Central

Section 14 of The Murshidabad Estate Administration Act, 1933

Scheme for settlement of debts.

(1)Whenthe amount due in respect of the debts and liabilities mentioned in section 11 has been finally determined, the Manager shall prepare and submit to the Board of Revenue a schedule of such debts and liabilities, and a scheme for the settlement thereof in whole or in part out of the residue referred to in section 7 annually available during the lifetime of the Nawab Bahadur; and the Board of Revenue may approve the scheme without modification or subject to such modification as it deems expedient. (2)The scheme shall provide for payment in full, as soon as may be, of—
1. (a)first, arrears of wages due to servants of the Nawab Bahadur, determined in accordance with the forgoing provisions, and
2. (b)secondly, claims of each creditor whose claims in the aggregate do not exceed five hundred rupees, as so determined; and the scheme shall further provide that any balance left after meeting the above claims and each annual residue thereafter shall be distributed rateably among the other creditors of the Nawab Bahadur inpayment of their claims, as so determined.

Summary

After the Manager finishes calculating all the debts, a formal plan (scheme) is created to settle them.
This plan must be sent to the Board of Revenue, which can approve it as is or make changes.
The money for these payments comes from the annual leftover income of the estate after taxes, maintenance, and the Nawab's allowance are paid.
The very first priority in the plan is to pay all back-wages owed to the servants of the Nawab Bahadur.
Any money left after those two priorities is shared proportionally among all the remaining larger creditors.

Practical examples

1The Manager sees there is 5,000 rupees left at the end of 1935. He uses 1,000 rupees to pay five servants their back-wages first, then pays off a small shopkeeper owed 300 rupees before giving the rest to larger banks.

2A creditor named Mr. Das is owed 450 rupees total. Because his claim is under the 500 rupee limit, the Manager's scheme ensures he gets his full 450 rupees in the first round of payments after servants are paid.

3If the estate only has 2,000 rupees to pay 4,000 rupees in large debts, the Manager gives each large creditor 50% of what they are owed that year, shared fairly (rateably).

FAQ

1. Who gets paid first under the settlement scheme?

The servants of the Nawab Bahadur who are owed back-wages are paid first.

2. Where does the money for the debt payments come from?

It comes from the "residue" or leftover money from the estate's income after meeting essential costs like taxes and the Nawab's support.

3. Can the Board of Revenue change the Manager's payment plan?

Yes, the Board of Revenue has the power to approve the scheme with any modifications it thinks are necessary.

Test yourself

1.Under Section 14 of The Murshidabad Estate Administration Act, 1933, whose approval is required for the debt settlement scheme?

2.According to Section 14 of The Murshidabad Estate Administration Act, 1933, which group has the highest priority for payment?

3.Under Section 14 of The Murshidabad Estate Administration Act, 1933, what happens to creditors owed more than five hundred rupees?

4.Under Section 14 of The Murshidabad Estate Administration Act, 1933, what must happen before the Manager can prepare the settlement scheme?

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