The Bengal Land Conditional sale Regulation



SECTION                                                       CONTENTS

1.         Preamble.

2.         Procedure for borrower of money on conditional sale of land who desire to redeem it by paying money lent.

3.         When lender has possessed land, and adjustment of account is necessary, he is to account for proceeds of estate.

4.         Tips not to be considered legal tender unless accepted by lender.

5.         Regulation not to alter contract between parties.

Bengal Regulations.


(9th January, 1798.)
2(Applies also to the North-West Frontier Province Except So far as it  Relates to Interest.
A Regulation to prevent fraud and injustice in conditional sales of land under deed of bai-bil- wafa or other deed of the same nature.


1. It has been long a prevalent practice in the Province of Bihar to borrow money on the mortgage and conditional sale of landed property, under a stipulation that, if the sum borrowed be not repaid (with or without interest) by a fixed period, the sale shall become absolute. This species of transfer has, in the above Province, been usually denominated bai-bil-wafa; and the same transaction is common in Bengal, under an instrument termed kat-kabala.
It doubtless exists also under deeds of the above or similar denominations is Orissa and Benares; and since the promulgation of the rules respecting interest contained in Regulation 3[XV, 1793], it has become more prevalent , particularly in the Province of Bihar, where- in stance have occurred in which persons lending money on bai-bil-wafa, in order to render the sale absolute, and thereby possess themselves of the landed property of the borrower, have denied the tender or evaded receiving payment of the money due to them within the period limited for the discharge of it.
In such cases, the proof of the tender falls on the borrower; and , if he fail in the proof of it for want of legal evidence, he is liable to lose his estate.
It is necessary, therefore, for the security of the borrower, in such transactions that he should have the means of establishing before a Court of Judicature his having tendered, or being ready to pay, within the stipulated

  1. Short tittle, “ The Bengal Land! Land (Conditional Sales) Regulation, 1798. “See the Amending             Act,1903 (I of 1903)     
  2. See s.4 of the North-West Frontier Province Law and Justice Regulation, 1901 (VI of 1901)
  3. Reg. XV of 1793 was repeated by the Repealing Act, 1868 (VIII of 1868), s. I and sch).

period, the amount due from him to the lender; who if he mean to act fairly, will also derive a benefit from a clear rule being laid down, whereby It may be readily ascertained whether the borrower was willing to redeem his property by the payment of the money lent upon it within the period agreed upon between the parties, or whether, from his having omitted to perform the conditions of such redemption the sale is become absolute and the property included therein finally transferred to the lender.
For the above purpose, and for the prevention of other abuses in the transactions referred to, the Governor General in Council has passed the following rules, to be considered in force in the provinces of Bengal, Bihar, Orissa and Benares, from the date of the receipt of this Regulation by the several Courts respectively.
2.In all instance of the loan of money ob bai-bil-wafa, or on the conditional sales of landed property, as explained in the preamble to this Regulation, however denominated, the borrower, who may be desireous to redeem his land by the payment of the money lane tupon it with any interest due thereon, within the stipulated period, is at liberty, on or before the date stipulated, either to tender and pay to the lender the amount due to him, taking such precautions as the may thing necessary to establish such tender and payment of evaded or denied, or without any tender to the lender, to deposit the amount due to him, on or before the stipulated date, in the Diwani Adalat of the city or Zila in which th eland my be situated; and the Judge receiving the same shall furnish the party with a written receipt for the amout, specifying on what date, and for what purpose, such deposit my have been made.







Procedure for borrower of money on conditi- nal sales of land who desires to redeem it by paying money lent.

            He shall also at the same time cause as written notice of such deposit to be delivered to the lender; and on the application of the latter, and his surrender of the conditional bill of sale, or showing satisfactory cause why it cannot be surrendered, shall pay him the amount deposited, and take his acknowledgement, to remain among the records of the Court.
That there may be no doubt to what amount the deposit in question is to be made, it is required to be as follows:-


            When the lender has not obtained possession of the lands, the deposit is to be the principal sum lent, with the stipulated interest thereon, not exceeding the legal rate of twelve per cent, per annum, or, if interest be payable and no rate has been stipulated, with interest at the established rate of twelve per cent; but, if the lender has held possession of the land, the principal sum borrowed only need be deposited, leaving the interest to be settled on an adjustment of the lender’s receipts and disbursements during the period he ahs been in possession.


1798 : Ben. Reg. I.                                                     LAND (CONDITIONAL SALES)


            In either case, a deposit made as above required, shall be considered to preserve to the borrower his full right of redemption; and, if the land be in the possession of the lender, shall entitle him to demand the immediate recovery there of, subject to the adjustment of accounts specified in the following section:


            Provided, however, that, if the borrower in any case shall deposit a less sum than above required, alleging that the sum so deposited is the total amount due to the lender for principal and interest after deducting the proceeds of the land in his possession, or otherwise, such deposit shall be received and notice given to the lender as above directed; and if the amount so deposited be admitted by the lender or be established, on investigation, to be the total amount duet to him, the right of redemption shall be considered to have been fully preserved to the borrower, who will no, however in such cases be entitled to the recovery of his lands, until it be admitted or established that he has paid the full amount due from him.

When lender has possessed land, and adjustment of account is necessary, he is to account for proceeds of estate.

      3. In all instances wherein the lender on a bai-bil-wafa, or similar conditional sale, may have been put in possession of the land, and an adjustment of accounts may consequently become necessary between him and the borrower, the lender id to account to the borrower for the proceeds of the estate whilst in his possession, on the principles prescribed with regard to mortgages and interest in Regulation 1[XV, 1793], as far as the same be applicable to the nature of the case.


            But such part of section –10 of the above Regulation as directs that the mortgages there in referred to are to be considered as cancelled and redeemed whenever the principal sum, with the sum, with the simple interest due upon it, shall have been realized from the usufruct of the mortgaged property, or otherwise liquidated by the mortgagee, being inapplicable to the conditional sales referred to in this regulation, it is hereby declared not to apply there to.

Tips not to be considered legal tender unless accepted by tender.

    4. A tip for the repayment of money lent on the conditional sales referred to in this regulation shall not be considered a legal tender unless accepted as such by the lender; the proof of which acceptances shall be the lender’s giving up the bill of sale, or giving a written acknowledgement that he has received back the money lent by him.

Regulation not to elter contract between parties.

    5. Nothing in this regulation being intended to alter the terms of contract settled between the parties in the transactions to which it refers (illegal interest excepted), the several provisions in it are to be construed accordingly, and any question of right between the parties is to be regularly brought before and determined by the Courts of Civil Justice.

1.             Reg. XV of 1793 was repealed by the Repealing Act, 1868 (VIII of 1898)


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