Chapter VII SALE OF MORTGAGED PROPERTY

(1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882) or any other law for the time being in force, where a gehan or mortgage or hypothecation has been created or executed moveable or immoveable property in accordance with the provisions of sub-section (1) of section 12 in favour of the Agriculture and Rural Development Bank or a Primary Agriculture and Rural Development Bank, the Board or the Committee of such bank or any person authorised by the Board or such Committee shall, in case of default in the payment of sums due to the bank, have power, in addition to any other (1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882), the Board or any other person authorised by the Board in this behalf shall, in case of default in payment of money due to the Agriculture and Rural Development Bank, have power, in addition to any other remedy available to the Primary Agriculture and Rural Development Bank to bring to sale the property to which Gehan or mortgage or hypothecation relates without intervention of the court. (2) No such power shall be exercised, unless and until- (a) the Board or the Committee has previously authorised such sale in the exercise of the power conferred on it by sub-section (1), after hearing and deciding the objections, if any, of the person who created the gehan or executed the mortgage or hypothecation, or any other person having any interest in the security property; (b) notice in writing requiring payment of sums due to the Agriculture and Rural Development Bank or any part thereof, has been served upon- (i) the person creating or executing the Gehan or mortgage or hypothecation; (ii) any person who has any interest or charge upon the property to which the Gehan or mortgage or hypothecation relates or any other right to redeem the same; (iii) any surety for the payment of the sums due to the Agriculture and Rural Development Bank or any part thereof; and (iv) any creditor of the person creating or executing the Gehan or mortgage, who has in a suit for the administration of his estate, obtained a decree for sale of the property to which Gehan or mortgage or hypothecation relates; (c) there has been default in payment of such sums due to the Agriculture and Rural Development Bank for a period of six months after service of the notice referred to in clause (b) : Provided that the objection to give such notice to the persons mentioned in sub-clauses (ii) and (iv) shall be confined to cases where the Board or the Committee has notice of such claims; and (d) the Registrar, in case where the amount claimed by the State Bank is disputed, has certified that the amount claimed or lesser amount is due from the person creating or executing the gehan, mortgage or hypothecation.

(1) In exercise of the power of the sale conferred by section 26, the Board or any person duly authorised by the Board, may apply to the sale officer appointed in that behalf under section 35 to sell the property to which the Gehan, mortgage or hypothecation relates or any part thereof and such officer shall, after giving notice in writing to all the persons referred to in section 26, sell such property, in the manner prescribed subject to any previous charge on the basis of registered deed. (2) The sale shall be by public auction and shall be held in the village where the property to which the Gehan, mortgage or hypothecation relates is situated or at the nearest place of public resort if the sale officer is of the opinion that the property is likely to be sold to better advantage there. (3) The Registrar may set aside a sale on the application of the person creating or executing the Gehan, mortgage or hypothecation or any other person interested in the property to which the Gehan, mortgage or hypothecation relates, presented to him within 30 days of the sale, if in his opinion there has been an illegality or material irregularity in conducting the sale. (4) On the sale being set aside by the Registrar under sub-section (3), fresh sale shall be conducted in accordance with the provisions of this Chapter.

(1) When a property to which the Gehan or the mortgage or hypothecation relates has been sold under this Chapter, the person creating or executing the Gehan, mortgage or hypothecation or any person having right or interest therein affected by the sale, may, at any time, within thirty days from the date of sale, apply to the Board to have the sale set aside on his depositing at the office of the State Bank,- (a) for payment, to the said Bank, the amount specified in the proclamation of sale together with subsequent interest and the cost, if any, incurred by the Bank in bringing the property to sale; and (b) for payment to the purchaser, a sum equal to two percent of the purchase money. (2) If such deposit is made, the Board 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 Board shall apply to the Registrar to make an order confirming the sale and no such officer confirming the sale, it shall become absolute.

(1) The proceeds of every sale under this Chapter shall be applied by the sale officer, first in payment 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 Gehan or mortgage or hypothecation in consequence whereof the property was sold; thirdly, in payment of the principal money due on account of the Gehan or mortgage or hypothecation 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 interests therein or upon their joint receipt. (2) (a) 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 court to establish the right he claims. (b) 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 of or otherwise than in accordance with the decision of the court therein. Explanation.- In this sub-section court means the civil court which would have jurisdiction to entertain a suit to enforce the Gehan or mortgage or hypothecation and within the limits of whose jurisdiction the property sold is situated.

Where a sale of 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, the day on which the sale became absolute.

(1) Where the property sold is in the occupation of the the person creating the Gehan or executing the mortgage or hypothecation 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 the person creating the Gehan or executing the mortgage or hypothecation subsequent to the Gehan or mortgage or hypothecation in favour of the State Bank and a certificate in respect thereof has been granted under section 30, the Collector 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 certificate in respect thereof has been granted under section 30, the Collector 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 to the occupant by beat of drum or other customary mode at some convenient place that the interest of the the person creating the Gehan or executing the mortgage or hypothecation has been transferred to the purchaser. (3) In regard to the cases dealt within the 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 (5 of 1908), shall, Mutatis Mutandis and so far as may be, apply.

Notwithstanding anything contained in any law for the time being in force, including a law imposing a ceiling on agricultural holdings, it shall be lawful for the Agriculture and Rural Development Bank to purchase any property sold under this Chapter.

(1) The Board may, on its own motion, or in the case of Gehan, mortgage or hypothecation executed in favour of Agriculture and Rural Development Banks on the application of such banks and under circumstances in which the power of sale conferred by section 26, may be exercised, appoint in writing a receiver of the produce and income of the 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 realised by him his expenses of management including his remuneration, if any, as fixed by the Board, and to apply the balance in accordance with the provisions of sub-section (8) of section 69-A of the Transfer of Property Act, 1882, (4 of 1882). (2) A receiver appointed under sub-section (1) may, for sufficient cause and on application made by the person who created the Gahen or executed the mortgage or hypothecation, as the case may be, be removed by the Board. (3) A vacancy in the office of the receiver may be filled up by the Board. (4) Nothing in this section shall empower the Board to appoint receiver where the property is already in the possession of a receiver appointed by a civil court.

When a sale purported to have been made in exercise of the power of sale given by section 26 has been confirmed under sub-section (3) of section 28, 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 of the power shall have his remedy in damages against the Agriculture and Rural Development Bank.

The State Government may appoint any officer to be a sale officer for the purpose of conducting sales under this Chapter.

(1) Without prejudice to any other remedy available to an Agriculture and Rural Development Bank for recoveries of arrears of any sum advanced by it to any of its members and on its furnishing a statement of accounts in respect of the arrears, the Registrar may, after making such enquiries as he deems fit, grant a certificate for the recovery of the amount stated therein to be due as arrears. (2) A certificate by the Registrar under sub-section (1) shall be final and conclusive as to the arrear due. The arrears stated to be due therein shall be recoverable according to the law for the time being in force for the recovery of arrears of land revenue. (3) It shall be lawful for the Collector to take any precautionary measures provided in the law for the time being in force, for the recovery of arrears of land revenue until the arrears due to the Agriculture and Rural Development Bank together with interest and any incidental charges incurred in the recovery of such arrears are paid or security of such arrears is furnished to the satisfaction of the Registrar. (4) It shall be competent for the Registrar or a person authorised by him in this behalf to direct conditional attachment of the property of the person who has created Gehan or executed the mortgage or hypothecation until the arrears due to the Agriculture and Rural Development Bank together with interest and any incidental charges incurred in recovery of such arrears, are paid or security for payment of such arrears, is furnished to the satisfaction of the Registrar and the provisions of section 74 of the Himachal Pradesh Co-operative Societies Act, 1968 (3 of 1969), shall apply mutatis mutandis to conditional attachment of any property made or to be made under this section.

(1) During such period as the State Government may by general or special order notify in the Official Gazette, it shall be competent for the Collector, on application being made to him in that behalf by a Agriculture and Rural Development Bank, to recover all sums due to the Agriculture and Rural Development Bank (including the cost of such recovery). (2) Any amount due to Agriculture and Rural Development Bank shall be recoverable by the Collector or any officer specially authorised by the Collector in this behalf, in all or any of the following modes, namely:- (a) from the borrower-as if they were arrears of land revenue due by him; (b) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (c) from a surety (if any) -as if they were arrears of land revenue due by him; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realisation of land revenue by the sale of immovable property other than the land on which the revenue is due.

A Gehan created, mortgages or hypothecation executed or deemed to have been created or executed in favour of and all other assets transferred or deemed to have been transferred to, Primary Agriculture and Rural Development Bank by the members thereof, shall with effect from the date of such creation, execution or transfer, be deemed to have been transferred by such Primary Agriculture and Rural Development Bank to the State Bank.

(1) The Board or trustee may direct the committee of a Primary Agriculture and Rural Development Bank to take action against a defaulter under section 22 or section 23, or section 26 and if the committee neglects or fails to do so, the Board or the trustee may take such action. (2) (a) Where such action is taken by the Board the provisions of this Act and of any rules or regulations made thereunder shall apply in respect thereto as if all references to the Primary Agriculture and Rural Development Bank and to its committee in the said provisions were references to the State Bank and the Board respectively. (b) Where such action is taken by the trustee, the provisions of this Act or any rules or regulations made thereunder shall apply in respect thereto as if all references to the Agriculture and Rural Development Bank or to its committee in the said provisions were references to the trustee.

Notwithstanding anything contained in the Insolvency Act, 1955 (2 of 1956), a Gehan created or mortgage or hypothecation executed in favour of the Agriculture and Rural Development Bank shall not be called in question on the ground that it was not created or executed in good faith or for valuable consideration or on the ground that it was created or executed in order to give such bank a preference over the other creditors of the person who created the gehan or executed the mortgage or hypothecation.

Any amount payable under a Gehan created or mortgage or hypothecation executed in favour of the Agriculture and Rural Development Bank shall have priority over any claim of the Government arising from a loan under the Land Improvement Loans Act, 1883 (19 of 1883) or any other law for the time being in force in the State, granted after the creation of the gehan or the execution of the mortgage or hypothecation.

or hypothecation] is executed in favour of the Agriculture and Rural Development Bank for payment of prior debts of the person who created the Gehan or executed the mortgage or hypothecation the Bank may not withstanding the provisions of sections 83 and 84 of the Transfer of Property Act, 1882 (4 of 1882), by notice in writing require any person to whom any such debt is due to receive payment of such debt or part thereof from the Agriculture and Rural Development Bank at its registered office within such period as may be specified in the notice. If any such person fails to receive such notice or such payment, such debt, or part thereof, as the case may be, shall cease to carry interest from the expiration of the period specified in the notice except in cases where such person proves to the satisfaction of the Board or the Committee of the Agriculture and Rural Development Bank, as the case may be, that the failure to receive notice or payment was due to causes beyond his control: Provided that where there is a dispute as regards the amount of any such debt, the person to whom such debt is due, shall be bound to receive payment of the amount offered by the Agriculture and Rural Development Bank toward the debt, but such receipt shall not prejudice the right, if any, of such person, to recover the balance claimed by him.

(1) Subject to such restrictions, limitations and conditions as may be prescribed, the Registrar and persons subordinate to the Registrar, who are, authorised by him in this behalf by general or special order in writing, or officers of Agriculture and Rural Development Bank which are registered or deemed to be registered under the Himachal Pradesh Co-operative Societies Act, 1968 (3 of 1969), as the State Government may, by notification in the Official Gazette, authorise in this behalf, shall have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit, in respect of the following matters, namely:- (a) enforcing the attendance of any person and examining him on oath or affirmation; (b) compelling the production of documents; and (c) issuing commissions for the examination of witnesses. (2) Any of the officers or persons authorised by or under sub-section (1) may require any person (s) present before him, to furnish any information or to produce any document then and there in his (or their) possession or power. (3) Any officer or person before whom any document is produced under sub-section (1) or sub-section (2) shall have power to take, or to authorise, the taking of, such copies of documents of any entries therein as such officer or person may consider necessary. Copies so taken shall, when certified in such manner as may be prescribed, be admissible in evidence for any purpose in the same manner and to the same extent as the original document or entries therein, as the case may be. (4) (a) Any person who wilfully or without reasonable excuse disobeys any summons, requisition or order issued under sub-section (1) or sub-section (2) shall be punishable with fine which may extend to fifty rupees and in the case of a continuing disobedience with an additional fine which may extend to five rupees for every day during which such disobedience continues after conviction for the last such disobedience. (b) No court inferior to that of a Magistrate of the First Class shall try any offence punishable under clause (a). (c) Every offence under clause (a) shall, for the purpose of the Code of Criminal Procedure, 1973 (2 of 1974), be deemed to be non-cognizable. (d) No prosecution shall be instituted under clause (a) without the previous sanction of the Registrar, who will accord such sanction, only after giving the party concerned an opportunity to be heard.

(1) Notwithstanding anything contained in the Indian Registration Act, 1908 (16 of 1908), it shall not be necessary for any Director, Secretary or other officer of Agriculture and Rural Development Bank to appear in person or by agent at any registration office in any proceeding connected with the registration of any instrument executed by him in his official capacity or to sign as provided in section 58 of that Act. (2) Where any instrument is so executed, the registering officer to whom such instrument is presented for registration may, if he thinks fit, refer to such Director, Secretary or Officer for information respecting the same, and on being satisfied of the execution thereof, shall register the instrument.

(1) Notwithstanding anything contained in any law for the time being in force, the Gehan created or mortgage or hypothecation in respect of loans by the Agriculture and Rural Development Banks either before or after commencement of this Act by the manager of joint Hindu family for the improvement of agricultural land or other purposes enumerated in this Act shall be binding on every member of such joint Hindu family. (2) Where a Gehan created or mortgage or hypothecation executed in favour of the Agriculture and Rural Development Bank is called in question on the ground that it was created or executed by a person governed by a custom or the manager of a joint Hindu family for a purpose not binding on the reversioners and the members thereof, whether major or minor, the burden of proving the same shall, notwithstanding any law to the contrary, be on the party raising it.

The Primary Agriculture and Rural Development Bank or the State Bank may grant copies of any document obtained and kept by it in the course of its business or of any entries in such documents; and any copy so granted shall, when certified in such manner as may be prescribed, be admissible in evidence for any purpose in the same manner and to the same extent as the original document, or the entries therein, as the case may be.

Whenever under the provisions of this Act any notice is required to be given to any person in writing, it shall be sufficient to send such notice by registered post at his last known address.

(1) At any sale of movable or immovable property held under the provisions of this Act in order to recover any money due to a Agriculture and Rural Development Bank, no Director, Director, Secretary or other officer of such Bank (except on behalf of the bank of which he is Director, Secretary or officer) and no sale officer or other person having any duty to perform in connection with such sale, shall, either directly or indirectly, bid for or acquire or attempt to acquire any interest in (1) (2) Every person contravening the provisions of the foregoing sub-section (1) shall, on conviction, be punished with fine which may extend to five hundred rupees. (3) No prosecution under this section shall be lodged, except with the previous sanction of Registrar.

The Board may, if it thinks fit, delegate all or any of its powers under sections 3, 16, 23, 24, 27, 33, 37, 39 and 42 to an executive committee constituted by it and consisting of two or more of its members.

Notwithstanding anything contained in the Himachal Pradesh Co-operative Societies Act, 1968, or the rules made thereunder, the Board shall have a general power of supervision over the Primary Agriculture and Rural Development Banks and may make regulations not inconsistent with this Act or the rules made thereunder-. (a) for the inspection of the account books and proceeding of the Primary Agriculture and Rural Development Banks; (b) for the submission of returns and reports by the Primary Agriculture and Rural Development Banks in respect of their transactions; (c) for the periodical settlement of accounts between the Primary Agriculture and Rural Development Banks and the State Bank and for the payment of the amounts recovered by the Primary Agriculture and Rural Development Banks and on gehan or mortgage or hypothecation transferred, or deemed under the provisions of section 38 to have been transferred, the State Bank; (d) prescribing the form in which application to a Agriculture and Rural Development Bank for loans should be made and for the valuation of the properties offered as security for such loan; (e) prescribing the proportions by which the property, to which gehan, mortgage or hypothecation relates, should exceed the amount for the time being due on the gehan or mortgage or hypothecation for security to be sufficient within the meaning of Explanation under section 22; (f) for the maintenance and utilisation of guarantee funds. (g) for the investment of money realised from the person creating or executing a gehan or mortgage or hypothecation; and (h) generally for the purpose of safeguarding the interest of the parties concerned and for carrying out the purposes of this Act.

The provisions of Chapters VI, VII and VIII shall apply mutatis mutandis to all the Primary Agriculture and Rural Development Banks as they apply to the State Bank with the modification that reference thereto the State Bank and Board shall be construed as reference to the Primary Agriculture and Rural Development Banks and committee respectively.

(1) It shall be competent for the State Government to constitute one or more guarantee funds on such terms and conditions as it may deem fit, for the purpose of meeting losses that might arise as a result of loans being made by Agriculture and Rural Development Banks on titles to immovable property subsequently found to be defective or for any other purpose under this Act for which in the opinion of the State Government, it is necessary to provide for or create a separate guarantee fund. (2) The State Bank and the Primary Agriculture and Rural Development Banks shall contribute to such funds at such rate as may be prescribed, and the maintenance and utilisation of such funds shall be governed by such regulations as may be made by the Board in this behalf.

No fee shall be chargeable in respect of registration of any instrument executed in favour of the Agriculture and Rural Development Bank, by any of its officers or members, under any law for the time being in force in the State.

It shall be competent for the Registrar to permit any co-operative bank to function as a Agriculture and Rural Development Bank under such terms and conditions and for such period as he may deem fit.

(1) The State Government may make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for:- (i) the manner of affecting distraint; (ii) the custody, preservation and the sale of distrained property; (iii) the investigation of claims by persons other than the defaulters, to any right or interest in the distrained property; and the postponement of the sale pending such investigation; (iv) immediate sale of perishable articles; (v) the due proclamation and the conduct of sale; (vi) the deposit of the purchase money; (vii) the resale of the property, if the purchase money is not deposited; (viii) the recovery of expenses of the proclamation; (ix) the manner of giving public notice of the application of the loan; (x) the person competent to give public notice; (xi) the manner of hearing and disposing of objections in regard to application of loan; (xii) the rate at which the State Bank and the Primary Agriculture and Rural Development Banks shall contribute to the guarantee fund; (xiii) the form of declaration under section 12; (xiv) the form of notice under sub-section (2) of section 17;and (xv) any other matter required or allowed by this Act to be prescribed. (3) All rules made by the State Government under this section shall be laid before the Legislative Assembly as soon as may be after they are made.

The Punjab Co-operative Land Mortgage Banks Act, 1957 (26 of 1957) as in force in the areas added to Himachal Pradesh under section 5 of the Punjab Re-organisation Act, 1966 (31 of 1966) and the Punjab Co-operative Land Mortgage Banks Act, 1957, as in force in the areas which comprised in Himachal Pradesh immediately before the 1st November, 1966 are hereby repealed.

The repeal of the Acts by section 56 shall not affect- (a) the previous operation of the said Acts or anything duly done or suffered thereunder; or (b) any right, privilege, obligation or liability required, 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 proceedings or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment, as aforesaid; and any such investigation, legal proceedings or remedy may be instituted, continued or enforced and such penalty, forfeiture or punishment may be imposed as if the said Acts had not been repealed.