Customs Tariff Act

November 30, 2014

Section 1. Short title, extent and commencement.

1. This Act may be called the Customs Tariff Act, 1975.

2. It extends to the whole of India.

3. It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

Section 2. Duties specified in the Schedules to be levied.

The rates at which duties of customs shall be levied under the Customs Act, 1962 (52 of 1962), are specified in the First and Second Schedules.

Section 3. Levy of additional duty equal to excise duty.

1. Any article which is imported into India shall, in addition, be liable to a duty (hereafter in this section referred to as the additional duty) equal to the excise duty for the time being leviable on a like article if produced or manufactured in India and if such excise duty on a like article is leviable at any percentage of its value, the additional duty to which the imported article shall be so liable shall be calculated at that percentage of the value of the imported article.

*Provided that in case of any alcoholic liquor for human consumption imported into India, the Central Government may, by notification in the official gazette, specify the rate of additional duty having regard to the excise duty for the time being leviable on a like alcoholic liquor produced are manufactured in different states, are, if a like alcoholic liquor is not produced or manufactured in any state, then, having regard to excise duty which would be leviable for the time being in different states on the class or description of alcoholic liquor to which such imported alcoholic liquor belongs.

Explanation.- In this section, the expression “the excise duty for the time being leviable on a like article if produced or manufactured in India” means the excise duty for the time being in force which would be leviable on a like article if produced or manufactured in India, or, if a like article is not so produced or manufactured, which would be leviable on the class or description of articles to which the imported article belongs, and where such duty is leviable at different rates, the highest duty.

2. For the purpose of calculating under this section, the additional duty on any imported article, where such duty is leviable at any percentage of its value, the value of the imported article shall, notwithstanding anything contained in Section 14 of the Customs Act, 1962 (52 of 1962), be the aggregate of —

i. the value of the imported article determined under sub-section (1) of the said Section 14 or the tariff value of such article fixed under sub-section (2) of that section, as the case may be; and

ii. any duty of customs chargeable on that article under Section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include (with retrospective effect from 1st day of March 2002)-

a. the special additional duty referred to in section 3(A)

b. the safeguard duty referred to in section 8B and 8C;

c. the countervailing duty referred to in section 9.

d. anti-dumping duty referred to in section 9A and

e. the duty referred to in sub section (1).

(i) In relation to which it is required, under the provisions of the standards of Weights and Measures Act, 1976 or the rules made thereunder or under any other law for the time being in force, to declare on the package thereof the retail sale price of such article; and

(ii) where the like article produced or manufactured in India, or in case where such like article is not so produced or manufactured, then, the class or description of articles to which the imported article belongs, is the goods specified by notification in the Official Gazette under sub-section (1) of section 4A of the Central Excise Act, 1944.

Explanation:- Where on any imported article more than one retail sale price is declared, the maximum of such retail sale price shall be deemed to be the retail sale price for the purposes of this section.

3. If the Central Government is satisfied that it is necessary in the public interest to levy on any imported article whether on such article duty is leviable under sub-section (1) or not such additional duty as would counter-balance the excise duty leviable on any raw materials, components and ingredients of the same nature as, or similar to those, used in the production or manufacture of such article, it may, by notification in the Official Gazette, direct that such imported article shall, in addition, be liable to an additional duty representing such portion of the excise duty leviable on such raw materials, components and ingredients as, in either case, may be determined by rules made by the Central Government in this behalf.

4. In making any rules for the purposes of sub-section (3), the Central Government shall have regard to the average quantum of the excise duty payable on the raw materials, components or ingredients used in the production or manufacture of such like article.

5. The duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.

6. The provisions of the Customs Act, 1962 (52 of 1962), and the rules and regulations made thereunder, including those relating to drawbacks, refunds and exemption from duties, shall, so far as may be, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act.

Section 3A. Special additional duty.

1. Any article which is imported into India shall in addition be liable to a duty (hereinafter referred to in this section as the special additional duty), which shall be levied at a rate to be specified by the Central Government, by notification in the Official Gazette, having regard to the maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India :

Provided that until such rate is specified by the Central Government, the special additional duty shall be levied and collected at the rate of eight per cent of the value of the article imported into India.

Explanation.- In this sub-section, the expression “maximum sales tax, local tax or any other charges for the time being leviable on a like article on its sale or purchase in India” means the maximum sales-tax, local tax, other charges for the time being in force, which shall be leviable on a like article, if sold or purchased in India, or if a like article is not so sold or purchased which shall be leviable on the class or description of articles to which the imported article belongs.

2. For the purpose of calculating under this section the special additional duty on any imported article, the value of the imported article shall, notwithstanding anything contained in section 14 of the Customs Act, 1962 (52 of 1962) or section 3 of this Act, be the aggregate of-

i. the value of the imported article determined under sub-section (1) of section 14 of the Customs Act, 1962 (52 of 1962) or the tariff value of such article fixed under sub-section (2) of that section, as the case may be;

ii. any duty of customs chargeable on that article under section 12 of the Customs Act, 1962 (52 of 1962), and any sum chargeable on that article under any law for the time being in force as an addition to, and in the same manner as, a duty of customs, but does not include (with retrospective effect from 1st day of March 2002) -

a. the safeguard duty referred to in section 8B and 8C;

b. the countervailing duty referred to in section 9.

c. anti-dumping duty referred to in section 9A;

d. special additional duty referred to in sub-section (1) and

iii. the additional duty of customs chargeable on that article under section 3 of this Act.

The duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.

The provisions of the Customs Act, 1962 (52 of 1962), and the rules and regulations made thereunder, including those relating to refunds and exemptions from duties shall, so far as may be, apply to the duty chargeable under this section as they apply in relation to the duties leviable under that Act.

Nothing contained in this section shall apply to any article, which is chargeable to additional duties levied under sub-section (1) of section 3 of the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957).

Section 4. Levy of duty where standard rate and preferential rate are specified.

1. Where in respect of any article a preferential rate of revenue duty is specified in the First Schedule, or is admissible by virtue of a notification under Section 25 of the Customs Act, 1962 (52 of 1962), the duty to be levied and collected shall be at the standard rate, unless the owner of the article claims at the time of importation that it is chargeable with a preferential rate of duty, being the produce or manufacture of such preferential area as is notified under sub-section (3) and the article is determined, in accordance with the rules made under sub-section (2), to be such produce or manufacture.

2. The Central Government may, by notification in the Official Gazette, make rules for determining if any article is the produce or manufacture of any preferential area.

3. For the purposes of this section and the First Schedule, “preferential area” means any country or territory which the Central Government may, by notification in the Official Gazette, declare to be such area.

4. Notwithstanding anything contained in sub-section (1), where the Central Government is satisfied that, in the interests of trade including promotion of exports, it is necessary to take immediate action for discontinuing the preferential rate, or increasing the preferential rate to a rate not exceeding the standard rate, or decreasing the preferential rate, in respect of an article specified in the First Schedule, the Central Government may, by notification in the Official Gazette, direct an amendment of the said Schedule to be made so as to provide for such discontinuance of, or increase or decrease, as the case may be, in the preferential rate.

5. Every notification issued under sub-section (3) or sub-section (4) shall, as soon as may be after it is issued, be laid before each House of Parliament.

Also see Notification 101/82-Cus., dated 1-4-1982

Section 5. Levy of a lower rate of duty under a trade agreement.

1. Whereunder a trade agreement between the Government of India and the Government of a foreign country or territory, duty at a rate lower than that specified in the First Schedule is to be charged on articles which are the produce or manufacture of such foreign country or territory, the Central Government may, by notification in the Official Gazette, make rules for determining if any article is the produce or manufacture of such foreign country or territory and for requiring the owner to make a claim at the time of importation, supported by such evidence as may be prescribed in the said rules, for assessment at the appropriate lower rate under such agreement.

2. If any question arises whether any trade agreement applies to any country or territory, or whether it has ceased to apply to India or any foreign country or territory, it shall be referred to the Central Government for decision and the decision of the Central Government shall be final and shall not be liable to be questioned in any court of law.

Section 6. Power of Central Government to levy protective duties in certain cases.

1. Where the Central Government, upon a recommendation made to it in this behalf by the Tariff Commission established under the Tariff Commission Act, 1951 (50 of 1951), is satisfied that circumstances exist which render it necessary to take immediate action to provide for the protection of the interests of any industry established in India, the Central Government may, by notification in the Official Gazette, impose on any goods imported into India in respect of which the said recommendation is made, a duty of customs of such amount, not exceeding the amount proposed in the said recommendation, as it thinks fit.

2. Every duty imposed on any goods under sub-section (1) shall, for the purposes of this Act, be deemed to have been specified in the First Schedule as the duty leviable in respect of such goods.

3. Where a notification has been issued under sub-section (1), the Central Government shall, unless the notification is in the meantime rescinded, have a Bill introduced in Parliament, as soon as may be, but in any case during the next session of Parliament following the date of the issue of the notification to give effect to the proposals in regard to the continuance of a protective duty of customs on the goods to which the notification relates, and the notification shall cease to have effect when such Bill becomes law, whether with or without modifications, but without prejudice to the validity of anything previously done thereunder :

Provided that if the notification under sub-section (1) is issued when Parliament is in session, such a Bill shall be introduced in Parliament during that session :

Provided further that where for any reason a Bill as aforesaid does not become law within six months from the date of its introduction in Parliament, the notification shall cease to have effect on the expiration of the said period of six months, but without prejudice to the validity of anything previously done thereunder.

Section 7. Duration of protective duties and power of Central Government to alter them.

1. When the duty specified in respect of any article in the First Schedule is characterized as protective in Column (5) of that Schedule, that duty shall have effect only up to and inclusive of the date, if any, specified in that Schedule.

2. Where in respect of any such article the Central Government is satisfied after such inquiry as it thinks necessary that such duty has become ineffective or excessive for the purpose of securing the protection intended to be afforded by it to a similar article manufactured in India and that circumstances exist which render it necessary to take immediate action, it may, by notification in the Official Gazette, increase or reduce such duty to such extent as it thinks necessary.

3. Every notification under sub-section (2), insofar as it relates to increase of such duty, shall be laid before each House of Parliament if it is sitting as soon as may be after the issue of the notification, and if it is not sitting within seven days of its re-assembly, and the Central Government shall seek the approval of Parliament to the notification by a resolution moved within a period of fifteen days beginning with the day on which the notification is so laid before the House of the People and if Parliament makes any modification in the notification or directs that the notification should cease to have effect, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, but without prejudice to the validity of anything previously done thereunder.

4. For the removal of doubts, it is hereby declared that any notification issued under sub-section (2), including any such notification approved or modified under sub-section (3), may be rescinded by the Central Government at any time by notification in the Official Gazette.

Section 8. Emergency power of Central Government to increase or levy export duties.

1. Where, in respect of any article, whether included in the Second Schedule or not, the Central Government is satisfied that the export duty leviable thereon should be increased or that an export duty should be levied, and that circumstances exist which render it necessary to take immediate action, the Central Government may, by notification in the Official Gazette, direct an amendment of the Second Schedule to be made so as to provide for an increase in the export duty leviable or, as the case may be, for the levy of an export duty, on that article.

2. The provisions of sub-sections (3) and (4) of Section 7 shall apply to any notification issued under sub-section (1) as they apply in relation to any notification increasing duty issued under sub-section (2) of Section 7.

Section 8A. Emergency power of Central Government to increase im port duties.

1. Where in respect of any article included in the First Schedule, the Central Government is satisfied that the import duty leviable thereon under section 12 of the Customs Act, 1962 (52 of 1962) should be increased and that circumstances exist which render it necessary to take immediate action, it may, by notification in the Official Gazette, direct an amendment of that Schedule to be made so as to provide for an increase in the import duty leviable on such article to such extent as it thinks necessary:

Provided that the Central Government shall not issue any notification under this sub-section for substituting the rate of import duty in respect of any article as specified by an earlier notification issued under this sub-section by that Government before such earlier notification has been approved with or without modifications under sub-section (2).

2. The provisions of sub-sections (3) and (4) of section 7 shall apply to any notification issued under sub-section (1) as they apply in relation to any notification increasing duty issued under sub-section (2) of section 7.

Section 8B. Power of Central Government to impose safeguard duty.

1. If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any article is imported into India in such increased quantities and under such conditions so as to cause or threatening to cause serious injury to domestic industry, then, it may, by notification in the Official Gazette, impose a safeguard duty on that article:

Provided that no such duty shall be imposed on an article originating from a developing country so long as the share of imports of that article from that country does not exceed three per cent or where the article is originating from more than one developing countries, then, so long as the aggregate of the imports from all such countries taken together does not exceed nine percent of the total imports of that article into India.

* Provided further that the Central Government may, by notification in the Official Gazette, exempt such quantity of any article as it may specify in the notification, when imported from any country or territory into India, from payment of the whole or part of the safeguard duty leviable thereon.

2. The Central Government may, pending the determination under sub-section (1), impose a provisional safeguard duty under this sub-section on the basis of a preliminary determination that increased imports have caused or threatened to cause serious injury to a domestic industry :

Provided that where, on final determination, the Central Government is of the opinion that increased imports have not caused or threatened to cause serious injury to a domestic industry, it shall refund the duty so collected :

Provided further that the provisional safeguard duty shall not remain in force for more than two hundred days from the date on which it was imposed.

* (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any safeguard duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred per cent. export-oriented undertaking or a unit in a free trade zone or in a special economic zone.

Explanation:- For the purposes of this section, the expressions “hundred per cent. export-oriented undertaking”, “free trade zone” and “special economic zone” shall have the meanings assigned to them in Explanation 2 to sub-section (1) of section 3 of Central Excise Act, 1944.

3. The duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.

4. The duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of four years from the date of such imposition :

Provided that if the Central Government is of the opinion that the domestic industry has taken measures to adjust to such injury or threat thereof and it is necessary that the safeguard duty should continue to be imposed, it may extend the period of such imposition :

Provided further that in no case the safeguard duty shall continue to be imposed beyond a period of ten years from the date on which such duty was first imposed.

5. The Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for safeguard duty may be identified and for the manner in which the causes of serious injury or causes of threat of serious injury in relation to such articles may be determined and for the assessment and collection of such safeguard duty.

6. For the purposes of this section, -

a. “developing country” means a country notified by the Central Government in the Official Gazette for the purposes of this section;

b. “domestic industry” means the producers -

i. as a whole of the like article or a directly competitive article in India; or

ii. whose collective output of the like article or a directly competitive article in India constitutes a major share of the total production of the said article in India;

c. “serious injury” means an injury causing significant overall impairment in the position of a domestic industry;

d. “threat of serious injury” means a clear and imminent danger of serious injury.

7. Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament.

Section 8C. Power of Central Government to impose transitional product specific safeguard duty on imports from the people’s Republic of China.

1. Notwithstanding anything contained in section 8B,

if the Central government after conducting such enquiry as it deems fit, is satisfied that any article is imported into India, from the people’s Republic of China, in such condition so as to cause or threatening to cause market disruption to domestic industry, then it may, by notification in the official Gazette, impose a safeguard duty on that article:

Provided that the central government may, by notification in the official Gazette, exempt such quantity of any article as it may specify in the notification, when imported from people’s republic of China into India, from payment of the whole or part of the safeguard duty leviable thereon.

2. The Central government may, pending the determination under sub-section (1), impose a provisional safeguard duty under this sub-section on the basis of a preliminary determination that increased imports have caused or threatened to cause market disruption to a domestic industry:

Provided that where, on final determination, the Central government is of the opinion that increased imports have not caused or threatened to cause market disruption to a domestic industry, it shall refund the duty so collected:

Provided further that the provisional safeguard duty shall not remain in force for more than two hundred days from the date on which it was imposed.

3. Notwithstanding anything contained in sub- (1) and (2), a notification issued under sub-section (1) or any safeguard duty imposed under sub-section (2) , unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred percent. Export-oriented undertaking or a unit in a free trade zone or in a special economic zone.

Explanation:-For the purpose of this section , the expressions “hundred percent. Export-oriented undertaking”, “free trade zone” and “special economic zone” shall have the meanings respectively assigned to them in Explanation 2 to sub-section (1) of section 3 of the central Excise Act, 1944.

4. The duty chargeable under this section shall be in addition to any other duty imposed under this act or under any other law for the time being in force.

5. The duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of four years from the date of such imposition;

Provided that if the Central government is of the opinion that such article continues to be imported into India, from people’s Republic of china, in such increased quantities so as to cause or threatening to cause market disruption to domestic industry and the safeguard duty should continue to be imposed, it may extend the period of such imposition for a period not beyond the period of ten years from the date on which the safeguard duty was first imposed.

6. The central Government may, be notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for safeguard duty may be identified and for the manner in which the cause of market disruption or cause of threat of markets disruption in relation to such articles may be determined and for the assessment and collection of such safeguard duty.

7. For the purpose of this section,-

” domestic industry” means the producers—

i. as a whole of a like article or a directly competitive article in India ; or

ii. Whose collective output of a like article or a directly competitive article in India constitutes a major share of the total production of the said article in India;

a. ” Market disruption” shall be caused whenever imports a like article or a directly competitive article produced by the domestic industry, increase rapidly, either absolutely or relatively, so as to be a significantly cause of material injury, or threat of material injury, to the domestic industry;

b. “Threat of market disruption” means a clear and imminent danger of market disruption.

8. Every notification issued under this section shall, as son as may be after it is issued, be laid before each house of Parliament;

Refund of additional duty of Customs in certain cases.

1. Notwithstanding anything contained in section 25 of the Customs Act, barge mounted power plants, falling under heading 98.01 of the First Schedule to the Customs Tariff Act, shall be deemed to have been exempted from the whole of the additional duty of Customs leviable thereon under sub-section (1) of section 3 of the customs Tariff Act, within the period commencing from the 8th December,2000 and ending with the 28th february,2002 (both the dates inclusive) and accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, barge mounted power plants shall be deemed to be, and always to have been, exempted from the said additional duty of customs as if the exemption given by this sub-section had been in force at all material times.

2. For the purpose of sub-section (1), the central Government shall have and shall be deemed to have the power to exempt the goods referred to in the said sub-section with retrospective effect as the Central Government had the power to exempt the said goods under sub-section (1) of section 25 of the customs act, retrospectively at all material times.

3. Refund shall be made of all such additional duty of customs which have been collected but which would have not been so collected if the exemption referred to in sub-section (1 had been in force at all material times.

4. Notwithstanding anything contained in section 27 of the Customs Act, an application for the claim of refund of the additional duty of customs under sub-section (3) shall be made with in six months from the date on which the Finance Bill, 2002 receive the assent of the President.

Section 9. Countervailing duty on subsidized articles.

1. Where any country or territory pays, bestows, directly or indirectly, any subsidy upon the manufacture or production therein or the exportation therefrom of any article including any subsidy on transportation of such article, then, upon the importation of any such article into India, whether the same is imported directly from the country of manufacture, production or otherwise, and whether it is imported in the same condition as when exported from the country of manufacture or production or has been changed in condition by manufacture, production or otherwise, the Central Government may, by notification in the Official Gazette, impose a countervailing duty not exceeding the amount of such subsidy.

Explanation. - For the purposes of this section, a subsidy shall be deemed to exist if -

a. there is financial contribution by a Government, or any public body within the territory of the exporting or producing country, that is, where -

i. a Government practice involves a direct transfer of funds (including grants, loans and equity infusion), or potential direct transfer of funds or liabilities, or both;

ii. Government revenue that is otherwise due is foregone or not collected (including fiscal incentives);

iii. a Government provides goods or services other than general infrastructure or purchases goods;

iv. a Government makes payments to a funding mechanism, or entrusts or directs a private body to carry out one or more of the type of functions specified in clauses (i) to (iii) above which would normally be vested in the Government and the practice in, no real sense, differs from practices normally followed by Governments; or

b. a Government grants or maintains any form of income or price support, which operates directly or indirectly to increase export of any article from, or to reduce import of any article into, its territory, and a benefit is thereby conferred.

2. The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the amount of subsidy, impose a countervailing duty under this sub-section not exceeding the amount of such subsidy as provisionally estimated by it and if such countervailing duty exceeds the subsidy as so determined, -

a. the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such countervailing duty; and

b. refund shall be made of so much of such countervailing duty which has been collected as is in excess of the countervailing duty as so reduced.

3. Subject to any rules made by the Central Government, by notification in the Official Gazette, the countervailing duty under sub-section (1) or sub-section (2) shall not be levied unless it is determined that -

a. the subsidy relates to export performance;

b. the subsidy relates to the use of domestic goods over imported goods in the export article; or

c. the subsidy has been conferred on a limited number of persons engaged in manufacturing, producing or exporting the article unless such a subsidy is for-

i. research activities conducted by or on behalf of persons engaged in the manufacture, production or export;

ii. assistance to disadvantaged regions within the territory of the exporting country; or

iii. assistance to promote adaptation of existing facilities to new environmental requirements.

4. If the Central Government, is of the opinion that the injury to the domestic industry which is difficult to repair, is caused by massive imports in a relatively short period, of the article benefiting from subsidies paid or bestowed and where in order to preclude the recurrence of such injury, it is necessary to levy countervailing duty retrospectively, the Central Government may, by notification in the Official Gazette, levy countervailing duty from a date prior to the date of imposition of countervailing duty under sub-section (2) but not beyond ninety days from the date of notification under that sub-section and notwithstanding anything contained in any law for the time being in force, such duty shall be payable from the date as specified in the notification issued under this sub-section.

5. The countervailing duty chargeable under this section shall be in addition to any other duty imposed under this Act or any other law for the time being in force.

6. The countervailing duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:

Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of subsidization and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension:

Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the countervailing duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.

7. The amount of any such subsidy as referred to in sub-section (1) or sub-section (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the identification of such article and for the assessment and collection of any countervailing duty imposed upon the importation thereof under this section.

8. Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament.

Section 9A. Anti-dumping duty on dumped articles.

1. Where any article is exported from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article.

Explanation. - For the purposes of this section, -

a. “margin of dumping”, in relation to an article, means the difference between its export price and its normal value;

b. “export price”, in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6);

c. “normal value”, in relation to an article, means-

i. the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or

ii. when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either -

a. comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

b. the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and gen eral costs, and for profits, as determined in accordance with the rules made under sub-section (6):

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.

2. The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such anti-dumping duty exceeds the margin as so determined : -

a. the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such anti-dumping duty; and

b. refund shall be made of so much of the anti-dumping duty which has been collected as is in excess of the anti-dumping duty as so reduced.

* (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred per cent. export-oriented undertaking or a unit in a free trade zone or in a special economic zone.

Explanation:- For the purposes of this section, the expressions “hundred per cent. export-oriented undertaking”, “free trade zone” and “special economic zone” shall have the meanings assigned to them in Explanation 2 to sub-section (1) of section 3 of Central Excise Act, 1944.

article under inquiry, is of the opinion that -

i. there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and

ii. the injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously under-mine the remedial effect of the anti-dumping duty liable to be levied,

the Central Government may, by notification in the Official Gazette, levy anti-dumping duty retrospectively from a date prior to the date of imposition of anti-dumping duty under sub-section (2) but not beyond ninety days from the date of notification under that sub-section, and notwithstanding anything contained in any law for the time being in force, such duty shall be payable at such rate and from such date as may be specified in the notification.

4. The anti-dumping duty chargeable under this section shall be in addition to any other duty imposed under this Act or any other law for the time being in force.

5. The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:

Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension :

Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.

6. The margin of dumping as referred to in sub-section (1) or sub-section (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for any anti-dumping duty under this section may be identified, and for the manner in which the export price and the normal value of, and the margin of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty.

7. Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament.

8. The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, relating to non-levy, short levy, refunds and appeals shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act.

Section 9AA. Refund of anti-dumping duty in certain cases.

1. Where an importer proves to the satisfaction of the Central Government that he has paid any anti-dumping duty imposed under sub-section (1) of section 9A on any article, in excess of the actual margin of dumping in relation to such article, he shall be entitled to refund of such excess duty :

Provided that such importer shall not be entitled to refund of so much of such excess duty under this sub-section which is refundable under sub-section (2) of section 9A.

Explanation - For the purposes of this sub-section, the expressions, “margin of dumping”, “export price” and “normal value” shall have the meanings respectively assigned to them in the Explanation to sub-section (1) of section 9A.

2. The Central Government may, by notification in the Official Gazette, make rules to -

i. provide for the manner in which and the time within which the importer may make application for the purposes of sub-section (1;

ii. authorise the officer of the Central Government who shall dispose of such application on behalf of the Central Government within the time specified in such rules; and

iii. provide the manner in which the excess duty referred to in sub-section (1) shall be -

(A) determined by the officer referred to in clause (ii); and

(B) refunded by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, after such determination.

Section 9B. No levy under section 9 or section 9A in certain cases.

1. Notwithstanding anything contained in section 9 or section 9A,-

a. no article shall be subjected to both countervailing duty and anti-dumping duty to compensate for the same situation of dumping or export subsidization;

b. the Central Government shall not levy any countervailing duty or anti-dumping duty -

i. under section 9 or section 9A by reasons of exemption of such articles from duties or taxes borne by the like article when meant for consumption in the country of origin or exportation or by reasons of refund of such duties or taxes;

ii. under sub-section (1) of each of these sections, on the import into India of any article from a member country of the World Trade Organisation or from a country with whom Government of India has a most favoured nation agreement (hereinafter referred as a specified country), unless in accordance with the rules made under sub-section (2) of this section, a determination has been made that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India; and

iii. under sub-section (2) of each of these sections, on import into India of any article from the specified countries unless in accordance with the rules made under sub-section (2) of this section, a preliminary findings has been made of subsidy or dumping and consequent injury to domestic industry; and a further determination has also been made that a duty is necessary to prevent injury being caused during the investigation:

Provided that nothing contained in sub-clauses (ii) and (iii) of clause (b) shall apply if a countervailing duty or an anti-dumping duty has been imposed on any article to prevent injury or threat of an injury to the domestic industry of a third country exporting the like articles to India;

c. the Central Government may not levy -

i. any countervailing duty under section 9, at any time, upon receipt of satisfactory voluntary undertakings from the Government of the exporting country or territory agreeing to eliminate or limit the subsidy or take other measures concerning its effect, or the exporter agreeing to revise the price of the article and if the Central Government is satisfied that the injurious effect of the subsidy is eliminated thereby;

ii. any anti-dumping duty under section 9A, at any time, upon receipt of satisfactory voluntary undertaking from any exporter to revise its prices or to cease exports to the area in question at dumped price and if the Central Government is satisfied that the injurious effect of dumping is eliminated by such action.

2. The Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which any investigation may be made for the purposes of this section, the factors to which regard shall be at in any such investigation and for all matters connected with such investigation.

Section 9C. Appeal.

1. An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal).

2. Every appeal under this section shall be filed within ninety days of the date of order under appeal:

Provided that the Appellate Tribunal may entertain any appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

3. The Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed against.

4. The provisions of sub-sections (1), (2), (5) and (6) of section 129C of the Customs Act, 1962 (52 of 1962) shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962 (52 of 1962).

5. Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President of the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member.

Section 10. Rules to be laid before Parliament.

Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule, or both Houses agree that the rule should not be made, the rule shall, thereafter, have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Section 11. Power of Central Government to alter duties under certain circumstances.

1. Where the Central Government is satisfied that it is necessary so to do for the purpose of giving effect to any agreement entered into before the commencement of this Act with a foreign Government, it may, by notification in the Official Gazette, increase or reduce the duties referred to in section 2 to such extent as each case may require :

Provided that no notification under this sub-section increasing or reducing the duties as aforesaid shall be issued by the Central Government after the expiration of a period of one year from the commencement of this Act.

2. Every notification issued under sub-section (1) shall, as soon as may be after it is issued, be laid before each House of Parliament.

Section 12. Repeal and saving.

1. The Indian Tariff Act, 1934 (32 of 1934), and the Indian Tariff (Amendment) Act, 1949 (1 of 1949), are hereby repealed.

2. Notwithstanding the repeal of any of the Acts mentioned in sub-section (1), anything done or any action taken (including any notification published and any rules and orders made or deemed to have been made under the provisions of those Acts and in force immediately before the commencement of this Act) shall, insofar as such thing or action is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the provisions of this Act and shall continue in force accordingly until superseded by anything done or any action taken under this Act.

Section 13. Consequential amendment of Act 52 of 1962.

In the Customs Act, 1962, in sub-section (1) of Section 12 and in sub-section (1) of Section 14, for the words and figures “Indian Tariff Act, 1934″, the words and figures “Customs Tariff Act, 1975″ shall be substituted.

Limitation Act

November 30, 2014

Section 1. Short title, extent, and commencement

1. This Act may be called the Limitation Act,1963.

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 be notification in the Official Gazette, appoint.

Section 2. Definitions:

In this Act, unless the context otherwise requires.

(a) “applicant” includes

(i) petitioner;

(ii) any person from or through whom an applicant derives his right to apply;

(iii) any person whose estate is represented by the applicant as executor, administrator or other representative;

(b) “application” includes a petitions;

(c) “bill of exchange” includes a hundi and a cheque;

(d) “bond” includes any instrument whereby a person obliges himself to pay money to another on condition that the obligation shall be void if a specified act is performed, or is not performed as the case may be;

(e) “defendant” includes

(i) any person from or through whom a defendant derives his liability to be sued;

(ii) any person whose estate is represented by the defendant as executor, administrator or other representative;

(f) “easement” includes a right not arising from contract, by which one person is entitled to remove and appropriate for his own profit any part of the soil belonging to another or anything growing in, or attached to, or subsisting upon the land of another;

(g) “foreign country’” means any country other than India;

(h) “good faith” nothing shall be deemed to be done in good faith which is not done with due care and attention;

(i) “plaintiff” includes

(i) any person from or through whom a plaintiff derives his right to sue; (ii) any person whose estate is represented by the plaintiff as executor, administrator or other representative;

(j) “period of limitation” means the period of limitation prescribed for any suit, appeal or application by the Schedule, and “prescribed period” means the period of limitation computed in accordance with the provisions of this Act;

(k) “promissory-note” means any instrument whereby the maker engages absolutely to pay a specified sum of money to another at time therein limited, or on demand, or at sight;

(l) “suit” does not include an appeal or an application;

(m) “tort” means a civil wrong which is not exclusively the breach of a contract or the breach of trust;

(n) “trustee” does not include a benamidar, a mortgage remaining in possession after the mortgage has been satisfied, or a person in a wrongful possession without title.

Part 3 – Limitation of Suits, Appeals and Applications 

Section 3. Bar of limitation

(1) Subject to the provisions contained in sections 4 to 24 (inclusive) every suit instituted, appeal preferred, and application made after the prescribed period shall be dismissed although limitation has not been set up as defense;

(1) For the purposes of this Act,

(a) A suit is instituted,

(i) in an ordinary case, when the plaint is presented to the proper officer;

(ii) in the case of a pauper, when his application for leave to sue is a pauper is made; and

(ii) in the case of a claim against a company which is being wound up by the court, when the claimant first sends in his claim to the official liquidator;

(b) any claim by way of a set-off or a counter claim, shall be treated as a separate suit and shall be deemed to have been instituted-

(i) in the case of a set-off, on the dame date as the suit in which the set off is pleaded;

(ii) in the case a counter claim, on the date on which the counter claim is made in court;

(c) an application by notice of motion in a High Court is made when the application is presented to the proper officer of that court

Section 4. Expiry of prescribed period when court is closed

When the prescribed period for any suit, appeal or application expires on a day when the court is closed, the suit, appeal or application may be instituted, preferred or made on the day when the court reopens.

Explanation – A court shall be deemed to be closed on any day within the meaning of this section if during any part of its normal working hours it remains closed on that day.

Section 5.Extension of prescribed period in certain cases

Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908 (5 of 1908) may be admitted after the prescribed period, if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.

Explanation – The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section

Section 6.Legal disability

Where a person entitled to institute a suit or make an application for the execution of a decree is, at the time from which the prescribed period is to be reckoned, a minor or insane, or an idiot, he may institute the suit or make the application within the same period after the disability has ceases, as would otherwise have been allowed from the time specified therefore in the third column of the Schedule.

(2) Where such person is, at the time from which the prescribed period it to be reckoned, affected by two such disabilities, or where, before his disability has ceased, he is affected by another disability, he may institute the suit or make the application within the same period after both disabilities have ceased, as would otherwise have been allowed from the time so specified.

(3) Where the disability continues up-to the death of that person, his legal representative may institute the suit or make the application within the same period after the death, as would otherwise have been allowed from the time so specified.

(4) Where the legal representative referred to in sub-section (3) is, at the date of the death of the person whom he represents. affected by any such disability, the rules contained in sub-sections (1) and (2) shall apply.

(5) Where a person under disability dies after the disability ceases but within the period allowed to him under this section, his legal representative may institute the suit or make the application within the same period after the death, as would otherwise have been available to that person had he not died.

Explanation – For the purposes of this section ‘minor’ includes a child in the womb.

Notes – This section corresponds with section 6 of the old Act with some changes.

Section 7. Disability of one of several persons

Where one of several persons jointly entitled to institute a suit or make an application for the execution of a decree is under any such disability, and a discharge can be given without the concurrence of such person, time will run against them all; but, where no such discharge can be given, time will not run as against any of them until one of them becomes capable of giving such discharge without the concurrence of the others or until the disability has cased.

Explanation I – This section applies to a discharge from every kind of liability, including a liability in respect of any immovable property.

Explanation II – For the purposes of this section, the manager of a Hindu undivided family governed by the Mitakshara law shall be deemed to be capable of giving a discharge without the concurrence of the other members of the family only if he is in management of the joint-family property.

Section 8. Special exceptions

Nothing in section 6 or in section 7 applies to suits to enforce rights of pre-emotion, or shall be deemed to extend, for more than three years from the cessation of the disability or the death of the person affected thereby the period of limitation for any suit or application.

Section 9. Continuous running of time 

Where once time has begun to run, no subsequent disability or inability to institute a suit or make an application stops it:

Provided that where letters of administration to the estate of a creditor have been granted to his debtor, the running of the period of limitation for a suit to recover the debt shall be suspended while the administration continues.

Section 10. Suits against trustees and their representatives

Notwithstanding anything contained in the foregoing provisions of this Act, no suit against a person in whom property has become vested if trust for any specific purpose, or against his legal representatives or assigns (not being assigns for valuable consideration), for the purpose of following in his or their hands such property, or the proceeds thereof or for an account of such property or proceeds, shall be barred by any length of time.

Explanation – For the purposes of this section any property comprised in a Hindu, Muslim or Buddhist religious or charitable endowment shall be deemed to be property vested in trust for a specific purpose and the manager of the property shall be deemed to be the trusted thereof.

Section 11. Suits on contracts entered into outside the territories to which the Act extends 

(1) Suits instituted in the territories to which this Act extends on contracts entered into the State of Jammu and Kashmir or in a foreign country shall be rules of limitation contained in this Act.

(2) No rule of limitation in force in the State of Jammu and Kashmir or in a foreign country shall be a defense to a suit instituted in the said territories on a contract entered into in that State or in a foreign country unless –

(a) the rule has extinguished the contract; and

(b) the parties were domiciled in that State or in the foreign country during the period prescribed by such rule.

Part 3 – Computation of Period of Limitation

Section 12. Exclusion of time in legal proceedings

(1) In computing the period of limitation for any suit, appeal or application, the day from which such period is to be reckoned shall be excluded.

(2) In computing the period of limitation for an appeal or an application for leave to appeal or for revision or for review of a judgment, the day on which the judgment complained of was pronounced and the time requisite for obtaining a copy of the decree, sentence or order appealed from or sought to be revised or reviewed shall be excluded.

(3) Where a decree or order is appealed from or sought to be revised or reviewed, or when an application is made for leave to appeal from a decree or order the time requisite for obtaining a copy of the judgment on which the decree or order is founded shall also be excluded.

(4) In computing the period of limitation for an application to set aside an award, the time requisite for obtaining a copy of the award shall be excluded.

Explanation – In computing under this section the time requisite for obtaining a copy of a decree or an order, any time taken by the court to prepare the decree or order before an application for copy thereof is made shall not be excluded.

Section 13. Exclusion of time in cases where leave to sue or appeal as a pauper is applied for

In computing the period of limitation prescribed for any suit or appeal in any case where an application for leave to sue or appeal as a pauper has been made and rejected, the time during which the applicant has been prosecuting in good faith his application for such leave shall be excluded, and the court may, on payment of the court-fees prescribed for such suit or appeal, treat the suit or appeal as having the same force and effect as if the court-fees had been paid in the first instance.

Section 14. Exclusion of time of proceeding bona fide in court without jurisdiction

(1) In computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of the appeal or revision, against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(2) In computing the period of limitation for any application, the time during which the applicant has been prosecuting with due diligence another civil proceeding, whether in a court of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a count of first instance or of appeal or revision, against the same party for the same relief shall be excluded, where such proceeding is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.

(3) Notwithstanding anything contained in rule 2 of Order XXIII of the Code of Civil Procedure, 1908 (5 of 1908), the provisions of sub-section (1) shall apply in relation to a fresh suit instituted on permission granted by the court under rule of that Order, where such permission is granted on the ground that the first suit must fail by reason of a defect in the jurisdiction of the court of other cause of a like nature.

Explanation – For the purpose of this section, –

(a) In excluding the time during which a former civil proceeding was pending, the day on which that proceeding was instituted and the day on which it ended shall both be counted;

(b) Plaintiff or an applicant resisting an appeal shall be deemed to be prosecuting a proceeding;

(c) Misjoinder of parties or of causes of action shall be deemed to be a cause of a like nature with defect of jurisdiction.

Related Judgements

FERRO ALLOYS CORPORATION LTD. v. RAJHANS STEEL LTD.

Section 15. Exclusion of time in certain other cases

(1) In computing the period of limitation for any suit or application for the execution of a decree, the institution or execution of which has been stayed by injunction or order, the time of continuance of the injunction or order, the day on which it was issued or made, and the day on which it was withdrawn, shall be excluded.

(2) In computing the period of limitation for any suit of which notice has been given, or for which the previous consent or sanction of the Government or any other authority is required, in accordance with the requirements of any law for the time being in force, the period of such notice or, as the case may be, the time required for obtaining such

consent or sanction shall be excluded.

Explanation – In excluding the time required for obtaining the consent or sanction of the Government or any other authority, the date on which the application was made obtaining the consent or sanction and the date of receipt of the order of the Government or other authority shall both be counted.

(3) In computing the period of limitation for any suit or application for execution of decree by any receiver of interim receiver appointed in proceedings for the adjudication of a person as an insolvent or by any liquidator or provisional lipuidator appointment in proceedings for the winding up of a company, the period beginning with the date of institution of such proceeding and ending with the expiry of three months from the date of appointment of such receiver or liquidator, as the case may be, shall be excluded.

(4) In computing the period of limitation for a suit for possession by a purchaser at a sale in execution of a decree, the time during which a proceeding to set aside the sale has been prosecuted shall be excluded.

(5) In computing the period of limitation for any suit the time during which the defendant has been absent from India and from the territories outside India under the administration of the Central Government, shall be excluded.

Related Judgements

FERRO ALLOYS CORPORATION LTD. v. RAJHANS STEEL LTD.

Section 16. Effect of death on or before the accrual of the right to sue

(1) Where a person who would, if he were living, have a right to institute a suit or make an application dies before the right accrues, or where a right to institute a suit or make an application accrues only on the death of a person, the period of limitation shall be computed from the time when there is a legal representative of the deceased capable of instituting such suit or making such application.

(2) Where a person against whom, if he were living, a right to institute a suit or make an application would have accrued dies before the right accrues, or where a right to institute a suit or make an application against any person accrues on the death of such person, the period of limitation shall be computed from the time when there is a legal representative of the deceased against whom the plaintiff may institute such suit or make such application.

(3) Nothing in sub-section (1) or sub-section (2) applies to suits to enforce rights of preemption or to suit for the possession of immovable property or of a hereditary office.

Section 17. Effect of fraud or mistake

(1) Where, in the case of any suit or application for which a period of limitation is prescribed by this Act-

(a) The suit or application is based upon the fraud of the defendant or respondent or his agent; or

(b) The knowledge of the right or title on which a suit or application is founded is concealed by the fraud of any such person as aforesaid; or

(c) The suit or application is for relief from the consequences of a mistake; or

(d) Where any document necessary to establish the right of the plaintiff or applicant has been fraudulently concealed from him;

The period of limitation shall not begin to run until the plaintiff or applicant has discovered the fraud or the mistake or could, with reasonable diligence, has discovered it, or in the case of concealed document, until the plaintiff or the applicant first had the means of producing the concealed document or compelling its production:

Provided that nothing in this section shall enable any suit to be instituted or application to be made to recover or enforce any charge against or set aside any transaction affecting, any property which-

(i) In the case of fraud, has been purchased for valuable consideration by a person who was not a party to the fraud and did not at the time of the purchase know, or have reason to believe, that any fraud had been committed, or

(ii) In the case of mistake, has been purchased for valuable consideration subsequently to the transaction in which the mistake was made, by a person who did not know, or have reason to believe, that the mistake had

been made, or

(iii) In the case of a concealed document, has been purchased for valuable consideration by a person who was not a party to the concealment and, did not at the time of purchase know, or have reason to believe, that the document had been concealed.

(2) Where a judgment-debtor has, by fraud or force, prevented the execution of a decree or order within the period of limitation, the court may, on the application of the judgment-creditor made after the expiry of the said period extend the period for execution of the decree or order:

Provided that such application is made within one year from the date of the discovery of the fraud or the cessation of force, as the case may be.

Section 18. Effect of acknowledgment in writing

(1) Where before the expiration of the prescribed period for a suit or application in respect or any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derived his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed.

(2) Where the writing containing thee acknowledgement is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act,1872 ( 1 of 1872), oral evidence of its contents shall not be received.

Explanation – For the purposes of this section, –

(a) An acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set-off, or is addressed to a person other than a person entitled to the property or night;

(b) The word “signed” means signed either personally or by an agent duly Authorised in this behalf ; and

(c) An application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.

NOTES – It is not necessary that an acknowledgment within Section 18 must contain a promise pay or should amount to a promise to pay. (Subbarsadya v.Narashimha, AIR 1936 Mad.939)

The above section corresponds to S.19 of the old Act and makes slight changes.

Section 19. Effect of payment on account of debt or of interest on legacy

Where payment on account of a debt or of interest on a legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy or by his agent duly Authorised in this behalf, a fresh period of limitation shall be computed from the time when payment was made:

Provided that, save in the case of payment of interest made before the 1st day of January,1928, an acknowledgment of the payment appears in the hand-writing of, or in a writing signed by the person making the payment.

Explanation – For the purposes of this section, –

(a) Where mortgaged land is in the possession of the mortgage, the receipt of the rent of produce of such land be deemed to be a payment;

(b) “Debt” does not include money payable under a decree or order of a court.

Related Judgements

FERRO ALLOYS CORPORATION LTD. v. RAJHANS STEEL LTD.

Section 20. Effect of acknowledgment or payment by another person

(1) The expression “agent duly Authorised in this behalf” in sections 18 and 19 shall in the case of a person under disability, include his lawful guardian, committee or manager or an agent duly Authorised by such guardian, committee or manager to sign the acknowledgment or make the payment. (2) Nothing in the said sections renders one of several joint contractors, partners, executors or mortgages chargeable by reason only of a written acknowledgment signed by, or of a payment made by, or by the agent of, any other or others of them.

(3) For the purposes of the said sections, –

(a) an acknowledgment signed or a payment made in respect of any liability by, or by the duly Authorised agent of, any limited owner of property who is governed by Hindu Law, shall be a valid acknowledgment or payment, as the case may be, against a reversionary succeeding to such liability; and

where a liability has been incurred by, or on behalf of a Hindu undivided family as such, an acknowledgment or payment made by, or by the duly Authorised agent or, the manager of the family for the time being shall be deemed to have been made on behalf of the whole family.

Section 21. Effect of substituting or adding new plaintiff or defendant

(1) Where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was made a party:

Provided that were the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.

(2) Nothing in sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the tendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff.

Section 22. Continuing breaches and torts

In the case of a continuing breach of contract or in the case of a continuing tort, a fresh period of limitation beings to run at every moment of the time during the breach or the tort, as the case may be, continues.

Section 23. Suits for compensation for acts not actionable without special damage

In the case of suit for compensation for an act which does not give rise to a cause of action unless some specific injury actually results there from, the period of limitation shall be computed from the time when the injury results.

Section 24. Computation of time mentioned in instrument

All instruments shall for purposes of this Act, be deemed to be made with reference to the Gregorian calendar.

Part 4 – Acquisition of ownership by possession

Section 25. Acquisition of easement by prescription

(1) Where the access and use of light or air to and for any building have been peaceable enjoyed there with as an easement, and as of right, without interruption and for twenty years, and where any way or watercourse or the use of any water or any other easement (whether affirmative or negative) has been peaceably and openly enjoyed by any person claiming title thereto as an easement and as of right without interruption and for twenty years, the right to such access and use of light or air, way, watercourse, use of other easement shall be absolute and indefeasible.

(2) Each of the said periods of twenty years shall be taken to be a period ending within two years next before the institution of the suit wherein claim to which such period relates is contested.

(3) Where property over which a right is claimed under sub-section (1) belongs to the Government that sub-section shall be read as if for the words “twenty years” the words “thirty years” were substituted.

Explanation – Nothing is an interruption within the meaning of the section, unless where there is an actual discontinuance of the possession or enjoyment by reason of an obstruction by the act of some person other than the claimant and unless such obstruction is submitted to or acquiesced in for one year after the claimant has notice thereof and of the person making or authorizing the same to be made.

Section 26. Exclusion in favour of reversionary of servant tenement

Where any land or water upon, over or from, which any easement has been enjoyed or derived has been held under or by virtue of any interest for life or in terms of years exceeding three years from the granting thereof the time of the enjoyment of such easement during the continuance of such interest or term shall be excluded in the computation of the period of twenty years in case the claim is, within three years next after the determination of such interest or term, resisted by the person entitled on such determination to the said land or water.

Section 27. Extinguishments of right to property

At the determination of the period hereby limited to any person for instituting a suit for possession of any property, his right to such property shall be extinguished.

Part 5 – Miscellaneous

Section 28.  Amendment of Certain Acts. (Repealed)

Section 29. Savings

(1) Nothing in this Act, shall affect section 25 of the Indian Contract Act,1872.

(2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any sit, appeal or application by any special or local law, the provisions contained in section 5 to 24 (inclusive shall apply only in so far, as and to the extent to which, they are not expressly excluded by such special or local law.

(3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law.

(4) Sections 25 and 26 and the definition of “easement” in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act,1882 may for the time being extend.

Section 30. Provision for suits, etc., for which the prescribed period is shorter than the period prescribed by the Indian Limitation Act,1908

Notwithstanding anything contained in this Act, (a) any suit for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act,1908, may be instituted within a period of (Note: Substituted for the words “five years” by Act No.10 of 1969) (Seven years) next after the commencement of this Act or within the period prescribed for such suit by the Indian Limitation Act,1908, whichever period expires earlier;

(Note: Substituted for the Words “five years” by Act No.10 of 1969)

[Provided that if in respect of any such suit, the said period of seven years expires earlier than the period of limitation prescribed therefore under the Indian Limitation Act,1908 and the said period of seven years together with so much of the period of limitation in repeat of such suit under the Indian Limitation Act,1908, as has already expired before the commencement of this Act is shorter than the period prescribed for such suit under this Act, then, the suit may be instituted within the period of limitation prescribed therefore under this Act].

(b) any appeal or application for which the period of limitation is shorter than the period of limitation prescribed by the Indian Limitation Act, 1908 may be preferred or made within a period of ninety days next after the commencement of this Act or within the period prescribed for such appeal or application by the Indian Limitation Act,1908, whichever period expires earlier.

Section 31. Provision as to barred or pending suits, etc.

Nothing in this Act shall,

(a) enable any suit, appeal or application to be instituted, preferred or made for which the period of limitation prescribed by the Indian Limitation Act,1908, expired before the commencement of this Act; or

(b) affect any suit, appeal or application instituted, preferred or made before, and pending at, such commencement.

Section 32. Repeal

Rep. By the Repealing and Amending Act,1974 (56 of 1974), section 2 and Schedule I.

Schedule – Period of Limitations

Division I – Suits

PART I – Suits Relating to Accounts

PART II – Suits relating to Contracts

PART III-Suits relating to Declarations

PART IV – Suits relating to Declarations.

PART V – Suits relating to Immovable Property

PART VI – Suits relating to movable property

PART VII – Suits relating to torts

PART VIII – Suits relating to trust and trust property

 PART IX – Suits relating to miscellaneous matters

PART X – Suits for which there is no prescribed period

  Division II

Division III – Applications

PART I

PART II

Other applications

Arbitration and Conciliation Act

November 30, 2014

Section 1. Short title, extent and commencement.

(1) This Act may be called the Arbitration and Conciliation Act, 1996.

(2) It extends to the whole of India:

Provided that Parts I, III and IV shall extend to the State of Jammu and Kashmir only in so far as they relate to international commercial arbitration or, as the case may be, international commercial conciliation.

Explanation.—In this sub-section, the expression “international commercial conciliation” shall have the same meaning as the expression “international commercial arbitration” in clause (f) of sub-section (1) of section 2, subject to the modification that for the word “arbitration” occurring therein, the word “conciliation” shall be substituted.

(3) It shall come into force on such date1 as the Central Government may, by notification in the official Gazette, appoint.

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1. Came into force on 22-8-1996 vide G.S.R. 375 (E), dated 22nd August, 1996.

Section 2. Definitions.

(1) In this Part, unless the context otherwise requires,—

(a) “arbitration” means any arbitration whether or not administered by permanent arbitral institution;

(b) “arbitration agreement” means an agreement referred to in section 7;

(c) “arbitral award” includes an interim award;

(d) “arbitral tribunal” means a sole arbitrator or a panel of arbitrators;

(e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;

(f) “international commercial arbitration” means an arbitration relating to disputes arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India and where at least one of the parties is—

(i) an individual who is a national of, or habitually resident in, any country other than India; or

(ii) a body corporate which is incorporated in any country other than India; or

(iii) a company or an association or a body of individuals whose central management and control is exercised in any country other than India; or

(iv) the Government of a foreign country;

(g) “legal representative” means a person who in law represents the estate of a deceased person, and includes any person who intermeddles with the estate of the deceased, and, where a party acts in a representative character, the person on whom the estate devolves on the death of the party so acting;

(h) “party” means a party to an arbitration agreement.

Scope

(2) This Part shall apply where the place of arbitration is in India.

(3) This Part shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration.

(4) This Part except sub-section (1) of section 40, sections 41 and 43 shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as the provisions of this Part are inconsistent with that other enactment or with any rules made thereunder.

(5) Subject to the provisions of sub-section (4), and save in so far as is otherwise provided by any law for the time being in force or in any agreement in force between India and any other country or countries, this Part shall apply to all arbitrations and to all proceedings relating thereto.

Construction of references

(6) Where this Part, except section 28, leaves the parties free to determine a certain issue, that freedom shall include the right of the parties to authorise any person including an institution, to determine that issue.

(7) An arbitral award made under this Part shall be considered as a domestic award.

(8) Where this Part—

(a) refers to the fact that the parties have agreed or that they may agree, or

(b) in any other way refers to an agreement of the parties, that agreement shall include any arbitration rules referred to in that agreement.

(9) Where this Part, other than clause (a) of section 25 or clause (a) of sub-section (2) of section 32, refers to a claim, it shall also apply to a counter-claim, and where it refers to a defence, it shall also apply to a defence to that counter-claim.

Section 3. Receipt of written communications.

(1) Unless otherwise agreed by the parties,—

(a) any written communication is deemed to have been received if it is delivered to the addressee personally or at his place of business, habitual residence or mailing address, and

(b) if none of the places referred to in clause (a) can be found after making a reasonable inquiry, a written communication is deemed to have been received if it is sent to the addressee’s last known place of business, habitual residence or mailing address by registered letter or by any other means which provides a record of the attempt to deliver it.

(2) The communication is deemed to have been received on the day it is so delivered.

(3) This section does not apply to written communications in respect of proceedings of any judicial authority.

Section 4. Waiver of right to object.

A party who knows that—

(a) any provision of this Part from which the parties may derogate, or

(b) any requirement under the arbitration agreement,has not been omplied with and yet proceeds with the arbitration without stating his objection to such non-compliance without undue delay or, if a time limit is provided for stating that objection, within that period of time, shall be deemed to have waived his right to so object.

Section 5. Extent of judicial intervention.

Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part.

Section 6. Administrative assistance.

In order to facilitate the conduct of the arbitral proceedings, the parties, or the arbitral tribunal with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.

Section 7. Arbitration agreement.

(1) In this Part, “arbitration agreement” means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in—

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.

Section 8. Power to refer parties to arbitration where there is an arbitration agreement.

(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration

may be commenced or continued and an arbitral award made.

Section 9. Interim measures, etc. by Court.

A party may, before or during arbitral proceedings or at any time after the making of the arbitral award but before it is enforced in accordance with section 36, apply to a court—

(i) for the appointment of a guardian for a minor or a person of unsound mind for the purposes of arbitral proceedings; or

(ii) for an interim measure of protection in respect of any of the following matters, namely:—

(a) the preservation, interim custody or sale of any goods which are the subject-matter of the arbitration agreement;

(b) securing the amount in dispute in the arbitration;

(c) the detention, preservation or inspection of any property or thing which is the subject-matter of the dispute in arbitration, or as to which any question may arise therein and authorising for any of the aforesaid purposes any person to enter upon any land or building in the possession of any party, or authorising any samples to be taken or any observation to be made, or experiment to be tried, which may be necessary or expedient for the purpose of obtaining full information or evidence;

(d) interim injunction or the appointment of a receiver;

(e) such other interim measure of protection as may appear to the court to be just and convenient,and the Court shall have the same power for making orders as it has for the purpose of, and in relation to, any proceedings before it.

Section 10. Number of arbitrators.

(1) The parties are free to determine the number of arbitrators, provided that such number shall not be an even number.

(2) Failing the determination referred to in sub-section (1), the arbitral tribunal shall consist of a sole arbitrator.

Section 11. Appointment of arbitrators.

(1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties.

(2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators.

(3) Failing any agreement referred to in sub-section (2), in an arbitration with three arbitrators, each party shall appoint one arbitrator, and the two appointed arbitrators shall appoint the third arbitrator who shall act as the presiding arbitrator.

(4) If the appointment procedure in sub-section (3) applies and—

(a) a party fails to appoint an arbitrator within thirty days from the receipt of a request to do so from the other party; or

(b) the two appointed arbitrators fail to agree on the third arbitrator within thirty days from the date of their appointment, the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.

(5) Failing any agreement referred to in sub-section (2), in an arbitration with a sole arbitrator, if the parties fail to agree on the arbitrator within thirty days from receipt of a request by one party from the other party to so agree the appointment shall be made, upon request of a party, by the Chief Justice or any person or institution designated by him.

(6) Where, under an appointment procedure agreed upon by the parties,—

(a) a party fails to act as required under that procedure; or

(b) the parties, or the two appointed arbitrators, fail to reach an agreement expected of them under that procedure; or

(c) a person, including an institution, fails to perform any function entrusted to him or it under that procedure,a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.

(7) A decision on a matter entrusted by sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justice or the person or institution designated by him is final.

(8) The Chief Justice or the person or institution designated by him, in appointing an arbitrator, shall have due regard to—

(a) any qualifications required of the arbitrator by the agreement of the parties; and

(b) other considerations as are likely to secure the appointment of an independent and impartial arbitrator.

(9) In the case of appointment of sole or third arbitrator in an international commercial arbitration, the Chief Justice of India or the person or institution designated by him may appoint an arbitrator of a nationality other than the nationalities of the parties where the parties belong to different nationalities.

(10) The Chief Justice may make such scheme1 as he may deem appropriate for dealing with matters entrusted by sub-section (4) or sub-section (5) or sub-section (6) to him.

(11) Where more than one request has been made under sub-section (4) or sub-section (5) or sub-section (6) to the Chief Justices of different High Courts or their designates, the Chief Justice or his designate to whom the request has been first made under the relevant sub-section shall alone be competent to decide on the request.

(12) (a) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in an international commercial arbitration, the reference to ‘‘Chief Justice’’ in those sub-sections shall be construed as a reference to the ‘‘Chief Justice of India’’.

(b) Where the matters referred to in sub-sections (4), (5), (6), (7), (8) and (10) arise in any other arbitration, the reference to “Chief Justice” in those sub-sections shall be construed as a reference to the Chief Justice of the High Court within whose local limits the principal Civil Court referred to in clause (e) of sub-section (1) of section 2 is situate and, where the High Court itself is the Court referred to in that clause, to the Chief Justice of that High Court.

Scope

It is well settled that where an arbitrator is named in the arbitration agreement, the provisions of section 11 of the Act are not attracted and the court will not have jurisdiction to try and decide the petition filed by party for appointment of another arbitrator; Kamla Solvent v. Manipal Finance Corpn. Ltd., AIR 2001 Mad 440.

Under section 11, there is no provision fixing any time limit except under sub-section (5) which provides the time limit of 30 days from the receipt of the request from the party for appointment of an arbitrator. Under sub-section (6) no such time limit have been fixed. It is required under the procedure, a party may request the Chief Justice or any person or institution designated by him to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment; Ansal Properties & Industries Ltd. v. Himachal Pradesh State Electricity Board, AIR 1997 Arb LR 11.

Existence of arbitration clause and validity of reference

The existence of the arbitration clause and the validity of reference shall only be decided by the Arbitrator. It is also within the domain of the Arbitrator to decide whether the claim of the petitioner has already been settled on full satisfaction; Navratandas & Co. (P) Ltd. v. Tata Iron & Steel Co., AIR 2006 Jhar 7.

—————

1. See Appointment of Arbitrators by the Chief Justice of India Scheme, 1996, published in the Gazette of India, Extra., Pt. III, Sec. 1, dated 16th May, 1996.

Section 12. Grounds for challenge.

(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.

(2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in sub-section (1) unless they have already been informed of them by him.

(3) An arbitrator may be challenged only if—

(a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or

(b) he does not possess the qualifications agreed to by the parties.

(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

Section 13. Challenge procedure.

(1) Subject to sub-section (4), the parties are free to agree on a procedure for challenging an arbitrator.

(2) Failing any agreement referred to in sub-section (1), a party who intends to challenge an arbitrator shall, within fifteen days after becoming aware of the constitution of the arbitral tribunal or after becoming aware of any circumstances referred to in sub-section (3) of section 12, send a written statement of the reasons for the challenge to the arbitral tribunal.

(3) Unless the arbitrator challenged under sub-section (2) withdraws from his office or the other party agrees to the challenge, the arbitral tribunal shall decide on the challenge.

(4) If a challenge under any procedure agreed upon by the parties or under the procedure under sub-section (2) is not successful, the arbitral tribunal shall continue the arbitral proceedings and make an arbitral award.

(5) Where an arbitral award is made under sub-section (4), the party challenging the arbitrator may make an application for setting aside such an arbitral award in accordance with section 34.

(6) Where an arbitral award is set aside on an application made under sub-section (5), the Court may decide as to whether the arbitrator who is challenged is entitled to any fees.

Section 14. Failure or impossibility to act.

(1) The mandate of an arbitrator shall terminate if—

(a) he becomes de jure or de facto unable to perform his functions or for other reasons fails to act without undue delay; and

(b) he withdraws from his office or the parties agree to the termination of his mandate.

(2) If a controversy remains concerning any of the grounds referred to inclause (a) of sub-section (1), a party may, unless otherwise agreed by the parties, apply to the Court to decide on the termination of the mandate.

(3) If, under this section or sub-section (3) of section 13, an arbitrator withdraws from his office or a party agrees to the termination of the mandate of an arbitrator, it shall not imply acceptance of the validity of any ground referred to in this section or sub-section (3) of section 12.

Section 15. Termination of mandate and substitution of arbitrator.

(1) In addition to the circumstances referred to in section 13 or section 14, the mandate of an arbitrator shall terminate—

(a) where he withdraws from office for any reason; or

(b) by or pursuant to agreement of the parties.

(2) Where the mandate of an arbitrator terminates, a substitute arbitrator shall be appointed according to the rules that were applicable to the appointment of the arbitrator being replaced.

(3) Unless otherwise agreed by the parties, where an arbitrator is replaced under sub-section (2), any hearings previously held may be repeated at the discretion of the arbitral tribunal.

(4) Unless otherwise agreed by the parties, an order or ruling of the arbitral tribunal made prior to the replacement of an arbitrator under this section shall not be invalid solely because there has been a change in the composition of the arbitral tribunal.

Section 16. Competence of arbitral tribunal to rule on its jurisdiction.

(1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose,—

(a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and

(b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.

(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.

(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified.

(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award.

(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34.

Section 17. Interim measures ordered by arbitral tribunal.

(1) Unless otherwise agreed by the parties, the arbitral tribunal may, at the request of a party, order a party to take any interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute.

(2) The arbitral tribunal may require a party to provide appropriate security in connection with a measure ordered under sub-section (1).

Section 18. Equal treatment of parties.

The parties shall be treated with equality and each party shall be given a full opportunity to present his case.

Section 19. Determination of rules of procedure.

(1) The arbitral tribunal shall not be bound by the Code of Civil Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).

(2) Subject to this Part, the parties are free to agree on the procedure to be followed by the arbitral tribunal in conducting its proceedings.

(3) Failing any agreement referred to in sub-section (2), the arbitral tribunal may, subject to this Part, conduct the proceedings in the manner it considers appropriate.

(4) The power of the arbitral tribunal under sub-section (3) includes the power to determine the admissibility, relevance, materiality and weight of any evidence.

Section 20. Place of arbitration.

(1) The parties are free to agree on the place of arbitration.

(2) Failing any agreement referred to in sub-section (1), the place of arbitration shall be determined by the arbitral tribunal having regard to the circumstances of the case, including the convenience of the parties.

(3) Notwithstanding sub-section (1) or sub-section (2), the arbitral tribunal may, unless otherwise agreed by the parties, meet at any place it considers appropriate for consultation among its members, for hearing witnesses, experts or the parties, or for inspection of documents, goods or other property.

Section 21. Commencement of arbitral proceedings.

Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.

Section 22. Language.

(1) The parties are free to agree upon the language or languages to be used in the arbitral proceedings.

(2) Failing any agreement referred to in sub-section (1), the arbitral tribunal shall determine the language or languages to be used in the arbitral proceedings.

(3) The agreement or determination, unless otherwise specified, shall apply to any written statement by a party, any hearing and any arbitral award, decision or other communication by the arbitral tribunal.

(4) The arbitral tribunal may order that any documentary evidence shall be accompanied by a translation into the language or languages agreed upon by the parties or determined by the arbitral tribunal.

Section 23. Statement of claim and defence.

(1) Within the period of time agreed upon by the parties or determined by the arbitral tribunal, the claimant shall state the facts supporting his claim, the points at issue and the relief or remedy sought, and the respondent shall state his defence in respect of these particulars, unless the parties have otherwise agreed as to the required elements of those statements.

(2) The parties may submit with their statements all documents they consider to be relevant or may add a reference to the documents or other evidence they will submit.

(3) Unless otherwise agreed by the parties, either party may amend or supplement his claim or defence during the course of the arbitral proceedings, unless the arbitral tribunal considers it inappropriate to allow the amendment or supplement having regard to the delay in making it.

Section 24. Hearings and written proceedings.

(1) Unless otherwise agreed by the parties, the arbitral tribunal shall decide whether to hold oral hearings for the presentation of evidence or for oral argument, or whether the proceedings shall be conducted on the basis of documents and other materials:

Provided that the arbitral tribunal shall hold oral hearings, at an appropriate stage of the proceedings, on a request by a party, unless the parties have agreed that no oral hearing shall be held.

(2) The parties shall be given sufficient advance notice of any hearing and of any meeting of the arbitral tribunal for the purposes of inspection of documents, goods or other property.

(3) All statements, documents or other information supplied to, or applications made to the arbitral tribunal by one party shall be communicated to the other party, and any expert report or evidentiary document on which the arbitral tribunal may rely in making its decision shall be communicated to the parties.

Section 25. Default of a party.

Unless otherwise agreed by the parties, where, without showing sufficient cause,—

(a) the claimant fails to communicate his statement of claim in accordance with sub-section (1) of section 23, the arbitral tribunal shall terminate the proceedings;

(b) the respondent fails to communicate his statement of defence in accordance with sub-section (1) of section 23, the arbitral tribunal shall continue the proceedings without treating that failure in itself as an admission of the allegations by the claimant;

(c) a party fails to appear at an oral hearing or to produce documentary evidence, the arbitral tribunal may continue the proceedings and make the arbitral award on the evidence before it.

Section 26. Expert appointment by arbitral tribunal.

(1) Unless otherwise agreed by the parties, the arbitral tribunal may—

(a) appoint one or more experts to report to it on specific issues to be determined by the arbitral tribunal, and

(b) require a party to give the expert any relevant information or to produce, or to provide access to, any relevant documents, goods or other property for his inspection.

(2) Unless otherwise agreed by the parties, if a party so requests or if the arbitral tribunal considers it necessary, the expert shall, after delivery of his written or oral report, participate in an oral hearing where the parties have the opportunity to put questions to him and to present expert witnesses in order to testify on the points at issue.

(3) Unless otherwise agreed by the parties, the expert shall, on the request of a party, make available to that party for examination all documents, goods or other property in the possession of the expert with which he was provided in order to prepare his report.

Section 27. Court assistance in taking evidence.

(1) The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance in taking evidence.

(2) The application shall specify—

(a) the names and addresses of the parties and the arbitrators;

(b) the general nature of the claim and the relief sought;

(c) the evidence to be obtained, in particular,—

(i) the name and address of any person to be heard as witness or expert witness and a statement of the subject-matter of the testimony required;

(ii) the description of any document to be produced or property to be inspected.

(3) The Court may, within its competence and according to its rules on taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal.

(4) The Court may, while making an order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.

(5) Persons failing to attend in accordance with such process, or making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the arbitral tribunal as they would incur for the like offences in suits tried before the Court.

(6) In this section the expression “Processes” includes summonses and commissions for the examination of witnesses and summonses to produce documents.

Section 28. Rules applicable to substance of dispute.

(1) Where the place of arbitration is situate in India,—

(a) in an arbitration other than an international commercial arbitration, the arbitral tribunal shall decide the dispute submitted to arbitration in accordance with the substantive law for the time being in force in India;

(b) in international commercial arbitration,—

(i) the arbitral tribunal shall decide the dispute in accordance with the rules of law designated by the parties as applicable to the substance of the dispute;

(ii) any designation by the parties of the law or legal system of a given country shall be construed, unless otherwise expressed, as directly referring to the substantive law of that country and not to its conflict of laws rules;

(iii) failing any designation of the law under clause (a) by the parties, the arbitral tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute.

(2) The arbitral tribunal shall decide ex aequo et bono or as amiable compositeur only if the parties have expressly authorised it to do so.

(3) In all cases, the arbitral tribunal shall decide in accordance with the terms of the contract and shall take into account the usages of the trade applicable to the transaction.

Section 29. Decision making by panel of arbitrators.

(1) Unless otherwise agreed by the parties, in arbitral proceedings with more than one arbitrator, any decision of the arbitral tribunal shall be made by a majority of all its members.

(2) Notwithstanding sub-section (1), if authorised by the parties or all the members of the arbitral tribunal, questions of procedure may be decided by the presiding arbitrator.

Section 30. Settlement.

(1) It is not incompatible with an arbitration agreement for an arbitral tribunal to encourage settlement of the dispute and, with the agreement of the parties, the arbitral tribunal may use mediation, conciliation or other procedures at any time during the arbitral proceedings to encourage settlement.

(2) If, during arbitral proceedings, the parties settle the dispute, the arbitral tribunal shall terminate the proceedings and, if requested by the parties and not objected to by the arbitral tribunal, record the settlement in the form of an arbitral award on agreed terms.

(3) An arbitral award on agreed terms shall be made in accordance with section 31 and shall state that it is an arbitral award.

(4) An arbitral award on agreed terms shall have the same status and effect as any other arbitral award on the substance of the dispute.

Section 31. Form and contents of arbitral award.

(1) An arbitral award shall be made in writing and shall be signed by the members of the arbitral tribunal.

(2) For the purposes of sub-section (1), in arbitral proceedings with more than one arbitrator, the signatures of the majority of all the members of the arbitral tribunal shall be sufficient so long as the reason for any omitted signature is stated.

(3) The arbitral award shall state the reasons upon which it is based, unless—

(a) the parties have agreed that no reasons are to be given, or

(b) the award is an arbitral award on agreed terms under section 30.

(4) The arbitral award shall state its date and the place of arbitration as determined in accordance with section 20 and the award shall be deemed to have been made at that place.

(5) After the arbitral award is made, a signed copy shall be delivered to each party.

(6) The arbitral tribunal may, at any time during the arbitral proceedings, make an interim arbitral award on any matter with respect to which it may make a final arbitral award.

(7) (a) Unless otherwise agreed by the parties, where and in so far as an arbitral award is for the payment of money, the arbitral tribunal may include in the sum for which the award is made interest, at such rate as it deems reasonable, on the whole or any part of the money, for the whole or any part of the period between the date on which the cause of action arose and the date on which the award is made.

(b) A sum directed to be paid by an arbitral award shall, unless the award otherwise directs, carry interest at the rate of eighteen per centum per annum from the date of the award to the date of payment.

(8) Unless otherwise agreed by the parties,—

(a) the costs of an arbitration shall be fixed by the arbitral tribunal;

(b) the arbitral tribunal shall specify—

(i) the party entitled to costs,

(ii) the party who shall pay the costs,

(iii) the amount of costs or method of determining that amount, and

(iv) the manner in which the costs shall be paid.

Explanation.—For the purpose of clause (a), “costs” means reasonable costs relating to—

(i) the fees and expenses of the arbitrators and witnesses,

(ii) legal fees and expenses,

(iii) any administration fees of the institution supervising the arbitration, and

(iv) any other expenses incurred in connection with the arbitral proceedings and the arbitral award.

Section 32. Termination of proceedings.

(1) The arbitral proceedings shall be terminated by the final arbitral award or by an order of the arbitral tribunal under sub-section (2).

(2) The arbitral tribunal shall issue an order for the termination of the arbitral proceedings where—

(a) the claimant withdraws his claim, unless the respondent objects to the order and the arbitral tribunal recognises a legitimate interest on his part in obtaining a final settlement of the dispute,

(b) the parties agree on the termination of the proceedings, or

(c) the arbitral tribunal finds that the continuation of the proceedings has for any other reason become unnecessary or impossible.

(3) Subject to section 33 and sub-section (4) of section 34, the mandate of the arbitral tribunal shall terminate with the termination of the arbitral proceedings.

Section 33. Correction and interpretation of award; additional award.

(1) Within thirty days from the receipt of the arbitral award, unless another period of time has been agreed upon by the parties—

(a) a party, with notice to the other party, may request the arbitral tribunal to correct any computation errors, any clerical or typographical errors or any other errors of a similar nature occurring in the award;

(b) if so agreed by the parties, a party, with notice to the other party, may request the arbitral tribunal to give an interpretation of a specific point or part of the award.

(2) If the arbitral tribunal considers the request made under sub-section (1) to be justified, it shall make the correction or give the interpretation within thirty days from the receipt of the request and the interpretation shall form part of the arbitral award.

(3) The arbitral tribunal may correct any error of the type referred to in clause (a) of sub-section (1), on its own initiative, within thirty days from the date of the arbitral award.

(4) Unless otherwise agreed by the parties, a party with notice to the other party, may request, within thirty days from the receipt of the arbitral award, the arbitral tribunal to make an additional arbitral award as to claims presented in the arbitral proceedings but omitted from the arbitral award.

(5) If the arbitral tribunal considers the request made under sub-section (4) to be justified, it shall make the additional arbitral award within sixty days from the receipt of such request.

(6) The arbitral tribunal may extend, if necessary, the period of time within which it shall make a correction, give an interpretation or make an additional arbitral award under sub-section (2) or sub-section (5).

(7) Section 31 shall apply to a correction or interpretation of the arbitral award or to an additional arbitral award made under this section.

Section 34. Application for setting aside arbitral award.

(1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section

(2) and sub-section (3).

(2) An arbitral award may be set aside by the Court only if—

(a) the party making the application furnishes proof that—

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not

in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that—

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

Explanation.—Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section

33, from the date on which that request had been disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it in order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.

Section 35. Finality of arbitral awards.

Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.

Section 36. Enforcement.

Where the time for making an application to set aside the arbitral award under section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court.

Section 37. Appealable orders.

(1) An appeal shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:—

(a) granting or refusing to grant any measure under section 9;

(b) setting aside or refusing to set aside an arbitral award under
section 34.

(2) An appeal shall also lie to a Court from an order granting of the arbitral tribunal.—

(a) accepting the plea referred in sub-section (2) or sub-section (3) of section 16; or

(b) granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Section 38. Deposits.

(1) The arbitral tribunal may fix the amount of the deposit or supplementary deposit, as the case may be, as an advance for the costs referred to in sub-section (8) of section 31, which it expects will be incurred in respect of the claim submitted to it:

Provided that where, apart from the claim, a counter-claim has been submitted to the arbitral tribunal, it may fix separate amount of deposit for the claim and counter-claim.

(2) The deposit referred to in sub-section (1) shall be payable in equal shares by the parties:

Provided that where one party fails to pay his share of the deposit, the other party may pay that share:

Provided further that where the other party also does not pay the aforesaid share in respect of the claim or the counter-claim, the arbitral tribunal may suspend or terminate the arbitral proceedings in respect of such claim or counter-claim, as the case may be.

(3) Upon termination of the arbitral proceedings, the arbitral tribunal shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the party or parties, as the case may be.

Section 39. Lien on arbitral award and deposits as to costs.

(1) Subject to the provisions of sub-section (2) and to any provision to the contrary in the arbitration agreement, the arbitral tribunal shall have a lien on the arbitral award for any unpaid costs of the arbitration.

(2) If in any case an arbitral tribunal refuses to deliver its award except on payment of the costs demanded by it, the Court may, on an application in this behalf, order that the arbitral tribunal shall deliver the arbitral award to the applicant on payment into Court by the applicant of the costs demanded, and shall, after such inquiry, if any, as it thinks fit, further order that out of the money so paid into Court there shall be paid to the arbitral tribunal by way of costs such sum as the Court may consider reasonable and that the balance of the money, if any, shall be refunded to the applicant.

(3) An application under sub-section (2) may be made by any party unless the fees demanded have been fixed by written agreement between him and the arbitral tribunal, and the arbitral tribunal shall be entitled to appear and be heard on any such application.

(4) The Court may make such orders as it thinks fit respecting the costs of the arbitration where any question arises respecting such costs and the arbitral award contains no sufficient provision concerning them.

Section 40. Arbitration agreement not to be discharged by death of party thereto.

(1) An arbitration agreement shall not be discharged by the death of any party thereto either as respects the deceased or as respects any other party, but shall in such event be enforceable by or against the legal representative of the deceased.

(2) The mandate of an arbitrator shall not be terminated by the death of any party by whom he was appointed.

(3) Nothing in this section shall affect the operation of any law by virtue of which any right of action is extinguished by the death of a person.

Section 41. Provisions in case of insolvency.

(1) Where it is provided by a term in a contract to which an insolvent is a party that any dispute arising thereout or in connection therewith shall be submitted to arbitration, the said term shall, if the receiver adopts the contract, be enforceable by or against him so far as it relates to any such dispute.

(2) Where a person who has been adjudged an insolvent had, before the commencement of the insolvency proceedings, become a party to an arbitration agreement, and any matter to which the agreement applies is required to be determined in connection with, or for the purposes of, the insolvency proceedings, then, if the case is one to which sub-section (1) does not apply, any other party or the receiver may apply to the judicial authority having jurisdiction in the insolvency proceedings for an order directing that the matter in question shall be submitted to arbitration in accordance with the arbitration agreement, and the judicial authority may, if it is of opinion that, having regard to all the circumstances of the case, the matter ought to be determined by arbitration, make an order accordingly.

(3) In this section the expression “receiver” includes an Official Assignee.

Section 42. Jurisdiction.

Notwithstanding anything contained elsewhere in this Part or in any other law for the time being in force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.

Section 43. Limitations.

(1) The Limitation Act, 1963 (36 of 1963), shall apply to arbitrations as it applies to proceedings in Court.

(2) For the purposes of this section and the Limitation Act, 1963 (36 of 1963), an arbitration shall be deemed to have commenced on the date referred in section 21.

(3) Where an arbitration agreement to submit future disputes to arbitration provides that any claim to which the agreement applies shall be barred unless some step to commence arbitral proceedings is taken within a time fixed by the agreement, and a dispute arises to which the agreement applies, the Court, if it is of opinion that in the circumstances of the case undue hardship would otherwise be caused, and notwithstanding that the time so fixed has expired, may on such terms, if any, as the justice of the case may require, extend the time for such period as it thinks proper.

(4) Where the Court orders that an arbitral award be set aside, the period between the commencement of the arbitration and the date of the order of the Court shall be excluded in computing the time prescribed by the Limitation Act, 1963 (36 of 1963), for the commencement of the proceedings (including arbitration) with respect to the dispute so submitted.

Section 44. Definition.

In this Chapter, unless the context otherwise requires, “foreign award” means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960—

(a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and

(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.44. Definition.—In this Chapter, unless the context otherwise requires, “foreign award” means an arbitral award on differences between persons arising out of legal relationships, whether contractual or not, considered as commercial under the law in force in India, made on or after the 11th day of October, 1960— (a) in pursuance of an agreement in writing for arbitration to which the Convention set forth in the First Schedule applies, and (b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.

Section 45. Power of judicial authority to refer parties to arbitration.

Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in section 44, shall, at the request of one of the parties or any person claiming through or under him, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.

Section 46. When foreign award binding.

Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award.

Section 47. Evidence.

(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the court—

(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which it was made;

(b) the original agreement for arbitration or a duly certified copy thereof; and

(c) such evidence as may be necessary to prove that the award is a foreign award.

(2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Explanation.—In this section and all the following sections of this Chapter, “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.

Section 48. Conditions for enforcement of foreign awards.

(1) Enforcement of a foreign award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the court proof that—

(a) the parties to the agreement referred to in section 44 were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

(2) Enforcement of an arbitral award may also be refused if the Court finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of India; or

(b) the enforcement of the award would be contrary to the public policy of India.

Explanation.—Without prejudice to the generality of clause (b) of this section, it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.

(3) If an application for the setting aside or suspension of the award has been made to a competent authority referred to in clause (e) of sub-section (1) the Court may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

Section 49. Enforcement of foreign awards.

Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of that Court.

Section 50. Appealable orders.

(1) An appeal shall lie from the order refusing to—

(a) refer the parties to arbitration under section 45;

(b) enforce a foreign award under section 48, to the court authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Section 51. Saving.

Nothing in this Chapter shall prejudice any rights which any person would have had of enforcing in India of any award or of availing himself in India of any award if this Chapter had not been enacted.

Section 52. Chapter II not to apply.

Chapter II of this Part shall not apply in relation to foreign awards to which this Chapter applies.

Section 53. Interpretation.

In this Chapter “foreign award” means an arbitral award on differences relating to matters considered as commercial under the law in force in India made after the 28th day of July, 1924,—

(a) in pursuance of an agreement for arbitration to which the Protocol set forth in the Second Schedule applies, and

(b) between persons of whom one is subject to the jurisdiction of some one of such Powers as the Central Government, being satisfied that reciprocal provisions have been made, may, by notification in the Official Gazette, declare to be parties to the Convention set forth in the Third Schedule, and of whom the other is subject to the jurisdiction of some other of the Powers aforesaid, and

(c) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made, may, by like notification, declare to be territories to which the said Convention applies, and for the purposes of this Chapter an award shall not be deemed to be final if any proceedings for the purpose of contesting the validity of the award are pending in the country in which it was made.

Section 54. Power of judicial authority to refer parties to arbitration.

Notwithstanding anything contained in Part I or in the Code of Civil Procedure, 1908 (5 of 1908), a judicial authority, on being seized of a dispute regarding a contract made between persons to whom section 53 applies and including an arbitration agreement, whether referring to present or future differences, which is valid under that section and capable of being carried into effect, shall refer the parties on the application of either of them or any person claiming through or under him to the decision of the arbitrators and such reference shall not prejudice the competence of the judicial authority in case the agreement or the arbitration cannot proceed or becomes inoperative.

Section 55. Foreign awards when binding.

Any foreign award which would be enforceable under this Chapter shall be treated as binding for all purposes on the persons as between whom it was made, and may accordingly be relied on by any of those persons by way of defence, set off or otherwise in any legal proceedings in India and any references in this Chapter to enforcing a foreign award shall be construed as including references to relying on an award.

Section 56. Evidence.

(1) The party applying for the enforcement of a foreign award shall, at the time of application, produce before the Court—

(a) the original award or a copy thereof duly authenticated in the manner required by the law of the country in which it was made;

(b) evidence proving that the award has become final; and

(c) such evidence as may be necessary to prove that the conditions mentioned in clauses (a) and (c) of sub-section (1) of section 57 are satisfied.

(2) Where any document requiring to be produced under sub-section (1) is in a foreign language, the party seeking to enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of the country to which that party belongs or certified as correct in such other manner as may be sufficient according to the law in force in India.

Explanation.—In this section and all the following sections of this Chapter, “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes.

Section 57. Conditions for enforcement of foreign awards.

(1) In order that a foreign award may be enforceable under this Chapter, it shall be necessary that—

(a) the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;

(b) the subject-matter of the award is capable of settlement by arbitration under the law of India;

(c) the award has been made by the arbitral tribunal provided for in the submission to arbitration or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;

(d) the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition or appeal or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending;

(e) the enforcement of the award is not contrary to the public policy or the law of India.

Explanation.—Without prejudice to the generality of clause (e), it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption.

(2) Even if the conditions laid down in sub-section (1) are fulfilled, enforcement of the award shall be refused if the Court is satisfied that—

(a) the award has been annulled in the country in which it was made;

(b) the party against whom it is sought to use the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case; or that, being under a legal incapacity, he was not properly represented;

(c) the award does not deal with the differences contemplated by or falling within the terms of the submission to arbitration or that it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that if the award has not covered all the differences submitted to the arbitral tribunal, the Court may, if it thinks fit, postpone such enforcement or grant it subject to such guarantee as the Court may decide.

(3) If the party against whom the award has been made proves that under the law governing the arbitration procedure there is a ground, other than the grounds referred to in clauses (a) and (c) of sub-section (1) and clauses (b) and (c) of sub-section (2) entitling him to contest the validity of the award, the Court may, if it thinks fit, either refuse enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal.

Section 58. Enforcement of foreign awards.

Where the Court is satisfied that the foreign award is enforceable under this Chapter, the award shall be deemed to be a decree of the Court.

Section 59. Appealable orders.

(1) An appeal shall lie from the order refusing—

(a) to refer the parties to arbitration under section 54; and

(b) to enforce a foreign award under section 57, to the court authorised by law to hear appeals from such order.

(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.

Section 60. Saving.

Nothing in this Chapter shall prejudice any rights which any person would have had of enforcing in India of any award or of availing himself in India of any award if this Chapter had not been enacted.

Section 61. Application and scope.

(1) Save as otherwise provided by any law for the time being in force and unless the parties have otherwise agreed, this Part shall apply to conciliation of disputes arising out of legal relationship, whether contractual or not and to all proceedings relating thereto.

(2) This Part shall not apply where by virtue of any law for the time being in force certain disputes may not be submitted to conciliation.

Section 62. Commencement of conciliation proceedings.

(1) The party initiating conciliation shall send to the other party a written invitation to conciliate under this Part, briefly identifying the subject of the dispute.

(2) Conciliation proceedings shall commence when the other party accepts in writing the invitation to conciliate.

(3) If the other party rejects the invitation, there will be no conciliation proceedings.

(4) If the party initiating conciliation does not receive a reply within thirty days from the date on which he sends the invitation, or within such other period of time as specified in the invitation, he may elect to treat this as a rejection of the invitation to conciliate and if he so elects, he shall inform in writing the other party accordingly.

Section 63. Number of conciliators.

(1) There shall be one conciliator unless the parties agree that there shall be two or three conciliators.

(2) Where there is more than one conciliator, they ought, as a general rule, to act jointly.

Section 64. Appointment of conciliators.

(1) Subject to sub-section (2),—

(a) in conciliation proceedings with one conciliator, the parties may agree on the name of a sole conciliator;

(b) in conciliation proceedings with two conciliators, each party may appoint one conciliator;

(c) in conciliation proceedings with three conciliators, each party may appoint one conciliator and the parties may agree on the name of the third conciliator who shall act as the presiding conciliator.

(2) Parties may enlist the assistance of a suitable institution or person in connection with the appointment of conciliators, and in particular,—

(a) a party may request such an institution or person to recommend the names of suitable individuals to act as conciliator; or

(b) the parties may agree that the appointment of one or more conciliators be made directly by such an institution or person:

Provided that in recommending or appointing individuals to act as conciliator, the institution or person shall have regard to such considerations as are likely to secure the appointment of an independent and impartial conciliator and, with respect to a sole or third conciliator, shall take into account the advisability of appointing a conciliator of a nationality other than the nationalities of the parties.

Section 65. Submission of statements to conciliator.

(1) The conciliator, upon his appointment, may request each party to submit to him a brief written statement describing the general nature of the dispute and the points at issue. Each party shall send a copy of such statement to the other party.

(2) The conciliator may request each party to submit to him a further written statement of his position and the facts and grounds in support thereof, supplemented by any documents and other evidence that such party deems appropriate. The party shall send a copy of such statement, documents and other evidence to the other party.

(3) At any stage of the conciliation proceedings, the conciliator may request a party to submit to him such additional information as he deems appropriate.

Explanation.—In this section and all the following sections of this Part, the term “conciliator” applies to a sole conciliator, two or three conciliators as the case may be.

Section 66. Role of conciliator.

(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.

(2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.

(3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.

(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefor.

Section 67. Role of conciliator.

(1) The conciliator shall assist the parties in an independent and impartial manner in their attempt to reach an amicable settlement of their dispute.

(2) The conciliator shall be guided by principles of objectivity, fairness and justice, giving consideration to, among other things, the rights and obligations of the parties, the usages of the trade concerned and the circumstances surrounding the dispute, including any previous business practices between the parties.

(3) The conciliator may conduct the conciliation proceedings in such a manner as he considers appropriate, taking into account the circumstances of the case, the wishes the parties may express, including any request by a party that the conciliator hear oral statements, and the need for a speedy settlement of the dispute.

(4) The conciliator may, at any stage of the conciliation proceedings, make proposals for a settlement of the dispute. Such proposals need not be in writing and need not be accompanied by a statement of the reasons therefore.

Section 68. Administrative assistance.

In order to facilitate the conduct of the conciliation proceedings, the parties, or the conciliator with the consent of the parties, may arrange for administrative assistance by a suitable institution or person.

Section 69. Communication between conciliator and parties.

(1) The conciliator may invite the parties to meet him or may communicate with them orally or in writing. He may meet or communicate with the parties together or with each of them separately.

(2) Unless the parties have agreed upon the place where meetings with the conciliator are to be held, such place shall be determined by the conciliator, after consultation with the parties, having regard to the circumstances of the conciliation proceedings.

Section 70. Disclosure of information.

When the conciliator receives factual information concerning the dispute from a party, he shall disclose the substance of that information to the other party in order that the other party may have the opportunity to present any explanation which he considers appropriate:

Provided that when a party gives any information to the conciliator subject to a specific condition that it be kept confidential, the conciliator shall not disclose that information to the other party.

Section 71. Co-operation of parties with conciliator.

The parties shall in good faith co-operate with the conciliator and, in particular, shall endeavour to comply with requests by the conciliator to submit written materials, provide evidence and attend meetings.

Section 72. Suggestions by parties for settlement of dispute.

Each party may, on his own initiative or at the invitation of the conciliator, submit to the conciliator suggestions for the settlement of the dispute.

Section 73. Settlement agreement.

(1) When it appears to the conciliator that there exist elements of a settlement which may be acceptable to the parties, he shall formulate the terms of a possible settlement and submit them to the parties for their observations. After receiving the observations of the parties, the conciliator may reformulate the terms of a possible settlement in the light of such observations.

(2) If the parties reach agreement on a settlement of the dispute, they may draw up and sign a written settlement agreement. If requested by the parties, the conciliator may draw up, or assist the parties in drawing up, the settlement agreement.

(3) When the parties sign the settlement agreement, it shall be final and binding on the parties and persons claiming under them respectively.

(4) The conciliator shall authenticate the settlement agreement and furnish a copy thereof to each of the parties.

Section 74. Confidentiality.

Notwithstanding anything contained in any other law for the time being in force, the conciliator and the parties shall keep confidential all matters relating to the conciliation proceedings. Confidentiality shall extend also to the settlement agreement, except where its disclosure is necessary for purposes of implementation and enforcement.

Section 75. Termination of conciliation proceedings.

The conciliation proceedings shall be terminated—

(a) by the signing of the settlement agreement by the parties on the date of the agreement; or

(b) by a written declaration of the conciliator, after consultation with the parties, to the effect that further efforts at conciliation are no longer justified, on the date of the declaration; or

(c) by a written declaration of the parties addressed to the conciliator to the effect that the conciliation proceedings are terminated, on the date of the declaration; or

(d) by a written declaration of a party to the other party and the conciliator, if appointed, to the effect that the conciliation proceedings are terminated, on the date of the declaration.

Section 76. Resort to arbitral or judicial proceedings.

The parties shall not initiate, during the conciliation proceedings, any arbitral or judicial proceedings in respect of a dispute that is the subject-matter of the conciliation proceedings except that a party may initiate arbitral or judicial proceedings where, in his opinion, such proceedings are necessary for preserving his rights.

Section 77. Costs.

(1) Upon termination of the conciliation proceedings, the conciliator shall fix the costs of the conciliation and give written notice thereof to the parties.

(2) For the purpose of sub-section (1), “costs” means reasonable costs relating to—

(a) the fee and expenses of the conciliator and witnesses requested by the conciliator with the consent of the parties;

(b) any expert advice requested by the conciliator with the consent of the parties;

(c) any assistance provided pursuant to clause (b) of sub-section (2) of section 64 and section 68;

(d) any other expenses incurred in connection with the conciliation proceedings and the settlement agreement.

(3) The costs shall be borne equally by the parties unless the settlement agreement provides for a different apportionment. All other expenses incurred by a party shall be borne by that party.

Section 78. Deposits.

(1) The conciliator may direct each party to deposit an equal amount as an advance for the costs referred to in sub-section (2) of section 78 which he expects will be incurred.

(2) During the course of the conciliation proceedings, the conciliator may direct supplementary deposits in an equal amount from each party.

(3) If the required deposits under sub-sections (1) and (2) are not paid in full by both parties within thirty days, the conciliator may suspend the proceedings or may make a written declaration of termination of the proceedings to the parties, effective on the date of that declaration.

(4) Upon termination of the conciliation proceedings, the conciliator shall render an accounting to the parties of the deposits received and shall return any unexpended balance to the parties.

Section 79. Role of conciliator in other proceedings.

Unless otherwise agreed by the parties,—

(a) the conciliator shall not act as an arbitrator or as a representative or counsel of a party in any arbitral or judicial proceeding in respect of a dispute that is the subject of the conciliation proceedings;

(b) the conciliator shall not be presented by the parties as a witness in any arbitral or judicial proceedings.

Section 80. Admissibility of evidence in other proceedings.

The parties shall not rely on or introduce as evidence in arbitral or judicial proceedings, whether or not such proceedings relate to the dispute that is the subject of the conciliation proceedings,—

(a) views expressed or suggestions made by the other party in respect of a possible settlement of the dispute;

(b) admissions made by the other party in the course of the conciliation proceedings;

(c) proposals made by the conciliator;

(d) the fact that the other party had indicated his willingness to accept a proposal for settlement made by the conciliator.

Section 81. Power of High Court to make rules.

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:

Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

Section 82. Removal of difficulties.

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions, not inconsistent with the provisions of this Act as appear to it to be necessary or expedient for removing the difficulty:

Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Act.

(2) Every order made under this section shall, as soon as may be after it is made, be laid before each House of Parliament.

Section 83. Power to make rules.

(1) The Central Government may, by notification in the Official Gazette, make rules for carrying out the provisions of this Act.

(2) Every rule made by the Central Government under this Act shall be laid, as soon as may be, after it is made before each House of Parliament while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Section 84. Repeal and savings.

(1) The Arbitration (Protocol and Convention) Act, 1937 (6 of 1937), the Arbitration Act, 1940 (10 of 1940) and the Foreign Awards (Recognition and Enforcement) Act, 1961 (45 of 1961) are hereby repealed.

(2) Notwithstanding such repeal,—

(a) the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force;

(b) all rules made and notifications published, under the said enactments shall, to the extent to which they are not repugnant to this Act, be deemed respectively to have been made or issued under this Act.

Section 85. Repeal of Ordinance 27 of 1996 and Saving.

(1) The Arbitration and Conciliation (Third) Ordinance, 1996 (27 of 1996) is hereby repealed.

(2) Notwithstanding such repeal, any order, rule, notification or scheme made or anything done or any action taken in pursuance of any provision of the said Ordinance, shall be deemed to have been made, done or taken under the corresponding provisions of this Act.

THE FIRST SCHEDULE

(See section 44)

CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS

ARTICLE I

1. This Convention shall apply to the recognition and enforcement of arbitral awards made in the territory of a State other than the State where the recognition and enforcement of such awards are sought, and arising out of differences between persons, whether physical or legal. It shall also apply to arbitral awards not considered as domestic awards in the State where their recognition and enforcement are sought.

2. The term “arbitral awards” shall include not only awards made by arbitrators appointed for each case but also those made by permanent arbitral bodies to which the parties have submitted.

3. When signing, ratifying or acceding to this Convention, or notifying extension under article X hereof, any State may on the basis of reciprocity declare that it will apply the Convention to the recognition and enforcement of awards made only in the territory of another Contracting State. It may also declare that it will apply the Convention only to differences arising out of legal relationships, whether contractual or not, which are considered as commercial under the national law of the State making such declaration.

ARTICLE II

1. Each Contracting State shall recognise an agreement in writing under which the parties undertake to submit to arbitration all or any differences which have arisen or which may arise between them in respect of defined legal relationship, whether contractual or not, concerning a subject-matter capable of settlement by arbitration.

2. The term “agreement in writing” shall include an arbitral clause in a contract or an arbitration agreement, signed by the parties or contained in an exchange of letters or telegrams.

3. The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall, at the request of one of the parties, refer the parties to arbitration, unless it finds that the said agreement is null and void, inoperative and incapable of being performed.

ARTICLE III

Each Contracting State shall recognize arbitral awards as binding and enforce them in accordance with the rules of procedure of the territory where the award is relied upon, under the conditions laid down in the following articles. There shall not be imposed substantially more onerous conditions or higher fees or charges on the recognition or enforcement of arbitral awards to which this Convention applies than are imposed on the recognition or enforcement of domestic arbitral awards.

ARTICLE IV

1. To obtain the recognition and enforcement mentioned in the preceding article, the party applying for recognition and enforcement shall, at the time of the application, supply—

(a) the duly authenticated original award or a duly certified copy thereof;

(b) the original agreement referred to in article II or a duly certified copy thereof.

2. If the said award or agreement is not made in an official language of the country in which the award is relied upon, the party applying for recognition and enforcement of the award shall produce a translation of these documents into such language. The translation shall be certified by an official or sworn translator or by a diplomatic or consular agent.

ARTICLE V

1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that—

(a) the parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or

(b) the party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or

(c) the award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration; provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced; or

(d) the composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or

(e) the award has not yet become binding on the parties, or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

2. Recognition and enforcement of an arbitral award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that—

(a) the subject-matter of the difference is not capable of settlement by arbitration under the law of that country; or

(b) the recognition or enforcement of the award would be contrary to the public policy of that country.

ARTICLE VI

If an application for the setting aside or suspension of the award has been made to a competent authority referred to in article V(1)(e), the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.

ARTICLE VII

1. The provisions of the present Convention shall not affect the validity of multilateral or bilateral agreements concerning the recognition and enforcement of arbitral awards entered into by the Contracting States nor deprive any interested party of any right he may have to avail himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.

2. The Geneva Protocol on Arbitration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927 shall cease to have effect between Contracting States on their becoming bound and to the extent that they become bound by this Convention.

ARTICLE VIII

1. This Convention shall be open until 31st December, 1958 for signature on behalf of any Member of the United Nations and also on behalf of any other State which is or hereafter becomes member of any specialised agency of the United Nations, or which is or hereafter becomes a party to the Statute of the International Court of Justice, or any other State to which an invitation has been addressed by the General Assembly of the United Nations.

2. This Convention shall be ratified and the instrument of ratification shall be deposited with the Secretary-General of the United Nations.

ARTICLE IX

1. This Convention shall be open for accession to all States referred to in

article VIII.

2. Accession shall be effected by the deposit of an instrument of accession with the Secretary-General of the United Nations.

ARTICLE X

1. Any State may, at the time of signature, ratification or accession, declare that this Convention shall extend to all or any of the territories for the international relations of which it is responsible. Such a declaration shall take effect when the Convention enters into force for the State concerned.

2. At any time thereafter any such extension shall be made by notification addressed to the Secretary-General of the United Nations and shall take effect as from the ninetieth day after the day of receipt by the Secretary-General of the United Nations of this notification, or as from the date of entry into force of the Convention for the State concerned, whichever is the later.

3. With respect to those territories to which this Convention is not extended at the time of signature, ratification or accession, each State concerned shall consider the possibility of taking the necessary steps in order to extend the application of this Convention to such territories, subject, where necessary for constitutional reasons, to the consent of the Governments of such territories.

ARTICLE XI

In the case of a federal or non-unitary State, the following provisions shall apply:—

(a) with respect of those articles of this Convention that come within the legislative jurisdiction of the federal authority, the obligations of the federal Government shall to this extent be the same as those of Contracting States which are not federal States;

(b) with respect to those articles of this Convention that come within the legislative jurisdiction of constituent States or provinces which are not, under the constitutional system of the federation, bound to take legislative action, the federal Government shall bring such articles with a favourable recommendation to the notice of the appropriate authorities of constituent States or provinces at the earliest possible moment;

(c) a federal State Party to this Convention shall, at the request of any other Contracting State transmitted through the Secretary-General of the United Nations, supply a statement of the law and practice of the federation and its constituent units in regard to any particular provision of this Convention, showing the extent to which effect has been given to that provision by legislative or other action.

ARTICLE XII

1. This Convention shall come into force on the ninetieth day following the date of deposit of the third instrument of ratification or accession.

2. For each State ratifying or acceding to this Convention after the deposit of the third instrument of ratification or accession, this Convention shall enter into force on the ninetieth day after deposit by such State of its instrument of ratification or accession.

ARTICLE XIII

1. Any Contracting State may denounce this Convention by a written notification to the Secretary-General of the United Nations. Denunciation shall take effect one year after the date of receipt of the notification by the Secretary-General.

2. Any State which has made a declaration or notification under article X may, at any time thereafter, by notification to the Secretary-General of the United Nations, declare that this Convention shall cease to extend to the territory concerned one year after the date of the receipt of the notification by the Secretary-General.

3. This Convention shall continue to be applicable to arbitral awards in respect of which recognition or enforcement proceedings have been instituted before the denunciation takes effect.

ARTICLE XIV

A Contracting State shall not be entitled to avail itself of the present Convention against other Contracting States except to the extent that it is itself bound to apply the Convention.

ARTICLE XV

The Secretary-General of the United Nations shall notify the States contemplated in article VIII of the following:—

(a) signatures and ratifications in accordance with article VIII;

(b) accessions in accordance with article IX;

(c) declarations and notifications under articles I, X and XI;

(d) the date upon which this Convention enters into force in accordance with article XII;

(e) denunciations and notifications in accordance with article XIII.

ARTICLE XVI

1. This Convention, of which the Chinese, English, French, Russian and Spanish texts shall be equally authentic, shall be deposited in the archives of the United Nations.

2. The Secretary-General of the United Nations shall transmit a certified copy of this Convention to the States contemplated in article XIII.

THE SECOND SCHEDULE

(See section 53)

PROTOCOL ON ARBITRATION CLAUSES

The undersigned, being duly authorised, declare that they accept, on behalf of the countries which they represent, the following provisions:—

1. Each of the Contracting States recognises the validity of an agreement whether relating to existing or future differences between parties subject respectively to the jurisdiction of different Contracting States by which the parties to a contract agree to submit to arbitration all or any differences that may arise in connection with such contract relating to commercial matters or to any other matter capable of settlement by arbitration, whether or not the arbitration is to take place in a country to whose jurisdiction none of the parties is subject.

Each Contracting State reserves the right to limit the obligation mentioned above to contracts which are considered as commercial under its national law. Any Contracting State which avails itself of this right will notify the Secretary-General of the League of Nations in order that the other Contracting States may be so informed.

2. The arbitral procedure, including the constitution of the Arbitral Tribunal, shall be governed by the will of the parties and by the law of the country in whose territory the arbitration takes place.

The Contracting States agree to facilitate all steps in the procedure which require to be taken in their own territories, in accordance with the provisions of their law governing arbitral procedure applicable to existing differences.

3. Each Contracting State undertakes to ensure the execution by its authorities and in accordance with the provisions of its national laws of arbitral awards made in its own territory under the preceding articles.

4. The Tribunals of the Contracting Parties, on being seized of a dispute regarding a contract made between persons to whom Article I applies and including an Arbitration Agreement whether referring to present or future differences which is valid in virtue of the said article and capable of being carried into effect, shall refer the parties on the application of either of them to the decision of the Arbitrators.

Such reference shall not prejudice the competence of the judicial tribunals in case the agreement or the arbitration cannot proceed or becomes inoperative.

5. The present Protocol, which shall remain open for signature by all States, shall be ratified. The ratification shall be deposited as soon as possible with the Secretary-General of the League of Nations, who shall notify such deposit to all the Signatory States.

6. The present Protocol will come into force as soon as two ratifications have been deposited. Thereafter it will take effect, in the case of each Contracting State, one month after the notification by the Secretary-General of the deposit of its ratification.

7. The present Protocol may be denounced by any Contracting State on giving one year’s notice. Denunciation shall be effected by a notification addressed to the Secretary-General of the League, who will immediately transmit copies of such notification to all the other Signatory States and inform them of the date on which it was received. The denunciation shall take effect one year after the date on which it was notified to the Secretary-General, and shall operate only in respect of the notifying State.

8. The Contracting States may declare that their acceptance of the present Protocol does not include any or all of the under-mentioned territories: that is to say, their colonies, overseas possessions or territories, protectorates or the territories over which they exercise a mandate.

The said States may subsequently adhere separately on behalf of any territory thus excluded. The Secretary-General of the League of Nations shall be informed as soon as possible of such adhesions. He shall notify such adhesions to all Signatory States. They will take effect one month after the notification by the Secretary-General to all Signatory States.

The Contracting States may also denounce the Protocol separately on behalf of any of the territories referred to above. Article 7 applies to such denunciation.

THE THIRD SCHEDULE

(See section 53)

CONVENTION OF THE EXECUTION OF FOREIGN ARBITRAL AWARDS

Article 1.—(1) In the territories of any High Contracting Party to which the present Convention applies, an arbitral award made in pursuance of an agreement, whether relating to existing or future differences (hereinafter called “a submission to arbitration”) covered by the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923, shall be recognised as binding and shall be enforced in accordance with the rules of the procedure of the territory where the award is relied upon, provided that the said award has been made in a territory of one of the High Contracting Parties to which the present Convention applies and between persons who are subject to the jurisdiction of one of the High Contracting Parties.

(2) To obtain such recognition or enforcement, it shall, further, be necessary—

(a) that the award has been made in pursuance of a submission to arbitration which is valid under the law applicable thereto;

(b) that the subject-matter of the award is capable of settlement by arbitration under the law of the country in which the award is sought to be relied upon;

(c) that the award has been made by the Arbitral Tribunal provided for in the submission to arbitration or constituted in the manner agreed upon by the parties and in conformity with the law governing the arbitration procedure;

(d) that the award has become final in the country in which it has been made, in the sense that it will not be considered as such if it is open to opposition, appeal or pourvoi en cassation (in the countries where such forms of procedure exist) or if it is proved that any proceedings for the purpose of contesting the validity of the award are pending;

(e) that the recognition or enforcement of the award is not contrary to the public policy or to the principles of the law of the country in which it is sought to be relied upon.

Article 2.—Even if the conditions laid down in Article 1 hereof are fulfilled, recognition and enforcement of the award shall be refused if the court is satisfied—

(a) that the award has been annulled in the country in which it was made;

(b) that the party against whom it is sought to use the award was not given notice of the arbitration proceedings in sufficient time to enable him to present his case; or that, being under a legal incapacity, he was not properly represented;

(c) that the award does not deal with the differences contemplated by or falling within the terms of the submission to arbitration or that it contains decisions on matters beyond the scope of the submission to arbitration.

If the award has not covered all the questions submitted to the arbitral tribunal, the competent authority of the country where recognition or enforcement of the award is sought can, if it thinks fit, postpone such recognition or enforcement or grant it subject to such guarantee as that authority may decide.

Article 3.—If the party against whom the award has been made proves that, under the law governing the arbitration procedure, there is a ground, other than the grounds referred to in Article 1(a) and (c), and Article 2(b) and (c), entitling him to contest the validity of the award in a Court of Law, the Court may, if it thinks fit, either refuse recognition or enforcement of the award or adjourn the consideration thereof, giving such party a reasonable time within which to have the award annulled by the competent tribunal.

Article 4.—The party relying upon an award or claiming its enforcement must supply, in particular—

(1) the original award or a copy thereof duly authenticated, according to the requirements of the law of the country in which it was made;

(2) documentary or other evidence to prove that the award has become final, in the sense defined in Article 1(d), in the country in which it was made;

(3) when necessary, documentary or other evidence to prove that the conditions laid down in Article 1, paragraph (1) and paragraph (2) (a) and (c), have been fulfilled.

A translation of the award and of the other documents mentioned in this Article into the official language of the country where the award is sought to be relied upon may be demanded. Such translations must be certified correct by a diplomatic or consular agent of the country to which the party who seeks to rely upon the award belongs or by a sworn translator of the country where the award is sought to be relied upon.

Article 5.—The provisions of the above Articles shall not deprive any interested party of the right of availing himself of an arbitral award in the manner and to the extent allowed by the law or the treaties of the country where such award is sought to be relied upon.

Article 6.—The present Convention applies only to arbitral awards made after the coming into force of the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923.

Article 7.—The present Convention, which will remain open to the signature of all the signatories of the Protocol of 1923 on Arbitration Clauses, shall be ratified.

It may be ratified only on behalf of those Members of the League of Nations and Non-Member States on whose behalf the Protocol of 1923 shall have been ratified.

Ratification shall be deposited as soon as possible with the Secretary-General of the League of Nations, who will notify such deposit to all the signatories.

Article 8.—The present Convention shall come into force three months after it shall have been ratified on behalf of two High Contracting Parties. Thereafter, it shall take effect, in the case of each High Contracting Party, three months after the deposit of the ratification on its behalf with the Secretary-General of the League of Nations.

Article 9.—The present Convention may be denounced on behalf of any Member of the League or Non-Member State. Denunciation shall be notified in writing to the Secretary-General of the League of Nations, who will immediately send a copy thereof, certified to be in conformity with the notifications, to all the other Contracting Parties, at the same time informing them of the date on which he received it.

The denunciation shall come into force only in respect of the High Contracting Party which shall have notified it and one year after such notification shall have reached the Secretary-General of the League of Nations.

The denunciation of the Protocol on Arbitration Clauses shall entail, ipso facto, the denunciation of the present Convention.

Article 10.—The present Convention does not apply to the colonies, protectorates or territories under suzerainty or mandate of any High Contracting Party unless they are specially mentioned.

The application of this Convention to one or more of such colonies, protectorates or territories to which the Protocol on Arbitration Clauses opened at Geneva on September 24th, 1923, applies, can be effected at any time by means of a declaration addressed to the Secretary-General of the League of Nations by one of the High Contracting Parties.

Such declaration shall take effect three months after the deposit thereof.

The High Contracting Parties can at any time denounce the Convention for all or any of the Colonies, Protectorates or territories referred to above. Article 9 hereof applied to such denunciation.

Article 11.—A certified copy of the present Convention shall be transmitted by the Secretary-General of the League of Nations to every Member of the League of Nations and to every Non-Member State which signs the same.

The Court Fees Act

November 30, 2014

INTRODUCTION

With the establishment of courts a system was evolved for the payment of fees for adjudication of the cases. The rates of stamp fees livable in courts and offices established beyond the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature at Fort William, Madras and Bombay, and in proceedings on the appellate side of High Court, were fixed by Act XXVI of 1867 which were, to the great extent, tentative. Within a span of about two years the experience gained of their working seems to be conclusive as to their repressive effect on the general litigation of the country. It was thought necessary to make a general reduction in the rates on the institution of civil suits, and to revert tot he principle of maximum fee which obtained under the former law. It was proposed to reduce the valuation for the computation of the livable on suits relating to land under temporary settlement or land exempt from the payment of revenue to the Government. In order to rectify the repressive effect and in future there may be no confusion between stamp-revenue proper and the revenue derived from what have heretofore been termed judicial stamps, a comprehensive Bill was introduced.

STATEMENT OF OBJECTS AND REASONS

“The rates of stamp fees livable in Courts and offices established beyond the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature at Fort William, Madras and Bombay and in proceedings on the appellate side of such High Courts, were as fixed by Act XXVI of 1867, to a great extent tentative.

The experience gained of their working during the two years in which they have been in force, seems to be conclusive as to their repressive effect on the general litigation of the country. It is, therefore, thought expedient to make a general reduction in the rates now chargeable on the institution of civil suits, and to revert to the principle of maximum fee which obtained under the former law.

It is proposed also to reduce the valuation fixed by the existing law for the computation of the fee livable on suits relating to land under temporary settlement or land exempt from the payment of revenue to the Government which is believed to be at least relatively excessive as compared with the valuation of permanently settled land; and to provide for the valuation of suits relating to mere parcels of land which, though forming part of estates under settlement, bear no specific allotment of any portion of the assessment of Government revenue on such estates, at the estimated selling price of such land, as was the rule in those cases under Act X of 1862.

The want of some fixed valuation applicable to certain classes on suits, as for example, suits instituted between landlord and tenant to recover a right of occupancy or enforce adjustment, or suits for maintenance or for an annuity the subject-matter of which though not absolutely indeterminable, is certainly not susceptible of ready determination, has given rise to much uncertainty and variety in the procedure adopted by the several Courts in such cases; and the amendment of the existing law in this respect is felt to be urgently called for.

In deference to the strong objections entertained by the local authorities in certain Provinces to the retention of the retention of the fee imposed on the presentation of certain petitions in the Criminal Courts, it is proposed to reduce the amount of such fee from one rupee to eight annas.

The uniform exaction of a fee of eight annas in the case of all petitions addressed to a Revenue Officer or a Magistrate, works harshly in its application to such communications when presented by persons having dealings or transactions with the Government in relation to such transactions. Equitable considerations require that petitions of this kind should be excepted from the operation of the general rule, and the Bill makes suitable provision for such cases.

The ad valorem fee now chargeable on summary suits instituted under Act XVI of 1838 and the Bombay Act (5 of 1864), is represented as working unsatisfactorily, and the substitution of a fixed rate is recommended.

It is to be observed that an award in such cases is liable to be set aside by a judgment passed in regard to the same matter in a regular suit; hence it appears more equitable to treat these summary suits as miscellaneous applications and to subject them to a similar fixed institution fee.

As the Bill provides for a considerable reduction of the fees heretofore chargeable on civil suits of small amount, it seems unnecessary to maintain the present distinction between the Courts of Cantonment Joint Magistrates and other Civil Courts in respect of the amount of fee livable on the institution of such suits.

It is proposed also to exempt suits instituted in a Military Court of Requests from the payment of any fee. The constitution of such Courts is peculiar; they form no part of the regular machinery employed in the general administration of justice, the present measure therefore is inapplicable to them. Moreover, the suitor in such Courts is placed at this disadvantage as compared with suitors in the ordinary Civil Courts that, although he may gain his case, he is unable to recover the costs which he has incurred in prosecuting his claim; hence the incidence of the taxation imposed by the levy of an institution fee in such cases is inequitable.

Suits for the restitution of wives, which are of common occurrence in Punjab are held to be some what excessively taxed under the present law, which prescribes that in suits the money value of the subject-matter of which cannot be estimated, fixed fee of Rs.10 shall be levied; the Bill substitutes for that rate in such cases, a special fee of Rs.5.

The clause in Act XXVI of 1867, exempting Advocates of a High Court from the obligation of presenting to any Court a written authority empowering them to Act in any case pending in such Court is excluded from the Bill. Such a provision appears to be beyond the scope of an enactment for regulating the levy of Court-fees. It is, moreover, open to the objection that it conflicts with section 18 of the Civil Procedure Code and consequently creates some doubt as to the intention of the Legislature.

As some measures of compensation for the loss of revenue which is expected to result from the general reduction of fees, it is proposed to discontinue the refund of any portion of the amount, levied on the first institution of suits, and also to raise the fees heretofore chargeable on probates and letters of administration granted under the Indian Succession Act, and on certificates issued under Act XXVII of 1860, to the ad valorem rates livable under the English law in like cases.

The abolition of refunds is justified by the consideration that for all practical purposes in the majority of cases, the plaintiff, whose suit has not gone beyond the stage at which under the present law he is entitled to recover a moiety of the institution fee, has gained as much through the Court’s agency as the suitor whose case has proceeded to a decision, and that, therefore, on the principle on which all Court-fees are adjusted, the former should contribute in equal proportion with the latter to the maintenance of the Courts from whose action both derive an equal benefit.

In lieu of the existing rates of process-fees, which vary according to the distance of the Court by which the processes are issued from the place where they are to be served or executed, it is proposed to levy, by means of stamps, a uniform rate in all cases. All suitors will thus be required to contribute in equal proportion to the maintenance of the establishment employed in the serving of processes, without reference to the length of time occupied in each service and the consequent amount of work rendered on behalf of each person at whose instance any process is served or executed.

Such a provision is in accordance with the modern system under which the charges in the Postal and Electric and Telegraph Departments are regulated, and is also more equitable to the general community.

The incorporation of the High Court-Fees Act (XV of 1868) with and the transfer of so much of the provisions of the Parsi Marriage and Divorce Act, 1865, the Native Converts’ Marriage Dissolution Act, 1866, the Punjab Tenancy Act, 1868, the the Indian Divorce Act and the Indian Income-tax Act, as relate to the levy of stamp fees in judicial proceedings, to the present Bill appear to be conducive to public convenience, as the whole of the existing law relating to fees livable in all courts of justice will thus be contained in one enactment.

With the same object this Bill purports to effect a complete re-arrangement of the provisions of the existing law on this subject, a similar classification of instruments chargeable with Court-fees to that which obtains in the General Stamp Act having been adopted, and the rules for determining the value of the subject-matter of certain suits being transferred from the Schedule where they are to be found in Act XXVI of 1867 to the body of the proposed Act.

Lastly, that for the future there may be no confusion between stamp-revenue proper and the revenue derived from what have heretofore been termed judicial stamps the proceeds of the proposed enactment are to be designated Court-fees, and the Bill is entitled accordingly.”

ACT 7 OF 1870

The Bill was passed and it got its assent on 11th March, 1870 and became an Act under short title and numbers THE COURT FEES’ ACT, 1870 (7 OF 1870). It came into force on 1st April, 1870

LIST OF AMENDING ACTS AND ADAPTATION ORDERS

Act 14 of 1870.

Chapter I – Preliminary

Section 1. Short title.

This Act may be called the Court Fees’ Act, 1870.

Extent of Act. – It extends to the whole of India except [(Note: Subs. by the Adaptation of Laws (No.2) Order, 1956, for “Part B States”) the territories which, immediately before the 1st November, 1956, were comprised in Part B States].

Commencement of Act. – And it shall come into force on the first day of April, 1870.

Section 1A. (Note: Ins. by the A.O. 1937) Definition of ‘Appropriate Government”.

In this Act “the Appropriate Government” means, in relation to fees or stamps relating to documents presented or to be presented before any officer serving under the Central Government, that Government, and in relation to any other fees or stamps, the State Government.]

COMMENTS

The enactment of the Act is intended to provided revenue to the State. It has been held that this is a fiscal statute and like identical legislations its provisions and connotations must be construed in its strict sense. Chief Inspector of Stamps, U.P. vs Mahant Lakshmi Narain – Air 1970 All 488.

Section 2. [“Chief Controlling Revenue-authority” defined.]

Rep. by the A.O. 1937.

Chapter II – Fees in the High Court and in the Courts of small causes at the Presidency-Towns

Section 3. Levy of fees in High Courts on their original sides.

The fees payable for the time being to the clerks and officers (other than the sheriffs and attorneys) of [(Note: Subs. by the A.O. 1950, for “the Courts which are High Courts for the purposes of the Government of India Ct,1935″) the [(Note: Subs by the Adaptation of Laws (No.2) Order, 1956, for “High Court for Part A States”) High Courts other than those of Kerala. Mysore and Rajasthan].

Or chargeable in each of such Courts under No.11 of the First, and Nos. 7,12,14, (Note: The number “16”, rep. by Act 12 of 1891, s.2 and Sch.1) 20 & 21 of the Second Schedule to this act annexed;

Levy of Fees in Presidency Small Cause Courts. – and the fees the time being chargeable in the Courts of Small Causes at Levy of the Presidency-towns, (Note: See the Presidency Small Cause Courts Act, 1882 (15 of 1882) and their several offices;

Shall be collected in manner hereinafter appearing.

Section 4. Fees on documents filed, etc., in High Courts in their extraordinary jurisdiction;

No document of any of the kinds specified in the First or Second Schedule to this Act annexed, as chargeable with fees, shall be filed, exhibited or recorded in, or shall be received or furnished by, any of the said High Courts in any case coming before such Courts in the exercise of its extraordinary original civil jurisdiction ; or in the exercise of its extraordinary original criminal jurisdiction ;

In their appellate jurisdiction ; – or in the exercise of its jurisdiction as regards appeals from the [(Note: Subs. by Act 19 of 1922, s.2, for “Judgment of two”) judgement (other than judgements passed in the exercise of the ordinary original civil jurisdiction of the Court) of one] or more Judges of the said Court, or of a division Court ;

Or in the exercise of its jurisdiction as regards appeals from the Courts subject to its superintendence ;

As Courts of reference and revision. – or in the exercise of its jurisdiction as a Court of reference or revision’

Unless in respect of such document there be paid a fee of an amount not less than that indicated by either of the said Schedules as the proper fee for such document.

COMMENTS

It has been held that a final decree for future mesne profits passed under Order XX Rule 12(2) CPC is like an award and does not amount to a decree under section 2(2) of The Code of Civil Procedure 1908 and is not a decree as stipulated under Schedule II of the Act. Diwan Brothers vs Central Bank of India – 1976 (2) ALR (SC) Summary.

Section 5. Procedure in case of difference as to necessity or amount of fee.

When any difference arises between the officer whose duty it is to see that any fee is paid under this Chapter and any suitor or attorney, as to the necessity of paying a fee or the amount thereof, the question shall, when the difference arises in any of said High Courts, be referred to the taxing-officer, whose decision thereon shall be final, except when the question is, in his opinion, one of general importance, in which case he shall refer it to the final decision of the Chief Justice of such High Court, or of such Judge of the High Court as the Chief Justice shall appoint either generally or specially in this behalf.

When any such difference arises in any of the said Courts of Small Causes, the question shall be referred to the Clerk of the Court, whose decision thereon shall be final, shall refer it to the final decision of the first Judge of such Court.

COMMENTS

It has been held that under section 5 the order or judgement of the Taxing Judge is final and not appeal is maintainable against such an order or judgement. S.Rm. Ar. S.Sp. Sathappa Chettiar vs S.Rm. Ar. Rm. Ramanathan Chettiar AIR 1958 SC 245.

Chapter III – Fees in other courts and in public offices

Section 6. Fees on documents filed, etc., in Mofussil Courts or in public Offices.

Except in the Courts hereinbefore mentioned, no document of any of the kinds specified as chargeable in the First or Second Schedule to this Act annexed shall be filed, exhibited or recorded in any Court of Justice, or shall be received or furnished by any public officer, unless in respect of such document there be paid a fee of an amount not less than that indicated by either of the said Schedules as the proper fee for such document.

COMMENTS

It has been held that while exercising the inherent powers the Court should apply Section 6 as court fee has to be paid on the documents received by the court, For this purpose the court may afford an opportunity to the party to pay such court fee. Netramani Dibya vs Dasarthi Misra – AIR 1986 Orissa 235.

Section 7. Computation of fees payable in certain suits

The amount of fee payable under this Act in the suits next hereinafter mentioned shall be computed as follows :-

For money:- In suits for money (including suits for damages or compensation, or arrears of maintenance, of annuities, or of other sums payable periodically) – according to the amount claimed ;

For maintenance and annuities:- In suits for maintenance and annuities or other sums payable periodically – according to the value of the subject-matter of the suit, and such value shall be deemed to be ten times the amount claimed to be payable for one year.

For other moveable property having a market-value:- In suits for moveable property other than money, where the subject-matter of the suit, and such value shall be deemed to be ten times the amount claimed to be payable for one year ;

In suits –

For moveable property of no market-value:- for moveable property where the subject-matter has no market-value, as, for instance, in the case of documents relating to title,

To enforce a right to share in joint family property:- to enforce the right to share in any property on the ground that it is joint family property,

For a declaratory decree and consequential relief:- to obtain a declaratory decree or order, where consequential relief is prayed,

For an injunction:- to obtain an injunction.

For easements:- for a right to some benefit (not herein otherwise provided for) to arise out of land, and

For accounts:- for accounts – according to the amount at which the relief sought is valued in the plaint or memorandum of appeal.

In all such suits the plaintiff shall state the amount at which he values the relief sought (Note: The words “and the provision of the Code of Civil Procedure, section thirty-one, shall apply as if, for the word claim,” ‘the words relief sought’ were substituted” rep. by Act 12 of 1891, s.2 and Sch.I)

For possession of land, houses and gardens ; – In suits for the possession of land, houses and gardens – according to the value of the subject – matter ; and such value shall be deemed to be -

Where the subject-matter is land, and

Where the land forms an entire estate, or a definite share of an estate, paying annual revenue to Government, or forms part of such an estate and is recorded in the Collector’s register as separately assessed with such revenue ; and such revenue is permanently settled – ten times the revenue so payable ;

Where the land forms an entire estate, or a definite share of an estate, paying annual revenue to Government, or forms part of such estate and is recorded as aforesaid ; and such revenue is settled, but not permanently –

five times the revenue so payable ;

Where the land pays no such revenue, or has been partially exempted from such payment, or is charged with any fixed payment in lieu of such revenue, and net profits have arisen from the land during the year next before the date of presenting the plaint – fifteen times such net profits ; but where no such net profits have arisen therefrom – the amount at which the Court shall estimate the land with reference to the value of similar land in the neighbourhood;

Where the land forms part of an estate paying revenue to Government, but is not a definite share of such estate and is not separately assessed as above-mentioned – the market-value of the land: proviso as to Bombay Presidency: – Provided that, in the territories subject to the (Note: See paragraph 8 of the A.O. 1937. In view of this provision the expression “Governor of Bombay in Council” has been left unmodified) Governor of Bombay in Council, the value of the land shall be deemed to be—

Where the land is held on settlement for a period not exceeding thirty years and pays the full assessment to Government—a sum equal to five times the survey-assessment ;

Where the land is held on a permanent settlement, or on a settlement for any period exceeding thirty years, and pays the full assessment to Government—a sum equal to ten times the survey assessment ; and

Where the whole or any part of the annual survey-assessment is remitted—sum computed under paragraph (1) or paragraph (2) of this proviso, as the case may be, in addition to ten times the assessment, or the portion of assessment, so remitted.

Explanation. – The word “estate”, as used in this paragraph, means any land subject to the payment of revenue, for which the proprietor or a farmer or ryot shall have executed a separate engagement to Government, or which, in the absence of such engagement, shall have been separately assessed with revenue ;

for houses and gardens:- where the subject-matter is a house or garden-according to the market-value of the house or garden;

To enforce a right of pre-emption:- In suits to enforce a right of pre-emption-according to the value [computed in accordance with paragraph (v) of this section] of the land, house or garden in respect of which the right is claimed ;

For interest of assignee of land-revenue ; In suits for the interest of an assignee of land-revenue fifteen times his net profits as such for the year next before the date of presenting the plaint ;

To set aside an attachment ; In suits to set aside an attachment of land or of an interest in land or revenue-according to the amount for which the land or interest was attached :

Provided that, where such amount exceeds the value of the land or interest, the amount of fee shall be computed as if the suit were for the possession of such land or interest ;

(ix) To redeem; In suits against a mortgage for the recovery of the property mortgaged, to foreclose ; and in suits by a mortgage to foreclose the mortgage, or, where the mortgage is made by conditional sale, to have the sale declared absolute – according to the principal money expressed to be secured by the instrument of mortgage ;

(x) for specific performance ; – In suits for specific performance — Of a contract of sale-according to the amount of the consideration;

Of a contract of mortgage—according to the amount agreed to be secured;

Of a contract of lease-according to the aggregate amount of the fine or premium (if any) and of the rent agreed to be paid during the first year of the term;

Of an award—according to the amount or value of the property in dispute ;

(xi) between landlord and tenant.—In the following suits between landlord and tenant ;-

For the delivery by a tenant of the counterpart of lease,

To enhance the rent of a tenant having a right of occupancy,

For the delivery by a landlord of a lease,

(Note: Ins. by Act 6 of 1905, s.2(1)) For the recovery of immovable property from a tenant, including a tenant holding over after the determination of a tenancy]

To contest a notice of ejectment.

To recover the occupancy of [(Note: Subs. by s.2(2), ibid, for “land”) immovable property] from which a tenant has been illegally ejected by d the landlord, and

For abatement of rent — According to the amount of the rent of the [immovable property] to which the suit refers, payable for the year next before the date of presenting the plaint.

COMMENTS

In general the court fee has to be decided on the basis of the subject matter of the suit and the appeal arising therefrom. It shall not be substantially affected by the claim as set out in the relief by the plaintiff. In Re. Thriupathiammal AIR 1956 Mad 179.

It has been held that the question of court fee must be decided having regard to the averments made in the plaint itself and the contentions raised in the written statement or the final decision on merits cannot affect the same. Sathappa Chettiar vs Ramanathan Chettiar.

It has been held that when the plaintiff paid advalorem court fee in a suit for recovery of a specific calculated amount as damages on account of leakage of cooking gas cylinder leading to accident the valuation was correct. Bhagwant Sarup vs Himalary Gas Co. – AIR 1985 HP 41

It has been held that in a suit for partition the share claimed by the plaintiff would determine the court fee and not he property as a whole. Rakesh Chandra Das vs Khan Bahadur Abdul Majid Choudhary AIR 1982 Gauhati 82.

It has been held that valuation as set up the plaintiff in the plaint of the suit is conclusive and final. Kesho Mahton vs Ayodhya Mahton – AIR 1983 PAT 67.

It has been held that section 7 (iv) (f) is applicable to a suit for dissolution of partnership at will and rendition of accounts in as much as it is a suit for accounts and value for jurisdiction and court fee is the same advalorem court fee to be paid under Section 7. Madan Mohan Sharma vs Uttam Singh Bagga – AIR 1985 J &K 87.

The Code of Civil Procedure empowers the court to make up deficiency of court fees and under Order VII Rule 11 it is provided that the plaint shall be rejected where the relief claimed is undervalued, and the plaintiff on being required by the court to correct the valuation within a time to be fixed by the court fails to do so. It has bee held in such cases where the valuation made by the plaintiff in respect of the suit property is unreasonable and arbitrary the court can exercise its powers vested in it under Order VII Rule 11 CPC, Mana Das vs Kisto Das – AIR 1983 Patna 272.

The Delhi High Court has held that if plaintiff files a suit for declarations and injunctions and the reliefs claimed therein are wholly independent of each other then the suit is not governed by Section 7(iv) (c). S.C. Malik vs Surender Nath Puri – 1991 Rajdhani Law Reporter (NOTE) 85.

It has been held that the words “Subject Matter” used in the Section include relief or reliefs. Managing Director. Hafiz vs Mustt Noorjahan – AIR 1989 GAU 13.

It has been held that in a single suit for recovery filed by a Bank against the defendant borrower pertaining to separate accounts in its different branches court fee has to be paid on each of the accounts separately. Bank of India vs Vinod Kumar Bhalla – AIR 1988 Delhi 79.

It has been held that Paragraph (iv) of Section 7 of the Court Fees Act gives a right to the plaintiff in any of the suits mentioned in the clauses of that paragraph to place any valuation that he likes on the reliefs he seeks, subject, however to any rules made under Section 9 of the Suit Valuation Act and the court has no power to interfere with the plaintiff’s valuation. Shiela Devi vs Kishan Lal Katra – ILR (1974) 2 Delhi (FB) 491 Commercial Aviation & Travel Co. vs Vinal Pannalal – AIR 1988 SC 1636.

Section 8. Fee on memorandum of appeal against order relating to compensation.

The amount of fee payable under this Act on a memorandum of appeal against an order relating to compensation under any Act for the time being in force for the (Note: See now the Land Acquisition Act,1894 (1 of 1894)) acquisition of land for public purposes, shall be computed according to the difference between the amount awarded and the amount claimed by the appellant.

COMMENTS

It has been held that the amount of court fee payable on a memorandum of appeal against an order relating to compensation for the acquisition of land for public purposes is to be computed only on difference between amount of compensation awarded and the amount claimed and not on the amount of valuation. Abun Naser vs Special Tehsildar, L.A. – AIR 1986 Madras 229.

Section 9. Power to ascertain nett profits of market-value

If the Court sees reason to think that the annual nett profits or the market-value of any such land, house or garden as is mentioned in section 7, paragraphs (v) and (vi) have or has been wrongly estimated, the Court may, for the purpose of computing the fee payable in any suit therein mentioned, issue a commission as may be necessary, and to report thereon to the Court.

Section 10. Procedure where nett profits or market-value wrongly estimated.

(I) If in the result of any such investigation the Court finds that the nett profits or market-value have or has been wrongly estimated, the Court, if the estimation has been excessive, may in its discretion refund the excess paid as such fee : but, if the estimation has been insufficient, the Court shall require the plaintiff to pay so much additional fee as would have been payable had the said market-value or nett profits been rightly estimated.

(II) In such case the suit shall be stayed until the additional fee is paid. If the additional fee is not paid within such time as the Court shall fix, the suit shall be dismissed.

(Note: Cl. (iii) rep. by Act 12 of 1891, s.2 and Sch. I.)

Section 11. Procedure in suits for mesne profits or account when amount decreed exceeds amount claimed.

In suits for mesna profits or for immovable property and mesne profits, or for an account, if the profits or amount decreed are or is in excess of the profits claimed or the amount at which the plaintiff valued the relief sought, the decree shall not be executed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits or amount so decreed shall have been paid to the proper officer.

Where the amount of mesne profits is left to be ascertained in the course of the execution of the decree, if the profits so ascertained exceed the profits claimed, the further execution of the decree shall be stayed until the difference between the fee actually paid and the fee which would have been payable had the suit comprised the whole of the profits so ascertained is paid. If the additional fee is not paid within such time as the Court shall fix, the suit shall be dismissed.

COMMENTS

It has been held that a separate application to raise objection with regard to under valuation of deficiency in court fee is not required and such objection can be contemplated from the written statement. Panna Lal vs Mohan Lal – AIR 1985 Raj 178.

It has been held that if the amount of mesne profits to be awarded after ascertaining the same exceed the pecuniary jurisdiction of the court the suit must be transferred to a court of competent jurisdiction. Siya Saran Singh vs Jamuna Devi – AIR 1987 PAT I.

It has been held that objection in respect to pecuniary jurisdiction must be raised at the earliest opportunity. Sml. Baba Dai vs Muneshwar Jha – AIR 1985 PAT 67.

It has been held that there is no provision either in the Code of Civil Procedure 1908 or in the Court Fees Act 1870 for decreeing any amount of compensation paid or received while the suit is pending adjudication or for the payment of court fees after decree has been passed. Usha Sales Ltd. vs Smt. Aruna Gupta – AIR 1988 (NOC) 74 Delhi.

Section 12. Decision of questions as to valuation

(I) Every question relating to valuation for the purpose of determining the amount of any fee chargeable under this Chapter on a plaint or memorandum of appeal, shall be decided by the Court in which such plaint or memorandum, as the case may be, is filed, and such decision shall be final as between the parties to the suit.

But whenever any such suit comes before a Court of appeal, reference or revision, if such Court considers that the said question has been wrongly decided, to the detriment of the revenue, it shall require the party by whom such fee has been paid to pay so much additional fee as would have been payable had the question been rightly decided, and the provisions of section 10, (ii), shall apply.

COMMENTS

It has held in a suit for partition where plaintiff was in possession that valuation for jurisdiction is the market value of plaintiff’s share and the same is applicable in its appeal therefrom as well. Pamban Kayakkal Vatsalam vs Pamban Kayakkal Kanmudi – AIR 1982 KER 304.

It has been that the order for remanding the case on the ground of non-payment of requisite court fee is illegal where no such objection was raised before the trail court. Pargat Singh vs U.O.I – AIR 1981 Delhi 328.

It has been that even if the plaint is deficiently stamped the appellate court could not reverse the trail court’s judgement on this acore alone. It is improper to decline granting of relief if requisite court fee was not fixed thereupon. Harbhajan Singh vs Prakash Kaur – AIR 1984 (NOC) 1 ALL.

Section 13. Refund of fee paid on memorandum of appeal.

If an appeal or plaint, which has been rejected by the lower Court on any of the grounds mentioned in the (Note: See now the Code of Civil Procedure, 1908 (Act 5 of 1908)) Code of Civil Procedure, is ordered to be received, or if a suit is remanded in appeal on any of the grounds mentioned in section 351 of the same Code, for a second decision by the lower Court, the Appellate Court shall grant to the appellant a certificate, authorizing him to receive back from the Collector the full amount of fee paid on the memorandum of appeal :

Provided that, if, in the case of a remand in appeal, the order of remand shall not cover the whole of the subject-matter of the suit, the certificate so granted shall not authorize the appellant to receive back more than so much fee as would have been originally payable on the part or parts of such subject-matter in respect whereof the suit has been remanded.

COMMENTS

It has been held that refund of court of fee could be ordered even where a case is remanded under the amended provisions of order XLI Rule 23 CPC. State of U.P. vs Chandra Bhushan Misra – AIR 1980 SC 591. It has been held that where a suit is transferred to the High Court under Cl. 13 of Letters Patent Court fee cannot be refunded. The official Receiver. Coimbatore vs Sar Gounder – AIR 1980 MAD 269.

Section 14. Refund of fee on application for review of judgement.

Where an application for a review of judgement is presented on or after the ninetieth day from the date of the decree, the Court unless the delay was caused by the applicant’s laches, may, in its discretion, grant him a certificate authorizing him to receive back from the Collector so much of the fee paid on the application as exceeds the fee which would have been payable had it been presented before such day.

Section 15. Refund where Court reverses or modifies its former decision on ground of mistake.

Where an application for a review of judgement is admitted, and where, on the rehearing, the Court reverses or modifies its former decision on the ground of mistake in law or fact, the applicant shall be entitled to a certificate from the Court authorizing him to receive back from the Collector so much of the fee paid on the [(Note: Subs. by Act 20 of 1870, s.1, for “plaint or memorandum of appeal”.) application] as exceeds the fee payable on any other application to such Court under the Second Schedule to this Act, No.1, clause (b) or clause (d).

But nothing in the former part of this section shall entitle the applicant to such certificate where the reversal or modification is due, wholly or in part, to fresh evidence which might have been produced at the original hearing.

Section 16. [Additional fee where respondent takes objection to unappealed part of decree.]

Rep. By the Code of Civil Procedure, 1908 (Act 5 of 1908). S.156 and Sch. V.

Section 17. Multifarious suits.

Where a suit embraces two or more distinct subjects, the plaint or memorandum of appeal shall be chargeable with the aggregate amount of the fees to which the plaints or memoranda of appeal in suits embracing separately each of such subjects would be liable under this Act.

Nothing in the former part of this section shall be deemed to affect the power conferred by the (Note: See now the Code of Civil Procedure, 1908 (Act 5 of 1908) Code of Civil Procedure, section 9.

Section 18. Written examinations of complainants.

When the first or only examination of a person who complaints of the offence of wrongful confinement, or of wrongful restraint, or of any offence other than an offence for which police-officers may arrest without a warrant, and who has not already presented a petition on which fee has been levied under this Act, is reduced to writing under the provisions of the (Note: See now the Code of Criminal Procedure, 1973 (Act 2 of 1974) Code of Criminal Procedure, the complainant, shall pay a fee of eight annas, unless the Court thinks fit to remit such payment.

Section 19. Exemption of certain documents.

Nothing contained in the Act shall render the following documents chargeable with any fee :-

Power-of-attorney to institute or defend a suit when executed [(Note: Subs. by the A.O. 1950, for “by an officer, warrant-officer, non-commissioned officer or private of Her Majesty’s Army”) by a member of any of the Armed Forces of the Union] not in civil employment.

Note: Cl. (ii) rep. by Act 12 of 1891, s.2 and Sch. I). Written statements called for by the Court after the first hearing of a suit.

(Note: Cl. (iv) rep. by Act 13 of 1889, s.2 and Sch.)

Plaints in suits tried by (Note: See the Madras Village Courts Act,1889 (Madras Act 1 of 1889)) Village Munsiffs in the Presidency of Fort St. George.

Plaints and processes in suits before District Panchayats in the same Presidency.

Plaints in suits before Collectors under Madras Regulation XII of 1816.

Probate of a will, letters of administration, [(Note: Subs. by Act 7 of 1889, s.13(2), for “and certificate mentioned in the First Schedule of this Act annexed, No.12″) and, save as regards debts and securities, a certificate under Bombay Regulation VIII of 1827], where the amount or value of the property in respect of which the probate or letters or certificate shall be granted does not exceed one thousand rupees.

Application or petition to a Collector or other officer making a settlement of land-revenue, or to a Board of Revenue, or a Commissioner of Revenue, relating to matters connected with the assessment of land, or the ascertainment of rights thereto or interests therein, if presented previous to the final confirmation of such settlement.

Application relating to a supply for irrigation of water belonging to Government.

Application for leave to extend cultivation, or to relinquish land, when presented to an officer of land-revenue by a person holding, under direct engagement with Government, land of which the revenue is settled but not permanently.

Application for service of notice of relinquishment of land or of enhancement of rent.

Written authority to an agent to distrain.

First application (other than a petition containing a criminal charge or information) for the summons of a witness or other person to attend either to give evidence or to produce a document, or in respect of the production or filing of an exhibit not being an affidavit made for the immediate purpose of being produced in Court.

Bail-bonds in criminal cases, recognizance’s to prosecute or give evidence, and recognizance’s for personal appearance or otherwise.

Petition, application, charge or information respecting any offence, when presented, made or laid to or before a police-officer, or to or before the Heads of Villages or the Village Police in the territories respectively subject to the Governors in Council of Madras and Bombay.

Petition by a prisoner, or other person in duress or under restraint of any Court or its officers.

Complaint of a public servant (as defined in the Indian Penal Code), a municipal officer, or an officer or servant of a Railway Company.

Application for permission to cut timber in Government forests, or otherwise relating to such forests.

Application for the payment of money due by Government to the applicant.

Petition of appeal against the chaukidari assessment under (Note: The Bengal Chaukidari Act, 1856) Act No.20 of 1856, or against any municipal tax.

Applications for compensation under any law for the time being in force relating to the acquisition of property for public purposes.

Applications for compensation under any law for the time being in force relating to the acquisition of property for public purposes.

Petitions presented to the Special Commissioner appointed under (Note: The Chota Nagpur Tenures Act, 1869) Bengal Act No.2 of 1869 (to ascertain, regulate and record certain tenures in Chota Nagpur).

[(Note: Subs. by Act 15 of 1872, s.2, for the original clause.) Petitions under the Indian Christian Marriage Act, 1872, sections 45 and 48.]

Chapter III A – Probates, letters of administration and certificates of administration

Section 19A. Relief where too high a court-fee has been paid.

Where any person on applying for the probate of a will or letters of administration has estimated the property of the deceased to be of greater value than the same has afterwards proved to be, and has consequently paid too high a court-fee thereon, if within six months after the true value of the property has been ascertained, such person produces the probate or letters to the Chief Controlling Revenue Authority [(Note: Subs. by Act 10 of 1901, s.3(1), for “of the Province”) for the local area] in which the probate or letters has or have been granted,

And delivers to such Authority a particular inventory and valuation of the property of the deceased, verified by affidavit or affirmation.

And if such Authority is satisfied that a greater fee was paid on the probate or letters than the law required,

The said Authority may –

(a) Cancel the stamp on the probate or letters, if such stamp has not been already cancelled :

(b) Substitute another stamp for denoting the court-fee which should have been paid thereon; and

Make an allowance for the difference between them as in the case of spoiled stamps, or repay the same in money, at his discretion.

Section 19B. Relief where debts due from a deceased person have been paid out of his estate.

Whenever it is proved to the satisfaction of such Authority that an executor or administrator has paid debts due from the deceased to such an amount as, being deducted out of the amount or value of the estate, reduces the same to a sum which, if it had been the whole gross amount or value of the estate, would have occasioned a less court-fee to be paid on the probate or letters of administration granted in respect of such estate than has been actually paid thereon under this Act,

Such Authority may return the difference, provided the same be claimed within three years after the date of such probate or letters.

But when, by reason of any legal proceeding, the debts due from the deceased have not been ascertained and paid, or his effects have not been recovered and made available, and in consequence thereof the executor or administrator is prevented from claiming the return of such difference within the said term of three years, the said Authority may allow such further time for making the claim as may appear to be reasonable under the circumstances.

Section 19C. Relief in case of several grants.

Whenever (Note: The word “such” rep. by Act 12 of 1891, s.2 and Sch.I) a grant of probate or letters of administration has been or is made in respect of the whole of the property belonging to an estate, and the full fee chargeable under this Act has been or is paid thereon, no fee shall be chargeable under the same Act when a like grant is made in respect of the whole or any part of the same property belonging to the same estate.

Whenever such a grant has been or is made in respect of any property forming part of an estate, the amount of fees then actually paid under this Act shall be deducted when a like grant is made in respect of property belonging to the same estate, identical with or including the property to which the former grant relates.

Section 19D. Probates declared valid as to trust-property though not covered by court-fee.

The probate of the will, or the letters of administration of the effects, of any person deceased heretofore or hereafter granted shall be deemed valid and available by his executors or administrators for recovering, transferring or assigning any moveable or immovable property whereof or whereto the deceased was possessed or entitled, either wholly or partially as a trustee, notwithstanding the amount or value of such property is not included in the amount or value of the estate in respect of which a court-fee was paid on such probate or letters of administration.

Section 19E. Provision for case where too low a court-fee has been paid on probates, etc.

Where any person on applying for probate or letters of administration has estimated the estate of the deceased to be of less value than the same has afterwards proved to be, and has in consequence paid too low a court-fee thereon, the Chief Controlling Revenue-authority [(Note: Subs. by Act 10 of 1901, S.3(1), for “of the Province”) for the local area] in which the probate or letters has or have been granted, may, on the value of the estate of the deceased being verified by affidavit or affirmation, cause the probate or letters of administration to be duly stamped on payment of the full court-fee which ought to have been originally paid thereon in respect of such value and of the further penalty, if the probate or letters is or are produced within one year from the date of the grant, of five times, or if it or they is or are produced after one year from such date, of twenty times, such proper court-fee, without deduction of the court-fee originally paid on such probate or letters :

Provided that, if the application be made within six months after the ascertainment of the true value of the estate and the discovery that too low a court-fee was at first paid on the probate or letters, and if the said Authority is satisfied that such fee was paid in consequence of a mistake or of its not being known at the time that some particular part of the estate belonged to the deceased, and without any intention of fraud or to delay the payment of the proper court-fee, the said Authority may remit the said penalty, and cause the probate or letters to be duly stamped on payment only of the sum wanting to make up the fee which should have been at first paid thereon.

Section 19F. Administrator to give proper security before letters stamped under section 19E.

In case of letters of administration on which too low a court-fee has been paid at first, the said Authority shall not cause the same to be duly stamped in manner aforesaid until the administrator has given such security to the Court by which the letters of administration have been granted as ought by law to have been given on the granting thereof in case the full value of the estate of the deceased had been than ascertained.

Section 19G. Executors, etc., not paying full court-fee on probates, etc., within six months after discovery of under-payment.

Where too low a court-fee has been paid on any probate or letters of administration in consequence of any mistake, or of its not being known at the time that some particular part of the estate belonged to the deceased, if any executor or administrator acting under such probate or letters does not, within six months (Note: The words and figures “after the first day of April, 1875, or” omitted by Act 12of 1891, s.2 and Sch.I) after the discovery of the mistake or of any effects not known at the time to have belonged to the deceased, apply to the said Authority and pay what is wanting to make up the court-fee which ought to have been paid at first on such probate or letters, he shall forfeit the sum of one thousand rupees and also a further sum at the rate of ten rupees per cent, on the amount of the sum wanting to make up the proper court-fee.]

Section 19H. Notice of applications for probate or letters of administration to be given to Revenue-authorities; and procedure thereon.

(1) Where an application for probate or letters of administration is made to any Court other than a High Court, the Court shall cause notice of the application to be given to the Collector.

(2) Where such an application as aforesaid is made to a High Court, the High Court shall cause notice of the application to be given to the Chief Controlling Revenue-authority [(Note: Subs. by Act 10 of 1901, s.3(2), for “of the Province”) for the local area in which the High Court is situated].

(3) The Collector within the local limits of whose revenue-jurisdiction the property of the deceased or any part thereof is, may at any time inspect or cause to be inspected, and take or cause to be taken copies of, the record of any case in which application for probate or letters of administration has been made ; and if, on such inspection or otherwise, he is of opinion that the petitioner has under estimated the value of the property of the deceased, the Collector may, if he thinks fit, require the attendance of the petitioner (either in person or by agent) and take evidence and inquire into the matter in such manner as he may think fit, and, if he is still of opinion that the value of the property has been under-estimated, may require the petitioner to amend the valuation.

(4) If the petitioner does not amend the valuation to the satisfaction of the Collector, the Collector may move the Court before which the application for probate or letters of administration was made, to hold an inquiry into the true value of the property :

Provided that no such motion shall be made after the expiration of six months from the date of the exhibition of the inventory required by section 277 of the (Note: See now the Indian Succession Act, 1925 (39 of 1925) Indian Succession Act, 1865, or, s the case may be, by section 98 of the Probate and Administration Act, 1881.

(5) The Court, when so moved as aforesaid, shall hold, or cause to be held, an inquiry accordingly, and shall record a finding as to the true value, as near as may be, at which the property of the deceased should have been estimated. The Collector shall be deemed to be a party to the inquiry.

(6) For the purposes of any such inquiry, the Court or person authorized by the Court to hold the inquiry may examine the petitioner for probate or letters of administration on oath (whether in person or by commission), and may take such further evidence as may be produced to prove the true value of the property. The person authorized as aforesaid to hold the inquiry shall return to the Court the evidence taken by him and report the result of the inquiry, and such report and the evidence taken by him and report the result of the inquiry, and such report and the evidence so taken shall be evidence in the proceeding, and the Court may record a finding in accordance with the report, unless it is satisfied that it is erroneous.

(7) The finding of the Court recorded under sub-section (5) shall be final, but shall not bar the entertainment and disposal by the Chief Controlling Revenue-authority of any application under section 19E.

(8) The State Government may make rules for the guidance of Collectors in the exercise of the powers conferred by sub-section (3).

COMMENTS

It has been that for valuation of property in respect of an application for letters of administration the court cannot decide the same without carrying out an inquiry. Lakshmi Prasak vs Badri Ram – AIR 1985 PAT 119.

It has been held that it is incumbent upon the Collector to afford an opportunity by giving notice to the petitioner and hearing him for probate. Only after such hearing the Collector can make the valuation of property in question. Trambak Lal Dayalal Kothari vs L.K. Dey – AIR 1982 CAL 217.

Section 19-I. Payment of court-fees in respect of probates and letters of administration.

(1) No order entitling the petitioner to the grant of probate or letters of administration shall be made upon an application for such grant until the petitioner has filed in the Court a valuation of the property in the form set forth in the Third Schedule, and the Court is satisfied that the fee mentioned in No.11 of the First Schedule has been paid on such valuation.

(2) The grant of probate or letters of administration shall not be delayed by reason of any motion made by the Collector under section 19H, sub-section (4).

COMMENT

It has been held that all the assets have to be incorporated in the Schedule as stipulated in this section no matter the petitioner claims against one of the items more fully set out in the Will. Smt. Kamala Rajamanikkam vs Smt. Sushila Thakur Dass – AIR 1983 ALL 90.

Section 19J. Recovery of penalties, etc.

(1) Any excess fee found to be payable on an inquiry held under section 19H, sub-section (6), and any penalty or forfeiture under section 19G may, on the certificate of the Chief Controlling Revenue-authority, be recovered from the executor or administrator as if it were an arrear of land-revenue by any Collector (Note: The words “in any part of British India” omitted by the A.O. 1948).

(2) The Chief Controlling Revenue-authority may remit the whole or any part of any such penalty or forfeiture as aforesaid, or any part of any penalty under section 19E or of any court-fee which ought to have been paid.

Section 19K. Sections 6 and 28 not to apply to probates or letters of administration

Nothing in section 6 or section 28 shall apply to probates or letters of administration.]

Chapter IV – Process Fees

Section 20. Rules as to costs of processes

The High Court shall, as soon as may be, make rules as to the following matters:-

The fees chargeable for serving and executing processes issued by such Court in its appellate jurisdiction and by the other Civil and Revenue Courts established within the local limits of such jurisdiction;

The fees chargeable for serving and executing processes issued by the Criminal Courts established within such limits in the case of offences other than offences for which police-officers any arrest without a warrant: and

The remuneration of the peons and all other persons employed by leave of a Court in the service or execution of processes.

The High Court may from time to time alter and add to the rules so made.

Confirmation and publication of rules – All such rules, alterations and additions shall, after being confirmed by the State Government (Note: The words “and sanctioned by the governor General of India in Council” omitted by Act 38 of 1920, s.2 and Sch.I) be published in the Official Gazette, and shall there-upon have the force of law.

Until such rules shall be so made and published, the fees now leviable for serving and executing processes shall continue to be levied, and shall be deemed to be fees leivable under this Act.

Section 21. Tables for process fees.

A table in the English and Vernacular languages, showing the fees chargeable for such service and execution, shall be exposed to view in a conspicuous part of each Court.

Section 22. Number of peons in District and subordinate Courts

Subject to rules to be made by the High Court and approved by the State Government (Note: The words “and the Governor General of India in Council” omitted by s.2 and Sch.I. ibid) every District Judge and every Magistrate of a District shall fix, and may from time to time alter, the number of peons necessary to be employed for the service and execution of processes issued out of his Court and each of the courts subordinate thereto.

Number of peons in Mofussil Small Cause Courts – and for the purpose of this section, very Court of Small Causes established under (Note: See now the Provincial Small Cause Courts Act, 1887 (9 of 1887) Act No.11 of 1865 (to consolidate and amend the law relating to Courts of Small Causes beyond the local limits of the ordinary original civil jurisdiction of the High Courts of Judicature) shall be deemed to be subordinate to the Court of the District Judge.

Section 23. Number of peons in Revenue Courts

Subject to rules to be framed by the Chief Controlling Revenue-authority and approved by the State Government, (Note: The words “and the governor General of India in Council,” omitted by Act 38 of 1920, s.2 and Sch.I, Pt. I) every officer performing the functions of a Collector of a District shall fix, and may from time to time alter, the number of peons necessary to be employed for the service and execution of processes issued out of his Court or the Courts subordinate to him.

Section 24. [Process served under this Chapter to be held to be process within meaning of Code of Civil Procedure.]

Rep. by the Amending Act, 1891 (12 of 1891), s.2 and Sch. I.

Chapter V – Of the Mode of Levying fees

Section 25. Collection of fees by stamps

All fees referred to in section 3 or chargeable under this Act shall be collected by stamps.

Section 26. Stamps to be impressed or adhesive

The stamps used to denote any fees chargeable under this Act shall be impressed or adhesive, or partly impressed and party adhesive, as the [(Note: Subs. by the A.O. 1937, for “L.G.” which had been subs. by Act 38 of 1920. s.2 and Sch.I, Pt I, for “Governor General of India in Council”.) Appropriate Government] may, by notification in the Official Gazette, from time to time direct.

Section 27. Rules for supply, number, renewal and keeping accounts of stamps

The [(Note: Subs. by the A.O. 1937, for “L.G.”)] Appropriate Government] may, from time to time, make rules for regulating -

(a) The supply of stamps to be used under this Act;

(b) The number of stamps to be used for denoting any fee chargeable under this Act;

(c) The renewal of damaged or spoiled stamps; and

(d) The keeping accounts of all stamps used under this Act:

Provided that, in the case of stamps used section 3 in a High Court, such rules shall be made with the concurrence of the Chief Justice of such Court.

All such rules shall be published in the Official Gazette, and shall thereupon have the force of law.

Section 28. Stamping documents inadvertently received

No document which ought to bear a stamp under this Act shall be of any validity, unless and until it is properly stamped.

But, if any such document is through mistake or inadvertence received, filed or used in any Court or office without being properly stamped, the presiding Judge or the head of the office, as the case may be, or, in the case of a High Court, any Judge of such Court, may, if he thinks fit, order that such document be stamped as he may direct; and, on such document being stamped accordingly, the same and every proceeding relative thereto shall be as valid as if it had been properly stamped in the first instance.

Section 29. Amended document

Where any such document is amended in order merely to correct a mistake and to make it conform to the original intention of the parties, is shall not be necessary to impose a fresh stamp.

Section 30. Cancellation of stamp

No document requiring a stamp under this Act shall be filed or acted upon in any proceeding in any Court or office until the stamp has been cancelled.

Such officer as the Court or the head of the office may from time to time appoint shall, on receiving any such document, forthwith effect such cancellation by punching out the figure-head so as to leave the amount designated on the stamp untouched, and the part removed by punching shall be burnt or otherwise destroyed.

Chapter VI – Miscellaneous

Section 31. [Repayment of fees paid on applications to Criminal Courts.]

Rep. by the Code of Criminal Procedure (Amendment) Act, 1923 (18 of 1923) s.163.

Section 32. [Amendments of Act 8 of 1859 and Act 9 of 1896.]

Rep. by the Amending Act, 1891 (12 of 1891) s.2 and Sch.I

Section 33. Admission in criminal cases of documents for which proper fee has not been paid

Whenever the filing or exhibition in a Criminal Court of a document in respect of which the proper fee has not been paid is, in the opinion of the presiding Judge, necessary to prevent a failure of justice, nothing contained in section 4 or section 6 shall be deemed to prohibit such filing or exhibition.

Section 34. Sale of stamps

(1) The [(Note: Subs. by the A.O. 1937, for “L.G.”) Appropriate Government] may from time to time make rules for regulating the sale of stamps to be used under this Act, the person by whom alone such sale is to be conducted, and the duties and remuneration of such persons.

(2) All such rules shall be published in the Official Gazette, and shall there upon have the force of law.

(3) Any person appointed to sell stamps who disobeys any rule made under this section, and any person not so appointed who sells or officers for sale any stamp, shall be punished with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.

Section 35. Power to reduce or remit fees

The [(Note: Subs. by the A.O. 1937, for “L.G” which had been subs. by Act 38 of 1920, s.2 and Sch.I, Pt.I, for “Governor General of India in Council”) Appropriate Government] may, from time to time by notification in the Official Gazette, reduce or remit, in the whole or in any part of [(Note: Subs. by Act 38 of 1920, s.2 and Sch.I, for “British India”) the territories under its administration], all or any of the fees mentioned in the First and Second Schedules to this Act annexed, and may in like manner cancel or vary such order.

Section 36. Saving of fees to certain officers of High Courts

Nothing in Chapters II and V of this Act applies to the Commission payable to the Accountant General of the High Court of Fort William, or to the fees which any officer of a High Court is allowed to receive in addition to a fixed salary.

SCHEDULES

SCHEDULE I

Ad valorem fees

Table of Rates of ad valorem Fees Leviable on the institution of suits.

SCHEDULE II

FIXED FEES

Prevention of Money Laundering Act

November 30, 2014

Section 1. Short title, extent and commencement

(1) This Act may be called the Prevention of Money Laundering Act, 2002.

(2) It extends to the whole of India.

(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 provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.

Section 2. Definitions

(1) In this Act, unless the context otherwise requires,—

(a) “Adjudicating Authority” means an Adjudicating Authority appointed under sub-section (1) of section 6;

(b) “Appellate Tribunal” means the Appellate Tribunal established under section 25;

(c) “Assistant Director” means an Assistant Director appointed under sub-section (1) of section 49;

(d) “attachment” means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III;

(e) “banking company” means a banking company or a co-operative bank to which the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act;

(f) “Bench” means a Bench of the Appellate Tribunal;

(g) “Chairperson” means the Chairperson of the Appellate Tribunal;

(h) “chit fund company” means a company managing, conducting or supervising, as foreman, agent or in any other capacity, chits as defined in section 2 of the Chit Funds Act, 1982 (40 of 1982);

(i) “co-operative bank” shall have the same meaning as assigned to it in clause (dd) of section 2 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961);

(j) “Deputy Director” means a Deputy Director appointed under subsection (1) of section 49;

(k) “Director” or “Additional Director” or “Joint Director” means a Director or Additional Director or Joint Director as the case may be, appointed under sub-section (1) of section 49;

(l) “financial institution” means a financial institution as defined in clause (c) of section 45-1 of the Reserve Bank of India Act, 1934 (2 of 1934) and includes a chit fund company, a co-operative bank, a housing finance institution and a non-banking financial company;

(m) “housing finance institution” shall have the meaning as assigned to it in clause (d) of section 2 of the National Housing Bank Act, 1987 (53 of 1987);

(n) “intermediary” means a stock-broker, sub-broker, share transfer agent, banker to an issue, trustee to a trust deed, registrar to an issue, merchant banker, underwriter, portfolio manager, investment adviser and any other intermediary associated with securities market and registered under section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);

¹[(na) “investigation” includes all the proceedings under this Act conducted by the Director or by an authority authorised by the Central Government under this Act for the collection of evidence;]

(o) “Member” means a Member of the Appellate Tribunal and includes the Chairperson;

(p) “Money-laundering” has the meaning assigned to it in section 3;

(q) “non-banking financial company” shall have the same meaning as assigned to it in clause (/) of section 45-1 of the Reserve Bank of India Act, 1934 (2 of 1934);

(r) “notification” means a notification published in the Official Gazette;

(s) “person” includes—

(i) an individual,

(ii) a Hindu undivided family,

(iii) a company,

(iv) a firm,

(v) an association of persons or a body of individuals, whether incorporated or not,

(vi) every artificial juridical person, not falling within any of the preceding sub-clauses, and

(vii) any agency, office or branch owned or controlled by any of the above persons mentioned in the preceding sub-clauses;

(t) “prescribed” means prescribed by rules made under this Act;

(u) “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property;

(v) “property” means any property or assets of every description, whether corporeal or incorporeal, movable or immovable, tangible or intangible and includes deeds and instruments evidencing title to, or interest in, such property or assets, wherever located;

(w) “records” include the records maintained in the form of books or stored in a computer or such other form as may be prescribed;

(x) “Schedule” means the Schedule to this Act;

(y) “scheduled offence” means—

(i) the offences specified under Part A of the Schedule; or

(ii) the offences specified under Part B of the Schedule if the total value involved in such offence is thirty lakh rupees or more.

(z) “Special Court” means a Court of Session designated as Special Court under sub-section (1) of section 43;

(za) “transfer” includes sale, purchase, mortgage, pledge, gift, loan or any other form of transfer of right, title, possession or lien;

(zb) “value” means the fair market value of any property on the date of its acquisition by any person, or if such date cannot be determined, the date on which such property is possessed by such person.

(2) Any reference, in this Act or the Schedule, to any enactment or any provision thereof shall, in relation to an area in which such enactment or such provision is not in force, be construed as a reference to the corresponding law or the relevant provisions of the corresponding law, if any, in force in that area.

——————–

1. Ins. by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 3. Offence of money-laundering

Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering.

Section 4. Punishment for money-laundering

Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees :

Provided that where the proceeds of crime involved in money-laundering relate to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted.

Section 5. Attachment of property involved in money-laundering

(1) Where the Director, or any other officer not below the rank of Deputy Director authorised by him for the purposes of this section, has reason to believe (the reason for such belief to be recorded in writing), on the basis of material in his possession, that—

(a) any person is in possession of any proceeds of crime;

(b) such person has been charged of having committed a scheduled offence: and

(c) such proceeds of crime are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of crime under this Chapter,

he may, by order in writing, provisionally attach such property for a period not exceeding ninety days from the date of the order, in the manner provided in the Second Schedule to the Income-tax Act, 1961 (43 of 1961) and the Director or the other officer so authorised by him, as the case may be, shall be deemed to be an officer under sub-rule (e) of rule 1 of that Schedule:

Provided that no such order of attachment shall be made unless, in relation to an offence under—

(i) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or

(ii) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(2) The Director, or any other officer not below the rank of Deputy Director, shall, immediately after attachment under sub-section (1), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority, in a sealed envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.

(3) Every order of attachment made under sub-section (1) shall cease to have effect after the expiry of the period specified in that sub-section or on the date of an order made under sub-section (2) of section 8, whichever is earlier.

(4) Nothing in this section shall prevent the person interested in the enjoyment of the immovable property attached under sub-section (1) from such enjoyment.

Explanation.—For the purposes of this sub-section, “person interested” in relation to any immovable property, includes all persons claiming or entitled to claim any interest in the property.

(5) The Director or any other officer who provisionally attaches any property under sub-section (1) shall, within a period of thirty days from such attachment, file a complaint stating the facts of such attachment before the Adjudicating Authority.

Section 6. Adjudicating authorities, composition, powers, etc

(1) The Central Government shall, by notification, appoint one or more Adjudicating Authorities to exercise jurisdiction, power and authority conferred by or under this Act.

(2) An Adjudicating Authority shall consist of a Chairperson and two other Members:

Provided that one Member each shall be a person having experience in the field of law, administration, finance or accountancy.

(3) A person shall, however, not be qualified for appointment as Member of an Adjudicating Authority:—

(a) in the field of law, unless he—

(i) is qualified for appointment as District Judge; or

(ii) has been a Member of the Indian Legal Service and has held a post in Grade I of that service;

(b) in the field of finance, accountancy or administration unless he possesses such qualifications, as may be prescribed.

(4) The Central Government shall appoint a Member to be the Chairperson of the Adjudicating Authority.

(5) Subject to the provisions of this Act,—

(a) the jurisdiction of the Adjudicating Authority may be exercised by Benches thereof;

(b) a Bench may be constituted by the Chairperson of the Adjudicating Authority with one or two Members as the Chairperson of the Adjudicating Authority may deem fit;

(c) the Benches of the Adjudicating Authority shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, by notification, specify;

(d) the Central Government shall, by notification, specify the areas in relation to which each Bench of the Adjudicating Authority may exercise jurisdiction.

(6) Notwithstanding anything contained in sub-section (5), the Chairperson may transfer a Member from one Bench to another Bench.

(7) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for transfer, to such Bench as the Chairperson may deem fit.

(8) The Chairperson and every Member shall hold office as such for a term of five years from the date on which he enters upon his office:

Provided that no Chairperson or other Member shall hold office as such after he has attained the age of sixty-two years.

(9) The salary and allowances payable to and the other terms and conditions of service of the Member shall be such as may be prescribed:

Provided that neither the salary and allowances nor the other terms and conditions of service of the Members shall be varied to his disadvantage after appointment.

(10) If, for reasons other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then, the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Adjudicating Authority from the stage at which the vacancy is filled.

(11) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office:

Provided that the Chairperson or any other Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

(12) The Chairperson or any other Member shall not be removed from his office except by an order made by the Central Government after giving necessary opportunity of hearing.

(13) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, the senior-most Member shall act as the Chairperson of the Adjudicating Authority until the date on which a new Chairperson, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

(14) When the Chairperson of the Adjudicating Authority is unable to discharge his functions owing to absence, illness or any other cause, the senior-most Member shall discharge the functions of the Chairperson of the Adjudicating Authority until the date on which the Chairperson of the Adjudicating Authority resumes his duties.

(15) The Adjudicating Authority shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Adjudicating Authority shall have powers to regulate its own procedure.

Section 7. Staff of Adjudicating Authorities

(1) The Central Government shall provide each Adjudicating Authority with such officers and employees as that Government may think fit.

(2) The officers and employees of the Adjudicating Authority shall discharge their functions under the general superintendence of the Chairperson of the Adjudicating Authority.

(3) The salaries and allowances and other conditions of service of the officers and employees of the Adjudicating Authority shall be such as may be prescribed.

Section 8. Adjudication

(1) On receipt of a complaint under sub-section (5) of section 5, or applications made under sub-section (4) of section 17 or under sub-section (10) of section 18 if the Adjudicating Authority has reason to believe that any person has committed an offence under section 3, he may serve a notice of not less than thirty days on such person calling upon him to indicate the sources of his income, earning or assets, out of which or by means of which he has acquired the property attached under sub-section (1) of section 5, or, seized under section 17 or section 18, the evidence on which he relics and other relevant information and particulars, and to show cause why all or any of such properties should not be declared to be the properties involved in money-laundering and confiscated by the Central Government:

Provided that where a notice under this sub-section specifies any property as being held by a person on behalf of any other person, a copy of such notice shall also be served upon such other person:

Provided further that where such property is held jointly by more than one person, such notice shall be served to all persons holding such property.

(2) The Adjudicating Authority shall, after—

(a) considering the reply, if any, to the notice issued under sub-section (i);

(b) hearing the aggrieved person and the Director or any other officer authorised by him in this behalf; and

(c) taking into account all relevant materials placed on record before him,

by an order, record a finding whether all or any of the properties referred to in the notice issued under sub-section (1) arc involved in money-laundering:

Provided that if the property is claimed by a person, other than a person to whom the notice had been issued, such person shall also be given an opportunity of being heard to prove that the property is not involved in money-laundering.

(3) Where the Adjudicating Authority decides under sub-section (2) that any property is involved in money-laundering, he shall, by an order in writing, confirm the attachment of the property made under sub-section (1) of section 5 or retention of property or record seized under section 17 or section 18 and record a finding to that effect, such attachment or retention of the seized property or record shall—

(a) continue during the pendency of the proceedings relating to any scheduled offence before a court; and

(b) become final after the guilt of the person is proved in the trial court and order of such trial court becomes final.

(4) Where the provisional order of attachment made under sub-section (1) of section 5 has been confirmed under sub-section (3), the Director or any other officer authorised by him in this behalf shall forthwith take the possession of the attached property.

(5) Where on conclusion of a trial for any scheduled offence, the person concerned is acquitted, the attachment of the property or retention of the seized property or record under sub-section (3) and net income, if any, shall cease to have effect.

(6) Where the attachment of any properly or retention of the seized property or record becomes final under clause (b) of sub-section (3), the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating such property.

Section 9. Vesting of property in Central Government

Where an order of confiscation has been made under sub-section (6) of section 8 in respect of any property of a person, all the rights and title in such property shall vest absolutely in the Central Government free from all encumbrances:

Provided that where the Adjudicating Authority, after giving an opportunity of being heard to any other person interested in the property attached under this Chapter, or seized under Chapter V, is of the opinion that any encumbrance on the property or lease-hold interest has been created with a view to defeat the provisions of this Chapter, it may, by order, declare such encumbrances or lease-hold interest to be void and thereupon the aforesaid property shall vest in the Central Government free from such encumbrances or lease-hold interest:

Provided further that nothing in this section shall operate to discharge any person from any liability in respect of such encumbrances which may be enforced against such person by a suit for damages.

Section 10. Management of properties confiscated under this Chapter

(1) The Central Government may, by order published in the Official Gazette, appoint as many of its officers (not below the rank of a Joint Secretary to the Government of India) as it thinks fit, to perform the functions of an Administrator.

(2) The Administrator appointed under sub-section (1) shall receive and manage the property in relation to which an order has been made under sub-section (6) of section 8 in such manner and subject to such conditions as may be prescribed.

(3) The Administrator shall also take such measures, as the Central Government may direct, to dispose of the property which is vested in the Central Government under section 9.

Section 11. Power regarding summons, production of documents and evidence, etc

(1) The Adjudicating Authority shall, for the purposes of this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely:—

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and examining him on oath;

(c) compelling the production of records;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witnesses and documents; and

(f) any other matter which may be prescribed.

(2) All the persons so summoned shall be bound to attend in person or through authorised agents, as the Adjudicating Authority may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

(3) Every proceeding under this section shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

Section 12. Banking companies, financial institutions and intermediaries to maintain records

(1) Every banking company, financial institution and intermediary shall—

(a) maintain a record of all transactions, the nature and value of which may be prescribed, whether such transactions comprise of a single transaction or a series of transactions integrally connected to each other, and where such series of transactions take place within a month;

(b) furnish information of transactions referred to in clause (a) to the Director within such time as may be prescribed;

(c) verify and maintain the records of the identity of all its clients, in such manner as may be prescribed:

Provided that where the principal officer of a banking company or financial institution or intermediary, as the case may be, has reason to believe that a single transaction or series of transactions integrally connected to each other have been valued below the prescribed value so as to defeat the provisions of this section, such officer shall furnish information in respect of such transactions to the Director within the prescribed time.

(2) The records referred to in sub-section (1) shall be maintained for a period of ten years from the date of cessation of the transactions between the clients and the banking company or financial institution or intermediary, as the case may be.

Section 13. Powers of director to impose fine

(1) The Director may, either of his own motion or on an application made by any authority, officer or person, call for records referred to in sub-section (1) of section 12 and may make such inquiry or cause such inquiry to be made, as he thinks fit.

(2) If the Director, in the course of any inquiry, finds that a banking company, financial institution or an intermediary or any of its officers has failed to comply with the provisions contained in section 12, then, without prejudice to any other action that may be taken under any other provisions of this Act, he may, by an order, levy a fine on such banking company or financial institution or intermediary which shall not be less than ten thousand rupees but may extend to one lakh rupees for each failure.

(3) The Director shall forward a copy of the order passed under sub-section (2) to every banking company, financial institution or intermediary or person who is a party to the proceedings under that sub-section.

Section 14. No civil proceedings against banking companies, financial institutions, etc., in certain cases

Save as otherwise provided in section 13, the banking companies, financial institutions, intermediaries and their officers shall not be liable to any civil proceedings against them for furnishing information under clause (b) of sub-section (1) of section 12.

Section 15. Procedure and manner of furnishing information by banking company, financial institution and intermediary

The Central Government may, in consultation with the Reserve Bank of India, prescribe the procedure and the manner of maintaining and furnishing information under sub-section (1) of section 12 for the purpose of implementing the provisions of this Act.

Section 16. Power of survey

(1) Notwithstanding anything contained in any other provisions of this Act, where an authority, on the basis of material in his possession, has reason to believe (the reasons for such belief to be recorded in writing) that an offence under section 3 has been committed, he may enter any place—

(i) within the limits of the area assigned to him; or

(ii) in respect of which he is authorised for the purposes of this section by such other authority, who is assigned the area within which such place is situated,

at which any act constituting the commission of such offence is carried on, and may require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, such act so as to,—

(i) afford him the necessary facility to inspect such records as he may require and which may be available at such place;

(ii) afford him the necessary facility to check or verify the proceeds of crime or any transaction related to proceeds of crime which may be found therein; and

(iii) furnish such information as he may require as to any matter which may be useful for, or relevant to, any proceedings under this Act.

Explanation.—For the purposes of this sub-section, a place, where an act which constitutes the commission of the offence is carried on, shall also include any other place, whether any activity is carried on therein or not, in which the person carrying on such activity states that any of his records or any part of his property relating to such act are or is kept.

(2) The authority referred to in sub-section (1) shall, after entering any place referred to in that sub-section immediately after completion of survey, forward a copy of the reasons so recorded along with material in his possession, referred to in that sub-section, to the Adjudicating Authority in a sealed envelope in the manner as may be prescribed and such Adjudicating Authority shall keep such reasons and material for such period as may be prescribed.

(3) An authority acting under this section may—

(i) place marks of identification on the records inspected by him and make or cause to be made extracts or copies therefrom,

(ii) make an inventory of any property checked or verified by him, and

(iii) record the statement of any person present in the place which may be useful for, or relevant to, any proceeding under this Act.

Section 17. Search and seizure

(1) Where the Director, on the basis of information in his possession, has reason to believe (the reason for such belief to be recorded in writing) that any person—

(i) has committed any act which constitutes money-laundering, or

(ii) is in possession of any proceeds of crime involved in money-laundering, or

(iii) is in possession of any records relating to money-laundering,

then, subject to the rules made in this behalf, he may authorise any officer subordinate to him to—

(a) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such records or proceeds of crime are kept;

(b) break open the lock of any door, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available;

(c) seize any record or property found as a result of such search;

(d) place marks of identification on such record or make or cause to be made extracts or copies therefrom;

(e) make a note or an inventory of such record or property;

(f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act:

Provided that no search shall be conducted unless, in relation to an offence under—

(a) Paragraph 1 of Part A and Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or

(b) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure, forward a copy of the reasons so recorded along with material in his possession, referred to in that subsection, to the Adjudicating Authority in a scaled envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such reasons and material for such period, as may be prescribed.

(3) Where an authority, upon information obtained during survey under section 16, is satisfied that any evidence shall be or is likely to be concealed or tampered with, he may, for reasons to be recorded in writing, enter and search the building or place where such evidence is located and seize that evidence :

Provided that no authorisation referred to in sub-section (1) shall be required for search under this sub-section.

(4) The authority, seizing any record or property under this section, shall, within a period of thirty days from such seizure, file an application, requesting for retention of such record or property, before the Adjudicating Authority.

Section 18. Search of persons

(1) If an authority, authorised in this behalf by the Central Government by general or special order, has reason to believe (the reason for such belief to be recorded in writing) that any person has secreted about his person or in anything under his possession, ownership or control, any record or proceeds of crime which may be useful for or relevant to any proceedings under this Act, he may search that person and seize such record or property which may be useful for or relevant to any proceedings under this Act.

(2) The authority, who has been authorised under sub-section (1) shall, immediately after search and seizure, forward a copy of the reasons so recorded along with material in his possession, referred to in that subsection, to the Adjudicating Authority in a sealed envelope, in the manner, as may be prescribed, and such Adjudicating Authority shall keep such reasons and material for such period, as may be prescribed.

(3) Where an authority is about to search any person, he shall, if such person so requires, take such person within twenty-four hours to the nearest Gazetted Officer, superior in rank to him, or a Magistrate:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey undertaken to take such person to the nearest Gazetted Officer, superior in rank to him, or Magistrate’s Court.

(4) If the requisition under sub-section (3) is made, the authority shall not detain the person for more than twenty-four hours prior to taking him before the Gazetted Officer, superior in rank to him, or the Magistrate referred to in that sub-section:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of detention to the office of the Gazetted Officer, superior in rank to him, or the Magistrate’s Court.

(5) The Gazetted Officer or the Magistrate before whom any such person in brought shall, if he sees no reasonable ground for search, forthwith discharge such person but otherwise shall direct that search be made.

(6) Before making the search under sub-section (1) or sub-section (5), the authority shall call upon two or more persons to attend and witness the search, and the search shall be made in the presence of such persons.

(7) The authority shall prepare a list of record or property seized in the course of the search and obtain the signatures of the witnesses on the list.

(8) No female shall be searched by any one except a female.

(9) The authority shall record the statement of the person searched under sub-section (1) or sub-section (5) in respect of the records or proceeds of crime found or seized in the course of the search:

Provided that no search of any person shall be made unless, in relation to an offence under—

(a) Paragraph 1 of Part A or Paragraph 1 or Paragraph 2 or Paragraph 3 or Paragraph 4 or Paragraph 5 of Part B of the Schedule, a report has been forwarded to a Magistrate under section 173 of the Code of Criminal Procedure, 1973 (2 of 1974); or

(b) Paragraph 2 of Part A of the Schedule, a police report or a complaint has been filed for taking cognizance of an offence by the Special Court constituted under sub-section (1) of section 36 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985).

(10) The authority, seizing any record or property under sub-section (1) shall, within a period of thirty days from such seizure, file an application requesting for retention of such record or property, before the Adjudicating Authority.

Section 19. Power to arrest

(1) If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

(2) The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority in a scaled envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed.

(3) Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction:

Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Magistrate’s Court.

Section 20. Retention of property

(1) Where any property has been seized under section 17 or section 18, and the officer authorised by the Director in this behalf has, on the basis of material in his possession, reason to believe (the reason for such belief to be recorded by him in writing) that such property is required to be retained for the purposes of adjudication under section 8, such property may be retained for a period not exceeding three months from the end of the month in which such property was seized.

(2) The officer authorised by the Director immediately after he has passed an order for retention of the property for purposes of adjudication under section 8 shall forward a copy of the order along with the material in his possession, referred to in sub-section (1), to the Adjudicating Authority in a scaled envelope, in the manner as may be prescribed and such Adjudicating Authority shall keep such order and material for such period as may be prescribed.

(3) On the expiry of the period specified in sub-section (1), the property shall be returned to the person from whom such property was seized unless the Adjudicating Authority permits retention of such property beyond the said period.

(4) The Adjudicating Authority, before authorising the retention of such property beyond the period specified in sub-section (1), shall satisfy himself that the property is prima facie involved in money-laundering and the property is required for the purposes of adjudication under section 8.

(5) After passing the order of confiscation under sub-section (6) of section 8, the Adjudicating Authority shall direct the release of all properties other than the properties involved in money-laundering to the person from whom such properties were seized.

(6) Notwithstanding anything contained in sub-section (5), the Director or any officer authorised by him in this behalf may withhold the release of any property until filing of appeal under section 26 or forty-five days from the date of order under sub-section (5), whichever is earlier, if he is of the opinion that such property is relevant for the proceedings before the Appellate Tribunal.

Section 21. Retention of records

(1) Where any records have been seized, under section 17, or section 18, and the Investigating Officer or any other officer authorised by the Director in this behalf has reason to believe that any of such records are required to be retained for any inquiry under this Act, he may retain such records for a period not exceeding three months from the end of the month in which such records were seized.

(2) The person, from whom records were seized, shall be entitled to obtain copies of records retained under sub-section (1).

(3) On the expiry of the period specified under sub-section (1), the records shall be returned to the person from whom such records were seized unless the Adjudicating Authority permits retention of such records beyond the said period.

(4) The Adjudicating Authority, before authorising the retention of such records beyond the period mentioned in sub-section (1), shall satisfy himself that the records arc required for the purposes of adjudication under section 8.

(5) After passing of an order of confiscation under sub-section (6) of section 8, the Adjudicating Authority shall direct the release of the records to the person from whom such records were seized.

(6) Notwithstanding anything contained in sub-section (5), the Director or any officer authorised by him in this behalf may withhold the release of any records until filing of appeal under section 26 or after forty-five days from the date of order under sub-section (5), whichever is earlier, if he is of the opinion that such records are relevant for the proceedings before the Appellate Tribunal.

Section 22. Presumption as to records or property in certain cases

(1) Where any records or property are or is found in the possession or control of any person in the course of a survey or a search, it shall be presumed that—

(i) such records or property belong or belongs to such person;

(ii) the contents of such records are true; and

(iii) the signature and every other part of such records which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, arc in that person’s handwriting, and in the case of a record, stamped, executed or attested, that it was executed or attested by the person by whom it purports to have been so stamped, executed or attested.

(2) Where any records have been received from any place outside India, duly authenticated by such authority or person and in such manner as may be prescribed, in the course of proceedings under this Act, the Special Court, the Appellate Tribunal or the Adjudicating Authority, as the case may be, shall—

(a) presume, that the signature and every other part of such record which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person’s handwriting; and in the case of a record executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested;

(b) admit the document in evidence, notwithstanding that it is not duly stamped, if such document is otherwise admissible in evidence.

Section 23. Presumption in inter-connected transactions

Where money-laundering involves two or more inter-connected transactions and one or more such transactions is or are proved to be involved in money-laundering, then for the purposes of adjudication or confiscation under section 8, it shall, unless otherwise proved to the satisfaction of the Adjudicating Authority, be presumed that the remaining transactions form part of such inter-connected transactions.

Section 24. Burden of proof

When a person is accused of having committed the offence under section 3, the burden of proving that proceeds of crime are untainted property shall be on the accused.

Section 25. Establishment of Appellate Tribunal

The Central Government shall, by notification, establish an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority and the authorities under this Act.

Section 26. Appeals to Appellate Tribunal

(1) Save as otherwise provided in sub-section (3), the Director or any person aggrieved by an order made by the Adjudicating Authority under this Act, may prefer an appeal to the Appellate Tribunal.

(2) Any banking company, financial institution or intermediary aggrieved by any order of the Director made under sub-section (2) of section 13, may prefer an appeal to the Appellate Tribunal.

(3) Every appeal preferred under sub-section (1) or sub-section (2) shall be filed within a period of forty-five days from the date on which a copy of the order made by the Adjudicating Authority or Director is received and it shall be in such form and be accompanied by such fee as may be prescribed:

Provided that the Appellate Tribunal may, after giving an opportunity of being heard entertain an appeal after the expiry of the said period of forty-five days if it is satisfied that there was sufficient cause for not filing it within that period.

(4) On receipt of an appeal under sub-section (1) or sub-section (2), the Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or setting aside the order appealed against.

(5) The Appellate Tribunal shall send a copy of every order made by it to the parties to the appeal and to the concerned Adjudicating Authority or the Director, as the case may be.

(6) The appeal filed before the Appellate Tribunal under sub-section (1) or sub-section (2) shall be dealt with by it as expeditiously as possible and endeavour shall be made by it to dispose of the appeal finally within six months from the date of filing of the appeal.

Section 27. Composition, etc., of Appellate Tribunal

(1) The Appellate Tribunal shall consist of a Chairperson and two other Members.

(2) Subject to the provisions of this Act,—

(a) the jurisdiction of the Appellate Tribunal may be exercised by Benches thereof;

(b) a Bench may be constituted by the Chairperson with one or two Members as the Chairperson may deem fit;

(c) the Benches of the Appellate Tribunal shall ordinarily sit at New Delhi and at such other places as the Central Government may, in consultation with the Chairperson, by notification, specify;

(d) the Central Government shall, by notification, specify the areas in relation to which each Bench of the Appellate Tribunal may exercise jurisdiction.

(3) Notwithstanding anything contained in sub-section (2), the Chairperson may transfer a Member from one Bench to another Bench.

(4) If at any stage of the hearing of any case or matter it appears to the Chairperson or a Member that the case or matter is of such a nature that it ought to be heard by a Bench consisting of two Members, the case or matter may be transferred by the Chairperson or, as the case may be, referred to him for transfer, to such Bench as the Chairperson may deem fit.

Section 28. Qualifications for appointment

(1) A person shall not be qualified for appointment as Chairperson unless he is or has been a Judge of the Supreme Court or of a ¹[High Court or is qualified to be a Judge of the High Court].

(2) A person shall not be qualified for appointment as a Member unless he—

(a) is or has been a Judge of a High Court; or

(b) has been a Member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years; or

(c) has been a member of the Indian Revenue Service and has held the post of Commissioner of Income-tax or equivalent post in that Service for at least three years; or

(d) has been a member of the Indian Economic Service and has held the post of Joint Secretary or equivalent post in that Service for at least three years; or

(e) has been a member of the Indian Customs and Central Excise Service and has held the post of a Joint Secretary or equivalent post in that Service for as least three years; or

(f) has been in the practice of accountancy as a chartered accountant under the Chartered Accountants Act, 1949 (38 of 1949) or as a registered accountant under any law for the time being in force or partly as a registered accountant and partly as a chartered accountant for at least ten years:

Provided that one of the members of the Appellate Tribunal shall be from category mentioned in clause (i); or

(g) has been a member of the Indian Audit and Accounts Service and has held the post of Joint Secretary or equivalent post in that Service for at least three years.

(3) No sitting Judge of the Supreme Court or of a High Court shall be appointed under this section except after consultation with the Chief Justice of India.

²[(4) The Chairperson or a Member holding a post as such in any other Tribunal, established under any law for the time being in force, in addition to his being the Chairperson or a Member of that Tribunal, may be appointed as the Chairperson or a Member, as the case may be, of the Appellate Tribunal under this Act.]

——————–

1. The words “High Court” Subs. by the Act No. 20 of 2005 w.e.f. 21-5-2005.

2. Ins. by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 29. Omitted

¹[***]

——————–

1. Section 29 Omited by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 30. Conditions of service

The salary and allowances payable to and the other ¹[terms and conditions of service (including tenure of office)] of the Chairperson and other Members shall be such as may be prescribed:

Provided that neither the salary and allowances nor the other ¹[terms and conditions of service (including tenure of office)]of the Chairperson or any other Member shall be varied to his disadvantage after appointment.

——————–

1. The words “terms and conditions of service” Subs. by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 31. Vacancies

If, for reason other than temporary absence, any vacancy occurs in the office of the Chairperson or any other Member, then the Central Government shall appoint another person in accordance with the provisions of this Act to fill the vacancy and the proceedings may be continued before the Appellate Tribunal from the stage at which the vacancy is filled.

Section 32. Resignation and removal

(1) The Chairperson or any other Member may, by notice in writing under his hand addressed to the Central Government, resign his office:

Provided that the Chairperson or any other Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

(2) The Chairperson or any other Member shall not be removed from his office except by an order made by the Central Government on the ground of proved misbehaviour or incapacity, after an inquiry made by a person appointed by the President in which such Chairperson or any other Member concerned had been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.

Section 33. Member to act as Chairperson in certain circumstances

(1) In the event of the occurrence of any vacancy in the office of the Chairperson by reason of his death, resignation or otherwise, the senior-most Member shall act as the Chairperson until the date on which a new Chairperson, appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his office.

(2) When the Chairperson is unable to discharge his functions owing to absence, illness or any other cause, the seniormost Member shall discharge the functions of the Chairperson until the date on which the Chairperson resumes his duties.

Section 34. Staff of Appellate Tribunal

(1) The Central Government shall provide the Appellate Tribunal with such officers and employees as that Government may think fit.

(2) The officers and employees of the Appellate Tribunal shall discharge their functions under the general superintendence of the Chairperson.

(3) The salaries and allowances and other conditions of service of the officers and employees of the Appellate Tribunal shall be such as may be prescribed.

Section 35. Procedure and powers of Appellate Tribunal

(1) The Appellate Tribunal shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908), but shall be guided by the principles of natural justice and, subject to the other provisions of this Act, the Appellate Tribunal shall have powers to regulate its own procedure.

(2) The Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) requiring the discovery and production of documents;

(c) receiving evidence on affidavits;

(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or copy of such record or document from any office;

(e) issuing commissions for the examination of witnesses or documents;

(f) reviewing its decisions;

(g) dismissing a representation for default or deciding it ex parte;

(h) setting aside any order of dismissal of any representation for default or any order passed by it ex parte; and

(i) any other matter, which may be, prescribed by the Central Government.

(3) An order made by the Appellate Tribunal under this Act shall be executable by the Appellate Tribunal as a decree of civil court and, for this purpose, the Appellate Tribunal shall have all the powers of a civil court.

(4) Notwithstanding anything contained in sub-section (3), the Appellate Tribunal may transmit any order made by it to a civil court having local jurisdiction and such civil court shall execute the order as if it were a decree made by that court.

(5) All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Indian Penal Code (45 of 1860) and the Appellate Tribunal shall be deemed to be a civil court for the purposes of sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974).

Section 36. Distribution of business amongst Benches

Where any Benches are constituted, the Chairperson may, from time to time, by notification, make provisions as to the distribution of the business of the Appellate Tribunal amongst the Benches and also provide for the matters which may be dealt with by each Bench.

Section 37. Power of Chairperson to transfer cases

On the application of any of the parties and after notice to the parties, and after hearing such of them as he may desire to be heard, or on his own motion without such notice, the Chairperson may transfer any case pending before one Bench, for disposal, to any other Bench.

Section 38. Decision to be by majority

If the Members of a Bench consisting of two Members differ in opinion on any point, they shall state the point or points on which they differ, and make a reference to the Chairperson who shall either hear the point or points himself or refer the case for hearing on such point or points by one or more of the other Members of the Appellate Tribunal and such point or points shall be decided according to the opinion of the majority of the Members of the Appellate Tribunal who have heard the case, including those who first heard it.

Section 39. Right of appellant to take assistance of authorised representative and of Government to appoint presenting officers

(1) A person preferring an appeal to the Appellate Tribunal under this Act may either appear in person or take the assistance of an authorised representative of his choice to present his case before the Appellate Tribunal.

Explanation.—For the purposes of this sub-section, the expression “authorised representative” shall have the same meaning as assigned to it under sub-section (2) of section 288 of the Income-tax Act, 1961 (43 of 1961).

(2) The Central Government or the Director may authorise one or more authorised representatives or any of its officers to act as presenting officers and every person so authorised may present the case with respect to any appeal before the Appellate Tribunal.

Section 40. Members, etc., to be public servants

The Chairperson, Members and other officers and employees of the Appellate Tribunal, the Adjudicating Authority, Director and the officers subordinate to him shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).

Section 41. Civil court not to have jurisdiction

No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Director, an Adjudicating Authority or the Appellate Tribunal is empowered by or under this Act to determine and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

Section 42. Appeal to High Court

Any person aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Appellate Tribunal to him on any question of law or fact arising out of such order:

Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.

Explanation.—For the purposes of this section, “High Court” means—

(i) the High Court within the jurisdiction of which the aggrieved party ordinarily resides or carries on business or personally works for gain; and

(ii) where the Central Government is the aggrieved party, the High Court within the jurisdiction of which the respondent, or in a case where there are more than one respondent, any of the respondents, ordinarily resides or carries on business or personally works for gain.

Section 43. Special Courts

(1) The Central Government, in consultation with the Chief Justice of the High Court, shall for trial of offence punishable under section A by notification designate one or more Courts of Session as Special Court or Special Courts for such area or areas or for such case or class or group of cases as may be specified in the notification.

Explanation.—In this sub-section, “High Court” means the High Court of the State in which a Sessions Court designated as Special Court was functioning immediately before such designation.

(2) While trying an offence under this Act, a Special Court shall also try an offence other than an offence referred to in sub-section (1), with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974), be charged at the same trial.

Section 44. Offences triable by Special Courts

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974),—

(a) the scheduled offence and the offence punishable under section 4 shall be triable only by the Special Court constituted for the area in which the offence has been committed:

Provided that the Special Court, trying a scheduled offence before the commencement of this Act, shall contribute to try such scheduled offence; or

(b) a Special Court may, ¹[***] upon a complaint made by an authority authorised in this behalf under this Act take cognizance of the offence for which the accused is committed to it for trial.

(2) Nothing contained in this section shall be deemed to affect the special powers of the High Court regarding bail under section 439 of the Code of Criminal Procedure, 1973 (2 of 1974) and the High Court may exercise such powers including the power under clause (b) of sub-section (1) of that section as if the reference to “Magistrate” in that section includes also a reference to a “Special Court” designated under section 43.

——————–

1. The words “upon perusal of police report of the facts which constitute an offence under thsis Act or” Omitted by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 45. Offences to be cognizable and non-bailable

¹[(1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part-A of the Schedule shall be released on bail or on his own bond unless-]—

(a) every offence punishable under this Act shall be cognizable;

(b) no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless—

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the court is satisfied that there arc reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail :

Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs :

Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by—

(i) the Director; or

(ii) any officer of the Central Government or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.

²[(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed.]

(2) The limitation on granting of bail specified in ³[***] of sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail.

——————–

1. Subs. by Act No. 20 of 2005 w.e.f. 21-5-2005.

2. Sub. Section (1A) Inserted by Act No. 20 of 2005 w.e.f. 21-5-2005.

3. The Words “clause (b) omitted by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 46. Application of Code of Criminal Procedure, 1973 to proceedings before Special Court

(1) Save as otherwise provided in this Act, the provisions of the Code of Criminal Procedure, 1973 (2 of 1974) (including the provisions as to bails or bonds), shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the persons conducting the prosecution before the Special Court, shall be deemed to be a Public Prosecutor:

Provided that the Central Government may also appoint for any case or class or group of cases a Special Public Prosecutor.

(2) A person shall not be qualified to be appointed as a Public Prosecutor or a Special Public Prosecutor under this section unless he has been in practice as an Advocate for not less than seven years, under the Union or a State, requiring special knowledge of law.

(3) Every person appointed as a Public Prosecutor or a Special Public Prosecutor under this section shall be deemed to be a Public Prosecutor within the meaning of clause (u) of section 2 of the Code of Criminal Procedure, 1973 (2 of 1974) and the provisions of that Code shall have effect accordingly.

Section 47. Appeal and revision

The High Court may exercise, so far as may be applicable, all the powers conferred by Chapter XXIX or Chapter XXX of the Code of Criminal Procedure, 1973 (2 of 1974), on a High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Court.

Section 48. Authorities under Act

There shall be the following classes of authorities for the purposes of this Act, namely :—

(a) Director or Additional Director or Joint Director,

(b) Deputy Director,

(c) Assistant Director, and

(d) such other class of officers as may be appointed for the purposes of this Act.

Section 49. Appointment and powers of authorities and other officers

(1) The Central Government may appoint such persons as it thinks fit to be authorities for the purposes of this Act.

(2) Without prejudice to the provisions of sub-section (1), the Central Government may authorise the Director or an Additional Director or a Joint Director or a Deputy Director or an Assistant Director appointed under that sub-section to appoint other authorities below the rank of an Assistant Director.

(3) Subject to such conditions and limitations as the Central Government may impose, an authority may exercise the powers and discharge the duties conferred or imposed on it under this Act.

Section 50. Powers of authorities regarding summons, production of documents and to give evidence, etc

(1) The Director shall, for the purposes of section 13, have the same powers as arc vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908) while trying a suit in respect of the following matters, namely :—

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any officer of a banking company or a financial institution or a company, and examining him on oath;

(c) compelling the production of records;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witnesses and documents; and

(f) any other matter which may be prescribed.

(2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act.

(3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required.

(4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code (45 of 1860).

(5) Subject to any rules made in this behalf by the Central Government, any officer referred to in sub-section (2) may impound and retain in his custody for such period, as he thinks fit, any records produced before him in any proceedings under this Act :

Provided that an Assistant Director or a Deputy Director shall not—

(a) impound any records without recording his reasons for so doing; or

(b) retain in his custody any such records for a period exceeding three months, without obtaining the previous approval of the Director.

Section 51. Jurisdiction of authorities

(1) The authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, assigned, as the case may be, to such authorities by or under this act or the rules framed thereunder in accordance with such directions as the Central Government may issue for the exercise of powers and performance of the functions by all or any ot the authorities.

(2) In issuing the directions or orders referred to in sub-section (1), the Central Government may have regard to any one or more of the following criteria, namely:—

(a) territorial area;

(b) classes of persons;

(c) classes of cases; and

(d) any other criterion specified by the Central Government in this behalf.

Section 52. Power of Central Government to issue directions, etc

The Central Government may, from time to time, issue such orders, instructions and directions to the authorities as it may deem fit for the proper administration of this Act and such authorities and all other persons employed in execution of this Act shall observe and follow such orders, instructions and directions of the Central Government:

Provided that no such orders, instructions or directions shall be issued so as to—

(a) require any authority to decide a particular case in a particular manner; or

(b) interfere with the discretion of the Adjudicating Authority in exercise of his functions.

Section 53. Empowerment of certain officers

The Central Government may, by a special or general order, empower an officer not below the rank of Director of the Central Government or of a State Government to act as an authority under this Act:

Provided that the Central Government may empower an officer below the rank of Director if the officer of the rank of the Director or above are not available in a particular area.

Section 54. Certain officers to assist in inquiry, etc

The following officers are hereby empowered and required to assist the authorities in the enforcement of this Act, namely:—

(a) officers of the Customs and Central Excise Departments;

(b) officers appointed under sub-section (1) of section 5 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985);

(c) income-tax authorities under sub-section (1) of section 117 of the Income-tax Act, 1961 (43 of 1961);

(d) officers of the stock exchange recognised under section 4 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956);

(e) officers of the Reserve Bank of India constituted under sub-section (1) of section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);

(f) officers of Police;

(g) officers of enforcement appointed under sub-section (1) of section 36 of the Foreign Exchange Management Act, 1999 (40 of 1999);

(h) officers of the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992(15 of 1992);

(f) officers of any other body corporate constituted or established under a Central Act or a State Act;

(g) such other officers of the Central Government, State Government, local authorities or banking companies as the Central Government may, by notification, specify, in this behalf.

Section 55. Definitions

In this Chapter, unless the context otherwise requires,—

(a) “contracting State” means any country or place outside India in respect of which arrangements have been made by the Central Government with the Government of such country through a treaty or otherwise;

(b) “identifying” includes establishment of a proof that the property was derived from, or used in the commission of an offence under section 3;

(c) “tracing” means determining the nature, source, disposition, movement, title or ownership of property.

Section 56. Agreements with foreign countries

(1) The Central Government may enter into an agreement with the Government of any country outside India for—

(a) enforcing the provisions of this Act;

(b) exchange of information for the prevention of any offence under this Act or under the corresponding law in force in that country or investigation of cases relating to any offence under this Act;

and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) The Central Government may, by notification in the Official Gazette, direct that the application of this Chapter in relation to a contracting State with which reciprocal arrangements have been made, shall be subject to such conditions, exceptions or qualifications as are specified in the said notification.

Section 57. Letters of request to a contracting State in certain cases

(1) Notwithstanding anything contained in this Act or the Code of Criminal Procedure, 1973 (2 of 1974) if, in the course of an investigation into an offence or other proceedings under this Act, an application is made to a Special Court by the Investigating Officer or any officer superior in rank to the Investigating Officer that any evidence is required in connection with investigation into an offence or proceedings under this Act and he is of the opinion that such evidence may be available in any place in a contracting State, and the Special Court, on being satisfied that such evidence is required in connection with the investigation into an offence or proceedings under this Act, may issue a letter of request to the court or an authority in the contracting State competent to deal with such request to—

(i) examine facts and circumstances of the case,

(ii) take such steps as the Special Court may specify in such letter of request, and

(iii) forward all the evidence so taken or collected to the Special Court issuing such letter of request.

(2) The letter of request shall be transmitted in such manner as the Central Government may specify in this behalf.

(3) Every statement recorded or document or thing received under subsection (1) shall be deemed to be the evidence collected during the course of investigation.

Section 58. Assistance to a contracting State in certain cases

Where a letter of request is received by the Central Government from a court or authority in a contracting State requesting for investigation into an offence or proceedings under this Act and forwarding to such court or authority any evidence connected therewith, the Central Government may forward such letter of request to the Special Court or to any authority under the Act as it thinks fit for execution of such request in accordance with the provisions of this Act or as the case may be, any other law for the time being in force.

Section 59. Reciprocal arrangements for processes and assistance for transfer of accused persons

(1) Where a Special Court, in relation to an offence punishable under section 4, desires that—

(a) a summons to an accused person, or

(b) a warrant for the arrest of an accused person, or

(c) a summons to any person requiring him to attend and produce a document or other thing, or to produce a document or other thing, or to produce it, or

(d) a search warrant,

issued by it shall be served or executed at any place in any contracting State, it shall send such summons or warrant in duplicate in such form, to such Court, Judge or Magistrate through such authorities, as the Central Government may, by notification, specify in this behalf and that Court, Judge or Magistrate, as the case may be, shall cause the same to be executed.

(2) Where a Special Court, in relation to an offence punishable under section 4 has received for service o,~ execution—

(a) a summons to an accused person, or

(b) a warrant for the arrest of an accused person, or

(c) a summons to any person requiring him to attend and produce a document or other thing, or to produce it, or

(d) a search-warrant,

issued by a Court, Judge or Magistrate in a contracting State, it shall, cause the same to be served or executed as if it were a summons or warrant received by it from another Court in the said territories for service or execution within its local jurisdiction; and where—

(i) a warrant of arrest has been executed, the person arrested shall, be dealt with in accordance with the procedure specified under section 19;

(ii) a search warrant has been executed, the things found !r> this search shall, so far as possible be dealt with in accordance with the procedure specified under sections 17 and 18:

Provided that in a case where a summon or search warrant received from a contracting State has been executed, the documents or other things produced or things found in the search shall be forwarded to the Court issuing the summons or search warrant through such authority as the Central Government may, by notification, specify in this behalf.

(3) Where a person transferred to a contracting State pursuant to subsection (2) is a prisoner in India, the Special Court or the Central Government may impose such conditions as that Court or Government deems fit.

(4) Where the person transferred to India pursuant to sub-section (1) is a prisoner in a contracting State, the Special Court in India shall ensure that the conditions subject to which the prisoner is transferred to India arc complied with and such prisoner shall be kept in such custody subject to such conditions as the Central Government may direct in writing.

Section 60. Attachment, seizure and confiscation, etc., of property in a contracting State or India

(1) Where the Director has made an order for attachment of any property under section 5 or where an Adjudicating Authority has made an order confirming such attachment or confiscation of any property under section 8, and such property is suspected to be in a contracting State, the Special Court, on an application by the Director or the Administrator appointed under sub-section (1) of section 10, as the case may be, may issue a letter of request to a court or an authority in the contracting State for execution of such order.

(2) Where a letter of request is received by the Central Government from a court or an authority in a contracting State requesting attachment or confiscation of the property in India, derived or obtained, directly or indirectly, by any person from the commission of an offence under section 3 committed in that contracting State the Central Government may forward such letter of request to the Director, as it thinks fit, for execution in accordance with the provisions of this Act.

(3) The Director shall, on receipt of a letter of request under section 58 or section 59, direct any authority under this Act to take all steps necessary for tracing and identifying such property.

(4) The steps referred to in sub-section (3) may include any inquiry, investigation or survey in respect of any person, place, property, assets, documents, books of account in any bank or public financial institutions or any other relevant matters.

(5) Any inquiry, investigation or survey referred to in sub-section (4) shall be carried out by an authority mentioned in sub-section (3) in accordance with such directions issued in accordance with the provisions of this Act.

(6) The provisions of this Act relating to attachment, adjudication, confiscation and vesting of property in Central Government contained in Chapter III and survey, searches and seizures contained in Chapter V shall apply to the property in respect of which letter of request is received from a court or contracting State for attachment or confiscation of property.

Section 61. Procedure in respect of letter of request

Every letter of request, summons or warrant, received by the Central Government from and every letter of request, summons or warrant, to be transmitted to a contracting State under this Chapter shall be transmitted to a contracting State or, as the case may be, sent to the concerned Court in India and in such form and in such manner as the Central Government may, by notification, specify in this behalf.

Section 62. Punishment for vexatious search

Any authority or officer exercising powers under this Act or any rules made thereunder, who, without reasons recorded in writing,—

(a) searches or causes to be searched any building or place; or

(b) detains or searches or arrests any person,

shall for every such offence be liable on conviction for imprisonment for a term which may extend to two years or fine which may extend to fifty thousand rupees or both.

Section 63. Punishment for false information or failure to give information, etc

(1) Any person wilfully and maliciously giving false information and so causing an arrest or a search to be made under this Act shall on conviction be liable for imprisonment for a term which may extend to two years or with fine which may extend to fifty thousand rupees or both.

(2) If any person,—

(a) being legally bound to state the truth of any matter relating to an offence under section 3, refuses to answer any question put to him by an authority in the exercise of its powers under this Act; or

(b) refuses to sign any statement made by him in the course of any proceedings under this Act, which an authority may legally require to sign; or

(c) to whom a summon is issued under section 50 either to attend to give evidence or produce books of account or other documents at a certain place and time, omits to attend or produce books of account or documents at the place or time,

he shall pay, by way of penalty, a sum which shall not be less than five hundred rupees but which may extend to ten thousand rupees for each such default or failure.

(3) No order under this section shall be passed by an authority referred to in sub-section (2) unless the person on whom the penalty is proposed to be imposed is given an opportunity of being heard in the matter by such authority.

Section 64. Cognizance of offences

(1) No court shall take cognizance of any offence under section 62 or sub-section (1) of section 63 except with the previous sanction of the Central Government.

(2) The Central Government shall, by an order either give sanction or refuse to give sanction within ninety days of the receipt of the request in this behalf.

Section 65. Code of Criminal Procedure, 1973 to apply

The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act.

Section 66. Disclosure of information

The Director or any other authority specified by him by a general or special order in this behalf may furnish or cause to be furnished to—

(i) any officer, authority or body performing any functions under any law relating to imposition of any tax, duty or cess or to dealings in foreign exchange, or prevention of illicit traffic in the narcotic drugs and psychotropic substances under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or

(ii) such other officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify, by notification in the Official Gazette, in this behalf, any information received or obtained by such Director or any other authority, specified by him in the performance of their functions under this Act, as may, in the opinion of the Director or the other authority, so specified by him, be necessary for the purpose of the officer, authority or body specified in clause (/) or clause (if) to perform his or its functions under that law.

Section 67. Bar of suits in civil courts

No suit shall be brought in any civil court to set aside or modify any proceeding taken or order made under this Act and no prosecution, suit or other proceeding shall lie against the Government or any officer of the Government for anything done or intended to be done in good faith under this Act.

Section 68. Notice, etc., not to be invalid on certain grounds

No notice, summons, order, document or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid, or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such notice, summons, order, document or other proceeding if such notice, summons, order, document or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.

Section 69. Recovery of fines

Where any fine imposed on any person under section 13 or section 63 is not paid within six months from the day of imposition of fine, the Director or any other officer authorised by him in this behalf may proceed to recover the amount from the said person in the same manner as prescribed in Schedule II of the Income-tax Act, 1961 (43 of 1961) for the recovery of arrears and he or any officer authorised by him in this behalf shall have all the powers of the Tax Recovery Officer mentioned in the said Schedule for the said purpose.

Section 70. Offences by companies

(1) Where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder is a company, every person who, at the time the contravention was committed, was in charge of, and was responsible to the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly :

Provided that nothing containing in this sub-section shall render any such person liable to punishment if he proves that the contravention took place without his knowledge or that he exercised all due diligence to prevent such contravention.

(2) Notwithstanding anything contained in sub-section (1), where a contravention of any of the provisions of this Act or of any rule, direction or order made thereunder has been committed by a company and it is proved that the contravention has taken place with the consent or connivance of, or is attributable to any neglect on the part of any director, manager, secretary or other officer of any company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.

Explanation.—For the purposes of this section,—

(i) “company” means any body corporate and includes a firm or other association of individuals; and

(ii) “director”, in relation to a firm, means a partner in the firm.

Section 71. Act to have overriding effect

The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.

Section 72. Continuation of proceedings in the event of death or insolvency

(1) Where—

(a) any property of a person has been attached under section 8 and no appeal against the order attaching such property has been preferred; or

(b) any appeal has been preferred to the Appellate Tribunal, and—

(i) in a case referred to in clause (a), such person dies or is adjudicated an insolvent before preferring an appeal to the Appellate Tribunal; or

(ii) in a case referred to in clause (b), such person dies or is adjudicated an insolvent during the pendency of the appeal,

then, it shall be lawful for the legal representatives of such person or the official assignee or the official receiver, as the case may be, to prefer an appeal to the Appellate Tribunal or as the case may be, to continue the appeal before the Appellate Tribunal, in place of such person and the provisions of section 26 shall, so far as may be, apply, or continue to apply, to such appeal.

(2) Where—

(a) after passing of a decision or order by the Appellate Tribunal, no appeal has been preferred to the High Court under section 42; or

(b) any such appeal has been preferred to the High Court,— then—

(i) in a case referred to in clause (a), the person entitled to file the appeal dies or is adjudicated an insolvent before preferring an appeal to the High Court, or

(ii) in a case referred to in clause (b), the person who had filed the appeal dies or is adjudicated an insolvent during the pendency of the appeal before the High Court,

then, it shall be lawful for the legal representatives of such person, or the official assignee or the official receiver, as the case may be, to prefer an appeal to the High Court or to continue the appeal before the High Court in place of such person and the provision of section 42 shall, so far as may be, apply, or continue to apply to such appeal.

(3) The powers of the official assignee or the official receiver under subsection (1) or sub-section (2) shall be exercised by him subject to the provisions of the Presidency-towns Insolvency Act, 1909 (3 of 1909) or the Provincial Insolvency Act, 1920 (5 of 1920), as the case may be.

Section 73. Power to make rules

(1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely :—

(a) the form in which records referred to in this Act may be maintained;

(b) the manner in which the order and the material referred to in subsection (2) of section 5 to be maintained;

(c) matters in respect of experience of Members under sub-section (3) of section 6;

(d) the salaries and allowances payable to and other terms and conditions of service of Members of the Adjudicating Authority under sub-section (9) of section 6;

(e) the salaries and allowances payable to and other terms and conditions of service of the officers and employees of the Adjudicating Authority under sub-section (3) of section 7;

(f) the manner in which and the conditions subject to which the properties confiscated may be received and managed under sub-section (2) of section 10;

(g) the additional matters in respect of which the Adjudicating Authority may exercise the powers of a civil court under clause (a) of sub-section (1) of section 11;

(h) the nature and value of transactions in respect of which records shall be maintained under clause (a) of sub-section (1) of section 12;

(i) the time within which the information of transactions under clause (b) of sub-section (1) of section 12 shall be furnished;

(j) the manner in which records shall be verified and maintained by banking companies, financial institutions and intermediaries under clause (c) of sub-section (1) of section 12;

(k) the procedure and the manner of maintaining and furnishing information under sub-section (1) of section 12 as required under section 15;

(l) the manner in which the reasons and the material referred to in sub-section (2) of section 16 shall be maintained;

(m) the rules relating to search and seizure under sub-section (1) of section 17;

(n) the manner in which the reasons and the material referred to in sub-section (2) of section 17 shall be maintained;

(o) the manner in which the reasons and the material referred to in sub-section (2) of section 18 shall be maintained;

(p) the manner in which the order and the material referred to in subsection (2) of section 19 shall be maintained;

(q) the manner in which records authenticated outside India may be received under sub-section (2) of section 22;

(r) the form of appeal and the fee for filing such appeal, under subsection (3) of section 26;

(s) the salary and allowances payable to and the other ¹[terms and conditions of service (including tenure of office)] of the Chairperson and other Members of the Appellate Tribunal under section 30;

(t) the salaries and allowances and the conditions of service of the officers and employees of the Appellate Tribunal under sub-section (3) of section 34;

(u) the additional matters in respect of which the Appellate Tribunal may exercise the powers of a civil court under clause (i) of subsection (2) of section 35;

²[(ua) conditions subject to which a police officer may be authorised to investigate into an offence under sub-section (1-A) of Section 45]

(v) the additional matters in respect of which the authorities may exercise powers of a civil court under clause (f) of sub-section (1) of section 50;

(w) the rules relating to impounding and custody of records under subsection (5) of section 50;

(x) any other matter which is required to be, or may be, prescribed.

——————–

1. The words “terms and conditions of service” Subs. by Act No. 20 of 2005 w.e.f. 21-5-2005.

2. Sub. Sectioin (ua) Inserted by Act No. 20 of 2005 w.e.f. 21-5-2005.

Section 74. Rules to be laid before Parliament

Every rule made under this Act shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Section 75. Power to remove difficulties

(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order, published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty :

Provided that no order shall be made under this section after the expiry of two years from the commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.

Schedule

SCHEDULE

[See section 2(y)]

PART A

PARAGRAPH 1

OFFENCES UNDER THE INDIAN PENAL CODE

PARAGRAPH 2

OFFENCES UNDER THE NARCOTIC DRUGS AND PSYCHOTROPIC SUBSTANCES ACT, 1985

PART B

PARAGRAPH 1

OFFENCES UNDER THE INDIAN PENAL CODE

PARAGRAPH 2

OFFENCES UNDER THE ARMS ACT, 1959

PARAGRAPH 3

OFFENCES UNDER THE WILD LIFE (PROTECTION) ACT, 1972

PARAGRAPH 4

OFFENCES UNDER THE IMMORAL TRAFFIC (PREVENTION) ACT, 1956

PARAGRAPH 5

OFFENCES UNDER THE PREVENTION OF CORRUPTION ACT, 1988

Delhi Land Reforms Act

November 30, 2014

Preamble

(Act No.8 of 1954)

[20th July, 1954]

An Act to provide for modification of zamindari system so as to create an uniform body of preasant proprietors without intermediaries, for the unification of the Punjab and Agra systems of tenancy laws in force in the State of Delhi and to make provision for other matters connected therewith.

Chapter I – Preliminary

Section 1. Short title extent and commencement.

(1) This Act may be called the Delhi Land reforms Act 1954.

(2) It extends to the whole of the Union territory of Delhi, but shall not apply to

(a) [(Note: Subs. by s.2 of Delhi act 16 of 1956, for the words “The areas which”) the areas which are or may before the first day of November, 1956 be] included in a Municipality or a Notified Area under the provisions of the Punjab Municipal Act, 1911, or a Cantonment under the provisions of the Cantonments Act, 1924,

(b) [(Note: Subs. by s.2 of Central Act 4 of 1959 for the word “areas, controlled, notified, held, occupied or owned by the Delhi Improvement Trust“.) areas] included in any estate owned by the Central Government or any local authority, and

(c) Areas held and occupied for public purpose or a work of public utility and declared as such by the Chief Commissioner or acquired under the Land Acquisition Act. 1894, or any other enactment other than this Act, relating to acquisition of land for a public purpose.

3. It shall come into force at once.

4. The declaration of the Chief Commissioner under clause (c) of sub-section (2) shall be conclusive evidence that the land is held and occupied for a public purpose or a work of public utility.

Section 2. Repeal.

(1) The following Act, in so far as they apply to areas to which this Act extends, are hereby repealed -

(i) The Punjab tenancy Act, 1887, as modified by Punjab Act No. 9 of 1939.

(ii) The Agra Tenancy Act 1901

(iii) The Punjab Tenants (Security of Tenure) Act, 1950,

(iv) The Punjab Land Revenue Act, 1887, in so far as its provisions are inconsistent with this Act,

(v) The U.P Land Revenue Act, 1901, in so far as its provisions are inconsistent with this Act, and

(vi) So much of any other law or of any rule having the force of law for the time being in force as is inconsistent with the provisions of this Act.

Section 3. Definitions.

In this Act, unless the context otherwise requires,-

[(1) (Note: Subs. by s.3 of central Act, 4 of 1959) “agricultural year” or “fails year” means the year commencing on the 1st day of July and ending on the 30th day of June.]

(2) All words and expressions used to denote the possessor of any right, title or interest in land, whether the same be proprietary or otherwise, shall be deemed to include the predecessors and successors in right, title or interest of such possessor;

(3) “Charitable purpose” include relief of the poor, education, medical relief or the advancement of any other object of general public utility, but does not include a purpose which relates exclusively to religious teaching or worship;

(4) “Decree” has the meaning assigned to it in the Code of Civil Procedure, 1908;

[(5) (Note: Subs. by s.3 of Central Act, 4 of 1959) “Delhi town” means the areas which immediately before the establishment of the Municipal Corporation of Delhi were included in the limits of Delhi Municipality, Civil Station Notified Area, West Delhi Municipality and the Fort Notified Area];

[(6) (Note: Substituted by Act 1 of 1966) “Deputy Commissioner” includes -

(i) A Collector;

(ii) An Additional Collector;

(iii) A Revenue Assistant empowered by the Chief Commissioner by notification in the Official Gazette to discharge all or any of the functions of a Deputy Commissioner under this Act; and

(iv) An Assistant Collector of the first grade or class empowered as aforesaid;

(7) “Economic holding” is a holding which is not an un-economic holding;

(8) “Estate” means the area included under one entry in any of the registers prepared and maintained in any of the registers prepared and maintained under clause (a), (b) , (c) or (d) of section 31 of the Punjab Land revenue Act, 1887, or section 32 of the U.P. Land Revenue Act, 1901, and includes share in or of an estate;

(9) “Gaon sabha area fund” means the fund of the gaon sabha area constituted or established under section 150 of this Act;

(10) “Gaon sabha” and “gaon panchayat” mean the gaon sabha and the gaon panchayat established under section 150 and 151 respectively of this Act;

(11) “Gaon sabha area” means the gaon sabha area constituted under section 150 of this Act;

(11a) (Note: Ins. by s.3 of Delhi Act 16 of 1956) “holding” means—

(a) In respect of -

(i) Bhumidar or Asami; or

(ii) Tenant or sub- tenant under the Punjab Tenancy Act, 1887, or the Agra tenancy Act, 1901; or

(iii) Lessee under the Bhoodan Yagna Act, 1955, a parcel or parcels of land held under one tenure, lease, engagement or grant; and

(b) In respect of proprietors, a parcel or parcels of land held as sir or khud –kasht” ].

(12) “Improvement ” means with reference to a holding -

(i) A dwelling house erected on the holding by the tenure- holder for his own occupation or any other constructions erected or set up by him on the holding for purpose connected with agriculture, horticulture or animal husbandry which includes pisiculture and poultry farming;

(ii) Any work which adds materially to the value of the holding and is consistent with the purpose aforesaid, which if not executed on the holding, is either executed directly for its benefit or is, after execution, made directly beneficial to it; and subject to the foregoing provisions of this clause, includes -

(a) The construction of wells, water channels and other works for the supply or distribution of water for the purposes aforesaid;

(b) The construction of works for the drainage of land or for the protection of land from floods or from erosion or other damage by water;

(c) The reclaiming, clearing ,enclosing, leveling or terracing of land;

(d) The erection in the immediate vicinity of the holding otherwise than on the village site, of buildings required for the convenient or profitable use or occupation of the holding;

(e) The construction of tanks or other works for the storage of water for purposes aforesaid;

(f) The planting of trees and groves on the holding;

(g) The renewal or reconstruction of any of the foregoing works or such alterations therein or additions thereto, as are not of the nature of mere repairs:

Provide that such water channels, embankments, enclosures, temporary wells, or other works as are made by a tenure- holder in the ordinary course of his requirements for purposes aforesaid , shall not be deemed to be improvements;

[(12A) (Note: Ins. by s.3 of Central Act 4 of 1959) “Khudkasht” means land (other than Sir) cultivated by a proprietor either by himself or by servants or by hired labour, -

(a) At the commencement of this Act, or

(b) At any time during the period of five years immediately before the commencement of this Act, whether or not it was so cultivated at such commencement, provided that it has not at any time after having been so cultivate, been let out to a tenant];

(13) “Land” except in sections 23 and 24, means land held or occupied for purpose connected with agriculture, horticulture or animal husbandry including pisciculture and poultry farming and includes -

(a) Buildings appurtenant thereto,

(b) Village abadis,

(c) Grovelands ,

(d) Lands for village pasture or land covered by water and used for growing singharas and other produce or land in the bed of a river and used for casual or occasional cultivation, but does not include -

Land occupied by building in belts or areas adjacent to Delhi town, which the Chief commissioner may by a notification in the official Gazette declare as an acquisition thereto ;

(14) “Legal representative” has the meaning assigned to it in the Code of Civil Procedure 1908;

(15) “New Delhi town” means the areas included in the limits of the New Delhi Municipality and Cantonment:

(16) “Prescribed” means as prescribed by rules made under this Act;

(17) “Proprietor” means as respects an estate a person owing, whether in trust or for his own benefit the estate and includes the heirs and successors – in – interest of proprietor;

(18) “Proprietor’s grove” means grove- land held or occupied by a proprietor as such;

(19) “Religious purpose” includes a purpose connected with religious worship, teaching or service or with the performance of religious rites;

[(19A) (Note: Substituted by Act 1 of 1966) “Revenue Assistant” includes any Assistant Collector of the first grade or class empowered by the Chief commissioner to perform all or any of the function of a Revenue Assistant under this Act;}

(20) “Standard acre” means a measure of area convertible into ordinary acres of any class of land according to the prescribed scale with reference to the quantity of yield and quality of soil;

(21) “State” means the [(Note: Subs. by A.O. (No.5) 1957 for the words “State of Delhi”) Union territory] of Delhi;

(22) “Uneconomic holding” means a holding of less than eight standard acres which, according to local conditions, is not sufficient to maintain a family unit consisting of a person, his minor children , his wife or her husband, as the case may be, and if the person himself is a minor, his father and mother;

(23) “Village” means any local area whether compact or otherwise recorded as a village in the revenue records of the Delhi State and includes any area which the Chief commissioner may, by a general or special order published in the official Gazette, declare to be a village;

(24) Words and expressions, grove, grove- holder, rent , cess Sir, (Note: The word “khudkasht” rep. by s.3 of Central Act 4 of 1959) rent – free grantee, landholder, ex-proprietary tenant, occupancy tenant, non-occupancy tenant, sub- tenant, (Note: The word “holding” rep. by s.3 of Delhi Act 16 of 1956) and crops or any other expressions, not defined in this Act and used in the Agra Tenancy Act, 1901, or the Punjab Tenancy Act, 1887, shall have the meaning assigned to them in the Agra Tenancy Act, 1901, or the Punjab tenancy Act, 1887, according as the context refers to the Shahdara or the remaining circles;

(25) Words and expressions , land revenue, (Note: The word “Revenue Assistant” rep. by s.3 of Central act 4 of 1959) and Tahsildar, not defined in this Act and used in the U.P Land Revenue Act, 1901, or the Punjab Revenue Act, 1887, shall have the meaning assigned to them in those Acts, as the case may be.

Chapter II – A. Tenures

Section 4. Classes of tenure and sub-tenure.

(1) There shall be , for the purpose of this Act, only one class of tenure- holder, that is to say, ‘Bhumidar’ and one class of sub – tenure, that is to say , ‘Asami’

(2) Tenure holder means a person who holds land directly under and is liable to pay land revenue for that land to the State, and sub- tenure holder is a person who holds land from a tenure- holder or Gaon Sabha and is liable to pay rent therefore to the tenure- holder or Gaon Sabha;

[(Note: Ins. by s.4 of Delhi Act of 1956) Provided that land given in exchange to a tenure holder or a sub tenure holder, as a result of consolidation of holdings, shall for the purposes of this Act be deemed to be land originally held by the tenure holder or the sub tenure holder as the case may be.]

Section 5. Bhumidhar.

Every person belonging to any of the following classes shall be a Bhumidhar and shall have all the rights and be subject to all the liabilities conferred or imposed upon a Bhumidhar by or under this Act, namely:

(a) A proprietor holding Sir or Khudkasht land (Note: The word “under his cultivation” rep. by s.4 of Central Act of 1959) a proprietor’s grove holder , an occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, paying rent at revenue rates or a person holding land under Patta Dawami, [(Note: The words “or Istamrari” Ins. by s.4 of Central Act of 1959) or Ist amrari] with rights of transfer by sale , who are declared Bhumidhar on the commencement of this Act;

(b) Every class of tenants other than those referred to in clause (a) and sub-tenants who are declared Bhumidhars on the commencement of this Act; or

(c) Every person who, after the commencement of this Act, is admitted to land as Bhumidhar or who acquires Bhumidhar in rights under any provisions of this Act.

Section 6. Asami.

Every person belonging to any of the following classes shall be an Asami and shall have all the rights and be subject to all the liabilities conferred or imposed upon an Asami by or under this Act, namely -

(a) Every person who, in the agricultural year immediately before the commencement of this Act, occupied or held land—

(i) As a non- occupancy tenant of proprietor’s grove;

(ii) As a sub-tenant of tenant ‘s grove;

(iii) As a non-occupancy tenant of pasture land, or of land covered by water and used for the purpose of growing singhara and other produce or land in the bed of a river and used for casual or occasional cultivation;

(b) Every person who, in accordance with the provisions of [(Note: Substituted by Act 38 of 1965) section 36, or section 64A], becomes a lessee of land comprised in the tenure of a Bhumidhar referred to in that section;

(c) Every person who is admitted as a lessee of land referred to in sub-clause (iii) of clause (a) by the Gaon Sabha or a person authorised to do so under the provisions of this Act;

(d) Every person who is a tenant of Sir or a sub-tenant of an occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, or of a Pattadar Dawami or Istamrari, with right of transfer by sale, who belongs to any of the categories of persons referred to in sub section (2) of section 10, and every person who is a sub-tenant of tenants referred to in clauses (a) , (b) and (c) of sub-section (1) of section 12 to whom the provision of sub-section (2) of section 10 applies; and

(e) Every person who acquires the rights of an Asami under any other provisions of this Act.

Chapter II – B. Declaration of Bhumidhari Rights, Compensation and Land Revenue

Section 7. Rights of proprietors in waste lands, pasture lands or lands of common utility etc. to vest in Gaon Sabha and compensation to be paid for them.

(1) All rights of an individual proprietor or proprietors pertaining to waste lands, grazing or collection of forest produce from forest or fish from fisheries lands of common utility, such as customary common pasture lands, cremation or burial grounds, abadi sites pathways, public wells, tanks and water channels, or Khalihans , whether covered by an existing contract between such proprietor or proprietors and any other person or not, shall with effect from the commencement of this Act be terminated in accordance with the provision of sub-section (2) and the said contracts, if any, shall become void with effect from such commencement:

[(Note: Ins. by s.5 of Delhi Act 16 of 1956) Provided that where such land was as a result of consolidation of holdings made available for use for any purposes other than those referred to in this sub-section, land kept aside in exchange thereof, as a result of such consolidation, shall for the purposes of this Act be deemed to be land originally meant for purposes referred to in this sub section].

Explanation – For the purposes of this sub-section-

(i) “Waste land” shall include cultivable and uncultivable waste area of the village (Note: The words “recorded as such on 1st July, 1950″ rep. by s.5 of Central Act 4 of 1959.)] [(Note: Ins. by s.5 of Delhi Act 16 of 1956) including any land in the bed of a river occupied or held by an Asami referred to in section 6 (a) (iii) of the Act ] [(Note: Subs. by s.5 of Central Act 4 of 1959 for the words “except the uncultivated areas included in the holdings of such proprietor or proprietors”) except the uncultivated areas -

(a) Included in the holdings of such proprietor or proprietors, or

(b) Used for purposes other than those mentioned in clause (13) of section 3, at any time before the 28th day of October, 1956, or

(c) Acquired by a bona fide purchaser for value at any time before the 28th day of October, 1956, for purpose other than those mentioned in clause (13) of section 3.

(ii) “Lands of common utility” shall include such lands as are recorded as such at the last settlement or have been or would have been customarily recorded as such on 1st July, 1950.]

(2) On the commencement of this Act, the Deputy Commissioner shall pass an order in respect of the proprietor or proprietors of each village either singly or collectively divesting the individual proprietor or proprietors of the rights mentioned in sub- section (1) and vesting those rights in the Goan Sabha (Note: The words “consisting of all the adults residents of the village” Rep. by s.5 of Central Act 4 of 1959) or in any person or authority appointed by the Chief Commissioner under section 161 with effect from the commencement of this Act and stating that a compensation equal in value to four times the amount of annual land revenue assessed at the last settlement for the cultivable and uncultivable waste area of the village (Note: The words “recorded as such on 1st July, 1950″ rep. by s.5 of Central Act 4 of 1959) shall be paid by the government to the proprietor or proprietors concerned.

[(Note: Ins. by s.5 of Delhi Act 16 of 1956) If no such assessment of land revenue was made at the last settlement the rate of land revenue applied at the last settlement for similar areas in any other village in the same assessment circle shall be taken to be the rate of land revenue applicable to such areas or failing this the rate of land revenue applicable to such areas shall be computed at 75 per cent of the land revenue assessed on the lowest class of soil in the village.]

(3) The amount of compensation shall be calculated separately for each village for the respective proprietor or proprietors in accordance with rules made under this Act and payments thereof shall be made in such number of annual installments, [(Note: Subs. by s.5 of Central Act 4 of 1959 for the words, “not exceeding two, as the Chief Commissioner may determine, commencing from the fasli year next following the commencement of this Act.”) not exceeding four, as the Chief Commissioner may determine, the first of which shall be paid

(a) In any case where such calculation has been made before the date on which the Delhi Land Reforms (Amendment) Act, 1959, receives the assent of the President, on the first day of fasli year next following such date; and

(b) In any other case, on the first day of the fasli year next following the date of such calculation.]

[(4) (Note: Ins. by s.5 of Central Act 4 of 1959) Where the amount of compensation is not paid by the due date specified in sub-section (3), such amount shall be paid with interest thereon at the rate of 21/2 percent. Per annum from the said date until payment.

Section 8. Private wells, trees in abadi and buildings.

(1) All private wells in or outside holdings, all tanks, groves and all buildings situate within the limits of an estate belonging to or help buildings situate within the limits of an estate belonging to or held by a proprietor tenant or other person, whether residing in the village or not, shall continue to belong to or be held by such proprietor, tenant or person, as the case may be, on such terms and conditions as may be prescribed by the Chief Commissioner.

(2) [(Note: Ins. by s.6 of Delhi Act of 1956) Trees planted by a person other than a proprietor of land other than land comprised in his holding shall continue to belong to or be held by such person on such terms and conditions as may be prescribed by the Chief Commissioner].

Section 9. Power to make rules.

The Chief Commissioner may make (Note: For Delhi Land Reforms Rules, 1954, see Notification No.F.3(16)/54-GA&R dated the 11th November, 1954, see Delhi State Gazette, Part V, dated 20-1-1955, p.27) rules for the purpose of carrying into effect the provisions of this chapter.

Chapter III – A. Declaration of Bhumidhari Rights, Compensation and Land Revenue

Section 10. Tenants of Sir and sub-tenants of occupancy tenants under section 5 of the Punjab Tenancy Act, 1887, and sub tenants of Tenants holding land with Patta Dawami or Istamrari and having right of right of transfer by sale.

(1) Every tenant of Sir and sub-tenant of an occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, or sub- tenant of a tenant holding land under a Patta Dawami or Istamrari, with right of transfer by sale, who in the fasli year immediately before the commencement of this Act, is recorded as a tenant of Sir or as a sub- tenant, shall be deemed to be a non occupancy tenant of land held by him at the rate of rent payable by him in the said year and the land held by such tenant and sub-tenant shall not for the purposes of section 11 be available to the Sir-holder, occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, or to the Pattadar Dawami or Istamrari for acquisition to Bhumidhari rights.

(2) Nothing in sub-section (1) shall apply to a tenant of Sir or a sub-tenant of occupancy tenant under section 5 of the Punjab Tenancy Act or of the said Pattadar, if his land holder belongs to any of the following categories of persons—

(i) A women,

(ii) A minor,

(iii) A linatic,

(iv) An idiot,

(v) A person incapable of cultivation by reason of blindness or physical infirmity, or

(vii) A person under detention or imprisonment, on the commencement of this Act:

Provided that where a holding is held jointly by several landholders of whom one or more but not all are persons belonging to any of the above categories, nothing in sub-section (1) shall apply to the share of these persons in the holding and such share shall be available for the acquisition of Bhumidhari rights by these persons.

Section 11. Declaration of Bhumidari rights in favour of proprietors and superior class of tenants, compensation and land revenue.

(1) Subject to the provisions of section 10, the Deputy Commissioner shall declare as Bhumidhars persons holding the following lands, namely:-

(a) Khud Kasht land or a proprietor’s grove in the tracts to which the Punjab tenancy Act, 1887, was applicable or Sir land or Khud Kasht land or a proprietor’s grove in the tracts to which the Agra Tenancy Act, 1901, was applicable;

(b) Land held by occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, with right of transfer by sale; and

(c) Land held under Patta Dawami or Istamrari by tenants with right of transfer by sale.

[(2) (Note: Subs. by s.6 of Central Act 4 of 1959 for the words “the basis for the purpose of this section shall be the records of the fasli year immediately proceeding the commencement of this Act”) For the purposes of sub-section (1), the Deputy Commissioner shall take into consideration the entries in the revenue records which shall be presumed to be correct unless the contrary is proved]:

Provided that where land held as Khud Kasht by a proprietor belonging to any of the categories of persons referred to in sub-section (2) of section 10 has been before the commencement of this Act, let out to another person by or on behalf of such proprietor within six moths of the commencement of this Act and after giving an opportunity to the tenant of being heard, shall declare such land to be the proprietor’s Khud Kasht for purposes of this section.

(3) While making a declaration under clauses (b) and (c) of sub-section (1), the deputy Commissioner shall order the occupancy tenant or the Pattadar to deposit in Government Treasury an amount equal to four times the land revenue as ascertained in sub- section (4) for the area of which he is declared as Bhumidhar as compensation thereof . If he fails to deposit the amount within six months of the date of declaration, the same shall be realized as arrears of land revenue. The amount deposited or so realized shall be disbursed to the proprietor under the order of the Revenue Assistant.

(4) Every person , who is declared as Bhumidhar under this section, shall, with effect from the commencement of this Act, be liable to pay to the Government for land , held by him as such , on account of land revenue, an amount which shall proportionately correspond to the land revenue payable immediately before the commencement of this Act for the area in respect of which he is declared Bhumidhar, with due regard to the class of soil comprised therein, together with the cesses and local rates.

Section 12. Sub- tenants of occupancy ex-proprietary tenants, etc.

(1) Every sub tenant

(a) Of an occupancy tenant other than an occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, or

(b) Of an ex-proprietary tenant, or of a non – occupancy tenant of over twelve years or less, or [(Note: Ins. by s.7 of Delhi Act 16 of 1956) of a rent free grantee or a grantee at a favorable rate of rent or]

(c) Of a tenant holding land under a Patta Dawami or Istamrari but without right of transfer by sale,

Who is recorded as such in the fasli year, before the commencement of this Act, shall be deemed to be a non- occupancy tenant of the land held by him and such land, for the purposes of section 13, shall not be available to the occupancy tenant, ex-proprietary tenant [(Note: Subs. by s.7 of Delhi Act 16 of 1956 for the words “non-occupancy tenants or Pattadar”) non-occupancy tenant, rent free grantee or a grantee at rate of rent or Pattadar] for acquisition of Bhumidhari rights.

(2) The provisions of sub-section (2) of section 10 shall apply, mutatis mutandis, to this section.

Section 13. Bhumidhar rights in other cases.

(1) On the commencement of this Act, the Deputy Commissioner shall also declare the following classes of tenants as Bhumidhars, who shall, with effect from the same date, have all the rights and be subject to all the liabilities conferred or imposed upon Bhumidhars under this Act, namely:-

(a) A rent free grantee or a grantee at favorable rate of rent;

(b) An ex-proprietary tenant in Shahdara Circle;

(c) An occupancy tenant except those under section 5 of the Punjab Tenancy Act,1887;

(d) A non-occupancy tenant, who pays rent at revenue rates with or without Malikana;

(e) A tenant of Sir or a sub-tenant declared as non- occupancy tenant under section 10or 12;

(f) [(Note: Substituted by Act 1 of 1966) a tenant of or over twelve years in Shahdara Circle and a non occupancy tenant in any part of the Union territory of Delhi other than a non- occupancy tenant referred to in clause (d);]

(g) A tenant grove holder; and

(h) S holder of Patta Dawami or Istamrari without any right to sell.

(2) Every person who, after the commencement of this Act, is admitted to land as Bhumidhar or who acquires Bhumidhari rights under any provisions of this Act, shall have all the rights and be subject to all the liabilities conferred or imposed upon Bhumidhars under this Act with effect from the date of admission or acquisition, as the case may be.

Section 14. Compensation and land revenue payable by Bhumidhars declared as such under section 13.

(1) Every person, declared as Bhumidhar under sub- section(1) of section 13, shall with effect from the commencement of this Act, cease to pay rent of the land in respect of this Act, cease to pay rent of the land in respect of which the declaration has been made to the proprietor or the landholder, as the case may be.

(2) Every such person, other than a sub- tenant deemed to be a non- occupancy tenant under section 10 or 12, shall

(a) Be liable for payment of such amount on account of land revenue for the holding or his share therein , as the case may be , as shall be one half of the amount of rent payable by him in the fasli year immediately preceding the commencement of this Act together with cesses and local rates of the area of which he is declared Bhumidhar from the commencement of this Act;

Provided that where half the amount of rent payable or deemed to be payable by him in the fasli year immediately preceding the commencement of this Act is less than the actual amount of land revenue payable immediately before the commencement of this Act for the holding or his share therein, the land revenue shall be the said actual amount of land revenue, and where the said half the amount of rent is greater than twice the actual amount of land revenue payable immediately before the commencement of this Act, the land revenue shall be twice the said actual amount of land revenue,

(b) Be liable to pay as compensation in the Government Treasury to the credit of the proprietor concerned an amount which shall in the case of tenants with permanent and heritable rights, i.e., in the case of tenants under clauses (b), (c) and (h) of sub-section (1) of section 13 , he eight times the amount of land revenue so determined and in the case of non- occupancy tenants, i.e., tenants, of Sir or tenants under clauses (a), (d), (f) and (g) of sub section (1) of section 13, be sixteen times the land revenue so determined.

(3) Every such person, being a sub-tenant who is declared as Bhumidhar under clause (e) of sub- section (1) of section 13 shall —

(a) Be liable for payment of such amount on account of land revenue for the holding or his share therein as is determined on the same principle as laid down in clause (a) of sub-section(2).

(b) And be liable to pay as compensation an amount equal to 20 times the land revenue so determined under clause (a) which shall be distributed between his immediate landholder and the proprietor in accordance with the following scale:–

(4) The tenant or sub tenant declared as Bhumidhar under section 13 shall pay the compensation either in one lump sum within six months of his declaration, or if he does not elect to pay the compensation in one lump sum, in ten annual equal installments together with interest at such rate as may be prescribed, beginning from the commencement of this Act.

(5) In the case of default in the payment on the date fixed of any installment under sun- section (4), the amount shall be recovered as arrear of land revenue.

(6) If during the period of installment the land revenue is postponed, suspended or remitted for reasons of agricultural calamity in the area concerned, the payment of compensation shall also be postponed or suspended but in the case of remission of land revenue, the payment of compensation shall not be remitted but recovered in subsequent installments to be fixed by the Deputy Commissioner.

(7) The Revenue Assistant shall annually disburse the installment of the compensation paid by the Bhumidhar under sub- section (4) or direct the payment of the amount deposited as compensation by the Bhumidar in one lumpsum under sub section (2) or (3) of this section to the proprietor or to the proprietor and landholder or their successor- in – interest, as the case may be , in accordance with the rules on the subject. The annual disbursements made to a proprietor and landholder in cases under sub section (3) , where payments are made by installments, shall be in the same proportion as the total compensations payable to them bear to each other,

(8) In this section the expression “rent deemed to be payable” means -

(i) Where the rent is paid in kind, or is based on an estimate or appraisement of standing crops or on rates varying with the crops sown or partly in one of such ways and partly in another or other of such ways, the rend shall be deemed to be an amount, which the average value of the landlord’s share of the crops grown in the preceding five years, subject to such rules as may be prescribed and

(ii) Where there was no rent payable or fixed for the holding or area concerned or part thereof, or where it was held rent-free or at favorable rate of rent, the rent for the said area shall be calculated at the prevailing village rate of rent.

(iii) [(Note: Ins. by s.8 of Delhi Act 16 of 1956) Where it is not possible to ascertain the crops grown in the preceding five years, the rent shall be calculated at the prevailing village rate of rent].

(9) Every person, who, after the commencement of this Act, is admitted to land as Bhumidhar or who acquired Bhumidhari rights under any provisions of this Act , shall pay the same amount of land revenue as was payable for the land immediately before his admission to or acquisition of Bhumidhari rights in the land, together with cesses and local rates :

Provided that if the last Bhumidhar, [(Note: Subs. by s.8 of Delhi Act 16 of 1956 for the words, “when”) whom] he has replaced was [(Note: Subs. by s.8 of Delhi Act 16 of 1956 for the words “making payment of compensation by installment”) to pay compensation] , he shall resume and complete the payments in the same manner:

Provided further that in any other case, i.e., where the last Bhumidhar had already paid up the total amount of compensation to the proprietor, he shall not be called upon to pay any compensation.

Chapter III – B. General consequences of the termination of intermediaries rights.

Section 15. Estate in possession of a mortgage with possession.

(1) A mortgage in possession of an estate or share therein shall cease to have any right in such estate or share, if the proprietor mortgagor deposits the mortgage money together with interest thereon in Government Treasury and applies for redemption of the mortgage in the proper court, within a period of nine months from the commencement of this Act.

(2) [(Note: Subs. by s.7 of Central Act 4 of 1959 for the original sub-section) If the proprietor mortgagor deposits the amount and applies for redemption as provided in sub section (1), he shall be declared as Bhumidhar in respect of the mortgaged area which was under the personal cultivation of the mortgage on the date of such application for redemption, and if any part of the mortgaged area was on the said date let out to a tenant , such tenant shall be declared as Bhumidhar in respect of the area that was so let out to him.]

(3) Where the proprietor mortgagor fails to take action under sub section (1) within the time specified therein, the mortgage of the area mortgaged with possession, (Note: The words “whether or not it was the Sir or Khudkasht of the mortgagor on the date of the mortgage” rep. by s.7 of Central Act 4 of 1959) shall be declared as the Bhumidhar of so much of the area mortgaged as is under the personal cultivation of the mortgage.

(4) Where the area mortgaged or part thereof is let out to tenants, the mortgage shall be declared as the Bhumidhar of the part under his personal cultivation and the tenants shall be declared as Bhumidhars of their respective areas let out to them.

(5) Subject to section 11 or 13 the provisions of sub section (1) to (4) shall apply mutatis mutandis to mortgages with possession where the mortgagors were -

(a) Occupancy tenants under section 5 of the Punjab Tenancy Act, 1887,

(b) Tenants holding land on Patta Dawami or Istamrari, with right of transfer by sale , or

(c) Exproprietary tenants, occupancy tenants other than those under section 5 of the Punjab Tenancy Act, 1887, grove holders or tenants holding land on Patta dawami or Istamrari without right of transfer by sale.

Section 16. Consequences of acquisition of Bhumidhari rights by mortgages etc, under section 15.

Notwithstanding anything contained in any other law for the time being in force or in any mortgage deed or other instrument or agreement, where a proprietor mortgagor fails to apply for the redemption of his mortgage within the time specified in sub section (1)of section 15 and the mortgage and tenants, if any, in respect of the mortgaged property or any portion thereof are declared Bhumidhars in accordance with the provisions of sub section (3) or sub section (4) as the case may be, of that section, the following consequences shall follow, namely:-

(1) The proprietor mortgagor shall be absolutely debarred of his right to redeem the mortgage;

(2) The mortgage and the tenants, if any; in respect of the mortgaged property or any portion thereof, who have been declared as Bhumidhars as aforesaid, shall pay to the proprietor mortgagor compensation which shall be determined as follows:

(a) The amount of compensation payable by the mortgage and each of the tenants, if any, shall be determined separately in accordance with the provisions laid down in clauses (a) and (b) of sub section (2) of section 14 for determining the amount of compensation, payable by a Bhumidhar;

(b) The amount of compensation as determined under clause (a) payable by each of the tenant shall be paid by him to the proprietor mortgagor through court either in one lump sum or in installments in the manner laid down in sub section (4) of section 14 ;

(c) The total amount due from the proprietor mortgagor to the mortgage under the mortgage deed on the date of the commencement of this Act shall then be determined in the prescribed manner after deducting the receipts if any , by the mortgage from the mortgaged property;

(d) If the amount of compensation payable by the mortgage to the proprietor mortgagor to the proprietor mortgagor is greater than the amount determined under clause (c) the mortgage shall pay through court to the proprietor mortgagor as compensation the difference between the two in one lump sum; [(Note: Ins. by s.9 of delhi Act 16 of 1956) within six months from the date of the order] and where the amount of compensation payable by the mortgage is less than the amount determined under clause

(c), the entire mortgage money with interest , if any thereon, shall be deemed to have been fully satisfied by the enjoyment of the usufruct of the mortgaged property and the proprietor mortgagor shall not be required to pay anything under the mortgage deed to the mortgage.

(3) Where a tenant mortgagor, referred to in sub section (5) of section 15 , fails to apply for redemption within the period specified in sub section(1) and of clause (a) of sub section(2) shall apply mutatis mutandis and the amount of compensation payable by the mortgage and his tenants, if any, in respect of mortgaged land in possession of each to the proprietor shall be determined separately, in accordance with the provisions of clauses (a) and (b) of sub section (2) of section 14 . the compensation so determined shall be paid as follows:-

(i) Where the mortgagor tenant is an occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, or a Pattadar Dawami or Istamrari with right of transfer by sale, the amount due from the mortgagor to the mortgage under the mortgage shall also be determined in accordance with clause (c) of sub section (2) . The mortgage or his tenants shall each first pay out of the total compensation determined above, an amount equal to four times the land revenue payable for the land in his possession immediately before the commencement of this Act, to the proprietor, If the balance of the compensation payable by the mortgage and his tenants, is greater than the amount due to the mortgage from the mortgagor under the mortgage, the difference shall be paid by the mortgage and his tenants, as compensation to the mortgagor tenant [(Note: Ins. by s.9 of Delhi Act 16 of 1956) in one lump sum within six months from the date of the order, first by the mortgage’s tenant upto the extent of the amount left over , if any] If it is less, the entire mortgage money with interest shall be deemed to have been fully satisfied by the enjoyment of the usufruct and nothing shall be payable to the mortgage in adjustment of the mortgage money.

(ii) Where the mortgagor tenant is a tenant, other than an occupancy tenant under section 5 of the Punjab Tenancy Act, 1887, or a Pattadar Dawami or Istamrari with right of transfer by sale, the entire amount of compensation payable by the mortgage and his tenants, if any, shall be paid direct to the proprietor of the mortgagor tenant and the mortgage money , shall be deemed to have been fully satisfied by the enjoyment of the usufruct.

Section 16A. Compensation payable by tenant declared Bhumidhar of redeemed land.

Where tenant is declared as Bhumidhar in respect of any part of mortgaged area that has been redeemed under sub- section (1) of section 15, the compensation payable by such tenant to the mortgagor shall be determined and paid in the manner provided in clause (2) or clause (3) of section 16 according as such tenant is declared a Bhumidhar under sub- section (2) or sub- section(5) of section 15.

Section 17. Variation in rent on or after July 1, 1950, not to be recognized.

Notwithstanding any contract made or anything done or permitted to be done, on or after the first day of July, 1950 by or on behalf of a proprietor or a tenant , in respect of any land in the State , the rent payable therefore by the tenant in the fasli year immediately preceding the commencement of this Act shall be deemed to be an amount equal to the rent payable by the tenant or his predecessor – in – title on the date aforesaid and any reduction or remission made therein after the said date otherwise than in pursuance of a decree or order of a court shall not be taken into account:

Provided that where the rent reduced in pursuance of any decree or order aforesaid is less than the amount computed at the prevailing village rate of rent the rent payable shall be an amount so computed.

Section 18. Contract agreement or eviction to defeat provisions of this Act to be void.

(1) Any contract or agreement made between a proprietor and any person on or after the 1st day of July, 1950, which has the effect, directly or indirectly of defeating the provisions of this Act shall be and is hereby declared null and void.

(2) Notwithstanding any decree or order where a tenant of Sir or sub tenant of tenants referred to in sub section (1) of section 10 or sub-tenant of tenants referred to in section 12 or a non-occupancy tenant referred to in clause (f) or sub- section (1) of section 13 was evicted from land after 1st July 1950 , on any ground other than for arrears of rent, the tenant or the sub- tenant shall be entitled to regain possession thereof on his making an application in this behalf to the Revenue Assistant [(Note: Ins. by s.9 of Central Act 4 of 1959) and, shall on regaining possession have the same rights as he would have had but for such eviction decree of order].

Provided that the land is not in the possession of any other tenant in the fasli year immediately before the commencement of this Act.

(3) (Note: Ins. by ibid) Nothing in this section shall affect the rights of a proprietor in any land held or occupied at the commencement of this Act for purposes other than those mentioned in clause(13) of section 3.

Section 19. Cesses, Local rates and sayar.

A Bhumidhar shall pay to Government all the cesses, local rates and sayar proportionately to his land revenue, in respect of his holding.

Any contract or agreement between the proprietor and any person compounding, releasing or reducing the payment of cesses, local rates or sayar after the 1st of July, 1950, shall be void.

Section 20. Stay of proceedings.

All proceedings whether of the first instance, appeal or revision, of the nature specified in Schedule II, pending in any court for hearing on the commencement of this Act shall be stayed.

Section 21. Stay of proceedings.

All proceedings whether of the first instance , appeal or revision, of the nature specified in Schedule II, pending in any court for hearing on the commencement of this Act and all proceedings (except in so far as they relate to the realisation, otherwise than by ejectment of the judgement debtor, of cost of compensation awarded in any suit or proceedings) upon any decree or order, unless it is a decree or order which become final before the commencement of this Act, but is not decree which may be executed by ejectment of the judgement debtor passed in any such suit or proceedings previous to the commencement of this Act, shall be stayed.

Chapter III – C. Use of land and improvements (Bhumidhars and Asamis)

Section 22. Right of Bhumidhar or Asami to the exclusive possession of land in his holding.

A Bhumidhar or Asami shall , subject to the provisions of this Act, have the right to the exclusive possession of all land comprised in his respective holding and to use land for any purpose connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming and make any improvement.

Section 23. Use of holding for industrial purposes.

(1) A Bhumidhar or Asami shall not be entitled to use his holding or part thereof for industrial purposes, other than those immediately connected with any of the purposes referred to in section 22, unless the land lies within the belt declared for the purpose by the Chief Commissioner by a notification in the official Gazette:

Provided that the Chief Commissioner may , on application presented to the Deputy Commissioner in the prescribed manner, sanction the use of any holding or part thereof by a Bhumidhar for industrial purposes even though it does not lie within such a belt.

(2) Where permission for industrial purposes is accorded, the provisions of this Chapter relating to devolution shall cease to apply to the Bhumidhar with respect to such land and he shall thereupon be governed in the matter of devolution of the land by personal law to which he is subject.

Section 24. Reversion to agriculture.

(1) Whenever any land held by a Bhumidhar which is used for industrial purposes has become land used for purposes connected with agriculture, horticulture or animal husbandry, which includes pisciculture and poultry farming, the Deputy Commissioner on being so satisfied, may with the sanction of the Chief Commissioner make a declaration to that effect and thereupon the Bhumidhar shall, as respects the land, be subject to the provisions relating to devolution in this chapter.

(2) Upon the grant of the declaration under sub- section (1) in respect of any land any person other than the Bhumidhar in possession of the land shall -

(a) If he holds it under any contract or lese which is inconsistent with any of the provisions of this chapter, be deemed to be an occupant liable to ejectment under section 84.

(b) If he holds it under any contract or lease which is not inconsistent with any of the provisions of this chapter, be entitled to the rights in the land determined in accordance with the provisions thereof.

(3) Any contract or lease referred to in sub-clause (a) of sub section (2) which in inconsistent with the provisions of this chapter shall, to the extent of the inconsistency, become void with effect from the date of declaration:

Provided that any mortgage with possession existing on any such land shall, to the extent of the amount due and secured on such land , be deemed to have been substituted by a simple mortgage carrying such rate of interest as may be prescribed.

Section 25. Registration of the sanction or declaration under section 23 or 24.

A copy of every sanction given or declaration made under section 23 or 24 shall be forwarded by the Deputy Commissioner to the Sub-Registrar concerned, who shall , notwithstanding anything contained in the Indian Registration Act, 1908, register the same free of cost in the manner prescribed.

Section 26. Restriction on improvements.

No Bhumidhar or Asami shall make an improvement on, or detrimental to, any land which is not included in the holding to be benefited thereby (Note: Subs. by s.10 of Central Act 4 of 1959, for the words “except with the written permission of the land holder of such land lord the Gaon Panchayat, as the case may be.”) except

(a) With the written permission of the landholder of such land or the Gaon Panchayat, as the case may be, or

(b) Where such permission is not given within the within the prescribed period, with the written permission of the Revenue Assistant granted in accordance with rules made under this Act this behalf.

Section 27. Works benefiting other land.

(1) Where a Bhumidhar or Asami has made an improvement on land and such land is sold in lieu of arrears of land revenue or in execution of a decree for payment of money or the Bhumidhar or Asami is ejected from such land, the purchaser or the landholder, as the case may be, shall become the owner of the improvement but the Bhumidhar or Asami shall be entitled to other benefit of the improvement in respect of the land remaining in his possession to the same extent and in the same manner as it had hitherto benefited thereby.

(2) Where the Bhumidhar or Asami has made an improvement on land which remains in his possession after a portion of his land has been sold in lieu of arrears of land revenue or in execution of a decree or order of Court for payment of money or after he has been ejected from a portion of his land, the purchaser or the landholder, as the case may be, shall be entitled to the benefit of such improvement in respect of land which does not remain in the possession of the Bhumidhar or Asami to the same extent and in the same manner as it had hitherto benefited thereby.

Section 28. Right to compensation for improvement made by an Asami.

(1) An Asami who has made any improvement with the [(Note: Subs. by s.11 of Central Act 4 of 1959, for the words “written consent of the Gaon Panchayat or the land holder”.) written permission of the landholder the Gaon Panchayat or the Revenue Assistant ], as the case may be, shall be entitled to compensation—

(a) When a decree or order for his ejectment is passed on any ground other than his making any transfer in contravention of the provisions of this Act or on the ground of his using the land for any purpose other than agriculture, horticulture or animal husbandry, which includes pisciculture and poultry farming;

(b) When he has been wrongfully deprived of possession by the Gaon Panchayat or his landholder, as the case may be, and has not recovered possession of his holding; or

(c) When he vacates the holding on the expiry of his lease or on becoming liable to ejectment on any ground mentioned in clause (a)

(2) No compensation shall be payable to an Asami where the improvement was made without the written [(Note: Subs. by s.11 of Central Act 4 of 1959 for the word “Consent”) permission] as aforesaid.

Section 29. Determination of the amount of compensation.

In determining the amount of compensation for improvement regard shall be had to –

(a) The cost of the work,

(b) The condition of the work and the period during which it is likely to add materially to the value of the holding,

(c) The amount by which the quantity or value of the produce of the holding is increased by the work.

(d) The length of time during which the Asami claiming compensation has had the benefit of the improvement, and

(e) The age of the trees, their class and the income likely to accrue from them.

Section 30. Court to assess the compensation for improvements.

(1) In any suit or other proceeding for ejectment of an Asami, the Court shall, where compensation for improvement is payable , before passing a decree or order for ejectment, assess the amount of compensation payable to the Asami under section 29.

(2) If the amount of compensation exceeds the amount recoverable from the Asami as arrears of rent , whether decreed or not, on account of the holding, together with costs, if any, the decree of order for ejectment shall be conditional on the payment by the landholder or the Gaon Sabha of the balance due to the Asami within such time as the Court may direct.

(3) If the amount of compensation dies not exceed the amount recoverable from the Asami as specified in sub-section (2), the same shall be deemed to have been satisfied on his ejectment, and the balance shall, subject to the Asami rights to the value of the standing crops and trees be recoverable from him.

Chapter III – D. Transfers (Bhumidhars and Asamis)

Section 31. Interest of a Bhumidhar to be transferable.

The interest of a Bhumidhar shall be transferable subject to the conditions hereinafter contained.

Section 32. Interest of an Asami not transferable.

The interest of an Asami shall not be transferable except as expressly permitted by this Act.

Section 33. (Note: Substituted by Act No.24 of 1960) Restrictions on the transfers by a Bhumidhar.

[(1) (Note: Renumbered by Act 38 of 1965)] No Bhumidhar shall have the right to transfer by sale or gift or otherwise any land to any person, other than a religious or charitable institution or any person in charge of any such Bhoodan movement, as the Chief Commissioner may, by notification in the Official Gazette, specify , where as a result of the transfer, the transferor shall be left with less than eight standard acres in the Union Territory of Delhi :

Provided that the Chief Commissioner may exempt from the operation of this section, the transfer of any land made before the 1st day of December, 1958, if the land covered by such transfer does not exceed on e acre in area and is used or intended to be used for purposes other than those mentioned in clause (13) of section 3.

(2) (Note: Inserted by Act 38 of 1965) Nothing contained in sub section (1) shall preclude the transfer of land by a Bhumidhar who holds less than eight standard acres of land, if such transfer is of the entire land held by him;

Provided that such Bhumidhar may transfer a part of such land to any religious or charitable institution or other person referred to in sub section (1)

Explanation – For the purposes of this section, a religious or charitable institution shall mean an institution established for a religious purpose or a charitable purpose, as the case may be.

Section 34. Only simple mortgage of land by a Bhumidhar allowed.

No Bhumidhar shall have the right to mortgage any land belonging to him as such where possession of the mortgaged land is transferred or is agreed to be transferred in future to the mortgage as security for the money advanced or to be advanced.

Section 35. Letting of land.

No Bhumidhar or Asami shall let, for any period whatsoever, any land comprised in his holding except in the cases provided for in section 36.

Explanation.- Any arrangement whereby a person is entitled to a right merely to share in the produce grown on the land in consideration of such person assisting or participating with the tenure holder in the actual performance of agricultural operations is not a “lease”.

Section 36. Lease by a disabled person.

(1) A Bhumidhar who is -

(a) An unmarried woman, or if married, divorced or separated from her husband , or a widow ;

(b) A minor whose father has died;

(c) A lunatic or an idiot;

(d) A person incapable of cultivating by reason of blindness or physical infirmity:

(e) Prosecuting studies in a recognize institution and does not exceed 25 years in age;

(f) In the armed forces of the Indian union; (Note: Omitted by Act 38 of 1965).

(g) [(Note: Inserted by Act 38 of 1965) Dependent for assistance in agricultural operation on a person serving in the armed forces of the Union and certified by the Deputy Commissioner to be so dependent; or]

(h) (Note: Relettered by Act 38 of 1965 for ‘g’) Under detention or imprisonment; may let the whole or any part of his holding;

Provided that in the case of a holding held jointly by more persons than one where but one or more of them, but not all, are subject to the disabilities mentioned in [(Note: Substituted by Act of 38 of 1965) clauses (a) to (h) , the person or persons may let out his or their share in the holding.

(2) Where any share of a holding has been let out under the proviso to sub-section (1), the Court may, on the application of the Asami or any tenure – holder, determine the share of the lessor in the holding and partition the same.

(3) A Bhumidhar, who holds only less than 8 standard acres in the State, may where he does not join a co-operative farm lease the whole of his holding to an Asami;

Provided that the lease is for not less than 5 years.

Provided further that the Bhumidhar shall not be entitled to resume it except for self-cultivation or for breach of terms of the lease.

Section 37. Registration of a lease.

Notwithstanding anything contained in the Transfer of Property Act, 1882, or the Indian Registration Act, 1908, a lease for a term exceeding one year or from year to year may be made either by a registered instrument or in the prescribed manner.

Section 38. Failure to register the lease under section 37.

A lease which fails merely to comply with the provisions of section 37 shall not , for purposes of [(Note: Substituted by Act 38 of 1965) section 42], be deemed to be a transfer made in contravention of the provisions of this Act.

Section 39. Successor –in– interest bound by a lease.

When a holding has been let in accordance with the provisions of section 36, the successor in interest of the Bhumidhar shall be bound by the terms of the lease in so far as they are not consistent with the provision of this Act.

Section 40. Exchange.

(1) Subject to the provisions of section 33, Bhumidhar may exchange lands held by him as such -

(a) For lands held by any other Bhumidhar as such or

(b) For lands for the time being vested in a Gaon Sabha or local authority or in Government:

Provided that no such exchange shall be made except with permission of the Deputy Commissioner, who will refuse permission if the difference between the area of the land given in exchange and of land received in exchange in terms of standard acres is more than ten per cent. Of the area in standard acres of the land which is smaller in area.

(2) Where the Deputy Commissioner permits exchange , he shall also order the relevant annual register to be corrected accordingly.

(3) On exchange made in accordance with the sub section (1), the parties to such exchange shall have the same rights in the land received in exchange as they had in the land given in exchange.

Section 41. Land revenue not affected by exchange.

Nothing in section 40 shall affect the amount of the land revenue assessed on or payable for land so exchanged.

Section 42. Transfer in contravention section 33.

(1) Where a transfer of any holding or part thereof has been made in contravention of the provisions of [(Note: Substituted by Act 38 of 1965 for ‘section 33′) this chapter by a Bhumidhar or Asami] , [(Note: Substituted by Act 38 of 1965 for “the transferee”) the transferee and every person who may have obtained possession of such holding or part] shall, notwithstanding anything in any law, be liable possession of such holding or part] shall , notwithstanding anything in any law, be liable to ejectment from such holding or part on the suit of the [(Note: Subsituted by Act 38 of 1965 for “Gaon Sabha”) Gaon Sabha, or the landholder as the may be], which shall thereupon become vacant land; but nothing in this section shall prejudice the right of the transferor to realize the whole or portion of the price remaining unpaid, or the right of any other person other than the transferee to proceed against such holding or land in enforcement of any claim thereto .

(2) To every suit for ejectment under this section the transferor shall be made a party.

[(3) (Note: Substituted by Act 38 of 1965) Notwithstanding anything contained in sub section (1), the Revenue Assistant also may on receiving information or on his own motion, take action to eject the transferee and every person who have may obtain possession aforesaid, after following such procedure as may be prescribed.

Section 43. Transfer with possession by a Bhumidhar to be deemed a sale.

Any transfer of any holding or part thereof made by a Bhumidhar by which possession is transferred to the transferee for the purpose of securing any payment of money advanced or to be advanced by way of loan, and existing or future debt or the performance of an engagement which may give wise to a pecuniary liability, shall, notwithstanding anything contained in the document of transfer or any law for the time being in force, be deemed at all times and for all purposes to be a sale to the transferee and to every such sale to the provisions of section 33 and 42 shall apply.

Section 44. Effect of lease in contravention of section 36.

When a Bhumidhar other than one referred to in section 36 has let out his holding or any part thereof, the lessee will, notwithstanding anything contained in any law or contract or document of lease become and be deemed to be a purchaser and the provisions of section 33 and 42 shall mutatis mutandis apply.

Section 45. Transfer made in contravention of this Chapter to be void.

(1) Any transfer made by or on behalf of a Bhumidhar or Asami in contravention of the provision of this Chapter shall be void.

(2) (Note: Ins. by s.i3 of Central Act 4 of 1959) Nothing in sub- section (1) shall apply to any transfer which has been exempted by the Chief Commissioner [(Note: Substituted by Act 38 of 1965) under the proviso to sub- section (I) of section 33.

Section 46. (Note: Omitted by Act 38 of 1965).

Section 47. Consequences of ejectment under section 46.

Upon ejectment [(Note: Subsituted by Act 38 of 1965) under section 42], all the rights and interests of the Bhumidhar or Asami in the holding or in any improvements made therein or to get compensation for such improvements shall be extinguished.

Chapter III – E. Devolution (Bhumidhar and Asami)

Section 48. Bequest by a Bhumidhar.

(1) A Bhumidhar may by will bequeath his holding or any part there of except as provided in sub- section.(2).

(2) No Bhumidhar entitled to any holding or part in the right of a widow, mother step- mother, father’s father, father’ mother, unmarried daughter, or unmarried sister, may bequeath by will such holding or part.

(3) Every will made under provisions of sub-section (1) shall , notwithstanding anything contained any law, custom or usage, be in writing and attested by two persons.

Section 49. Bequest by an Asami.

No Asami shall have the right to bequeath by will his holding or part thereof.

Section 50. General order of succession from males.

Subject to the provisions of section 48 and 52, when a Bhumidhar or Asami being a male dies, his interest in his holding shall devolve in accordance with the order of the succession given below :

(a) Male lineal descendants in the male line of the descent :

Provided that no member of this class shall inherit if any male descendant between him and the deceased is alive:

Provided further that the son or sons of a predeceased on how lowsoever shall inherit the share which would have devolved upon the deceased if he had been then alive:

(b) Widow

(c) Father

(d) Mother, being a widow;

(e) Step mother, being a widow;

(f) Father’s father

(g) Father’s mother, being a widow;

(h) Widow of a male lineal descendant in the male line of descent;

(i) Brother, being the son of same father as the deceased;

(k) Unmarried sister;

(l) Brother’s son, the brother having been a son of the same father as the deceased;

(m) Father’s father’s son;

(n) Brother’s son’s son;

(o) Father’s father’s son’s son;

(p) Daughter’s son.

Section 51. Succession in the case of a woman holding an interest inherited as a widow, mother, daughter etc.

(1) When a Bhumidhar or Asami, who has after the commencement of this Act inherited an interest in any holding as a widow, mother, step-mother, father’s mother, unmarried daughter or unmarried sister, [(Note: Subs by s.10 of Delhi Act 16 of 1956 for the words “dies, marries, abandons or surrenders such holding or part there of, the holding or the part”) dies or marries or the Asami abandons or surrenders such holding, it] shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provisions of section 50) of the last male Bhumidhar or Asami other than one who inherited as a father’s father.

(2) When a Bhumidhar who has before the commencement of this Act, inherited an interest in any holding as a widow, mother, step- mother, father-mother, father’s mother, daughter, sister or step- sister

(a) Dies and such Bhumidhar was on the date a proprietor of the land comprised in the holding and -

(i) She was in accordance with the personal law applicable to her entitle to a life estate only in the holding, the holding shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provision of section 50) of the last male proprietor or tenant aforesaid; and if

(ii) She was in accordance with the personal law applicable to her entitled to the holding absolutely the holding shall devolve in accordance with the table mentioned in section 53;

(b) [(Note: Subs. by s.10 of Delhi Act 16 of 1956, for the words “dies, marries, abandons or surrenders such holding”) dies or marries] and such Bhumidhar on the date immediately before the sad date held the holding otherwise than as a proprietor, the holding shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provision of the section 50) of the last male tenant other than one who inherited as a father’s father.

(3) The provision of sub section (1) shall muttdis mutandis apply to an Asami who inherited the holding before the commencement of this Act.

(4) Nothing in sub- section (1) shall apply to a person, succeeding to an interest in any holding under the provision of section 53.

Section 52. Succession in the case of a holding inherited as father’s father.

When a Bhumidhar or Asami, who has , whether before or after the commencement of this Act, inherited an interest in a holding as a father’s father [(Note: Subs. by s.11 of Delhi Act 16 of 1956, for the words “dies, marries, abandons or surrenders such holding or part thereof, such holding or part”) dies or the Asami abandons or surrenders such holding, it] shall devolve upon the nearest surviving heir (such heir being ascertained in accordance with the provisions of section 50) of the last male Bhumidhar or Asami from whom such father’s father inherited the interest in the holding.

Section 53. Succession to a woman holding an interest otherwise.

When a Bhumidhar or Asami, other than one mentioned in section 50 or 51, who is a woman dies, her interest in the holding shall devolve in accordance with the order of succession given below:

(a) Male lineal descendants in the male line of descent:

Provided that no member of this class shall inherit of any male descendant between him and the deceased is alive:

Provided further that the son or sons of a predeceased son how lowsoever shall inherit the share which would have developed upon the deceased if he had been then alive;

(b) Husband

(c) Widow of male lineal descendant in the male line of descent;

(d) Daughter;

(e) Daughter’s son;

(f) Husband’s brother;

(g) Husband brother’s son

Section 54. Passing of interest by survivorship.

In the case of a co- widow or a co-tenure or co-sub-tenure holder, who dies living no heir entitled to succeed under the provision of this Act, the interest in such holding shall pass by survivorship.

Chapter III – F. Partition (Bhumidhar)

Section 55. Holding of a Bhumidhar particle.

(1) A Bhumidhar may sue for partition of his holding.

(2) To every such suit the Gaon Sabha concerned shall be made a party.

Section 56. One suit for partition of several holdings.

One suit may be instituted for the partition of more than one holding provided that all the parties to the suit are jointly interested in each of the holdings.

Section 57. Mode of partition of a holding.

(1) Except as provided in sub-section (3) whenever in a suit for partition, the Court finds -

(a) That the aggregate area of holding or holdings to be partition does not exceed eight standard acres, or

(b) That the partition will result in a holding of less than eight standard acres,

The Court shall in the cases falling under clause (a) instead of proceeding to divide the holding or holdings direct the sale of the same and a distribution of the proceeds thereof, and incases falling under clause (b) either proceed to divide the holding in accordance with such principles as may be prescribed or in the alternative dismiss the suit.

(2) The rules framed under sub-section (1) shall prescribe the circumstances in which compensation may be awarded to a co-tenure holder to land under provisions of section 73.

(3) In the case of a co-tenure – holder to whom the provisions of section 36 apply and such tenure holder has let out his share or part thereof in the holding, the Court shall divide the holding by separating the share aforesaid, but in respect on the remainder of the holding the Court will proceed in accordance with the provisions of this section, if applicable.

Section 58. Valuation of the holding to be sold.

Where a Court has under section 57, ordered a sale of the holding or holdings, it shall a order a valuation of the same to be made in such manner as may be prescribed and shall offer to sell the same at the price so ascertained to the co-tenure holders in such order of preference as may be prescribed.

Section 59. Preferential right of purchase.

If two or more co-tenure holders having an equal preferential right severally ask for leave to buy, the Court shall order the sale of the same to such one of them as offers to pay the highest price above the price ascertained under section 58.

Section 60. Sale in default of purchase under section. 59.

If no shareholder offers to buy at or above the price ascertained under section 58, the Court shall order the sale of the same to the share – holder who offers to pay the highest price.

Section 61. Procedure in sale.

Save as hereinbefore provided, when any holding is ordered to be sold in pursuance of any order made under section 57, the Court shall follow such procedure as may be prescribed.

Chapter III – G. Surrender, Abandonment, Extinction and Acquistion (Bhumidhars and Asamis)

Section 62. Surrender of holding by Asami.

An Asami may surrender the whole of his holding but not any part thereof by giving a notice in writing to the Gaon Sabha or the land holder, as the case may be, intimating his intention to do so and by giving up possession thereof.

Section 63. Notice of surrender.

Notwithstanding the surrender, unless the Asami applies or gives notice in writing before the first day of April, he shall be able to pay the rent for the holding for the agricultural year next following the date of surrender.

Section 64. Abandonment.

(1) Where an Asami has not used his holding for a purpose connected with agriculture, horticulture, or animal husbandry, which includes pisciculture and poultry farming, for two consecutive agricultural years, the Gaon Sabha or the land-holder may apply to the Tahsildar for a notice to such Asami to show cause why the holding be not treated as abandoned.

(2) The application shall contain such particulars as may be prescribed.

(3) If the Tahsildar finds that the application has been duly made he shall cause to be served on the Asami or publish in the manner prescribed a notice in the from to be prescribed requiring him to appear and show cause on a date to be fixed why the holding be not held as abandoned.

(4) If the Asami does not appear in answer to the notice or appears but does not contest it, the Tahasildar shall declare the holding as abandoned and thereupon , except as provided in section 51 and 52, the holding shall be deemed to be vacant land.

Section 65. Admission of Asami to the holding of a disabled Bhumidhar.

Where a Bhumidhar, being minor, lunatic or idiot, has not used his holding for a purpose connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming, for two consecutive agricultural years, the Gaon Sabha may, notwithstanding anything contained in any law, after notice to the Bhumidhar and his guardian and after such enquiry as may be prescribed, after the expirty of the two years aforesaid, admit on behalf of the Bhumidhar, any person as Asami to the land comprised in the holding inthe manner and upon the terms as may be prescribed and all the provisions of this Act applicable to an Asami shall apply to him as if he had been admitted to the land by the Bhumidhar personally.

Section 65A. Consequences where Bhumidhar or Asami leaves land uncultivated.

(1) Where on the basis of any information received by him or otherwise the Deputy Commissioner has reason to believe that any land included in the holding of a Bhumidhar or Asami has not been used for two consecutive agricultural years immediately preceding for a purpose connected with agriculture, horticulture or animal husbandry which includes or poultry farming, he may , unless the land lies within the belt referred to in section 23 or unless sanction under that section has been obtained in respect thereof, notice require -

(i) The Bhumidhar to appear and show cause why the land may not be let out for any such purpose as aforesaid to any person;

(ii) The Asami to appear and show cause why his interest may not be extinguished and the land restored to the Bhumidhar or the Gaon Sabha, as the case may be.

(2) The notice under sub-section (1) shall state the grounds for believing that the land has not been used for any purpose referred to in that sub- section and such other particulars as may be prescribed.

(3) If the Bhumidhar or the Asami appears and satisfies the Deputy Commissioner—

(a) That the land was used for a purpose connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming during the period mentioned in sub-section (1);

(b) That he had sufficient cause for not using it as aforesaid; or

(c) That he shall, within one year next following the date of service of the notice under sub-section (1), use the land for any such purpose as aforesaid unless in the meantime the land is included within any belt referred to in section 23 or the use of the land for industrial purposes is sanctioned under that section, the Deputy Commissioner shall, in a case falling under clause (a) or clause (b), discharge the notice forthwith and in a case falling under clause (c), postpone further proceedings to a date one year after the date of service of the said notice.

(4) On the date fixed under sub-section (3) or any other date to which the proceeding may be adjourned, the Deputy Commissioner, if he is satisfied that the land has been used for any such purpose as aforesaid during the said period of one year or that the land has been included within the belt referred to in section 23 or that sanction as aforesaid has been obtained in respect thereof, discharge the notice of if he is not so satisfied, unless for reasons to be recorded in writing he allows further time, he shall -

(i) If the land is that of the Bhumidhar, lease it on behalf of the Bhumidhar to any person for a period of five years in such manner and on such terms and conditions as may be prescribed;

(ii) If the land is that of the Asami of the Bhumidhar, terminate the lease and restore the land to the Bhumidhar subject to the condition that the Bhumidhar shall undertake to cultivate the land within six months from the date it is restored to him; and if the Bhumidhar does not give such undertaking or fails, after giving such undertaking, to cultivate the land within the said period, the Deputy commissioner may lease the land on behalf of the Bhumidhar, to any person for a period of five years in such manner and on such terms and conditions as may be prescribed; and

(iii) If the land is that of the Asami of Goan Sabha, terminate the lease and restore the land to the Gaon Sabha;

Provided that the restoration of the land of the Asami under this sub—section shall be without prejudice to any right of the Bhumidhar or Gaon Sabha, as the case may be, to recover any rent due from the Asami.

(5) If the Bhumidhar or Asami appears in response to the notice under sub-section (1) but does not undertake to use the land as provided in clause (c) of sub section (3) or if the Bhumidhar or Asami does not appear in response to such notice and the Deputy Commissioner, after such inquiry as he may consider necessary, is satisfied that the Bhumidhar or Asami has failed to use the land as aforesaid during the period referred to in sub-section (1), he shall , unless for reasons to be recorded in writing he decides to discharge the notice, take action under clause (I) or clause (ii) or, as the case may be, clause (iii) of sub section (4).

(6) On the expiry of the period of any lease of land under sub-section (4) or sub section (5), if the Deputy Commissioner, after making such inquiry as he thinks fit, is satisfied -

(a) That the land has been properly cultivated, he may declare the lessee to be Bhumidhar in respect of such land subject to the payment by him to the original Bhumidhar of compensation equal to twenty times the land revenue then payable for such land either in one lump sum or in such installments together with interest as may be prescribed and upon such declaration the interest of the original Bhumidhar shall be extinguished;

(b) That the land has not been properly cultivated by the lessee, the Deputy Commissioner shall terminate the lease and may lease the land on behalf of the Bhumidhar, to another person for a period of five years in such manner and on such terms and conditions as may be prescribed and on the expiry of the period of such lease, the provisions of this sub-section shall apply:

Provided that no lease shall be terminated unless the lessee has been given reasonable opportunity of being heard.

(7) Nothing contained in this section shall apply to Bhumidhar to whom the provisions of section 65 apply.

Section 66. Entry upon an abandoned holding.

A Gaon Sabha or a landholder who enters upon a holding in contravention of the provisions of section 64 shall be deemed to have ejected the Asami otherwise than in accordance with the provisions of this Act.

Section 67. Extinction of the interest of Bhumidhar.

The interest of Bhumidhar in his holding or any part thereof shall be extinguished

(a) When he dies interstate leaving no heir entitled to inherit in accordance with the provisions of this Act,

(b) When the land comprised in the holding has been acquired under any law for the time being in force relating to the acquisition of land, (Note: The word “or” rep. by s.12 of Delhi Act of 1956).

(bb) [(Note: Inserted by Act of 38 of 1965) When a declaration in respect of such holding or part is made under clause (a) of sub section (6), of section 65 A.

(c) When he has been ejected in accordance with the provisions of this Act, or

(d) When he has been deprived of possession and his right to recover possession is barred by limitation .

Section 68. Extinction of the interest of an Asami.

Subject to the provisions of section 51 and 52, the interest of an Asami in holding or any part thereof shall be extinguished

(a) When he dies leaving no heir entitled to inherit in accordance with the provisions of this Act,

(b) When the holding has been declared as abandoned in accordance with the provisions of section 64,

(c) When he surrenders his holdings. (Note: The word “or part thereof” rep. by s.13 of Delhi Act of 1956)

(d) When the land comprised in the holding has been acquired under any law for the time being in force relating to the acquisition of land,

[(dd) (Note: Inserted by Act 38 of 1965) Where his lease is terminated under clause (ii) or clause (iii) of sub- section (4), or clause (b) of sub section (6), of section 65A.

(e) When he has been ejected in accordance with the provisions of this Act or

(f) When he has been deprived of possession and his right to recover possession is barred by limitation.

Section 69. Extinction of the interest of an Asami on extinction of the interest of the Bhumidhar.

(1) The extinction of the right , title and interest of a Bhumidhar shall operate to extinguish the interest of any Asami holding under him.

Notwithstanding the provisions of section 75, whenever the interest of an Asami is extinguished under sub- section (1)m the Goun Sabha shall admit the Asami as an Asami to some other vacant land of such valuation computed at prevailing village rate of rent applicable to the land as shall be equal to the valuation of the land on which his right has determined.

Section 70. Marger.

The interest of an Asami in his holding shall determine when his interest and the interest of the Bhumidhar in the whole of the holding become vested in one person in the same right.

Section 71. Rights and liabilities of a Bhumidhar or Asami on extinction of his interest.

When the interest of a Bhumidhar or Asami is extinguished he shall vacate his holding and he shall, except in cases where his interest has extinguished under or in accordance with the provisions of any law for the time being in force relating to the acquisition of land, have in respect of removal of his standing crops and any construction existing on the holding the same right as he would have upon ejectment under the provisions of this Act.

Section 72. Gaon Sabha to take over land after extinction of interest therein.

The Gaon Sabha shall be entitled to take possession of land comprised in holding or part thereof if -

(a) The land was held by Bhumidhar and his interest in such land is extinguished under [(Note: Subs. by s.14 of Delhi Act 16 of 1956, for the word “clause (a) of clause (a) or clause (c) of] section 67 , or

(b) The land, being land falling in any of the clauses mentioned in sub- clause (iii) of clause (a) of section 6, was held by an Asami and the Asami has been ejected or his interest therein have otherwise extinguished under provisions of this Act.

Section 73. Admission to land.

The Gaon Sabha shall have the right to admit any person as Bhumidhar to any land, other than land falling in any of the classes mentioned in sub- clause (iii) of clause (a) of section 6, where -

(a) The land is vacant land ,

(b) The land is vested in the Gaon Sabha under section 72 or under any other provision of this Act.

(c) The land has come into the possession of Gaon Sabha under section 72 or under any other provision of this Act,

(d) The land is let in accordance with sub- section (4) of section 74.

Section 74. Admission to land mentioned in sub- clause (iii) of clause (a) of section 6 or to waste land for reclamation.

(1) The Gaon Sabha shall have the right to admit any person as Asami to any land falling in any of the classes mentioned in sub- clause (iii) of clause (a) of section 6 where -

(a) The land is vacant land,

(b) The land is vested in the Gaon Sabha , or

(c) The land has come into the possession of the Gaon Sabha under section 72 or under any other provision of this Act.

(2) In order to encourage the reclamation of waste land, the Gaon Sabha shall also have the right to admit any person as Asami on a five years lease to any land which forms part of the cultivable or uncultivable waste area of the village, not included in holdings, which are vested in the Gaon Sabha under section 7, but which do not fall in any of the classes mentioned in sub-clause (iii) if clause (a) of section 6.

(3) The Asami shall have the right to hold the land for the period of five years at a rate of rent, which shall not be more than 50 per cent. Of the prevailing rate of rent of the village, payable for the land.

(4) At the end of five years, the Gaon Sabha shall report to the Revenue Assistant the extent to which reclamation has been made. The Revenue Assistant shall, after necessary enquiry and after hearing the Asami , either order the termination of the lease and his ejectment if there has been no reclamation or extend his lease for another period of two years. If, however, the land has been duly reclaimed during the period of five years or the extended period, the Revenue Assistant shall direct the Gaon Sabha to admit the Asami as Bhumidhar under section 73. The Asami on his admission as Bhumidhar shall be liable to pay such land revenue as shall be equal to 50 percent of the rent calculated at the prevailing village rate of rent together with cesses and local rates, but he shall not be liable to pay any compensation.

Section 75. Order of preference in admitting persons to land under section 73 and 74.

(1) In admitting any person as Bhumidhar or Asami under section 73 or 74, Gaon Sabha shall subject to the rules framed or any order made by Court in a suit for partition or in any other suit, observe the following order of preference

(a) (Note: Inserted by Act 38 of 1965) Persons in the armed forces of the Union and the dependents of such of those persons as are killed in action, special preference being given in the case of persons decorated for gallantry.

(aa) (Note: Reentered by Act 38 of 1965 for “a”) A co- operative farm established under this Act holding land within l the jurisdiction of the Gaon Sabha to enable it to possess a suitable area of agricultural or cultivable land,

(b) A group of landless labourers or a landless labourer residing in the village,

(c) A Bhumidhar residing in the village, who is holding land less than eight standard acres in area in the State,

(d) An Asami holding land than eight standard acres in area in the village, and

(e) Any other person:

Provided that the land allotted to a co-operative farm under [(Note: Substituted by Act 38 of 1965 for “clause a”) clause (aa) ] shall, if the registration of such farm is cancelled within two years of the allotment, revert upon such cancellation to the Gaon Sabha, and any person holding or retaining possession of such land shall be deemed to be a person occupying it without title liable to ejectment under clause (b) of [(Note: Substituted by Act 38 of 1965) sub section (1)section 84].

Provided further that in the cases to which clauses (b), (c), (d) and (e) apply the area to which the person concerned is admitted together with the total area of any other tenure held by him shall in no case exceed 8 standard acres:

Provided also that in the case of reclamation of waste land under sub-section (2) of section 74, where available, preference in the first instance shall be given to either the co-operative farm or a tenure holder having established provision for mechanised farming in the Gaon Sabha area, and the Gaon Sabha in that case shall be entitled to let out in excess of eight standard acres with the previous sanction in writing of the Chief Commissioner.

[(2) (Note: Substituted by Act 38 of 1965) The Deputy Commissioner may, on his own motion, and shall , on the application of any person aggrieved by an order of the Gaon Sabha passed under subsection (1), enquire in other prescribed manner and if he is satisfied that the Gaon Sabha has acted with substantial irregularity or otherwise than in accordance with the provisions of this Act, he may cancel such order.

(3) Where the deputy Commissioner cancels an order relating to admission of a person as Bhumidhar or Asami, the right, title and interest of such person or any person claiming through him shall cease in the land to which the order relates and shall revert to the Gaon Sabha and any person holding or retaining possession of such land after such cancellation shall be deemed to be a trespasser in respect of such land and shall be liable to ejectment in the manner prescribed.”]

Chapter III –  H. Ejectment (Bhumidhar and Asami)

Section 76. Bhumidhar not liable to ejectment.

Subject to the provisions of section 33, 42 [(Note: Substituted by Act 38d 1965) 81,85,86,86 A and 87], no Bhumidhar shall be liable to ejectment.

Section 77. Ejectment of Asami.

[(1) (Note: Renumbered by Act 38 of 1965) An Asami shall be liable to ejectment from his holding on the suit of the land- holder or Gaon Sabha, as the case may be , on the following grounds only

(a) Those mentioned in [(Note: Substituted by Act 38 of 1965) sections 42, 69,74,81,)

(b) That he belongs to any of the classes mentioned in sub-clauses (I), (ii) and (iii) of clause (a)or in clause (c) of section 6 and that he holds the land from year to year or for a period which has expired or will expire before the end of the current agricultural year.

(c) That he belongs to the class mentioned in clause (b) or (d) of section 6 and that

(i) That land holder wishes to bring the under his personal cultivation and in cases where the lease is for a fixed term such term has expired, or

(ii) The disability was determined, or

(d) That there is an unsatisfied decree of arrears of rent outstanding against him and such decree can be executed by ejectment.

[(2) (Note: Inserted by Act 38 of 1965) Notwithstanding anything contained in sub-section (1), a Bhumidhar referred to in clause (f) of sub-section (1) of section 36 may, on retirement or discharge from the armed forces of the Union or on being sect on Reserve, within six months of such retirement or discharge or of his being sent on Reserve, apply to the Deputy Commissioner for ejectment of the Asami of his land, and the Deputy Commissioner may , after notice to the Asami and subject to such conditions as he may think fit to impose, cause possession of the land to be delivered to such Bhumidhar as soon as possible or, where there are standing crops on such land , within one month of the harvesting of such crops.”]

Section 78. Rights to crops and trees when ejectment takes effect.

(1) Where in execution of any decree (other than a decree under section 84) or order for delivery of possession the Court is satisfied that any ungathered crops or trees which are the property of the judgment debtor exist on the land to be delivered, the Court executing the decree or order shall, notwithstanding anything in the Code of Civil Procedure, 1908, proceed as follows:

(a) If the amount due from the judgment debtor is equal to or greater than the value of such crops or trees, the Court shall deliver the possession of the land with the crops and the trees to the Gaon Sabha or the land holder, as the case may be, and all rights of the judgment debtor in or upon such crops or trees shall pass to the decree holder.

(b) If the amount due from the judgment debtor is less than the value of such crops or trees and—

(i) The Gaon Sabha or the land holder pays the difference between such amount and the value to the judgment debtor, the Court shall deliver the possession of the holding the Gaon Sabha or land holder concerned and all rights, of the judgment debtor in such crops or trees shall pass to decree holder;

(ii) The Gaon Sabha or the land holder does not pay such difference , the judgment debtor shall have a right of tending, gathering or removing such crops or trees of fruits of such trees until such crops or trees have been gathered and removed or die or are cut down, as the case may be, paying such compensation for the use and occupation of land as the Court may fix.

(2) The Court executing the decree or the order of ejectment may on the application of any party determine the value of crops or trees and the compensation payable by the judgment debtor under the provisions of clause (b) of sub section (1).

Section 79. Failure to institute a suit for ejectment under section 77 or execute the decree obtained there under.

If a suit for ejectment of an Asami, to whom any of the sub clauses (I) and (ii) of clause (a) or clause (b) or (d) of section 6 applies, is not instituted or a decree obtained in such suit not executed within the period of limitation prescribed therefore , the Asami shall, on the expiry of the period, become a Bhumidhar of the land held by him.

Section 80. Consequence of ejectment under section 77.

Where an asami has been ejected form his holding on the ground mentioned in clause (c) (I) of [(Note: Substituted by Act 38 of 1965) sub-section (1) of section 77)], the land holder shall not grant a lease thereof any person within 2 years of the date of ejectment.

Section 81. Ejectment for use of land in contravention of the provisions of this Act.

[(1) (Note: Renumbered by Act 38 of 1965)] A Bhumidhar or an Asami shall be liable to ejectment on the suit of the Gaon Sabha or the land holder, as the case may be, for using land for any purpose other than a purpose connected with agriculture, horticulture or animal husbandry, which includes pisciculture and poultry farming, and also pay [(Note: Substituted by Act 38 of 1965 for “damage”) damages] equivalent to the cost of works which may be required to render the land capable of use for the said purposes.

[(2) (Note: Inserted by Act 38 of 1985) Notwithstanding anything contained in sub section (1) the Revenue Assistant also may, on receiving information or on his own motion, eject the Bhumidhar or Asami, as the case may be, and also recover the damages referred to in sub-section (1), after following such procedure as may be prescribed”]

Section 82. Decree for ejectment under section 81.

(1) A decree for ejectment under Section 81 may direct the ejectment of Bhumidhar or Asami form the whole or part of the holding as the Court, having regard to the circumstances of the case , may direct.

(2) The decree shall further direct that, if the Bhumidhar or Asami repairs the damage within three months next after the decree, the same shall not be executed except in respect of costs.

Section 83. Suit for compensation and repair of the waste or damage.

Notwithstanding anything in section 81, the Gaon Sabha or the land holder may, in lieu of suing for ejectment sue

(a) For injunction with or without compensation, or

(b) For the repair of the waste or damage caused to the holding.

Section 84. Ejectment of persons occupying land without title.

[(1) (Note: Renumbered by Act 38 of 1965) A person taking or retaining possession of land otherwise than in accordance with the provisions of the law for the time being in force, and

(a) Where the land forms part of the holding of a Bhumidhar or Asami without the consent of such Bhumidhar or Asami, or

(b) Where the land does not form part of the holding of a Bhumidhar or Asami without the consent of the Gaon Sabha.

Shall be liable to ejectment on the suit of the Bhumidhar, Asami or Gaon Sabha, as the case may be and shall also be liable to pay damages.

[(2) (Note: Inserted by Act 38 of 1965) Where any person against whom a decree for ejectment from any land has been executed in pursuance of a suit under sub-section (1) re-enters or attempts to re-enter upon such land otherwise than under authority of law , he shall be presumed to have done so with intent to intimidate or annoy the person in possession or the Gaon Sabha, as the case may be, within the meaning of section 441 of the Indian Penal Code.

(iii) the Gaon Sabha.

The Act envisaged only these three classes of persons who would possess right in agricultural land after the commencement of the Act. Proprietors as such having ceased to exist could not therefore, institute a suit for possession.

(ii) Section 84 of the Delhi Land Reforms Act does not govern the proceedings before the Civil Court. It does not take into consideration the acts of the Civil Court delivering possession to a party in execution of its order or decree. Such a matter would be determined by the provisions of the Civil Procedure Code itself and not by Section 84 of the Act.

Section 85. Failure to file suit under section 84 or to execute decree obtained there under.

If a suit is not brought under [(Note: Substituted by Act 38 of 1965) Sub-section(1) of section 84] or a decree obtained in any such suit is not executed within the period of limitation provided for the filing of the suit or the execution of the decree, the person taking or retaining possession shall -

(i) Where the land forms part of the holding of a Bhumidhar, become a Bhumidhar thereof;

(ii) Where the land forms part of the holding of an Asami on behalf of the Gaon Sabha, become an Asami thereof;

(iii) In any case to which the provisions of clause (b) of section 84 apply, become a Bhumidhar or Asami as if he had been admitted to the possession of the land by the Gaon Sabha.

[(Note: Inserted by Act 38 of 1965) “Provided that if in the revenue records of the fails year ending on the 30th June, 1954,the land referred to in clause (iii) was not included in the holding of the person taking or retaining possession or his predecessor-in interest, then , notwithstanding the expiry of the aforesaid period of limitation for such suit or decree, the suit may be filed or the decree obtained in such suit may be executed within a period of three years from the date of passing of the Delhi Land Reforms (Amendment) Act, 1965.]

Provided further that the benefit of the extension of the period of limitation under the proceeding proviso shall not be availed fin any case where a person who has become a Bhumidhar in respect of any land under clause (iii) has transferred such land to another person for valuable consideration before 10the May, 1965.

Section 86. Ejectment of Bhumidhar to whom section 85 applies.

(1) Any person, who becomes a Bhumidhar under the provisions of clause (I) of section 85, may notwithstanding anything hereinbefore contained, be ejected form the land at the instance of the Gaon Sabha within such period as may be prescribed.

(2) Where a Bhumidhar has been ejected, his rights in the holding shall be extinguished and the land shall become vacant land.

Section 86A. Ejectment by Revenue Assistant of persons occupying land without title.

Notwithstanding anything contained in section 84, 85 and 86, the Revenue Assistant also may, on receiving information or on his own motion, eject any person who is liable to be eject form any land on a suit of the Gaon Sabha under any of those section, after following such procedure as may be prescribed”.

Section 87. Ejectment of persons form lands of public utility.

Any person who, on or after the first day of July, 1950, has been admitted as a tenure or grove holder of, or being proprietor has brought under his own cultivation or has planted a grove upon, land which was recorded as or was customary common pasture land, cremation or burial ground, tank , pathway or Khalian, shall be liable, on the suit of the Gaon Sabha to ejectment from the land , on payment of such compensation, if any, as may be prescribed.

Chapter III –  I. Rent (Asami)

Section 88. Rent payable by an Asami.

An Asami shall be liable to pay such rent as may be agreed upon between him and his land-holder or the Gaon sabha, as the case may be, subject to the condition that it shall not exceed one fifth of the produce of the land or (Note: Subs. by s.14 of central Act 4 of 1959, for the words “if the words “if the rent is paid in cash, its equivalent value”) four times the land revenue payable for the land held by the Asami, whichever is less.

Section 89. Rent not to be varied.

The rent payable by an Asami shall not be varied except in the manner and to the extent provided under this Act.

Section 90. Suit for fixation of rent.

(1) Where any person is admitted to or permitted to retain possession of any land as an Asami thereof by any person having a right to so admit or permit him, but no rent is fixed, the Asami or the land – holder may, at any time during the period of occupation or within three years after the expiry of this period, instituted a suit for fixation of rent.

(2) In any such suit the plaintiff may, subject to the law of limitation, ask for a decree for the arrears of rent.

(3) The rent decreed in any such suit, shall be the rent payable in the years previous to the year of admission, permission or accrual of asami rights, or if no rent was payable in such year, it shall be fixed at the prevailing village rate of rent applicable to the land, subject to the maximum laid down in section 88.

Section 91. Hypothecation of produce towards payment of rent.

The produce of every holding in the cultivation of an Asami and the fruit of every tree in such holding shall be deemed to be hypothecated for the rent payable by him in respect of the holding and, until the rent has been paid or otherwise satisfied, no other claim on such produce or fruit shall be enforced by sale thereof in execution of a decree or order of a Court.

Section 92. Rent how payable.

An Asami may pay his rent either direct or by postal money order , but the acceptance by the Gaon Sabha or the land holder of a sum so paid shall not debar the Gaon Sabha or the land holder , as the case may be, form proving that the amount due for any year or installment was different from the amount paid.

(2) Where rent is remitted by money order, the payee’s receipt or the endorsement of refusal on the money order duly stamped by the post office shall be admissible in evidence without formal proof and shall, until the contrary is proved, be presumed to record the receipt or refusal thereof.

Section 93. Commutation of rent.