioned by the Central Government or by any officer or authority to whom powers in this behalf have been delegated by that Government, under the Defence of India Act, 1962, and the rules made thereunder (including any immovable property deemed to have been requisitioned under the said Act) which has not been released from such requisition before the 10thJanuary,1968, shall, as from that date, be deemed to have been requisitioned by the competent authority under the provisions of this Act for the purpose for which such property was held immediately before the said date and all the provisions of this Act shall apply accordingly :

Provided that –

(a) all determinations, agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the said date and in force immediately before the said date; shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition as from the said date;

(b) anything done or any action taken (including any order, notifications or rules made or issued) by the Central Government or by any officer or authority to whom powers in this behalf have been delegated by the Government, in exercise of the powers conferred by or under Chapter VI of the Defence of India Act,1962, shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this section was in force on the date on which such thing was done or action was taken.

(2) Save as otherwise provided in sub-section (1), the provisions of the Defence of India Act,1962, and the rule made thereunder, in so far as those provisions relate to the requisitioning of any such immovable property as is referred to in sub-section (1), shall as from the 10th January,1968 cease to operate except as respects things done or omitted to be done before such cesser and section 6 of the General Clauses Act,1897, shall apply upon such cesser of operation as if such cesser were a repeal of an enactment by a Central Act.]

Section 26. Special provision as to certain requisitions under Act 42 of 1971

(1) Notwithstanding anything contained in this Act, any immovable property requisitioned or purported to have been requisitioned by the Central Government or by any officer or authority to whom powers in this behalf have been delegated by that Government, under the Defence of India Act,1971, and the rules made thereunder (including any immovable property deemed to have been requisitioned under the said Act), which has not been released from such requisition before the appointed day, shall,-

(i) if such property was requisitioned on or before the 21st day of March,1977, as from the date, and

(ii) if such property was requisitioned at any time after such date as from the date of its requisition, be deemed to have been requisitioned by the competent authority under the provisions of this Act for the purpose for which such property was held immediately before the appointed day and all the provisions of this Act shall apply accordingly :

Provided that in determining the compensation payable under this Act in respect of any property so deemed to have been requisitioned under this Act the sum or sums, if any, as may be found necessary to compensate the person interested for all or any of the matters specified in clause (b) of sub-section (2) of section 8 shall be reduced by the sum or sums, if any, paid or payable in respect of such matter or matters as compensation in respect of such property under the Defence of India Act,1971, and the rules made thereunder.

(2) Save as otherwise provided in sub-section (1), the provisions of the Defence of India Act,1971, and the rules made thereunder, in so far as those provisions relate to the requisitioning of any such immovable property as is referred to in sub-section (1), shall, as from the 21st March 1977, cease to operate except as respects things done or omitted to be done before such cesser and section 6 of the General Clauses Act,1897, shall apply upon such cesser of operation as if such cesser were a repeal of an enactment by a Central Act.

Explanation.- In this section “appointed day” means the 23rd September,1977.]

Bydeb

The Requisitioning and Acquisition of Immovable Property Act, 1952

An Act to provide for the requisitioning and acquisition of immovable property for the purposes of the Union.

BE it enacted by parliament as follows :-

[a] For Statement of  Objects and Reasons, see Gazette of India, 1952, Pt.II, section 2,p.55.

This Act has been applied to the Union territory of Pondicherry – See the Requisitioning and Acquisition of Immovable Property (Application to the State of Pondicherry) Order,1960, Gaz of Ind., 1961,Pt.II,Section 3(I), Page 6.

It has been extended to the Union territory of Goa, Daman and Diu by G.S.R. 388, dated 15-3-1967, published under section 6 of Act 1 of 1962, in Gaz. of Ind.,25-3-1967, Pt.II, section3(I),page471.

It has been applied to the Union Territory of Dadra and Nagar Haveli by Regn.6 of 1963 (1-7-1965).

The Act has been extended to Sikkim – See S.O., 208 (E)/1975 – Gaz. of Ind.,16-5-1975,Pt.II, section 3(ii),Ext., p.1213

Section 1. Short title, extent and duration

(1) This Act may be called the Requisitioning and Acquisition of Immovable Property Act, 1952.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3)[ * * * * * *]

[a] Sub-section (3),which was earlier substituted by Act 48 of 1963 has been omitted by the Requisitioning and Acquisition of Immovable Property (Amendment) Act,1970 (1 to 1970), section 2(11-3-1970).

Note – The Act was extended up to 14-5-1970 in Kerala by Kerala Act 6 of 1968, Section 2.

Section 2. Definitions

In this Act, unless the context otherwise requires,-

(a) “award” means any award of an arbitrator made under section 8;

(b) “competent authority” means any person or authorised by the Central Government, by notification in the Official Gazette, to perform the functions of the competent authority under this Act for such area as may be specified in the notification.

(c) “landlord” means any person who for the time being is receiving or is entitled to receive, the rent of any premises, whether on his own account, or on account or on behalf of for the benefit, of any other person or as a trustee, guardian or receiver for any other person, or who would so receive the rent or be entitled to receive the rent if the premises were let to a tenant ;

(d) the expression “person interested”, in relation to any property, includes all persons claiming, or entitled to claim, an interest in the compensation payable on account of the requisitioning or acquisition of that property under this Act;

(e) “premises” means any building or part of a building and includes –

the garden, grounds and outhouses, if any, appertaining to such building or part of a building;

(i) any fittings affixed to such building of part of a building for the more beneficial enjoyment thereof;

(f) “prescribed” means prescribed by rules made under this Act ;

(g) “property” means immovable property of every king and includes any rights in or over such property :

(h) “tenant” means any person by whom or on whose account rent is payable for any premises and includes such sub-tenants and other persons as have derived title under the tenant under any law for the time being in force.

Section 3. Power to requisition immovable property

(1) Where the competent authority is of opinion that any property is needed or likely to be needed for any public purpose, being a purpose of the Union, and that the property should be requisitioned, the competent authority –

(a) shall call upon the owner or any other person who may be in possession of the property by notice in writing (specifying therein the purpose of the requisition) to show cause, within fifteen days of the date of the service of such notice on him, why the property should not be requisitioned ; and

(b) may, by order, direct that neither the owner of the property nor any other person shall, without permission of the competent authority, dispose of, or structurally alter, the property or let it out to a tenant until the expiry of such period, not exceeding two months, as may be specified in the order.
(2) If, after considering the cause, if any, shown by any person interested in the property or in possession thereof, the competent authority is satisfied that it is necessary or expedient so to do, it may, by order in writing, requisition the property and may make such further orders as appear to it to be necessary or expedient in connection with the requisitioning:

Provided that no property or part thereof –

(a) which is bonafide used by the owner thereof as the residence of himself or his family, or

(b) which is exclusively used either for religious worship by the public or as a school, hospital, public library or an orphanage or for the purpose of accommodation of person connected with the management of such place of worship or such school, hospital, library, or orphanage, shall be requisitioned :

Provided further that where the requisitioned property consists of premises which are being used as a residence by a tenant for not less than two months immediately preceding the date of the service of notice under sub-section (1), the competent authority shall provide such tenant with alternative accommodation which, in its opinion, is suitable.

Section 4. Power to take possession of requisitioned property

(1) Where any property has been requisitioned under section 3, the competent authority may, by notice in writing order the owner as well as any other person who may be in possession of the property to surrender or deliver possession thereof to the competent authority or any person duly authorised by it in this behalf within thirty days of the service of the notice.

Section 5. Rights over requisitioned property

(1) All property requisitioned under section 3, shall be used for such purposes as may be mentioned in the notice of requisition.

(2) Where any premises are requisitioned under section 3, the competent authority may order the landlord to execute such repairs as may be necessary and are usually made by landlords in that locality and as may be specified in the notice, within such reasonable time as may be mentioned therein, and if the landlord fails to execute any repairs in pursuance of such order, the competent authority may cause the repairs specified in the order to be executed at the expense of the landlord and the cost thereof may, without prejudice to any other mode of recovery, be deducted from the compensation payable to the landlord.

Section 6. Release from requisitioning

(1) The Central Government may at any time release from requisition any property requisitioned under this Act and shall, as far as possible, restore the property in as good a condition as it was when possession thereof was taken subject only to the changes caused by reasonable wear and tear and irresistible force:

Provided that where the purposes for which any requisitioned property was being used cease to exits, the Central Government shall, unless the property is acquired under section 7, release that property, as soon as may be, from requisition.

“(I-A) Notwithstanding anything contained in sub-section (1), the Central Government shall release from requisition.-

(a) any property requisitioned or deemed to be requisitioned under this Act before the commencement of Requisitioning and Acquisition of Immovable Property (Amendment) Act,1970, on or before the expiry of a period of [Five years] from such commencement ;

(b) any property requisitioned under this Act after such commencement, on or before the expiry of a period of [Five years] from the date on which possession of such property was surrendered or delivered to, or taken by, the competent authority under section 4, unless such property is acquired under section 7 within the period of [five years] aforesaid.

(2) Where any property is to be released from requisition, [under sub-section (1) or under sub-section (I-A) the competent authority may, after such inquiry, if any, as it may in any case consider necessary to make or cause to be made, specify by order in writing the person to whom possession of the property shall be given and such possession shall, as far as practicable, be given to the person from whom possession was taken at the time of the requisition or to the successors-in-interest of such person.

(3) The delivery of possession of the property to the person specified in an order under sub-section (2) shall be a full discharge of the Central Government from all liability in respect of the property, but shall not prejudice any rights in respect of the property which any other person may be entitled by due process of law to enforce against the person to whom possession of the property is given.

(4) Where any person to whom possession of any requisitioned property is go be given is not found and has no agent or other person empowered to accept delivery on his behalf, the competent authority shall cause a notice declaring that the property is released from requisition to be affixed on some conspicuous part of the property and shall also publish the notice in the Official Gazette.

(5) When a notice referred to in sub-section (4) is published in the Official Gazette, the property specified in such notice shall cease to be subject to requisition on and from the date of such publication and shall be deemed to have been delivered to the person entitled to possession thereof and the Central Government shall not be liable for any compensation or other claim in respect of the property for any period after the said date.

(6) Where any property requisitioned under this Act or any material part thereof is wholly destroyed or rendered substantially and permanently unfit for the purpose for which it was requisitioned by reason of fire, earthquake, tempest, flood or violence of any army or of a mob or other irresistible force, the requisition shall, at the option of the Central Government, be void :

Provided that the benefit of this sub section shall not be available to the Central Government where the injury to such property is caused by any wrongful act or default of that Government.

Section 7. Power to acquire requisitioned property

(1) Where any property is subject to requisition, the Central Government may, if it is of opinion that it is necessary to acquire the property for a public purpose, at any time acquire such property by publishing in the Official Gazette a notice to the effect that the Central Government has decided to acquire the property in pursuance of this section :

Provided that before issuing such notice, the Central Government shall call upon the owner of, or any other person who, in the opinion of the Central Government, may be interested in, such property to show cause why the property should not be acquired; and after considering the cause, if any, shown by any person interested in the property and after giving the parties an opportunity of being heard, the Central Government may pass such orders as it deems fit.

(2) When a notice as aforesaid is published in the Official Gazette, the requisitioned property shall, on and from the beginning of the day on which the notice is so published, vest absolutely in the Central Government free from all encumbrances and the period of requisition of such property shall end.

(3) No property shall be acquired under this section except in the following circumstances, namely :-

(a) Where any works have, during the period of requisition, been constructed on, in or over, the property wholly or partially at the expense of the Central Government and the Government decides that the value of, or the right to use, such works should be secured or preserved for the purposes of Government; or

(b) where the cost of restoring the property to its condition at the time of its requisition would, in the determination of the Central Government, be excessive and the owner declines to accept release from requisition of the property without payment of compensation for so restoring the property.

(4) Any decision or determination of the Central Government under sub-section (3) shall be final and shall not be called in question in any Court.

(5) For the purposes of clause (a) of sub-section (3) “works” includes buildings, structures and improvements of every description.

Section 8. Principles and method of determining compensation

(1) Where any property is requisitioned or acquired under this Act, there shall be paid compensation the amount of which shall be determined in the manner and in accordance with the principles hereinafter set out, that is to say,-

(a) where the amount of compensation can be fixed by agreement, it shall be paid in accordance with such agreement ;

(b) where no agreement can be reached, the Central Government shall appoint as arbitrator a person who is, or has been, or is qualified for appointment as, a judge of a High Court;

(c) the Central Government may, in any particular case, nominate a person having expert knowledge as to the nature of the property requisitioned or acquired to assist the arbitrator and where such nomination is made, the person to be compensated may also nominate an assessor for the same purpose;

(d) at the commencement of the proceedings before the arbitrator, the Central Government and the person to be compensated shall state what in their respective opinion is a fair amount of compensation.

(e) the arbitrator shall, after hearing the dispute, make an award determining the amount of compensation which appears to him to be just and specifying the person or persons to whom such compensation shall be paid; and in making the award, he shall have regard to the circumstances of each case and the provisions of sub-sections (2) and (3), so far as they are applicable;

(f) when there is any dispute as to the person or persons who are entitled to the compensation the arbitrator shall decide such dispute and if the arbitrator finds that more persons than one are, entitled to compensation, he shall apportion the amount thereof amongst such persons;

(g) nothing in the Arbitration Act,1940 shall apply to arbitration under this section.

(2) The amount of compensation payable for the requisitioning, of any property shall, consist of subject to the provisions of sub-sections (2A) and (2B), consist of -]

(a) a recurring payment, in respect of the period of requisition, of a sum equal to the rent which would have been payable for the use and occupation of the property, if it had been taken on lease for that period; and

(b) such sum or sums, if any, as may be found necessary to compensate the person interested for all or any of the following matters, namely :-

(i) pecuniary loss due to requisitioning ;

(ii) expenses on account of vacating the requisitioned premises;

(ii) expenses on account of reoccupying the premises upon release from requisition; and

(iii) damages (other than normal wear and tear) caused to the property during the period of requisition, including the expenses that may have to be incurred for restoring the property to the condition in which it was at the time of requisition.

(2A) The recurring payment, referred to in clause (a) of sub-section (2), in respect of any property shall, unless the property is sooner released from requisition under section 6 or acquired under section 7, be revised in accordance with the provision of sub-section (2B)-

(a) in a case where such property has been subject to requisition under this Act for the period of five years or a longer period immediately preceding the commencement of the Requisitioning and Acquisition of Immovable property (Amendment) Act,1975-

(i) first with effect from the date of such commencement, and

(ii) secondly with effect from the expiry of five years, thirdly with effect from the expiry of ten years, from such commencement;]

(b) in a case where such property has been subject to requisition under this Act immediately before such commencement for a period shorter than five years and the maximum period within which such property shall, in accordance with the provision of sub-section (1A) of section 6, be released from requisition or acquired, extends beyond five years from such commencement,-

(i) first with effect from the date of expiry of five years from the date on which possession of such property has been surrendered or delivered to, or taken by, the competent authority under section 4, and

(ii) secondly with effect from the date of expiry of five years, and thirdly with effect from the date of expiry of ten years, from the date on which the revision made under sub-clause (I) takes effect;]

(c) in any other case,-

(i) first with effect from the date of expiry of five years from the date on which possession of such property has been surrendered or delivered to, or taken by, the competent authority under section 4, and

(ii) secondly with effect from the date of expiry of five years, and thirdly with effect from the date of expiry of ten years, from the date on which the revision under sub-c1. (I) takes effect.]

(2B) The recurring payment in respect of any property shall be revised by re-determining such payment in the manner and in accordance with the principles set out in sub-section (1) read with clause (a) of sub-section (2), as if such property had been requisitioned under this Act on the date with effect from which the revision has no be made under sub-section (2A).]

(3) The compensation payable for the acquisition of any property under section 7 shall be the price which the requisitioned property would have fetched in open market, if it had remained in the same condition as it was at the time or requisitioning and been sold on the date of acquisition.]

Section 9. Payment of compensation

The amount of compensation payable under an award shall, subject to rules made under this Act, be paid by the competent authority to the person or persons entitled thereto in such manner and within such time as may be specified in the award.

Section 10. Appeals from orders of requisitioning

(1) Any person aggrieved by an order of requisition made by the competent authority under sub-section (2) of section 3 may, within twenty-one days from the date of service of the order, prefer an appeal to the Central Government :

Provided that the Central Government may entertain the appeal after the expiry of the said period of twenty-one days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

(2) On receipt of an appeal under sub-section (1), the Central Government may, after calling for a report from the competent authority and giving an opportunity to the parties of being heard and after making such further inquiry, if any, as may be necessary, pass such orders as it thinks fit and the order of the Central Government shall be final.

(3) Where an appeal is preferred under sub-section (1), the Central Government may stay the enforcement of the order of the competent authority for such period and on such condition as it thinks fit.

Section 11. Appeals from awards in respect of compensation

Any person aggrieved by an award of the arbitrator made under section 8 may, within thirty days from the date of such award, prefer an appeal to the High Court within whose jurisdiction the requisitioned or acquired property is situate:

Provided that the High Court may entertain the appeal after the expiry of the said period of thirty days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

Section 12. Competent authority and arbitrator to have certain powers of civil courts

The competent authority and the arbitrator appointed under section 8, while holding an inquiry or, as the case may be arbitration proceeding under this Act, shall have all the powers of a civil court, while trying a suit, under the Code of Civil Procedure, 1908 in respect of the following matters, namely :-

(a) summoning and enforcing the attendance of person and examining him on oath;

(b) requiring the discovery and production of any document;

(c) reception of evidence of affidavits;

(d) requisitioning any public record from any court or office;

(e) issuing commissions for examination of witnesses.

Section 13. Power to obtain information

The Central Government or the competent authority may, with a view to carrying out the purposes of section 3 or section 6, or section 7, or section 8, by order require any person to furnish to such officer, as may be specified in the order, such information in his possession as may be specified relating to any property which is requisitioned or acquired, or intended to be requisitioned or acquired, under this Act.

Section 14. Power to enter and inspect

The competent authority or any officer, empowered in this behalf by such authority by general or special order, may enter and inspect any property for the purposes of determining whether, and if so, in what manner, an order this Act should be made in relation to such property or with a view to securing compliance with an order made under this Act.

Section 15. Service of notice and orders

(1) Subject to the provisions of this section and any rules that may be made under this Act, every notice or order issued or made under this Act shall,-

(a) in the case of any notice or order of a general nature or affecting a class of persons, be published in the Official Gazette; and

(b) in the case of any notice or order affecting an individual, corporation or firm be served in the manner provided for the service of summons in Rule 2 of Order XXIX or Rule 3 of Order XXX, as the case may be, in the First Schedule of the Code of Civil Procedure, 1908; and

(c) in the case of any order affecting an individual person (not being a corporation or firm), be served on such person-

(i) by delivering or tendering it to that person; or

(ii) if it cannot be so delivered or tendered, by delivering or tendering it to any officer or such person or any adult male member of the family or such person, or by affixing a copy thereof on the outer door or on some conspicuous part of the premises in which that person is known to have last resided or carried on business or personally worked for gain; or failing service by these means,

(iii) by post.

(2) Where the ownership of the property is in dispute or where the persons interested in the property are not readily traceable and the notice or order cannot be served without undue delay, the notice or order may be served by publishing it in the Official Gazette, and where possible, by affixing a copy thereof on any conspicuous part of the property to which it relates.

Section 16. Easement not to be disturbed

No person interested in any property requisitioned or acquired under this Act shall, without the previous written consent of the competent authority or except for the purpose of effecting repairs or complying with a municipal requirement, willfully disturb any convenience or easement attached to such property or remove, destroy or render unserviceable any thing provided for permanent use therewith or discontinue or cause to be discontinued any supply or service provided for the property.

Section 17. Delegation of powers

(1) The Central Government may, by notification in the Official Gazette, direct that the powers exercisable by it under this Act shall, in such circumstances and under such conditions, if any, as may be specified in the notification, be exercisable also by an officer subordinate to that Government or [by the State Government or by an officer subordinate to the State Government.]

(2) All notifications issued under sub-section (1) shall be laid, as soon as may be, before Parliament.

Section 18. Protection of action taken in good faith

(1) No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done in pursuance of this Act or any order made thereunder.

(2) No suit or other legal proceeding shall lie against the Central Government or the competent authority for any damage caused or likely to be caused by anything which is in good faith done or intended to be done in pursuance of this Act or any order made thereunder.

Section 19. Bar of jurisdiction of civil courts

Save as otherwise expressly provided in this Act, no civil court shall have jurisdiction in respect of any matter which the competent authority or arbitrator is empowered by or under this Act to determine, and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

Section 20. Penalty for offences

Whoever contravenes any provision of this Act, or any rule made thereunder, or any order made or direction given under this Act, or obstructs the lawful exercise of any power conferred by or under this Act, shall be punishable with fine which may extend to one thousand rupees.

Section 21. Certain persons to be public servants

The competent authority, every arbitrator and every officer empowered by the Central Government or the competent authority, while exercising any power or performing any duty under this Act, shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.(Act XLV of 1860)

Section 22. Power to make rules

(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :-

(a) the procedure to be followed by the competent authority in making inquires under section 3 or section 6;

(b) the procedure to be followed in arbitration proceedings and appeals under this Act;

(c) the principles to be followed in determining the amount of compensation and method of payment of such compensation;

(d) the principles to be followed in apportioning the cost or proceedings before the arbitrator and on appeal under this Act;

(e) the manner of service of notices and orders;

(f) any other matter which has to be, or may be, prescribed.

(3) Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive session, and, if before the expiry of the session immediately following the session or the successive session aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made the rule shall thereafter have effect only in such modified from or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.]

Section 23. Validation of certain requisitions and acquisitions

(1) All immovable property which purports to have been requisitioned by a State Government for any public purpose, being a purpose of the Union, under any Provincial or State Act which, immediately before the 25th day of January,1952, was used or occupied by the Central Government or by an officer or authority subordinate to that Government shall, as from that date, be deemed to be property duly requisitioned under section 3 of this Act, and every such requisition shall, notwithstanding any judgment, decree or order of any Court, be deemed always to have been valid as if this Act had been in force on and from the date of the requisition and the requisition had been duly made by a competent authority under this Act, and all the provisions of this Act shall apply accordingly :

Provided that all agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the 25th day of January, 1952 and in force immediately before that date shall be valid and shall be deemed always to have been valid and shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition after that date.

(2) Every acquisition of immovable property purporting to have been made before the commencement of this Act by a State Government for any public purpose, being a purpose of a Union, under any enactment for the time being in force in that State and which, immediately before such commencement, was used or occupied by the Central Government or by an officer or authority subordinate to that Government shall, notwithstanding any defect in, or invalidity of, the enactment or order under which the acquisition was made, be deemed for all purposes to have been validly made as if the provisions of the said enactment or order had been included and enacted in this section and this section had been in force on and from the date of the acquisition.

Section 24. Repeals and savings

(1) The Requisitioned land (Continuance of Powers) Act, 1947, the Delhi Premises (Requisition and Eviction) Act,1947 and the Requisitioning and Acquisition of Immovable Property Ordinance, 1952 are hereby repealed.

(2) For the removal of doubts, it is hereby declared that any property which immediately before such repeal was subject to requisition under the provisions of either of the said Acts or the said Ordinance shall, on the commencement of this Act, be deemed to be property requisitioned under section 3 of this Act, and all the provisions of this Act shall apply accordingly :

Provided that –

(a) all agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the commencement of this Act and in force immediately before such commencement, shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition after such commencement;

(b) anything done or any action taken (including any orders, notifications or rules made or issued) in exercise of powers conferred by or under either of the said Acts or the said Ordinance shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this Act was in force on the day on which such thing was done or action was taken.

Section 25. Special provision as to certain requisitions under Act 51 of 1962

1) Notwithstanding anything contained in this Act, any immovable property requisitioned by the Central Government or by any officer or authority to whom powers in this behalf have been delegated by that Government, under the Defence of India Act, 1962, and the rules made thereunder (including any immovable property deemed to have been requisitioned under the said Act) which has not been released from such requisition before the 10thJanuary,1968, shall, as from that date, be deemed to have been requisitioned by the competent authority under the provisions of this Act for the purpose for which such property was held immediately before the said date and all the provisions of this Act shall apply accordingly :

Provided that –

(a) all determinations, agreements and awards for the payment of compensation in respect of any such property for any period of requisition before the said date and in force immediately before the said date; shall continue to be in force and shall apply to the payment of compensation in respect of that property for any period of requisition as from the said date;

(b) anything done or any action taken (including any order, notifications or rules made or issued) by the Central Government or by any officer or authority to whom powers in this behalf have been delegated by the Government, in exercise of the powers conferred by or under Chapter VI of the Defence of India Act,1962, shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken in the exercise of the powers conferred by or under this Act as if this section was in force on the date on which such thing was done or action was taken.

(2) Save as otherwise provided in sub-section (1), the provisions of the Defence of India Act,1962, and the rule made thereunder, in so far as those provisions relate to the requisitioning of any such immovable property as is referred to in sub-section (1), shall as from the 10th January,1968 cease to operate except as respects things done or omitted to be done before such cesser and section 6 of the General Clauses Act,1897, shall apply upon such cesser of operation as if such cesser were a repeal of an enactment by a Central Act.]

Section 26. Special provision as to certain requisitions under Act 42 of 1971

(1) Notwithstanding anything contained in this Act, any immovable property requisitioned or purported to have been requisitioned by the Central Government or by any officer or authority to whom powers in this behalf have been delegated by that Government, under the Defence of India Act,1971, and the rules made thereunder (including any immovable property deemed to have been requisitioned under the said Act), which has not been released from such requisition before the appointed day, shall,-

(i) if such property was requisitioned on or before the 21st day of March,1977, as from the date, and

(ii) if such property was requisitioned at any time after such date as from the date of its requisition, be deemed to have been requisitioned by the competent authority under the provisions of this Act for the purpose for which such property was held immediately before the appointed day and all the provisions of this Act shall apply accordingly :

Provided that in determining the compensation payable under this Act in respect of any property so deemed to have been requisitioned under this Act the sum or sums, if any, as may be found necessary to compensate the person interested for all or any of the matters specified in clause (b) of sub-section (2) of section 8 shall be reduced by the sum or sums, if any, paid or payable in respect of such matter or matters as compensation in respect of such property under the Defence of India Act,1971, and the rules made thereunder.

(2) Save as otherwise provided in sub-section (1), the provisions of the Defence of India Act,1971, and the rules made thereunder, in so far as those provisions relate to the requisitioning of any such immovable property as is referred to in sub-section (1), shall, as from the 21st March 1977, cease to operate except as respects things done or omitted to be done before such cesser and section 6 of the General Clauses Act,1897, shall apply upon such cesser of operation as if such cesser were a repeal of an enactment by a Central Act.

Explanation.- In this section “appointed day” means the 23rd September,1977.]

Bydeb

The Presidency-Towns Insolvency Act, 1909

Preamble

[ACT No.3 OF 1909]1

[12th March, 1909]

——————–

1. The Act has been amended in Bombay by Bom.Acts 20 of 1933 and 15 of 1939; in Bengal by Ben.Act 18 of 1936; and in Madras by Mad. Act 5 of 1943

An Act to amend the Law of Insolvency in the Presidency towns 1

WHEREAS it is expedient to amend the law relating to insolvency in the Presidency-towns 2

It is hereby enacted as follows:–

——————–

1. The words and the town of Rangoon rep. by the A.O.1937.

2. {The words “and the town of Karachi” rep.by the A.O.1948.The words “towns of Rangoon and Karachi” had been subs.for “town of Rangoon” by Act 9 of 1926, s.2, and the words “town of” had been subs.for “towns of Rangoon and” by the A.O.1937;

Section 1. Short title and commencement

(1) This Act may be called the Presidency-towns Insolvency Act, 1909.

(2) It shall come into force on the first day of January 1910.

Section 2. Definitions

In this Act, unless there is anything repugnant in the subject or context,–

(a) “Creditor” includes a decree-holder;

(b) “Debt” includes a judgment-debt, and “debtor” includes a judgment-debtor;

1[* * *]

(c) “Official assignee” includes an acting official assignee 2[and a deputy official assignee, whether permanent or acting];

(d) “Prescribed” means prescribed by rules;

(e) “Property” includes any property over which or the profits of which any person has a disposing power which he may exercise for his own benefit;

(f) “Rules” means rules made under this Act;

(g) “Secured creditor” includes a landlord who under any enactment for the time being in force has a charge on land for the rent of that land;

(h) “The Court” means the Court exercising jurisdiction under this Act; and

(i) “Transfer of property” includes a transfer of any interest therein and any charge created thereon;

3[(j) “States” means all the territories 4[which immediately before the 1st November, 1956, were comprised] within Part A States and Part C States.]

——————–

1. Cls.(bb) and (bbb), ins. by Act 9 of 1926, s.3, rep. by the A.O.1948.

2. Ins. by Act 10 of 1930, s.2.

3. Cl.(j) ins.by the A.O.1950

4. Subs. by the Adaptation of Laws (No.2) Order, 1956, for “for the time being comprised”

Section 3. Courts having jurisdiction in insolvency

The Courts having jurisdiction in insolvency under this Act shall be 1[the High Courts at Calcutta, Madras and Bombay].

——————–

1. Subs. by the A.O.1948 for the original cls.(a) and (b) as amended by Act 9 of 1926, s.4, and the A.O.1937.

Section 4. Jurisdiction to be exercised by a single Judge

All matters in respect of which jurisdiction is given by this Act shall be ordinarily transacted and disposed of by or under the direction of one of the Judges of the Court, and the Chief Justice 1 shall, from time to time, assign a Judge for that purpose.

——————–

1. The words “or Judicial Commissioner” rep.by the A.O.1948

Section 5. Exercise of jurisdiction in chambers

Subject to the provisions of this Act and of rules, the Judge of a Court exercising jurisdiction in insolvency may exercise in chambers the whole or any part of his jurisdiction.

Section 6. Delegation of powers to officers to officers of Court

(1) The Chief Justice 1may, from time to time, direct that, in any matters in respect of which jurisdiction is given to the Court by this Act, an officer of the Court appointed by him in this behalf shall have all or any of the powers in this section mentioned; and any order made or act done by such officer in the exercise of the said powers shall be deemed the order or act of the Court.

(2) The powers referred to in sub-section (1) are the following, namely:—

(a) To hear insolvency petitions presented by debtors, and to make orders of adjudication thereon;

(b) To hold the public examination of insolvents;

(c) To make any order or exercise any jurisdiction which is prescribed as proper to be made or exercised in chambers;

(d) To hear and determine any unopposed or ex-parte application;

(e) To examine any person summoned by the Court under section 36.

(3) An officer appointed under this section shall not have power to commit for contempt of Court.

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1. The words “or Judicial Commissioner”

Section 7. Power of Court to decide all questions arising in insolvency

Subject to the provisions of this Act, the Court shall have full power to decide all questions of priorities, and all other questions whatsoever, whether of law or fact, which may arise in any case of insolvency coming within the cognizance of the Court, or which the Court may deem it expedient or necessary to decide for the purpose of doing complete justice or making a complete distribution of property in any such case:

1[Provided that, unless all the parties otherwise agree, the power hereby given shall, for the purpose of deciding any matter arising under section 36, be exercised only in the manner and to the extent provided in that section.]

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1. Ins. by Act 19 of 1927, s.2

Section 8. Appeals in insolvency

(1) The Court may review, rescind or vary any order made by it under its insolvency jurisdiction.

(2) Orders in insolvency matters shall, at the instance of any person aggrieved, be subject to appeal as follows, namely: —

(a) An appeal from an order made by an officer of the Court empowered under section 6 shall lie to the Judge assigned under section 4 for the transaction and disposal of matters in insolvency and no further appeal shall lie except by leave of such Judge;

(b) Save as otherwise provided in clause (a), an appeal from an order made by a Judge in the exercise of the jurisdiction conferred by this Act shall lie in the same way and be subject to the same provisions as an appeal from an order made by a Judge in the exercise of the ordinary original civil jurisdiction of the Court.

Section 9. Acts of insolvency

A debtor commits an act of insolvency in each of the following cases, namely:—

(a) If, in the states or elsewhere, he makes a transfer of all or substantially all his property to a third person for the benefit of his creditors generally;

(b) If, in the States or elsewhere, he makes a transfer of his property or of any part thereof with intent to defeat or delay his creditors;

(c) If, in the States or elsewhere, he makes any transfer of his property or of any part thereof, which would, under this or any other enactment for the time being in force, be void as a fraudulent preference if he were adjudged an insolvent;

(d) If, with intent to defeat or delay his creditors,—

(i) He departs or remains out of the States,

(ii) He departs from his dwelling-house or usual place of business or otherwise absents himself,

(iii) He secludes himself so as to deprive his creditors of the means of communicating with him;

(e) If any of his property has been sold or attached for a period of not less than twenty-one days in execution of the decree of any Court for the payment of money;

(f) If he petitions to be adjudged an insolvent;

(g) If he gives notice to any of his creditors that he has suspended, or that he is about to suspend, payment of his debts;

(h) If he is imprisoned in execution of the decree of any Court for the payment of money.1

Explanation.—For the purposes of this section, the act of an agent may be the act of the principal, even though the agent have no specific authority to commit the act.2

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1. For cl.(i) and the proviso, applicable to Bombay only, see the Presidency-towns Insolvency and the Provincial Insolvency (Bombay Amendment) Act, 1939 (Bom.15 of 1939), s.2

2. For s.9A, applicable to Bombay only, see s.2, ibid.

Section 10. Power to adjudicate

Subject to the conditions specified in this Act, if a debtor commits an act of insolvency, an insolvency petition may be presented either by a creditor or by the debtor, and the Court may on such petition make an order (hereinafter called an order of adjudication) adjudging him an insolvent.

Explanation.—The presentation of a petition by the debtor shall be deemed an act of insolvency within the meaning of this section, and on such petition the Court may make an order of adjudication.

Section 11. Restrictions on jurisdiction

The Court shall not have jurisdiction to make an order of adjudication, unless—

(a) The debtor is, at the time of the presentation of the insolvency petition, imprisoned in execution of the decree of a Court for the payment of money in any prison to which debtors are ordinarily committed by the Court in the exercise of its ordinary original jurisdiction; or

(b) The debtor, within a year before the date of the presentation of the insolvency petition, has ordinarily resided or had a dwelling-house or has carried on business either in person or through an agent within the limits of the ordinary original civil jurisdiction of the Court; or

(c) The debtor personally works for gain within those limits; or

(d) In the case of a petition by or against a firm of debtors the firm has carried on business within a year before the date of the presentation of the insolvency petition within those limits.

Section 12. Conditions on which creditor may petition

(1) A creditor shall not be entitled to present an insolvency petition against a debtor unless—

(a) The debt owing by the debtor to the creditor, or, if two or more creditors join in the petition, the aggregate amount of debts owing to such creditors, amounts to five hundred rupees, and

(b) The debt is a liquidated sum payable either immediately or at some certain future time, and

(c) The act of insolvency on which the petition is grounded has occurred within three months before the presentation of the petition:

1[Provided that where the said period of three months referred to in clause (c) expires on a day when the Court is closed, the insolvency petition may be presented on the day on which the Court reopens].

(2) If the petitioning creditor is a secured creditor, he shall in his petition either state that he is willing to relinquish his security for the benefit of the creditors in the event of the debtor being adjudged insolvent or give an estimate of the value of the security. In the latter case he may be admitted as a petitioning creditor to the extent of the balance of the debt due to him after deducting the value so estimated in the same way as if he were an unsecured creditor.

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1. Added by Act 3 of 1950, s.2.

Section 13. Proceedings and order on creditors petition

(1) A creditor’s petition shall be verified by affidavit of the creditor, or of some person on his behalf having knowledge of the facts.

(2) At the hearing the Court shall require proof of—

(a) The debt of the petitioning creditor, and

(b) The act of insolvency, or, if more than one act of insolvency is alleged in the petition, some one of the alleged acts of insolvency.

(3) The Court may adjourn the hearing of the petition and order service thereof on the debtor.

(4) The Court shall dismiss the petition—

(a) If it is not satisfied with the proof of the facts referred to in sub-section (2); or

(b) If the debtor appears and satisfies the Court that he is able to pay his debts, or that he has not committed an act of insolvency or that for other sufficient cause no order ought to be made.

(5) The Court may make an order of adjudication if it is satisfied with the proof above referred to, or if on a hearing adjourned under sub-section (3) the debtor does not appear and service of the petition on him is proved, unless in its opinion the petition ought to have been presented before some other Court having insolvency jurisdiction.

(6) Where the debtor appears on the petition and denies that he is indebted to the petitioner, or that he is indebted to such an amount as would justify the petitioner in presenting a petition against him, the Court, on such security (if any) being given as the Court may require for payment to the petitioner of any debt which may be established against the debtor in due course of law, and of the costs of establishing the debt, may, instead of dismissing the petition, stay all proceedings on the petition for such time as may be require a for trial of the question relating to the debt.

(7) Where proceedings are stayed, the Court may, if by reason of the delay caused by the stay of proceedings or for any other cause it thinks just, make an order of adjudication on the petition of some other creditor, and shall thereupon dismiss, on such terms as it thinks just, the petition on which proceedings have been stayed as aforesaid.

(8) A creditor’s petition shall not, after presentation, be withdrawn without the leave of the Court.

Section 14. Conditions on which debtor may petition

1[(1)] A debtor shall not be entitled to present an insolvency petition unless—

(a) His debts amount to five hundred rupees, or

(b) He has been arrested and imprisoned in execution of the decree of any Court for the payment of money, or

(c) An order of attachment in execution of such a decree has been made and is subsisting against his property.

2[(2) A debtor in respect of whom an order of adjudication, whether made under this Act or under the Provincial Insolvency Act, 1920, has been annulled owing to his failure to apply or to prosecute an application for his discharge shall not be entitled to present an insolvency petition without the leave of the Court by which the order of adjudication was annulled.Such Court shall not grant leave unless it is satisfied either that the debtor was prevented by any reasonable cause from presenting or prosecuting his application, as the case may be, or that the petition is founded on facts substantially different from those contained in the petition on which the order of adjudication was made.]

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1. The original s.14 was renumbered as sub-section (1) of that section by Act 11 of 1927, s.2}

2. Ins. by s.2, ibid.

Section 15. Proceedings and order on debtors petition

(1) A debtor’s petition shall allege that the debtor is unable to pay his debts, and, if the debtor proves that he is entitled to present the petition, the Court may thereupon make an order of adjudication, unless in its opinion the petition ought to have been presented before some other Court having insolvency jurisdiction.

(2) A debtor’s petition shall not, after presentation, be withdrawn without the leave of the Court.

1[(3) On the making of the order admitting his petition. a debtor shall—

(a) Unless the Court otherwise directs, produce all his books of account, and

(b) File such lists of creditors and debtors and afford such assistance to the Court as may be prescribed,

Failing which the Court may dismiss his petition.]

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1. Ins. by Act 19 of 1927, s.3.

Section 16. Discretionary powers as to appointment of inter in receiver

The Court may, if it is shown to be necessary for the protection of the estate, at any time after the presentation of an insolvency petition and before an order of adjudication is made, appoint the official assignee to be interim receiver of the property of the debtor, or of any part thereof, and direct him to take immediate possession thereof or any part thereof, and the official assignee shall thereupon have such of the powers conferable on a receiver appointed under the Code of Civil Procedure, 1908 (5 of 1908), as may be prescribed.

Section 17. Effect of order of adjudication

On the making of an order of adjudication, the property of the insolvent wherever situate shall vest in the official assignee and shall become divisible among his creditors, and thereafter, except as directed by this Act, no creditor to whom the insolvent is indebted in respect of any debt provable in insolvency shall, during the pendency of the insolvency proceedings, have any remedy against the property of the insolvent in respect of the debt or shall commence any suit or other legal proceeding except with the leave of the Court and on such terms as the Court may impose:

Provided that this section shall not affect the power of any secured creditor to realize or otherwise deal with his security in the same manner as he would have been entitled to realize or deal with it if this section had not been passed.

Section 18. Stay of proceedings

(1) The Court may, at any time after the making of an order of adjudication, stay any suit or other proceeding pending against the insolvent before any Judge or Judges of the Court or in any other Court subject to the superintendence of the Court.

(2) An order made under sub-section (1) may be served by sending a copy thereof, under the seal of the Court, by post to the address for service of the plaintiff or other party prosecuting such suit or proceeding, and notice of such order shall be sent to the Court before which the suit or proceeding is pending.

(3) Any Court in which proceedings are pending against a debtor may, on proof that an order of adjudication has been made against him under this Act, either stay the proceedings or allow them to continue on such terms as it may think just.

Section 18 A. Control over insolvency proceedings in subordinate Courts

1[Control over insolvency proceedings in subordinate Courts. (1) The Court may, at any time after the presentation of an insolvency petition, stay any insolvency proceedings pending against the debtor in any Court subject to the superintendence of the Court, and may, at any time after the making of an order of adjudication, annul an adjudication against the debtor made by any such Court.

(2) Where an adjudication is annulled under sub-section (1), all sales and dispositions of property and payments duly made and all acts done by the Court whose order is annulled, or by the receiver appointed by it or other person acting under his authority, shall be valid, but the property vested in such Court or receiver shall vest in the official assignee, and the Court may make such direction in regard to the custody of such property as it thinks fit.

(3) Notice of the order annulling an adjudication under subsection (1) shall be published in the Official Gazette and in such other manner as may be prescribed.]

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1. Ins. by Act 10 of 1930, s.3.

Section 19. Power to appoint special manager

(1) If in any case the Court, having regard to the nature of the debtor’s estate or business or to the interests of the creditors generally, is of opinion that a special manager of the estate or business ought to be appointed to assist the official assignee, the Court may appoint a manager thereof accordingly to act for such time as the Court may authorize, and to have such powers of the official assignee as may be entrusted to him by the official assignee or as the Court may direct.

(2) The special manager shall give security and furnish accounts in such manner as the Court may direct, and shall receive such remuneration as the Court may determine.

Section 20. Advertisement of order of adjudication

Notice of every order of adjudication, stating the name, address and description of the insolvent, the date of the adjudication, the Court by which the adjudication is made and the date of presentation of the petition, shall be published 1 in the Official Gazette and in such other manner as may be prescribed.

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1. The words “in the Gazette of India and” rep. by the A.O.1937.

Section 21. Power for Court to annul adjudication in certain cases

(1) Where, in the opinion of the Court, a debtor ought not to have been adjudged insolvent, or where it is proved to the satisfaction of the Court that the debts of the insolvent are paid in full, 1 [the Court shall, on the application of any person interested,] by order annul the adjudication 2 [and the Court may, of its own motion or on application made by the official assignee or any creditor, annul any adjudication made on the petition of a debtor who was, by reason of the provisions of sub-section (2) of section 14, not entitled to present such petition].

(2) For the purposes of this section, any debt disputed by a debtor shall be considered as paid in full, if the debtor enters into a bond, in such sum and with such sureties as the Court approves, to pay the amount to be recovered in any proceeding for the recovery of or concerning the debt, with costs, and any debt due to a creditor who cannot be found or cannot be identified shall be considered as paid in full if paid into Court.

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1. Subs. by Act 3 of 1950, s.3, for “the Court may, on the application of an y person interested

2. Ins. by Act 11 of 1927, s.3

Section 22. Concurrent proceedings in Courts in India

Where it is proved to the satisfaction of the Court that insolvency proceedings are pending in any other 1[Court in India] whether within or without the States against the same debtor and that the property of the debtor can be more conveniently distributed by such other Court, the Court may annul the adjudication or may stay all proceedings thereon.

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1. Subs. by the A.O.1950 for “British Court”

Section 23. Proceedings on annulment

(1) Where an adjudication is annulled, all sales and dispositions of property and payments duly made, and all acts theretofore done, by the official assignee or other person acting under his authority, or by the Court, shall be valid, but the property of the debtor who was adjudged insolvent shall vest in such person as the Court may appoint, or, in default of any such appointment, shall revert to the debtor to the extent of his right or interest therein on such terms and subject to such conditions (if any) as the Court may declare by order.

(2) Where a debtor has been released from custody under the provisions of this Act and the order of adjudication is annulled as aforesaid, the Court may, if it thinks fit, recommit the debtor to his former custody, and the jailor or keeper of the prison to whose custody such debtor is so recommitted shall receive such debtor into his custody according to such recommitment, and thereupon all processes which were in force against the person of such debtor at the time of such release as aforesaid shall be deemed to be still in force against him as if such order had not been made.

(3) Notice of the order annulling an adjudication shall be published 1in the Official Gazette and in such other manner as may be prescribed.

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1. The words “in the Gazette of India and” rep. by the A.O.1937.

Section 24. Insolvents schedule

(1) Where an order of adjudication is made against a debtor, he shall prepare and submit to the Court a schedule verified by affidavit, in such form and containing such particulars of and in relation to his affairs as may be prescribed.

(2) The schedule shall be so submitted within the following times, namely:—

(a) If the order is made on the petition of the debtor, within thirty days from the date of the order,

(b) If the order is made on the petition of a creditor, within thirty days from the date of service of the order.

(3) If the insolvent fails, without reasonable excuse, to comply with the requirements of this section, the Court may, on the application of the official assignee or of any creditor, make an order for his committal to the civil prison.

(4) If the insolvent fails to prepare and submit any such schedule as aforesaid, the official assignee may, at the expense of the estate, cause such a schedule to be prepared in manner prescribed.

Section 25. Protection order

(1) Any insolvent who shall have submitted his schedule as aforesaid may apply to the Court for protection, and the Court may, on such application, make an order for the protection of the insolvent from arrest or detention.

(2) A protection order may apply either to all the debts mentioned in the schedule or to any of them as the Court may think proper, and may commence and take effect at and for such time as the Court may direct and may be revoked or renewed as the Court may think fit.

(3) A protection order shall protect the insolvent from being arrested or detained in prison for any debt to which such order shall apply, and any insolvent arrested or detained contrary to the terms of such order shall be entitled to his release: Provided that no such order shall operate to prejudice the right of any creditor in the event of such order being revoked or the adjudication annulled.

(4) Any creditor shall be entitled to appear and oppose the grant of a protection order, but the insolvent shall be prima facie entitled to such order on production of a certificate signed by the official assignee that he has so far conformed to the provisions of this Act.

(5) The Court may make a protection order before an insolvent has submitted his schedule if it thinks it necessary to do so in the interests of the creditors.

Section 26. Meeting of creditors

(1) At any time after the making of an order of adjudication against an insolvent, the Court, on the application of a creditor or of the official assignee, may direct that a meeting of creditors shall be held to consider the circumstances of the insolvency and the insolvent’s schedule and his explanation thereof and generally as to the mode of dealing with the property of the insolvent.

(2) With respect to the summoning of and proceedings at a meeting of creditors the rules in the First Schedule shall be observed.

Section 27. Public examination of the insolvent

(1) Where the Court makes an order of adjudication it shall hold a public sitting on a day to be appointed by the Court, of which notice shall be given to creditors in the prescribed manner, for the examination of the insolvent, and the insolvent shall attend thereat, and shall be examined as to his conduct, dealings and property.

(2) The examination shall be held as soon as conveniently may be after the expiration of the time for the filing of the insolvent’s schedule.

(3) Any creditor who has tendered a proof or a legal practitioner on his behalf may question the insolvent concerning his affairs and the causes of his failure.

(4) The official assignee shall take part in the examination of the insolvent; and for the purpose thereof, subject to such directions as the Court may give, may be represented by a legal practitioner.

(5) The Court may put such questions to the insolvent as it may think expedient.

(6) The insolvent shall be examined upon oath, and it shall be his duty to answer all such questions as the Court may put or allow to be put to him.Such notes of the examination as the Court thinks proper shall be taken down in writing and shall be read over either to or by the insolvent and signed by him, and may thereafter be used in evidence against him and shall be open to the inspection of any creditor at all reasonable times.

(7) When the Court is of opinion that the affairs of the insolvent have been sufficiently investigated, it shall, by order, declare that his examination is concluded, but such order shall not preclude the Court from directing further examination of the insolvent whenever it may deem fit to do so.

(8) Where the insolvent is a lunatic or suffers from any such mental or physical affliction or disability as in the opinion of the Court makes him unfit to attend his public examination, or is a woman who according to the customs and manners of the country ought not to be compelled to appear in public, the Court may make an order dispensing with such examination, or directing that the insolvent be examined on such terms, in such manner and at such place as to the Court seems expedient.

Section 28. Submission of proposal and acceptance by creditors

(1) An insolvent may at any time after the making of an order of adjudication submit a proposal for a composition in satisfaction of his debts or a proposal for a scheme of arrangement of his affairs in the prescribed form, and such proposal shall be submitted by the official assignee to a meeting of creditors.

(2) The official assignee shall send to each creditor who is mentioned in the schedule, or who has tendered a proof before the meeting, a copy of the insolvent’s proposals with a report thereon, and if on the consideration of such proposal the majority in number and three-fourths in value of all the creditors whose debts are proved resolve to accept the proposal, the same shall be deemed to be duly accepted by the creditors.

(3) The insolvent may at the meeting amend the terms of his proposal if the amendment is in the opinion of the official assignee calculated to benefit the general body of creditors.

(4) Any creditor who has proved his debt may assent to or dissent from the proposal by a letter, in the prescribed form, addressed to the official assignee so as to be received by him not later than the day preceding the meeting, and any such assent or dissent shall have effect as if the creditor had been present and had voted at the meeting.

Section 29. Approval of proposal by Court

(1) The insolvent or the official assignee may after the proposal is accepted by the creditors apply to the Court to approve it, and notice of the time appointed for hearing the application shall be given to each creditor who has proved.

(2) Except where an estate is being summarily administered or special leave of the Court has been obtained, the application shall not be heard until after the conclusion of the public examination of the insolvent. Any creditor who has proved may be heard by the Court in opposition to the application notwithstanding that he may at a meeting of creditors have voted for the acceptance of the proposal.

(3) The Court shall before approving the proposal hear a report of the official assignee as to the terms thereof and as to the conduct of the insolvent and any objections which may be made by or on behalf of any creditor.

(4) Where the Court is of opinion that the terms of the proposal are not reasonable or are not calculated to benefit the general body of creditors or in any case in which the Court is required to refuse the insolvent’s discharge, the Court shall refuse to approve the proposal.

(5) Where any facts are proved on proof of which the Court would be required either to refuse, suspend or attach conditions to the debtor’s discharge, the Court shall refuse to approve the proposal unless it provides reasonable security for payment of not less than four annas in the rupee on all the unsecured debts provable against the debtor’s estate.

(6) No composition or scheme shall be approved by the Court which does not provide for the payment in priority to other debts of all debts directed to be so paid in the distribution of the property of an insolvent.

(7) In any other case the Court may either approve or refuse to approve the proposal.

Section 30. Order on approval

(1) If the Court approves the proposal, the terms shall be embodied in an order of the Court, and an order shall be made annulling the adjudication, and the provisions of section 23, sub-sections (1) and (3), shall thereupon apply, and the composition or scheme shall be binding on all the creditors so far as relates to any debt due to them from the insolvent and provable in insolvency.

(2) The provisions of the composition or scheme may be enforced by the Court on application by any person interested, and any disobedience of an order of the Court made on the application shall be deemed a contempt of Court.

Section 31. Power to re-adjudge debtor insolvent

(1) If default is made in the payment of any instalment due in pursuance of any composition or scheme, approved as aforesaid, or if it appears to the Court that the composition or scheme cannot proceed without injustice or undue delay or that the approval of the Court was obtained by fraud, the Court may, if it thinks fit, on application by any person interested, re-adjudge the debtor insolvent and annul the composition or scheme, and the property of the debtor shall thereupon vest in the official assignee but without prejudice to the validity of any transfer or payment duly made or of anything duly done under or in pursuance of the composition or scheme.

(2) Where a debtor is re-adjudged insolvent under sub-section (1), all debts provable in other respects which have been contracted before the date of such re-adjudication shall be provable in the insolvency.

Section 32. Limitation of effect of composition or scheme

Notwithstanding the acceptance and approval of a composition or scheme, the composition or scheme shall not be binding on any creditor so far as regards a debt or liability from which, under the provisions of this Act, the insolvent would not be discharged by an order of discharge in insolvency, unless the creditor assents to the composition or scheme.

Section 33. Duties of insolvent as to discovery and realization of property

(1) Every insolvent shall, unless prevented by sickness or other sufficient cause, attend any meeting of his creditors which the official assignee may require him to attend, and shall submit, to such examination and give such information as the meeting may require.

(2) The insolvent shall—

(a) Give such inventory of his property, such list of his creditors and debtors, and of the debts due to and from them respectively,

(b) Submit to such examination in respect of his property or his creditors,

(c) Wait at such times and places on the official assignee or special manager,

(d) Execute such powers-of-attorney, transfers and instruments, and

(e) Generally do all such acts and things in relation to his property and the distribution of the proceeds amongst his creditors.

As may be required by the official assignee or special manager or may be prescribed or be directed by the Court by any special order or orders made in reference to any particular case, or made on the occasion of any special application by the official assignee or special manager, or any creditor or person interested.

(3) The insolvent shall aid, to the utmost of his power, in the realization of his property and the distribution of the proceeds among his creditors.

(4) If the insolvent wilfully fails to perform the duties imposed upon him by this section, or to deliver up possession to the official assignee of any part of his property, which is divisible amongst his creditors under this Act and which is for the time being in his possession or under his control, he shall, in addition to any other punishment to which he may be subject be, guilty of a contempt of Court, and may be punished accordingly.

Section 34. Arrest of insolvent

(1) The Court may, either of its own motion or at the instance of the official assignee or of any creditor, by warrant addressed to any police-officer or prescribed officer of the Court, cause an insolvent to be arrested, and committed to the civil prison or if in prison to be detained until such time as the Court may order, under the following circumstances, namely:—

(a) If it appears to the Court that there is probable reason for believing that he has absconded or is about to abscond with a view of avoiding examination in respect of his affairs, or of otherwise avoiding, delaying or embarrassing proceedings in insolvency against him; or

(b) If it appears to the Court that there is probable reason for believing that he is about to remove his property with a view of preventing or delaying possession being taken of it by the official assignee, or that there is probable reason for believing that he has concealed or is about to conceal or destroy any of his property or any books, documents or writings which might be of use to his creditors in the course of his insolvency; or

(c) If he removes any property in his possession above the value of fifty rupees without the leave of the official assignee.

(2) No payment or composition made or security given after arrest made under this section shall be exempt from the provisions of this Act relating to fraudulent preferences.

Section 35. Redirection of letters

Where the official assignee has been appointed interim receiver or an order of adjudication is made, the Court, on the application of the official assignee, may, from time to time, order that for such time, not exceeding three months, as the Court thinks fit, all post letters, whether registered or unregistered, parcels and money orders addressed to the debtor at any place or places mentioned in the order for redirection, shall be re-directed or delivered by the Postal authorities in the States, to the official assignee, or otherwise as the Court directs; and the same shall be done accordingly.

Section 36. Discovery of Insolvents property

(1) The Court may, on the application of the official assignee or of any creditor who has proved his debt, at any time after an order of adjudication has been made, summon before it in such manner as may be prescribed the insolvent or any person known or suspected to have in his possession any property belonging to the insolvent, or supposed to be indebted to the insolvent, or any person whom the Court may deem capable of giving information respecting the insolvent, his dealings or property; and the Court may require any such person to produce any documents in his custody or power refining to the insolvent, his dealings or property.

(2) If any person so summoned, after having been tendered a reasonable sum, refuses to come before the Court at the time appointed, or refuses to produce any such document, having no lawful impediment made known to the Court at the time of its sitting and allowed by it, the Court may, by warrant, cause him to be apprehended and brought up for examination.

(3) The Court may examine any person so brought before it concerning the insolvent, his dealings or property, and such person may be represented by a legal practitioner.

(4) 1[If on his examination any such person admits] that he is indebted to the insolvent, the Court may, on the application of the official assignee, order him to pay to the official assignee, at such time and in such manner as to the Court seems expedient, the amount in which he is indebted, or any part thereof, either in full discharge of the whole amount or not, as the Court thinks fit, with or without costs of the examination.

(5) 2[If on his examination any such person admits] that he has in his possession any property belonging to the insolvent, the Court may, on the application of the official assignee, order him to deliver to the official assignee that property, or any part thereof at such time, in such manner and on such terms as to the Court may seem just.

(6) Orders made under sub-sections (4) and (5) shall be executed in the same manner as decrees for the payment of money or for the delivery of property under the Code of Civil Procedure, 1908, respectively.

(7) Any person making any payment or delivery in pursuance of an order made under sub-section (4) or sub-section (5) shall by such payment or delivery be discharged from all liability whatsoever in respect of such debt or property.

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1. Subs. by Act 19 of 1927, s.4, for “If, on the examination of any such person, the Court is satisfied”

2. Subs. by Act 19 of 1927, s.4, for “If, on the examination of any such person, the Court is satisfied”

Section 37. Power to issue commissions

The Court shall have the same powers to issue commissions and letters of request for the examination on commission or otherwise of any person liable to examination under section 36 as it has for the examination of witnesses under the Code of Civil Procedure, 1908.

Section 38. Discharge of insolvent

(1) An insolvent may, at any time after the order of adjudication, apply to the Court for an order of discharge, and the Court shall appoint a day for hearing the application, but, save where the public examination of the insolvent has been dispensed with under the provisions of this Act, the application shall not be heard until after such examination has been concluded. The application shall be heard in open Court.

(2) On the hearing of the application, the Court shall cake into consideration any report of the official assignee as to the insolvent’s conduct and affairs, and, subject to the provisions of section 39, may—

(a) Grant or refuse an absolute order of discharge, or

(b) Suspend the operation of the order for a specified time, or

(c) Grant an order of discharge subject to any conditions with respect to any earnings or income which may afterwards become due to the insolvent, or with respect to his after acquired property.

Section 39. Cases in which the Court must refuse an absolute discharge

(1) The Court shall refuse the discharge in all cases where the insolvent has committed any offence under this Act, or under sections 421 to 424 of the Indian Penal Code, and shall, on proof of any of the facts hereinafter mentioned, either–

(a) Refuse the discharge; or

(b) Suspend the discharge for a specified time; or (c) Suspend the discharge until a dividend of not less than four annas in the rupee has been paid to the creditors; or (d) Require the insolvent as a condition of his discharge to consent to a decree being passed against him in favour of the official assignee for any balance or part of any balance of the debts provable under the insolvency which is not satisfied at the date of his discharge; such balance or part of any balance of the debts to be paid out of the future earnings or after-acquired property of the insolvent in such manner and subject to such conditions as the Court may direct; but in that case the decree shall not be executed without leave of the Court, which leave may be given on proof that the insolvent has since his discharge acquired property or income available for payment of his debts.

(2) The facts hereinbefore referred to are—

(a) That the insolvent’s assets are not of a value equal to four annas in the rupee on the amount of his unsecured liabilities, unless he satisfies the Court that the fact that the assets are not of such value has arisen from circumstances for which he cannot justly be held responsible;

(b) That the insolvent has omitted to keep such books of account as are usual and proper in the business carried on by him and as sufficiently disclose his business transactions and financial position within the three years immediately preceding his insolvency;

(c) That the insolvent has continued to trade after knowing himself to be insolvent;

(d) That the insolvent has contracted any debt provable under this Act without having at the time of contracting it any reasonable or probable ground of expectation (the burden of proving which shall lie on him) that he would be able to pay it;

(e) That the insolvent has failed to account satisfactorily for any loss of assets or for any deficiency of assets to meet his liabilities;

(f) That the insolvent has brought on or contributed to his insolvency by rash or hazardous speculations or by unjustifiable extravagance in living or by gambling, or by culpable neglect of his business affairs;

(g) That the insolvent has put any of his creditors to unnecessary expense by a frivolous or vexatious defence to any suit properly brought against him;

(h) That the insolvent has within three months preceding the time of presentation of the petition incurred unjustifiable expense by bringing a frivolous or vexatious suit;

(i) That the insolvent has within three months preceding the date of the presentation of the petition, when unable to pay his debts as they become due, given an undue preference to any of his creditors;

(j) That the insolvent has concealed or removed his books or his property or any part thereof or has been guilty of any other fraud or fraudulent breach of trust.

(3) The power of suspending and of attaching conditions to an insolvent’s discharge may be exercised concurrently.

(4) On any application for discharge the report of the official assignee shall be prima facie evidence and the Court may presume the correctness of any statement contained therein.

Section 40. Hearing of application for discharge

Notice of the appointment by the Court of the day for hearing the application for discharge shall be published in the prescribed manner and sent one month at least before the day so appointed to each creditor who has proved, and the Court may hear the official assignee and may also hear any creditor.At the hearing, the Court may put such questions to the insolvent and receive such evidence as it may think fit.

Section 41. Power to annul adjudication on failure to apply for discharge

If an insolvent does not appear on the day so appointed for hearing his application for discharge or if an insolvent shall not apply to the Court for an order of discharge within such time as may for be prescribed, the Court, on the application of the official assignee or of a creditor or of its own motion, may annul the adjudication or make such other order as it may think fit, and the provisions of section 23 shall apply on such annulment.

Section 42. Renewal of application and variation of terms of order

(1) Where the Court refuses the discharge of the insolvent it may, after such time and in such circumstances as may be prescribed, permit him to renew his application.

(2) Where an order of discharge is made subject to conditions and at any time after the expiration of two years from the date of the order the insolvent shall satisfy the Court that there is no reasonable probability of his being in a position to comply with the terms of such order, the Court may modify the terms of the order, or of any substituted order, in such manner and upon such conditions as it may think fit.

Section 43. Duty of discharged insolvent to assist in realization of property

A discharged insolvent shall, notwithstanding his discharge, give such assistance as the official assignee may require in the realization and distribution of such of his property as is vested in the official assignee, and, if he fails to do so, shall be guilty of a contempt of Court; and the Court may also, if it thinks fit, revoke his discharge, but without prejudice to the validity of any sale, disposition or payment duly made or thing duly done subsequent to the discharge, but before its revocation.

Section 44. Fraudulent settlements

In either of the following cases, that is to say —

(1) In the case of a settlement made before and in consideration of marriage where the settlor is not at the time of making the settlement able to pay all his debts without the aid of the property comprised in the settlement; or

(2) In the case of any covenant or contract made in consideration of marriage for the future settlement on or for the settlor’s wife or children of any money or property wherein he had not at the date of his marriage any estate or interest (not being money or property of or in right of his wife);

If the settlor is adjudged insolvent or compounds or arranges with his creditors, and it appears to the Court that the settlement, covenant or contract was made in order to defeat or delay creditors, or was unjustifiable having regard to the state of the settlor’s affairs at the time when it was made, the Court may refuse or suspend an order of discharge or grant an order subject to conditions or refuse to approve a composition or arrangement.

Section 45. Effect of order of discharge

(1) An order of discharge shall not release the insolvent from—

(a) Any debt due to the Government,

(b) Any debt or liability incurred by means of any fraud or fraudulent breach of trust to which he was a party; or

(c) Any debt or liability in respect of which he has obtained forbearance by any fraud to which he was a party; or

(d) Any liability under an order for maintenance made under section 488 of the Code of Criminal Procedure, 1898.

(2) Save as otherwise provided by sub-section (1), an order of discharge shall release the insolvent from all debts provable in insolvency.

(3) An order of discharge shall be conclusive evidence of the insolvency, and of the validity of the proceedings therein.

(4) An order of discharge shall not release any person who at the date of the presentation of the petition was a partner or co-trustee with the insolvent or was jointly bound or had made any joint contract with him, or any person who was surety or in the nature of a surety for him.

Section 46. Debts provable in insolvency

(1) Demands in the nature of unliquidated damages arising otherwise than by reason of a contract or breach of trust shall not be provable in insolvency.

(2) A person having notice of the presentation of any insolvency petition by or against the debtor shall not prove for any debt or liability contracted by the debtor subsequently to the date of his so having notice.

(3) Save as provided by sub-sections (1) and (2), all debts and liabilities, present or future, certain or contingent, to which the debtor is subject when he is adjudged an insolvent or to which he may become subject before his discharge by reason of any obligation incurred before the date of such adjudication, shall be deemed to be debts provable in insolvency.

(4) An estimate shall be made by the official assignee of the value of any debt or liability provable as aforesaid which by reason of its being subject to any contingency or contingencies, or for any other reason, does not bear a certain value:

Provided that if in his opinion the value of the debt or liability is incapable of being fairly estimated, he shall issue a certificate to that effect, and thereupon the debt or liability shall be deemed to be a debt not provable in insolvency.

Explanation.—For the purposes of this section “liability” includes any compensation for work or labour done, any obligation or possibility of an obligation to pay money or money’s worth on the breach of any express or implied covenant, contract, agreement or undertaking, whether the breach does or does not occur, or is or is not likely to occur or capable of occurring, before the discharge of the debtor, and generally it includes any express or implied engagement, agreement or undertaking to pay, or capable of resulting in the payment of, money or money’s worth, whether the payment is, as respects amount, fixed or unliquidated; as respects time, present or future, certain or dependent on any contingency or contingencies; as to mode of valuation, capable of being ascertained by fixed rules, or as matter of opinion.

Section 47. Mutual dealings and set-off

Where there have been mutual dealings between an insolvent and a creditor proving or claiming to prove a debt under this Act, an account shall be taken of what is due from the one party to the other in respect of such mutual dealings, and the sum due from the one party shall be set off against any sum due from the other party, and the balance of the account, and no more, shall be claimed or paid on either side respectively:

Provided that a person shall not be entitled under this section to claim the benefits of any set-off against the property of an insolvent in any case where he had at the time of giving credit to the insolvent notice of the presentation of any insolvency petition by or against him.

Section 48. Rules as to proof of debts

With respect to the mode of proving debts, the right of proof by secured and other creditors, the admission and rejection of proofs, and the other matters referred to in the Second Schedule, the rules in that Schedule shall be observed.

Section 49. Priority of debts

(1) In the distribution of the property of the insolvent there shall be paid in priority to all other debts —

(a) All debts due to the Government or to any local authority;

(b) All salary or wages of any clerk, servant or labourer in respect of services rendered to the insolvent during four months before the date of the presentation of the petition, not exceeding three hundred rupees for each such clerk, and one hundred rupees for each such servant or labourer; and

(c) Rent due to a landlord from the insolvent: provided the amount payable under this clause shall not exceed one month’s rent.

(2) The debts specified in sub-section (1) shall rank equally between themselves, and shall be paid in full, unless the property of the insolvent is insufficient to meet them, in which case they shall abate in equal proportions between themselves.

(3) Subject to the retention of such sums as may be necessary for the expenses of administration or otherwise, the debts specified in sub-section (1) shall be discharged forthwith in so far as the property of the insolvent is sufficient to meet them.

(4) In the case of partners, the partnership property shall be applicable in the first instance in payment of the partnership debts and the separate property of each partner shall be applicable in the first instance in payment of his separate debts. Where there is a surplus of the separate property of the partners, it shall be dealt with as part of the partnership property; and where there is a surplus of the partnership property, it shall be dealt with as part of the respective separate property in proportion to the rights and interests of each partner in the partnership property.

(5) Subject to the provisions of this Act, all debts proved in insolvency shall be paid rateably according to the amounts of such debts respectively and without any preference.

(6) Where there is any surplus after payment of the foregoing debts, it shall be applied in payment of interest from the date on which the debtor is adjudged an insolvent at the rate of six per centum per annum on all debts proved in the insolvency.

Section 50. Rent due before adjudication

After an order of adjudication has been made no distress for in rent due before such order shall be made upon the goods or effects of the insolvent, unless the order be annulled, but the landlord or part to whom the rent may be due shall be entitled to prove in respect of such rent.

Section 51. Relation of assignees title

The insolvency of a debtor, whether the same takes place on the debtor’s own petition or upon that of a creditor or creditors, shall deemed to have relation back to and to commence at–

(a) The time of the commission of the act of insolvency on which an order of adjudication is made against him, or

(b) If the insolvent is proved to have committed more acts of insolvency than one, the time of the first of the acts of insolvency proved to have been committed by the insolvent within three months next preceding the date of the presentation of the insolvency petition:

Provided that no insolvency petition or order of adjudication shall be rendered invalid by reason of any act of insolvency committed anterior to the debt of the petitioning creditor.

Section 52. Description of insolvents property divisible amongst creditors

(1) The property of the insolvent divisible amongst his creditors, and in this Act referred to as the property of the insolvent, shall not comprise the following particulars, namely:—

(a) Property held by the insolvent on trust for any other a person;

(b) The tools (if any) of his trade and the necessary wearing apparel, bedding, cooking vessel, and furniture of himself, his wife and children, to a value, inclusive of tools and apparel and other necessaries as aforesaid, not exceeding three hundred rupees in the whole.

(2) Subject as aforesaid, the property of the insolvent shall comprise the following particulars, namely:—

(a) All such property as may belong to or be vested in the insolvent at the commencement of the insolvency or may be acquired by or devolve on him before his discharge;

(b) The capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge; and

(c) All goods being at the commencement of the insolvency in the possession, order or disposition of the insolvent, in his trade or business by the consent and permission of the true owner under such circumstances that he is the reputed owner thereof:

Provided that things in action other than debts due or growing due to the insolvent in the course of his trade or business shall not be deemed goods within the meaning of clause (c):

Provided also that the true owner of any goods which have become divisible among the creditors of the insolvent under the provisions of clause (c) may prove for the value of such goods.

Section 53. Restriction of rights of creditor under execution

(1) Where execution of a decree has issued against the property of a debtor, no person shall be entitled to the benefit of the execution against the official assignee, except in respect of assets realised in the course of the execution by sale or otherwise 1[before the date of the admission of the insolvency petition].

(2) Nothing in this section shall affect the right of a secured creditor in respect of property against which a decree is executed.

(3) A person who in good faith purchases the property of a debtor under a sale in execution shall in all cases acquire a good title to it against the official assignee.

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1. Subs. by Act 3 of 1950, s.4, for “before the date of the order of adjudication and before he had notice of the presentation of any insolvency petition by or against the debtor.

Section 54. Duties of Court executing decree as to property taken in execution

Where execution of a decree has issued against any property of a debtor which is saleable in execution, and before the sale thereof to notice is given to the Court executing the decree that an order of adjudication has been made against the debtor, the Court shall, on application, direct the property, if in the possession of the Court, to be delivered to the official assignee, but the costs of the execution shall be a first charge on the property so delivered, and the official assignee may sell the property or an adequate part thereof for the purpose of satisfying the charge.

Section 55. Avoidance of voluntary transfer

Any transfer of property, not being a transfer made before any and in consideration of marriage, or made in favour of a purchaser or incumbrancer in good faith and for valuable consideration, shall, if the transferor is adjudged insolvent within two years after the date of the transfer, be void against the official assignee.

Section 56. Avoidance of preference in certain cases

(1) Every transfer of property, every payment made, every obligation incurred, and every judicial proceeding taken or suffered by any person unable to pay his debts as they become due from his own money in favour of any creditor, with a view of giving that creditor a preference over the other creditors, shall, if such person is adjudged insolvent on a petition presented within three months after the date thereof, be deemed fraudulent and void as against the official assignee.

(2) This section shall not affect the rights of any person making title in good faith and for valuable consideration through or under a creditor of the insolvent.

Section 57. Protection of bona fide transactions

Subject to the foregoing provisions with respect to the effect of insolvency on an execution and with respect to the avoidance of certain transfers and preferences, nothing in this Act shall invalidate in the case of an insolvency—

(a) Any payment by the insolvent to any of his creditors;

(b) Any payment or delivery to the insolvent;

(c) Any transfer by the insolvent for valuable consideration; or

(d) Any contract or dealing by or with the insolvent for valuable consideration:

Provided that any such transaction takes place before the date of the order of adjudication and that the person with whom such transaction takes place has not at the time notice of the presentation of any insolvency petition by or against the debtor.

Section 58. Possession of property by official assignee

(1) The official assignee shall, as soon as may be, take possession of the deeds, books and documents of the insolvent and all other of parts of his property capable of manual delivery.

(2) The official assignee shall, in relation to and for the purpose of acquiring or retaining possession of the property of the insolvent, be in the same position as if he were a receiver of the property appointed under the Code of Civil Procedure, 1908, and the Court may on his application enforce such acquisition or retention accordingly.

(3) Where any part of the property of the insolvent consists of stock, shares in ships, shares, or any other property transferable in the books of any company, office or person, the official assignee may exercise the right to transfer the property to the same extent as the insolvent might have exercised it, if he had not become insolvent.

(4) Where any part of the property of the insolvent consists of things in action, such things shall be deemed to have been duly transferred to the official assignee.

(5) Any treasurer or other officer, or any banker, attorney or agent of an insolvent, shall pay and deliver to the official assignee all money and securities in his possession or power as such officer, banker, attorney or agent, which he is not by law entitled to retain as against the insolvent or the official assignee. If he fails so to do, he shall be guilty of a contempt of Court, and shall be punishable accordingly on the application of the official assignee.

Section 59. Seizure of property of insolvent

(1) The Court may grant a warrant to any prescribed officer of the Court or any police-officer above the rank of a constable to seize any part of the property of an insolvent in the custody or possession of the insolvent or of any other person, and with a view to such seizure to break open any house, building or room of the insolvent where the insolvent is supposed to be, or any building or receptacle of the insolvent where any of his property is supposed to be.

(2) Where the Court is satisfied that there is reason to believe that property of the insolvent is concealed in a house or place not belonging to him, the Court may, if it thinks fit, grant a search-warrant to any such officer as aforesaid who may execute it according to its tenor.

Section 60. Appropriation of portion of pay or other income to creditors

(1) Where an insolvent is an officer of 1[the Indian Army or Navy], or an officer or clerk or otherwise employed or engaged in the civil service of the Government, the official assignee shall receive for distribution amongst the creditors so much of the insolvent’s pay or salary liable to attachment in execution of a decree as the Court may direct.

(2) Where an insolvent is in the receipt of a salary or income other; than as aforesaid, the Court may, at any time after adjudication an from time to time, make such order as it thinks just for the payment to the official assignee, for distribution among the creditors of so much of such salary or income as may be liable to attachment in execution of a decree, or of any portion thereof.

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1. Subs. by the A.O.1950 for “the Army or Navy or of the Royal Indian Navy”

Section 61. Vesting and transfer of property

1[Vesting and transfer of property. The property of the insolvent shall pass from official assignee to official assignee, and shall vest in the official assignee for the time being during his continuance in office, without any transfer whatever.

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1. In the application of the Act to Bombay and Madras, this section has been repealed: see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11 and Sch.I and the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.2.

Section 62. Disclaimer of onerous property

(1) Where any part of the property of an insolvent consists of land of any tenure burdened with onerous covenants, of shares or stocks in companies, of unprofitable contracts, or of any other property that is unsaleable, or not readily saleable, by reason of its binding the possessor thereof to the performance of any onerous act or to the payment of any sum of money, the official assignee may, notwithstanding that he may have endeavoured to sell or have taken possession of the property, or exercised any act of ownership in relation thereto, but subject always to the provisions hereinafter contained in that behalf, by writing signed by him, at any time within twelve months after the insolvent has been adjudged insolvent, disclaim the property:

Provided that, where any such property has not come to the knowledge of the official assignee within one month after such adjudication as aforesaid, he may disclaim the property at any time within twelve months after he has first become aware thereof.

(2) The disclaimer shall operate to determine, as from the date thereof, the rights, interest and liabilities of the insolvent and his property in or in respect of the property disclaimed, and shall also discharge the official assignee from all personal liability in respect of the property disclaimed as from the date when the property vested in him, but shall not, except so far as is necessary for the purpose of releasing the insolvent and his property and the official assignee from liability, affect the rights or liabilities of any other person.

Section 63. Disclaimer of leaseholds

Subject always to such rules as may be made in this behalf, the official assignee shall not be entitled to disclaim any leasehold interest without the leave of the Court; and the Court may, before or on granting such leave, require such notices to be given to persons interested, and impose such terms as a condition of granting leave, and make such orders with respect to fixtures, tenant’s improvements and other matters arising out of the tenancy, as the Court thinks just.

Section 64. Power to call on official assignee to disclaim

The Official assignee shall not be entitled to disclaim any property in pursuance of section 62 in any case where an application of in writing has been made to the official assignee by any person interested in the property requiring him to decide whether he will disclaim, and the official assignee has for a period of twenty-eight days after the receipt of the application, or such extended period as may be allowed by the Court, declined or neglected to give notice that he disclaims the property; and in the case of a contract, if the official assignee, after such application as aforesaid, does not within the said period or extended period disclaim the contract, he shall be deemed to have adopted it.

Section 65. Power for Court to rescind contract

The Court may, on the application of any person who is, as against the official assignee, entitled to the benefit or subject to the burden of a contract made with the insolvent, make an order rescinding the contract on such terms as to payment by or to either party of damages for the non-performance of the contract, or otherwise, as to the Court may seem equitable, and any damages payable under the order to any such person may be proved by him as a debt under the insolvency.

Section 66. Power for Court to make vesting order in respect of disclaimed property

(1) The Court may, on the application of any person either claiming any interest in any disclaimed property, or under any liability not discharged by this Act in respect of any disclaimed property, and on hearing such persons as it thinks fit, make an order for the vesting of the property in or delivery thereof to any person entitled thereto, or to whom it may seem just that the same should be delivered by way of compensation for such liability as aforesaid, or a trustee for him, and on such terms as the Court thinks just; and on any such vesting order being made, the property comprised therein shall vest accordingly in the person therein named in that behalf without any transfer for the purpose:

Provided always, that, where the property disclaimed is of a leasehold nature, the Court shall not make a vesting order in favour of any person claiming under the insolvent, whether as under-lessee or as mortgagee except upon the terms of making such person subject to the same liabilities and obligations as the insolvent was subject to under the lease in respect of the property at the date when the insolvency petition was filed, and any under-lessee or mortgagee declining to accept a vesting order upon such terms shall be excluded from all interest in and security upon the property, and if there is no person claiming under the insolvent who is willing to accept an order upon such terms, the Court shall have power to vest the insolvent’s interest in the property in any person liable either personally or in a representative character, and either alone or jointly with the insolvent, to perform the lessee’s covenants in such lease, freed and discharged from all estates, incumbrances and interests created therein by the insolvent.

(2) The Court may, if it thinks fit, modify the terms prescribed by the foregoing proviso so as to make a person in whose behalf the vesting order may be made subject only to the same liabilities and obligations as if the lease had been assigned to him at the date when the insolvency petition was filed, and (if the case so requires) as if the lease had comprised only the property comprised in the vesting order.

Section 67. Persons injured by disclaimer may prove

Any person injured by the operation of a disclaimer under by the foregoing provisions shall be deemed to be a creditor of the insolvent to the amount of the injury, and may accordingly prove the same as a debt under the insolvency.

Section 68. Duty and powers of official assignee as to realization

(1) Subject to the provisions of this Act, the official assignee shall, with all convenient speed, realize the property of the insolvent, and for that purpose may—

(a) Sell all or any part of the property of the insolvent;

(b) Give receipts for any money received by him;

And may, by leave of the Court, do all or any of the following things namely:—

(c) Carry on the business of the insolvent so far as may be necessary for the beneficial winding up of the same;

(d) Institute, defend or continue any suit or other legal proceeding relating to the property of the insolvent;

(e) Employ a legal practitioner or other agent to take any proceedings or do any business which may be sanctioned by the Court;

(f) Accept as the consideration for the sale of any property of the insolvent a sum of money payable at a future time or fully paid shares, debentures or debenture stock in any limited company subject to such stipulations as to security and otherwise as the Court thinks fit;

(g) Mortgage or pledge any part of the property of the insolvent for the purpose of raising money for the payment of his debts or for the purpose of carrying on the business;

(h) Refer any dispute to arbitration, and compromise all debts, claims and liabilities, on such terms as may be agreed upon;

(i) Divide in its existing form amongst the creditors, according to its estimated value, any property which, from its peculiar nature or other special circumstances, cannot readily or advantageously be sold.

1[(2) The official assignee shall account to the Court and pay over all monies and deal with all securities in such manner {For Madras, the words “as is laid down in this Act or” have been ins.here by the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.3} as is prescribed or as the Court directs.

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1. In the application of the Act to Bombay, this sub-section has been repealed: see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11 and Sch.I.

Section 69. Declaration and distribution of dividends

(1) The official assignee shall, with all convenient speed, declare and distribute dividends amongst the creditors who have proved their debts.

(2) The first dividend (if any) shall be declared and be distributed within 1[one year] after the adjudication, unless the official assignee satisfies the Court that there is sufficient reason for postponing the declaration to a later date.

(3) Subsequent dividends shall, in the absence of sufficient reason to the contrary, be declared and be payable at intervals of not more than six months.

(4) Before declaring a dividend, the official assignee shall cause notice of his intention to do so to be published in the prescribed manner, and shall also send reasonable notice thereof to each creditor mentioned in the insolvent’s schedule who has not proved his debt.

(5) When the official assignee has declared a dividend, he shall send to each creditor who has proved a notice showing the amount of the dividend, and when and how it is payable, and, if required by any creditor, a statement in the prescribed form as to the particulars of the estate.

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1. Subs. by Act 3 of 1929, s.2, for “six months”.

Section 70. Joint and separate properties

Where one partner in a firm is adjudged insolvent, a creditor to whom the insolvent is indebted jointly with the other partners in the firm or any of them shall not receive any dividend out of the separate property of the insolvent until all the separate creditors have received the full amount of their respective debts.

Section 71. Calculation of dividends

(1) In the calculation and distribution of dividends, the official assignee shall retain 1[in his hands] sufficient assets to meet—

(a) Debts provable in insolvency and appearing from the insolvent’s statements or otherwise to be due to persons resident in places so distant that in the ordinary course of communication they have not had sufficient time to tender their proofs;

(b) Debts provable in insolvency the subject of claims not yet determined;

(c) Disputed proofs or claims; and

(d) The expenses necessary for the administration of the estate or otherwise.

(2) Subject to the provisions of sub-section (1), all money 2 [in hand] shall be distributed as dividends.

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1. For Madras, read: “under his control”—see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.4

2. For Madras, read: “realized by the official assignee”—see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.4.

Section 72. Right of creditor who has not proved debt before declaration of a dividend

Any creditor who has not proved his debt before the declaration of any dividend or dividends shall be entitled to be paid out of any money for the time being 1[in the hands] of the official assignee any dividend or dividends which he may have failed to receive, before that money is applied to the payment of any future dividend or dividends, but he shall not be entitled to disturb the distribution of any dividend declared before his debt was proved by reason that he has not participated therein.

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1. For Madras, read: “under the control”—see s.5, ibid.

Section 73. Final dividend

(1) When the official assignee has realized all the properly of the insolvent, or so much thereof as can, in his opinion, be realized without needlessly protracting the proceedings in insolvency, he shall, with the leave of the Court, declare a final dividend; but, before so doing, he shall give notice in manner prescribed to the persons whose claims to be creditors have been notified to him but not proved that, if they do not prove their claims, to the satisfaction of the Court, within the time limited by the notice, he will proceed to make a final dividend without regard to their claims.

(2) After the expiration of the time so limited, or, if the Court on application by any such claimant grants him further time for establishing his claim, then on the expiration of that further time, the property of the insolvent shall be divided among the creditors who have proved their debts, without regard to the claims of any other persons.

Section 74. No suit for dividend

1[No suit for dividend. No suit for a dividend shall lie against the official assignee, but, where the official assignee refuses to pay any dividend, the Court may, on the application of the creditor who is aggrieved by such refusal, order him to pay it, and also to pay out of his own money interest thereon at such rate as may be prescribed for the time that it is withheld, and the costs of the application.

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1. S.74 has been amended in its application to Bombay and Madras by the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.2, and the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 1943), s.6 .

Section 75. Power to allow insolvent to manage property, and allowance to insolvent for maintenance or service

(1) Subject to such conditions and limitations as may be prescribed, the official assignee may appoint the insolvent himself to superintend the management of the property of the insolvent or of any part thereof, or to carry on the trade (if any) of the insolvent, for the benefit of his creditors, and in any other respect to aid in administering the property in such manner and on such terms as the official assignee may direct.

(2) Subject as aforesaid, the Court may, from time to time, make such allowance as it thinks just to the insolvent out of his property, for the support of the insolvent and his family, or in consideration of his services, if he is engaged in winding up his estate, but any such allowance may at any time be varied or determined by the Court.

Section 76. Right of insolvent so surplus

The insolvent shall be entitled to any surplus remaining after payment in full of his creditors, with interest, as provided by this Act and of the expenses of the proceedings taken thereunder.

Section 77. Appointment and removal of official assignees of insolvents estate

1[(1)

(a) The Chief Justice of the High Court at Madras may from time to time appoint substantively or temporarily such persons as he thinks fit to the office of official assignee of insolvents’ estates and such person or persons as he thinks fit to the office of the deputy official assignee for the said Court and may, with the concurrence of a majority of the other Judges of the Court, remove the person for the time being holding any of the said offices for any cause appearing to the Court sufficient.

(b) The State Government of West Bengal shall, after consultation with, and with the concurrence of, the Chief Justice of the High Court at Calcutta, appoint substantively or temporarily a person to the office of official assignee of insolvents’ estates for the said Court and may, after the like consultation and with the like concurrence, appoint substantively or temporarily a person or persons to the office of the deputy official assignee for the said Court.

(c) For the High Court at Bombay, the State Government of Bombay2 may from time to time appoint substantively or temporarily such person as the State Government thinks fit to the office of official assignee of insolvents’ estates and such person or persons as the State Government thinks fit to the office of the deputy official assignee]

3[(1A) Subject to rules made under section 112,4 the deputy official assignee shall have all the powers and shall discharge all the duties and in exercise of such powers and in the discharge of such duties shall be subject to all the liabilities of the official assignee under this Act.]

(2) Every official assignee 9[and every deputy official assignee] shall give such security and shall be subject to such rules and shall act in such manner as may be prescribed.

5[(3) Not withstanding anything in sub-section (1), the persons substantively or temporarily holding the office of official assignee immediately before the commencement of this Act in the Courts for the relief of Insolvent Debtors at Calcutta, Madras and Bombay respectively under the Indian Insolvency Act, 1848, 6 shall, without further appointment for that purpose, become the official assignees, substantive or temporary, as the case may be, under this Act in the High Courts at Fort William, Madras and Bombay 7 respectively.8

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1. Subs. by the A.O.1937 for the original sub-section (1) as amended by Act 9 of 1926, s.7, and Act 10 of 1930, s.4.In its application to Calcutta, s.77 had been previously amended by the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), s.3.In its application to Madras, this section has been amended by the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.7

2. The words “and for the Court of the Judicial Commissioner of Sind, the Provincial Government of Sind” rep.by the A.O.1948

3. Ins. by act 10 of 1930, s.4.

4. In Calcutta read “112A” for “112”: see the Presidency-towns Insolvency (Ben.Amendment) Act, 1936 (Ben.18 of 1936), s.3 (b).

5. This sub-section has been replaced by another in Calcutta: see s.3 (c), ibid.

6. The words “and in the Chief Court of Lower Burma under that Act as applied by the Lower Burma Courts Act, 1900” rep.by the A.O.1937.

7. The words “and in the Chief Court of Lower Burma” rep., ibid.

8. For s.77A, applicable to Bombay and Madras, see the Presidency-towns Insolvency (Bombay Amendment) act, 1933 (Bom.20 of 1933), s.3 and the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.8 respectively.

9. Ins. by Act 10 of 1930, s.4}

Section 78. Power to administer oath

An official assignee may, for the purpose of affidavits verifying proofs, petitions or other proceedings under this Act, administer oaths.

Section 79. Duties as regards the insolvents conduct

(1) The duties of an official assignee shall have relation to the conduct of the insolvent as well as to the administration of his estate.

(2) In particulars it shall be the duty of the official assignee–

(a) To investigate the conduct of the insolvent and to report to the Court upon any application for discharge, stating whether there is reason to believe that the insolvent has whether there is reason to believe that the insolvent has committed any act which constitutes an offence under this Act or under sections 421 to 424 of the Indian Penal Code in connection with his insolvency or which would justify the Court in refusing, suspending or qualifying an order for his discharge;

(b) To make such other reports concerning the conduct of the insolvent as the Court may direct or as may be prescribed; and

(c) To take such part and give assistance in relation to the prosecution of any fraudulent insolvent as the Court may; direct or as may be prescribed.

Section 80. Duty to furnish list of creditors

The official assignee shall, whenever required by any creditor so to do and on payment by the creditor of the prescribed fee, furnish and send to the creditor by post a list of the creditors showing in the list the amount of the debt due to each of the creditors.

Section 81. Remuneration

1[Remuneration. (1) Such remuneration shall be paid to the official assignee as may be prescribed.

(2) No remuneration whatever beyond that referred to in sub section (1) shall be received by an official assignee as such.2

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1. In the application of the Act to Madras, ss.81 and 83 have been repealed, see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), ss.9 and 12.In the application of the Act to Bombay, s.84 has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11.For ss.81, 81B, 82, 82A, 82B, 82C and 84A, as applicable to Calcutta, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), ss.4 to 7.For ss.82 and 83, as applicable to Bombay, see Bombay Act 20 of 1933, ss.4 and 5.For ss.82, 82A, 82B, 84 and 84A, as applicable to Madras, see Madras Act 5 of 1943, ss.11 and 14.

2. In the application of the Act to Madras, ss.81 and 83 have been repealed, see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), ss.9 and 12.In the application of the Act to Bombay, s.84 has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11.For ss.81, 81B, 82, 82A, 82B, 82C and 84A, as applicable to Calcutta, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), ss.4 to 7.For ss.82 and 83, as applicable to Bombay, see Bombay Act 20 of 1933, ss.4 and 5.For ss.82, 82A, 82B, 84 and 84A, as applicable to Madras, see Madras Act 5 of 1943, ss.11 and 14.

Section 82. Misfeasance

1[Misfeasance. The Court shall call the official assignee to account for any misfeasance, neglect or omission which may appear in his accounts or otherwise, and may require the official assignee to make good any loss which the estate of the insolvent may have sustained by reason of the misfeasance, neglect or omission.2

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1. In the application of the Act to Madras, ss.81 and 83 have been repealed, see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), ss.9 and 12.In the application of the Act to Bombay, s.84 has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11.For ss.81, 81B, 82, 82A, 82B, 82C and 84A, as applicable to Calcutta, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), ss.4 to 7.For ss.82 and 83, as applicable to Bombay, see Bombay Act 20 of 1933, ss.4 and 5.For ss.82, 82A, 82B, 84 and 84A, as applicable to Madras, see Madras Act 5 of 1943, ss.11 and 14.

2. In the application of the Act to Madras, ss.81 and 83 have been repealed, see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), ss.9 and 12.In the application of the Act to Bombay, s.84 has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11.For ss.81, 81B, 82, 82A, 82B, 82C and 84A, as applicable to Calcutta, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), ss.4 to 7.For ss.82 and 83, as applicable to Bombay, see Bombay Act 20 of 1933, ss.4 and 5.For ss.82, 82A, 82B, 84 and 84A, as applicable to Madras, see Madras Act 5 of 1943, ss.11 and 14.

Section 83. Name under which to sue or be sued

1[Name under which to sue or be sued. The official assignee may sue and be sued by the name of “the official assignee of the property of, an insolvent,” inserting the name of the insolvent, and by that name may hold property of every description, make contracts, enter into any engagements binding on himself and his successors in office, and do all other acts necessary or expedient to be done in the execution of his office.

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1. In the application of the Act to Madras, ss.81 and 83 have been repealed, see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), ss.9 and 12.In the application of the Act to Bombay, s.84 has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11.For ss.81, 81B, 82, 82A, 82B, 82C and 84A, as applicable to Calcutta, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), ss.4 to 7.For ss.82 and 83, as applicable to Bombay, see Bombay Act 20 of 1933, ss.4 and 5.For ss.82, 82A, 82B, 84 and 84A, as applicable to Madras, see Madras Act 5 of 1943, ss.11 and 14.

Section 84. Office vacated by insolvency

1[Office vacated by insolvency. If an order of adjudication is made against an official assignee, he shall thereby vacate the office of official assignee.2

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1. In the application of the Act to Madras, ss.81 and83 have been repealed, see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), ss.9 and 12.In the application of the Act to Bombay, s.84 has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11.For ss.81, 81B, 82, 82A, 82B, 82C and 84A, as applicable to Calcutta, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), ss.4 to 7.For ss.82 and 83, as applicable to Bombay, see Bombay Act 20 of 1933, ss.4 and 5.For ss.82, 82A, 82B, 84 and 84A, as applicable to Madras, see Madras Act 5 of 1943, ss.11 and 14.

2. {In the application of the Act to Madras, ss.81 and 83 have been repealed, see the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), ss.9 and 12.In the application of the Act to Bombay, s.84 has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11.For ss.81, 81B, 82, 82A, 82B, 82C and 84A, as applicable to Calcutta, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), ss.4 to 7.For ss.82 and 83, as applicable to Bombay, see Bombay Act 20 of 1933, ss.4 and 5.For ss.82, 82A, 82B, 84 and 84A, as applicable to Madras, see Madras Act 5 of 1943, ss.11 and 14.

Section 85. Discretionary powers and control thereof

(1) Subject to the provisions of this Act and to the directions of the Court, the official assignee shall, in the administration of the property of the insolvent and in the distribution thereof amongst his creditors, have regard to any resolution that may be passed by the creditors at a meeting.

(2) The official assignee may, from time to time, summon meetings of the creditors for the purpose of ascertaining their wishes, and it shall be his duty to summon meetings at such times as the creditors, by resolution at any meeting, or the Court may direct, or whenever requested in writing to do so by one-fourth in value of the creditors who have proved.

(3) The official assignee may apply to the Court for directions in relation to any particular matter arising under the insolvency.

(4) Subject to the provisions of this Act, the official assignee shall use his own discretion in the management of the estate and its distribution among the creditors.

Section 86. Appeal to Court

If the insolvent or any of the creditors or any other person is aggrieved by any act or decision of the official assignee, he may at appeal to the Court, and the Court may confirm, reverse or modify the act or decision complained of, and make such order as it thinks just.

Section 87. Control of Court

(1) If any official assignee does not faithfully perform his duties and duly observe all the requirements imposed on him by any enactment, rules or otherwise, with respect to the performance of his duties, or if any complaint is made to the Court by any creditor in regard thereto, the Court shall enquire into the matter and take such action thereon as may be deemed expedient.

(2) The Court may at any time require any official assignee to answer any enquiry made by it in relation to any insolvency in which he is engaged, and may examine him or any other person on oath concerning the insolvency.

1[(3) The Court may also direct an investigation to be made of the books and vouchers of the official assignee.

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1. In the application of the Act to Bombay, this sub-section has been repealed, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.11 and Sch.I.

Section 88. Committee of inspection

The Court may, if it so thinks fit, authorize the creditors who have proved to appoint from among the creditors or holders of general proxies or general powers-of-attorney from such creditors, a committee of inspection for the purpose of superintending the administration of the insolvent’s property by the official assignee:

Provided that a creditor, who is appointed a member of a committee of inspection, shall not be qualified to act until he has proved.

Section 89. Control of committee of inspection over official assignee

The committee shall have such powers of control over the ton proceedings of the official assignee as may be prescribed.

Section 90. Power of the Court

(1) In proceedings under this Act the Court shall have the like powers and follow the like procedure as it has and follows in the exercise of its ordinary original civil jurisdiction:

Provided that nothing in this sub-section shall in any way limit the jurisdiction conferred on the Court under this Act.

(2) Subject to the provisions of this Act and rules, the costs of and incidental to any proceeding in the Court shall be in the discretion of the Court.

(3) The Court may at any time adjourn any proceedings before it upon such terms, if any, as it thinks fit to impose.

(4) The Court may at any time amend any written process or proceeding under this Act upon such terms, if any, as it thinks fit to impose.

(5) Where by this Act or by rules the time for doing any act or thing is limited, the Court may extend the time either before or after the expiration thereof, upon such terms, if any, as the Court thinks fit to impose.

(6) Subject to rules, the Court may in any matter take the whole or any part of the evidence either viva voce or by interrogatories, or upon affidavit, or by commission.

(7) For the purpose of approving a composition or scheme by joint debtors the Court may, if it thinks fit, and on the report of the official assignee that it is expedient so to do, dispense with the public examination of one of the joint debtors if he is unavoidably prevented from attending the examination by illness or absence abroad.

Section 91. Consolidation of petitions

1Consolidation of petitions. Where two or more insolvency petitions are presented against the same debtor or against joint debtors, or where joint debtors file separate petitions, the Court may consolidate the proceedings or any of them on such terms as the Court thinks fit.

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1. Sub-section (8) rep. by the A.O.1948.

Section 92. Power to change carriage of petition

Where the petitioner does not proceed with due diligence on his petition, the Court may substitute as petitioner any other creditor, to whom the debtor is indebted in the amount required by this Act in the case of a petitioning creditor.

Section 93. Continuance of proceedings on death of debtor

If a debtor by or against whom an insolvency petition has been presented dies, the proceedings in the matter shall, unless the Court otherwise orders, be continued as if he were alive.

Section 94. Power to stay proceedings

The Court may, at any time, for sufficient reason, make an order staying the proceedings under an insolvency petition, either altogether or for a limited time, on such terms and subject to such conditions as the Court thinks just.

Section 95. Power to present petition against a partner

Any creditor whose debt is sufficient to entitle him to present an insolvency petition against all the partners in a firm may present a petition against any one or more partners in the firm without including the others.

Section 96. Power to dismiss petition against some respondents only

Where there are more respondents than one to a petition, the Court may dismiss the petition as to one or more of them without prejudice to the effect of the petition as against the other or others of them.

Section 97. Separate insolvency petitions against partners

Where an order of adjudication has been made on an insolvency petition against or by one partner in a firm, any other insolvency petition against or by a partner in the same firm shall be presented in or transferred to the Court in which the first-mentioned petition is in course of prosecution; and such Court may give such directions for consolidating the proceedings under the petitions as it thinks just.

Section 98. Suits by official assignee and insolvents partners

(1) Where a partner in a firm is adjudged insolvent, the Court may authorize the official assignee to continue or commence and carry on any suit or other proceeding in his name and that of the insolvent’s partner; and any release by the partner of the debt or demand to which the proceeding relates shall be void.

(2) Where application for authority to continue or commence any suit or any other proceeding has been made under sub-section (1), notice of the application shall be given to the insolvent’s partner, and he may show cause against it, and on his application the Court may, if it thinks fit, direct that he shall receive his proper share of the proceeds of the proceeding, and if he does not claim any benefit therefrom he shall be indemnified against costs in respect thereof as the Court directs.

Section 99. Proceedings in partnership name

(1) Any two or more persons, being partners, or any person carrying on business under a partnership name, may take proceedings or be proceeded against under this Act in the name of the firm:

Provided that in that case the Court may, on application by any person interested, order the names of the persons who are partners in the firm, or the name of the person carrying on business under a partnership name, to be disclosed in such manner and verified on oath or otherwise, as the Court may direct.

(2) In the case of a firm in which one partner is an infant, an adjudication order may be made against the firm other than the infant partner.

Section 100. Warrants of Insolvency Courts

(1) A warrant of arrest issued by the Court may be executed in the same manner and subject to the same conditions as a warrant of arrest issued under the Code of Criminal Procedure, 1898, may be executed.

(2) A warrant to seize any part of the property of an insolvent, issued by the Court under section 59, sub-section (1), shall be in the form prescribed, and sections 77(2), 79, 82, 83, 84 and 102 of the said Code shall, so far as may be, apply to the execution of such warrant.

(3) A search-warrant issued by the Court under section 59, subsection (2), may be executed in the same manner and subject to the same conditions as a search-warrant for property supposed to be stolen may be executed under the said Code.

Section 101. Limitation of appeals

The period of limitation for an appeal from any act or decision of the official assignee, or from an order made by an officer of the Court empowered under section 6, shall be twenty days from the date of such act, decision or order, as the case may be.1

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1. For s.101A, applicable to Bombay only, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1939 (Bom.15 of 1939), s.2.

Section 101 A. Exclusion of time in computation of period of limitation in certain cases

1[Exclusion of time in computation of period of limitation in certain cases. Where an order of adjudication has been annulled under this Act, in computing the period of limitation prescribed for any suit or other legal proceeding (other than a suit or legal proceeding in respect of which the leave of the Court was obtained under section 17) which might have been brought but for the making of an order of adjudication under this Act, the period from the date of the order of adjudication to the date of the order of annulment shall be excluded:

Provided that nothing in this section shall apply to any suit or other legal proceeding in respect of a debt provable but not proved under this Act.]

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1. Ins. by Act 3 of 1950, s.5.

Section 102. Undischarged insolvent obtaining credit

An undischarged insolvent obtaining credit to the extent of fifty rupees or upwards from any person without informing such person that he is an undischarged insolvent shall, on conviction by a Magistrate, be punishable with imprisonment for a term which may extend to six months, or with fine, or with both.

Section 103. Punishment of insolvent for certain offences

Any person adjudged insolvent who–

(a) Fraudulently with the intent to conceal the state of his affairs or to defeat the objects of this Act,–

(i) Has destroyed or otherwise wilfully prevented or purposely withheld the production of any book, paper or writing relating to such of his affairs as are subject to investigation under this Act, or

(ii) Has kept or caused to be kept false books, or

(iii) Has made false entries in , or withheld entries from, or wilfully altered or falsified, any book, paper or writing relating to such of his affairs as are subject to investigation under this Act, or

(b) Fraudulently with intent to diminish the sum to be divided amongst his creditors or of giving an undue preference to any of the said creditors,–

(i) Has discharged or concealed any debt due to or from him, or

(ii) Has made away with, charged, mortgaged or concealed any part of his property of what kind soever, shall on conviction be punishable with imprisonment for a term which may extend to two years.

Section 103 A. Disqualifications of insolvent

1[Disqualifications of insolvent. (1) Where a debtor is adjudged or readjudged insolvent under this Act, he shall, subject to the provisions of this section, be disqualified from—

(a) Being appointed or acting as a Magistrate;

(b) Being elected to any office of any local authority where the appointment to such office is by election, or holding or exercising any such office to which no salary is attached; and

(c) Being elected or sitting or voting as a member of any local authority.

(2) The disqualifications which an insolvent is subject to under this section shall be removed, and shall cease if—

(a) The order of adjudication is annulled under sub-section (1) of section 21, or

(b) He obtains from the Court an order of discharge, whether absolute or conditional, with a certificate that his insolvency was caused by misfortune without any misconduct on his part.

(3) The Court may grant or refuse such certificate as it thinks fit.]

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1. Ins. by Act 11 of 1920, s.2

Section 104. Procedure on charge under section 103

1[Procedure on charge under section 103. (1) Where the Court is satisfied, after such preliminary inquiry, if any, as it thinks necessary, that there is ground for inquiring into any offence referred to in section 103 and appearing to have been committed by the insolvent, the Court may record a finding to that effect and make a complaint of the offence in writing to a Presidency Magistrate or a Magistrate of the first class having jurisdiction, and such Magistrate shall deal with such complaint in the manner laid down in the Code of Criminal Procedure, 1898 (5 of 1898).

(2) Any complaint made by the Court under sub-section (1) may be signed by such officer of the Court as the Court may appoint in this behalf.]

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1. Subs. by Act 9 of 1926, s.9, for the original s.104.

Section 105. Criminal liability after discharge or composition

Where an insolvent has been guilty of any of the offences specified in section 102 or section 103, he shall not be exempt from being proceeded against therefor by reason that he has obtained his discharge or that a composition or scheme of arrangement has been accepted or approved.

Section 106. Summary administration in small cases

(1) Where the Court is satisfied by affidavit or otherwise, or the official assignee reports to the Court, that the property of an insolvent is not likely to exceed in value three thousand rupees or such other less amount as may be prescribed, the Court may make an order that the insolvent’s estate be administered in a summary manner, and thereupon the provisions of this Act shall be subject to the following modifications, namely:—

(a) No appeal shall lie from any order of the Court, except by leave of the Court;

(b) No examination of the insolvent shall be held except on the application of a creditor or the official assignee;

(c) The estate shall, where practicable, be distributed in a single dividend;

(d) Such other modifications as may be prescribed with the view of saving expense and simplifying procedure:

Provided that nothing in this section shall permit the modification of the provisions of this Act relating to the discharge of the insolvent.

(2) The Court may at any time, if it thinks fit, revoke an order for the summary administration of an insolvent’s estate.

Section 107. Exemption of corporation, etc., from insolvency proceedings

No insolvency petition shall be presented against any corporation or against any association or company registered under any enactment for the time being in force.

Section 108. Administration in insolvency of estate of person dying insolvent

(1) Any creditor of a deceased debtor whose debt would have been sufficient to support an insolvency petition against the debtor, had he been alive, may present to the Court within the limits of whose ordinary original civil jurisdiction the debtor resided or carried on business for the greater part of the six months immediately prior to his decease, a petition in the prescribed form praying for an order for the administration of the estate of the deceased debtor under this Act.

(2) Upon the prescribed notice being given to the legal representative of the deceased debtor, the Court may, upon proof of the petitioner’s debt, unless the Court is satisfied that there is a reasonable probability that the estate will be sufficient for the payment of the debts owing by the deceased, make an order for the administration in insolvency of the deceased debtor’s estate, or may upon cause shown dismiss the petition with or without costs.

(3) A petition for administration under this section shall not be presented to the Court after proceedings have been commenced in any Court of justice for the administration of the deceased debtor’s estate; but that Court may in that case, on proof that the estate is insufficient to pay its debts, transfer the proceedings to the Court exercising jurisdiction in insolvency under this Act, and thereupon the last-mentioned Court may make an order for the administration of the estate of the deceased debtor, and the like consequences shall ensue as under an administration order made on the petition of a creditor.

Section 109. Vesting of estate and mode of administration

(1) Upon an order being made for the administration of a deceased debtor’s estate under section 108, the property of the debtor shall vest in the official assignee of the Court, and he shall forthwith proceed to realize and distribute the same in accordance with the provisions of this Act.

(2) With the modification hereinafter mentioned, all the provisions of Part III, relating to the administration of the property of an insolvent, shall, so far as the same are applicable, apply to the case of such administration order in like manner as to an order of adjudication under this Act.

(3) In the administration of the property of the deceased debtor under an order of administration, the official assignee shall have regard to any claims by the legal representative of the deceased debtor to payment of the proper funeral and testamentary expenses incurred by him in and about the debtor’s estate; and those claims shall be deemed a preferential debt under the order, and be payable in full, out of the debtor’s estate, in priority to all other debts.

(4) If, on the administration of the deceased debtor’s estate, any surplus remains in the hands of the official assignee after payment in full of all the debts due from the debtor, together with the costs of the administration and interest as provided by this Act in case of insolvency, such surplus shall be paid over to the legal representative of the deceased debtor’s estate, or dealt with in such other manner as may be prescribed.

Section 110. Payments or transfer by legal representatives

(1) After notice of the presentation of a petition under section 108 no payment or transfer of property made by the legal representative shall operate as a discharge to him as between himself and the official assignee.

(2) Save as aforesaid nothing in section 108 or section 109 or this section shall invalidate any payment made or act or thing done in good faith by the legal representative or by a District Judge acting under the powers conferred on him by section 64 of the Administrator-General’s Act, 1874 (2 of 1874), before the date of the order for administration.

Section 111. Saving of jurisdiction of Administrator-General

The provisions of sections 108, 109 and 110 shall not apply to any case in which probate or letters of administration to the estate of a deceased debtor have been granted to an Administrator-General.

Section 112. Rules

1[Rules. (1) The Courts having jurisdiction under this Act may from time to time make rules for carrying into effect the objects of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for and regulate—

(a) The fees and percentages to be charged under this Act and the manner in which the same are to be collected and accounted for and the account to which they are to be paid;

(b) The investment, whether separately or collectively, of unclaimed dividends, balances and other sums appertaining to the estates of insolvent debtors whether adjudicated insolvent under this or any former enactment; and the application of the proceeds of such investment;

(c) The proceedings of the official assignee in taking possession of and realising the estates of insolvent debtors;

1[* * *]

(e) The receipts, payments and accounts of the official assignee;

(f) The audit of the accounts of the official assignee;

(g) The payment5of the costs of the audit of his accounts out of the proceeds of the investments in his hands;

(h) The payment of the costs incurred in the prosecution of fraudulent debtors and in legal proceedings taken by the official assignee under the direction of the Court out of the proceeds aforesaid;

(i) The payment of any civil liability incurred by an official assignee acting under the order or direction of the Court;

(j) The proceedings to be taken in connection with proposals for composition and schemes of arrangement with the creditors of insolvent debtors;

(k) The intervention of the official assignee at the hearing of applications and matters relating to insolvent debtors and their estates;

2[(kk) Filing of lists of creditors and debtors and the affording of assistance to the Court by a petitioning debtor;]

(l) The examination by the official assignee of the books and papers of account of undischarged insolvent debtors;

(m) The service of notices in proceedings under this Act;

(n) The appointment, meetings and procedure of committees of inspection;

(o) The conduct of proceedings under this Act in the name of a firm;

(p) The forms to be used in proceedings under this Act;

(q) The procedure to be followed in the case of estates to be administered in a summary manner;

(r) The procedure to be followed in the case of estates of deceased persons to be administered under this Act;

3[(s) The distribution of work between the official assignee and his deputy or deputies ;]

4[and, in the case of the High Court at Madras, may also provide for and regulate the remuneration of the official assignee and the payment of the costs, charges and expenses of his establishment].7

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1. This section has been amended in its application to Bombay, Madras and Calcutta: see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.6; the Presidency-towns Insolvency (Bombay Amendment) Act, 1939 (Bom.15 of 1939), s.2; the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.15, and the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), s.8.

2. Ins. by act 19 of 1927, s.5

3. Ins. by the A.O.1937

4. Ins. by the A.O.1937

5. The words “of the remuneration of the official assignee, of the costs, charges and expenses of his establishment, and” rep., ibid}

6. Cl.(d) rep. by the A.O.1937.

7. For s.112A, applicable to Calcutta only, see the Presidency-towns Insolvency (Bengal Amendment) act, 1936 (Ben.18 of 1936), s.9.

Section 113. Sanction to rules

1[Sanction to rules. Rules made under the provisions of this Part shall be subject to the previous sanction of the State Government.]

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1. Subs. by the A.O.1937 for the original s.113

Section 114. Publication of Rules

Rules so made and sanctioned shall be published1 in the Official Gazette,2 and shall thereupon have the same force and effect with regard to proceedings under this Act in the Court which made them as if they had been enacted in this Act.

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1. The words “in the Gazette of India or” rep. by the A.O.1937.

2. The words “as the case may be” rep., ibid

Section 115. Exemption from duty of transfers, etc., under this Act

(1) Every transfer, mortgage, assignment, power-of attorney, proxy paper, certificate, affidavit, bond or other proceedings, of instrument or writing whatsoever before or under any order of the Court, and any copy thereof, shall be exempt from payment of any stamp or other duty whatsoever.

(2) No stamp-duty or fee shall be chargeable for any application made by the official assignee to the Court under this Act, or for the drawing and issuing of any order made by the Court on such application.

Section 116. The Gazette to be evidence

(1) A copy of the Official Gazette containing any notice inserted in pursuance of this Act shall be evidence of the facts to stated in the notice.

(2) A copy of the Official Gazette containing any notice of an order of adjudication shall be conclusive evidence of the order having been duly made, and of its date.

Section 117. Swearing of affidavits

Any affidavit may be used in a Court having jurisdiction under this Act if it is sworn—

(a) In 1[the States 2], before—

(i) Any Court or Magistrate, or

(ii) Any officer or other person appointed to administer oaths under the Code of Civil Procedure, 1908; (5 of 1908)

(b) In England, before any person authorized to administer oaths in His Majesty’s High Court of Justice, or in the Court of Chancery of the County Palatine of Lancaster, or before any Registrar of a Bankruptcy Court, or before any officer of a Bankruptcy Court authorized in writing in that behalf by the Judge of the Court or before a Justice of the peace for the county or place where it is sworn;

(c) In Scotland or in Ireland, before a Judge Ordinary, Magistrate or Justice of the Peace; and

(d) In any other place, before a Magistrate or Justice of the Peace or other person qualified to administer oaths in that place (he being certified to be a Magistrate or Justice of the Peace, or qualified as aforesaid, by 3[an Indian Consul or Political Agent] or by a notary public).

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1. Subs. by the A.O.1948

2. The words “of India” omitted by the A.O.1950

3. Subs. by the A.O.1950 for “a British Minister or British Consul or British Political Agent}

Section 118. Formal defect not to invalidate proceedings

(1) No proceeding in insolvency shall be invalidated by any formal defect or by any irregularity, unless the Court before which an objection is made to the proceeding is of opinion that substantial injustice has been caused by the defect or irregularity, and that the injustice cannot be remedied by any order of that Court.

(2) No defect or irregularity in the appointment of an official assignee or member of a committee of inspection shall vitiate any act done by him in good faith.

Section 119. Application of Trustee Act to insolvency of trustee

Where an insolvent is a trustee within the Indian Trustee Act, 1866, (27 of 1866) section 35 of that Act shall have effect so as to authorize the appointment of a new trustee in substitution for the insolvent (whether voluntarily resigning or not), if it appears expedient to do so, and all provisions of that Act, and of any other Act relative thereto, shall have effect accordingly.

Section 120. Certain provisions to bind the Government

Save as herein provided, the provisions of this Act relating to the remedies against the property of a debtor, the priorities of debts, the effect of a composition or scheme of arrangement, and the effect of a discharge shall bind the Government.

Section 121. Savings for existing rights of audience

Nothing in this Act, or in any transfer of jurisdiction effected thereby, shall take away or affect any right of audience that any person may have had immediately before the commencement of this Act, or shall be deemed to confer such right in insolvency matters on any person who had not a right of audience before the Courts for the Relief of Insolvent Debtors.1

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1. For s.121A, applicable to Bombay only, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.7.

Section 122. Lapse and credit to Government of unclaimed dividends

1[Lapse and credit to Government of unclaimed dividends. Where the official assignee has under his control any dividend which has remained unclaimed for fifteen years from the date of declaration or such less period as may be prescribed, he shall pay the same to the account and credit of 2[the State Government], unless the Court otherwise directs.

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1. This section has been amended in its application to Bombay by s.8, ibid

2. Subs. by the A.O.1937 for “the Govt.of India”.

Section 123. Claims to monies credited to Government under section 122

Any person claiming to be entitled to any monies paid to the account and credit of 1[the State Government] under section 122, may apply to the Court for an order for payment to him of the same; and the Court, if satisfied that the person claiming is entitled, shall make an order for payment to him of the sum due:

Provided that, before making an order for the payment of a sum which has been carried to the account and credit of 2[the State Government], the Court shall cause a notice to be served on such officer as 3[the State Government] may appoint in this behalf, calling on the officer to show cause, within one month from the date of the service of the notice, why the order should not be made.4

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1. Subs. by the A.O.1937 for “the Govt.of India”.

2. Subs. by the A.O.1937 for “the Govt.of India”.

3. Subs., ibid., for “the G.G.in C”.

4. For ss.123A and 123B, applicable to Bombay only, see the Presidency-towns Insolvency (Bombay Amendment) Act, 1933 (Bom.20 of 1933), s.10.

Section 124. Access to insolvents book

(1) No person shall, as against the official assignee, be entitled to withhold possession of the books of accounts belonging to the insolvent or to set up any lien thereon.

(2) Any creditor of the insolvent may, subject to the control of the Court, and on payment of such fee, if any, as may be prescribed, inspect at all reasonable times, personally or by agent, any such books in the possession of the official assignee.

Section 125. Fees and percentages

Such fees and percentages shall be charged for and in respect of proceedings under this Act as may be prescribed.1

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1. In its application to Calcutta and Madras, this section has been amended: see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), s.11, and the Presidency-towns Insolvency (Madras Amendment) Act, 1943 (Mad.5 of 1943), s.16.

Section 126. Courts to be auxiliary to each other

All Courts having jurisdiction under this Act shall make such orders and do such things as may be necessary to give effect to section 118 of the Bankruptcy Act, 1883, and to section 50 of the Provincial Insolvency Act, 1907.1

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1. See now the Provincial Insolvency Act, 1920 (5 of 1920).

Section 127. Saving

1[(1)

(2) 2The proceedings under an insolvency petition under the Indian Insolvency Act, 1848, pending at the commencement of this Act shall, except so far as any provision of this Act is expressly applied to pending proceedings, continue, and all the provisions of the said Indian Insolvency Act shall, except as aforesaid, apply thereto, as if this Act had not been passed.

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1. Sub-section (1) and the words “Notwithstanding the repeal effected by this Act,” in sub-section (2) rep. by Act 10 of 1914, s.3 and Sch.II.

2. Sub-section (1) and the words “Notwithstanding the repeal effected by this Act,” in sub-section (2) rep. by Act 10 of 1914, s.3 and Sch.II.

Schedule 1

THE FIRST SCHEDULE

(See section 26)

MEETINGS OF CREDITORS

1. Meetings of creditors.

The official assignee may at any time summon a meeting of creditors, and shall do so whenever so directed by the Court or by the creditors by resolution at any meeting or whenever requested in writing by one-fourth in value of the creditors who have proved.

2. Summoning of meetings.

Meetings shall be summoned by sending notice of the time and place thereof to each creditor at the address given in his proof, or, if he has not proved, at the address given in the insolvent’s schedule, or such other address as may be known to the official assignee.

3. Notice of meetings.

The notice of any meeting shall be sent off not less than seven days before the day appointed for the meeting and may be delivered personally or sent by prepaid post letter, as may be convenient.The official assignee may, if he thinks fit, also publish the time and place of any meeting in any local newspaper or in the Official Gazette.

4. Duty of insolvent to attend if required.

It shall be the duty of the insolvent to attend any meeting which the official assignee may, by notice, require him to attend, and any adjournment thereof.Such notice shall be either delivered to him personally or sent to him at his address by post at least three days before the date fixed for the meeting.

5. Proceedings not to be avoided for non-receipt of notice.

The proceedings held and resolutions passed at any meeting shall, unless the Court otherwise orders, be valid notwithstanding that any creditor has not received the notice sent to him.

6. Proof of issue of notice.

A certificate of the official assignee that the notice of any meeting has been duly given shall be sufficient evidence of such notice having been duly sent to the person to whom the same was addressed.

7. Costs of meeting.

Where on the request of creditors the official assignee summons a meeting, there shall be deposited with the written request the sum of five rupees for every twenty creditors for the costs of summoning the meeting, including all disbursements: Provided that the official assignee may require such further sum to be deposited as in his opinion shall be sufficient to cover the costs and expenses of the meeting.

8. Chairman.

The official assignee shall be the chairman of any meeting.

9. Right to vote.

A creditor shall not be entitled to vote at a meeting unless he has duly proved a debt provable in insolvency to be due to him from the insolvent, and the proof has been duly lodged one clear day before the time appointed for the meeting.

10. No Vote in respect of certain debts.

A creditor shall not vote at any such meeting in respect of any unliquidated or contingent debt, or any debt the value of which is not ascertained.

11. Secured creditor.

For the purpose of voting, a secured creditor shall, unless he surrenders his security, state in his proof the particulars of his security, the date when it was given, and the value at which he assesses it, and shall be entitled to vote only in respect of the balance, if any, due to him after deducting the value of his security.If he votes in respect of his whole debt, he shall be deemed to have surrendered his security, unless the Court on application is satisfied that the omission to value the security has arisen from inadvertence.

12. Proof in respect of negotiable instruments.

Where a creditor seeks to prove in respect of a bill of exchange, promissory note, or other negotiable instrument or security on which the insolvent is liable, such bill of exchange, note, instrument or security must, subject to any special order of the Court made to the contrary, be produced to the official assignee before the proof can be admitted for voting.

13. Power to require creditor to give up security.

It shall be competent to the official assignee, within twenty-eight days after a proof estimating the value of a security has been made use of in voting at any meeting, to require the creditor to give up the security for the benefit of the creditors generally, on payment of the value so estimated.

14. Proof by partner.

If one partner in a firm is adjudged insolvent, any creditor to whom that partner is indebted jointly with the other partners in the firm, or any of them, may prove his debt for the purpose of voting at any meeting of creditors and shall be entitled to vote thereat.

15. Power of official assignee to admit or reject proof.

The official assignee shall have power to admit or reject a proof for the purpose of voting but his decision shall be subject to appeal to the Court.If he is in doubt whether the proof of a creditor should be admitted or rejected, he shall mark the proof as objected to, and shall allow the creditor to vote, subject to the vote being declared invalid in the event of the objection being sustained.

16. Proxy.

A creditor may vote either in person or by proxy.

17. Instrument of proxy.

Every instrument of proxy shall be in the prescribed form and shall be issued by the official assignee.

18. General proxy.

A creditor may give a general proxy to his attorney or to his manager or clerk, or any other person in his regular employment.In such case the instrument of proxy shall state the relation in which the person to act thereunder stands to the creditor.

19. Proxy to be deposited one day before date of meeting.

A proxy shall not be used unless it is deposited with the official assignee one clear day before the time appointed for the meeting at which it is to be used.

20. Official assignee as proxy.

A creditor may appoint the official assignee to act as his proxy.

21. Adjournment of meeting.

The official assignee may adjourn the meeting from time to time and from place to place, and no notice of the adjournment shall be necessary.

22. Minute of proceedings.

The official assignee shall draw up a minute of the proceeding at the meeting and shall sign the same.

Schedule 2

THE SECOND SCHEDULE

(See section 48)

PROOF OF DEBTS

1. Time for lodging proof.

Every creditor shall lodge the proof of his debt as soon as may be after the making of an order of adjudication.

2. Mode of lodging proof.

A proof may be lodged by delivering or sending by post in a registered letter to the official assignee an affidavit verifying the debt.

3. Authority to make affidavit.

The affidavit may be made by the creditor himself or by some person authorized by or on behalf of the creditor. If made by a person so authorized, it shall state his authority and means of knowledge.

4. Contents of affidavit.

The affidavit shall contain or refer to a statement of account showing the particulars of the debt, and shall specify the vouchers, if any, by which the same can be substantiated.The official assignee may at any time call for the production of the vouchers.

5. Affidavit to state if creditor holds security.

The affidavit shall state whether the creditor is or is not a secured creditor.

6. Cost of proving debts.

A creditor shall bear the cost of proving his debt unless the Court otherwise specially orders.

7. Right to see and examine proof.

Every creditor who has lodged a proof shall be entitled to see and examine the proofs of other creditors at all reasonable times.

8. Deduction to be made from proof.

A creditor in lodging his proofs shall deduct from his debt all trade discounts, but he shall not be compelled to deduct any discount, not exceeding five per centum on the net amount of his claim, which he may have agreed to allow for payment in cash.

Proof by secured creditors

9. Proof where security realized.

If a secured creditor realizes his security, he may prove for the balance due to him, after deducting the net amount realized.

10. Proof where security is surrendered.

If a secured creditor surrenders his security to the official assignee for the general benefit of the creditors, he may prove for his whole debt.

11. Proof in other cases.

If a secured creditor does not either realize or surrender his security, he shall, before ranking for dividend, state in his proof the particulars of his security, the date when it was given and the value at which he assesses it, and shall be entitled to receive a dividend only in respect of the balance due to him after deducting the value so assessed.

12. Valuation of security.

(1) Where a security is so valued the official assignee may at any time redeem it on payment to the creditor of the assessed value.

(2) If the official assignee is dissatisfied with the value at which a security is assessed, he may require that the property comprised in any security so valued be offered for sale at such times and on such terms and conditions as may be agreed on between the creditor and the official assignee, or as, in default of agreement, the Court may direct.If the sale is by public auction, the creditor, or the official assignee on behalf of the estate, may bid or purchase:

Provided that the creditor may at any time, by notice in writing, require the official assignee to elect whether he will or will not exercise his power of redeeming the security or requiring it to be realized, and if the official assignee does not, within six months after receiving the notice, signify in writing to the creditor his election to exercise the power, he shall not be entitled to exercise it; and the equity of redemption, or any other interest in the property comprised in the security which is vested in the official assignee, shall vest in the creditor, and the amount of his debt shall be reduced by the amount at which the security has been valued.

13. Amendment of valuation.

Where a creditor has so valued his security, he may at any time amend the valuation and proof on showing to the satisfaction of the official assignee, or the Court, that the valuation and proof were made bona fide on a mistaken estimate, or that the security has diminished or increased in value since its previous valuation; but every such amendment shall be made at the cost of the creditor, and upon such terms as the Court shall order, unless the official assignee shall allow the amendment without application to the Court.

14. Refund of excess received.

Where a valuation has been amended in accordance with the foregoing rule, the creditor shall forthwith repay any surplus dividend which he has received in excess of that to which he would have been entitled on the amended valuation, or, as the case may be, shall be entitled to be paid out of any money for the time being available for dividend, any dividend or share of dividend which he has failed to receive by reason of the inaccuracy of the original valuation, before that money is made applicable to the payment of any future dividend, but he shall not be entitled to disturb the distribution of any dividend declared before the date of the amendment.

15. Amendment where security subsequently realized.

If a creditor after having valued his security subsequently realizes it, or if it is realized under the provisions of rule 12, the net amount realized shall be substituted for the amount of any valuation previously made by the creditor and shall be treated in all respects as an amended valuation made by the creditor.

16. Exclusion from sharing in dividend.

If a secured creditor does not comply with the foregoing rules, he shall be excluded from all share in any dividend.

17. Limit of receipt.

Subject to the provisions of rule 12, a creditor shall in no case receive more than sixteen annas in the rupee and interest as provided by this Act.

Taking Accounts of property mortgaged, and of the sale thereof

18. Inquiry into mortgage, etc.

Upon application by any person claiming to be a mortgagee of any part of the insolvent’s real or leasehold estate and whether such mortgage is by deed or otherwise, and whether the same is of a legal or equitable nature, or upon application by the official assignee with the consent of such person claiming to be a mortgagee as aforesaid, the Court shall proceed to inquire whether such person is such mortgagee, and for what consideration and under what circumstances; and if it is found till at such person is such mortgagee, and if no sufficient objection appears to the title of such person to the sum claimed by him under such mortgage, the Court shall direct such accounts and inquiries to be taken as may be necessary for ascertaining the principal, interest and costs due upon such mortgage, and of the rents and profits, or dividends, interest or other proceeds received by such person, or by any other person by his order or for his use in case he has been in possession of the property over which the mortgage extends, or any part thereof, and the Court, if satisfied that there ought to be a sale, shall direct notice to be given in such newspapers as the Court thinks fit, when and where, and by whom and in what way, the said premises or property, or the interest therein so mortgaged, are to be sold, and that such sale be made accordingly, and that the official assignee (unless it is otherwise ordered1 shall have the conduct of such sale; but it shall riot be imperative on any such mortgagee to make such application.At any such sale the mortgagee may bid and purchase.

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1. In the application of this rule to Calcutta, the words “for reasons to be recorded in writing” have been inserted here, see the Presidency-towns Insolvency (Bengal Amendment) Act, 1936 (Ben.18 of 1936), s.12.

19. Conveyance.

All proper parties shall join in the conveyance to the purchaser, as the Court directs.

20. Proceeds of sale.

The monies to arise from such sale shall be applied, in the first place, in payment of the costs, charges and expenses of and occasioned s by the application to the Court, and of such sale and the commission (if any) of the official assignee, and in the next place in payment and satisfaction, so far as the same extend, of what shall be found due to such mortgagee, for principal, interest and costs, and the surplus of the sale monies (if any) shall then be paid to the official assignee.But if the monies to arise from such sale are insufficient to pay and satisfy what is so found due to such mortgagee, then he shall be entitled to prove as a creditor for such deficiency, and receive dividends thereon rateably with the other creditors, but so as not to disturb any dividend then already declared.

21. Proceedings on inquiry.

For the better taking of such inquiries and accounts, and making a title to the purchaser, all parties may be examined by the Court upon interrogatories or otherwise as the Court thinks fit, and shall produce before the Court upon oath all deeds, papers, books and writings in their respective custody or power relating to the estate or effects of the insolvent as the Court directs.

Periodical payments

22. Periodical payments.

When any rent or other payment falls due at stated periods, and the order of adjudication is made at any time other than one of those periods, the person entitled to the rent or payment may prove for a proportionate part thereof up to the date of the order as if the rent or payment due grew from day to day.

Interest

23. Interest.

(1) On any debt or sum certain whereon interest is not reserved or agreed for, and which is overdue when the debtor is adjudged an insolvent, and which is provable under this Act, the creditor may prove for interest at a rate not exceeding six per centum per annum—

(a) If the debt or sum is payable by virtue of a written instrument at a certain time, from the time when such debt or sum was payable to the date of such adjudication; or

(b) If the debt or sum is payable otherwise, from the time when a demand in writing has been made giving the debtor notice that interest will be claimed from the date of the demand until the time of payment to the date of such adjudication.

(2) Where a debt which has been proved in insolvency includes interest or any pecuniary consideration in lieu of interest, the interest or consideration shall, for the purposes of dividend, be calculated at a rate not exceeding six per centum per annum, without prejudice to the right of a creditor to receive out of the debtor’s estate any higher rate of interest to which he may be entitled after all the debts proved have been paid in full.

Debt payable at a future time

24. Debt payable in future.

A creditor may prove for a debt not payable when the debtor is adjudged an insolvent as if it were payable presently, and may receive dividends equally with the other creditors, deducting therefrom only a rebate of interest at the rate of six per centum per annum, computed from the declaration of a dividend to the time when the debt would have become payable, according to the terms on which it was contracted.

Admission or rejection of proofs

25. Admission or rejection of proof.

The official assignee shall examine every proof and the grounds of the debt, and in writing admit or reject it in whole or in part, or require further evidence in support of it. If he rejects a proof, he shall state in writing to the creditor the grounds of the rejection.

26. Court may expunge proof improperly received.

If the official assignee thinks that a proof has been improperly admitted, the Court may, on the application of the official assignee, after notice to the creditor who made the proof, expunge the proof or reduce its amount.

27. Power for Court to expunge or reduce proof.

The Court may also expunge or reduce a proof upon the application of a creditor if the official assignee declines to interfere in the matter, or in the case of a composition or scheme upon the application of the insolvent.

Schedule 3

THE THIRD SCHEDULE.

[Enactments repealed.]

Rep. by the Repealing and Amending Act.1914 (10 of 1914), s.3 and Sch.II.

Bydeb

The Prevention of Damage to Public Property Act, 1984

[Act No. 3 of 1984]

[16th March 1984]

An Art to provide for prevention of damage to public property and for the matter connected therewith.

Be it enacted by Parliament in the Thirty-fifth year of the Republic of India as follows:

1. Short title, extent and commencement.

(1) This Act may be called the Prevention of Damage to Public Property Act, 1984,

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on 28th day of January 1984.

2. Definitions.

In this Act unless the context otherwise requires, –

(a) “Mischief” shall have the same meaning as in Section 425 of the Indian Penal Code (45 of 1860),

(b) “Public property” means any property, whether immovable or movable (including any machinery) which is owned by, or in the possession of, or under the control of-

(i) The Central Government; or

(ii) Any State Government; or

(iii) Any local, authority; or

(iv) Any corporation established by, or under, Central, Provincial or State Act; or

(v) Any company as defined in Section 617 of the Companies, Act, 1956 (1 of 1956); or

(vi) Any institution, concern or undertaking which the Central Government may, notification in the Official Gazette, specify in this behalf-

Provided that the Central Government shall not specify any institution concern or undertaking under this sub-clause unless such institution, concern or undertaking is financed wholly or substantially by funds provided directly or indirectly by the Central Government by one or more State Governments, or partly by the Central Government and partly by one or more State Governments.

3. Mischief causing damage to public property.

(1) Whoever commits mischief by doing any act in respect of any public property, other than public property of the nature referred to in subsection (2), shall be punished with imprisonment for a tern) which may extend to five years and with fine.

(2) Whoever commits mischief by doing any act in respect of any public property being-

(a) Any building, installation or other property used in connection with the production, distribution or supply of water, light, power or energy;

(b) Any oil installations;

(c) Any sewage works;

(d) Any mine or factory;

(e) Any means of public transportation or of telecommunications, or any building, installation or other property used in connection therewith,

Shall be punished with rigorous imprisonment for a term which shall not be less than six months, but which may extend to five years, and with fine:

Provided that the Court may, for reasons to be recorded in its judgment-award a sentence of imprisonment for a term of less than six months

4. Mischief causing damage to public property by fire or explosive substance.

Whoever commits an offence under sub-section (1) or sub-section (2) of Section 3 by fire or explosive substance shall be punished with rigorous imprisonment for a term which shall not be less than one year, but which may extend to ten years and with fine:

Provided that the Court may, for special reasons to be recorded in its judgment-award a sentence of imprisonment for a term of less than one year.

5. Special provisions regarding bail.

No person accused or convicted of an offence punishable under Section 3 or Section 4 shall, if in custody, be released on bail or on his own bond unless the prosecution has been given an opportunity to oppose the application for such release.

6. Saving.

The provisions of this Act shall be in addition to, and in derogation of, the provisions of any other law for the time being in force, and nothing contained in this Act shall exempt any person from any proceeding (whether by way of investigation or otherwise), which might, apart from this Act be instituted or taken against him.

7. Repeal and saving.

(1) The Prevention of Damage to Public Property Ordinance, 1984 (3 of 1984) is hereby repealed.

(2) Notwithstanding such repeal anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.

Bydeb

The Requisitioned Land (Apportionment of Compensation) Act, 1949

(ACT NO.51 OF 1949)

[AS ON 1995]

[10th December, 1949.]

{Extended to the Hazaribagh and Manbhum Districts, Sadar Sub-Division of the Palamau District, Dhalbhum Sub-Division of the Singhbhum District and Godda and Deoghar Sub-Division of the Santal Parganas District in the State of Bihar and Darjeeling District of West Bengal by the Absorbed Areas (Laws) Act, 1954 (20 of 1954), s. 3 and Sch.}

An Act to provide for the apportionment of compensation payable in respect of requisitioned land.

WHEREAS doubts have arisen whether an arbitrator appointed under section 19 of the Defence of India Act, 1939 (35 of 1939), or under the said section as deemed to be continuing in force for the purpose of section 6 of the Requisitioned Land (Continuance of Powers) Act, 1947 (17 of 1947) {Since rep. by Act 30 of 1952.} has power to apportion the compensation payable in respect of any requisitioned land among persons interested therein;

AND WHEREAS it is expedient to resolve the said doubts and expressly to provide for the apportionment of compensation in al such cases;

It is hereby enacted as follows :-

1. Short title.

This Act may be called the Requisitioned Land (Apportionment of Compensation) Act, 1949.

2. Definitions.

In this Act,-

(a) The expression “persons interested”, in relation to any requisitioned land, includes all person claiming an interest in the compensation to be paid on account of the requisitioning or the acquisition of the requisitioned land under the provisions of section 19 of the Defence of India Act, 1939 (35 of 1939), or section 6 of the Requisitioned Land (Continuance of Powers) Act, 1947 (17 of 1947);

(b) The expression “requisitioned land” means any immovable property which is, or was, subject to any requisition effected under the rules made under the Defence of India Act, 1939(35 of 1939), or continued under the Requisitioned Land (Continuance of Powers) Act, 1947, (17 of 1947) {Since rep. by Act 30 of 1952.}

3. Apportionment of compensation.

(1) Notwithstanding anything contained in either of the Acts mentioned in section 2, where there are several persons interested in any requisitioned land, it shall be lawful, and shall be deemed always to have been lawful, for an arbitrator appointed in pursuance of either of the sections mentioned in clause (a) of section 2, to apportion by his award the compensation payable in respect of the requisitioning or, as the case may be, acquisition of the land amount the persons interested.

(2) Where an arbitrator appointed in pursuance either of the sections mentioned in clause (a) of section 2 has, before the 13th day of September, 1949, made an award determining, but not apportioning, the compensation payable, and such compensation has not been paid, the Government by whom such compensation is payable may, either on its own motion or upon the application of any person interested, appoint the same or another arbitrator to apportion the compensation amount the persons interested and it shall be lawful for the arbitrator so appointed to make a supplementary award of apportionment.

(3) An appeal shall lie to the High Court against a supplementary award made under sub-section (2).

(4) The provisions of the rules made under section 19 shall, in so far as they are applicable, apply to arbitrations and awards under this section as they apply in relation to arbitrations and awards under the said section 19.

4. Repeal of Ordinance 22 of 1949.

(1) The Requisitioned Land (Apportionment of Compensations Ordinance, 1949 (22 of 1949) is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken in the exercise of any power conferred by or under the said Ordinance shall be deemed to have been done or taken in the exercise of the powers conferred by or under this Act, as if this Act were in force on the day on which such thing was done or action taken.

STATEMENT OF OBJECTS AND REASONS

“In a recent judgement the Calcutta High Court has held that an arbitrator appointed under Cl. (b) of section 19 of the Defence of India Act has no power to entertain any reference requiring apportionment of compensation between parties having different interests in the land. As a consequence of this ruling the payment of compensation in all cases where the interested parties could not agree came t a standstill. As an immediate remedy. Ordinance No. XXII of 1949 was promulgated to enable disposal of long pending cases. As the Ordinance will lapse on the expiry of six months form the date of promulgation, it is necessary to replace it by an Act.”

Bydeb

The Urban Land (Ceiling and Regulation) Repeal Act, 1999

[Act No. 15 of 1999]

March 22, 1999

An Act to repeal the Urban Land (Ceiling and Regulation) Act, 1976

Be it enacted by Parliament in the Fiftieth Year of the Republic of India as follows: –

1. Short title, application and commencement.

(1) This Act may be called the Urban Land (Ceiling and Regulation) Repeal Act, 1999.

(2) It applies in the first instance to the whole of the States of Haryana and Punjab and to all the Union Territories; and it shall apply to such other State, which adopts this Act by resolution passed in that behalf under clause (2) of Article 252 of the Constitution-.

(3) It shall be deemed to have come into force in the States of Haryana and Punjab and in all the Union territories on the 11th day of January, 1999 and in any other State which adopts this Act under clause (2) of Article 252 of the Constitution-on the date of such adoption; and the reference to repeal of the Urban Land (Ceiling and Regulation) Act, 1976(33 of 1976)-shall, in relation to any State or Union territory, mean the date on which this Act comes into force in such State or Union territory.

2. Repeal of Act 33 of 1976.

The Urban Land (Ceiling and Regulation) Act, 1976-(hereinafter referred to as the principal Act) is hereby repealed.

3. Savings.

(1) The repeal of the principal Act shall not affect-

(a) The vesting of any vacant land under sub-section (3) of Section 10-, possession of which has been taken over by the State Government or any person duly authorised by the State Government in this behalf or by the competent authority;

(b) The validity of any order granting exemption under sub-section (1) of Section 20-or any action taken there under, notwithstanding any judgment of any court to the contrary;

(c) Any payment made to the State Government as a condition for granting exemption under sub-section (1) of Section 20-

(2) Where-

(a) Any land is deemed to have vested in the State Government under sub-section (3) of Section 10-of the principal Act but possession of which has not been taken over by the State Government or any person duly authorised by the State Government in this behalf or by the competent authority; and

(b) Any amount has been paid by the State Government with respect to such land, then, such land shall not restored unless the amount paid, if any, has been refunded to the State Government.

4. Abatement of legal proceedings.

All proceedings relating to any order made or purported to be made under the principal Act pending immediately before the commencement of this Act, before any court, tribunal or other authority shall abate:

Provided that this section shall not apply to the proceedings relating to Sections 11-, 12-, 13 and 14 of the principal Act in so far as such proceedings are relatable to the land, possession of which has been taken over by the State Government or any person duly authorised by the State Government in this behalf or by the competent authority.

5. Repeal and saving.

(1) The Urban Land (Ceiling and Regulation) Repeal Ordinance 1999 is hereby repealed.

(2) Notwithstanding such repeal, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under the corresponding provisions of this Act.

Bydeb

The Uttar Pradesh Cantonments (Control of Rent and Eviction) (Repeal) Act, 1971

No.68 OF 1971

[23rd December, 1971]

An Act to provide for the repeal of the Uttar Pradesh Cantonments (Control of Rent and Eviction) Act, 1952

BE it enacted by Parliament in the Twenty-second Year of the Republic of India as follows:-

1. Short title.

This Act may be called the Uttar Pradesh Cantonments (Control of Rent and Eviction) (Repeal) Act, 1971.

2. Repeal of Act 10 of 1952.

On and from the date1 on which the United Provinces (Temporary) Control of Rent and Eviction Act, 1947 (United Provinces Act, III of 1947) is extended by notification under section 3 of the Cantonments (Extension of Rent Control Laws) Act, 1957 (46 of 1957.), to the cantonments in the State of Uttar Pradesh, the Uttar Pradesh Cantonments (Control of Rent and Eviction) Act, 1952 (10 of 1952) shall stand repealed.

——————–

1. 3-4-1972 :Vide Notification No.S.R..O.8-E, dated 3-4-1972 , Gazette of India, Extraordinary, part II , Sec.4, p.41.

3. Savings.

(1) The repeal of Uttar Pradesh Cantonments (Control of Rent and Eviction) Act, 1952 (10 of 1952) by section 2 shall not affect.

(a) The previous operation of the said Act or anything duly done or suffered thereunder; or

(b) Any right, privilege, obligation or liability acquired, accrued or incurred under the said Act; or

(c) Any penalty, forfeiture or punishment incurred in respect of any offence committed against the said Act; or

(d) Any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid,

And any such investigation, legal proceeding or remedy may be instituted, continued or enforced and any such penalty, forfeiture or punishment may be imposed as if the said Act had not been repealed.

(2) Subject to the provisions contained in sub-section (1), anything done or any action taken under the Act repealed by section 2 shall be deemed to have been done or taken under the corresponding provisions of the United Provinces (Temporary) Control of Rent and Eviction Act, 1947 (United Provinces Act III of 1947) extended by notification as provided in that section to the cantonments in the State of Uttar Pradesh and shall continue to be in force accordingly unless and until superseded by anything done or any action taken under the Act so extended.

Bydeb

The Uttar Pradesh Reorganization Act, 2000

Section 1. Short title

This Act may be called the Uttar Pradesh Reorganisation Act, 2000

Section 2. Definitions

In this Act, unless the context otherwise requires,-

(a) “Appointed day” means the day which the Central Government may, by notification in the Official Gazette, appoint;

(b) “Article” means an article of the Constitution;

(c) “Assembly constituency”, “council constituency” and “parliamentary constituency” have the same meanings as in the Representation of the People Act, 1950 (43 of 1950);

(d) “Election Commission” means the Election Commission appointed by the President under article 324;

(e) “Existing State of Uttar Pradesh” means the State of Uttar Pradesh as existing immediately before the appointed day;

(f) “Law” includes any enactment, ordinance, regulation, order, bye-law, rule, scheme, notification or other instrument having, immediately before the appointed day, the force of law in the whole or in any part of the existing State of Uttar Pradesh;

(g) “Notified order” means an order published in the Official Gazette;

(h) “population ratio”, in relation to the States of Uttar Pradesh and Uttaranchal, means the ratio of 1321:70;

(i) “sitting member”, in relation to either House of Parliament or of the Legislature of the existing State of Uttar Pradesh, means a person who immediately before the appointed day, is a member of that House;

(j) “successor State”, in relation to the existing State of Uttar Pradesh, means the State of Uttar Pradesh or Uttaranchal

(k) “transferred territory” means the territory which on the appointed day is transferred from the existing State of Uttar Pradesh to the State of Uttaranchal

(l) “Treasury” includes a sub-treasury; and

(m) Any reference to a district, Tehsil or other territorial division of the existing State of Uttar Pradesh shall be construed as a reference to the area comprised within that territorial division on the appointed day

Section 3. Formation of Uttaranchal State

On and from the appointed day, there shall be formed a new State to be known as the State of Uttaranchal comprising the following territories of the existing State of Uttar Pradesh, namely:- Pauri Garhwal, Tehri Garhwal, Uttar Kashi, Chamoli, Dehradun, Nainital, Almora, Pithoragarh, Udham Singh Nagar, Bageshwar, Champawat, Rudraprayag and Hardwar districts, and thereupon the said territories shall cease to form part of the existing State of Uttar Pradesh

Section 4. State of Uttar Pradesh and territorial divisions thereof

On and from the appointed day, the State of Uttar Pradesh shall comprise the territories of the existing State of Uttar Pradesh other than those specified in section 3

Section 5. Amendment of the First Schedule to the Constitution

On and from the appointed day, in the First Schedule to the Constitution, under the heading “I.THE STATES”,-

(a) In the paragraph relating to the territories of the State of Uttar Pradesh, after the words, brackets and figures “clause (a) of sub-section (1) of section 3 of the Bihar and Uttar Pradesh (Alteration of Boundaries) Act, 1968 (24 of 1968)”, the foll wing shall be inserted, namely:- “and the territories specified in section 3 of the Uttar Pradesh Reorganisation Act, 2000”;

(b) After entry 26, the following entry shall be inserted, namely:- “27.Uttaranchal: The territories specified in section 3 of the Uttar Pradesh Reorganisation Act, 2000.”

Section 6. Saving powers of State Governments

Nothing in the foregoing provisions of this Part shall be deemed to affect the power of the Government of Uttar Pradesh or Uttaranchal to alter, after the appointed day, the name, area or boundaries of any district r other territorial division in the State

Section 7. Amendment of the Fourth Schedule to the Constitution

On and from the appointed day, in the Fourth Schedule to the Constitution, in the Table,-

(a) Entries 17 to 28 shall be renumbered as entries 18 to 29 respectively;

(b) In entry 16, for the figures “34”, the figures “31” shall be substituted;

(c) After entry 16, the following entry shall be inserted, namely:-

“17. Uttaranchal ………………………………………………………………………..3”

Section 8. Allocation of sitting members

(1) On and from the appointed day, thirty-four sitting members of the Council of States representing the existing State of Uttar Pradesh shall be deemed to have been elected to fill the seats allotted to the States of U tar Pradesh and Uttaranchal, as specified in the First Schedule to this Act

(2) The term of office of such sitting members shall remain unaltered

Section 9. Representation in the House of the People

On and from the appointed day, there shall be allocated 80 seats to the successor State of Uttar Pradesh, and 5 to the successor State of Uttaranchal, in the House of the People, and the First Schedule to the Representation of the People Act, 1950 (43 of 1950) shall be deemed to be amended accordingly

Section 10. Delimitation of Parliamentary and Assembly Constituencies

On and from the appointed day, the Delimitation of Parliamentary and Assembly Constituencies Order, 1976, shall stand amended as directed in the Second Schedule to this Act

Section 11. Provision as to sitting members

(1) Every sitting member of the House of the People representing a constituency which, on the appointed day by virtue of the provisions of section 10, stands allotted, with or without alteration of boundaries, to the successor State of Uttar Pradesh or Uttaranchal, shall be deemed to have been elected to the House of the People by that constituency as so allotted

(2) The term of office of such sitting members shall remain unaltered

Section 12. Provisions as to Legislative Assemblies

(1) The number of seats as on the appointed day in the Legislative Assemblies of the States of Uttar Pradesh and Uttaranchal shall be four hundred and three and seventy respectively

(2) In the Second Schedule to the Representation of the People Act, 1950 (43 of 1950), under heading “I.States”-

(a) Entries 25 and 26 shall be renumbered as entries 26 and 27 respectively;

(b) After entry 24, the following entry shall be inserted, namely:- “1 5 25 Uttaranchal………………………………………………………………..70”;

(c) In entry 26 as so renumbered, for the figures “425”, the figures “403” shall be substituted

Section 13. Allocation of sitting members

(1) Every sitting member of the Legislative Assembly of the existing State of Uttar Pradesh elected to fill a seat in that Assembly from a constituency which on the appointed day by virtue of the provisions of section 1 stands allotted, with or without alteration of boundaries, to the State of Uttaranchal shall, on and from that day, cease to be a member of the Legislative Assembly of Uttar Pradesh and shall be deemed to have been elected to fill a seat in the provisio al Legislative Assembly of Uttaranchal from that constituency as so allotted

(2) All other sitting members of the Legislative Assembly of the existing State of Uttar Pradesh shall continue to be members of the Legislative Assembly of that State and any such sitting member representing a constituency the extent or the name and ext nt of which are altered by virtue of the provisions of section 10 shall be deemed to have been elected to the Legislative Assembly of Uttar Pradesh by that constituency as so altered

(3) Notwithstanding anything contained in any other law for the time being in force, the Legislative Assemblies of Uttar Pradesh and Uttaranchal shall be deemed to be duly constituted on the appointed day

(4) The sitting member of the Legislative Assembly of the existing State of Uttar Pradesh nominated to that Assembly under article 333 to represent the Anglo-Indian community shall be deemed to have been nominated to represent the said community in the Legislative Assembly of Uttar Pradesh under that article

Section 14. Composition of provisional Legislative Assembly of Uttaranchal

(1) On and from the appointed day and until the Legislative Assembly of the successor State of Uttaranchal has been duly constituted and summoned to meet for the first session under the revisions of the Constitution, a provisional Legislative Assembly of the State of Uttaranchal, consisting of the twenty-two sitting members of the Legislative Assembly and nine members of the Legislative Council of the existing State of Uttar Pradesh representing the Assembly constituencies or Council constituencies of the territories transferred by virtue of the provisions of section 3 shall be constituted

(2) The provisional Legislative Assembly of the State of Uttaranchal shall exercise all the powers and perform all the duties conferred by the provisions of the Constitution on the Legislative Assembly of that State

(3) The term of office of the members of the provisional Legislative Assembly of the State of Uttaranchal shall, unless the said Legislative Assembly is sooner dissolved, expire immediately before the first meeting of the Legislative Assembly of the Stat of Uttaranchal

Section 15. Duration of Legislative Assemblies

The period of five years referred to in clause (1) of article 172 shall, in the case of the Legislative Assembly of the State of Uttar Pradesh, be deemed to have commenced on the date on which it actually commenced in the case of the Legislative Assembly of the existing State of Uttar Pradesh

Section 16. Speaker and Deputy Speaker

(1) The persons who immediately before the appointed day are the Speaker and Deputy Speaker of the Legislative Assembly of the existing State of Uttar Pradesh shall continue to be the Speaker and Deputy Speaker respectively of that Assembly on and from that day

(2) As soon as may be after the appointed day, the provisional Legislative Assembly of the successor State of Uttaranchal shall choose two members of that Assembly to be respectively Speaker and Deputy Speaker thereof and until they are so chosen, the duties of the office of Speaker shall be performed by such member of the Assembly as the Governor may appoint for the purpose

Section 17. Rules of procedure

The rules of procedure and conduct of business of the Legislative Assembly of Uttar Pradesh as in force immediately before the appointed day shall, until rules are made under clause (1) of article 208, be the rules of procedure an conduct of business of the Legislative Assembly of Uttaranchal, subject to such modifications and adaptations as may be made therein by the Speaker thereof

Section 18. Legislative Council of Uttar Pradesh

On and from the appointed day, there shall be ninety-nine seats in the Legislative Council of Uttar Pradesh, and in the Third Schedule to the Representation of the People Act, 1950 (43 of 1950), for the existing entry 8, the following entry shall be substituted, namely:-

“8. Uttar Pradesh ……………………………………………..99, 36, 8, 8, 37, 10”

Section 19. Amendment of the Delimitation of Council Constituencies

On and from the appointed day, the Delimitation of the Council Constituencies (Uttar Pradesh) Order, 1951 shall stand amended as directed in the Third Schedule

Section 20. Provision as to certain sitting members

(1) On and from the appointed day, the sitting members of the Legislative Council of the existing State of Uttar Pradesh specified in the Fourth Schedule to this Act shall cease to be members of that Council a d shall be deemed to be the members of the provisional Legislative Assembly

(2) On and from the appointed day, all sitting members of the Legislative Council of the existing State of Uttar Pradesh other than those referred to in sub-section (1) shall continue to be members of that Council

(3) The term of office of the members referred to in sub-section (2) shall remain unaltered

Section 21. Deputy Chairman

The person who immediately before the appointed day is the Deputy Chairman of the Legislative Council of the existing State of Uttar Pradesh shall continue to be the Deputy Chairman, on and from that day of that Council

Section 22. Delimitation of constituencies

(1) For the purpose of giving effect to the provisions of section 12, the Election Commission shall determine in the manner hereinafter provided-

(a) The number of seats to be reserved for the Scheduled Castes and the Scheduled Tribes in the Legislative Assemblies of the States of Uttar Pradesh and Uttaranchal, respectively, having regard to the relevant provisions of the Constitution;

(b) The assembly constituencies into which each State referred to in clause (a) shall be divided, the extent of each of such constituencies and in which of them seats shall be reserved for the Scheduled Castes or for the Scheduled Tribes; and

(c) The adjustments in the boundaries and description of the extent of the parliamentary constituencies in each State referred to in clause (a) that may be necessary or expedient

(2) In determining the matters referred to in clauses (b) and (c) of sub-section (1), the Election Commission shall have regard to the following provisions, namely:-

(a) All the constituencies shall be single-member constituencies;

(b) All constituencies shall, as far as practicable, be geographically compact areas, and in delimiting them, regard shall be had to physical features, existing boundaries of administrative units, facilities of communication and conveniences to the public; and

(c) Constituencies in which seats are reserved for the Scheduled Castes and the Scheduled Tribes shall, as far as practicable, be located in areas where the proportion of their population to the total population is the largest

(3) The Election Commission shall, for the purpose of assisting it in the performance of its functions under sub-section (1), associate with itself as associate members, five persons as the Central Government may by order specify, being persons who are t e members of the Legislative Assembly of the State or of the House of the People representing the State: Provided that none of the associate members shall have a right to vote or to sign any decision of the Election Commission

(4) If, owing to death or resignation, the office of an associate member falls vacant, it shall be filled as far as practicable, in accordance with the provisions of sub-section (3)

(5) The Election Commission shall-

(a) Publish its proposals for the delimitation of constituencies together with the dissenting proposals, if any, of any associate member who desires publication thereof in the Official Gazette and in such other manner as the Commission may consider fit, together with a notice inviting objections and suggestions in relation to the proposals and specifying a date on or after which the proposals will be further considered by it;

(b) Consider all objections and suggestions which may have been received by it before the date so specified; and

(c) After considering all objections and suggestions which may have been received by it before the date so specified, determine by one or more orders the delimitation of constituencies and cause such order or orders to be published in the Official Gazette ; and upon such publication, the order or orders shall have the full force of law and shall not be called in question in any court

(6) As soon as may be after such publication, every such order relating to assembly constituencies shall be laid before the Legislative Assembly of the concerned State

Section 23. Power of Election Commission to maintain Delimitation Orders up-to-date

(1) The Election Commission may, from time to time, by notification in the Official Gazette,-

(a) Correct any printing mistakes in any order made under section 22 or any error arising therein from inadvertent slip or omission; and

(b) Where the boundaries or name of any territorial division mentioned in any such order or orders is or are altered, make such amendments as appear to it to be necessary or expedient for bringing such order up-to-date

(2) Every notification under this section relating to an assembly constituency shall be laid, as soon as may be after it is issued, before the concerned Legislative Assembly

Section 24. Amendment of the Scheduled Castes Order

On and from the appointed day, the Constitution (Scheduled Castes) Order, 1950, shall stand amended as directed in the Fifth Schedule to this Act

Section 25. Amendment to the Scheduled Tribes Order

On and from the appointed day, the Constitution (Scheduled Tribes) Order, 1950, shall stand amended as directed in the Sixth Schedule to this Act

Section 26. High Court of Uttaranchal

(1) As from the appointed day, there shall be a separate High Court for the State of Uttaranchal (hereinafter referred to as “the High Court of Uttaranchal”) and the High Court of Judicature at Allahabad shall become the High Court for the State of Uttar Pradesh (hereinafter referred to as the High Court at Allahabad)

(2) The principal seat of the High Court of Uttaranchal shall be at such place as the President may, by notified order, appoint

(3) Notwithstanding anything contained in sub-section (2), the Judges and division courts of the High Court of Uttaranchal may sit at such other place or places in the State of Uttaranchal other than its principal seat as the Chief Justice may, with the approval of the Governor of Uttaranchal, appoint

Section 27. Judges of Uttaranchal High Court

(1) Such of the Judges of the High Court at Allahabad holding office immediately before the appointed day as may be determined by the President shall on that day cease to be Judges of the High Court at Allahabad and become, Judges of the High Court of Uttaranchal

(2) The persons who by virtue of sub-section (1) become Judges of the High Court of Uttaranchal shall, except in the case where any such person is appointed to be the Chief Justice of that High Court, rank in that Court according to the priority of their respective appointments as Judges of the High Court at Allahabad

Section 28. Jurisdiction of Uttaranchal High Court

The High Court of Uttaranchal shall have, in respect of any part of the territories included in the State of Uttaranchal, all such jurisdiction, powers and authority as, under the law in force immediately before the appointed day, are exercisable in respect of that part of the said territories by the High Court at Allahabad

Section 29. Special provision relating to Bar Council and advocates

(1) On and from the appointed day, in the Advocates Act, 1961 (25 of 1961), in section 3, in sub-section (1), in clause (a), for the words “and Uttar Pradesh”, the words “Uttar Pradesh and Uttaranchal” shall be substituted

(2) Any person who immediately before the appointed day is an advocate on the roll of the Bar Council of the existing State of Uttar Pradesh may give his option in writing, within one year from the appointed day to the Bar Council of such existing State, to transfer his name on the roll of the Bar Council of Uttaranchal and notwithstanding anything contained in the Advocates Act, 1961 (25 of 1961) and the rules made there under, on such option so given his name shall be deemed to have been transferred on he roll of the Bar Council of Uttaranchal with effect from the date of the option so given for the purposes of the said Act and the rules made there under

(3) The persons other than the advocates who are entitled immediately before the appointed day, to practise in the High Court at Allahabad or any subordinate court thereof shall, on and after the appointed day, be recognised as such persons entitled also to practise in the High Court of Uttaranchal or any subordinate court thereof, as the case may be

(4) The right of audience in the High Court of Uttaranchal shall be regulated in accordance with the like principles as immediately before the appointed day are in force with respect to the right of audience in the High Court at Allahabad

Section 30. Practice and procedure in Uttaranchal High Court

Subject to the provisions of this Part, the law in force immediately before the appointed day with respect to practice and procedure in the High Court at Allahabad shall, with the necessary modifications, apply in relation to the High Court of Uttaranchal, and accordingly, the High Court of Uttaranchal shall have all such powers to make rules and orders with respect to practice and procedure as are immediately before the appointed day exercisable by t e High Court at Allahabad: Provided that any rules or orders which are in force immediately before the appointed day with respect to practice and procedure in the High Court at Allahabad shall, until varied or revoked by rules or orders made by the High Court of Uttaranchal, apply with the necessary modifications in relation to practice and procedure in the High Court of Uttaranchal as if made by that Court

Section 31. Custody of seal of Uttaranchal High Court

The law in force immediately before the appointed day with respect to the custody of the seal of the High Court at Allahabad shall, with the necessary modifications, apply with respect to the custody of the real of the High Court of Uttaranchal

Section 32. Form of writs and other processes

The law in force immediately before the appointed day with respect to the form of writs and other processes used, issued or awarded by the High Court at Allahabad shall, with the necessary modifications, apply with aspects to the form of writs and other processes used, issued or awarded by the High Court of Uttaranchal

Section 33. Powers of Judges

The law in force immediately before the appointed day relating to the powers of the Chief Justice, single Judges and division courts of the High Court at Allahabad and with respect to all matters ancillary to the exercise of those powers shall, with the necessary modifications, apply in relation to the High Court of Uttaranchal

Section 34. Procedure as to appeals to Supreme Court

The law in force immediately before the appointed day relating to appeals to the Supreme Court from the High Court at Allahabad and the Judges and division courts thereof shall, with the necessary modifications, apply in relation to the High Court of Uttaranchal

Section 35. Transfer of proceedings from Allahabad High Court to Uttaranchal High Court

(1) Except as hereinafter provided, the High Court at Allahabad shall, as from the appointed day, have no jurisdiction in respect of the transferred territory

(2) Such proceedings pending in the High Court at Allahabad immediately before the appointed day as are certified, whether before or after that day, by the Chief Justice of that High Court, having regard to the place of accrual of the cause of action and other circumstances, to be proceedings which ought to be heard and decided by the High Court of Uttaranchal shall, as soon as may be after such certification, be transferred to the High Court of Uttaranchal

(3) Notwithstanding anything contained in sub-sections (1) and (2) of this section or in section 28, but save as hereinafter provided, the High Court at Allahabad shall have, and the High Court of Uttaranchal shall not have, jurisdiction to entertain, he r or dispose of appeals, applications for leave to the Supreme Court, applications for review and other proceedings where any such proceedings seek any relief in respect of any order passed by the High Court at Allahabad before the appointed day:

Provided that if after any such proceedings have been entertained by the High Court at Allahabad, it appears to the Chief Justice of that High Court that they ought to be transferred to the High Court of Uttaranchal, he shall order that they shall be so transferred, and such proceedings shall thereupon be transferred accordingly

(4) Any order made by the High Court at Allahabad-

(a) Before the appointed day, in any proceedings transferred to the High Court of Uttaranchal by virtue of sub-section (2), or

(b) In any proceedings with respect to which the High Court at Allahabad retains jurisdiction by virtue of sub-section (3), shall for all purposes have effect, not only as an order of the High Court at Allahabad, but also as an order made by the High Court of Uttaranchal

Section 36. Right to appear or to act in proceedings transferred to Uttaranchal High Court

Any person who, immediately before the appointed day, is an advocate entitled to practise or any other persons entitled to practise in the High Court at Allahabad and was authorised to appear in any proceedings transferred from that High Court to the High Court of Uttaranchal under section 35, shall have the right to appear in the High Court of Uttaranchal in relation to those proceedings

Section 37. Interpretation

For the purposes of section 35-

(a) Proceedings shall be deemed to be pending in a court until that court has disposed of all issues between the parties, including any issues with respect to the taxation of the costs of the proceedings and shall include appeals, applications for leave o appeal to the Supreme Court, applications for review, petitions for revision and petitions for writs; and

(b) References to a High Court shall be construed as including references to a Judge or division court thereof, and references to an order made by a court or a Judge shall be construed as including references to a sentence, judgment or decree passed or m de by that court or Judge

Section 38. Savings

Nothing in this Part shall affect the application to the High Court of Uttaranchal of any provisions of the Constitution, and this Part shall have effect subject to any provision that may be made on or after the appointed day with respect t that High Court by any Legislature or other authority having power to make such provision

Section 39. Authorisation of expenditure of Uttaranchal State

The Governor of Uttar Pradesh may, at any time before the appointed day, authorise such expenditure from the Consolidated Fund of the State of Uttaranchal as he deems necessary for any period not more than six months beginning with the appointed day pending the sanction of such expenditure by the Legislative Assembly of the State of Uttaranchal: Provided that the Governor of Uttaranchal may, after the appointed day, authorise such further expenditure as he deems necessary from the Consolidated Fund of the State of Uttaranchal for any period not extending beyond the said period of six months

Section 40. Reports relating to accounts of Uttar Pradesh State

(1) The reports of the Comptroller and Auditor-General of India referred to in clause (2) of article 151 relating to the accounts of the existing State of Uttar Pradesh in respect of any period pr or to the appointed day shall be submitted to the Governor of each of the successor States of Uttar Pradesh and Uttaranchal who shall cause them to be laid before the Legislature of that State

(2) The President may by order-

(a) Declare any expenditure incurred out of the Consolidated Fund of Uttar Pradesh on any service in respect of any period prior to the appointed day during the financial year or in respect of any earlier financial year in excess of the amount granted for that service and for that year as disclosed in the reports referred to in sub-section (1) to have been duly authorised; and

(b) Provide for any action to be taken on any matter arising out of the said reports

Section 41. Distribution of revenue

The President shall, by order, determine the share of the States of Uttar Pradesh and Uttaranchal in its total amount payable to the existing State of Uttar Pradesh on the recommendation of the Finance Commission constituted under article 280 in such manner as he thinks fit

Section 42. Application of Part

(1) The provisions of this Part shall apply in relation to the apportionment of the assets and liabilities of the existing State of Uttar Pradesh immediately before the appointed day

(2) The successor States shall be entitled to receive benefits arising out of the decisions taken by the predecessor State and the successor States shall be liable to bear the financial liabilities arising out of the decisions taken by the existing State of Uttar Pradesh

(3) The apportionment of assets and liabilities would be subject to such financial adjustment as may be necessary to secure just, reasonable and equitable apportionment of the assets and liabilities amongst the successor States

(4) Any dispute regarding the amount of financial assets and liabilities shall be settled through mutual agreement, failing which by order by the Central Government on the advice of the Comptroller and Auditor-General of India

Section 43. Land and goods

(1) Subject to the other provisions of this Part, all land and all stores, articles and other goods belonging to the existing State of Uttar Pradesh shall,-

(a) If within the transferred territory, pass to the State of Uttaranchal; or

(b) In any other case, remain the property of the State of Uttar Pradesh: Provided that where the Central Government is of opinion that any goods or class of goods should be distributed among the States of Uttar Pradesh and Uttaranchal, otherwise than according to the situation of the goods, the Central Government may issue su h directions as it thinks fit for a just and equitable distribution of the goods and the goods shall pass to the successor States accordingly: Provided further that in case of any dispute relating to the distribution of any goods or class of goods under this sub-section, the Central Government shall endeavour to settle such dispute through mutual agreement arrived at between the Governments of he successor States for that purpose, failing which the Central Government may, on request by any of the Governments of the successor States, after consulting both the Governments of the successor States, issue such direction as it may deem fit for the distribution of such goods or class of goods, as the case may be, under this sub-section

(2) Stores held for specific purposes, such as use or utilisation in particular institutions, workshops or undertakings or on particular works under construction, shall pass to the successor States in whose territories such institutions, workshops, under kings or works are located

(3) Stores relating to the Secretariat and offices of Heads of Departments having jurisdiction over the whole of the existing State of Uttar Pradesh shall be divided between the successor States in accordance with such directions as the Central Government may, after consultation with the Government of each successor States, think fit to issue for a just and equitable distribution of such stores

(4) Any other unissued stores of any class in the existing State of Uttar Pradesh shall be divided between the successor States in proportion to the total stores of that class purchased in the period of three years prior to the appointed day, for the territories of the existing State of Uttar Pradesh included respectively in each of the successor States: Provided that where such proportion cannot be ascertained in respect of any class of stores or where the value of any class of such stores does not exceed rupees ten thousand, that class of stores shall be divided between the successor States according t the population ratio

(5) In this section, the expression “land” includes immovable property of every kind and any rights in or over such property, and the expression “goods” does not include coins, bank notes and currency notes

Section 44. Treasury and bank balances

The total of the cash balances in all treasuries of the State of Uttar Pradesh and the credit balances of the State with the Reserve Bank of India, the State Bank of India or any other bank immediately before the appointed day shall be divided between the States of Uttar Pradesh and Uttaranchal according to the population ratio: Provided that for the purposes of such division, there shall be no transfer of cash balances from any treasury to any other treasury and the apportionment shall be effected by adjusting the credit balances of the two States in the books of the Reserve Back of India on the appointed day: Provided further that if the State of Uttaranchal has no account on the appointed day with the Reserve Bank of India, the adjustment shall be made in such manner as the Central Government may, by order, direct

Section 45. Arrears of taxes

The right to recover arrears of the tax or duty on property, including arrears of land revenue, shall belong to the successor State in which the property is situated, and the right to recover arrears of any other tax or duty shall b long to the successor State in whose territories the place of assessment of that tax or duty is included on the appointed day

Section 46. Right to recover loans and advances

(1) The right of the existing State of Uttar Pradesh to recover any loans or advances made before the appointed day to any local body, society, agriculturist or other person in an area within that State shall belong to the successor State in which that area is included on that day

(2) The right of the existing State of Uttar Pradesh to recover any loans or advances made before the appointed day to any person or institution outside that State shall belong to the State of Uttar Pradesh:

Provided that any sum recovered in respect of any such loan or advance shall be divided between the States of Uttar Pradesh and Uttaranchal according to the population ratio

Section 47. Investments and credits in certain funds

(1) The securities held in respect of the investments made from Cash Balances Investment Account or from any Fund in the Public Account of the existing State of Uttar Pradesh as specified in the Seventh Schedule shall be apportioned in the ratio of population of the successor States: Provided that the securities held in investments made from the Calamity Relief Fund of the existing State of Uttar Pradesh shall be divided in the ratio of the area of the territories occupied by the successor States: Provided further that the balance in the Reserve Funds in the Public Account of Uttar Pradesh created wholly out of appropriations from the Consolidated Fund of the existing State of Uttar Pradesh, to the extent the balances have not been invested outside Government account, shall not be carried forward to similar Reserve Funds in the Public Account of the successor States

(2) The investments of the existing State of Uttar Pradesh immediately before the appointed day in any special fund, the objects of which are confined to a local area, shall belong to the State in which that area is included on the appointed day

(3) The investments of the existing State of Uttar Pradesh immediately before the appointed day in any private, commercial or industrial undertaking, in so far as such investments have not been made or are deemed not to have been made from the Cash Balances Investment Account, shall pass to the State in which the principal seat of business of the undertaking is located

(4) Where any body corporate constituted under a Central Act, State Act or Provincial Act for the existing State of Uttar Pradesh or any part thereof has, by virtue of the provisions of Part II, become an inter-State body corporate, the investments in, o loans or advances to, any such body corporate by the existing State of Uttar Pradesh made before the appointed day shall, save as otherwise expressly provided by or under this Act, be divided between the States of Uttar Pradesh and Uttaranchal in the sa e proportion in which the assets of the body corporate are divided under the provisions of this Part

Section 48. Assets and liabilities of State undertakings

(1) The assets and liabilities relating to any commercial or industrial undertaking of the State of Uttar Pradesh shall pass to the State in which the undertaking is located

(2) Where a depreciation reserve fund is maintained by the State of Uttar Pradesh for any such commercial or industrial undertaking, the securities held in respect of investments made from that fund shall pass to the State in which the undertaking is located

Section 49. Public Debt

(1) All liabilities on account of Public Debt and Public Account of the existing State of Uttar Pradesh outstanding immediately before the appointed day shall be apportioned in the ratio of population of the successor States unless a different mode of apportionment is provided under the provisions of this Act

(2) The individual items of liabilities to be allocated to the successor States and the amount of contribution required to be made by one successor State to another shall be such as may be ordered by the Central Government in consultation with the Comptroller and Auditor-General of India: Provided that till such orders are issued, the liabilities on account of Public Debt and Public Account of the existing State of Uttar Pradesh shall continue to be the liabilities of the successor State of Uttar Pradesh

(3) The liability on account of loan raised from any source and re-lent by the existing State of Uttar Pradesh to such entities as may be specified by the Central Government and whose area of operation is confined to either of the successor States shall devolve on the respective States as specified in sub-section (4)

(4) The public debt of the existing State of Uttar Pradesh attributable to loan taken from any source for the express purpose of re-lending the same to a specific institution and outstanding immediately before the appointed day shall,-

(a) If re-lent to any local body, body corporate or other institution in any local area, be the debt of the State in which the local area is included on the appointed day; or

(b) If re-lent to the Uttar Pradesh Power Corporation Limited, the Uttar Pradesh Jal Vidyut Nigam Limited, the Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited, the Uttar Pradesh State Road Transport Corporation, or the Uttar Pradesh Housing Board or any other institution which becomes an inter-State institution on the appointed day, be divided between the States of Uttar Pradesh and Uttaranchal in the same proportion in which the assets of such body corporate or institution are divided under the provisions of Part VII

(5) Where a sinking fund or a depreciation fund is maintained by the existing State of Uttar Pradesh for repayment of any loan raised by it, the securities held in respect of investments made from that fund shall be divided between the successor States f Uttar Pradesh and Uttaranchal in the same proportion in which the total public debt is divided between the two States under this section

(6) In this section, the expression “Government security” means a security created and issued by a State Government for the purpose of raising a public loan and having any of the forms specified in, or prescribed under, clause (2) of section 2 of the Public Debt Act, 1944 (18 of 1944)

Section 50. Floating Debt

The liability of the State of Uttar Pradesh in respect of any floating loan to provide short-term finance to any commercial undertaking shall be the liability of the State in whose territories the undertaking is located

Section 51. Refund of taxes collected in excess

The liability of the existing State of Uttar Pradesh to refund any tax or duty on property, including land revenue, collected in excess shall be the liability of the successor State in whose territories the property is situated, and the liability of the existing State of Uttar Pradesh to refund any other tax or duty collected in excess shall be the liability of the successor State in whose territories the place of assessment of that tax or duty is included

Section 52. Deposits, etc

(1) The liability of the existing State of Uttar Pradesh in respect of any civil deposit or local fund deposit shall, as from the appointed day, be the liability of the State in whose area the deposit has been made

(2) The liability of the existing State of Uttar Pradesh in respect of any charitable or other endowment shall, as from the appointed day, be the liability of the State in whose area the institution entitled to the benefit of the endowment is located or of the State to which the objects of the endowment, under the terms thereof, are confined

Section 53. Provident Fund

The liability of the existing State of Uttar Pradesh in respect of the provident fund account of a Government servant in service on the appointed day shall, as from that day, be the liability of the State to which that Government ser ant is permanently allotted

Section 54. Pensions

The liability of the existing State of Uttar Pradesh in respect of pensions shall pass to, or be apportioned between, the successor States of Uttar Pradesh and Uttaranchal in accordance with the provisions contained in the Eighth Schedule o this Act

Section 55. Contracts

(1) Where, before the appointed day, the existing State of Uttar Pradesh has made any contract in the exercise of its executive power for any purposes of the State, that contract shall be deemed to have been made in the exercise of the executive power-

(a) If the purposes of the contract are, on and from the appointed day, exclusive purposes of either of the successor States of Uttar Pradesh and Uttaranchal; and

(b) In any other case, of the State of Uttar Pradesh, and all rights and liabilities which have accrued, or may accrue under any such contract shall, to the extent to which they would have been rights or liabilities of the existing State of Uttar Pradesh, be rights or liabilities of the State of Uttaranchal or the State of Uttar Pradesh, as the case may be: Provided that in any such case as is referred to in clause (b), the initial allocation of rights and liabilities made by this sub-section shall be subject to such financial adjustment as may be agreed upon between the successor States of Uttar Pradesh a d Uttaranchal or in default of such agreement, as the Central Government may, by order, direct

(2) For the purposes of this section, there shall be deemed to be included in the liabilities which have accrued or may accrue under any contract-

(a) Any liability to satisfy an order or award made by any court or other tribunal in proceedings relating to the contract; and

(b) Any liability in respect of expenses incurred in or in connection with any such proceedings

(3) This section shall have effect subject to the other provisions of this Part relating to the apportionment of liabilities in respect of loans, guarantees and other financial obligation; and bank balances and securities shall, notwithstanding that the partake of the nature of contractual rights, be dealt with under those provisions

Section 56. Liability in respect of actionable wrong

Where, immediately before the appointed day, the existing State of Uttar Pradesh is subject to any liability in respect of any actionable wrong other than breach of contract, that liability shall,-

(a) If the cause of action arose wholly within the territories which, as from that day, are the territories of either of the successor States of Uttar Pradesh or Uttaranchal, be a liability of that successor State; and

(b) In any other case, be initially a liability of the State of Uttar Pradesh, but subject to such financial adjustment as may be agreed upon between the States of Uttar Pradesh and Uttaranchal or, in default of such agreement, as the Central Government ay, by order, direct

Section 57. Liability as guarantor

Where, immediately before the appointed day, the existing State of Uttar Pradesh is liable as guarantor in respect of any liability of a registered co-operative society or other person, that liability of the existing State of Uttar Pradesh shall,-

(a) If the area of operations of such society or persons is limited to the territories which, as from that day, are the territories of either of the States of Uttar Pradesh or Uttaranchal, be a liability of that successor State; and

(b) In any other case, be initially a liability of the State of Uttar Pradesh, subject to such financial adjustment as may be agreed upon between the States of Uttar Pradesh and Uttaranchal or, in default of such agreements, as the Central Government may by order, direct

Section 58. Items in suspense

If any item in suspense is ultimately found to affect an asset or liability of the nature referred to in any of the foregoing provisions of this Part, it shall be dealt with in accordance with that provision

Section 59. Residuary provision

The benefit or burden of any asset or liability of the existing State of Uttar Pradesh not dealt with in the foregoing provisions of this Part shall pass to the State of Uttar Pradesh in the first instance, subject to such financial adjustment as may be agreed upon between the States of Uttar Pradesh and Uttaranchal or, in default of such agreement, as the Central Government may, by order, direct

Section 60. Apportionment of assets or liabilities by agreement

Where the successor States of Uttar Pradesh and Uttaranchal agree that the benefit or burden of any particular asset or liability should be apportioned between them in a manner other than that provided for in the foregoing provisions of this Part, notwithstanding anything contained therein, the benefit or burden of that asset or liability shall be apportioned in the manner agreed upon

Section 61. Power of Central Government to order allocation or adjustment in certain cases

Where, by virtue of any of the provisions of this Part, any of the successor States of Uttar Pradesh and Uttaranchal becomes entitled to any property or obtains any benefits or becomes subject to any liability, and the Central Government is of opinion, on a reference made within a period of three years from the appointed day by either of the States, that it is just and equitable that property or those benefits should be transferred to, or shared with, the other successor State, or that a contribution towards that liability should be made by the other successor State, the said property or benefits shall be allocated in such manner between the two States, or the other Stat shall make to the State subject to the liability such contribution in respect thereof, as the Central Government may, after consultation with the two State Governments, by order, determine

Section 62. Certain expenditure to be charged on Consolidated Fund

All sums payable either by the State of Uttar Pradesh or by the State of Uttaranchal to the other States or by the Central Government to either of those States, by virtue of the provisions of th s Act, shall be charged on the Consolidated Fund of the State by which such sums are payable or, as the case may be, the Consolidated Fund of India

Section 63. Provisions for Power Corporation Limited, etc

(1) The following bodies Corporate constituted for the existing State of Uttar Pradesh, namely:-

(a) The Uttar Pradesh Power Corporation Limited, the Uttar Pradesh Jal Vidyut Nigam Limited and the Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited;

(b) The Uttar Pradesh Electricity Regulatory Commission; and

(c) The State Warehousing Corporation established under the Warehousing Corporations Act, 1962 (58 of 1962), shall, on and from the appointed day, continue to function in those areas in respect of which they were functioning immediately before that day, subject to the provisions of this section and to such directions as may, from time to time, be issued by the enteral Government

(2) Any directions issued by the Central Government under sub-section (1) in respect of the Power Corporation, Commission or Warehousing Corporation shall include a direction that the Act under which the Power Corporation, Commission or Warehousing Corporation was constituted shall, in its application to that Power Corporation, Commission or Warehousing Corporation, have effect subject to such exceptions and modifications as the Central Government thinks fit

(3) The Power Corporation, Commission or Warehousing Corporation referred to in sub-section (1) shall cease to function as from, and shall be deemed to be dissolved on such date as the Central Government may, by order, appoint; and upon such dissolution, its assets, rights and liabilities shall be apportioned between the successor States of Uttar Pradesh and Uttaranchal in such manner as may be agreed upon between them within one year of the dissolution of the Power Corporation, Commission or Warehousing Corporation, as the case may be, or if no agreement is reached, in such manner as the Central Government may, by order, determine: Provided that any liabilities of any of the said Power Corporations referred to in clause (a) of sub-section (1) relating to the unpaid dues of the coal supplied to the Power Corporation by any public sector coal company shall be provisionally apportioned between the corresponding Power Corporations constituted respectively in the successor States of the existing State of Uttar Pradesh or after the date appointed for the dissolution of the Power Corporation under this sub-section in such manner as may b agreed upon between the Governments of the successor States within one month of such dissolution or if no agreement is reached, in such manner as the Central Government may by order determine subject to reconciliation and finalisation of the liabilities which shall be completed within three months from the date of such dissolution by the mutual agreement between the successor States or failing such agreement by the direction of the Central Government:

Provided further that an interest at the rate of two per cent higher than the cash credit interest shall be paid on outstanding unpaid dues of the coal supplied to the Electricity Corporation by the public sector coal company till the liquidation of such dues by the concerned State Power Corporation constituted in the successor States on or after the date appointed for the dissolution of the Power Corporation under this sub-section

(4) Nothing in the preceding provisions of this section shall be construed as preventing the Government of the State of Uttar Pradesh or, as the case may be, the Government of the State of Uttaranchal Power Corporation, an Electricity Regulatory Commission or a State Warehousing Corporation for the State under the provisions of this Act relating to such Power Corporation, Commission or Warehousing Corporation; and if such a Power Corp from constituting, at any time on or after the appointed day, a State ration, Commission or Warehousing Corporation is so constituted in either of the States before the dissolution of the Power Corporation, Commission or Warehousing Corporation referred to in sub-section (1),-

(a) Provision may be made by order of the Central Government enabling the new Power Corporation, new Commission or the new Warehousing Corporation to take over from the existing Power Corporation, Commission or Warehousing Corporation all or any of its u der takings, assets, rights and liabilities in that State, and

(b) Upon the dissolution of the existing Power Corporation, Commission or Warehousing Corporation,-

(i) Any assets, rights and liabilities which would otherwise have passed to that State by or under the provisions of sub-section (3) shall pass to the new Board, new Commission or the new Warehousing Corporation instead of to that State;

(ii) Any employee who would otherwise have been transferred to or re-employed by that State under sub-section (3), read with clause (i) of sub-section (5), shall be transferred to or re-employed by the new Power Corporation, new Commission or the new War housing Corporation instead of to or by that State

(5) An agreement entered into between the successor States under sub-section (3) and an order made by the Central Government under that sub-section or under clause (a) of sub-section (4) may provide for the transfer or re-employment of any employee of the Power Corporation, Commission or Warehousing Corporation referred to in sub-section (1),-

(i) To or by the successor States, in the case of an agreement under sub-section (2) or an order made under that sub-section;

(ii) To or by the new Power Corporation, new Commission or the new Warehousing Corporation constituted under sub-section (4), in the case of an order made under clause (a) of that sub-section, and, subject to the provisions of section 68, also for the terms and conditions of service applicable to such employees after such transfer or re-employment

Section 64. Continuance of arrangements in regard to generation and supply of electric power and supply of water

If it appears to the Central Government that the arrangement in regard to the generation of supply or electric power or the supply of water for any rea or in regard to the execution of any project for such generation or supply has been or is likely to be modified to the disadvantage of that area by reason of the fact that it is, by virtue of the provisions of Part II, outside the State in which the owner stations and other installations for the generation and supply of such power, or the catchment area, reservoirs and other works for the supply of water, as the case may be, are located, the Central Government may, after consultation with the Government of each successor States wherever necessary, give such directions as it deems proper to the State Government or other authority concerned for the maintenance, so far as practicable, of the previous arrangement

Section 65. Provisions as to Uttar Pradesh State Financial Corporation

(1) The Uttar Pradesh State Financial Corporation established under the State Financial Corporations Act, 1951 (63 of 1951) shall, on and from the appointed day, continue to function in those areas in respect of which it was functioning immediately before that day, subject to the provisions of this section and to such directions as may, from time to time, be issued by the Central Government

(2) Any directions issued by the Central Government under sub-section (1) in respect of the Corporation may include a direction that the said Act, in its application to the Corporation, shall have effect subject to such exceptions and modifications as ma be specified in the direction

(3) Notwithstanding anything contained in sub-section (1) or sub-section (2), the Board of Directors of the Corporation may, with the previous approval of the Central Government and shall, if so required by the Central Government, convene at any time aft r the appointed day a meeting for the consideration of a scheme for the reconstitution or reorganisation or dissolution, as the case may be, of the Corporation, including proposals regarding the formation of new Corporations, and the transfer thereto of he assets, rights and liabilities of the existing Corporation, and if such a scheme is approved at the general meeting by a resolution passed by a majority of the shareholders present and voting, the scheme shall be submitted to the Central Government for its sanction

(4) If the scheme is sanctioned by the Central Government either without modifications or with modifications which are approved at a general meeting, the Central Government shall certify the scheme, and upon such certification, the scheme shall, not withes ending anything to the contrary contained in any other law for the time being in force, be binding on the Corporations affected by the scheme as well as the shareholders and creditors thereof

(5) If the scheme is not so approved or sanctioned, the Central Government may refer the scheme to such Judge of the High Court of Uttar Pradesh and Uttaranchal as may be nominated in this behalf by the Chief Justice thereof, and the decision of the Judg in regard to the scheme shall be final and shall be binding on the Corporations affected by the scheme as well as the shareholders and creditors thereof

(6) Nothing in the preceding provisions of this section shall be construed as preventing the Government of the States of Uttar Pradesh and Uttaranchal from constituting, at any time on or after the appointed day, a State Financial Corporation for that State under the State Financial Corporations Act, 1951 (63 of 1951)

Section 66. Provisions as to certain companies

(1) Notwithstanding anything contained in the foregoing provisions of this Part, each of the companies specified in the Ninth Schedule to this Act shall, on and from the appointed day and until otherwise provided f r in any law, or in any agreement among the successor States, or in any direction issued by the Central Government, continue to function in the areas in which it was functioning immediately before that day; and the Central Government may from time to time issue such directions in relation to such functioning as it may deem fit, notwithstanding anything to the contrary contained in the Companies Act, 1956 (1 of 1956), or in any other law

(2) Any directions issued under sub-section (1) in respect of a company referred to in that sub-section, may include directions-

(a) Regarding the division of the interests and shares of existing State of Uttar Pradesh in the Company among the successor States;

(b) Requiring the reconstitution of the Board of Directors of the Company so as to give adequate representation to all the successor States

Section 67. General provision as to statutory Corporations

(1) Save as otherwise expressly provided by the foregoing provisions of this Part, where any body corporate constituted under a Central Act, State Act or Provincial Act for the existing State of Uttar Pradesh or any part thereof has, by virtue of the provisions of Part II, become an inter-State body corporate, then, the body corporate shall, on and from the appointed day, continue to function and operate in those areas in respect of which it was functioning and operating immediately before that day, subject to such directions as may from time to time be issued by the Central Government, until other provision is made by law in respect of the said body corporate

(2) Any directions issued by the Central Government under sub-section (1) in respect of any such body corporate shall include a direction that any law by which the said body corporate is governed shall, in its application to that body corporate, have eff ct subject to such exceptions and modifications as may be specified in the direction

Section 68. Temporary provisions as to continuance of certain existing road transport permits

(1) Notwithstanding anything contained in section 89 of the Motor Vehicles Act, 1988 (59 of 1988), a permit granted by the State Transport Authority of the existing State of Uttar Pradesh or any Regional Transport Authority in that State shall, if such permit was, immediately before the appointed day, valid and effective in any area in the transferred territory, be deemed to continue to be valid and effective in that a ea after that day subject to the provisions of that Act as for the time being in force in that area; and it shall not be necessary for any such permit to be countersigned by the State Transport Authority of Uttaranchal or any Regional Transport Authority therein for the purpose of validating it for use in such area: Provided that the Central Government may, after consultation with the successor State Government or Governments concerned add to amend or vary the conditions attached to the permit by the Authority by which the permit was granted

(2) No tolls, entrance fees or other charges of a like nature shall be levied after the appointed day in respect of any transport vehicle for its operations in any of the successor States under any such permit, if such vehicle was, immediately before than day, exempt from the payment of any such toll, entrance fees or other charges for its operations in the transferred territory: Provided that the Central Government may, after consultation with the State Government or Governments concerned, authorise the levy of any such toll, entrance fees or other charges, as the case may be: Provided further that the provisions of this sub-section shall not be applicable where any such tolls, entrance fees or other charges of a like nature is leviable for the use of any road or bridge which is constructed or developed for commercial purpose y the State Government, an undertaking of the State Government, a joint undertaking in which the State Government is a shareholder or a private sector

Section 69. Special provisions relating to retrenchment compensation in certain cases

Where on account of the reorganisation of the existing State of Uttar Pradesh under this Act, any body corporate constituted under a Central Act, State Act or Provincial Act, ny co-operative society registered under any law relating to co-operative societies or any commercial or industrial undertaking of that State is reconstituted or reorganised in any manner whatsoever or is amalgamated with any other body corporate, co-ope active society or undertaking, or is dissolved, and in consequence of such reconstitution, reorganisation, amalgamation or dissolution, any workman employed by such body corporate or in any such co-operative other body corporate, or in any other co-operative society or undertaking, then, notwithstanding anything contained in section 25F or section 25FF or section 25FFF of the Industrial Disputes Act, 1947 (14 of 1947), such transfer or re-e society or undertaking, is transferred to, or r -employed by, any polymeat shall not entitle him to any compensation under that section:

Provided that-

(a) The terms and conditions of service applicable to the workman after such transfer or re-employment are not less favourable to the workman than those applicable to him immediately before the transfer or re-employment;

(b) The employer in relation to the body corporate, the co-operative society or the undertaking where the workman transferred or re-employed is, by agreement or otherwise, legally liable to pay to the workman, in the event of his retrenchment, compensation under section 25F or section 25FF or section 25FFF of the Industrial Disputes Act, 1947 (14 of 1947) on the basis that his service has been continuous and has not been interrupted by the transfer or re-employment

Section 70. Special provision as to income-tax

Where the assets, rights and liabilities of any body corporate carrying on business are, under the provisions of this Part, transferred to any other bodies corporate which after the transfer carry on the same business, the losses or profits or gains sustained by the body corporate first-mentioned which, but for such transfer, would have been allowed to be carried forward and set off in accordance with the provisions of Chapter VI of the Income-tax Act, 1961 (43 of 961), shall be apportioned amongst the transferee bodies corporate in accordance with the rules to be made by the Central Government in this behalf and, upon such apportionment, the share of loss allotted to each transferee body corporate shall be dealt itch in accordance with the provisions of Chapter VI of the said Act, as if the transferee body corporate had itself sustained such loss in a business carried on by it in the years in which these losses were sustained

Section 71. Continuance of facilities in certain State institutions

(1) The Government of State of Uttar Pradesh or Uttaranchal, as the case may be, shall, in respect of the institutions specified in the Tenth Schedule to this Act, located in that State, continue to provide facilities to the people of the other State which shall not, in any respect, be less favourable to such people than what were being provided to them before the appointed day, for such period and upon such terms and conditions as may be agree upon between the two State Governments before the 1st day of December, 2001 or if no agreement is reached by the said date as may be fixed by order of the Central Government

(2) The Central Government may, at any time before the 1st day of December, 2001, by notification in the Official Gazette, specify in the Tenth Schedule referred to in sub-section (1) any other institution existing on the appointed day in the States of Uttar Pradesh and Uttaranchal and on the issue of such notification, such Schedule shall be deemed to be amended by the inclusion of the said institution therein

Section 72. Provisions relating to All-India Services

(1) In this section, the expression “State cadre”- (a) in relation to the Indian Administrative Service, has the meaning assigned to it in the Indian Administrative Service (Cadre) Rules, 1954; (b) in relation to the Indian Police Service, has the meaning assigned to it in the Indian Police Service (Cadre) Rules, 1954; and (c) in relation to the Indian Forest Service, has the meaning assigned to it in the Indian Forest Service (Cadre) Rules, 1966

(2) In place of the cadres of the Indian Administrative Service, Indian Police Service and Indian Forest Service for the existing State of Uttar Pradesh, there shall, on and from the appointed day, be two separate cadres, one for the State of Uttar Pradesh and the other for the State of Uttaranchal in respect of each of these services

(3) The initial strength and composition of the State cadres referred to in sub-section (2) shall be such as the Central Government may, by order, determine before the appointed day

(4) The members of each of the said services borne on the Uttar Pradesh cadre thereof immediately before the appointed day shall be allocated to the State cadres of the same service constituted under sub-section (2) in such manner and with effect from such date or dates as the Central Government may, by order, specify

(5) Nothing in this section shall be deemed to affect the operation, on or after the appointed day, of the All-India Services Act, 1951 (61 of 1951), or the rules made there under

Section 73. Provisions relating to other services

(1) Every person who immediately before the appointed day is serving in connection with the affairs of the existing State of Uttar Pradesh shall, on and from that day provisionally continue to serve in connect in with the affairs of the State of Uttar Pradesh unless he is required, by general or special order of the Central Government to serve provisionally in connection with the affairs of the State of Uttaranchal:

Provided that every direction under this sub-section issued after the expiry of a period of one year from the appointed day shall be issued with the consultation of the Governments of the successor States

(2) As soon as may be after the appointed day, the Central Government shall, by general or special order, determine the successor State to which every person referred to in sub-section (1) shall be finally allotted for service and the date with effect from which such allotment shall take effect or be deemed to have taken effect

(3) Every person who is finally allotted under the provisions of sub-section (2) to a successor State shall, if he is not already serving therein be made available for serving in the successor State from such date as may be agreed upon between the Govern ends concerned or in default of such agreement, as may be determined by the Central Government

Section 74. Other provisions relating to services

(1) Nothing in this section or in section 73 shall be deemed to affect on or after the appointed day, the operation of the provisions of Chapter I of Part XIV of the Constitution in relation to determination of he conditions of service of persons serving in connection with the affairs of the Union or any State: Provided that the conditions of service applicable immediately before the appointed day in the case of any person deemed to have been allocated to the State of Uttar Pradesh or to the State of Uttaranchal the previous approval of the Central Government under section 73 shall not be varied to his disadvantage except with

(2) All services prior to the appointed day rendered by a person,-

(a) If he is deemed to have been allocated to any State under section 73, shall be deemed to have been rendered in connection with the affairs of that State;

(b) If he is deemed to have been allocated to the Union in connection with the administration of the Uttaranchal, shall be deemed to have been rendered in connection with the affairs of the Union, for the purposes of the rules regulating his conditions of service

(3) The provisions of section 73, shall not apply in relation to members of any All-India Service

Section 75. Provisions as to continuance of officers in same post

(1) Every person who, immediately before the appointed day, is holding or discharging the duties of any post or office in connection with the affairs of the existing State of Uttar Pradesh in any area which on that day falls within any of the successor States shall continue to hold the same post or office in that successor State, and shall be deemed, on and from that day, to have been duly appointed to the post or office by the Government of, or any other appropriate authority in that successor State: Provided that nothing in this section shall be deemed to prevent a competent authority, on and from the appointed day, from passing in relation to such person any order affecting the continuance in such post or office

Section 76. Advisory Committees

The Central Government may, by order, establish one or more Advisory Committees for the purpose of assisting it in regard to-

(a) The discharge of any of its functions under this Part; and

(b) The ensuring of fair and equitable treatment to all persons affected by the provisions of this Part and the proper consideration of any representations made by such persons

Section 77. Power of Central Government to give directions

The Central Government may give such directions to the State Government of Uttar Pradesh and the State Government of Uttaranchal as may appear to it to be necessary for the purpose of giving effect to t e foregoing provisions of this Part and the State Government shall comply with such directions

Section 78. Provisions as to State Public Service Commission

(1) The Public Service Commission for the existing State of Uttar Pradesh shall, on and from the appointed day, be the Public Service Commission for the State of Uttar Pradesh

(2) The persons holding office immediately before the appointed day as the Chairman or other member of the Public Service Commission for the existing State of Uttar Pradesh shall, as from the appointed day, be the Chairman or, as the case may be, the other member of the Public Service Commission for the State of Uttar Pradesh

(3) Every person who becomes the Chairman or other member of the Public Service Commission for the State of Uttar Pradesh on the appointed day under sub-section (2), shall-

(a) Be entitled to receive from the Government of the State of Uttar Pradesh conditions of service not less favourable than those to which he was entitled under the provisions applicable to him;

(b) Subject to the proviso to clause (2) of article 316, hold office or continue to hold office until the expiration of his term of office as determined under the provisions applicable to him immediately before the appointed day

(4) The report of the Uttar Pradesh Public Service Commission as to the work done by the Commission in respect of any period prior to the appointed day shall be presented under clause (2) of article 323 to the Governors of the States of Uttar Pradesh and Uttaranchal, and the Governor of the State of Uttar Pradesh shall, on receipt of such report, cause a copy thereof together with a memorandum explaining as far as possible, as respects the cases, if any, where the advice of the Commission was not accepted , the reasons for such non-acceptance to be laid before the Legislature of the State of Uttar Pradesh and it shall not be necessary to cause such report or any such memorandum to be laid before the Legislative Assembly of the State of Uttaranchal

Section 79. Water Resources Development and its Management

(1) Notwithstanding anything contained in this Act but subject to the provisions of section 80, all rights and liabilities of the existing State of Uttar Pradesh in respect of water resource projects n relation to-

(i) Ganga and its tributaries traversing the successor States excluding the Upper Yamuna River up to Okhla; and

(ii) Upper Yumuna River and its tributaries up to Okhla, shall, on the appointed day, be the rights and liabilities of the successor States in such proportion as may be fixed, and subject to such adjustments as may be made, by agreement entered into by the said States after consultation with the Central Government, or, if no such agreement is entered into within two years of the appointed day, then, the Central Government may, by order, determine within one year having regard to the purposes of the project: Provided that the order so made by the Central Government may be varied by any subsequent agreement entered into by the successor States after consultation with the Central Government

(2) An agreement or order referred to in sub-section (1) shall, where an extension or further development of any of the projects referred to in that sub-section after the appointed day is undertaken, be the rights and liabilities of the successor States in relation to such extension or further development

(3) The rights and liabilities referred to in sub-sections (1) and (2) shall include-

(a) The right to receive and utilise the water available for distribution as a result of the projects; and

(b) The right to receive and utilise the power generated as a result of the projects, but shall not include the rights and liabilities under any contract entered into before the appointed day by the Government of the existing State of Uttar Pradesh with any person or authority other than Government

Section 80. Constitution and functions of the Ganga Management Board

(1) The Central Government shall constitute a Board to be called the Ganga Management Board (hereinafter referred to as the Board) for referred to in sub-section (1) of section 79 for any or for a combination of the following purposes, namely:- administration, construction, maintenance and operation of projects (i) irrigation; (ii) rural and urban water supply; (iii) hydro power generation; (iv) navigation; (v) industries; and (vi) for any other purpose which the Central Government may, by notification in the Official Gazette, specify

(2) The Board shall consist of-

(a) A whole-time Chairman to be appointed by the Central Government in consultation with the successor States;

(b) Two full time members, one from each of the successor States, to be nominated by the respective State Government;

(c) Four part-time members, two from each of the successor States, to be nominated by the respective State Government;

(d) Two representatives of the Central Government to be nominated by that Government

(3) The functions of the Board shall include

(a) The regulation of supply of water from the projects referred to in clause (i) of sub-section (1) of section 79 to the successor States having regard to-

(i) Any agreement entered into or arrangement made covering the Government of existing State of Uttar Pradesh and any other State or Union territory, and

(ii) The agreement or the order referred to in sub-section (2) of section 79;

(b) The regulation of supply of power generated at the projects referred to in clause (i) of sub-section (1) of section 79, to any Electricity Board or other authority in-charge of the distribution of power having regard to-

(i) Any agreement entered into, or arrangement made covering the Government of the existing State of Uttar Pradesh and any other State or Union territory, and

(ii) The agreement or the order referred to in sub-section (2) of section 79;

(c) The construction of such of the remaining on-going or new works connected with the development of the water resources projects relating to the rivers or their tributaries as the Central Government may specify by notification in the Official Gazette

(d) Such other functions as the Central Government may, after consultation with the successor States entrust to it

Section 81. Staff of the Management Board

(1) The Board may employ such staff, as it may consider necessary for the efficient discharge of its functions under this Act. Such staff shall at the first instance, be any other method: appointed on deputation from the successor State ailing which through Provided that every person who, immediately before the constitution of the said Board, was engaged in the construction, maintenance or operation of the works relating to the projects referred to in clause (i) of sub-section (1) of section 79 shall continue to be so employed under the Board in connection with the said works on the same terms and conditions of service as were applicable to him before such constitution until the Central Government, by order, directs otherwise:

Provided further that the said Board may, in consultation with the Government of the successor State or the Electricity Board concerned and with the prior approval of the Central Government, retain any such person for service under that State Government r Board

(2) The Government of the successor States shall at all times provide the necessary funds to the Board to meet all expenses (including the salaries and allowances of the staff) required for the discharge of its functions and such amounts shall be apportned between the States concerned in such proportion as the Central Government may, having regard to the benefits to each of the said States specify

(3) The Board shall be under the control of the Central Government and shall comply with such directions, as may, from time to time, be given to it by that Government

(4) The Board may delegate such of its powers, functions and duties as it may deem fit to the Chairman of the said Board or to any officer subordinate to the Board

(5) The Central Government may, for the purpose of enabling the Board to function efficiently, issue such directions to the State Governments concerned, or any other authority, and the State Governments, or the other authority shall comply with such directions

Section 82. Jurisdiction of the Board

(1) The Board shall, ordinarily exercise jurisdiction in regard to any of the projects referred to in clause (i) of sub-section (1) of section 79 over headwork’s (barrages, dams, reservoirs, regulating structures), part of canal network and transmission lines necessary to deliver water or power to the States concerned

(2) If any question arises as to whether the Board has jurisdiction under sub-section (1) over any project referred thereto, the same shall be referred to the Central Government for decision thereon

Section 83. Power of Board to make regulations

The Board may make regulations consistent with the Act and the rules made there under, to provide for-

(a) Regulating the time and place of meetings of the Board and the procedure to be followed for the transaction of business at such meetings;

(b) Delegation of powers and duties of the Chairman or any officer of the Board;

(c) The appointment and regulation of the conditions of service of the officers and other staff of the Board;

(d) Any other matter for which regulations are considered necessary by the Board

Section 84. Allocation of the water resources of the River Yamuna

(1) The utilisable water resources of the Yamuna River up to Okhla, as allocated, before the appointed day, to the existing State of Uttar Pradesh under the Memorandum of Undertakings, dated the 2nd May, 1994 shall be further allocated between the successor States by mutual agreement within a period of two years, failing which, the Central Government shall, by order, determine the allocation of such water resource between the successor States within a further period of one year

(2) The State of Uttaranchal shall, on the appointed day, be inducted as a member of the Upper Yamuna Board constituted for the implementation of the Memorandum of Undertaking referred to in sub-section (1)

Section 85. Amendment of section 15 of Act 37 of 1956

On and from the appointed day, in section 15 of the States Reorganisation Act, 1956 (U.P.Act 1 of 1961), in clause (b), for the words “Uttar Pradesh and Madhya Pradesh”, the words “Uttar Pradesh, Uttaranchal and Madhya Pradesh” shall be substituted

Section 86. Territorial extent of laws

The provisions of Part II shall not be deemed to have affected any change in the territories to which the Uttar Pradesh Imposition of Ceiling of Land Holding Act, 1961 and any other law in force immediately before the appointed day, extends or applies, and territorial references in any such law to the State of Uttar Pradesh shall, until otherwise provided by a competent Legislature or other competent authority be construed as meaning the territories within the existing State of Uttar Pradesh before the appointed day

Section 87. Power to adapt laws

For the purpose of facilitating the application in relation to the State of Uttar Pradesh or Uttaranchal of any law made before the appointed day, the appropriate Government may, before the expiration of two years from that day, y order, make such adaptations and modifications of the law, whether by way of repeal or amendment, as may be necessary or expedient, and thereupon every such law shall have effect subject to the adaptations and modifications so made until altered, repeated or amended by a competent Legislature or other competent authority

Explanation.

In this section, the expression “appropriate Government” means as respects any law relating to a matter enumerated in the Union List, the Central Government, and as respects any other law in its application to a State, the State Government

Section 88. Power to construe laws

Notwithstanding that no provision or insufficient provision has been made under section 87 for the adaptation of a law made before the appointed day, any court, tribunal or authority, required or empowered to enforce such law ay, for the purpose of facilitating its application in relation to the State of Uttar Pradesh or Uttaranchal, construe the law in such manner, without affecting the substance, as may be necessary or proper in regard to the matter before the court, tribunal or authority

Section 89. Power to name authorities, etc., for exercising statutory functions

The Government of the State of Uttaranchal, as respects the transferred territory may, by notification in the Official Gazette, specify the authority, officer or person who, on or a ter the appointed day, shall be competent to exercise such functions exercisable under any law in force on that day as may be mentioned in that notification and such law shall have effect accordingly

Section 90. Legal proceedings

Where immediately before the appointed day, the existing State of Uttar Pradesh is a party to any legal proceedings with respect to any property, rights or liabilities subject to apportionment between the States of Uttar Pradesh a d Uttaranchal under this Act, the State of Uttar Pradesh or Uttaranchal which succeeds to, or acquires a share in, that property or those rights or liabilities by virtue of any provision of this Act shall be deemed to be substituted for the existing Stat of Uttar Pradesh or added as a party to those proceedings, and the proceedings may continue accordingly

Section 91. Transfer of pending proceedings

(1) Every proceeding pending immediately before the appointed day before a court (other than High Court), tribunal, authority or officer in any area which on that day falls within the State of Uttar Pradesh shall, if t is a proceeding relating exclusively to the territory, which as from that day are the territories of Uttaranchal State, stand transferred to the corresponding court, tribunal, authority or officer of that State

(2) If any question arises as to whether any proceeding should stand transferred under sub-section (1) it shall be referred to the High Court at Allahabad and the decision of that High Court shall be final

(3) In this section-

(a) “Proceeding’’ includes any suit, case or appeal; and

(b) “Corresponding court, tribunal, authority or officer” in the State of Uttaranchal means-

(i) The court, tribunal, authority or officer in which, or before whom, the proceeding would have laid if it had been instituted after the appointed day; or

(ii) In case of doubt, such court, tribunal, authority, or officer in that State, as may be determined after the appointed day by the Government of that State or the Central Government, as the case may be, or before the appointed day by the Government of the existing State of Uttar Pradesh to be the corresponding court, tribunal, authority or officer

Section 92. Right of pleaders to practise in certain cases

Any person who, immediately before the appointed day, is enrolled as a pleader entitled to practise in any subordinate courts in the existing State of Uttar Pradesh shall, for a period of one year from hat day, continue to be entitled to practise in those courts, notwithstanding that the whole or any part of the territories within the jurisdiction of those courts has been transferred to the State of Uttaranchal

Section 93. Effect of provisions of the Act inconsistent with other laws

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law

Section 94. Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act, the President may, by order, do anything not inconsistent with such provisions which appears to him to be necessary or expedient for the purpose of removing the difficulty: Provided that no such order shall be made after the expiry of a period of three years from the appointed day

(2) Every order made under this section shall be laid before each House of Parliament

Bydeb

The Waste Lands (Claims) Act, 1863

Preamble

1[The WASTE LANDS (CLAIMS) ACT, 1863]

[ACT NO.23 OF 1863]2

[10th March 1863.]

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1. Short title given by the Indian Short Titles Act, 1897 (14 of 1897)

2. This Act has been declared to be in force in all Part A States except the Scheduled Districts, by the Laws Local Extent Act, 1874 (15 of 1874), s.3.

It has been declared by notification under s.3 (a) of the Scheduled Districts Act, 1874 (14 of 1874), to be in force in the following Scheduled Districts namely:—

West JalpaiguriSee Gazette of India1881, Pt.I, P.1.
The Districts of Hazaribagh, Lohardaga (now the Ranchi District, see Calcutta Gazette, 1899, Pt.1p.44), and Manbhum and ParganaDitto1881, Pt.I, p.504.
Dhalbhum and the Kolhan in the District of Singbhurn
The Porahat Estate in the Sing bhum DistrictDitto1897, Pt.I, p.1059
Kumaon and GarhwalDitto1876, Pt.I, p.605
The Scheduled portion of the Mirzapur DistrictDitto1879, Pt.I, p.383.
Jaunsar BawarDitto1879, Pt.I, p.382.
The District of LahaulDitto1886, Pt.I, p.’301
The Districts of Kamrup, Naugong, Darrang, Sibsagar, Lakhimpur, Goalpara (excluding the Eastern Duars) and Cachar (excluding the North Cachar Hills)Ditto1878, Pt.I, p.533.

It has been declared under s.3 (b) of the same Act not to be in force in the Scheduled Districts in Ganjam and Vizagapatam, see Gazette of India, 1898, Pt.I, p.872

It has been extended, by notification under s.5 of the last-mentioned Act, to the following Scheduled Districts, namely:—

Western Duars.Gazette of India,1875, Pt.I, p.497.
The Tarai of the province of AgraDitto1876, Pt.I, p.505

It has been repealed in Bombay by the Waste Lands (Claims) (Bombay Repeal) Act, 1943 (Bom.9 of 1943).

This Act has been extended to the new provinces and Merged States by the Merged States (Laws) Act, 949 (59 of 1949) and to the States of Manipur, Tripura and Vindhya Pradesh by the part C States (Laws) Act, 1950 (30 of 1950}.

An Act to provide for the adjudication of claims to waste lands.

WHEREAS it is expedient to make special provision for the speedy adjudication of claims which may be preferred to waste lands proposed to be sold, or otherwise dealt with, on account of 1[the Provincial Government], and of objections taken to the sale or other disposition of such lands;

It is enacted as follows:—

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1. Subs. by the A.O.1937 for ” Govt.”

Section 1. Provision for enquiry in claims, to land, or objection to sale of same

When any claim shall be preferred to any waste land proposed to be sold, or otherwise dealt with, on account of 1[The State Government], or when any objection shall be taken to the sale or other on disposition of such land, the Collector of the district in which such land is situate, or other officer performing the duties of a Collector of Land Revenue in such district by whatever name his office is designated, shall, if the claim or objection be preferred within the period mentioned in the advertisement to be issued for the sale or other disposition of such land, which period shall not be less than three months, proceed to make an enquiry into the claim or objection.

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1. Subs. by the A.O.1937 for ” Govt.”.

Section 2. Procedure in such cases

The Collector or other officer as aforesaid shall call upon the claimant or objector to produce any evidence, or documents, upon which he may rely in proof of his claim or objection; and after considering the same, and making any further enquiry that may appear proper, shall dispose of the case by an order for the admission or rejection of the claim or objection; and if the land is proposed to be sold, for the sale of the same subject to any condition or reservation which, to such Collector or other officer as aforesaid, shall appear to be proper.

Notification of conditions. If the land is ordered to be sold subject to any condition or reservation, such condition or reservation shall be notified to intending purchasers at the time of sale.

Section 3. Postponement of sale pending enquiry, to allow claimant to contest rejection of claim

Pending an enquiry into any claim or objection under the date last preceding section, the Collector or other officer as aforesaid shall postpone the sale or other disposition of the land;

And, if he shall order that such claim or objection be rejected, he of shall further postpone the sale or other disposition of the land, to allow the claimant or objector to contest the order of rejection in the manner hereinafter provided.

Section 4. Sale to be stopped if claim appear to be established, but may afterwards be proceeded with

If the Collector or other officer as aforesaid shall consider the claim or objection to be established, and that the sale or other disposition of the land should not take place, he shall stop the sale or other disposition of the land:

But such sale or other disposition of the land may afterwards be proceeded with, if, on an order issued 1 to try to claim or objection, as provided in section 6 of this Act, the claimant or objector shall fail to establish the same.

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1. The words “by the L.G.” rep.by Act 4 of 1914, Sch., Pt.I

Section 5. Delivery to claimant of copy of order of rejection or of sale

If the Collector or other officer as aforesaid shall order that the claim or objection be rejected, or that the land be sold subject to any condition or reservation, or that it be otherwise dealt with, he shall cause a copy of such order to be delivered to the claimant or objector;

Order when final. and if such claimant or objector shall not, within one week from the delivery of such copy, or within such further time as the Collector or other officer as aforesaid, for any special reason to be recorded, shall see fit to grant, give notice in writing to such Collector or other officer as aforesaid, that he intends to contest such order, the order shall be final.

Report to Board. If the claimant or objector shall, within the time allowed, give such notice, the Collector or other officer as aforesaid shall immediately make a report to the 1Superior revenue authority 2[to which he is immediately subordinate] and shall forward with such report a copy of his order, stating fully all the circumstances of the case, and the evidence adduced in support, or otherwise, of the claim or objection;

Decision of Board. and such 3Authority, on the receipt of such report, and after calling for any further information which it may consider necessary, of may confirm, modify or reverse the order of the Collector or other officer as aforesaid.

Certification to Court. If the 3authority as aforesaid confirm the order of the Collector or other officer as aforesaid, or modify such order in such to manner as to leave any part of such order in force adverse to the claimant or objector, the Collector or other officer as aforesaid shall certify such order to the Court constituted as hereinafter provided;

Notice to claimant. and such Court shall forthwith give notice to the claimant or objector;

Decision when final. and if such claimant or objector shall not 4institute a suit in such Court to establish his claim or objection, the order of the 3authority aforesaid shall be final.

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1. The words “Board of Revenue of other” were repealed by the Decentration Act, 1914 (4 of 1914), Sch., Pt, I.

2. Inserted, by the Decentration Act, 1914 (4 of 1914), Sch., Pt, I.

3. The words ” Board or other ” rep. by Act 4 of 1914, Sch., Pt.I

4. The words ” within thirty days from the delivery of such notice from the Court” rep by Act 9 of 1871. (9 of 1871).

Section 6. Power to order suit to try claim admitted by Collector

The State Government may, within twelve months after the date on which the claim of any claimant of waste land, or the objection of any objector, as aforesaid, shall have been admitted under this Act by the Collector or other officer as aforesaid, direct a suit to be brought to try the claim or objection of the claimant or objector, in a Court constituted as hereinafter provided.

Section 7. Special Court for trying claims

For the investigation and trial of claims under this Act, the State Government shall constitute, in every district in which there may be any waste lands capable of being sold, or otherwise deaIt with, on account of 1[the State Government], a Court consisting of an uneven number of persons, not less than three, of whom the Judge of the district, or the officer presiding in the principal Civil Court of original jurisdiction in the district, by whatever name his office may be designated, shall be one.

Power of members. Any one or more of the members of which such Court shall consist shall have power to make all such orders in the case as may be necessary prior to the hearing of the suit:

Exclusion of officer making original enquiry. Provided that, whenever the Collector, or other officer, by whom the original enquiry was held, is the officer presiding in the principal Civil Court of original jurisdiction in the district, such officer shall not be a member of such Court.

——————–

1. Subs. by the A.O.1937 for ” Govt.”

Section 8. Notice of constitution of special Courts

Whenever any Court is constituted under this Act, notice thereof shall be given by a written proclamation, copies of which shall be affixed in the several Courts, and in the offices of the several Collectors and Magistrates of the district:

Claims not cognizable in other Courts. and from the date of the issue of such proclamation no other Court shall be competent to entertain any claim or objection belonging to the class of claims or objections for the trial and determination of which such Court is constituted.

Section 9. Special Court where held

The Courts constituted under this Act shall be held at such place, or places, within the limits of their respective jurisdictions, as shall be considered most convenient.

Section 10. Plaintiff and defendant in suit under section 5

In every suit instituted under section 5 of this Act, the claimant of the waste land, or objector to the sale or other disposition of such land, shall appear as plaintiff; and the Collector, or other officer aforesaid, shall appear as defendant on the part of 1[the State Government].

Appearance. Either party may appear by pleader or by agent:

Proviso. Provided that if such other officer as aforesaid be the presiding officer of the principal Civil Court of original jurisdiction in the district, the State Government shall appoint some other officer to appear as defendant in the case on its behalf.

Plaintiff and defendant in suits under section 6. In any suit ordered to be instituted 2under section 6 of this Act, { 1[the State Government] by any officer, to be appointed for the purpose, shall appear as plaintiff; and the claimant or objector as aforesaid shall appear as defendant.

——————–

1. Subs. by the A.O.1937 for ” Govt.”

2. The words ” by the L.G.” rep.by Act 4 of 1914, Sch., Pt.I.

Section 11. Regulation of proceedings

In suits instituted under this Act, except as hereinafter provided, the proceedings shall be regulated, so far as they can be, by the Code of Civil Procedure.

Section 12. Procedure before hearing

The Court shall fix a day for the appearance of the parties and for the hearing of the suit, of which due notice shall be given to the parties or their agents; and on the day so fixed, the parties or their agents shall bring their witnesses into Court, together with any documents on which they may intend to rely in support of their respective statements.

Procuring attendance of witnesses. If either party require the assistance of the Court to procure the attendance of a witness on such day, he shall apply to the Court in sufficient time before the day fixed for the hearing of the suit; and the Court shall issue a subpoena requiring such witness to attend the Court on that day.

Power to require attendance of claimant. It shall be competent to the Court to require the personal attendance of the claimant of the waste land, or objector, as aforesaid, on the day fixed for the hearing, or at any subsequent stage of the suit.

Section 13. Procedure on hearing

On the day fixed for the hearing of the suit, or as soon after as may be practicable, the Court shall proceed to examine the claimant of the waste land, or the objector, or his agent (when his personal attendance is not required), and the witnesses of the parties;

And upon such examination, and after inspecting the documents of the parties, and making any further enquiry that may appear

Necessary, shall proceed to pass such order in the case as it may consider just and proper.

Section 14. No appeal or revision

No appeal shall lie from any decision or order passed under in this Act, nor shall any such decision or order be open to revision.

Section 15. Reference of question of law, etc., to High Court, etc

If, on the trial of any suit under this Act, any question of to law or of usage having the force of law, or the construction of a document affecting the merits of the case, shall arise, on which the Court shall entertain reasonable doubts, the Court may, either of its own motion, or on the application of any of the parties to the suit, draw up a statement of the case and submit it, with its own opinion, for the opinion of the High Court of Judicature, or of the highest Civil Court of Appeal and Revision in the territory in which the land is situate:

When reference obligatory. Provided that it shall be the duty of every Court held under this Act to make such reference to such High Court, or Court of Appeal, if, in any suit under this Act, any question shall arise in volving any principle of general importance, or the rights of a class.

Section 16. Court may proceed notwithstanding reference

The Court may proceed in the case notwithstanding a reference to the High Court, or other highest Civil Court of Appeal as aforesaid; and may pass an order contingent upon the opinion of the High Court, or other Court as aforesaid, on the point referred;

But not make final order. but no final order for the sale or other disposition of the land in question in the suit, or for the admission or rejection of any claim or objection which shall be before the Court in such suit, shall be passed, until the receipt of the order of the said High Court, or highest Civil Court of Appeal.

Section 17. Records of cases where to be deposited

The record of cases disposed of by Courts constituted under this Act shall be deposited amongst the records of the principal Civil Court of original jurisdiction in the district in which the property in dispute is situate.

Section 18. Limitation as to claims to land sold or dealt with

No claim to any land, or to compensation or damages in respect of any land, sold or otherwise dealt with on account of 1[the State Government] as waste land, shall be received after the expiration of three years from the date on which such land shall have been delivered 1[the State Government] to the purchaser, or otherwise dealt with. Provision for such claims if preferred within time. If within three years after any lands have been delivered by 1[the State Government] to the purchaser, or otherwise dealt with, any claimant or objector shall prefer a claim to the land so delivered, or otherwise dealt with, or an objection to such sale, or to compensation or damages in respect thereof, in the Court constituted under this Act for the district in which the land is situate; and shall show good and sufficient reason for not having preferred his claim or objection to the Collector or other officer as aforesaid, within the period limited under section 1 of this Act; such Court shall file the claim or objection, making the claimant or objector plaintiff, and the Collector of the district or other officer as aforesaid (with the like provision as aforesaid if such other officer be the presiding officer of the principal Civil Court of original jurisdiction in the district), the defendant in the suit;

And the foregoing provisions of this Act shall be applicable to the trial and determination of the suit.

The report of the officer employed to give delivery, or to take possession, on the part of 1[the State Government], of the land sold or otherwise dealt with, shall be conclusive evidence as to the date on which such delivery was made, or possession was taken.

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1. Subs. by the A.O.1937 for ” Govt,”

Section 19. If claim established, possession not to be given, but compensation

In any case in which the land has been sold, if the Court shall be of opinion that the claim of the claimant is established, the Court shall not award the claimant possession of the land in dispute, but shall order him to receive from 1[the State Government] Treasury, by way of compensation, a sum equal to the price at which the , land was sold, in addition to the costs of suit.

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1. Subs. by the A.O.1937 for ” Govt,”

Section 20. When land sold not absolutely, or not sold, but otherwise dealt with

If the land shall have been sold subject to any condition reservation, or shall not have been sold, but shall have been otherwise dealt with on account of 1[the State Government], and the Court shall be of opinion that the claim to such land, or the objection of an objector, is established, the Court shall award the claimant or objector to receive such sum, in respect of his interest in such land, as shall be awarded in that behalf under the provisions of 2Act 6 of 1857 (for the acquisition of lands for public purposes),

And thereupon the State Government shall proceed under the said Act to obtain an upward of the value of such interest.

——————–

1. Subs. by the A.O.1937 for ” Govt,”

2. See now the Land Acquisition Act, 1894 (1 of 1894), s.2.

Section 21. Award under two last sections to be in full satisfaction

An award under any of the provisions of the two last preceding sections shall be in full satisfaction of the claim of the claimant or objector; and shall bar any future claim on his part, in respect to the land in suit resting on the same cause of action, or on a cause of action which existed prior to the date of the sale or other disposition of the land on account of 1[the State Government].

——————–

1. Subs. by the A.O.1937 for ” Govt.”

Section 22. Government not barred from awarding compensation for land absolutely sold, though claim be not preferred in time

Nothing in this Act shall be held to prevent the State Government from awarding, to any claimant of waste land sold on account of 1[the State Government], on proof to the satisfaction of the State Government of the claim of such claimant (notwithstanding that he may not have preferred his claim either to the Collector or other officer as aforesaid, or to the proper Court constituted under this Act, within the period prescribed by this Act), such amount as compensation for the said land, within the limit as to amount mentioned in section 19 of this Act, if the land have been sold not subject to any condition or reservation, as to such State Government may seem proper.

——————–

1. Subs. by the A.O.1937 for ” Govt.”

Section 23. Compensation for land sold subject to condition, if claim proved, though not preferred in time

If the land have been sold subject to any condition or reservation, or have been otherwise disposed of, on account of 1[the State Government], and any claim to such land, or objection to the sale or other disposition of the land, shall be proved to the satisfaction of the State Government; although not preferred to the Collector or other officer as aforesaid, or to the Court constituted under this Act, within the period prescribed by this Act, the State Government may award to such claimant or objector such amount as to such State Government may appear to be the value of the interest of such claimant or objector in such land.

——————–

1. Subs. by the A.O.1937 for ” Govt.”

Section 23A. Exercise of power of the State Government by the Board of Revenue or the Financial Commissioner

1[23-A. Exercise of power of the State Government by the Board of Revenue or the Financial Commissioner. In a State for which there is a Board of Revenue or a Financial Commissioner, the powers and duties of the State Government under sections 6, 10, 22 and 23 may be exercised by such Board or Financial Commissioner, as the case may be.]

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1. Ins. by Act 4 of 1914, Sch., Pt.I.S. 23-A has been omitted in its application to the U.P., see the U.P.Board of Revenue Act, 1922 (U.P.12 of 1922).

Section 24. Interpretation-clause. Number Gender

Rep. by Repealing and Amending Act, 1914 (10 of 1914), s.3 and Sch.II.

Bydeb

Transfer of Property Act 1882

1. Short title.—

This Act may be called the Transfer of Property Act, 1882.

Commencement.—It shall come into force on the first day of July, 1882.

Extent.1[It extends2 in the first instance to the whole of India except 3[the territories which, immediately before the 1st November, 1956, were comprised in Part B States or in the States of] Bombay, Punjab and Delhi.]

4[But this Act or any part thereof may by notification in the Official Gazette be extended to the whole or any part of the 5[said territories] by the 6[State Government] concerned.]

7[And any 6[State Government] may 8[***] from time to time, by notification in the Official Gazette, exempt, either retrospectively or prospectively, any part of the territories administered by such State Government from all or any of the following provisions, namely:—

Section 54, paragraph 2 and sections 3, 59, 107 and 123.]

9[Notwithstanding anything in the foregoing part of this section, section 54, paragraphs 2 and 3, and sections 59, 107 and 123 shall not extend or be extended to any district or tract of country for the time being excluded from the operation of the Indian Registration Act, 10[1908], (16 of 1908), under the power conferred by the first section of that Act or otherwise.]

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1. Subs. by the A.O. 1950, for the original third paragraph.

2. The application of this Act was barred in the Naga Hills District, including the Mokokchang Sub-Division, the Dibrugarh Frontier Tract, the North Cachar Hills, the Garo Hills, the Khasea and Jaintia Hills and the Mikir Hills Tract, by notification under sec. 2 of the Assam Frontier Tracts Regulation, 1880 (2 of 1880).

The Act has been declared to be in force in Panth Piploda by the Panth Piploda Laws Regulation, 1929 (1 of 1929), sec. 2, and continued in force, with modifications, in the territory transferred to Delhi Province by the Delhi Laws Act, 1915 (7 of 1915), sec. 3 and Sch. III. It has also been partially extended to Berar by the Berar Laws Act, 1941 (4 of 1941).

The Act has been extended with effect from 1st January, 1893, to the whole of the territories, other than the Scheduled Districts, under the administration of the Govt. of Bombay. Sections 54, 107 and 123 have been extended from 6th May, 1925 to all Municipalities in the Punjab and to all notified areas declared and notified under sec. 241 of the Punjab Municipal Act, 1911 (Pun. Act 3 of 1911), see Punjab Gazette, Extra., 1925, p. 27.

These sections and section 129 have been extended to certain areas in Delhi Province, see Notifications No. 198/38-III, dated 30th May, 1939, Gazette of India, 1939, Pt. I, p. 918, and No. 61/40-Judl., dated 16th November, 1940, Gazette of India, 1940, Pt. I, p. 1639, respectively.

The Act has been extended to Manipur by the Union Territories (Laws) Amendment Act, 1956 (68 of 1956).

It has been rep. as to Government Grants by the Government Grants Act, 1895 (15 of 1895) and rep. or modified to the extent necessary to give effect to the provisions of the Madras City Tenants Protection Act, 1921 (Madras 3 of 1921) in the City of Madras; see sec. 13 of that Act.

It has been amended in Bombay by Bombay Act 14 of 1939, and in Uttar Pradesh by Uttar Pradesh Act 24 of 1954. It has been extended to Pondicherry by Act 26 of 1968, sec. 3, Sch., Part I.

3. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “Part B States”.

4. Subs. by the A.O. 1937, for the original paragraph.

5. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “said States”.

6. Subs. by A.O. 1950, for “Provincial Government”.

7. Subs. by Act 3 of 1885, sec. 1, for the original paragraph.

8. The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1920, sec. 2 and Sch. I.

9. Added by Act 3 of 1885, sec. 2 (with retrospective effect). Section 54, paras 2 and 3 and sections 59, 107 and 123 extend to every cantonment—see section 287 of the Cantonment Act, 1924(2 of 1924).

10. Subs. by Act 20 of 1929, sec. 2, for “1877”.

2. Repeal of Acts.—

Saving of certain enactments, incidents, rights, liabilities, etc.—In the territories to which this Act extends for the time being the enactments specified in the Schedule hereto annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be deemed to affect—

(a) the provisions of any enactment not hereby expressly repealed;

(b) any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act, and are allowed by the law for the time being in force;

(c) any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability; or

(d) save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction,

and nothing in the second Chapter of this Act shall be deemed to affect any rule of 1[***] Muhammadan 2[***] law.

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1. Added by Act 3 of 1885, sec. 2 (with retrospective effect). Section 54, paras 2 and 3 and sections 59, 107 and 123 extend to every cantonment—see section 287 of the Cantonment Act, 1924(2 of 1924).

2. Subs. by Act 20 of 1929, sec. 2, for “1877”.

3. Interpretation clause.—

In this Act, unless there is something repugnant in the subject or context,—

“immoveable property” does not include standing timber, growing crops or grass;

‘‘instrument” means a non-testamentary instrument;

1[“attested”, in relation to an instrument, means and shall be deemed always to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the direction of the executant, or has received from the executant a personal acknowledgement of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shall have been present at the same time, and no particular form of attestation shall be necessary;]

“registered” means registered in 2[3[any part of the territories] to which this Act extends] under the law4 for the time being in force regulating the registration of documents;

“attached to the earth” means—

(a) rooted in the earth, as in the case of trees and shrubs;

(b) imbedded in the earth, as in the case of walls or buildings; or

(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached;

5[“actionable claim” means a claim to any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or pledge of moveable property, or to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent;]

6[“a person is said to have notice” of a fact when he actually knows that fact, or when, but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it.

Explanation I.—Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated:]

Provided that—

(1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908 (16 of 1908), and the rules made thereunder,

(2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and

(3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under section 55 of that Act.

Explanation II.—Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.

Explanation III.—A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material:

Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.

COMMENTS

Constructive notice of the suit agreement

The defendants failed to make necessary inquiry in respect of possession of the suit land by going to the site or from neighbouring land owners. Therefore, it has been held that constructive notice of the suit agreement shall have to be imputed to defendants in view of actual possession of the suit land being with the plaintiffs; Murlidhar Bapuji Valve v. Yallappa Lalu Chaugle, AIR 1994 Bom 358.

Meaning of word “Immovable”

The word “immovable” means permanent, fixed, not liable to be removed and the property must be attached to immovable property permanently; Shree Arcee Steel P. Ltd. v. Bharat Overseas Bank Ltd., AIR 2005 Kant 287.

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1. Ins. by Act 27 of 1926, sec. 2 as amended by Act 10 of 1927, sec. 2 and Sch. I.

2. Subs. by Act 3 of 1951, sec. 3 and sch., for “a Part A State or a Part C State” (w.e.f. 1-4-1951).

3. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “any State”.

4. See the Indian Registration Act, 1908 (16 of 1908).

5. Ins. by Act 2 of 1900, sec. 2.

6. Subs. by Act 20 of 1929, sec. 4 as amended by Act 5 of 1930, sec. 2 for the original paragraph.

4. Enactments relating to contracts to be taken as part of Contract Act and supplemental to the Registration Act.—

The Chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872

(9 of 1872).

1[And section 54, paragraphs 2 and 3, and sections 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 2[1908 (16 of 1908)].]

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1. Added by Act 3 of 1885, sec. 3.

2. Subs. by Act 20 of 1929, sec. 5, for “1877”.

5. “Transfer of property” defined.—

In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, 1[or to himself] and one or more other living persons; and “to transfer property” is to perform such act.

1[In this section “living person” includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.]

COMMENTS

Right to Property

Right to obtain shares of a company is a “property” and the donee’s right to such shares cannot be thwarted only because such shares in the name of the donee was not entered into the register of the company; Vasudev Ram Chandra Shelat v. P.J. Thakkar, (1974) 2 SCC 323.

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1. Ins. by Act 20 of 1929, sec. 6.

6. What may be transferred.—

Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force,—

(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred;

(b) A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby;

(c) An easement cannot be transferred apart from the dominant heritage;

(d) All interest in property restricted in its enjoyment to the owner personally cannot be transferred by him;

1[(dd) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred;]

(e) A mere right to sue 2[***] cannot be transferred;

(f) A public office cannot be transferred, nor can the salary of a public officer, whether before or after it has become payable;

(g) Stipends allowed to military 3[naval], 4[air-force] and civil pensioners of the 5[Government] and political pensions cannot be transferred;

(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest affected thereby, or (2) 6[for an unlawful object or consideration within the meaning of section 23 of the Indian Contract Act, 1872 (9 of 1872)], or (3) to a person legally disqualified to be transferee;

7[(i) Nothing in this section shall be deemed to authorise a tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate, under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee.]

COMMENTS

If guardian of a minor transfers his property without permission of Court as envisaged under section 8 of the Hindu Minority and Guardianship Act, 1956 and without legal necessity, then a purchaser of property from minor can sue to set aside such sale within 3 years after the minor attains majority; Amritham Kudumbah v. Sarnam Kudumbam, AIR 1991 SC 1256.

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1. Ins. by Act 20 of 1929, sec. 6.

2. The words “for compensation for a fraud or for harm illegally caused” omitted by Act 2 of 1900, sec. 3.

3. Ins. by Act 35 of 1934, sec. 2 and Sch.

4. Ins. by Act 10 of 1927, sec. 2 and Sch. I.

5. The word “Government” successively subs. by the A.O. 1937 and the A.O. 1950 to read as above.

6. Subs. by Act 2 of 1900, sec. 3, for “for an illegal purpose”.

7. Added by Act 3 of 1885, sec. 4.

7. Persons competent to transfer.—

Every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed by any law for the time being in force.

COMMENTS

A person’s conduct in collecting rents and managing an estate of the landlord does not empower him to transfer the land as the landlord’s agent; Balai Chandra Mondal v. Indurekha Devi, AIR 1973 SC 782.

8. Operation of transfer.—

Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof.

Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth; and, where the property is machinery attached to the earth, the moveable parts thereof; and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith; and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer;and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.

COMMENTS

There may be a presumption that when land is transferred, all things attached to the earth such as trees and shrubs, are also transferred alongwith the land in view of the provisions of section 8 read with section 3 of Transfer of Property Act. But there can be no presumption in a case of vice-versa; Vishwa Nath v. Ramraj, AIR 1991 All 193.

9. Oral transfer.—

A transfer of property may be made without writing in every case in which a writing is not expressly required by law.

10. Condition restraining alienation.—

Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: provided that property may be transferred to or for the benefit of a women (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.

11. Restriction repugnant to interest created.—

Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.

1[Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.]

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1. Subs. by Act 20 of 1929, sec. 8, for the original paragraph.

12. Condition making interest determinable on insolvency or attempted alienation.—

Where property is transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is void.

Nothing in this section applies to a condition in a lease for the benefit of the lessor or those claiming under him.

13. Transfer for benefit of unborn person.—

Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

Illustration

A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A’s second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A’s remaining interest in the property.

14. Rule against perpetuity.—

No transfer of property can operate to create an interest which is to take effect after the life-time of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

COMMENTS

A covenant for pre-emption does not offend the rule against perpetuities and cannot be considered void in law; Ram Baran v. Ram Mohit, AIR 1967 SC 747.

15. Transfer to class some of whom come under sections 13 and 14.—

If, on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails 1[in regard to those persons only and not in regard to the whole class].

COMMENTS

It has been held by the Supreme Court that although no interest could be created in favour of an unborn person but if gift was made to a class of series of person some of whom were in existence and some were not, it was valid with regard to the former and invalid as to the latter; Raj Bajrang Bahadur Singh v. Thakurain Bakhtraj Kuer, (1953) SCR 232.

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1. Subs. by Act 20 of 1929, sec. 9, for “as regards the whole class”.

16. Transfer to take effect on failure of prior interest.

1[16. Transfer to take effect on failure of prior interest.—Where, by reason of any of the rules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails.

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1. Subs. by Act 20 of 1929, sec. 10, for the original sections 16 to 18.

17. Direction for accumulation.—

(1) Where the terms of a transfer of property direct that the income arising from the property shall be accumulated either wholly or in part during a period longer than—

(a) the life of the transferor, or

(b) a period of eighteen years from the date of transfer,

such direction shall, save as hereinafter provided, be void to the extent to which the period during which the accumulation is directed exceeds the longer of the aforesaid periods, and at the end of such last-mentioned period the property and the income thereof shall be disposed of as if the period during which the accumulation has been directed to be made had elapsed.

(2) This section shall not affect any direction for accumulation for the purpose of—

(i) the payment of the debts of the transferor or any other person taking any interest under the transferor; or

(ii) the provision of portions for children or remoter issue of the transferor or of any other person taking any interest under the transfer; or

(iii) the preservation or maintenance of the property transferred,

and such direction may be made accordingly.

18. Transfer in perpetuity for benefit of public.—

The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety or any other object beneficial to mankind.]

19. Vested interest.—

Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested, unless a contrary intention appears from the terms of the transfer.

A vested interest is not defeated by the death of the transferee before he obtains possession.

Explanation.—An intention that an interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other person, or whereby income arising from the property is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another person.

20. When unborn person acquires vested interest on transfer for his benefit.—

Where, on a transfer of property, an interest therein is created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appears from the terms of the transfer, a vested interest, although he may not be entitled to the enjoyment thereof immediately on his birth.

21. Contingent interest.—

Where, on a transfer of property, an interest therein is created in favour of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property. Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter, when the happening of the event becomes impossible.

Exception.—Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent.

22. Transfer to members of a class who attain a particular age.—

Where, on a transfer of property, an interest therein is created in favour of such members only of a class as shall attain a particular age, such interest does not vest in any member of the class who has not attained that age.

23. Transfer contingent on happening of specified uncertain event.—

Where, on a transfer of property, an interest therein is to accrue to a specified person if a specified uncertain event shall happen, and no time is mentioned for the occurrence of that event, the interest fails unless such event happens before, or at the same time as, the intermediate or precedent interest ceases to exist.

24. Transfer to such of certain persons as survive at some period not specified.—

Where, on a transfer of property, an interest therein is to accrue to such of certain persons as shall be surviving at some period, but the exact period is not specified, the interest shall go to such of them as shall be alive when the intermediate or precedent interest ceases to exist, unless a contrary intention appears from the terms of the transfer.

Illustration

A transfers property to B for life, and after his death to C and D, equally to be divided between them, or to the survivor of them. C dies during the life of B. D survives B. At B’s death the property passes to D.

25. Conditional transfer.—

An interest created on a transfer of property and dependent upon a condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies injury to the person or property of another, or the Court regards it as immoral or opposed to public policy.

Illustration

(a) A lets a farm to B on condition that he shall walk a hundred miles in an hour. The lease is void.

(b) A gives Rs. 500 to B on condition that he shall marry A’s daughter C. At the date of the transfer C was dead. The transfer is void.

(c) A transfers Rs. 500 to B on condition that she shall murder C. The transfer is void.

(d) A transfers Rs. 500 to his niece C, if she will desert her husband. The transfer is void.

26. Fulfilment of condition precedent.—

Where the terms of a transfer of property impose a condition to be fulfilled before a person can take an interest in the property, the condition shall be deemed to have been fulfilled if it has been substantially complied with.

Illustration

(a) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. E dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition.

(b) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. B marries without the consent of C, D and E, but obtains their consent after the marriage. B has not fulfilled the condition.

27. Conditional transfer to one person coupled with transfer to another on failure of prior disposition.—

Where, on a transfer of property, an interest therein is created in favour of one person, and by the same transaction an ulterior disposition of the same interest is made in favour of another, if the prior disposition under the transfer shall fail, the ulterior disposition shall take effect upon the failure of the prior disposition, although the failure may not have occurred in the manner contemplated by the transferor.

But, where the intention of the parties to the transaction is that the ulterior disposition shall take effect only in the event of the prior disposition failing in a particular manner, the ulterior disposition shall not take effect unless the prior disposition fails in that manner.

Illustration

(a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within three months after A’s death, and, if he should neglect to do so, to C. B dies in A’s life-time. The disposition in favour of C takes effect.

(b) A transfers property to his wife; but, in case she should die in his life-time, transfer to B that which he had transferred to her. A and his wife perish together, under circumstances which make it impossible to prove that she died before him. The disposition in favour of B does not take effect.

28. Ulterior transfer conditional on happening or not happening of specified event.—

Where, on a transfer of property, an interest therein is created in favour of one person, and by the same transaction an ulterior disposition of the same interest is made in favour of another, if the prior disposition under the transfer shall fail, the ulterior disposition shall take effect upon the failure of the prior disposition, although the failure may not have occurred in the manner contemplated by the transferor.

But, where the intention of the parties to the transaction is that the ulterior disposition shall take effect only in the event of the prior disposition failing in a particular manner, the ulterior disposition shall not take effect unless the prior disposition fails in that manner.

Illustration

(a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within three months after A’s death, and, if he should neglect to do so, to C. B dies in A’s life-time. The disposition in favour of C takes effect.

(b) A transfers property to his wife; but, in case she should die in his life-time, transfer to B that which he had transferred to her. A and his wife perish together, under circumstances which make it impossible to prove that she died before him. The disposition in favour of B does not take effect.

29. Fulfilment of condition subsequent.—

An ulterior disposition of the kind contemplated by the last preceding section cannot, take effect unless the condition is strictly fulfilled.

Illustration

A transfers Rs. 500 to B, to be paid to him on his attaining his majority or marrying, with a proviso that, if B dies as minor or marries without C’s consent, the Rs. 500 shall go to D. B marries when only 17 years of age, without C’s consent. The transfer to D takes effect.

30. Prior disposition not affected by invalidity of ulterior disposition.—

If the ulterior disposition is not valid, the prior disposition is not affected by it.

Illustration

A transfers a farm to B for her life, and, if she does not desert her husband to C. B is entitled to the farm during her life as if no condition had been inserted.

31. Condition that transfer shall cease to have effect in case specified uncertain event happens or does not happen.—

Subject to the provisions of section 12, on a transfer of property an interest therein may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happen.

Illustration

(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a certain wood, the transfer shall cease to have any effect. B cuts down the wood. He loses his life-interest in the farm.

(b) A transfers a farm to B, provided that, if B shall not go to England within three years after the date of the transfer, his interest in the farm shall cease. B does not go to England within the term prescribed. His interest in the farm ceases.

32. Such condition must not be invalid.—

In order that a condition that an interest shall cease to exist may be valid, it is necessary that the event to which it relates be one which could legally constitute the condition of the creation of an interest.

33. Transfer conditional on performance of act, no time being specified for performance.—

Where, on a transfer of property, an interest therein is created subject to a condition that the person taking it shall perform a certain act, but no time is specified for the performance of the act, the condition is broken when he renders impossible, permanently or for an indefinite period, the performance of the act.

34. Transfer conditional on performance of act, time being specified.—

Where an act is to be performed by a person either as a condition to be fulfilled before an interest created on a transfer of property is enjoyed by him, or as a condition on the non-fulfilment of which the interest is to pass from him to another person, and a time is specified for the performance of the act, if such performance within the specified time is prevented by the fraud of a person who would be directly benefited by non-fulfilment of the condition, such further time shall as against him be allowed for performing the act as shall be requisite to make up for the delay caused by such fraud. But if no time is specified for the performance of the act, then, if its performance is by the fraud of a person interested in the non-fulfilment of the condition rendered impossible or indefinitely postponed, the condition shall as against him be deemed to have been fulfilled.

35. Election when necessary.—

Where a person professes to transfer property which he has no right to transfer, and as part of the same transaction confers any benefit on the owner of the property, such owner must elect either to confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so conferred, and the benefit so relinquished shall revert to the transferor or his representative as if it had not been disposed of,

subject nevertheless,

where the transfer is gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh transfer,and in all cases where the transfer is for consideration,to the charge of making good to the disappointed transferee the amount or value of the property attempted to be transferred to him.

Illustrations

The farm of Sultanpur is the property of C and worth Rs. 800. A by an instrument of gift professes to transfer it to B, giving by the same instrument Rs. 1,000 to C. C elects to retain the farm. He forfeits the gift of Rs. 1,000.

In the same case, A dies before the election. His representative must out of the Rs. 1,000 pay Rs. 800 to B.

The rule in the first paragraph of this section applies whether the transferor does or does not believe that which he professes to transfer to be his own.

A person taking no benefit directly under a transaction, but deriving a benefit under it indirectly, need not elect.

A person who in his one capacity takes a benefit under the transaction may in another dissent therefrom.

Exception to the last preceding four rules.—Where a particular benefit is expressed to be conferred on the owner of the property which the transferor professes to transfer, and such benefit is expressed to be in lieu of that property, if such owner claims the property, he must relinquish the particular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same transaction.

Acceptance of the benefit by the person on whom it is conferred constitutes an election by him to confirm the transfer, if he is aware of his duty to elect and of those circumstances which would influence the judgment of a reasonable man in making an election, or if he waives enquiry into the circumstances.

Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the person on whom the benefit has been conferred has enjoyed it for two years without doing any act to express dissent.

Such knowledge or waiver may be inferred from any act of his which renders it impossible to place the persons interested in the property professed to be transferred in the same condition as if such act had not been done.

Illustration

A transfers to B an estate to which C is entitled, and as part of the same transaction gives C a coal-mine. C takes possession of the mine and exhausts it. He has thereby confirmed the transfer of the estate to B.

If he does not within one year after the date of the transfer signify to the transferor or his representatives his intention to confirm or to dissent from the transfer, the transferor or his representative may, upon the expiration of that period, require him to make his election; and, if he does not comply with such requisition within a reasonable time after he has received it, he shall be deemed to have elected to confirm the transfer.

In case of disability, the election shall be postponed until the disability ceases, or until the election is made by some competent authority.

COMMENTS

When question of election arises

A case of election arises only when the transferee takes a benefit directly under a transaction. When the transferee derives any benefit indirectly, no question of election arises, as he, in that case, cannot be said to take under the deed; Valliammai v. Nagappa, AIR 1967 SC 1153.

36. Apportionment of periodical payments on determination of interest of person entitled.—

In the absence of a contract or local usage to the contrary, all rents annuities, pensions, dividends and other periodical payments in the nature of income shall, upon the transfer of the interest of the person entitled to receive such payments, be deemed, as between the transferor and the transferee, to accrue due from day to day, and to be apportionable accordingly, but to be payable on the days appointed for the payment thereof.

37. Apportionment of benefit of obligation on severance.—

When, in consequence of a transfer, property is divided and held in several shares, and thereupon the benefit of any obligation relating to the property as a whole passes from one to several owners of the property, the corresponding duty shall, in the absence of a contract, to the contrary amongst the owners, be performed in favour of each of such owners in proportion to the value of his share in the property, provided that the duty can be severed and that the severance does not substantially increase the burden of the obligation; but if the duty cannot be severed, or if the severance would substantially increase the burden of the obligation the duty shall be performed for the benefit of such one of the several owners as they shall jointly designate for that purpose:

Provided that no person on whom the burden of the obligation lies shall be answerable for failure to discharge it in manner provided by this section, unless and until he has had reasonable notice of the severance.

Nothing in this section applies to leases for agricultural purposes unless and until the State Government by notification in the Official Gazette so directs.

Illustration

(a) A sells to B, C and D a house situated in a village and leased to E at an annual rent of Rs. 30 and delivery of one fat sheep, B having provided half the purchase-money and C and D one quarter each. E, having notice of this, must pay Rs. 15 to B, Rs. 7.50 to C, and Rs. 7.50 to D and must deliver the sheep according to the joint direction of B, C and D.

(b) In the same case, each house in the village being bound to provide ten days’ labour each year on a dyke to prevent inundation. E had agreed as a term of his lease to perform this work for A. B, C and D severally require E to perform the ten days’ work due on account of the house of each. E is not bound to do more than ten days’ work in all, according to such directions as B, C and D may join in giving.

38. Transfer by person authorised only under certain circumstances to transfer.—

Where any person, authorised only under circumstances in their nature variable to dispose of immoveable property, transfers such property for consideration, alleging the existence of such circumstances, they shall, as between the transferee on the one part and the transferor and other persons (if any) affected by the transfer on the other part, be deemed to have existed, if the transferee, after using reasonable care to ascertain the existence of such circumstances, has acted in good faith.

Illustration

A, a Hindu widow, whose husband has left collateral heirs, alleging that the property held by her as such is insufficient for her maintenance, agrees, for purposes neither religious nor charitable to sell a field, part of such property, to B. B satisfies himself by reasonable enquiry that the income of the property is insufficient for A’s maintenance, and that the sale of the field is necessary, and acting in good faith, buys the field from A. As between B on the one part and A and the collateral heirs on the other part, a necessity for the sale shall be deemed to have existed.

39. Transfer where third person is entitled to maintenance.—

Where a third person has a right to receive maintenance, or a provision for advancement or marriage, from the profits of immoveable property, and such property is transferred, 1[***] the right may be enforced against the transferee, if he has notice 2[thereof] or if the transfer is gratuitous; but not against a transferee for consideration and without notice of the right, nor against such property in his hands.

3[* * *]

———————–

1. The words “with the intention of defeating such right” omitted by Act 20 of 1929, sec. 11.

2. Subs. by Act 20 of 1929, sec. 11, for “of such intention”.

3. The illustration omitted by Act 20 of 1929, sec. 11.

0. Burden of obligation imposing restriction on use of land.—

Where, for the more beneficial enjoyment of his own immoveable property, a third person has, independently of any interest in the immoveable property of another or of any easement thereon, a right to restrain the enjoyment 1[in a particular manner of the latter property], or

Or of obligation annexed to ownership but not amounting to interest or easement.—Where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immoveable property, but not amounting to an interest therein or easement thereon,

such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation, not against such property in his hands.

Illustration

A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the same extent as against A.

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1. Subs. by Act 20 of 1929, sec. 12, for “of the latter property or to compel its enjoyment in a particular manner”.

41. Transfer by ostensible owner.—

Where, with the consent, express or implied, of the persons interested in immoveable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it: provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.

42. Transfer by person having authority to revoke former transfer.—

Where a person transfers any immoveable property, reserving power to revoke the transfer, and subsequently transfers the property for consideration to another transferee, such transfer operates in favour of such transferee (subject to any condition attached to the exercise of the power) as a revocation of the former transfer to the extent of the power.

Illustration

A lets a house to B, and reserves power to revoke the lease if, in the opinion of a specified surveyor, B should make a use of it detrimental to its value. Afterwards A, thinking that such a use has been made, lets the house to C. This operates as a revocation of B’s lease subject to the opinion of the surveyor as to B’s use of the house having been detrimental to its value.

43. Transfer by unauthorised person who subsequently acquires interest in property transferred.—

Where a person 1[fraudulently or] erroneously represents that he is authorised to transfer certain immoveable property and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists.

Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.

Illustration

A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorised to transfer the same. Of these fields Z does not belong to A, it having been retained by B on the partition; but on B’s dying A as heir obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to him.

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1. Ins. by Act 20 of 1929, sec. 13.

44. Transfer by one co-owner.—

Where one of two or more co-owners of immoveable property legally competent in that behalf transfers his share of such property or any interest therein, the transferee acquires as to such share or interest, and so far as is necessary to give, effect to the transfer, the transferor’s right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same, but subject to the conditions and liabilities affecting at the date of the transfer, the share or interest so transferred.

Where the transferee of a share of a dwelling-house belonging to an undivided family is not a member of the family, nothing in this section shall be deemed to entitle him to joint possession or other common or part enjoyment of the house.

45. Joint transfer for consideration.—

Where immoveable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property in proportion to the shares of the consideration which they respectively advanced.

In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property.

COMMENTS

In a suit for partition by metes and bounds, partition can be made on the basis of admission of the parties in the Income-tax and Wealth-tax returns with regard to contributions made by each party towards consideration of property in question; Chiranjilal v. Bhagwan Dass, AIR 1991 Del 325.

46. Transfer for consideration by persons having distinct interests.—

Where immoveable property is transferred for consideration by persons having distinct interests therein, the transferors are, in the absence of a contract to the contrary, entitled to share in the consideration equally, where their interests in the property were of equal value, and, where such interests were of unequal value, proportionately to the value of their respective interests.

Illustration

(a) A, owing a moiety, and B and C, each a quarter share, of mauza Sultanpur, exchange an eighth share of that mauza for a quarter share of mauza. There being no agreement to the contrary, A is entitled to an eighth share in Lalpura, and B and C each to a sixteenth share in the mauza.

(b) A, being entitled to a life-interest in mauza Atrali and B and C to the reversion, sell the mauza for Rs. 1,000. A’s life-interest is ascertained to be worth Rs. 600, the reversion Rs. 400. A is entitled to receive Rs. 600 out of the purchase-money. B and C to receive Rs. 400.

47. Transfer by co-owners of share in common property.—

Where several co-owners of immoveable property transfer a share therein without specifying that the transfer is to take effect on any particular share or shares of the transferors, the transfer, as among such transferors, takes effect on such shares equally where the shares were equal, and, where they were unequal, proportionately to the extent of such shares.

Illustration

A, the owner of an eight-anna share, and B and C, each the owner of a four-anna share, in mauza Sultanpur, transfer a two-anna share in the mauza to D, without specifying from which of their several shares the transfer is made. To give effect to the transfer one-anna share is taken from the share of A, and half-an-anna share from each of the shares of B and C.

48. Priority of rights created by transfer.—

Where a person purports to create by transfer at different times rights in or over the same immoveable property, and such rights cannot all exist or be exercised to their full extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created.

49. Transferee’s right under policy.—

Where immoveable property is transferred for consideration, and such property or any part thereof is at the date of the transfer insured against loss or damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to the contrary, require any money which the transferor actually receives under the policy, or so much thereof as may be necessary, to be applied in reinstating the property.

50. Rent bona fide paid to holder under defective title.—

No person shall be chargeable with any rents or profits of any immoveable property, which he has in good faith paid or delivered to any person of whom he in good faith held such property, notwithstanding it may afterwards appear that the person to whom such payment or delivery was made had no right to receive such rents or profits.

Illustration

A lets a field to B at a rent of Rs. 50, and then transfers the field to C. B, having no notice of the transfer, in good faith pays the rent to A. B is not chargeable with the rent so paid.

51. Improvements made by bona fide holders under defective titles.—

When the transferee of immoveable property makes any improvement on the property, believing in good faith that he is absolutely entitled thereto, and he subsequently evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell interest in the property to the transferee at the then market value thereof, irrespective of the value of such improvement.

The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of the eviction.

When, under the circumstances aforesaid, the transferee has planted or sown on the property crops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress and egress to gather and carry them.

COMMENTS

No man, who knowingfully that he had no title to property, spends money on improving it can be permitted to deprive the original owner of his right to possession of the property except upon the payment for the improvements which were not affected with the consent of that person; Maddahappa v. Chandramma, AIR 1965 SC 1812.

52. Transfer of property pending suit relating thereto.—

During the 1[pendency] in any Court having authority 23[within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by 4[the Central Government] 5[* * *] of 6[any] suit or proceedings which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.

7[Explanation.—For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order and complete satisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.]

COMMENTS

(i) This section comes into existence from the point of the institution of the suit and continues to survive till the satisfaction of the decree. The petitioners were as much bound by the decree and judgement dated 16th August, 1973 and their transferor; Abdul Aziz v. District Judge, AIR 1994 All 167.

(ii) The effect of doctrine of his pendens as embodied in section 52 of Transfer of Property Act is not to annul all voluntary transfers effected by the parties to a suit but only to render it subservient to the rights of the parties thereto under the decree or order which may be made in that suit. Its effect is only to make the decree passed in the suit binding on the transferee if he happens to be third party person even if he is not a party to it. The transfer will remain valid subject, however to the result of the suit; K.A. Khader v. Rajamma John Madathil, AIR 1994 Ker 122.

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1. Subs. by Act 20 of 1929, sec. 14, for “active prosecution”.

2. Subs. by the A.O. 1950, for “in the Provinces or established beyond the limits of the Provinces”.

3. Subs. by Act 3 of 1951, sec. 3 and Sch., for “within the limits of Part A States and Part C States” (w.e.f. 1-4-1951).

4. Subs. by the A.O.1937, for “the Governor General in Council”.

5. The words “or the Crown Representative” rep. by the A.O. 1948.

6. Subs. by Act 20 of 1929, sec. 14, for “a contentious”.

7. Ins. by Act 20 of 1929, sec. 14.

53. Fraudulent transfer.—

1[53. Fraudulent transfer.—(1) Every transfer of immoveable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.

Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.

Nothing in this sub-section shall affect any law for the time being in force relating to insolvency.

A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or for the benefit of, all the creditors.

(2) Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee.

For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.]

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1. Subs. by Act 20 of 1929, sec. 15, for the original section.

53A. Part performance.—

1[53A. Part performance.—Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty,

and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract,

then, notwithstanding that 2[***] where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:

Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.]

COMMENTS

Under the provisions of section 53A the transferee is entitled to resist any attempt on the part of the transferor to disturb transferee’s lawful possession under the contract of sale and his position either as a plaintiff or as a defendant should make no difference. Contrary interpretation viz, the transferee can use the shield only as a defendant and not as a plaintiff would defeat the very spirit of section 53A for it will be possible for an over-powering transferor to forcibly dispossess the transferee even against the convenants in the contract and compel him to go to the court as plaintiff; Dharmaji v. Jagannath Shankar Jadhav, AIR 1994 Bom 254.

1. Ins. by Act 20 of 1929, sec. 16.

2. The words “the contract, though required to be registered, has not been registered, or,” omitted by Act 48 of 2001, sec. 10 (w.e.f. 24-9-2001).

54. “Sale” defined.—

‘‘Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Sale how made.—3Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

1In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties.

It does not, of itself, create any interest in or charge on such property.

COMMENTS

Concluded Contract

Section 54 includes the settlement of the terms between the parties as one of the conditions essential for the completion of a contract. There was no concluded contract between the parties, as the appellant was a contracting party, he was only acting on behalf of third person and hence unless the third person i.e. the party agreed to the terms and conditions there could be no concluded contract; Satya Prakash Goel v. Ram Krishna Mission, AIR 1991 All 343.

Contract for sale

A contract for sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself create any interest in or charge on such property. An agreement for sale is merely a document creating a right to obtain another document of sale on fulfilment of terms and conditions specified therein. On the strength of such an agreement a buyer does not become the owner of the property. The ownership remains with the seller. It will be transferred to the buyer only on the execution of sale deed by the seller. The buyer obtains only a right to get the sale deed executed in his favour. It has been held that the cancellation of the agreement took place before possession could be given to the purchasers, hence there was no sale of the flats; Crest Hotel Ltd. v. Assistant Superintendent of Stamps, AIR 1994 Bom 228.

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1. As to limitation to the territorial operation of paragraphs 2 and 3 of section 54, see section 1, supra. These paragraphs extend to every cantonment see section 287 of the CantonmentsAct, 1924 (2 of 1924).

55. Rights and liabilities of buyer and seller.—

In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in ,the rules next following, or such of them as are applicable to the property sold:—

(1) The seller is bound—

(a) to disclose to the buyer any material defect in the property 1[or in the seller’s title thereto] of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover;

(b) to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller’s possession or power;

(c) to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto;

(d) on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place;

(e) between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents;

(f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits;

(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing.

(2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same:

Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is encumbered or whereby he is hindered from transferring it.

The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

(3) Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller’s possession or power :

Provided that, (a) where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and, (b) where the whole of such property is sold to different buyers, the buye of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts therefrom as he may require; and in the meantime, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so doing by fire or other inevitable accident.

(4) The seller is entitled—

(a) to the rents and profits of the property till the ownership thereof passes to the buyer;

(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, 1[any transferee without consideration or any transferee with notice of the non-payment], for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part 1[from the date on which possession has been delivered].

(5) The buyer is bound—

(a) to disclose to the seller any fact as to the nature or extent of the seller’s interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest;

(b) to pay or tender, at the time and place of completing the sale, the purchase-money to the seller or such person as he directs: provided that, where the property is sold free from encumbrances, the buyer may retain out of the purchase-money the amount of any encumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto;

(c) where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller;

(d) where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.

(6) The buyer is entitled—

(a) where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof;

(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, 2[* * *] to the extent of the seller’s interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.

An omission to make such disclosures as are mentioned in this section, paragraph (1), clause (a), and paragraph (5), clause (a), is fraudulent.

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1. Ins. by Act 20 of 1929, sec. 17.

2. The words “with notice of the payment” omitted by Act 20 of 1929, sec. 17.

56. Marshalling by subsequent purchaser.—

1[56. Marshalling by subsequent purchaser.—If the owner of two or more properties mortgages them to one person and then sells one or more of the properties to another person, the buyer is, in the absence of a contract to the contrary, entitled to have the mortgaged-debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties.]

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1. Subs. by Act 20 of 1929, sec. 18, for the original section.

57. Provision by Court for encumbrances and sale freed therefrom.—

(a) Where immoveable property subject to any encumbrances, whether immediately payable or not, is sold by the court or in execution of a decree, or out of court, the court may, if it thinks fit, on the application of any party to the sale, direct or allow payment into Court,—

(1) in case of an annual or monthly sum charged on the property, or of a capital sum charged on a determinable interest in the property—of such amount as, when invested in securities of the Central Government, the Court considers will be sufficient, by means of the interest thereof, to keep down or otherwise provide for that charge, and

(2) in any other case of a capital sum charged on the property—of the amount sufficient to meet the encumbrance and any interest due thereon.

But in either case there shall also be paid into court such additional amount as the Court considers will be sufficient to meet the contingency of further costs, expenses and interest, and any other contingency, except depreciation of investment, not exceeding one-tenth part of the original amount to be paid in, unless the Court for special reasons (which it shall record) thinks fit to require a large additional amount.

(b) Thereupon the Court may, if it thinks fit, and after notice to the encumbrance, unless the Court, for reasons to be recorded in writing, thinks fit to dispense with such notice, declare the property to be freed from the encumbrance, and make any order for conveyance, or vesting order, proper for giving effect to the sale, and give directions for the retention and investment of the money in Court.

(c) After notice served on the persons interested in or entitled to the money or fund in Court, the Court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof.

(d) An appeal shall lie from any declaration, order or direction under this section as if the same were a decree.

(e) In this section “Court” means (1) a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction, (2) the Court of a District Judge within the local limits of whose jurisdiction the property or any part thereof is situate, (3) any other Court which the State Government may, from time to time, by notification in the Official Gazette, declare to be competent to exercise the jurisdiction conferred by this section.

58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-money” and “mortgage-deed” defined.—

(a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.

The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.

(b) Simple mortgage.—Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.

(c) Mortgage by conditional sale.—Where, the mortgagor ostensibly sells the mortgaged property—

on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or

on condition that on such payment being made the sale shall become void, or

on condition that on such payment being made the buyer shall transfer the property to the seller,

the transaction is called mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:

1[Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.]

(d) Usufructuary mortgage.—Where the mortgagor delivers possession 1[or expressly or by implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property 2[or any part of such rents and profits and to appropriate the same] in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest 3[or] partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.

(e) English mortgage.—Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.

4[(f) Mortgage by deposit of title-deeds.—Where a person in any of the following towns, namely, the towns of Calcutta, Madras, 5[and Bombay], 6[* * *] and in any other town7which the 8[State Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

(g) Anomalous mortgage.—A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.]

COMMENTS

Usufructuary mortgage

(i) The mortgagor had borrowed Rs. 1000 from the mortgagee and the possession of the building was handed over to the mortgagor. The mortgage money was to be repaid within a period of six months and in case of default the mortgagee had the right to bring the property to sale and realise the amount. The document therefore which was described as usufructuary mortgage was held to be anomalous mortgage and not usufructuary mortgage as it had character of a simple mortgage too as mortgagee was given the right to sell the property to realise the mortgaged amount; Hathika v. Puthiyapurayil Padmanathan, AIR 1994 Ker 141.

(ii) Where a mortgagee is continuing in possession of suit land as mortgagee for a continuous period of not less than fifty years, mere increase in the mortgage money, induction of a co-mortgagee, non-defining of their shares, would not alter the situation; Narayana Pillai Raghavan Pillai v. Narayani Amma Ponnamma, AIR 1992 SC 146.

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1. Ins. by Act 20 of 1929, sec. 19.

2. Subs. by Act 20 of 1929, sec. 19, for “and to appropriate them”.

3. Subs. by Act 20 of 1929, sec. 19, for “and”.

4. Added by Act 20 of 1929, sec. 19.

5. Subs. by the A.O. 1948, for “Bombay and Karachi”. The word “and” had been ins. by the A.O. 1937.

6. The words “Rangoon, Moulmein, Bassein and Akyab” omitted by the A.O. 1937.

7. For notifications relating to the towns of—Ahmedabad, see Gazette of India, 1935, Pt. I, p. 936, Bandra, Kurla and Ghathkoper Kirol, see Gazette of India, 1924, Pt.I, p.1064, Cawnpore, Allahabad and Lucknow, see Gazette of India, 1938, Pt. I, p. 158. Coimbatore, Madura, Cocanada and Cochin, see Gazette of India, 1935, Pt. I, p. 526.

8. The words “Governor General in Council”, successively amended by the A.O. 1937 and the A.O. 1950 to read as above.

59. Mortgage when to be by assurance

Where the principal money secured is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of title deeds can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.

Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by a registered instrument signed and attested as aforesaid or (except in the case of a simple mortgage) by delivery of the property.

1[***]

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1. The third paragraph was omitted by Act 20 of 1929, sec. 20.

59A. References to mortgagors and mortgagees to include persons deriving title from them.

1[59A. References to mortgagors and mortgagees to include persons deriving title from them.—Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees shall be deemed to include references to persons deriving title from them respectively.]

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1. Ins. by Act 20 of 1929, sec. 21.

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1. As to limitation to the territorial operation of section 59, see section 1, supra, section 59, extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).

2. Ins. by Act 20 of 1929, sec. 20.

3. Subs. by Act 6 of 1904, sec. 3, for “an instrument”.

4. The third paragraph omitted by Act 20 of 1929, sec. 20

60. Right of mortgagor to redeem.—

At any time after the principal money has become 1[due], the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, to require the mortgagee (a) to deliver 2[to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee], (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:

Provided that the right conferred by this section has not been extinguished by act of the parties or by 3[decree] of a Court.

The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption.

Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money.

COMMENTS

Extinguishment of mortgage right

When a mortgagee acquires a portion of the equity of redemption, the mortgage is not extinguished completely. There can be only a pro tanto extinguishment of the mortgage right to the extent of the mortgagee acquiring the mortgagor’s interest and so far as the other sharer of the equity of redemption is concerned, the mortgage will subsist; Madhavan Nair v. Ramankutty Menon, AIR 1994 Ker 75.

Redemption of mortgage

During the continuation of tenancy if a contract of mortgage is created, the contract of lease would not get merged into contract of mortgage. On redemption of mortgage the leasehold rights get revived; M.C. Venkateshappa v. K.N. Sadashivaiah, AIR 2004 Kant 438.

Redemption of portion of mortgaged property.—Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except 4[only] where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor.

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1. Subs. by Act 20 of 1929, sec. 22, for “payable”.

2. Subs. by Act 20 of 1929, sec. 22, for “the mortgage-deed, if any to the mortgagor”.

3. Subs. by Act 20 of 1929, sec. 22, for “order”.

4. Ins. by Act 20 of 1929, sec. 22.

60A. Obligation to transfer to third party instead of re-transference to mortgagor.—

1[60A. Obligation to transfer to third party instead of re-transference to mortgagor.—(1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on the fulfilment of which he would be entitled to require a re-transfer, he may require the mortgagee, instead of re-transferring the property, to assign the mortgage-debt and transfer the mortgaged property to such third person as the mortgagor may direct; and the mortgagee shall be bound to assign and transfer accordingly.

(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by any encumbrancer notwithstanding an intermediate encumbrance; but the requisition of any encumbrance shall prevail over a requisition of the mortgagor and, as between encumbrancers, the requisition of a prior encumbrancer shall prevail over that of a subsequent encumbrancer.

(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in possession.

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1. Sections 60A and 60B ins. by Act 20 of 1929, sec. 23.

60B. Right to inspection and production of documents.—

A mortgagor, as long as his right of redemption subsists, shall be entitled at all reasonable times, at his request and at his own cost, and on payment of the mortgagee’s costs and expenses in this behalf, to inspect and make copies or abstracts of, or extracts from, documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.]

61. Right to redeem separately or simultaneously.—

1[61. Right to redeem separately or simultaneously.—A mortgagor who has executed two or more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary, when the principal money of any two or more of the mortgages has become due, be entitled to redeem any one such mortgage separately, or any two or more of such mortgages together.]

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1. Subs. by Act 20 of 1929, sec. 24, for the original section.

62. Right of usufructuary mortgagor to recover possession.—

In the case of a usufructuary mortgage, the mortgagor has a right to recover possession of the property 1[together with the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee],—

(a) where the mortgagee is authorized to pay himself the mortgage-money from the rents and profits of the property,—when such money is paid;

(b) where the mortgagee is authorised to pay himself from such rents and profits2[or any part thereof a part only of the mortgage-money],—when the term (if any) prescribed for the payment of the mortgage-money has expired and the mortgagor pays or tenders to the mortgagee 3[the mortgage-money or the balance thereof] or deposits it in Court as hereinafter provided.

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1. Ins. by Act 20 of 1929, sec. 25.

2. Subs. by Act 20 of 1929, sec. 25, for “the interest of the principal money”.

3. Subs. by Act 20 of 1929, sec. 25, for “the principal money”.

63. Accession to mortgaged property.—

Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon redemption shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession.

Accession acquired in virtue of transferred ownership.—Where such accession has been acquired at the expense of the mortgagee, and is capable of separate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it. If such separate possession or enjoyment is not possible, the accession must be delivered with the property; the mortgagor being liable, in the case of an acquisition necessary to preserve the property from destruction, forfeiture or sale, or made with his assent, to pay the proper cost thereof, as an addition to the principal money, 1[with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent per annum].

In the case last mentioned the profits, if any, arising from the accession shall be credited to the mortgagor.

Where the mortgage is usufructuary and the accession has been acquired at the expense of the mortgagee, the profits, if any, arising from the accession shall, in the absence of a contract to the contrary, be set off against interest, if any, payable on the money so expended.

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1. Subs. by Act 20 of 1929, sec. 26, for “at the same rate of interest”.

63A. Improvements to mortgaged property.—

1[63A. Improvements to mortgaged property.—(1) Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled to the improvement; and the mortgagor shall not, save only in cases provided for in sub-section (2), be liable to pay the cost thereof.

(2) Where any such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient, or was made in compliance with the lawful order of any public servant or public authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper cost thereof as an addition to the principal money with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent per annum, and the profits, if any, accruing by reason of the improvement shall be credited to the mortgagor.]

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1. Ins. by Act 20 of 1929, sec. 27.

64. Renewal of mortgaged lease.—

Where the mortgaged property is a lease 1[***], and the mortgagee obtains a renewal of the lease, the mortgagor, upon redemption, shall, in the absence of a contract by him to the contrary, have the benefit of the new lease.

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1. The words “for a term of years” omitted by Act 20 of 1929, sec. 28.

65. Implied contracts by mortgagor.—

In the absence of a contract to the contrary, the mortgagor shall be deemed to contract with the mortgagee,—

(a) that the interest which the mortgagor professes to transfer to the mortgagee subsists, and that the mortgagor has power to transfer the same;

(b) that the mortgagor will defend, or, if the mortgagee be in possession of the mortgaged property, enable him to defend, the mortgagor’s title thereto;

(c) that the mortgagor will, so long as the mortgagee is not in possession of the mortgaged property, pay all public charges accruing due in respect of the property;

(d) and, where the mortgaged property is a lease 1[***], that the rent payable under the lease, the conditions contained therein, and the contracts binding on the lessee have been paid, performed and observed down to the commencement of the mortgage; and that the mortgagor will, so long as the security exists and the mortgagee is not in possession of the mortgaged property, pay the rent reserved by the lease, or, if the lease be renewed, the renewed lease, perform the conditions contained therein and observe the contracts binding on the lessee, and indemnify the mortgagee against all the claims sustained by reason of the non-payment of the said rent or the non-performance or non-observance of the said conditions and contracts;

(e) and, where the mortgage is a second or subsequent encumbrance on the property, that the mortgagor will pay the interest from time to time accruing due on each prior encumbrance as and when it becomes due, and will at the proper time discharge the principal money due on such prior incumbrance.

2[***]

The benefit of the contracts mentioned in this section shall be annexed to and shall go with the interest of the mortgagee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

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1. The words “for a term of years” omitted by Act 20 of 1929, sec. 29.

2. Certain words omitted by Act 20 of 1929, sec. 29.

65A. Mortgagor’s power to lease.—

1[65A. Mortgagor’s power to lease.—(1) Subject to the provisions of sub-section (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee.

(2) (a) Every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law, custom or usage,

(b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance,

(c) No such lease shall contain a covenant for renewal,

(d) Every such lease shall take effect from a date not later than six months from the date on which it is made,

(e) In the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a covenant for payment of the rent and a condition of re-entry on the rent not being paid with a time therein specified.

(3) The provisions of sub-section (1) apply only if and as far as a contrary intention is not expressed in the mortgage-deed; and the provisions of sub-section (2) may be varied or extended by the mortgage-deed and, as so varied and extended, shall, as far as may be, operate in like manner and with all like incidents, effects and consequences, as if such variations or extensions were contained in that sub-section.]

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1. Ins. by Act 20 of 1929, sec. 30.

66. Waste by mortgagor in possession.—

A mortgagor in possession of the mortgaged property is not liable to the mortgagee for allowing the property to deteriorate; but he must not commit any act which is destructive or permanently injurious thereto, if the security is insufficient or will be rendered insufficient by such act.

Explanation.—A security is insufficient within the meaning of this section unless the value of the mortgaged property exceeds by one-third, or, if consisting of buildings, exceeds by one-half, the amount for the time being due on the mortgage.

67. Right to fore-closure or sale.—

In the absence of a contract to the contrary, the mortgagee has, at any time after the mortgage-money has become 1[due] to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgage-money has been paid or deposited as hereinafter provided, a right to obtain from the Court 2[a decree] that the mortgagor shall be absolutely debarred of his right to redeem the property, or 2[a decree] that the property be sold.

A suit to obtain 2[a decree] that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.

Nothing in this section shall be deemed—

3[(a) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee under an anomalous mortgage by the terms of which he is entitled to foreclose, to institute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee by conditional sale as such to institute a suit for sale; or]

(b) to authorise a mortgagor who holds the mortgagee’s rights as his trustee or legal representative, and who may sue for a sale of the property, to institute a suit for foreclosure; or

(c) to authorise the mortgagee of a railway, canal, or other work in the maintenance of which the public are interested, to institute a suit for foreclosure or sale; or

(d) to authorise a person interested in part only of the mortgage-money to institute a suit relating only to a corresponding part of the mortgaged property, unless the mortgagees have, with the consent of the mortgagor, severed their interests under the mortgage.

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1. Subs. by Act 20 of 1929, sec. 31, for “payable”.

2. Subs. by Act 20 of 1929, sec. 31, for “an order”.

3. Subs. by Act 20 of 1929, sec. 31, for the original clause.

67A. Mortgagee when bound to bring one suit on several mortgages.—

1[67A. Mortgagee when bound to bring one suit on several mortgages.—A mortgagee who holds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to obtain the same kind of decree under section 67, and who sues to obtain such decree on any one of the mortgages, shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect of which the mortgage-money has become due.]

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1. Ins. by Act 20 of 1929, sec. 32.

68. Right to sue for mortgage-money.—

1[68. Right to sue for mortgage-money.—(1) The mortgagee has a right to sue for the mortgage-money in the following cases and no others, namely:—

(a) where the mortgagor binds himself to repay the same;

(b) where, by any cause other than the wrongful act or default of the mortgagor or mortgagee, the mortgaged property is wholly or partially destroyed or the security is rendered insufficient within the meaning of section 66, and the mortgagee has given the mortgagor a reasonable opportunity of providing further security enough to render the whole security sufficient, and the mortgagor has failed to do so;

(c) where the mortgagee is deprived of the whole or part of his security by or in consequence of the wrongful act or default of the mortgagor;

(d) where, the mortgagee being entitled to possession of the mortgaged property, the mortgagor fails to deliver the same to him, or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor :

Provided that, in the case referred to in clause (a), a transferee from the mortgagor or from his legal representative shall not be liable to be sued for the mortgage-money.

(2) Where a suit is brought under clause (a) or clause (b) of sub-section (1), the Court may, at its discretion, stay the suit and all proceedings therein, notwithstanding any contract to the contrary, until the mortgagee has exhausted all his available remedies against the mortgaged property or what remains of it, unless the mortgagee abandons his security and, if necessary, re-transfers the mortgaged property.]

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1. Subs. by Act 20 of 1929, sec. 33, for the original section.

69. Power of sale when valid.—

69. Power of sale when valid.—1[(1)] 2[3[***] A mortgagee, or any person acting on his behalf, shall, subject to the provisions of this section have power to sell or concur in selling the mortgaged property or any part thereof, in default of payment of the mortgage-money, without the intervention of the court, in the following cases and in no others, namely:—]

(a) where the mortgage is an English mortgage, and neither the mortgagor nor the mortgagee is a Hindu, Muhammadan or Buddhist 4[or a member of any other race, sect, tribe or class from time to time specified in this behalf by 5[the State Government], in the Official Gazette];

(b) where 6[a power of sale without the intervention of the court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgagee is 7[the Government];

(c) where 6[a power of sale without the intervention of the court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgaged property or any part thereof 8[was, on the date of the execution of the mortgage-deed], situate within the towns of Calcutta, Madras, Bombay, 9[***] 10[or in any other town11 or area which the State Government may, by notification in the Official Gazette, specify in this behalf.]

12[(2)] 13[***] No such power shall be exercised unless and until—

14[(a)] notice in writing requiring payment of the principal money has been served on the mortgagor, or on one of several mortgagors, and default has been made in payment of the principal money, or of part thereof, for three months after such service; or

15[(b)] some interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due.

16[(3)] When a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person damnified by an unauthorised or improper or irregular exercise or the power shall have his remedy in damages against the person exercising the power.

17[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of prior encumbrances, if any, to which the sale is not made subject, or after payment into Court under section 57 of a sum to meet any prior encumbrance, shall, in the absence of a contract to the contrary, be held by him in trust to be applied by him, first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of the mortgage-money and costs and other money, if any, due under the mortgage; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof.

18[(5) Nothing in this section or in section 69A applies to powers conferred before the first day of July, 1882.]

19[***]

COMMENTS

If the mortgagee exercises his or her power of sale bona fide for the purpose of realising his/her debt and without the collusion with the purchaser, the court will not interfere even though the sale be very disadvantageous, unless the price is so low as to be evidence of fraud. Held that the sale should be set aside as the value received after sale was only 35% of the actual price and greater portion of the bidders had been kept away because of the unattractive terms in which the property was depicted in the sale proclamation and there was definite collusion between the mortgagee and purchasers; Satyapal v. Rukayyabai, AIR 1993 Bom 203.

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1. Section 69 re-numbered as sub-section (1) of that section, by Act 20 of 1929, sec. 34.

2. Subs. by Act 20 of 1929, sec. 34, for certain words.

3. The words and figures “Notwithstanding anything contained in the Trustees’ and Mortgagees’ Powers Act, 1866″ omitted by Act 48 of 1952, sec. 3 and Sch. II.

4. Ins. by Act 3 of 1885, sec. 5.

5. The words “the L.G., with the previous sanction of the G.G. in C” successively amended by the A.O. 1937 and the A.O. 1950 to read as above.

6. Ins. by Act 20 of 1929, sec. 34.

7. The words “the Secretary of State for India in Council” successively amended by the A.O. 1937 and the A.O. 1950 to read as above.

8. Subs. by Act 20 of 1929, sec. 34, for “is”.

9. The word “Karachi” omitted by the A.O. 1948.

10. The words “or Rangoon” have been successively amended by Acts 6 of 1904, 11 of 1915, 20 of 1929, the A.O. 1937 and the A.O. 1950 to read as above.

11. For notifications relating to the towns of— Ahmedabad, see Gazette of India 1935, Pt. I, p. 936. Bandra, Kurla and Ghatkoper-Kirol, see Gazette of India, 1924, Pt. I, p. 1964. Cawnpore, Allahabad and Lucknow, see Gazette of India, 1933, Pt. I, p. 158. Coimbatore, Mudura, Cocanada and Cochin, see Gazette of India, 1935, Pt. I, p. 526. Delhi (Contonment), see Gazette of India, 1963, Pt. II, Section 3, Sub-section (1), p. 1020.

12. Second paragraph re-numbered as sub-section (2) by Act 20 of 1929, sec. 34.

13. The word “But” omitted by Act 20 of 1929, sec. 34.

14. Clause (1) was lettered (a) by Act 20 of 1929, sec. 34.

15. Clause (2) was lettered (b) by Act 20 of 1929, sec. 34.

16. Third paragraph numbered as sub-section (3) by Act 20 of 1929, sec. 34.

17. Fourth paragraph numbered as sub-section (4) by Act 20 of 1929, sec. 34.

18. Subs. by Act 20 of 1929, sec. 34, for the original fifth paragraph.

19. Original last paragraph omitted by Act 20 of 1929, sec. 34.

69A. Appointment of receiver.—

1[69A. Appointment of receiver.—(1) A mortgagee having the right to exercise a power of sale under section 69 shall, subject to the provisions of sub-section (2), be entitled to appoint, by writing signed by him or on his behalf, a receiver of the income of the mortgaged property or any part thereof.

(2) Any person who has been named in the mortgage-deed and is willing and able to act as receiver may be appointed by the mortgagee.

If no person has been so named, or if all persons named are unable or unwilling

to act, or are dead, the mortgagee may appoint any person to whose appointment the mortgagor agrees; failing such agreement, the mortgagee shall be entitled to apply to the Court for the appointment of a receiver, and any person appointed by the Court shall be deemed to have been duly appointed by the mortgagee.

A receiver may at any time be removed by writing signed by or on behalf of the mortgagee and the mortgagor, or by the court on application made by either party and on due cause shown.

A vacancy in the office of receiver may be filled in accordance with the provisions of this sub-section.

(3) A receiver appointed under the powers conferred by this section shall be deemed to be the agent of the mortgagor; and the mortgagor shall be solely responsible for the receiver’s act or defaults, unless the mortgage-deed otherwise provides or unless such acts or defaults are due to the improper intervention of the mortgagee.

(4) The receiver shall have power to demand and recover all the income of which he is appointed receiver, by suit, execution or otherwise, in the name either of the mortgagor or of the mortgagee to the full extent of the interest which the mortgagor could dispose of, and to give valid receipts accordingly for the same, and to exercise any powers which may have been delegated to him by the mortgagee, in accordance with the provisions of this section.

(5) A person paying money to the receiver shall not be concerned to inquire if the appointment of the receiver was valid or not.

(6) The receiver shall be entitled to retain out of any money received by him, for his remuneration, and in satisfaction of all costs, charges and expenses incurred by him as receiver, a commission at such rate not exceeding five per cent, on the gross amount of all money received as is specified in his appointment, and, if no rate is so specified, then at the rate of five per cent. on that gross amount, or at such other rate as the court thinks fit to allow, on application made by him for that purpose.

(7) The receiver shall, if so directed in writing by the mortgagee, insure to the extent, if any, to which the mortgagee might have insured, and keep insured against loss or damage by fire, out of the money received by him, the mortgaged property or any part thereof being of an insurable nature.

(8) Subject to the provisions of this Act as to the application of insurance money, the receiver shall apply all money received by him as follows, namely:—

(i) in discharge of all rents, taxes, land revenue, rates and outgoings whatever affecting the mortgaged property;

(ii) in keeping down all annual sums or other payments, and the interest on all principal sums, having priority to the mortgage in right whereof he is receiver;

(iii) in payment of his commission, and of the premiums on fire, life or other insurances, if any, properly payable under the mortgage-deed or under this Act, and the cost of executing necessary or proper repairs directed in writing by the mortgagee;

(iv) in payment of the interest falling due under the mortgage;

(v) in or towards discharge of the principal money, if so directed in writing by the mortgagee,

and shall pay the residue, of any, of the money received by him to the person who, but for the possession of the receiver, would have been entitled to receive the income of which he is appointed receiver, or who is otherwise entitled to the mortgaged property.

(9) The provisions of sub-section (1) apply only if and as far as a contrary intention is not expressed in the mortgage-deed; and the provisions of sub-sections (3) to (8) inclusive may be varied or extended by the mortgage-deed; and, as so varied or extended, shall, as far as may be, operate in like manner and with all the like incidents, effects and consequences, as if such variations or extensions were contained in the said sub-sections.

(10) Application may be made, without the institution of a suit, to the court for its opinion, advice or direction on any present question respecting the management or administration of the mortgaged property, other than questions of difficulty or importance not proper in the opinion of the court for summary disposal. A copy of such application shall be served upon, and the hearing thereof may be attended by, such of the persons interested in the application as the Court may think fit.

The costs of every application under this sub-section shall be in the discretion of the Court.

(11) In this section, “the Court” means the Court which would have jurisdiction in a suit to enforce the mortgage.]

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1. Ins. by Act 20 of 1929, sec. 35.

70. Accession to mortgaged property.—

If, after the date of a mortgage, any accession is made to the mortgaged property, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to such accession.

Illustrations

(a) A mortgages to B a certain field bordering on a river. The field is increased by alluvion. For the purposes of his security, B is entitled to the increase.

(b) A mortgages a certain plot of building land to B and afterwards erects a house on the plot. For the purposes of his security, B is entitled to the house as well as the plot.

71. Renewal of mortgaged lease.—

When the mortgaged property is a lease 1[***] and the mortgagor obtains a renewal of the lease, the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the security, be entitled to the new lease.

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1. The words “for a term of years” omitted by Act 20 of 1929, sec. 36.

72. Right of mortgagee in possession.—

1[A mortgagee] may spend such money as is necessary—

2[***]

(b) for 3[the preservation of the mortgaged property] from destruction, forfeiture or sale;

(c) for supporting the mortgagor’s title to the property;

(d) for making his own title thereto good against the mortgagor; and

(e) when the mortgaged property is a renewable lease-hold, for the renewal of the lease, and may, in the absence of a contract to the contrary, add such money to the principal money, at the rate of interest payable on the principal, and, where no such rate is fixed, at the rate of nine per cent. per annum:

4[Provided that the expenditure of money by the mortgagee under clause (b) or clause (c) shall not be deemed to be necessary unless the mortgagor has been called upon and has failed to take proper and timely steps to preserve the property or to support the title.]

Where the property is by its nature insurable, the mortgagee may also, in the absence of a contract to the contrary, insure and keep insured against loss or damage by fire the whole or any part of such property, and the premiums paid for any such insurance shall be 5[added to the principal money with interest at the same rate as is payable on the principal money or, where no such rate is fixed, at the rate of nine per cent. per annum]. But the amount of such insurance shall not exceed the amount specified in this behalf in the mortgage-deed or (if no such amount is therein specified) two-thirds of the amount that would be required in case of total destruction to reinstate the property insured.

Nothing in this section shall be deemed to authorise the mortgagee to insure when an insurance of the property is kept up by or on behalf of the mortgagor to the amount in which the mortgagee is hereby authorised to insure.

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1. Subs. by Act 20 of 1929, sec. 37, for “When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he”.

2. Clause (a) omitted by Act 20 of 1929, sec. 37.

3. Subs. by Act 20 of 1929, sec. 37, for “its preservation”.

4. Ins. by Act 20 of 1929, sec. 37.

5. Subs. by Act 20 of 1929, sec. 37, for certain original words.

[73. Right to proceeds of revenue sale or compensation on acquisition.—

1[73. Right to proceeds of revenue sale or compensation on acquisition.—(1) Where the mortgaged property or any part thereof or any interest therein is sold owing to failure to pay arrears of revenue or other charges of a public nature or rent due in respect of such property, and such failure did not arise from any default of the mortgagee, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of any surplus of the sale-proceeds remaining after payment of the arrears and of all charges and deductions directed by law.

(2) Where the mortgaged property or any part thereof or any interest therein is acquired under the Land Acquisition Act, 1894 (1 of 1894); or any other enactment for the time being in force providing for the compulsory acquisition of immoveable property, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of the amount due to the mortgagor as compensation.

(3) Such claims shall prevail against all other claims except those of prior encumbrancers, and may be enforced notwithstanding that the principal money on the mortgage has not become due.]

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1. Subs. by Act 20 of 1929, sec. 38, for the original section.

74. Right of subsequent mortgagee to pay off prior mortgagee.—

[Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), sec. 39.]

75. Rights of mesne mortgagee against prior and subsequent mortgagees.—

[Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), sec. 39.]

76. Liabilities of mortgagee in possession.—

When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property,—

(a) he must manage the property as a person of ordinary prudence would manage it if it were his own;

(b) he must use his best endeavours to collect the rents and profits thereof;

(c) he must, in the absence of a contract to the contrary, out of the income of the property, pay the Government revenue, all other charges of a public nature 1[and all rent] accruing due in respect thereof during such possession, and any arrears of rent in default of payment of which the property may be summarily sold;

(d) he must in the absence of a contract to the contrary, make such necessary repairs of the property as he can pay for out of the rents and profits thereof after deducting from such rents and profits the payments mentioned in clause (c) and the interest on the principal money;

(e) he must not commit any act which is destructive or permanently injurious to the property;

(f) where he has insured the whole or any part of the property against loss or damage by fire, he must, in case of such loss or damage, apply any money which he actually receives under the policy or so much thereof as may be necessary, in reinstating the property, or, if the mortgagor so directs, in reduction or discharge of the mortgage-money;

(g) he must keep clear, full and accurate accounts of all sums received and spent by him as mortgagee, and, at any time during the continuance of the mortgage, give the mortgagor, at his request and cost, true copies of such accounts and of the vouchers by which they are supported;

(h) his receipts from the mortgaged property, or, where such property is personally occupied by him, a fair occupation-rent in respect thereof, shall, after deducting the expenses 1[properly incurred for the management of the property and the collection of rents and profits and the other expenses] mentioned in clauses (c) and (d), and interest thereon, be debited against him in reduction of the amount (if any) from time to time due to him on account of interest 2[***] and, so far as such receipts exceed any interest due, in reduction or discharge of the mortgage-money; the surplus, if any, shall be paid to the mortgagor;

(i) when the mortgagor tenders, or deposits in the manner hereinafter provided, the amount for the time being due on the mortgage, the mortgagee must, notwithstanding the provisions in the other clauses of this section, account for his 3[***] receipts from the mortgaged property from the date of the tender or from the earliest time when he could take such amount out of court, as the case may be 1[and shall not be entitled to deduct any amount therefrom on account of any expenses incurred after such date or time in connection with the mortgaged property].

Loss occasioned by his default.—If the mortgagee fails to perform any of the duties imposed upon him by this section, he may, when accounts are taken in pursuance of a decree made under this Chapter, be debited with the loss, if any, occasioned by such failure.

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1. Ins. by Act 20 of 1929, sec. 40.

2. The words “on the mortgage-money” omitted by Act 20 of 1929, sec. 40.

3. The word “gross” omitted by Act 20 of 1929, sec. 40.

77. Receipts in lieu of interest.—

Nothing in section 76, clauses (b), (d), (g) and (h), applies to cases where there is a contract between the mortgagee and the mortgagor that the receipts from the mortgaged property shall, so long as the mortgagee is in possession of the property, be taken in lieu of interest on the principal money, or in lieu of such interest and defined portions of the principal.

78. Postponement of prior mortgagee.—

Where, through the fraud, misrepresentation or gross neglect of prior mortgagee, another person has been induced to advance money on the security of the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee.

79. Mortgage to secure uncertain amount when maximum is expressed.—

If a mortgage made to secure future advances, the performance of an engagement or the balance of a running account, expresses the maximum to be secured thereby, a subsequent mortgage of the same property shall, if made with notice of the prior mortgage, be postponed to the prior mortgage in respect of all advances or debits not exceeding the maximum, though made or allowed with notice of the subsequent mortgage.

Illustration

A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them to the extent of Rs.10,000. A then mortgages Sultanpur to C, to secure Rs.10,000, C having notice of the mortgage to B & Co., and C gives notice to B & Co. of the second mortgage. At the date of the second mortgage, the balance due to B & Co. does not exceed Rs. 5,000. B & Co. subsequently advance to A sums making the balance of the account against him exceed the sum of Rs.10,000. B & Co. are entitled, to the extent of Rs.10,000, to priority over C.

80. Tacking abolished.—

[Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), sec. 41.]

81. Marshalling, securities.—

1[81. Marshalling, securities.—If the owner of two or more properties mortgages them to one person and then mortgages one or more of the properties to another person, the subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior mortgage-debt satisfied out of the property or properties not mortgaged to him, so far as the same will extend, but not so as to prejudice the rights of the prior mortgagee or of any other person who has for consideration acquired an interest in any of the properties.]

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1. Subs. by Act 20 of 1929, sec. 42, for the original section.

82. Contribution to mortgage-debt.—

1[Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate at which each such share or part shall contribute, the value thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount of any other mortgage or charge to which it may have been subject on that date.]

Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another debt, and the former debt is paid out of the former property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to the latter debt after deducting the amount of the former debt from the value of the property out of which it has been paid.

Nothing in this section applies to a property liable under section 81 to the claim of the 2[subsequent] mortgagee.

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1. Subs. by Act 20 of 1929, sec. 43, for the original paragraph.

2. Subs. by Act 20 of 1929, sec. 43, for “second”.

83. Power to deposit in Court money due on mortgage.—

At any time after the principal money 1[payable in respect of any mortgage has become due] and before a suit for redemption of the mortgaged property is barred, the mortgagor, or any other person entitled to institute such suit, may deposit, in any court in which he might have instituted such suit, to the account of the mortgagee, the amount remaining due on the mortgage.

Right to money deposited by mortgagor.—The court shall thereupon cause written notice of the deposit to be served on the mortgagee, and the mortgagee may, on presenting a petition (verified in manner prescribed by law2 for the verification of plaints) stating the amount then due on the mortgage, and his willingness to accept the money so deposited in full discharge of such amount, and on depositing in the same Court the mortgage-deed 3[and all documents in his possession or power relating to the mortgaged property], apply for and receive the money, and the mortgage-deed, 4[and all such other documents] so deposited shall be delivered to the mortgagor or such other person as aforesaid.

5[Where the mortgagee is in possession of the mortgaged property, the court shall, before paying to him the amount so deposited, direct him to deliver possession thereof to the mortgagor and at the cost of the mortgagor either to re-transfer the mortgaged property to the mortgagor or to such third person as the mortgagor may direct or to execute and (where the mortgage has been effected by a registered instrument) have registered an acknowledgement in writing that any right in derogation of the mortgagor’s interest transferred to the mortgagee has been extinguished.]

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1. Subs. by Act 20 of 1929, sec. 44, for “has become payable”.

2. See the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order VI, rule 15.

3. Subs. by Act 20 of 1929, sec. 44, for “if then in his possession or power”.

4. Ins. by Act 20 of 1929, sec. 44. 5. Ins. by Act 20 of 1929, sec. 44.

84. Cessation of interest.—

When the mortgagor or such other person as aforesaid has tendered or deposited in Court under section 83 the amount remaining due on the mortgage, interest on the principal money shall cease from the date of the tender or 1[in the case of a deposit, where no previous tender of such amount has been made] as soon as the mortgagor or such other person as aforesaid has done all that has to be done by him to enable the mortgagee to take such amount out of Court, 2[and the notice required by section 83 has been served on the mortgagee:

Provided that, where the mortgagor has deposited such amount without having made a previous tender thereof and has subsequently withdrawn the same or any part thereof, interest on the principal money shall be payable from the date of such withdrawal.]

Nothing in this section or in section 83 shall be deemed to deprive the mortgagee of his right to interest when there exists a contract that he shall be entitled to reasonable notice before payment or tender of the mortgage-money 3[and such notice has not been given before the making of the tender or deposit, as the case may be].

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1. Ins. by Act 20 of 1929, sec. 45.

2. Subs. by Act 20 of 1929, sec. 45, for “as the case may be”.

3. Added by Act 20 of 1929, sec. 45.

85. Parties to suits for foreclosure, sale and redemption.—

[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

86.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

86.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

87.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

87.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

88.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

88.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

89.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

89.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

90.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

90.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

91. Persons who may sue for redemption.—

1[91. Persons who may sue for redemption.—Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of, the mortgaged property, namely:—

(a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same;

(b) any surety for the payment of the mortgage-debt or any part thereof; or

(c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property.]

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1. Subs. by Act 20 of 1929, sec. 46, for the original section.

92. Subrogation.—

1[92. Subrogation.—Any of the persons referred to in section 91 (other than the mortgagor) and any co-mortgagor shall, on redeeming property subject to the mortgage, have, so far as regards redemption, foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee.

The right conferred by this section is called the right of subrogation, and a person acquiring the same is said to be subrogated to the rights of the mortgagee whose mortgage he redeems.

A person who has advanced to a mortgagor money with which the mortgage has been redeemed shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor has by a registered instrument agreed that such persons shall be so subrogated.

Nothing in this section shall be deemed to confer a right of subrogation on any person unless the mortgage in respect of which the right is claimed has been redeemed in full.]

COMMENTS

The payment of mortgage money after the preliminary decree has been passed will not make any difference to the right of the respondents for subrogation when all the requirements of section 92 are in existence; Kadanba Sugar Industries Pvt. Ltd. v. Devru Ganapathi Hegde Bahairi, AIR 1993 Kant 288.

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1. Ins. by Act 20 of 1929, sec. 47. Original sections 92 were repealed by Act 5 of 1908, sec. 156 and Sch.V.

93. Prohibition of tacking.—

1[93. Prohibition of tacking.—No mortgagee paying off a prior mortgage,whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his original security; and, except in the case provided for by section 79, no mortgagee making a subsequent advance to the mortgagor, whether with or without notice of an intermediate mortgage, shall thereby acquire any priority in respect of his security for such subsequent advance.]

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1. Ins. by Act 20 of 1929, sec. 47. Original sections 93 were repealed by Act 5 of 1908, sec. 156 and Sch.V.

94. Rights of mesne mortgagee.—

1[94. Rights of mesne mortgagee.—Where a property is mortgaged for successive debts to successive mortgagees, a mesne mortgagee has the same rights against mortgagees posterior to himself as he has against the mortgagor.]

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1. Ins. by Act 20 of 1929, sec. 47. Original sections 94 were repealed by Act 5 of 1908, sec. 156 and Sch.V.

95. Right of redeeming co-mortgagor to expenses.—

1[95. Right of redeeming co-mortgagor to expenses.—Where one of several mortgagors redeems the mortgaged property, he shall, in enforcing his right of subrogation under section 92 against his co-mortgagors, be entitled to add to the mortgage money recoverable from them such proportion of the expenses properly incurred in such redemption as is attributable to their share in the property.]

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1. Subs. by Act 20 of 1929, sec. 48, for the original section 95. Original section 96 was repealed by Act 5 of 1908, sec. 156 and Sch.V.

96. Mortgage by deposit of title-deeds.—

1[96. Mortgage by deposit of title-deeds.—The provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title-deeds.]

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1. Subs. by Act 20 of 1929, sec. 48, for the original section 95. Original section 96 was repealed by Act 5 of 1908, sec. 156 and Sch.V.

97. Application of proceeds.—

1[97. Application of proceeds.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V.]

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1. For the repealed provisions as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order XXXIV, rules 12 and 13.

98. Rights and liabilities of parties to anomalous mortgages.—

98. Rights and liabilities of parties to anomalous mortgages.—In the case of 1[an anomalous mortgage] the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage-deed, and, so far as such contract does not extend, by local usage.

COMMENTS

The mortgagee was given the right to sell the property in his possession for the realisation of mortgage debt in the case the mortgagor defaulted in payment of mortgage debt. The mortgagee had to pay a monthly sum of Rs.85 towards “excess profits” after adjusting the balance towards interest on the mortgage amount. It has been held that payment of Rs. 85 was not rent for the property and the mortgagee was not a lessee, but the mortgage was an anomalous mortgage and rights and liabilities of the mortgagee were to be determined according to section 98 of Transfer of Property Act; Hathika v. Puthiyapurayil Padmanabhan, AIR 1994 Ker 141.

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1. Subs. by Act 20 of 1929, sec. 49, for “a mortgage, not being a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage or an English mortgage or a combination of the first and third, or the second and third, of such forms”.

99. Attachment of mortgaged property.—

1[99. Attachment of mortgaged property.—[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec.156 and Sch. V.]

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1. For the repealed provisions as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order XXXIV, rule 14.

100. Charges.—

Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained 1[which apply to a simple mortgage shall, so far as may be, apply to such charge].

Nothing in this section applies to the charge of a trustee on the trust-property for expenses properly incurred in the execution of his trust, 2[and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge].

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1. Subs. by Act 20 of 1929, sec. 50, for “as to a mortgagor shall, so far as may be, apply to the owner of such property, and the provisions of sections 81 and 82 shall, so far as may be, apply to the person having such charge”.

2. Added by Act 20 of 1929, sec. 50.

101. No merger in case of subsequent encumbrance.—

1[101. No merger in case of subsequent encumbrance.—Any mortgagee of, or person having a charge upon, immoveable property, or any transferee from such mortgagee or charge-holder, may purchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be, without thereby causing the mortgage or charge to be merged as between himself and any subsequent mortgagee of, or person having a subsequent charge upon, the same property; and no such subsequent mortgagee or charge-holder shall be entitled to foreclose or sell such property without redeeming the prior mortgage or charge, or otherwise than subject thereto.]

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1. Subs. by Act 20 of 1929, sec. 51, for the original section.

102. Service or tender on or to agent.—

Where the person on or to whom any notice or tender is to be served or made under this Chapter does not reside in the district in which the mortgaged property or some part thereof is situate, service or tender on or to an agent holding a general power-of-attorney from such person or otherwise duly authorised to accept such service or tender shall be deemed sufficient.

1[Where no person or agent on whom such notice should be served can be found or is known] to the person required to serve the notice, the latter person may apply to any court in which a suit might be brought for redemption of the mortgaged property, and such court shall direct in what manner such notice shall be served, and any notice served in compliance with such direction shall be deemed sufficient:

2[Provided that, in the case of a notice required by section 83, in the case of a deposit, the application shall be made to the court in which the deposit has been made.]

3[Where no person or agent to whom such tender should be made can be found or is known] to the person desiring to make the tender, the latter person may deposit 4[in any Court in which a suit might be brought for redemption of the mortgaged property] the amount sought to be tendered, and such deposit shall have the effect of a tender of such amount.

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1. Subs. by Act 20 of 1929, sec. 52, for “Where the person or agent on whom such notice should be served cannot be found in the said district, or is unknown”.

2. Ins. by Act 20 of 1929, sec. 52.

3. Subs. by Act 20 of 1929, sec. 52, for “Where the person or agent to whom such tender should be made cannot be found within the said district or is unknown”.

4. Subs. by Act 20 of 1929, sec. 52, for “in such Court as last aforesaid”.

103. Notice, etc., to or by person incompetent to contract.—

Where, under the provisions of this Chapter, a notice is to be served on or by, or a tender or deposit made or accepted or taken out of court by, any person incompetent to contract, such notice may be served 1[on or by] or tender or deposit made, accepted or taken, by the legal curator of the property of such person; but where there is no such curator, and it is requisite or desirable in the interest of such person that a notice should be served or a tender or deposit made under the provisions of this Chapter, application may be made to any court in which a suit might be brought for the redemption of the mortgage to appoint a guardian ad litem for the purpose of serving or receiving service of such notice, or making or accepting such tender, or making or taking out of court such deposit, and for the performance of all consequential acts which could or ought to be done by such person if he were competent to contract2; and the provisions of 3[order XXXII in the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908)] shall, so far as may be, apply to such application and to parties thereto and to the guardian appointed thereunder.

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1. Ins. by Act 20 of 1929, sec. 53.

2. As to persons competent to contract, see sections 11 and 12 of the Indian Contract Act, 1872 (9 of 1872).

3. Subs. by Act 20 of 1929, sec. 53, for “Chapter XXXI of the Code of Civil Procedure”.

104. Power to make rules.—

The High Court may, from time to time, make rules consistent with this Act for carrying out, in itself and in the Courts of Civil Judicature subject to its superintendence, the provisions contained in this Chapter.

105. Lease defined.—

A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.

Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.

COMMENTS

Lessee

A lessee of a property has a right to possession and enjoyment of the devise to the exclusion of the lessor whereas a licensee does not have such a right. Since the appellant had the right to exclusive possession and enjoyment of the disputed property, he was a lessee and not a licensee; Ajab Singh v. Shital Puri, AIR 1993 All 138.

Lease

(i) If the agreement between the parties shows an intention to create an interest in the property in favour of the grantee what results is said to be a lease. A licensee on the other hand does not create an interest in property; Mrs. Karuna Manoharlal Ohri v. Vipinbhai U. Sanghani, AIR 1993 Bom 177.

(ii) The furniture and fittings and the tools and implements which have been given alongwith the shop were not meant for the beneficial use of the shop but were meant exclusively for running of the hair dressing saloon, thus creating a lease of the business and not a lease of the shop; Vidya Wati v. Hansraj, AIR 1993 Del 187.

Licence

The Corporation had all the supervisory powers to regulate the running of the refreshment stall. No exclusive right was created in favour of the caterer to run the refreshment stall in the manner the caterer choose to do so. Since there is no transfer of interest in the stall and as per the terms of agreement, the document can be termed as licence only and not a lease; Udai Pratap Singh v. Collector Varanasi, AIR 1991 All 104.

[106. Duration of certain leases in absence of written contract or local usage.—

1[106. Duration of certain leases in absence of written contract or local usage.—(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice.

(2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice.

(3) A notice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit or proceeding is filed after the expiry of the period mentioned in that sub-section.

(4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property.]

COMMENTS

If any person claims to the contrary that the lease was for a fixed term or to be a yearly lease instead of a lease from month to month he has to prove by legal, valid and reliable evidence. Therefore the burden lay upon the defendant to prove his contrary claim that lease was for a fixed term of five years and the lease would be entered at the option and wish of the lessee; Punjab National Bank v. Ganga Narain Kapur, AIR 1994 All 221.

Service of notice

Notice sent on correct address to addressee who refused to accept it. Presumption lies with regard to notice on addressee/defendant. It is addressee/defendant who has to prove that either notice was not sent on correct address or same was not served upon him; Kali Ram v. Mirza Wakar Ali, AIR 2005 NOC 296 (UP).

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1. Subs. by Act 3 of 2003, sec. 2, for section 106 (w.e.f. 31-12-2002).

Section 106, before substitution, stood as under: “106. Duration of certain leases in absence of written contract or local usage.—

In the absence of a contract or local law or usage to the contrary, a lease of immoveable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice expiring with the end of a year of the tenancy; and a lease of immoveable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with the end of a month of the tenancy.

Every notice under this section must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property”.

107. Leases how made.—

1107. Leases how made.—A lease of immoveable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.

2[All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.

3[Where a lease of immoveable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee:]

Provided that the State Government may4[***] from time to time, by notification in the Official Gazette, direct that leases of immoveable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.]

COMMENTS

Lease of immoveable property

The legislature intended that a lease of immoveable property for a period of more than one year should be made by a registered deed. But if a lease of immoveable property for a term of more than one year is not made by a registered deed or is made orally, then in such cases the presumption about the duration of lease under section 106 will apply; Punjab National Bank v. Ganga Narain Kapur, AIR 1994 All 221.

Lease not to apply agricultural lease

Principle of section 107 which envisage mode in which lease is to be made do not apply to agricultural lease; Atar Singh v. Jiledar Singh, AIR 2005 MP 157.

Nature of lease

If a lease agreement is neither a registered document nor an oral argeement accompanied by delivery of possession, it cannot create lessor and lessee relationship. Such document shall not effect any immoveable property nor be received as evidence of any transaction affecting such property; Chemical Sales Agencies v. Naraini Newar, AIR 2005 Del 76.

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1. As to limitation to the territorial operation of section 107, see section 1, supra, section 107 extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).

2. Subs. by Act 6 of 1904, sec. 5, for the original paragraph.

3. Ins. by Act 20 of 1929, sec. 55.

4. The words “with the previous sanction of the Governor General in Council” omitted by the A.O. 1937.

108. Rights and liabilities of lessor and lessee.—

In the absence of a contract or local usage to the contrary, the lessor and the lessee of immoveable property, as against one another, respectively, possess the rights and are subject to the liabilities mentioned in the rules next following, or such of them as are applicable to the property leased:—

(A) Rights and Liabilities of the Lessor

(a) The lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover;

(b) the lessor is bound on the lessee’s request to put him in possession of the property;

(c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contracts binding on the lessee, he may hold the property during the time limited by the lease without interruption.

The benefit of such contract shall be annexed to and go with the lessee’s interest as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

(B) Rights and Liabilities of the Lessee

(d) If during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease;

(e) if by fire, tempest or flood, or violence of an army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void:

Provided that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself of the benefit of this provision;

(f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to make to the property, the lessee may make the same himself, and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the lessor;

(g) if the lessor neglects to make any payment which he is bound to make, and which, if not made by him, is recoverable from the lessee or against the property, the lessee may make such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor;

(h) the lessee may 1[even after the determination of the lease] remove, at any time 2[whilst he is in possession of the property leased but not afterwards] all things which he has attached to the earth; provided he leaves the property in the state in which he received it;

(i) when a lease of uncertain duration determines by any means except the fault of the lessee, he or his legal representative is entitled to all the crops planted or sown by the lessee and growing upon the property when the lease determines, and to free ingress and egress to gather and carry them;

(j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole or any part of his interest in the property, and any transferee of such interest or part may again transfer it. The lessee shall not, by reason only of such transfer, cease to be subject to any of the liabilities attaching to the lease;

Nothing in this clause shall be deemed to authorise a tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee;

(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of the interest which the lessee is about to take, of which the lessee is, and the lessor is not, aware, and which materially increases the value of such interest;

(l) the lessee is bound to pay or tender, at the proper time and place, the premium or rent to the lessor or his agent in this behalf;

(m) the lessee is bound to keep, and on the termination of the lease to restore, the property in as good condition as it was in at the time when he was put in possession, subject only to the changes caused by reasonable wear and tear or irresistible force, and to allow the lessor and his agents, at all reasonable times during the term, to enter upon the property and inspect the condition thereof and give or leave notice of any defect in such condition; and, when such defect has been caused by any act or default on the part of the lessee, his servants or agents, he is bound to make it good within three months after such notice has been given or left;

(n) if the lessee becomes aware of any proceeding to recover the property or any part thereof, or of any encroachment made upon, or any interference with, the lessor’s rights concerning such property, he is bound to give, with reasonable diligence, notice thereof to the lessor;

(o) the lessee may use the property and its products (if any) as a person of ordinary prudence would use them if they were his own; but he must not use, or permit another to use, the property for a purpose other than that for which it was leased, or fell 3[or sell] timber, pull down or damage buildings 3[belonging to the lessor, or] work mines or quarries not open when the lease was granted, or commit any other act which is destructive or permanently injurious thereto;

(p) he must not, without the lessor’s consent, erect on the property any permanent structure, except for agricultural purposes;

(q) on the determination of the lease, the lessee is bound to put the lessor into possession of the property.

COMMENTS

(i) Under clause (o) the lessee must not use or permit another to use the property for a purpose other than that for which it was leased. The premises were let out to the tenant for sugarcane juice business but was using the premises for selling readymade clothes thereby contravening the provisions of the Act; Dashrath Baburao Sangale v. Kashinath Bhaskar Datta, AIR 1993 SC 2646.

(ii) The respondent is liable to be evicted on the ground of wilful denial of title and wilful default in the payment of rent; Kanuthi Madalichamy v. Thangarathina Nadar, AIR 1991 Mad 229.

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1. Ins. by Act 20 of 1929, sec. 56.

2. Subs. by Act 20 of 1929, sec. 56, for “during the continuance of the lease”.

3. Ins. by Act 20 of 1929, sec. 56.

109. Rights of lessor’s transferee.—

If the lessor transfers the property leased, or any part thereof, or any part of his interest therein, the transferee, in the absence of a contract to the contrary, shall possess all the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to the property or part transferred so long as he is the owner of it; but the lessor shall not, by reason only of such transfer cease to be subject to any of the liabilities imposed upon him by the lease, unless the lessee elects to treat the transferee as the person liable to him:

Provided that the transferee is not entitled to arrears of rent due before the transfer, and that, if the lessee, not having reason to believe that such transfer has been made, pays rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee.

The lessor, the transferee and the lessee may determine what proportion of the premium or rent reserved by the lease is payable in respect of the part so transferred, and, in case they disagree, such determination may be made by any Court having jurisdiction to entertain a suit for the possession of the property leased.

COMMENTS

Successor in interest

When right, title and interest in immoveable property stand transferred by operation of law, the spirit behind section 109 would apply and successor in interest would be entitled to the rights of the predecessor. Therefore the suit filed for ejectment filed by the successor Board was competent; Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port of Bombay, AIR 1991 SC 14.

Absence of contract

It appears from section 109 that provision stands only in the absence of any contract to the contrary; Nemai Basak v. Kalyani Rakshit, AIR 2005 Cal 163.

110. Exclusion of day on which term commences.—

Where the time limited by a lease of immoveable property is expressed as commencing from a particular day, in computing that time such day shall be excluded. Where no day of commencement is named, the time so limited begins from the making of the lease.

Duration of lease for a year.—Where the time so limited is a year or a number of years, in the absence of an express agreement to the contrary, the lease shall last during the whole anniversary of the day from which such time commences.

Option to determine lease.—Where the time so limited is expressed to be terminable before its expiration, and the lease omits to mention at whose option it is so terminable, the lessee, and not the lessor, shall have such option.

111. Determination of lease.—

A lease of immoveable property determines—

(a) by efflux of the time limited thereby;

(b) where such time is limited conditionally on the happening of some

event—by the happening of such event;

(c) where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event—by the happening of such event;

(d) in case the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person in the same right;

(e) by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them;

(f) by implied surrender;

(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter 1[* * *]; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; 2[or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event]; and in3[any of these cases] the lessor or his transferee4[gives notice in writing to the lessee of] his intention to determine the lease;

(h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other.

Illustration to clause (f)

A lessee accepts from his lessor a new lease of the property leased, to take effect during the continuance of the existing lease. This is an implied surrender of the former lease, and such lease determines thereupon.

COMMENTS

Doctrine of merger

The doctrine of merger is attracted when a leasehold and revision coincide. If the lessee purchases the lessor’s interest, the lease is relinquished as the same person cannot at the same time be both landlord and tenant. The doctrine of merger is based on the principle of union of two conflicting interests which cannot be held by one person at the same time. Therefore, the leasehold rights in favour of the appellants stand extinguished; Ramesh Kumar Jhambh v. Official Assignee, High Court Bombay, AIR 1993 Bom 374.

Implied surrender

There can be implied surrender, if the lessor grants a new lease to a third person with the assent of the lessee under the existing lease who delivers the possession to such person or where the lessee directs his sub-tenant to pay the rent directly to the lessor. Since the respondents had by executing the agreement impliedly surrendered their leasehold rights, they were no longer lessees; P.M.C. Kunhiraman Nair v. C.R. Nagaratha Iyer, AIR 1993 SC 307.

Clause (1) of section 111(g) has no application as there was no covenant prohibiting sale or on its breach, of the right of re-entry. Clause (2) of section 111(g) is also of no avail to the landlord for forfeiture because there is no unequivocal and clear disclaimer of title of the landlord. Therefore neither clause (1) nor (2) of section 111(g) are of any avail for forfeiture; Guru Amarjit Singh v. Rattan Chand, AIR 1994 SC 227.

The statement by the tenant that he was not aware of as to who was his landlord cannot be held to be denial of title of landlord and no eviction decree by forfeiture was granted; Munisami Naidu v. C. Ranganathan, AIR 1991 SC 492.

It has been held that the Board was entitled to institute proceedings against the tenant as the notice period had expired; Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port of Bombay, AIR 1991 SC 14.

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1. The words “or the lease shall become void” omitted by Act 20 of 1929, sec. 57.

2. Ins. by Act 20 of 1929, sec. 57.

3. Subs. by Act 20 of 1929, sec. 57, for “either case”.

4. Subs. by Act 20 of 1929, sec. 57, for “does some act showing”.

112. Waiver of forfeiture.—

A forfeiture under section 111, clause (g) is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other act on the part of the lessor showing an intention to treat the lease as subsisting:

Provided that the lessor is aware that the forfeiture has been incurred:

Provided also that, where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver.

113. Waiver of notice to quit.—

A notice given under section 111, clause (h), is waived, with the express or implied consent of the person to whom it is given, by any act on the part of the person giving it showing an intention to treat the lease as subsisting.

Illustrations

(a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice expires. B tenders and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice is waived.

(b) A, the lessor, gives B, the lessee; notice to quit the property leased. The notice expires, and B remains in possession. A gives to B as lessee a second notice to quit. The first notice is waived.

114. Relief against forfeiture for non-payment of rent.—

Where a lease of immoveable property has determined by forfeiture for non-payment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had not occurred.

COMMENTS

(i) Section 114 affords protection to the tenant against forfeiture. While the tenant enjoys the immunity from eviction for default in the payment of rent, the landlord gets the corresponding benefit of recovery even such arrears as are not legally recoverable. Such an equitable provision as is engrafted in section 114 of Transfer of Property Act, shall govern only to such an extent which does not run counter to any specific statutory provisions; Shyam Bhagwan Dubey v. Shaikh Nizam, AIR 1994 MP 52.

(ii) The right of the landlord to get the tenant evicted is restricted under the Rent Act. As the law restricts the power of the landlord to evict the tenant except in accordance with the provisions of Rent Act section 114 is not attracted. Once the requirements of Rent legislation are satisfied, the tenant cannot claim the double protection of invoking the provision of Transfer of Property Act; Prithivichand Ramchand Sablok v. S.Y. Shinde, AIR 1993 SC 1929.

114A. Relief against forfeiture in certain other cases.—

1[114A. Relief against forfeiture in certain other cases.—Where a lease of immoveable property has determined by forfeiture for a breach of an express condition which provides that on breach thereof the lessor may re-enter, no suit for ejectment shall lie unless and until the lessor has served on the lessee a notice in writing—

(a) specifying the particular breach complained of; and

(b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and the lessee fails, within a reasonable time from the date of the service of the notice, to remedy the breach, if it is capable of remedy.

Nothing in this section shall apply to an express condition against the assigning, under-letting, parting with the possession, or disposing, of the property leased, or to an express condition relating to forfeiture in case of non-payment of rent.]

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1. Ins. by Act 20 of 1929, sec. 58.

115. Effect of surrender and forfeiture on under-leases.—

The surrender, express or implied, of a lease of immoveable property does not prejudice an under-lease of the property or any part thereof previously granted by the lessee, on terms and conditions substantially the same (except as regards the amount of rent) as those of the original lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable by, and the contracts binding on, the under-lessee shall be respectively payable to and enforceable by the lessor.

The forfeiture of such a lease annuls all such under-leases, except where such forfeiture has been procured by the lessor in fraud of the under-lessees, or relief against the forfeiture is granted under section 114.

116. Effect of holding over.—

If a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year, or from month to month, according to the purpose for which the property is leased, as specified in section 106.

Illustrations

(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. C’s lease is renewed from month to month.

(b) A lets a farm to B for the life of C. C dies, but B continues in possession with A’s assent. B’s lease is renewed from year to year

COMMENTS

Tenant at sufferance

A person who is a tenant at sufferance has no estate or interest in the leasehold property. A tenant holding after the expiry of his term is a tenant at sufferance, which is a term useful to distinguish a possession rightful in its inception but wrongful in its continuance from a trespass which is wrongful both in its inception and in its continuance. A co-owner can maintain a suit by himself in ejectment of a trespasser or a tenant at sufferance; B. Valsala v. Sundram Nadar Bhaskaran, AIR 1994 Ker 164.

117. Exemption of leases for agricultural purposes.—

None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Government 1[***] may by notification published in the Official Gazette declare all or any of such provisions to be so applicable 2[in the case of all or any of such leases], together with, or subject to, those of the local law, if any, for the time being in force.

Such notification shall not take effect until the expiry of six months from the date of its publication.

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1. The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1920, sec. 2 and Sch. I. 2. Ins. by Act 6 of 1904, sec. 6.

118. “Exchange” defined.—

When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an “exchange”.

A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale.

Comments

Exchange of ownership

Plot over which ownership and possession vested in ‘R’ was wrongly recorded in the name of ‘G’ in Land Survey entries. Document executed between parties acknowledging factum of possession of their correct plot numbers. There was no exchange of ownership or transfer of property. Said document would be construed as acknowledgement of possession and not as exchange. It would be admissible without being registered; Md. Uddin @ Mohammadin v. Asibun Nissa, AIR 2005 Jhar 1.

119. Right of party deprived of thing received in exchange.—

1[119. Right of party deprived of thing received in exchange.—If any party to an exchange or any person claiming through or under such party is by reason of any defect in the title of the other party deprived of the thing or any part of the thing received by him in exchange, then, unless a contrary intention appears from the terms of the exchange, such other party is liable to him or any person claiming through or under him for loss caused thereby, or at the option of the person so deprived, for the return of the thing transferred, if still in the possession of such other party or his legal representative or a transferee from him without consideration.]

COMMENTS

Right of Party

The first respondent admitted that he received no rent from the appellant and that the appellant was his lessee-at-will is a false story. Therefore the respondent is liable to return the land to that extent; Jattu Ram v. Hakama Singh, AIR 1994 SC 1653.

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1. Subs. by Act 20 of 1929, sec. 59, for the original section.

120. Rights and liabilities of parties.—

Save as otherwise provided in this Chapter, each party has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and is subject to the liabilities of a buyer as to that which he takes.

121. Exchange of money.—

On an exchange of money, each party thereby warrants the genuineness of the money given by him.

122. “Gift” defined.—

“Gift” is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.

Acceptance when to be made.—Such acceptance must be made during the lifetime of the donor and while he is still capable of giving.

If the donee dies before acceptance, the gift is void.

COMMENTS

Validity of gift

Gift deed executed by defendant in favour of plaintiff with respect of property of her deceased husband. Defendant was not legally wedded wife of deceased. She being concubine was not entitled to inherit property. Gift deed executed by her is not valid; P. Jayaramaiah v. Aragonda Munemma, AIR 2005 AP 26.

123. Transfer how effected.—

1123. Transfer how effected.—For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.

For the purpose of making a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery.

Such delivery may be made in the same way as goods sold may be delivered.

COMMENTS

Unregistered gift of immovable property

Under section 123 a gift of immoveable property cannot pass any title to the donee if it is not registered. Any oral gift of immoveable property cannot be made in view of the provision of section 123 of the Act, mere delivery of possession without written instrument cannot confer any title; R.N. Dawar v. Ganga Ram Saran Dhama, AIR 1993 Del 19.

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1. As to limitation to the territorial operation of section 123, see section 1, supra, section 123 extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).

124. Gift of existing and future property.—

A gift comprising both existing and future property is void as to the latter.

125. Gift to several of whom one does not accept.—

A gift of a thing to two or more donees, of whom one does not accept it, is void as to the interest which he would have taken had he accepted

126. When gift may be suspended or revoked.—

The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be.

A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded.

Save as aforesaid, a gift cannot be revoked.

Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice.

Illustrations

(a) A gives a field to B, reserving to himself, with B’s assent, the right to take back the field in case B and his descendants die before A. B dies without descendants in A’s lifetime. A may take back the field.

(b) A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to take back at pleasure Rs. 10,000 out of the lakh. The gift holds goods as to Rs. 90,000, but is void as to Rs. 10,000, which continue to belong to A.

127. Onerous gifts.—

Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not burdened by an obligation, the donee can take nothing by the gift unless he accepts it fully.

Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the doneee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous.

Onerous gift to disqualified person.—A donee not competent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound.

Illustrations

(a) A shares in X, prosperous joint stock company, and also shares in Y, a joint stock company in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his shares in joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in X.

(b) A, having a lease for a term of years of a house at a rent which he and his representatives are bound to pay during the term, and which is more than the house can be let for, gives to B the lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept the lease. He does not by this refusal forfeit the money.

128. Universal donee.—

Subject to the provisions of section 127, where a gift consists of the donor’s whole property, the donee is personally liable for all the debts due by 1[and liabilities of] the donor at the time of the gift to the extent of the property comprised therein.

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1. Ins. by Act 20 of 1929, sec. 60.

129. Saving of donations mortis causa and Muhammadan Law.—

129. Saving of donations mortis causa and Muhammadan Law.—Nothing in this Chapter relates to gifts of moveable property made in contemplation of death, or shall be deemed to affect any rule of Muhammadan law 1[***].

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1. The words and figures “or, save as provided by section 123, any rule of Hindu or Buddhist law” omitted by Act 20 of 1929, sec. 61.

130. Transfer of actionable claim.—

(1) The transfer of an actionable claim 1[whether with or without consideration] shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, 2[***] shall be complete and effectual upon the execution of such instruments, and thereupon all the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not:

Provided that every dealing with the debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer.

(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer as aforesaid, sue or institute proceedings for the same in his own name without obtaining the transferor’s consent to such suit or proceeding and without making him a party thereto.

Exception.—Nothing in this section applies to the transfer of a marine or fire policy of insurance 3[or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)].

Illustrations

(i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in section 131, pays B. The payment is valid, and C cannot sue A for the debt.

(ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for securing the payment of an existing or future debt. If A dies, the Bank is entitled to receive the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in sub-section (1) of section 130 and to provisions of section 132.

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1. Ins. by Act 20 of 1929, sec. 62.

2. The words and figures “and notwithstanding anything contained in section 123” ins. by Act 38 of 1925, sec. 2 and omitted by Act 20 of 1929, sec. 62.

3. Added by Act 4 of 1938, sec. 121 (w.e.f. 1-7-1939).

130A. Transfer of policy of marine insurance.—

1[130A. Transfer of policy of marine insurance.—[Rep. by the Marine Insurance Act, 1963 (11 of 1963), sec. 92 (w.e.f. 1-8-1963)].]

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1. Ins. by Act 6 of 1944, sec. 2.

131. Notice to be in writing, signed.—

Every notice of transfer of an actionable claim shall be in writing, signed by the transferor or his agent duly authorised in this behalf, or, in case the transferor refuses to sign, by the transferee or his agent, and shall state the name and address of the transferee.

132. Liability of transferee of actionable claim.—

The transferee of an actionable claim shall take it subject to all the liabilities and equities and to which the transferor was subject in respect thereof at the date of the transfer.

Illustrations

(i) A transfers to C a debt due to him by B, A being then indebted to B. C sues B for the debt due by B to A. In such suit B is entitled to set off the debt due by A to him; although C was unaware of it at the date of such transfer.

(ii) A executed a bond in favour of B under circumstances entitling the former to have it delivered up and cancelled. B assigns the bond to C for value and without notice of such circumstances. C cannot enforce the bond against A.

133. Warranty of solvency of debtor.—

Where the transferor of a debt warrants the solvency of the debtor, the warranty, in the absence of a contract to the contrary, applies only to his solvency at the time of the transfer, and is limited, where the transfer is made for consideration, to the amount or value of such consideration.

134. Mortgaged debt.—

Where a debt is transferred for the purpose of securing an existing or future debt, the debt so transferred, if received by the transferor or recovered by the transferee, is applicable, first, in payment of the costs of such recovery; secondly, in or towards satisfaction of the amount for the time being secured by the transfer; and the residue, if any, belongs to the transferor or other person entitled to receive the same.

135. Assignment of rights under policy of insurance against fire.—

1[135. Assignment of rights under policy of insurance against fire.—Every assignee by endorsement or other writing, of a policy of insurance against fire, in whom the property in the subject insured shall be absolutely vested at the date of the assignment, shall have transferred and vested in him all rights of suit as if the contract contained in the policy has been made with himself.]

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1. Subs. by Act 6 of 1944, sec. 3, for the original section.

135A. Assignment of rights under policy of marine insurance.—

1[135A. Assignment of rights under policy of marine insurance.—[Rep. by the Marine Insurance Act, 1963 (11 of 1963), sec.92, (w.e.f. 1-8-1963)].]

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1. Section 135A ins. by Act 6 of 1944, sec. 4.

136. Incapacity of officers connected with Courts of Justice.

No judge, legal practitioner or officer connected with any Court of Justice shall buy or traffic in, or stipulate for, or agree to receive any share of, or interest in, any actionable claim, and no Court of Justice shall enforce, at his instance, or at the instance of any person claiming by or through him, any actionable claim so dealt with by him as aforesaid.

137. Saving of negotiable instruments, etc.—

Nothing in the foregoing sections of this Chapter applies to stocks, shares or debentures, or to instruments which are for the time being, by law or custom, negotiable, or to any mercantile document of title to goods.

Explanation.—The expression “mercantile document of title to goods” includes a bill of lading, dock-warrant, warehouse-keeper’s certificate, railway receipt, warrant or order for the delivery of goods, and any other document used in the ordinary course of business as proof of the possession or control of goods, or authorising or purporting to authorise, either by endorsement or by delivery, the possessor of the document to transfer or receive goods thereby represented.

THE SCHEDULE

(A) STATUTESYear and ChapterSubjectExtent of repeal27 Hen. VIII c. 10UsesThe Whole.13 Eliz., c. 5Fraudulent conveyancesThe Whole.27 Eliz., c. 4Fraudulent conveyancesThe Whole.4 Wm and marry, c. 16Clandestine mortgagesThe Whole.(B) ACT OF THE GOVERNOR GENERAL IN COUNCILNumber and YearSubjectExtent of repealX of 1842Lease and re-leaseThe WholeXXXI of 1854Modes of conveying landSection117XI of 1855Mesne profit and improvementSection 1; in the title, the word “to mesne profits and”, and in the preamble “to limit the liability for mesne profits and”XXVII of 1866Indian Trustee ActSection 31.V of 1872Punjab Laws ActSo fas as it related to Bengal Regulations 1 of 1798 and XVII of 1806XX of 1875Central Provinvces Laws ActSo fas as it related to Bengal Regulations 1 of 1798 and XVII of 1806XVIII of 1876Oudh Laws ActSo fas as it related to Bengal Regulations XVII of 18061 of 1877Specific ReliefIn section 35 and 36, the word “in writing”.(C)  REGULATIONSNumber and yearsSubjectExtent of repealBengal Regulation 1 of 1798Conditional SaleThe Whole RegulationBengal Regulation XVII of 1806RedemptionThe Whole RegulationBombay Regulation V of 1827Acknowledgement of debts; interest;Mortgagees in possessionSection 15