3. Discharge of debts of Scheduled debtors and consequences of such discharge.
(1)Notwithstanding anything contained in any other law for the time being in force or in any contract or other instrument having force of law by virtue of any such law and save as otherwise expressly provided by section 5 of this Act, every debt incurred by a Scheduled debtor before the commencement of this Act including the amount of interest, if any, payable on such debt shall be deemed to have been wholly discharged; and-(a)no such debt due from a Scheduled debtor shall be recoverable from him or from any movable or immovable property belonging to him, nor shall any such property be liable to be attached or sold or be proceeded against in any manner in the execution of any decree or order relating to such debt;(b)no Civil Court shall entertain any suit or proceeding against a Scheduled debtor for the recovery of such debt or any portion thereof or any interest due thereon:Provided that where a suit or proceeding is instituted jointly against a Scheduled debtor and any other person, nothing in this Clause shall apply to the maintainability of a suit or proceeding so far as it relates to such other person;(c)all suits and proceedings (including appeals, revision proceeding in execution and attachment), pending on the date of commencement of this Act for the recovery of any such debt or interest due thereon against a Scheduled debtor shall abate:Provided that where a suit or proceeding is pending jointly against a Scheduled debtor and any other person it shall not abate in so far as the claim against such other person is concerned:Provided further that if a sale in an execution proceeding against a Scheduled debtor has been confirmed before the commencement of this Act a proceeding to give effect to the sale shall be neither barred nor shall it abate.(d)every Scheduled debtor undergoing detention in a civil prison in execution of any decree for money passed against him by a Civil Court in respect of any such debt shall be released; and(e)every property pledged by a Scheduled debtor shall on the commencement of this Act stand released in favour of such debtor, and the creditor shall be bound to return the same to the debtor forthwith.(2)Nothing in this section shall be construed to entitle any Scheduled debtor for refund of any part of a debt already repaid by him or recovered from him before the commencement of this Act.(3)The State Government if it considers necessary for the purpose of liquidation of rural indebtedness in stages may from time to time, by notification in the Official Gazette, impose a moratorium on debts or scale down debts in favour of persons other than the Scheduled debtors and may prescribe by rules procedure for scaling down of such debts in favour of such persons.
