Chapter II LIQUIDATION OF CERTAIN DEBTS

Notwithstanding anything contained in any other law for the 6me being in force or in any contract, decree of any court or other instrument having force by virtue of any such law, and save as otherwise expressly provided in this Act, every debt outstanding on the appointed day, including the amount of interest, if any payable by a debtor to creditor shall be deemed to be wholly discharged, and the consequences as hereinafter set forth shall, with effect from the appointed day, ensure, namely:-

1. (a) no such debt due from a debtor on the appointed day shall be recoverable from him or from or against any movable or immovable property belonging to him, nor shall any such property be liable to be attached and sold or proceeded against in any manner in the execution of any decree or order relating to such debt against him;
2. (b) no civil court shall entertain any suit or proceeding against such debtor for the recovery of any amount of such debt, including interest, if any: Provided that where a suit or proceeding is instituted jointly against such debtor or any other person nothing in this clause shall apply to the maintainability of a suit or proceeding in so far as it relates to such other person;
3. (c) all suits and proceedings (including appeals, revisions, attachment or execution proceedings) pending on the appointed day for the recovery of any such debt against such debtor shall abate: Provided that nothing in this clause shall apply to the sale of-
   • (i) any movable property held and concluded before the appointed day;
   • (ii) any immovable property confirmed before such day;
4. (d) every debtor undergoing detention in a civil prison in execution of any decree for money passed against him by a civil court in respect of any such debt shall be released forthwith;
5. (e) every property pledged or mortgaged by such debtor shall stand released in favour of such debtor, and the creditor shall be bound to return the same to the debtor forthwith. If the debtor is opposed or impeded in taking possession of the property, then he may request the District Magistrate, or any executive magistrate authorized by him to enforce delivery of possession of such property. The District Magistrate, or as the case may be, the executive magistrate shall take or cause to be taken such steps and use or cause to be used such force as may be reasonably necessary for securing the delivery of possession of the property to the debtor. Explanation.- Nothing in this section shall be construed to entitle any such debtor to the refund of any part of a debt already repaid by him or recovered from him before the appointed day.

Any custom or tradition or any agreement (whether made before or after the appointed day), whereunder or by virtue of which a debtor or any member of his family is required to work as labourer or otherwise for the creditor shall be void and of no effect and shall not be enforceable in any court.