THE
(Punjab Act VII
of 1934)
C O N T E N T S
PART I
PRELIMINARY
Sections
1. Short title, extent and
commencement.
2. Interpretation clause (definitions).
PART II
INSOLVENCY
PROCEDURE
3. [Repealed]
4. [Repealed]
PART III
USURIOUS LOANS
5. [Repealed]
6. [Repealed]
PART IV
DEBT
CONCILIATION BOARDS
7. Interpretation clause (definitions).
8. Setting up of debt conciliation
boards.
9. Application for settlement between a
debtor and his creditors.
10. Verification of application.
11. Particulars to be stated in
application.
12. Procedure on receipt of application.
13. Notice calling upon creditors to
submit statements of debts.
14. Procedure on submission of
statements of debts.
15. Board to attempt amicable settlement.
15-A. Power of board to adjudicate on
genuineness or enforceability of debts.
16. Power of Board to require attendance
of persons and production of documents and to receive evidence.
17. Registration and effect of
agreement.
18. Dismissal of application in default.
19. Bar to successive application.
20. Grant of certificate by board in
respect of debts
Power of court to
disallow costs or interest.
20-A. Decision of board to be final.
21. Bar of Civil suits.
22. Bar of appeal or revision.
23. Power of board to review its order.
24. Appearance of party before board by
agent or legal practitioner.
25. Bar to new suits and applications
and suspension of pending suits and applications.
26. Extension of limitation.
27. Members of boards deemed to be
public servants.
28. Power to make rules.
29. Penalty for breach of the rules.
PART V
DAMDUPAT
30. [Repealed]
PART VI
DEPOSIT IN
COURT
31. [Repealed]
32. [Repealed]
REDEMPTION OF
MORTGAGES
33. [Repealed]
MISCELLANEOUS AMENDMENTS
34. [Repealed]
35. [Repealed]
36. [Repealed]
37. [Repealed]
38. [Repealed]
[1]THE
(Punjab Act VII of 1934)
[
An Act to
provide for the Relief of Indebtedness in the Punjab
WHEREAS it is
expedient to amend the law governing the relations between debtors and
creditors;
And whereas the previous sanction of the
Governor-General required under section 80-A (3) of the Government of India Act
and the previous sanction of the Governor required under section 80-C of the
said Act have been obtained;
It is hereby enacted as follow:-
PART
I
PRELIMINARY
1. Short title, extent and commencement.— (1) This Act may be called the Punjab Relief of Indebtedness Act, 1934.
(2) This
Part and Parts III, IV, V, VI, VII and VIII shall extend to the whole of the
Punjab and Part II to such areas as the [2][Provincial
Government] [3][or the Board
of Revenue] may from time to time, by notification, direct.
(3) This
Act shall come into force on such date[4] as the [5][Provincial
Government] may, by notification, appoint in this behalf.
2. Interpretation clause (definitions).— In this Act, unless there is anything repugnant in the subject or context,
[6][(1) “Court” or “Civil Court” includes a Court of
insolvency, a receiver appointed under the Provincial Insolvency Act, 1920, and
an arbitrator appointed with the consent of the parties or by an order of a
Court.]
[7][(2)] “interest” means rate of interest and
includes the return to be made over and above what was actually lent whether
the same is charged or sought to be recovered specially by way of interest or
otherwise;
[8][(3)] “Loan” means a loan whether of money or in
kind, and includes any transaction which is, in the opinion of the court, in
substance a loan.
PART
II
INSOLVENCY
PROCEDURE
3. and 4. [Amendment of section 10 of
the Provincial Insolvency Act, 1920.] [Amendment of section 74 of the
Provincial Insolvency Act, 1920.] Repealed by the Provincial Insolvency (West
Pakistan Amendment) Ordinance, 1959 (VIII of 1959), section 3 and Schedule.
PART
III
USURIOUS
LOANS
5. and 6. [Amendment of the Usurious
Loans Act, 1918.] [Retrospective effect.] Repealed by the Punjab Usurious Loans
Ordinance, 1959 (XVIII of 1959), section 6, and Schedule.
PART IV
DEBT
CONCILIATION BOARDS
7. Interpretation clause (definitions).— (1) “Debt” includes all liabilities of a
debtor in cash or in kind, secured or unsecured, payable under a decree or
order of a civil court or otherwise, whether mature or not, but shall not
include debts incurred for the purposes of trade, arrears of wages, land
revenue or anything recoverable as an arrear of land revenue, or any debt which
is barred by the law of limitation, or debts due to co-operative banks or to
co-operative societies or to [9][* * *] any banking company registered under the [10][* * *] Companies Act, 1913[11], [12][prior to the first day of April, 1937, or any bank included in the
second Schedule to [13][the State Bank of Pakistan Order, 1948], other than debts transferred
to such societies, banks or banking companies during the pendency of an
application under section 9 in which such debts could be taken into
consideration for the purposes of this Act, or debts transferred to such
societies, banks or banking companies on or after the 2nd day of September,
1938, if in the opinion of the board such transfer was effected with a view to
avoid the operation of this Act].
(2) “Debtor”
means a person who owes a debt and—
(i) who both earns his livelihood mainly by agriculture, and is either a landowner, or tenant of agricultural land, or a servant of a landowner, or of a tenant of agricultural land, or
(ii) who
earns his livelihood as a village menial paid in cash or kind for work
connected with agriculture, [14][or]
[15][(iii) whose total assets do not exceed five
thousand rupees:]
Provided that a
member of a tribe, notified as agricultural under the Punjab Alienation of Land
Act, 1900[16], shall be presumed to be a debtor as defined in this section until it
is proved that his income from other sources is greater than his income from
agriculture.
Explanation—
(i) A debtor shall not lose his status as such through involuntary unemployment
or an account of incapacity, temporary or permanent, by bodily infirmity or if
he is or has been in service of [17][Pakistan’s] Military or Naval [18][or Air] Forces, only on account of his pay and allowances or pension
exceeding his income from agricultural sources.
(ii) A debtor shall not lose his status as such by
reason of the fact that he makes income by using his plough cattle for purposes
of transport.
(iii) A debtor shall not lose his status as such
only because he does not cultivate with his own hands.
[19][* * * * * * * * * * * * *]
(3) “Agriculture” shall include horticulture and
the use of land for any purpose of husbandry inclusive of the keeping or
breeding of livestock, poultry, or bees, and the growth of fruit, vegetables
and the like.
(4) “Prescribed” means prescribed by rules made under this part of the
Act.
8. Setting up of debt conciliation boards.— (1) (a) The [20][Provincial
Government] [21][or the Board
of Revenue] may for the purpose of amicable settlement between debtors and
their creditors establish debt conciliation boards.
(b) The [22][Provincial
Government] [23][or the Board
of Revenue] shall define the local limits of the area in which a board shall
have jurisdiction.
(c) The [24][Provincial
Government] [25][or the Board
of Revenue] shall determine the pecuniary limits of the jurisdiction of the
board, provided that no board shall have jurisdiction to make a settlement between
a debtor and his creditors if the total debts of the debtor exceed Rs.10,000 or
such larger amount as the [26][Provincial
Government] [27][or the Board
of Revenue] may prescribe for any area.
(d) Such board shall consist of a chairman and [28][one] or more members
to be appointed by the [29][Provincial
Government] [30][or the Board
of Revenue]:
[31][Provided that
no act done or proceeding taken by a board under this Act shall be called into
question on the ground merely of the existence of any vacancy in any board.]
(e) The chairman and every member of a board so established shall be appointed for a term not exceeding three years, but shall be eligible for re-appointment on the expiry of his term.
(f) The quorum of a board shall be prescribed by the [32][Provincial Government]
[33][or the Board
of Revenue].
(g) Where the chairman and members of a board are not unanimous, the opinion of the majority shall prevail, and, if the board is equally divided, the chairman shall exercise a casting vote.
(2) The [34][Provincial Government] [35][or the Board of Revenue] may cancel the appointment of any member of a
board or dissolve any board.
(3) The [36][Provincial
Government] [37][or the Board
of Revenue] shall notify in the [38][official
Gazette]—
(a) the establishment of a board and the appointment of its members; and the board shall be deemed to have been established and its members appointed from the date specified in such notification or notifications;
(b) the cancellation of the appointment of any member of a board; and from the date specified in such notification the member shall cease to be a member of the board;
(c) the
dissolution of a board; and from the date specified in such notification the
board shall cease to exist.
(4) When a board is dissolved or ceases to exist otherwise, the [39][Provincial
Government] [40][or the Board
of Revenue] may at any time establish another board within the same local
limits in which the former board had jurisdiction and may declare this board to
be the successor in office of the first board and may confer on it power to
dispose of such applications under section 13(2) and section 23 as the [41][Provincial
Government] [42][or the Board
of Revenue] may direct.
9. Application for settlement between a debtor and his creditors.— A debtor or any of his creditors may apply to the board appointed for the area in which debtor resides or holds any land, to effect a settlement between the debtor and his creditors:
Provided that no application
shall be made if the debtor’s debts exceed ten thousand rupees or such larger
sum as the [43][Provincial
Government] [44][or the Board
of Revenue] may prescribe for any particular area.
10. Verification of application.— Every application to a board shall be in writing and be signed by the applicant and verified in such manner as may be prescribed.
11. Particulars to be stated in application.— (1) Every application presented by a debtor to
a board shall contain the following particulars, namely,—
(a) the place where
he resides or holds land;
(b) the particulars of all claims against him together with names and residences of his creditors;
(c) the particulars of all his property, together
with a specification of the value of such property and the place or places at
which any such property is to be found;
(d) a statement that
he is unable to pay his debts, and that they do not exceed the prescribed
amount [45][;]
[46][(e) a statement whether he has previously filed
an application in respect of the same debt before the same or another board,
and if so, with what result.]
(2) Every application presented by a creditor shall contain the following particulars, namely,—
(a) the place
where the debtor resides or holds land;
(b) the
amount and particulars of his claim against such debtor;
(c) a statement
that the debtor is unable to pay his debts.
12. Procedure on receipt of application.— (1) On receipt of an application under section
9 the board shall pass an order fixing a date and place for hearing the
application:
Provided that the board may at any time dismiss the application if, for reasons to be stated in writing, it does not consider it desirable to attempt to effect a settlement between the debtor and the creditors.
(2) Notice of the order under sub-section (1) shall be sent to
creditors by registered post, acknowledgement due, and where the debtor is not
the applicant, notice of the order under sub-section (1) shall be sent to him
in a similar manner.
13. Notice calling upon creditors to submit statements of debts.— (1) On the date fixed the board shall publish,
in such manner as may be prescribed, a notice, calling upon every creditor of
the debtor to submit a statement of debts owed to such creditor by the debtor.
Such statement shall be submitted to the board in writing within two months
from the date of publication of the notice:
Provided that,
if the board is satisfied that any creditor was, for good and sufficient cause,
unable to comply with such direction [47][or to produce the documents required under sub-section (1) of section
14] within the time fixed, it may extend the period for the submission of his
statement of the debts owed to him [48][or for the production of such documents].
[49][(2) Every debt owed to a single
creditor of which no such statement has been submitted to the board in
compliance with the provisions of sub-section (1) shall be deemed to be duly
discharged for all purposes and all occasions against such creditor; and every
debt owed to two or more creditors jointly, of which such statement or
statements signed by all such creditors or their recognised agents has or have
not been so submitted, shall be deemed to be so discharged against such
creditors as have failed to submit the said statement or statements, but only
to the extent of their respective shares in the said debt:
Provided that no such debts
shall be deemed to be discharged against any creditors whose names have not
been included in the application made under section 9.]
[50][(3) If the creditor or any of the
joint creditors fails without sufficient cause to be present in person or by
his recognised agent or legal practitioner in accordance with the provisions of
section 24 at any of the hearings fixed by the board, or fails to produce full
particulars and documents as required under sub-section (1) of section 14, the
debt due to him or to the joint creditors, as the case may be, shall be deemed
for all purposes and all occasions to have been fully discharged.
(4) If any creditor proves to the satisfaction of
the board or, if no board is vested with jurisdiction by the Provincial
Government [51][or the Board of Revenue], to the satisfaction of a civil court, that
the notice was not served on him and that he had no knowledge of its
publication or that he was unavoidably absent at any of the hearings fixed by
the board, the board or the court, as the case may be, may revive that debt.]
14. Procedure on submission of statements of debts.— (1) Every creditor submitting in compliance
with a notice issued under sub-section (1) of section 13 a statement of the
debts owed to him shall furnish, alongwith such statement, full particulars of
all such debts, and shall at the same time produce all documents (including
entries in books of account) on which he relies to support his claims, together
with a true copy of every such document:
Provided that a decree or order of a civil court shall be conclusive evidence as to the amount of the debt to which the decree relates, but the amount may be reduced as the result of an agreement arrived at in accordance with section 17.
(2) The board shall, after marking for the purpose of identification
every original document so produced and verifying the correctness of the copy,
retain the copy and return the original to the creditor.
15. Board to attempt amicable settlement.— The board shall call upon the debtor and each
creditor to explain his case regarding each debt, and shall use its best
endeavors to induce them to arrive at an amicable settlement.
[52][15-A. Power
of board to adjudicate on genuineness or enforceability of debts.— (1) If a creditor or debtor, as the case may
be, challenges the genuineness or enforceability of any debt included in an
application, the board shall adjudicate upon the issue.
(2) Any person aggrieved by a decision of the
board under sub-section (1) may appeal therefrom to the Collector or such other
officer, not below the rank of an Assistant Collector of the first grade, as
the Provincial Government [53][or the Board of Revenue] may appoint in this behalf [54][:]
[55][Provided that
no order under subsection (2) shall be passed without giving the parties an
opportunity of being heard.]
(3) The period of limitation for an appeal under this section shall run from the date of the order appealed against and shall be thirty days.
(4) An appeal shall not lie from an order refusing to review or
confirming on review a previous order.
(5) Notwithstanding anything hereinbefore contained, no appeal or application for revision shall lie against a decision of the board under sub-section (1) unless the aggregate value of the items in regard to which the appeal is preferred exceeds two thousand rupees.
(6) No order passed under this section shall be open to question in a
civil court.]
16. Power of Board to require attendance of persons and production of
documents and to receive evidence.— Any board empowered under this Act may
exercise all such powers connected with the summoning and examining of parties
and witnesses and with the production of documents as are conferred on civil
courts by the Code of Civil Procedure[56], and every
proceeding before the board shall be deemed a judicial proceeding.
17. Registration and effect of agreement.— (1) If the debtor and all or any
of the creditors come to an amicable settlement, the board shall forthwith
reduce such settlement to writing in the form of an agreement setting forth the
amounts payable to each creditor and the manner in which and the times at which
they are to be paid. Such agreement shall be read out and explained to the
parties concerned, and shall be signed or otherwise authenticated by the board
and the parties: provided that if the board is of the opinion that the period
fixed for payment is excessive, the board may refuse to authenticate the
agreement. The board shall also pass an order dismissing the application so far
as it relates to the creditors who have not come to an amicable settlement.
(2) An agreement thus made shall take effect as if
it were a decree of a civil court having jurisdiction in the area of the
jurisdiction of the board.
[57][(3) Notwithstanding anything contained in the [58][* * *]
Registration Act, 1908, or in the rules made thereunder an agreement made under
sub-section (1) shall not be liable to registration.]
18. Dismissal of application in default.— If in the opinion of the board any applicant
fails to conduct his application with due diligence, the board may dismiss the
application at any stage.
19. Bar to successive application.— If once an application has been
made by a debtor and disposed of, no board shall entertain a second application
within two years of the date of disposal of the first application.
20. Grant of certificate by board in respect of
debts.— (1) Where,
during the hearing of any application made under section 9, any creditor
refuses to agree to an amicable settlement, the board may, if it is of opinion
that the debtor has made such creditor a fair offer which the creditor ought
reasonably to accept, grant the debtor a certificate, in such form as may be
prescribed, in respect of the debts owed by him to such creditor.
[59][* * * * * * * * * * * * *]
(2) Power
of court to disallow costs or interest.— Where any creditor sues [60][or takes out execution proceedings] in a civil court for the recovery
of a debt in respect of which a certificate has been granted under sub-section
(1), the court notwithstanding the provisions of any law for the time being in
force, shall not allow the plaintiff any costs in such suit, [61][or proceedings] or any interest on the debt after the date of
certification under sub-section (1) [62][* * *].
(3) Where after the date of an agreement made in accordance with section 17 or of certification any unsecured creditor sues for the recovery of a debt in respect of which a certificate has been granted under sub-section (1) or any creditor sues for the recovery of a debt incurred after the date of such agreement, any decree passed in such suit notwithstanding anything contained in the Code of Civil Procedure, 1908[63], shall not be executed until six months after the expiry of the period fixed in the agreement authenticated under sub-section (1) of section 17.
[64][(4) Where after the date of an
agreement made in accordance with section 17 or of certification any unsecured
creditor applies for the execution of a decree in respect of which a
certificate has been granted under sub-section (1), the said decree
notwithstanding anything contained in the Code of Civil Procedure, 1908[65], shall not be executed until six months after the expiry of the period
fixed in the agreement authenticated under sub-section (1) of section 17.]
[66][20-A. Decision
of board to be final.— If any
question arises in any proceedings under this part of the Act whether a loan or
liability is a debt or not or whether a person is a debtor or not, the decision
of the debt conciliation board shall be final, and shall not be called into
question in any court.]
21. Bar of Civil suits.— [67][Save as
otherwise provided in this Act] no civil court shall entertain—