3.
| (1) Subject to the provisions of section 4, every creditor to whom any liquidated sum of money is due on a debt incurred or outstanding in whole or part prior to the appointed date shall, within three months of such date, make an application in the prescribed form to the Chairman of the Panel of Conciliators of the Conciliation Board area in which the debtor or any of the debtors resides, for settlement or determination of such debt in accordance with the provisions of this Law. |
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| (2) For the purposes of this Law, a debt means a debt incurred or outstanding in whole or part prior to the appointment date and includes any debt, whether secured or unsecured, incurred jointly or severally but not jointly end severally, op or by way of a bill, of exchange, promissory note, cheque mortgage, conditional transfer of immovable property, shop bill or book debt or otherwise. |
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| (3) In the case of a conditional transfer of immovable property referred to in subsection (2)-
| | (a) the person to whom the property is transferred, sold or alienated shall be deemed to be the creditor ; and | | |
| | (b) the person who transferred, sold or alienated such property shall be deemed to be the debtor. | | |
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| (4) Where any debtor-
| | (a) who was resident in any Conciliation Board area at any time during the year immediately preceding the appointed date ceases to reside in that area in order to defeat the purposes of this Law ; or | | |
| | (b) whose whereabouts being unknown, was last known to reside in any Conciliation Board area at any time during the year preceding the appointed date, | | |
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| (5) Every application under section 6 of the Conciliation Boards Act by a creditor in respect of any debt to which this Law applies, made to a Conciliation Board prior to the appointed date and pending before that Board on the said date, shall be deemed to be an application made under subsection (1), and accordingly the provisions of this Law shall apply in all matters relating to the disposal of such application. |
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| (6) Every application made or deemed to be made under this section shall be referred for settlement or determination by the Chairman of the Panel of Conciliators to a Conciliation Board constituted from that Panel. |
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| (7) Where any creditor referred to in subsection (1) fails to make an application for the settlement of a debt in accordance with the provisions of that subsection, then-
| | (a) no action shall be instituted in or entertained by, any court ; | | |
| | (b) no application shall be entertained by the Debt Conciliation Board ; and | | |
| | (c) no application shall be entertained by the Chairman of a Panel of Conciliators under section 6 of the Conciliation Boards Act, | | |
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| (8) Any novation created on or after the appointed date of an obligation to pay a liquidated sum of money arising from a debt subsisting on the said date, shall be null and void. |
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| (9) Any person who is a party to the novation, in fraud of this Law, of an obligation arising from a debt referred to in subsection (8) shall be guilty of an offence and shall, on conviction after trial by a Magistrate, be 'liable to a fine not exceeding one hundred rupees. |
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Sri Lanka Consolidated Acts