Bare Acts Live

The Maharashtra Debt Relief Act, 1975

Maharashtra Act No. 3 of 1976

mh046

Chapter I

Preliminary

(a) "Agriculturist" means a person who cultivates land personally;

(b) "appointed day" means the 22nd day of August 1975;

(c) "civil court" includes a Court of Small Causes;

(d) "corporation area" means an area within the jurisdiction of any Municipal Corporation constituted or established under any law for the time being in force;

(e) "debt" means any liability, in cash or kind, outstanding on the appointed day, being a liability arising out of a loan (with interest if the loan is taken by a worker, and with or without interest, in any other case), whether secured or unsecured, due from a debtor whether payable under a decree or order of any court or otherwise;

(f) "debtor" means a marginal farmer, rural artisan, or rural labourer whose total income from all sources did not exceed two thousand and four hundred rupees during the year immediately before the 1st day of August 1975 and a worker whose total income from all sources did not exceed, if living in an urban area six thousand rupees during the year immediately before the said date, and if living-elsewhere four thousand and eight hundred rupees during that year;

(g) "to hold land" with its grammatical variations and cognate expressions, means to be lawfully in actual possession of land as owner or as tenant (including a government lessee), and the expression "holding" shall be construed accordingly;

(h) "marginal farmer" means an agriculturist who holds land measuring not more than one hectare of unirrigated land and includes an agriculturist who cultivates as a tenant or share-cropper land measuring not more than one hectare of unirrigated land;

(i) "member of a family" means a father, mother, spouse, brother, unmarried dependent sister, divorced and dependent sister, son, son's wife, or unmarried daughter, divorced and dependent daughter, son's son, son's unmarried daughter, son's divorced and dependent daughter, and includes any relation residing with and actually dependent for his maintenance on the debtor;

(j) "rural area" means an area for the time being within the jurisdiction of a Zilla Parishad established under the Maharashtra Zilla Parishad and Panchayat Samitis Act, 1961, and includes any 'B' Class, or 'C' Class municipal area as classified under the Maharashtra Municipalities Act, 1965, but does not include the area within the limits of the cantonments of Poona, Kirkee and Kamptee as defines under the Cantonments Act, 1924;

(k) "rural artisan" means a person who principally earns his livelihood in a rural area by practicing any craft either by his own labour or with help of labour of the members of his family but does not include an artisan who resides in an urban areas;

(l) "rural labourer" means a person who -

(i) does not hold any land in a rural area,

(ii) may or may not have any homestead therein, and

(iii) earn his livelihood principally by manual labour,

(m) "small farmer" means an agriculturist who holds land measuring more than one hectare of unirrigated land but less than two hectares of such land and who cultivates personally such land and includes an agriculturist who cultivates as a tenant or a share-cropper land measuring more than one hectare of unirrigated land but not more than two hectares of such land;

(n) "urban area" means a corporation area or an area within the limits any municipal council constituted under any law for the time being in force in the State, and includes the area within the limits of the Cantonments of Poona, Kirkee and Kamptee as defined under the Cantonments Act, 1924, but does not include any "B" Class or "C" Class municipal area as classified under the Maharashtra Municipalities Act, 1965;

(o) "worker" means a person who earns his livelihood through any profession, calling or trade and also a person who is working in any factory (including a badli worker therein);

(1) the expression "factory" has the meaning assigned to it in the Factories Act, 1948, with this modification that the limitation on the number of workers working therein shall be dispensed with;

(2) the expression "badli worker" means a worker who is provided with a badli card and who is employed in a factory in place of another worker who is temporarily absent and whose name is borne on the muster-roll of the factory;

(3) for the avoidance of doubt, it is hereby declared that the expression 'profession, calling or trade' shall include and shall be deemed always to have included 'employment' and that expression shall be construed accordingly.

(p) words and expression used in this Act but not defined therein shall have the meanings, respectively assigned to them in the Maharashtra Agricultural Lands (Ceiling on Holdings) Act, 1961.

Chapter II

Revival of Debts

Chapter III

Liquidation of Certain Debts

(a) no such debt due from a debtor on the appointed day shall be recoverable from him or from or against any moveable or immovable property belonging to him, nor shall any such property be liable to be attached and sold or proceeded against in any manner in the execution of any decree or order relating to such debt against him:

(b) no civil court shall entertain any suit or proceeding against such debtor for the recovery of any amount of such debt, including interest, if any:

(c) all suits and proceedings (including appeals, revisions, attachment or execution proceedings) pending on the appointed day for the recovery of any such debt against such debtor shall abate:

(i) any moveable property, held and concluded before the appointed day:

(ii) any immovable property, confirmed before such day;

(d) every debtor undergoing detention in a civil prison in execution of any decree for money passed against him by a civil court in respect of any such debt shall be released;

(e) every property pledged or mortgaged by such debtor shall stand released in favour of such debtor and the creditor shall be bound to return the same to the debtor forthwith on the debtor making an application in writing in that behalf; and the creditor shall pass a receipt to the debtor of having received the application. If the creditor refuses to pass a receipt then the debtor may get the application endorsed to that effect under the signature and date of any of the officers referred to in section 6 or by any person authorised by them in this behalf.

(a) the Commissioner of Police includes an officer not below the rank of an Inspector duly authorised by him;

(b) the District Magistrate includes an officer not below the rank of a Tahsildar duly authorized by him; and

(c) the Superintendent of Police includes an officer not below the rank of a Sub-Inspector duly authorised by him.

Chapter IV

Moratorium on Debts of Workers

Chapter V

Moratorium on Execution of Decrees Against Small Farmers

(a) apply to a decree for money arising out of claims relating to trusts or for maintenance or for profits in favour of a co-tenant, or co-owner, or for means profits or for damages for tort, or for contribution between co-tenants of agricultural lands; or

(b) apply to a mortgage decree against property in the hands of a subsequent transferee who has taken the transfer in order to satisfy the mortgage subject to the mortgage on the basis of which such decree has been obtained; or

(c) apply to the decisions or orders or awards given or made by the Registrar, persons appointed to assist the Registrar, nominees or boards of nominees appointed by the Registrar, Liquidators, Maharashtra State Co-operative Tribunal, Co-operative Court, Co-operative Appellate Court or other authorities under the Maharashtra Co-operative Societies Act, 1960 or the rules made thereunder.

[Chapter VA]

Adjustment of Debts of Certain Farmers and Workers

(a) "award" means an award made under sub-section (4) of section 27 or under section 41 or 42 or as confirmed or modified by the Court in appeal;

(b) "Court" means-

(i) in Greater Bombay, the Court of Small Causes, Bombay,

(ii) in any area for which a Court of Small Causes is established under the Provincial Small Cause Courts Act, 1887, such Court, and

(iii) elsewhere, the Court of the Civil Judge (Junior Division) having jurisdiction in the area in which the debtor ordinarily resides or, if there is no such Civil Court, the Court of the Civil Judge (Senior Division) having ordinary Jurisdiction.

(c) "debt" means any liability, in cash or kind, outstanding on the date of commencement of this Chapter, being a liability arising out of a loan (with interest if the loan is taken by a worker, and with or without interest, in any other case), whether secured or unsecured, due from a debtor, whether payable under a decree or order of any Court or otherwise.

(d) "debtor" means-

(i) a marginal farmer, small farmer, rural artisan or rural labourer as defined in section 2, who owes any debt and whose total income from all sources exceeded two thousand and four hundred rupees, but did not exceed six thousand rupees, during the year immediately preceding the date of commencement of this Chapter;

(ii) a worker as defined in section 2, who owes any debt, and-

(A) whose total income from all sources exceeded, if living in an urban area, six thousand rupees, but did not exceed eight thousand rupees, during the year immediately preceding the date of commencement of this Chapter, or exceeded, if living elsewhere, four thousand and eight hundred rupees, but did not exceed seven thousand rupees, during that year; or

(B) who holds immovable property the market value of which, on the date of commencement of this Chapter, exceeds twenty thousand rupees, but does not exceed forty thousand rupees;

(iii) an agriculturist who owes any debt and who, on the date of commencement of this Chapter, holds more than two hectares of unirrigated land, but less than four hectares of such land, and cultivates such land personally; or an agriculturist who owes any debt and who is, on the date of commencement of this Chapter, cultivating as a tenant or a share cropper land measuring more than two hectares of unirrigated land, but less than four hectares of such land, in both cases the land being situated in any drought prone area; or

(iv) any other person, the payment of recovery of whose debts has been stayed under section 14 or against whom any proceedings have been stayed under section 15;

(e) "drought prone area" means any area or areas, which the State Government, having regard to the distress caused therein by serious drought, flood or other natural calamities, may, from time to time, by notification in the Official Gazette, declare to be drought prone areas, for the purposes of this Chapter;

(f) "financing of crops" means advancing of loans for the cultivation of crops during the ploughing season or later, for ploughing, sowing, harrowing, weeding, harvesting, purchase of seeds, manure or bullocks or for such other purposes and payable during such periods (not exceeding five years from the date on which the loan is advanced) as may be prescribed;

(g) "prescribed" means prescribed by rules made under this Chapter;

(h) "resource society" shall have the meaning assigned to it in the Maharashtra Co-operative Societies Act, 1960;

(i) "seasonal finance" means advancing of loans for preparation of land for irrigation, for constructing field channels or bunds to save land from erosion, for the removal of silt or for such other purposes and payable during such periods as may be prescribed;

(j) words and expressions used in this Chapter, but not defined in this Chapter, shall have the meanings, respectively, assigned to them in the other Chapters of this Act, or the Code of Civil Procedure, 1908, as the case may be.

(a) every creditor, on being required to do so by notice in writing by any of his debtors shall, within two months from the date of receipt of such notice, file before the Court a true and correct statement of all his claims under any decree or otherwise against such debtor, and shall at the same time send a copy thereof to such debtor, and

(b) every debtor, being required to do so by notice in writing by any of his creditors, shall, within two months from the date of receipt of such notice, file before, the Court a true and correct statement,-

(i) of all the debts owned by such debtor under any decree or otherwise to such creditor or creditors;

(ii) declaring whether he holds any land used for agricultural purposes, and if so, the exact area and situation of the land so held, together with its market value as certified in a corporation area by an engineer of the corporation authorised by it in this behalf and elsewhere by the Tahsildar having jurisdiction over the area where such land is situated, and whether he has been cultivating the land personally within the meaning of the relevant tenancy law;

(iii) of his total income from agriculture, and from sources other than agriculture, in the year immediately preceding the date of the notice, the agricultural and non-agricultural income and the different sources of non-agricultural income being shown separately;

(iv) of his other immovable property, if any, together with its market value as certified in a corporation area by an engineer of the corporation authorised by it in this behalf and elsewhere by the Tahsildar having jurisdiction over the area where such property is situated.

(a) give notice to the debtor (unless the debtor is himself an applicant) and to every creditor (other than the creditor who is himself an applicant) whose name and address are given in the application, and

(b) publish a general notice,

(a) whether the person for the adjustment of whose debts the application has been made is a debtor within the meaning of clause (d) of section 23;

(b) whether the creditor or creditors are holding a valid decree against such debtor;

(c) whether the creditor or creditors have any other debts against the debtor on the basis of valid documents and accounts maintained by him or them in the regular course of business.

(a) Separate accounts of principal and interest shall be taken.

(b) In the account of principal, there shall be debited to the debtor e such money as may, from time to time, have been actually received by him, o on his account, from the creditor, and the price of goods, if any, sold to him by the creditor.

(c) In the accounts of principal and interest, there shall be debited the amounts, if any, respectively due for principal (including costs) and interest under any decree or order passed by a competent Court in respect of any debts:

(d) In the account of interest, there shall be debited to the debtor simple interest on the balance of principal for the time being outstanding at the rate agreed upon between the parties, or at the rate allowed under any decree or order passed between the parties, or at a rate not exceeding six per cent per annum, whichever is the lowest.

(e) Credit shall be given for all sums paid by the debtor first towards outstanding interest and the balance, if any, shall be credited towards repayment of the principal. The principal and interest outstanding thus calculated shall be considered as net outstanding debt as on the date of application for the purpose of scaling down as hereinafter provided. In no case the total repayments made shall exceed twice the principal.

(a) any transfer which has been finally adjudged to be a transfer other than a mortgage by a decree of a Court, tribunal or other authority of competent jurisdiction; and

(b) any bona fide transferee for value without notice of the real nature of such transfer or his representative, where such transferee or representative holds under a registered deed executed before the date of commencement of this Chapter.

(a) the particulars of the property belonging to the debtor;

(b) the value of the said property;

(c) the particulars of any encumbrances on the said property;

(d) in the case of a debtor who is a marginal farmer, small farmer or other agriculturist, the average annual gross value of the agricultural produce during the five years immediately preceding the date of application, in the prescribed manner;

(e) in the case of a debtor, who is a worker, rural artisan or rural labourer, the average gross annual income during the five years immediately preceding the date of application, in the prescribed manner;

(f) the paying capacity of the debtor.

(i) in the case of a debtor who is a marginal or small farmer or other agriculturist, or rural artisan or rural labourer, the total amount of debts, whether secured or unsecured, found due after taking accounts shall be scaled down to 10 per cent of such debts;

(ii) in case of a debtor who is a worker, the total amount of debts, whether secured or unsecured found due after taking accounts, shall be scaled down to per cent of such debts;

(iii) notwithstanding anything contained in clauses (i) and (ii) the debts to be scaled down shall not exceed the amount which a debtor would be able to repay within a period of seven years based on his repaying capacity worked out in the manner provided in section 39.

(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 recoverable as the current year's dues;

(iii) loans given by resource societies, secured debts due to co-operative societies not begin resource 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:

(c) in the case of a debtor who is a marginal or small farmer or other agriculturist, the total annual instalments 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 instalments shall not exceed eighty-four;

(i) such sum as may be considered necessary for the payment of the liability, if any, imposed on the debtor under a degree 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 or 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 lowest.

(1) an appeal shall lie-

(i) from every order made under sub-section (3) or (4) of section 27;

(ii) from every decision or order given or made under section 31;

(iii) from every declaration or order made under section 35;

(iv) from every declaration or order made under section 38;

(v) from every award made under section 41;

(vi) from every decision or order under section 42, subject to the provisions of that section;

(2) an appeal from the Court shall lie-

(a) in Greater Bombay from any order, decision, declaration or award made or given by the Court of Small Causes, Bombay, to a Bench of two Judges of the said Court, which shall not include the Judge who made or gave such order, decision, declaration or award;

(b) elsewhere from any order, decision, declaration or award made or given by the Judge of the Court of Small Causes established under the Provincial Small Cause Courts Act, 1887, or by the Court of any Civil Judge, to the District Court;

(3) every appeal under clause (1) shall be made within sixty days from the date of order, decision, declaration or award, as the case may be, provided that, in computing the period of limitation prescribed by this clause, the provisions contained in section 4, 5 and 12 of the Limitation Act, 1963, shall, as far as may be, apply;

(4) no second appeal shall lie against any order, decision, declaration or award of the Court under this Chapter.

(i) on an application under sub-section (1) of section 24 or section 27 or on an award under sub-section (4) of section 27 - Re. 1.

(ii) on an award than an award specified in clause (i) - Re. 1 for every hundred rupees, or part thereof, of amount of the award, subject to a maximum of Rs. 50;

(iii) on an appeal against an order of the Court under sub-section (3) or (4) of section 27 or against any decision or order given or made under section 31 - Rs. 2.

(iv) on an appeal other than an appeal specified in clause (iii) - Re. 1 for every hundred rupees, or part thereof of the amount involved, subject to a maximum of Rs. 50.

(a) any matter pending before the Court under this Chapter;

(b) the validity of any procedure or the legality of any award, declaration, decision or order of the Court under this Chapter; and

(c) the recovery of any debt made payable under such award.

(a) any other Corporation (including a company) owned or controlled by the State;

(b) a co-operative society registered or deemed to be registered under the Maharashtra Co-operative Societies Act, 1960.

Chapter VI

Exemptions and Repeals

(a) debts due to any Government;

(b) debts due to any local authority including amount due by way of tax, cess or fee;

(c ) debts due to-

(i) (a) a banking company as defined in the Banking Regulations Act, 1949;

(b) the State Bank of India constituted under the State Bank of India Act, 1955;

(c) a subsidiary bank as denied in the State Bank of India (Subsidiary Banks) Act, 1959;

(d) a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970;

(e) the Agricultural Refinance Corporation constituted under the Agricultural Refinance Corporation Act, 1963; and

(ii) any other banking financial or institution which the State Government may, by notification in the Official Gazette, specify in this behalf;

(d) any sum recoverable by way of arrear of land revenue;

(e) any advance of loan given to a debtor by his employer for any specific purpose, such as, for festival, medical treatment, meeting any educational, marriage or funeral expenses and the like;

(f) any sum due in favour of public trusts registered under the Bombay Public Trusts Act, 1950;

(g) any claim arising out of contract or transaction not connected with money-lending.

Notifications

Certificate under section 7(5) of the Maharashtra Debt Relief Act, 1975

*(i) a marginal farmer possessing the following unirrigated lands-

*(ii) a rural artisan;

(iii) a rural labourer who-

(a) does not hold any land in a rural area, and

(b) earns his livelihood principally by manual labour; and has his total income from all sources .................. rupees during the year immediately before the 1st day of August 1975.

*(iv) an urban/rural worker whose total income from all sources was ........................... rupees during the year immediately before 1st day of August 1975 and the value of his immovable during the year immediately before 1st day of August 1975 and the value of his immovable property does not exceed twenty thousand rupees;

(Signature in full)
.........................
(Designation)

The Schedule

1. All Corporations or other bodies corporate (other than those which are already mentioned in section 22 of the said Act) constituted by or under any Central State or Provincial Act.

2. All Government Companies within the meaning of section 617 of the Companies Act, 1956 (I of 1956).

3. All Co-operative societies registered or deemed to be registered under the Maharas Co-operative Societies Act, 1960 (Maharashtra 24 of 1961).

Schedule

(1) a Regional Rural Bank established under the Regional Rural Banks Act, 1976 (21 of 1976);

(2) a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980);

(3) the National Bank for Agricultural arid Rural Development established under the National Bank for Agricultural and Rural Development Act, 1981 (61 of 1981);

(4) the Agricultural Finance Corporation Limited, a company incorporated under the Companies Act, 1956 (1 of 1965).