(3)Such occupancy or holding, when disposed of, whether by sale as aforesaid or otherwise under rules referred to in sub-section (2) except by restoration to the defaulter, shall, unless the [Tahsildar] [Substituted by Act 5 of 1970 w.e.f. 23.10.1969.] otherwise directs, be deemed to be freed from all tenures, rights, encumbrances and equities therefor created by the occupant or holder or any of his predecessors in title in favour of any person other than the Government or in any way subsisting against such occupant or holder, but so as not to affect the rights of kadim tenants or permanent tenants in alienated holdings in respect of such occupancy or holding.
