The proceedings relating to the recovery of the sums due from the defaulters, pending at the commencement of this Act in any civil Court, shall abate.

Savings. - (1) Nothing in Section 3 shall affect any interest of the State Government, a Corporation or a Government company in any property created by any mortgage, charge, pledge or other encumbrance.

1. (2) Where the property of any person referred to in Section 3 is subject to any mortgage, charge, pledge or other encumbrance in favour of the State Government, a Corporation or a Government company, then in every case of a pledge or hypothecation property, such property or, as the case may be, the interest of of the defaulter therein, shall first be sold in proceedings for recovery of the sum due from that person, and if the proceeds of the sale of the aforesaid property are less than the sum due, proceedings may be taken against the other property of the defaulter : Provided that where the State Government is of the opinion that it is necessary so to do for safeguarding the recovery to the sum due to it or to the Corporation or Government company, as the case may be, it may, for reasons to be recorded, direct proceedings to be taken simultaneously for the recovery of the sum due in respect of the goods pledged or hypothecated, the immovable property mortgaged, charged or encumbered and other property of the defaulter.