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THE DISPLACED PERSONS (COMPENSATION AND REHABILITATION) ACT, 1954

Title : THE DISPLACED PERSONS (COMPENSATION AND REHABILITATION) ACT, 1954

Year : 1954



(1) The Central Government may, by notification in the Official Gazette, appoint a chief Settlement Commissioner, a Joint Chief Settlement Commissioner, 1*[and as many Deputy Chief Settlement Commissioners, Settlement Commissioners] Additional Settlement Commissioners, Assistant Settlement Commissioners, Settlement Officers, Assistant Settlement Officers and managing officers as may be necessary for the purpose of performing the functions assigned to them by or under this Act and may, by general or special order, provide for the distribution or allocation of work to be performed by them under this Act.

(2) Subject to the provisions of the Act, the Joint Chief Settlement Commissioner, 2*[all Deputy Chief Settlement Commissioners, Settlement Commissioners] Additional Settlement Commissioners, Assistant Settlement Commissioners, Settlement Officers, Assistant Settlement Officers and managing officers shall perform the functions assigned to them by or under this Act under the general superintendence and control of the Chief Settlement Commissioner.

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1. Substituted for "a Deputy Chief Settlement Commissioner and as many settlement Commissioners" by the Displaced Persons (Compensation and Rehabilitation) (Amendment) Act, 1960, w.e.f 27-02-1960.

2. Substituted for " the Deputy Chief Settlement Commissioner and as many settlement Commissioners" by the Displaced Persons (Compensation and Rehabilitation) (Amendment) Act, 1960, w.e.f 27-02-1960

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(1) The Central Government shall, from time to time, but not later than the thirtieth day of June, 1955, by notification in the Official Gazette, require all displaced persons having a verified claim to make applications for the payment of compensation and any such notification may be issued with reference to displaced persons residing in any State or in any one of a group of States.

(2) Every displaced person who, by a notification issued under sub-section (1), is required to make an application for the payment of compensation shall make such application in the prescribed form to the Settlement Officer having jurisdiction, within three months of the date of the notification :

Provided that the Settlement Officer may entertain any such application after the expiry of the said period of three months, if he is satisfied that the applicant was prevented by sufficient cause from filing the application in time.

(3) An application for the payment of compensation under this section shall contain the following particulars, namely :-

(a) The name and address of the applicant;

(b) The amount of the verified claim;

(c) The encumbrances, if any, on the property to which the verified claim relates;

(d) The form in which the applicant desires to receive compensation;

(e) The amount, if any, of the public dues recoverable from the applicant;

(f) The property, if any, allotted or leased to the applicant by the Central Government or a State Government or by the Custodian;

(g) Such other particulars as may be prescribed.

(4) Any notification issued by the Central Government before the commencement of this Act requiring displaced persons of any class or description to make applications for the payment of compensation, shall be deemed to have been issued under this section and all applications for compensation made in pursuance of any such notification shall be deemed to have been made under this section and any proceeding in relation to any such application pending at the commencement of this Act shall be disposed of in accordance with the provisions of this Act:

Provided
that a displaced person who has made an application for payment of compensation before the commencement of this Act, may within one month of such commencement intimate in writing to the officer or authority to whom the application was made or to the successor-in-office of any such officer or authority, the form in which he desires to receive the compensation.



On receipt of an application under section 4, the Settlement Officer shall, after making an inquiry in such manner as may be prescribed, pass an order determining the amount of public dues, if any, recoverable from the applicant and shall forward the application and the record of the case to the Settlement Commissioner.



(1) Where a debt due to a banking company is secured by a mortgage, charge or lien on any immovable property belonging to a displaced person in West Pakistan in respect of which compensation is payable under this Act and such mortgage, charge or lien was subsisting at the date when the claim of the banking company was registered under the Displaced Persons (claims) Act, 1950 (XLIV of 1950), the banking company shall be entitled to relief in accordance with the provisions of this section.

(2) Where the displaced person is entitled to receive compensation in respect of any such property as is referred to in sub-section (1), the banking company shall be entitled,-

(a) If the compensation to the displaced person in respect of such property is payable in cash, to receive such amount as bears to the total debt, the same proportion as the compensation payable to the displaced person bears to the value of the verified claim of the displaced person in respect of such property;

(b) If the compensation to the displaced person is payable in the form of transfer of any property from the compensation pool, then subject to a prior charge under sub-section (3) of section 20, to a second charge on such property for the amount which would have been payable to the banking company under clause (a) if the displaced person had been paid compensation in cash;

(c) If the compensation to the displaced person is payable in any other form, to such relief as the Settlement Officer, having regard to the principle specified in clause (a) or clause (b), may determine.

(3) For the purposes of this section,-

(a) The expression 'banking company' means any of the displaced banks specified in the Schedule and includes any other banking company which, before the fifteenth day of August, 1947 carried on the business of banking, whether wholly or partially in any area now forming part of West Pakistan, and which the Central Government may, having regard to the dislocation of such business on account of the partition of the country, by notification in the Official Gazette, specify in this behalf;

(b) The expression 'total debt' means,-

(i) Where the banking company has preferred a claim under the Displaced Persons (claims) Act, 1950 (XLIV of 1950) and the claim has been verified, the amount of the verified claim, subject to such adjustment as the Settlement Officer, having regard to the provisions of the Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951) applicable to secured debts, may make;

(ii) Where the banking company has preferred such claim but the claim has not been verified, such amount as the Settlement Officer, having regard to the provisions of the Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951) applicable to secured debts, may determine.



(1) On receipt of an application for payment of compensation together with the record of the case forwarded under section 5, the Settlement Commissioner shall make an inquiry in such manner as may be prescribed and having due regard to the prescribed scales of compensation, the nature of the verified claim and other circumstances of the case, shall ascertain the amount of compensation to which the applicant is entitled.

(2) On ascertaining the amount of compensation to which an applicant is entitled under sub-section (1), the Settlement Commissioner shall deduct therefrom the following dues recoverable from the applicant, in the order of priority mentioned below :-

(a) The amount, if any, of the public dues recoverable from the applicant under section 5;

(b) The amount, if any, payable to a banking company under section 6, and the amount, if any, of the prior charge declared under sub-section (3) of section 16 of the Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951) in respect of which any communication is

(c) Where any communication is received from any tribunal under section 52 of the received from any tribunal under section 52 of that Act; Displaced Persons (Debts Adjustment) Act, 1951 (LXX of 1951) in respect of any unsecured debts, the amount of such debts payable by the applicant in accordance with the provisions of that Act.

(3) After deducting the dues referred to in sub-section (2), the Settlement Commissioner shall make an order determining the net amount of compensation, if any, payable to the applicant.

(4) The amount, if any, deducted under sub-section (2) shall be paid to the person entitled to it.



(1) A displaced person shall be paid out of the compensation pool the amount of net compensation determined under sub-section (3) of section 7 as being payable to him, and subject to any rules that may be made under this Act, the Settlement Commissioner or any other officer or authority authorised by the Chief Settlement Commissioner in this behalf may make such payment in any one of the following forms or partly in one and partly in any other form, namely :-

(a) In cash;

(b) In Government bonds;

(c) By sale to the displaced person of any property from the compensation pool and setting off the purchase money against the compensation payable to him;

(d) By any other mode of transfer to the displaced person of any property from the compensation pool and setting off the valuation of the property against the compensation payable to him;

(e) By transfer of shares or debentures in any company or corporation;

(f) In such other form as may be prescribed.

(2) For the purpose of payment of compensation under this Act, the Central Government may, by rules, provide for all or any of the following matters, namely :-

(a) The classes of displaced persons to whom compensation may be paid;

(b) The scales according to which, the form and manner in which and the installments by which, compensation may be paid to different classes of displaced persons;

(c) The valuation of all property, shares and debentures to be transferred to displaced persons;

(d) Any other matter which is to be, or may be, prescribed.

8A - 1*Payment compensation in cases of mortgaged properties

(1) Where any compensation is payable to any displaced persons in lieu of property abandoned by him in West Pakistan which on the date of his migration from West Pakistan was subject to a mortgage in favour of a person who is not resident in India, the Settlement Commissioner shall, after giving a reasonable notice to the displaced person, determine the principal sum for which the property was so mortgaged and such portion of the principal sum so determined as bears the same proportion as the compensation payable to the displaced person bears to the value of the verified claim of the displaced person in respect of that mortgaged property shall be deductible from the compensation payable in respect of the mortgaged property:

Provided that where compensation has been paid to any displaced person without such deduction having been made, the displaced person shall pay to the Central Government the amount of such deduction within three months of the determination thereof or such longer period as may be prescribed:

Provided further
that where compensation has been paid to any displaced person by sale or any other mode of transfer to him of any property from the compensation pool, the displaced person may, within the aforesaid period of three months or, as the case may be, within the aforesaid prescribed period,-

(a) Either retain the property on his paying in cash the aforesaid amount, or

(b) Surrender a portion of that property of a value equivalent to the amount of such deduction, such value being determined by the Settlement Commissioner in the prescribed manner.

(2) If any displaced person fails to pay any amount which is liable to be deducted from his compensation under sub- section (1), or fails to surrender the property of the value equivalent to such amount, such amount may be recovered in the same manner as an arrear of land revenue]

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1. Inserted by the Displaced Persons (Compensation and Rehabilitation) (Amendment) Act, 1968, w.e.f 03-04-1968.

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Where there is any dispute as to the person or persons who are entitled to the compensation (including any dispute as to who are the successors-in-interest of any deceased claimant to compensation) or as to the apportionment of compensation among persons entitled thereto, such dispute shall, after such enquiry as may be prescribed be decided-

(a) Where the value of the verified claim does not exceed twenty thousand rupees, by the Settlement Officer;

(b) Where the value of the verified claim exceeds twenty thousand rupees, by the Settlement Commissioner:

Provided that the Settlement Officer or the Settlement Commissioner, as the case may be, may refer any such dispute to the District Judge nominated in this behalf by the State Government, whose decision thereon shall be final.



Where any immovable property has been leased or allotted to a displaced person by the Custodian under the conditions published-

(a) By the notification of the Government of Punjab in the Department of Rehabilitation No.4891-S or 4892-S, dated the 8th July, 1949; or

(b) By the notification of the Government of Patiala and East Punjab States Union in the Department of Rehabilitation No.8R or 9R, dated the 23rd July, 1949, and published in the Official Gazette of that State, dated the 7th August, 1949,and such property is acquired under the provisions of this Act and forms part of the compensation pool, the displaced person shall, so long as the property remains vested in the Central Government, continue in possession of such property on the same conditions on which he held the property immediately before the date of the acquisition, and the Central Government may, for the purpose of payment of compensation to such displaced person, transfer to him such property on such terms and conditions as may be prescribed.

Explanation.- For the removal of doubts, it is hereby declared that the notifications of the Government of Patiala and East Punjab States Union Nos.7R, 8R and 9R, dated the 23rd July, 1949, and published in the Official Gazette on the 7th August, 1949, purporting to have been made under the provisions of the Patiala and East Punjab States Union Evacuees (Administration of Property) Ordinance, 2006 (Ordinance No. XIII of 2006) shall be deemed to have been issued under the provisions of the Patiala and East Punjab States Union Administration of Evacuee Property Ordinance, 2006 (Ordinance No. XVII of 2006) and the said notifications shall not be invalid and shall be deemed never to have been invalid merely by reason of the fact that they were expressed to have been issued under the provisions of the said Ordinance No. XIII of 2006, and anything done or any action taken (including any lease or allotment granted or made) under the provisions of the said notifications shall, notwithstanding any defect in, or invalidity of, the said notifications, be deemed for all purposes to have been validly done or taken as if the said notifications were issued under the provisions of the aforesaid Ordinance No. XVII of 2006 and this section were in force on the day on which such thing was done or action was taken.



(1) The Central Government may, for the relief and rehabilitation of displaced persons, direct payment of any rehabilitation grant or other grant out of the compensation pool to a displaced person under such conditions and to such extent and in such form and manner as may be prescribed.

1[***]

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1. Sub-section (2) of section 11 omitted by the Displaced Persons (Compensation and Rehabilitation) (Amendment) Act, 1956, w.e.f 22-10-1956.

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Last updated on August, 2016

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