Section 8A(1) in The Displaced Persons (Compensation and Rehabilitation) Act, 1954
(1)Where any compensation is payable to any displaced person in lieu of property abandoned by him in West Pakistan which on the date of his migration from West Pakistan was subject to a mortgage is in favour of a person who is not resident in India, the Settlement Commissioner shall after giving a reasonable notice to the displaced person, determine the principal sum for which the property was so mortgaged and such portion of the principal sum so determined as bears the same proportion as the compensation payable to the displaced person bears to the value of verified claim of the displaced person in respect of that mortgaged property shall be deductible from the compensation payable in respect of the mortgaged property :Provided that where compensation has been paid to any displaced person without such deduction having been made, the displaced person shall pay to the Central Government the amount of such deduction within three months of the determination thereof or such longer period as may be prescribed;Provided further that where compensation has been paid to any displaced person by sale or any other mode of transfer to him of any property from the compensation pool the displaced person may, within the aforesaid period of three months or, as the case may be, within the aforesaid prescribed period—(a)either retain the property on his paying in cash the aforesaid amount.or(b)surrender a portion of that property of a value equivalent to the amount of such deduction, such value being determined by the Settlement Commissioner in the prescribed manner.
