Right of Co-operative land development bank to pay prior debts of mortgagor

(1) Where a mortgage is executed in favour of a co-operative land development bank for payment of prior debts of the mortgagor, such bank shall, notwithstanding anything contained in the Transfer of Property Act, 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 bank at its registered office, within such period as may be specified in the notice. (2) Where any such person fails to accept such notice or, to receive such payments, such debt or part thereof, as the case may be, shall cease to carry interest from the expiry of the period specified in the notice ; 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 agreed by the co-operative land development bank towards the debt, but such receipt shall not prejudice the right, if any, of such person to recover the balance claimed by him.