Section 36State of West Bengal Act

Section 36: Reopening of transactions

The Bengal Money-Lenders Act, 1940

Reopening of transactions. -

(1)

Notwithstanding anything contained in any law for the time being in force [or in any agreement] [Words Inserted by W.B. Act 21 of 1965.], if in any suit to which this Act applies, or in any suit brought by a borrower for relief under this section whether heard ex-parte or otherwise, the Court has reason to believe that the exercise of one or more of the powers under this section will give relief to the borrower, it shall exercise all or any of the following powers as it may consider appropriate, namely, shall-

(a)

reopen any transaction and take an account between the parties;

(b)

[ reopen any account already taken between the parties, purporting to close any previous dealings and to create new obligations;] [Clause (b) Substituted by W.B. Act 21 of 1965, which was earlier as under:- '(b) notwithstanding any agreement, purporting to close previous dealings and to create new obligations, reopen any account already taken between the parties:'.]

(c)

release the borrower of all liability in excess of the limits specified in clauses (1) and (2) of section 30;

(d)

if anything has been paid or allowed in account on or after the first day of January, 1939, in respect of the liability referred to in clause (c), order the lender to repay any sum which the Court considers to be repayable in respect of such payment or allowance in account as aforesaid:

Provided that in the case of a loan to which the provisions of subsection (2) of section 29 apply the lender or money-lender and each of his assigness shall be liable to repay the sum which the Court considers to be repayable in respect of and in proportion to the sum received by such lender or money-lender and such assignee;

(e)

set aside either wholly or in part or revise or alter any security given or agreement made in respect of any loan, and if the lender has parted with the security, order him to indemnify the borrower in such manner and to such extent as it may deem just:

Provided that in the exercise of these powers the Court shall not-

(i)

reopen any adjustment or agreement, purporting to close previous dealings and to create new obligations, which has been entered into, at a date more than twelve years prior to the date of the suit by the parties or any person through whom they claim, or

(ii)

do anything which affects any decree of a Court, other than a decree in a suit to which this Act applies which was not fully satisfied by the first day of January, 1939, or anything which affects an award made under the Bengal Agricultural Debtors Act, [1936] [Figures Substituted for the figures '1935' by W.B. Act 7 of 1948.],

Explanation.- A decree shall not, for the purposes of this section, be deemed to have been fully satisfied so long as there remains undisposed of an application by the decree-holder for possession of property purchased by him in execution of the decree.

(2)

If in exercise of the powers conferred by sub-section (1) the Court reopens a decree, the Court-

(a)

shall, after affording the parties an opportunity of being heard, pass a new decree in accordance with the provisions of this Act, and may award to the decree-holder such costs in respect of the reopened decree as it thinks fit:

[Provided that where, in consequence of the execution of the decree which is reopened, the property of the judgment-debtor has been purchased bona fide by any person other than the decree-holder jointly with the decree-holder, the decree-holders claim and the judgment-debtors liability in respect of the decree which is reopened shall be reduced by the amount of the purchase money paid by such other person and received by the decree-holder,] [Proviso Inserted by W.B. Act 21 of 1965.]

(b)

shall not do anything which affects any right acquired bona fide by any person, other than the decree-holder, in consequence of the execution of the reopened decree,

(c)

shall order the restoration [of possession] [Words Inserted by W.B. Act 21 of 1965.] to the judgment-debtor of such property, if any, of the judgment-debtor acquired by the decree-holder in consequence of the execution of the reopened decree as may be in the possession of the decree-holder on the date on which the decree was reopened,

(d)

shall order the judgment-debtor to pay to the decree-holder, in such number of instalments as it may think fit, the whole amount of the new decree passed under clause (a)[and upon such payment of all the instalments the sale shall be deemed to have been set aside] [Words Inserted by W.B. Act 21 of 1965.], and

(e)

shall direct that, in default of the payment of any instalment ordered under clause (d), the decree-holder shall be put into possession of the property referred to in clause (c) and that the amount for which the decree-holder purchased such property in execution of the reopened decree shall be set off against so much of the amount of the new decree as remains unsatisfied.

(3)

In this section the expression "suit to which this Act applies" includes a proceeding in respect of any application relating to the admission or amount of a proof of a loan advanced before or after the commencement of this Act in any insolvency proceedings.

(4)

This section shall apply to any suit, whatever its form may be, if such suit is substantially one for the recovery of a loan or for the enforcement of any agreement of security in respect of a loan or for the redemption of any such security.

(5)

Nothing in this section shall affect the rights of any assignee or holder for value if the Court is satisfied that the assignment to him was bona fide, [and, in the case of an assignment after the commencement of this Act also that he had not received] [Words Substituted for the words 'and that he had not received' by W.B. Act 21 of 1965.] the notice referred to in clause (a) of subsection (1) of section 28.

(6)

Notwithstanding anything contained in any law for the time being in force,-

(a)

the Court which, in a suit to which this Act applies passed a decree which was not fully satisfied by the first day of January, 1939, may exercise the powers conferred by sub-sections (1) and (2)-

(i)in any proceedings in execution of such decree, or

(ii)on an application, for review of such decree made within one year of the date of commencement of this Act, and the provisions of rules 2 and 5 of Order XLVII of the First Schedule to the Code of Civil Procedure, 1908, shall not apply to any such application;

(b)

any Court before which an appeal is pending in respect of a decree referred to in clause (a) may either itself exercise the like powers as may be exercised under sub-sections (1) and (2), or refer the case to the Court which passed the decree directing such Court to exercise such powers, and such Court shall after exercise thereof return the record with the additional evidence, if any, taken by it and its findings and the reasons therefor to the Appellate Court and thereupon the provisions of rule 26 of Order XLI of the First Schedule to the Code of Civil Procedure, 1908, shall apply.

Sec 35 — Sale of property in execution of decrees in respect of loans

Sec 37 — Prohibition of execution of decrees by arrest and detention in prison

Disclaimer: This section is reproduced for general informational and reference purposes only. Always verify against the latest official gazette and consult a qualified advocate before relying on any provision.