Section 51 of The Punjab Reorganisation Act, 1966 — Right to recover loans and advances

Bare section text

Official Legislative Text

(1)The right to recover any loans or advances made before the appointed day by the existing State of Punjab to any local body, society, agriculturist or other person in an area within that State shall belong to the successor State in whose territories that area is included: Provided that the right to recover loans or advances of pay and travelling allowance to a Government servant made before the appointed day by the existing State of Punjab shall pass to the successor State to which such Government servant is allotted.
(2)The right to recover any loans or advances made before the appointed day by the existing State of Punjab to any person or institution outside that State shall belong to the State of Punjab: Provided that any sum recovered in respect of any such loan or advance shall be divided between all the successor States according to the population ratio.

Educational Study Layer

Summary

This section dictates who has the right to collect debts owed to the old government by citizens, local groups, and employees.
If the old government loaned money to a local town council, agricultural worker, or local society, the new state that now contains that area gets to collect the debt.
If the old government gave an advance on pay or travel money to a government worker, the right to recover that advance follows the worker to whichever new state they are assigned.
If the old government loaned money to an institution located completely outside the state, the new State of Punjab collects the money but must share the proceeds with all successor states based on population ratio.

Practical examples

1In 1965, the government gave a large civic improvement loan to the city of Rohtak. Since Rohtak is now in Haryana, the Haryana state government assumes the right to recover this loan from the city.

2A junior clerk took an advance on his travel allowance a week before the split and was subsequently assigned to work for the new Union territory of Chandigarh. The Chandigarh administration will collect the remaining debt by deducting it from his future paychecks.

3The old Punjab state lent money to a cultural society based in Mumbai to promote regional art. The new Punjab state acts as the debt collector, but once the society pays the money back, Punjab must split those funds with Haryana and Chandigarh.

FAQ

1. Who recovers loans made to local societies under Section 51 of the Punjab Reorganisation Act 1966?

Section 51 of the Act states that loans made to a society belong to the successor state in whose territories that area is included.

2. What happens to a government servant's loan under Section 51 of the 1966 Act?

Under Section 51 of the reorganisation law, the right to recover pay or travel advances passes to the successor state to which that government servant is allotted.

3. How are loans to outside institutions handled under Section 51 of the Act?

Section 51 of the Punjab Reorganisation Act says the State of Punjab recovers outside loans but must divide the recovered sum among all successor states according to the population ratio.

Practice Quiz

Q1.Under Section 51 of The Punjab Reorganisation Act 1966, which state has the right to recover a loan given to an agriculturist living in a village that is now part of Haryana?

Q2.According to Section 51 of the 1966 reorganisation law, what dictates who recovers a pay advance given to a government employee?

Q3.Under Section 51 of the Punjab Reorganisation Act 1966, if the State of Punjab recovers a loan from an institution located in Kerala, what must it do with the money?

Q4.Connecting Section 48 and Section 51 of the 1966 Act, how is an outside loan treated similarly to unissued cheap office supplies?

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