DISPLACED PERSONS DEBTS ADJUSTMENT ACT, 1951
(1) This Act may be called the Displaced Persons (Debts Adjustment) Act, 1951.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different States or for different parts thereof.
In this Act, unless the context otherwise requires.--
(1) "company" means a company as defined in the Indian Companies Act, 1913 (VII of 1913), and includes a company deemed to be registered under that Act by reason of any of the provisions contained in this Act;
(2) "Companies Act" means the Indian Companies Act, 1913 (VII of 1913);
(3) "compensation" means any compensation paid, whether in cash or in kind, in respect of any immovable property in West Pakistan belonging to a displaced person under any general scheme arrived at in this behalf between the Government of India and the Government of Pakistan or framed by the Government of India;
(4) "co-operative society" means a co-operative society registered under the Co-operative Societies Act, 1912
Save as otherwise expressly provided in this Act, the provisions of this Act and of the rules and orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force, or in any decree or order of a court, or in any contract between the parties.
The State Government may, by notification in the Official Gazette, specify any civil court or class of civil courts as the Tribunal or Tribunals having authority to exercise jurisdiction under this Act and may define the areas in which and the extent to which such jurisdiction may be exercised.
(iv) a schedule of all his properties in respect of which a claim has been submitted to the registering officer under the Displaced Persons (Claims) Act, 1950 (XLIV of 1950), and, where any order has been passed in relation to the verification and valuation of the claim under that Act, with a certified copy of the order.
(3) All persons whose names are shown in any schedule as having claims against the displaced debtor and all persons whose names are shown as joint-debtors shall be deemed to be the respondents to the application and there shall be filed along with the application, or with the permission of the Tribunal at any later state of the proceedings, as many copies of the application and as many envelops and notices in the prescribed form duly addressed to the respondents as there are respondents.
Where an application made under section 5 does not comply with any of the requirements of that section, the Tribunal may either reject it, or grant to the applicant such further time as it thinks fit to comply with such requirements.
If the application is not rejected under section 6, the Tribunal shall, after causing the date for the hearing of the application to be entered in the notices referred to in section 5, cause them to be served on the respondents.
In response to a notice under section 7, the respondent may show cause against the application by filing a written statement containing his objections to the application:
Provided that where he does not appear in person or through any authorised agent, the written statement may be sent by registered post, acknowledgement due, to the Tribunal after having been signed in the presence of a civil judicial officer or a magistrate or any other prescribed office and duly attested by such officer or magistrate.
(1) If there is a dispute as to whether the applicant is a displaced person or not or the assets of any displaced debtor, the Tribunal shall decide the matter after taking such evidence as may be adduced by all the parties concerned and shall pass such decree in relation thereto as it thinks fit.
(2) If there is no such dispute or if the respondents do not appear or have o objection tot he application being granted, the Tribunal may, after considering the evidence placed before it, pass such decree in relation thereto as it thinks fit.
Any displaced person having a claim against a displaced debtor may make an application, in such form as may be prescribed, for the determination thereof to the Tribunal within the local limits of whose jurisdiction the displaced debtor actually and voluntarily resides, or carries on business, or personally works for gain, together with a statement of the debts owed to the creditor with full particulars thereof.
(1) Where an application under section 10 has been made the Tribunal shall cause notice thereof to be served on the displaced debtor calling upon him either to show cause, if any, against the application or to make an application on his own behalf under section 5.
(2) If, in response to a notice under sub-section (1), the displaced debtor makes an application in accordance with the provisions of section 5, the Tribunal shall proceed further in the matter as if it had commenced with an application by the displaced debtor under section 5, and all the other provisions of this Act shall apply accordingly; but, if the displaced debtor does not choose to make any such application, the Tribunal shall, after considering such evidence, if any, as may be produced before it, determine the claim and pass such decree in relation thereto as it thinks fit.
(1) Any creditor of a disposed debtor may make an application to the Tribunal stating that the displaced debtor, who has made an application under section 5 or sub-section (2) of section 11, has concealed any part of his assets, and the Tribunal shall, after giving due notice thereof to the displaced debtor, determine the matter.
(2) If the Tribunal finds that the displaced debtor has wilfully and fraudulently omitted to include such assets in his application, the Tribunal may dismiss the application or refuse to allow to the displaced debtor any of the reliefs under this Act to which he would otherwise have been entitled or pass such other order in relation thereto as it thinks fit.
At any time within one year after the date on which this Act comes into force in any local area, any displaced creditor claiming a debt from any other person who is not a displaced person may make an application, in such form as may be prescribed, to the Tribunal within the local limits of whose jurisdiction he or the respondent or, if there are more respondents than one, any of such respondents, actually and voluntarily resides, or carries on business or personally works for gain, together with a statement of the debt owing to him with full particulars thereof.
(1) Where an application under section 13 has been made to the Tribunal, the Tribunal shall cause notice thereof to be given to the debtor, calling upon him to show cause, if any, against the application.
(2) If there is a dispute as to whether the applicant is a displaced creditors or not or as to the existence of the debt or as to the amount thereof, the Tribunal shall decide the matter, after taking such evidence as may be produced before it, and pass such decree in relation thereto as it thinks fit.
(3) If there is no such dispute or if the debtor does not appear or has no cause to show, the Tribunal may, after considering the evidence placed before it, pass such decree in relation thereto as it thinks fit.
(1) Where a debt incurred by a displaced person is secured by a mortgage, charge or lien on the immovable property belonging to him in West Pakistan, the Tribunal may, for the purpose of any proceeding under this Act, require the creditor to elect to retain the security or to be treated as an unsecured creditor.
(2) If the creditor elects to retain the security, he may apply to the Tribunal, having jurisdiction in this behalf as provided in section 10, for a declaration of the amount due under his debt.
(3) Where in any case, the creditor elects to retain his security if the displaced debtor receives any compensation in respect of any such property as is referred to in sub-section (1), the creditor shall be entitled--
(a) where the compensation is paid in cash, to a first charge thereon:
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(1) Where in respect of a debt incurred by a displaced debtor and secured by the pledge of movable property belonging to him, the creditor had been placed in possession of such property at any time before the debtor became displaced person, the following rules shall regulate the rights and liabilities of the creditor and the debtor, namely:--
(a) the creditor may, if he is still in possession of the pledged property, realise the sum due to him by the sale of such property after giving to the debtor reasonable notice of the sale;
(b) the creditor shall not be liable, in the case where the pledged property is no longer in his possession or is not available for redemption by the debtor, to recover from the debtor the debt or any part thereof for which the pledged property was security;
(c) the de
(1) Where any property in West Pakistan belonging to a displaced person was insured with any insurance company before the 15th day of August, 1947, against any risk arising out of fire or theft or riot and civil commotion and there has been a loss in respect of such property arising out of any such risk at a time when the contract of insurance was in force, such company shall not be entitled to refuse payment of the sum due under any claim in relation thereto on the ground that--
(a) no report was lodged with the police within the agreed time, or
(b) the claim was not made to the company within the agreed time, or
(c) in the case of a policy covering any risk arising out of riot and civil commotion, the disturbances in West Pakistan were not in the nature of a riot and civil commotion, the dis
(3) Where any share forfeited before the commencement of this Act has been disposed of by the company in accordance with its articles of association and it is not possible for the company in accordance with its articles of association and it is not possible for the company to give to the displaced person the relief to which he is entitled under this section without increasing its capital, the capital of the company shall be deemed to have been increased to the extent to which it is necessary to provide that relief.
(4) if the company or the co-operative society refuses to comply with any such request as is contained in an application under sub-section (2), the Tribunal may, on application made to it in this behalf and if satisfied that there is no cause for such refusal, issue a direction to the company or the co-operative society accordingly, and the company or society shall be bo
(1) Where a company or a co-operative society is being wound up, no displaced person or displaced bank shall be called upon, notwithstanding anything to the contrary contained in the Companies Act, or in the memorandum or articles of association or the Co-operative Societies Act, to make any contribution to the assets of the company or co-operative society, as the case may be, in respect of any share held by him or it in the company or society on the 15th day of August, 1947.
(2) The provisions of this section shall have effect for a period of ten years from the 15th day of August, 1947, and shall also apply in respect of any calls made and not satisfied before that date, and shall cease to have effect after the expiry of the said period except as respects things done or omitted to be done.
(1) Where before the commencement of this Act, a decree has been passed by a civil court against, or a settlement has been entered into by, a displaced debtor in respect of any debt, the Tribunal shall, on the application of such debtor revise it so as to bring it into accord with the provisions of this Act.
(2) In determining the amount due under any such decree or settlement, the Tribunal shall accept as binding the findings of the court which passed the decree or the facts contained in the settlement, as the case may be, to the extent to which the findings or the facts are not inconsistent with the provisions of this Act:
Provided that the Tribunal shall not determine any claim under any such decree until any appeal or revision filed against it has been finally decided or the period allowed for any appeal therefrom has expired, and i
Where a debt is due from a displaced person jointly with another person, the Tribunal shall, for the purposes of this Act, apportion the liability between them according to the following rules, namely:--
(a) if the liability of each debtor is defined, then according to the defined share of each;
(b) if the debt was taken for any trade or business of the joint debtors then according to the shares held by each of the joint debtors in the trade or business;
(c) if the debt was not taken in any defined shares or for any trade or business in which the partners have any defined share, the debt shall be apportioned into as may parts as there are joint debtors, and each joint debtor shall be liable only for the part apportioned to him;
(d) if one joint debt
In the determination of any individual debt which does not exceed five thousand rupees,-
(a) it shall not be necessary for the Tribunal to take down the evidence of the witnesses in writing at length but the Tribunal, as the examination of each witness proceeds, shall make a memorandum of the substance of what he deposes and such memorandum shall be written and signed by the Tribunal and shall form part of the record;
(b) the decision of the Tribunal need not contain more than the points for determination and the decision thereon.
It shall be presumed until the contrary is proved that any document registered under the Indian Registration Act, 1908 (XVI of 1908) or any certified copy thereof and produced before the Tribunal has been proved.
Every application and the schedules, if any, attachment thereto and every written statement filed before the Tribunal for any relief under this Act shall be signed and verified in the manner prescribed by the Code of Civil Procedure, 1908 (Act V of 1908), for the signing and verification of pleadings
In all cases in which the Tribunal passes a decree on the application of a displaced person, it shall prepare a complete of the creditors and of the assets and liabilities of the displaced person.
It shall be competent for the civil court which has been specified as the Tribunal for the purposes of this Act to execute any decree or order passed by its as the Tribunal in the same manner as it could have done if it were a decree or order passed by it as a civil court.
(1) On and from the 15th day of August, 1947, no interest shall accrue or be deemed to have accrued in respect of any debt owed by a displaced person, and no Tribunal shall allow any future interest in respect of any decree or order passed by it:
Provided that--
(a) where the debt is secured by the pledge of shares, stocks, Governmental securities or securities of a local authority, the Tribunal shall allow, for the period commencing from the 15th day of August, 1947, and ending with the date of commencement of this Act, interest to the creditor at the rate mutually agreed upon or at a rate at which any dividend or interest has been paid or is payable in respect thereof, whichever is less;
(b) in any other case the Tribunal may, if it thinks it just and proper to do so after taking into accoun
No displaced person shall be liable to arrest or imprisonment in execution of any decree for the recovery of any debt whether passed before or after the commencement of this Act.
Section 60 of the Code of Civil Procedure, 1908 (Act V of 1908) shall, in relation to the execution of any decree for a debt against a displaced person (whether passed before or after the commencement of this Act), have effect, as if--
(1) for clause (c) of the proviso to sub-section (1), the following clauses had been substituted, namely:--
"(c) houses and other buildings (with the materials and the sites thereof and the land immediately appertaining thereto and necessary for their enjoyment) belonging to an agriculturist and not proved by the decree-holder to have been let out on rent or otherwise to any person other than the father, mother, wife, son, daughter, daughter-in-law, brother, sister or other dependent of the judgement-debtor or to have been left vacant for a period of one year or more;
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(1) Where, on the application of a displaced debtor under section 5 or sub-section (2) of section 11, the Tribunal has determined the amount due in respect of each debt n accordance with the provisions of this Act, it shall proceed to determine the paying capacity of the debtor.
(2) If the paying capacity of the debtor is equal to or exceeds the aggregate sum of all the debts so determined (exclusive of any debt in respect of which the creditor has elected to retain the security in accordance with the provisions of section 16), the Tribunal shall pass a decree for the aggregate sum so determined, specifying the amount due to each creditor and shall allow repayment thereof in instalments, in accordance with the provisions contained in section 33, unless for reasons to be recorded it directs otherwise.
(3) If the paying capacity of the deb
(1) In directing payment of any sums by instalments under the first part of the decree, the Tribunal shall take into account among other matters--
Where a displaced debtor has been ordered to pay an allowance periodically to any person for his maintenance under any decree or order of a court, or is liable to pay such allowance under any agreement voluntarily entered into, the rate at which such allowance is payable may be varied by the Tribunal on application made to it in his behalf, if the Tribunal thinks that such variation is necessary, and such variation shall have effect for such period as the Tribunal may direct, notwithstanding anything in any decree, order or agreement to the contrary.
In directing payment of costs by any person as costs in respect of fees to any legal practitioner employed in any proceeding before it, the Tribunal shall be guided by any rules for the time being in force regulating the payment of such costs in proceedings of a similar nature before the ordinary civil courts, and shall not award more than one-half of what in its opinion the costs before the civil court would have been.
Notwithstanding anything contained in the Indian Limitation Act, 1908 (IX of 1908) or in any special or local law or in any agreement,--
(a) any suit or other legal proceeding in respect whereof the period of limitation was extended by section 8, or the Displaced Persons (Institution of Suits) Act, 1948 (XLVII of 1948), and
(b) any suit or other legal proceeding for the enforcement of a claim against an insurance company not falling within the provisions of clause (a) in respect whereof the cause of action had arisen, whether wholly or in part, in the territories now suitable in West Pakistan and the institution of the suit or other legal proceeding has become barred by reason of a condition in the contract, which, but for the condition, would have been governed by the provisions contained in clause (a).
Notwithstanding anything contained in section 48 of the Code of Civil Procedure 1908 (Act V of 1908), or in any other law for the time being in force, no order for the execution of a decree in respect of a debt against a displaced person shall be made upon an application presented after the expiration of--
(a) in the case of decrease passed before the commencement of his Act, six years from such commencement;
(b) in the case of decree passed after the commencement of this Act, six years from the date of the decrees;
(c) in the case of decrees directing payment of money to be made at prescribed intervals or no certain dates, six years from the date of default in making the payment in respect of which the decree-holder seeks to have the decree executed:
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(1) Where in the execution of any decree for the recovery of a debt against a displaced person his immovable property is sought to be sold, the court executing the decree shall, in the first instance, determine the market value of the property and, if the value so determined is less than or equal to the amount of the decree together with the proportionate amount of any prior encumbrance, the court shall transfer the property to the decree-holder.
(2) If the value determined under sub-section or (1) is greater than the amount of the decree together with the proportionate amount of any prior encumbrance, the court shall determine the portion of such property the value of which is equal to the amount of the decree with the proportionate amount of such prior encumbrance, and may, if it is reasonable or convenient to do so, transfer that portion to the decree-holder.
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If the displaced debtor and the creditor or, where there are more creditor than one, such number thereof as hold more than two-thirds in value of the debts due from the displaced debtor enter into an agreement for the adjustment of the liabilities, the Tribunal shall, if an application is made to it in this behalf, after giving due notice to the other creditors affected, adjust the remaining debts accordingly if the terms of the agreement are just and fair, and pass a decree accordingly.
Save as otherwise provided in section 41, an appeal shall lie from--
(a) any final decree or order of the Tribunal, or
(b) any order made in the course of execution of any decree or order of the Tribunal, which if passed in the course of execution of a decree or order of a civil court would be appealable under the Code of Civil Procedure, 1908 (Act V of 1908),
to the High Court within the limits of whose jurisdiction the Tribunal is situate.
Notwithstanding anything contained in section 40, where the subject-matter of the appeal relates to the amount of a debt and such amount on appeal is less than rupees five thousand, no appeal shall lie.
For the purpose of any appeal under this Act, it shall be sufficient if only such persons as, in the opinion of the appellant, are necessary parties to the appeal for the purpose of determining the real questions in controversy between them, are impleaded as respondents to the appeal:
Provided that where it appears to the High Court at the hearing that any person who was a party to the proceeding before the Tribunal from whose decree the appeal is preferred but who has not been made a party to the appeal is interested in the result of the appeal, the Court may adjourn the hearing to a future date to he fixed by the Court and direct that such person be made a respondent.
(1) Where the registered office of any society or company registered before the 15th day of August, 1947, under the Societies Registration Act, 1860 (XXI of 1860), or the Cooperative Societies Act, 1912 (II of 1912), or under any other law then in force in any Province for the registration of co-operative societies or the Indian Companies Act, 1913 (VII of 1913), is situated in the territory now forming part of West Pakistan but a majority of its members for the time being are resident in India, or in the case of a company, more than thirty-three and one-third per cent.of its shares in value are being held by persons resident in India, the society, or company, as the case may be, may apply within one year from the commencement of?this Act to the Registrar of Societies, Co-operative Societies or Companies, as the case may be, within the local limits of whose jurisdiction the majority of the members of the governing body reside
Subject to the other provisions contained in this Act, where an application made by a displaced under section 5 or under sub-section (2) of section 11, or by a displaced creditor under section 13 has been dismissed, no further application for the same purpose shall lie.
Clerical or arithmetical mistakes in any application or in any schedule annexed thereto arising from any accidental slip or omission may at any time be corrected by the Tribunal, either of its own motion or on the application of any of the parties.
Every notice issued under this Act shall be served by registered post, acknowledgment due, unless the Tribunal for reasons to be recorded, directs service in any of the other modes specified in Order V of the First Schedule to the Code of Civil Procedure, 1908 (Act V of 1908).
Where a displaced debtor has not mentioned in the relevant schedule to his application any debt owing by him or any property, movable or immovable, belonging to him, whether such property is liable to attachment or not liable to attachment at all, nothing contained in this Act shall prevent--
(a) in the case of the debt, the creditor from instituting any proceeding for the recovery thereof under any law for the time being in force other than this Act; and
(b) in the case of the property, from being attached or otherwise dealt with under any such law.
Notwithstanding anything contained in this Act, no proceeding before a Tribunal shall be deemed to abate by reason merely of the death of the debtor who is a party to the proceeding, and a decree may be passed notwithstanding the death and such decree shall have the same force and effect as if it had been passed before the death took place:
Provided that the Tribunal on an application made in that behalf, shall cause the legal representative of the deceased debtor to be made a party to the proceeding, and nay person so made a party may make any defence appropriate to his character as legal representative of the deceased debtor:
Provided further that nothing contained herein shall be deemed to render the legal representative of the deceased debtor liable to satisfy the decree except to the extent to which any of the assets of the decease
(1) If before the commencement of this Act a displaced debtor has satisfied or discharged any of his liabilities in any manner whatsoever, such transactions shall not be affected by anything contained in this Act.
(2) Where the Tribunal has determined the amount due in respect of any debt in accordance with the provisions of this Act, any payments (including payments by way of interest) made by the displaced debtor towards the debt prior to such determination shall be adjusted towards the amount so determined:
Provided that no creditor shall be called upon to refund any amount paid to him if it is found that it is in excess of the amount determined as being due to him under this Act.
Notwithstanding anything contained in any law for the time being in force relating to insolvency, no displaced debtor shall be deemed to be insolvent or to have been adjudicated as such within the meaning of any law for the time being in force relating to insolvency by reason only of his applying to get his debts adjusted under this Act, and no petition in insolvency shall lie against a displaced debtor in respect of any debt incurred by him before the 15th day of August, 1947.
Notwithstanding anything contained in this Act, no compromise or arrangement arrived at, whether before or after the commencement of this Act, between a displaced debtor and a bank relating to the repayment, discharge or satisfaction of any debt owing by the displaced debtor to the bank shall be reopened by the Tribunal, and nothing contained in this Act shall affect any such compromise or arrangement:
Provided that there is in force in respect of the bank compromise or arrangement between it and its own creditors or any class of such creditors which has been duly sanctioned by the court under section 153 of the Indian Companies Act, 1913 (VII of 1913): and
Provided further that the particulars specified in clause (c), (cc), (Ccc), (I) (q), ® and (S) of the proviso to sub-section (1) of section 60 of the Code of Civil Procedure, 1908 (Ac
(1) Every Tribunal shall communicate to the prescribed authority, in such manner as may be prescribed the amount of the prior charge declared under sub-section (3) of section 16, and shall also forward to it a copy of the decree passed on the application of a displaced debtor under section 5 or sub-section (2) of section 11 and also of any order passed under sub-section (5) of section 32, specifying the amount due to the creditor mentioned therein on the date of the order.
(2) The prescribed authority shall scale down the debts reported to him in accordance with sub-section (6) of section 32 and shall, subject to any rules made in this behalf, meet the prior charge of the secured creditor in accordance with sub-section (2) of section 16 in the first instance and thereafter distribute the balance of the compensation available for distribution within the meaning of sub-section (10) o
Nothing contained in Order XXXVIII of the First Schedule to the Code of Civil Procedure, 1908 (Act V of 1908) relating to arrest and attachment before judgement, shall apply to any proceeding under this Act.
No suit, prosecution or other legal proceeding shall lie against the Government or any person, in respect of anything done or intended to be done by it or him in good faith in pursuance of this Act or of any rule or order made thereunder.
The Central Government may, by notification in the Official Gazette, direct that any power exercisable by it under this Act may also be exercised by such officer or authority subordinate to the Central Government or by the State Government or by any officer or authority subordinate to the State Government as may be specified in the direction.
(1) The Central Government may be notification in the Official Gazette, make rules for carrying out the purposes of this Act.
(2) In particular, and without prejudice to the generality of the provisions contained in sub-section (1), the rules so made may provide for all or any of the following matters, namely:--
(a) the additional, particulars, if any, which an application under section 5, should contain;
(b) the form in which notices under this Act may be issued;
(c) the form in which applications under section 10 or section 13 may be made;
(d) the registers which should be maintained under this Act;
(e) the authorities which should be maintained under this Ac
The State Government may, by notification in the Official Gazette, makes rules providing for--
(a) the distribution of business amongst the various Tribunals within the State;
(b) the manner is which copies of documents produced before the Tribunals should be certified;
(c) the returns to be made by the Tribunals and the authorities to which they may be so made.
Save as otherwise provided to section 36, the Displaced Persons (Institution of Suits) Act, 1948 (XLVII of 1948) and the Displaced Persons (Legal Proceedings) Act, 1949 (XXV of 1949) shall cease to apply to displaced persons as defined in this Act.
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