RAJASTHAN SAGRI SYSTEM ABOLITION ACT, 1961

Act No. 40 of 1961

21st November, 1961

An Act to provide for the abolition, of the Sagri system in the State pf Rajasthan. Be it enacted by the Rajasthan State Legislature in the Twelfth Year of the Republic of India as follows:--

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S.1 Short title, extent and commencement

(1) This Act may be called the Rajasthan Sagri System Abolition Act, 1961.

(2) It extends to the whole of the State of Rajasthan.

(3) It shall come into force at once.

S.2 Sagri system defined

(1) The Sagri system consists in the advance of a loan by one person (hereinafter called the creditor) to another person (hereinafter called the debtor), whether evidenced by a writing or otherwise on any one or more of the following terms, namely:--

• (a) that the principal amount of such loan, whether with or without interest accrued due thereon at the stipulated rate, shall be treated as repaid in full by the debtor rendering, to or for the benefit of the creditor or to or for the benefit of any person named in this behalf by the creditor, labour or personal service by himself or by any member or members of his family or by his hired servant or labourer or by any of his relations for a specific period of time either without wages or on payment of merely nominal wages;
• (b) that, upon the expiration of such period, the security, if any, furnished for the repayment of the said loan shall automatically stead discharged;
• (c) that only the interest on such
  

S.3 Sagri system abolished

(1) On and from the date of the commencement of this Act,--

• (i) the Sagri system shall stand abolished,, and
• (ii) no creditor shall advance a loan to his debtor on the Sagri system.

(2) If on or after the said date any loan is advanced on the Sagri system, it shall not be recoverable by suit or other proceeding in any court and the debtor shall not be bound or compelled to under the labour or personal service stipulated for.

S.4 Penalties

Whoever---

• (i) advances a loan on the, Sagri system on or after the date of commencement of this Act, or.
• (ii) compels his debtor to render labour or persona service in fulfillment of the terms on which a loan was advanced to him, shall, on conviction before a Magistrate of the first class-, be punishable, for every such advance or compulsion, with imprisonment of either description for a term which may extend to one year or with fine which may extend to five hundred rupees or with both.

S.5 Presumption as to Sagri character of loan

In relation to every transaction made after the date of the commencement of this Act whereby a creditor advances a loan to a debtor and also engages him or any member or member of his family or his hired servant or labourer or his relations to render any labour or personal service to or for the benefit of himself (the creditor) or any person named by him in this behalf, it shall be presumed that the loan, was advanced on the Sagri system unless it is satisfactorily proved that such engagement on labour or personal service was altogether independent of the advance of the loan.

S.6 Provision for Sagri system loans remaining partly or wholly un-repaid at commencement of Act

(1) If any loan advanced on the Sagri system before the commencement of this Act shall not have been repaid in whole or in part at such commencement, the provisions of the Rajasthan Relief of Agricultural Indebtedness Act, 1957 (Rajasthan Act 28 of 1957) shall apply to the recovery of such whole or part as if the debtor were an agriculturist within the meaning of that Act.

(2) Notwithstanding anything contained in that Act--

• (a) any suit or other proceeding pending before a court at the commencement of this Act for the recovery of, the whole or a part of any loan advanced before such commencement on the Sagri system shall forthwith be transferred by such court to the Debt Relief Court having jurisdiction, and
• (b) any creditor claiming recovery of the whole or a part of such loan may, within six months from the date of the commencement of this Act, present to the Debt Relief Court having jurisdiction an application in this behalf, as nearly as may be, in
  

S.7 Savings

The provisions of this Act shall be in addition to and not in derogation of any law providing for the regulation and control of transactions of money lending for the time being in force in the whole or any part of the State.