Power of the Debt Relief officer to declare transfer purporting to be a sale to be in the nature of mortgage

(1) Any debtor may within one year from the date of commencement of this Act may, make an application to the concerned Debt Relief officer that any transfer of immovable property made by him or any other person through whom he inherited the immovable property was a transfer in the nature of a mortgage and the Debt Relief officer, may, after such enquiry as he deems fit, if satisfied that the circumstances connected with the transfer showed the transfer to be in the nature of a mortgage, then notwithstanding anything to the contrary contained in any law, custom or contract declare such transfer to be a mortgage.

1. (2) When the Debt Relief officer makes any such declaration, if the transfer was made prior to the date of the commencement of this Act, the debt covered under the transfer shall deemed to be wholly discharged and the provision of sub-section (2) of section 6, shall mutatis mutandis apply for recording the redemption of the mortgage and delivering possession of the property.
2. (3) For the purpose of any enquiry under sub-section (1), the Debt Relief Officer may exercise all or any of the powers conferred on him under the Karnataka Land Revenue Act, 1964(Karnataka Act 12 of 1964) and shall follow such procedure as may be prescribed.
3. (4) The order of the Debt Relief Officer shall subject to any order in revision under section 15 be final.
4. (5) Nothing in this section shall apply to,-
   • (i) a transfer which has been finally adjudged to be a transfer, other than a mortgage, by a competent Court;
   • (ii) any bona fide transferee for value without notice of the real nature of such transfer or his representative;
   • (iii) any transfer made prior to 1 st March, 1974;
   • (iv) a transfer in respect of which a proceedings is pending under section 23 of the Karnataka Agricultural Debts Relief Act, 1966 (Karnataka Act 29 of 1966) and the provisions of the Karnataka Debt Relief Act, 1976 (Karnataka Act 25 of 1976) and the