Section 40. Debts payable by debtor to be scaled down.

Notwithstanding anything to the contrary contained in any law, custom, contract, award or decree of a Court, or other competent authority, the amounts found due under section 33 from a debtor shall be scaled down in the manner hereinafter provided- (i) in the case of a debtor who is a marginal or small farmer or other agriculturist, or rural artisan or rural labourer, the total amount of debt, whether secured or unsecured, found due after taking accounts, shall be scaled down to 10 per cent. of such debt; (ii) in case of a debtor who is a worker, the total amount of debt, whether secured or unsecured, found due after taking accounts, shall be scaled down to 50 per cent. of such debt; (iii) notwithstanding anything contained in clauses (i) and (ii) the debts to be scaled down shall not exceed the amount which a debtor would be able to repay within a period of seven years based on his repaying capacity worked out in the manner provided in section 39.