THE PUNJAB RELIEF OF INDEBTEDNESS
ACT, 1934
PUNJAB ACT 7 OF 1934
TABLE OF CONTENTS
PUNJAB ACT 7 OF 1934
[Received the assessment of
His Excellency the Governor on the 4th February, 1935 and that of
his Excellency the Viceroy and Governor-General on the 5th April, 1935
and was first published in the Punjab Gazette, Extraordinary, of the 8th
April, 1935]
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Year |
No. |
Short Title |
Whether repealed or
otherwise affected by legislation. |
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1934 |
7 |
The Punjab Relief of Indebtedness Act, 1934. |
Amended by Punjab Act 12
of 1940. Amended by Punjab Act 6 of
1942. Amended by the adaptation
of Laws order, 1950. Amended by the Adaptation
of Laws (third amendment), Order, 1951 Extended to Pepsu
Territory by Punjab Act 44 or 1960. |
An Act to provide for the Relief of
Indebtedness in [Punjab].
PART I
WHEREAS
it is expedient to amend the law governing the relations between debtors and
creditors;
1.
(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 Punjab and Part II to such areas as the [State] Government may from time to time, by notification, direct.
(3) This Act shall come into force on such date as the [State] Government may, by notification appoint in this behalf.
Interpretation clause (definitions)
2.
In this Act unless there is anything
repugnant in the subject or context,-
[(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].
(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 specifically by way
of interest or otherwise;
(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.
INSOLVANCY PROCEDURE
Amendment of section 10 of the Provincial Insolvency Act, 1920
3. In section 10(1) of the Provincial Insolvency Act, 1920, after the existing clause (a) the following clause shall be inserted.
'(aa)' his debts amount to two hundred and fifty
rupees, and he satisfies the court that he is entitled to summary
administration of his estate under section 74 of this Act; or.”
Amendment of section 74 of
the Provincial Insolvency Act, 1920.
4.
In
section 74 of the Provincial Insolvency act 1920, for the words “five hundred
rupees” the words “two thousand rupees” shall be substituted.
Amendment of section 3 of
the Usurious Loans Act, 1918
5.
In
section 3 of the Usurious Loans Act, 1918-
(i)
for
the word “and” in clause (a) of sub-section (1) the word “or” shall be
substituted;
(ii)
for
the word “may” where it appears for the first time in sub-section(1) the word
“shall” be substituted;
(iii)
for
the word “may” after the word “namely” in sub-section (1) the word “shall”
shall be substituted;
[(iv) to sub-section (2) the following clause
shall be added namely:-
(e)
The
Court shall deem interest to be excessive if it exceeds seven and –a-half
percentum per annum simple interest or is more than two per centum over the
Bank rate, which ever is higher at the time of taking the loan, in the case of
secured loans, or twelve and-a-half per centum per annum simple interest in the
case of unsecured loans; Provided that the court shall not deem interest in
excess of the above rates to be excessive if the loan has been advanced by the
Imperial Bank of India or any bank included in the Second Schedule to the
Reserve Bank of India Act, 1934, or any banking company registered under the
Indian companies Act, 1913, prior to the first day of April, 1937, or any
co-operative society registered under the Co-operative Societies Act, 1912.]
6.
The
provisions of this part of the Act shall apply to all suits pending on or
instituted after the commencement of this Act.
Interpretation clause
(definitions).
7.
(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 the Imperial Bank of India or to any
banking company registered under the Indian companies Act, 1913, [prior to the
first day of April, 1937,or any bank included in the Second Schedule to the
Reserve Bank of India Act, 1934 other than debts transferred to such societies,
bank 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, bank 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, [or]
(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
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 on account of incapacity, temporary or permanent, by bodily
infirmity or, if he is or has been in service of [Military, Naval or Air Forces
of the Union], 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.
(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.
Setting up of Debt Conciliation Boards
8.
(1)
(a) The [State] Government may for the purpose of amicable settlement between
debtors and their creditors establish debt conciliation boards.
(b) The [State] Government shall
define the local limits of the area in which a board shall have jurisdiction.
(c) The
[State] Government 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 [State] Government may prescribe for any
area.
(d) Such board shall consist of a chairman and [one] or
more members to be appointed by the [State] government. [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
[State] Government.
(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 [State] Government
may cancel the appointment of any
member of a board or dissolve any board.
(3) The [State] Government
shall notify in the (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 of 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 [State] government 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 [State] government may direct.
Application for settlement between a debtor and his creditors.
9.
A
debtor or any of the creditors may apply to the board appointed for the area in
which a 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 [State] government may prescribe for any particular area.
10.
Every
application to a board shall be in writing and be signed by the applicant and
verified in such manner as may be prescribed.
Particulars to be stated in application.
11.
(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;
[(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.
Procedure on receipt of application.
12.
(1)On
receipt of an application under section 9 the board shall pass on 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.
Notice calling upon
creditors to submit statements of debts.
13.
(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 this
notice:
Provided that if the board
is satisfied that any creditor was, for good and sufficient cause, unable to
comply with such direction [ or to produce the documents required under
sub-section(1) of section14] within the time fixed, it may extend the period
for the submission of his statement of the debts owed to him [ or for the
production of such documents].
(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 a statement or statements signed by all such creditors
or their recognized agents has or have not been so submitted, shall be deemed
to be so discharged against such creditors as have failed o submit the said
statement or statements, but only to 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.
(3) If the creditor or any of the joint creditors fails without
sufficient cause to be present in person or by his recognized 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 debts 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 [state] Government, 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.
Procedure on submission of statement of debts.
14.
(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, along with 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 to the
creditor.
Board to attempt amicable settlement
15.
The
board shall call upon the debtor and each creditor to explain his cause regarding
each debt, and shall use its best endeavors to induce them to arrive at an
amicable settlement.
Power of Board to adjudicate on genuineness or enforceability of debts.
[15-A. (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 Assistant
Collector of the first grade, as the {state] government may appoint in his
behalf.
(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 or 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.]
Power of board to require attendance of persons and production of documents and to receive evidence.
16.
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, and
every proceeding before the board shall be deemed a judicial proceeding.
Registration and effect of agreement.
17.
(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.
[(3)Notwithstanding anything
contained in the Indian Registration Act, 1908 or in the rules made thereunder
an agreement made under sub-section(1) shall not be liable to registration.]
Dismissal of application in default.
18.
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.
Bar to successive applications.
19.
If
once an application has been made by a debtor and disposed of, no board shall entertain
second application within two years of the date of disposal of first
application.
Grant of certificate by board in respect of debts.
20.
(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.
(2) Where any creditor sues [ 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 [ or proceedings], or any interest on the debt
after the date of certificate under sub-section(1).
(3) Where after the date of an agreement made in accordance with
section 17 or of certification any unsecured creditors 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 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.
[(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 any-thing contained in the
code of Civil Procedure, 1908, 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.]
Decision of board to be final.
[20-A. 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.
[Save
as otherwise provided in this Act, no civil court shall entertain-
(a)
any
suit [appeal or application for revision]
(i) to question the validity of any procedure or
the legality of any [order or agreement made or certificate issued] under this
Act, or
(ii) to recover any debt recorded
as wholly or partly payable under an agreement made in accordance with section
17 from any person who, as a debtor, was party to such agreement, or
(iii) to
recover any debt which has been deemed to have been duly discharged under [the
provisions of this Act]:
(b)
any
application to execute a decree, the execution of which is suspended under
[sub-section(3) or (4)] of section 20;
[(c) any suit for a
declaration, or any suit or application for injunction, affecting, any
proceedings under this Act before a board.]
22.
[Save
as otherwise expressly provided in this Act] no appeal or application for
revision shall lie against any order passed by a board.
Power of board to review its order.
23.
A
board may, on the application from any person interested, review any order
passed by it and pass such order, as it thinks fit:
Provided that it shall not
under this section pass an order reversing or modifying any order affecting any
person interested without giving such person an opportunity of being heard:
Provided further, that no application for review shall be
entertained if presented more than twelve months after the date of the order,
which the person interested seeks to have reviewed.
Appearance of party before board by agent or legal practitioner.
24.
In
any proceeding under this part of the Act, any party may be represented by an
agent authorised in writing or [with the permission of the board by a legal
practitioner.
Bar to new suits applications and suspension of pending suits and applications.
25.
(1)When
an application has been made to a board under section 9 [or section 23] no
civil court shall entertain any new suit or other proceeding brought for the
recovery of any debt [covered by such application] and any suit or other
proceeding pending before a civil court in respect of any such debt shall be
suspended until the board has dismissed the application or an agreement has
been made under section 17.
(2) When any execution
proceeding pending before a civil court is suspended under sub-section (1), and
any animal has been attached and made over to suparddar in connection with such
proceeding, the judgement-debtor shall be entitled to the return of such animal
but shall not be competent to sell or in any way part with the ownership of any
animal so attached during the suspension of such proceeding and if the
judgment-debtor has been committed to a civil prison in connection with such
proceedings he shall be released forthwith.]
26.
The
time spent in proceedings before a conciliation board and time during which a
person is debarred from suing or executing his decree under the provisions of
this part of this Act shall be excluded when counting the period of limitation
for any application, suit or appeal.
Members of boards deemed to be Public Servants
27.
The
members of a board shall be deemed to be public servants within the meaning of
the Indian Penal Code.
28.
(1)The
[State] Government may make any rules consistent with this part of this Act to
carry out the purposes thereof, and in particular and without prejudice to the
generality of the foregoing power may make rules-
(a)
prescribing
the amount of debt for the purposes of section 8(1) (c);
(b)
prescribing
the quorum for and regulating the procedure before a board;
(c)
prescribing
the charges to be made by a board for anything done under this Act and the
persons by whom and the manner in which such charges shall be paid;
(d)
prescribing
the records to be kept and the returns to be made by a board;
(e)
prescribing
the allowances to be paid to members of a board;
[(ee) prescribing the particulars of
debts under sub-section(1) of section 14];
(f)
prescribing
the place at which and the manner in which an agreement shall be registered;
(g)
prescribing
the form of certificate to be granted under sub-section(1) of section 20; and
(h)
generally,
for the purpose of carrying into effect the provisions of this part of this
Act.
(2) The power conferred by
this section of making rules is subject
to the condition that the rules be make after previous publication.
Penalty for breach of the rules.
29.
In
making any rule the [State] Government may direct that a breach thereof shall
be punishable with fine which may extend to fifty rupees, and, where the breach
is a continuing one, with further fine which may extend to ten rupees for every
day after the first during which the breach continues.
DAMDUPAT
30.
[“(1)
In any suit brought after the commencement of this Act in respect of a debt as
defined in section 7, advanced before the commencement of this Act no court
shall pass or execute a decree or give effect to an award in respect of such
debt for a larger sum than twice the amount of the sum found by the Court to
have been actually advanced, less any amount already received by a creditor in
excess of the amount due to him under clause (e) of sub-section(2) of section 3
of the Usurious Loans Act, 1918.”]
[“(2) In any suit in respect
of a debt as defined in section 7, advanced after the commencement of this Act,
no court shall pass or execute a decree or give effect to an award in respect
of such debt for a larger sum than twice the amount of the sum found by the
Court to have been actually advanced less any amount already received by a
creditor.
(3) Where in any proceeding
concluded on or after the 15th day of October, 1939, any decree has
been passed or an award has been given by an arbitrator against a debtor in
respect of a debt as defined in section 7, which is not in conformity with
sub-sections(1) and (2), such decree or award shall be voidable at the option
of the debtor on whose application, made within six months from the
commencement of the Punjab Relief of Indebtedness (Amendment) Act, 1940, the
Court shall set aside the decree or award, reopen the transaction and pass such
order as may be in conformity with the provisions of this section.
(4) Nothing in this section
shall be deemed to entitle any person to claim a refund of any sum already paid
except by adjustment under sub-section(1).]
DEPOSIT IN COURT
31. (1) Any person who owes money may at any time deposit in court a sum of money in full or part payment to his creditor.
(2) The court on receipt of
such deposit shall give notice thereof to the creditor and shall, on his
application, pay the sum to him.
(3) From the date of such
deposit interest shall cease to run on the sum so deposited.
Power of State Government to make rules.
32.
(1)
The [State] Government may make rules for carrying into effect the provisions
of this Part of this Act.
(2) In particular and
without prejudice to the generality of the foregoing powers such rules may
provide-
(a)
for
determining the court into which the sum shall be deposited;
(b)
the
procedure for keeping accounts of such deposits and the manner in which notices
are to be served on creditors and payments made to them.
(3) The power conferred by
this section of making rules is subject to the condition that the rules be made
after previous publication.
REDEMPTIONS OF MORTGAGES
Amendment of section 1(3)(a)
of the Redemption of Mortgages (Punjab) Act, 1913.
33.
In
section 1, sub-section (3) (a) of the Redemption of Mortgages ( Punjab) Act,
1913 for the figures and word “30 acres” the figures and word “50 acres” shall
be substituted and in sub-section(3) (b) of the same section for the figures
“1,000” the figures “5,000” shall be substituted.
MISCELLANEOUS AMENDMENTS OF THE CIVIL LAW
Immunity from arrests.
34.
[No
debtor as defined in section 7 of this Act, shall be arrested or imprisoned in
execution of a decree for money, whether passed before or after the
commencement of this Act.]
Amendment of section 60 of the Code of Civil Procedure, 1908.
35.
[
In section 60 of the code of Civil Procedure 1908-
(a)
in
sub-section 1 [ in the proviso],-
(i)
in
clause (c), for words “occupied by him” the following words shall be
substituted namely:-
“not proved by
decree-holder to have been let out on rent or lent to persons other than his father, mother, wife, son, daughter,
daughter-in-law, brother, sister or other dependants or left vacant for a
period of a year or more;”
(ii) after
clause (c), the following clauses shall be deemed to be inserted, namely:
“(cc)
Milch animals, whether in milk or in
calf, kids, animals used for the purposes of transport or draught cart and open
spaces or enclosures belonging to an agriculturist and required for use in case
of need for tying cattle, parking carts, or stacking fodder or manure;
(ccc)
one
main residential house and other buildings attached to it (with the material
and the sites thereof and the land immediately appurtenant thereto and
necessary for the enjoyment) belonging to a judgement-debtor other than an
agriculturist and occupied by him;
[
Provided that the protection afforded by this clause shall not extend to any
property specifically charged with the debt sought to be recovered].
(b)
after
sub-section(2), the following sub-sections shall be deemed to be inserted,
namely:-
“(3) Notwithstanding any other law for the time being in force an
agreement by which a debtor agrees to waive any benefit of any exemption under
this section shall be void.
(4) For the purposes of this section the “agriculturist” shall
include every person whether as owner, tenant, partner or agricultural laborer
who depends for his livelihood mainly on income from agricultural land as
defined in the Punjab Alienation of
Land Act, 1900.
(5)
Every
member of a tribe notified as agricultural under the Punjab Alienation of Land
Act, 1900 band every member of a scheduled caste shall be presumed to be an
agriculturist until the contrary is proved.
(6)
No
order for attachment shall be made unless the court is satisfied that the
property sought to be attached is not exempt from attachment or sale.
Amendment of Order XXI, rule
2 of the code of civil procedure 1908.
36.
In
order XXI, rule 2, of the Code of Civil
Procedure, 1908 sub-rule(3)
shall be committed.
Penalty for false claims of
a principal sum.
37.
Where,
in a suit for the recovery of a loan, the court is satisfied that an entry relating
to the loan has been made [by the creditor or at his instance] in any document
showing the amount of the sum advance to be in excess of that actually advanced
plus legitimate expenses incurred, the court [shall disallow the whole claim
with costs, unless the creditor satisfies the court that the wrong entry was
accidental or was the result of a bona fide mistake.]
Penalty for use of documents
containing false entries.
38.
[(1)
If any party to a suit for the recovery of a loan dishonestly uses in such suit
any document in which he is aware that there is any statement or entry relating
to such loan which is false in any material particulars he shall on conviction
be punished with imprisonment of either description which may extend to three
months or with a fine not exceeding one thousand rupees or with both.
(2) If the court is
satisfied after such preliminary enquiry, if any, as it thinks necessary that
there is ground for enquiring into an offence under sub-section(1) the court
may record a finding to that effect and
prefer a complaint of the offence in writing to a magistrate of the first class
having jurisdiction, and such magistrate shall deal with such complaint in the
manner laid down in the code of criminal procedure, 1898].