(1) On the commencement of this Act, the bonded labour system shall stand abolished and every bonded labourer shall stand freed and discharged from any obligation to render any bonded labour.
(2) No person shall make any advance under, or in pursuance of, the bonded labour system or compel any person to render any bonded labour or other form of forced labour.

Whoever enforces, after the commencement of this Act, any custom, tradition, practice, contract, agreement or other instrument, by virtue of which any person or any member of his family is required to render any service under the bonded labour system, shall be punishable with imprisonment for a term which may extend to five years but shall not be less than two years or with fine which may extend to three hundred thousand rupees but shall not be less than one hundred thousand rupees or with both, and out of the fine, if recovered, payment shall be made to the bonded labourer at the rate of not less than fifty percent of the minimum rate of wages fixed by the government for each day for which bonded labour was extracted from him.

Whoever, after the commencement of this Act, compels any person to render any bonded labour shall be punishable with imprisonment for a term which may extend to five years but shall not be less than two years, or with fine which may extend to two hundred thousand rupees but shall not be less than fifty thousand rupees or with both.