All Sections

Award.

§41

Summary

(1) After determining the amount of the debts due to the creditors in accordance with the provisions of section 40, the Court shall make an award. (2) After the Court passes an award in terms of the amounts so scaled down, the scaled down amount specified in the award shall be the amount due by the debtor in respect of his debts, and any amount remaining due in excess of such amount shall stand extinguished. (3) The award shall be in the prescribed form and shall be drawn up subject to the following provision:- (a) the amount of the secured debts scaled down shall be charged on the properties on which they may have been secured; (b) in fixing the priority in which debts shall be paid, the following order shall be followed, namely:- (i) debts due to Government, which are charged on the immovable property belonging to the debtor or which are recoverable as the current year's land revenue; (ii) debts due to local authorities, which are charged on the immovable property belonging to the debtor or which are recoverable as the current year's dues; (iii) loans given by resource societies, secured debts due to co-operative societies, not being resources societies, and debts due to any of the institutions referred to in clause (c) of section 60; (iv) secured debts in order of priority; (v) unsecured debts: Provided that, in the case of unsecured debts they shall be paid pro rata; (c) in the case of a debtor who is a marginal or small farmer or other agriculturist, the total annual installments in which the debts shall be paid shall not exceed seven, and in the case of a debtor who is a worker, rural artisan or rural labourer, the total monthly installments shall not exceed eighty-four: Provided that, in fixing the amount of installments in which the debts shall be paid, the Court shall ascertain the net annual income of the debtor, and the annual installments or twelve monthly installments during any year payable by the debtor shall not exceed his net annual income. Explanation.- For the purpose of this clause, the "net annual income" of the debtor means the balance of his annual income after deducting- (i) such sum as may be considered necessary for the payment of the liability, if any, imposed on the debtor under a decree or order for maintenance passed by a competent Court, (ii) such sum as may be considered necessary for the maintenance of the debtor and his dependents, that is to say, his spouse and his children, whether married or unmarried, his parents, sisters and daughters-in-law, if such persons (other than the spouse) are dependent on him for their maintenance, and (iii) the sum required by the debtor to pay the assessment and taxes in respect of the current year to Government and to the local authorities and to pay off loans borrowed for the purpose of the financing of crops or seasonal finance under any law; (d) the Court may pass an order for the delivery of possession of any property notwithstanding any law or contract to the contrary; (e) the rate of interest shall not exceed six per cent. per annum or such less rate as may be notified by the State Government or the rate agreed upon between the parties when the debt was originally incurred or the rate allowed by the decree in respect of such debt, whichever is the lowest.

(1) After determining the amount of the debts due to the creditors in accordance with the provisions of section 40, the Court shall make an award. (2) After the Court passes an award in terms of the amounts so scaled down, the scaled down amount specified in the award shall be the amount due by the debtor in respect of his debts, and any amount remaining due in excess of such amount shall stand extinguished. (3) The award shall be in the prescribed form and shall be drawn up subject to the following provision:- (a) the amount of the secured debts scaled down shall be charged on the properties on which they may have been secured; (b) in fixing the priority in which debts shall be paid, the following order shall be followed, namely:- (i) debts due to Government, which are charged on the immovable property belonging to the debtor or which are recoverable as the current year's land revenue; (ii) debts due to local authorities, which are charged on the immovable property belonging to the debtor or which are recoverable as the current year's dues; (iii) loans given by resource societies, secured debts due to co-operative societies, not being resources societies, and debts due to any of the institutions referred to in clause (c) of section 60; (iv) secured debts in order of priority; (v) unsecured debts: Provided that, in the case of unsecured debts they shall be paid pro rata; (c) in the case of a debtor who is a marginal or small farmer or other agriculturist, the total annual installments in which the debts shall be paid shall not exceed seven, and in the case of a debtor who is a worker, rural artisan or rural labourer, the total monthly installments shall not exceed eighty-four: Provided that, in fixing the amount of installments in which the debts shall be paid, the Court shall ascertain the net annual income of the debtor, and the annual installments or twelve monthly installments during any year payable by the debtor shall not exceed his net annual income. Explanation.- For the purpose of this clause, the "net annual income" of the debtor means the balance of his annual income after deducting- (i) such sum as may be considered necessary for the payment of the liability, if any, imposed on the debtor under a decree or order for maintenance passed by a competent Court, (ii) such sum as may be considered necessary for the maintenance of the debtor and his dependents, that is to say, his spouse and his children, whether married or unmarried, his parents, sisters and daughters-in-law, if such persons (other than the spouse) are dependent on him for their maintenance, and (iii) the sum required by the debtor to pay the assessment and taxes in respect of the current year to Government and to the local authorities and to pay off loans borrowed for the purpose of the financing of crops or seasonal finance under any law; (d) the Court may pass an order for the delivery of possession of any property notwithstanding any law or contract to the contrary; (e) the rate of interest shall not exceed six per cent. per annum or such less rate as may be notified by the State Government or the rate agreed upon between the parties when the debt was originally incurred or the rate allowed by the decree in respect of such debt, whichever is the lowest.

← Previous Section Next Section →

Explore this Chapter