Chapter X DISTRAINT AND SALE OF PRODUCE

(1) If an instalment of a loan advanced against a mortgage or charge created in favour of a society under section 53 or any part of such instalment has remained unpaid for more than three months from the date it fell due, the society may in addition to any other remedy available to it apply to the Registrar for the recovery of such instalment or part by the distraint and sale of the produce of the charged or mortgaged land. (2) On receipt of such application the Registrar may, notwithstanding anything contained in the Transfer of Property Act, 1882 or any other law for the time being in force, take action for distraint and sale of such produce: Provided that no distraint shall be made after the expiry of six months from the date on which the instalment fell due. (3) The value of the property distrained shall be, as nearly as possible, equal to the amount due and the expenses of the distraint and the cost of sale. (4) Any mistake, defect or irregularity in this respect shall not invalidate a distraint or sale made under this Act.

(1) Before or at the time when a distraint is made under section 72, the distrainer shall serve or cause to be served upon the defaulter a written demand specifying the amount for which the distraint is made. (2) The demand shall be dated and signed by the distrainer and shall be served upon the defaulter by delivering a copy to him or to some adult male member of his family at his usual place of abode or to his authorized agent, or when such service cannot be effected, by affixing, a copy of the demand on some conspicuous part of his abode and land.

(1) If, within fifteen days from the date of service of the demand referred to in section 73, the defaulter does not pay the amount for which the distraint was effected, the distrainer may sell in auction the distrained property or such part thereof as may in his opinion be necessary to satisfy the demand together with the expenses of the distraint and cost of the sale: Provided, however, that the sale of the distrained property shall be subject to the confirmation by the Registrar. (2) From the proceeds of such sale, a deduction shall be made at a rate not exceeding ten paise in a rupee on account of the costs of the sale. (3) From the balance shall be deducted the expenses incurred by the distrainer on account of the distraint. (4) The remainder, if any, shall be applied to the discharge of the amount for which distraint was made. (5) The surplus, if any, shall be delivered to the person whose property has been sold and he shall be given a receipt for the amount discharged from the proceeds of the sale.

(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 or any other law for the time being in force, where a power of sale without the intervention of the court is expressly conferred on a society by declaration creating the mortgage, the society or any person authorized by such society in this behalf shall, in case of default of payments of the mortgage money or any part thereof, have power, in addition to any other remedy available to the society, to bring the mortgaged property to sale without the intervention of the Court. (2) No such power shall be exercised unless and until, – (a) the society has previously authorized the exercise of the power conferred by sub-section (1), after hearing and deciding the objections, if any, of the mortgagor or any other person having any interest in the mortgaged property; (b) notice in writing requiring payment of such mortgage money or part has been served upon – (i) the mortgagor or each of the mortgagors; (ii) any person who has any interest in or charge upon the property mortgaged or the right to redeem the same; (iii) any surety for the payment of the mortgage debt or any part thereof; and (iv) 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; (c) default has been made in payment of such mortgaged money or part for thirty days after such service; and (d) the Registrar, in case where the amount claimed by the society is disputed, has certified that the amount claimed or lesser amount is due from the mortgagor.

(1) In exercise of the power of sale conferred by section 75, the society or any person duly authorized by the society, may apply to the sale officer appointed in that behalf under section 84 to sell the mortgaged property or any part thereof and such officer shall, after giving notice in writing to all the persons referred to in section 75, sell such property in the manner prescribed subject to any previous charge on the basis of a registered deed. (2) The sale shall be by public auction and shall be held in the village or town where the mortgaged property is situated or at the nearest place of public resort if the sale officer is of opinion that

(1) When a mortgaged property has been sold under this Chapter, the mortgagor or any person having a right or interest therein affected by the sale, may, at any time within thirty days from the date of sale, apply to the society, to have the sale set aside on his depositing at the office of the society– (a) for payment to the said society, the amount specified in the proclamation of sale together with subsequent interest and the costs, if any, incurred by the society in bringing the property to sale; and (b) for payments to the purchaser, a sum equal to two percent of the purchase money. (2) If such deposit is made, the society shall make an order setting aside the sale. (3) Where no application is made under sub-section (1) or where such application is made and disallowed, the society shall apply to the Registrar to make an order confirming the sale and on his confirming the sale, it shall become absolute.

(1) The proceeds of every sale under this Chapter shall be applied by the sale officer, firstly in payments of all costs, charges and expenses properly incurred by him as incidental to the sale or any attempted sale determined in the prescribed manner; secondly in payment of all interest due on account of the mortgage in consequence whereof the mortgaged property was sold; thirdly, in payment of the principal money due on account of the mortgage; and lastly, the residue, if any, shall be paid to the person proving himself interested in the property sold or, if there are more such persons than one, then to such persons according to their respective interest therein upon their joint receipt. (2) Any person dissatisfied with the decision of the sale officer in regard to the distribution of such residue may, within thirty days of the communication to him of such decision, institute a suit in a civil court to establish the right he claims. (3) The sale officer shall not distribute such residue until thirty days have elapsed from communication of his decision to all the persons concerned or, if a suit has been instituted within the said period of thirty days by any such person, until the suit is disposed off or otherwise than in accordance with the decision of the civil court therein.

Where a sale of mortgaged property has become absolute, the sale officer shall grant a certificate specifying the property sold and the name of the person who at the time of the sale is declared to be purchaser. Such certificate shall bear date and the day on which the sale became absolute.

(1) Where the mortgaged property sold is in the occupation of the mortgager or of some person on his behalf or of some person claiming under a title other than a lease for a period not exceeding five years created by the mortgager subsequent to the mortgage in favour of the society and a certificate in respect thereof has been granted under section 79, the civil court shall, on the application of the purchaser, order delivery to be made by putting such purchaser, or any person, whom he may appoint to receive delivery on his behalf, in possession of the property. (2) Where the property sold is in the occupation of a tenant or other person entitled to occupy the same and a certificate in respect thereof has been granted under section 79, the civil court shall, on the application of the purchaser, and after notice to such tenant or other person, order delivery to be made by affixing a copy of the certificate of sale in some conspicuous place on the property and proclaiming by beat of drum or other customary mode at some convenient place that the interest of the mortgagor has been transferred to the purchaser. (3) In regard to the cases dealt within sub-sections (1) and (2), the provisions of rules 97 to 103 of Order XXI of the First Schedule to the Code of Civil Procedure 1908, shall, mutatis mutandis, apply.

Notwithstanding anything contained in any law for the time being in force, including a law imposing ceiling on agricultural holdings, it shall be lawful for the society to purchase any mortgaged property sold under this chapter, and the property so purchased shall be disposed of by such society by sale within such period as may be fixed by the Registrar.

(1) The society which has power to sell under section 75 may, appoint in writing a receiver of the produce and income of the mortgaged property or any part thereof and such receiver shall be entitled either to take possession of the property or collect its produce and income as the case may be, to retain out of any money realized by him, his expenses of management including his remuneration, if any, as fixed by the society and to apply the balance in accordance with the provision of sub-section (8) of section 69-A of the Transfer of Property Act, 1882. (2) A receiver appointed under sub-section (1) may, for sufficient cause and on application made by the mortgagor, be removed by the society. (3) A vacancy in the office of the receiver may be filled up by the society. (4) Nothing in this section shall empower the society to appoint receiver where the mortgaged property is already in the possession of a receiver appointed by a civil court.

When a sale, purported to have been made in the exercise of power of sale conferred by section 75, has been confirmed under sub-section (3) of section 77, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorize 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 unauthorized or improper or irregular exercise of the power shall have his remedy in damages against the society.

The Government may appoint any person not below the rank of a gazetted officer as a sale officer for the purpose of conducting sales under this Chapter.