If no application be made for the restoration of a village or share of a village attached under section 183 within the aforesaid period of twelve years, or if after such application has been made, the superior holder fails to pay the balance, if any, still due by him within the period specified by the Deputy Commissioner in this behalf, the said village or share of a village shall thenceforward vest in the State Government, free from all encumbrances created by the superior holder or any of the sharers or any of his or their predecessors in title or in any wise subsisting as against such superior holder or any of the shares, but without prejudice to the rights of the persons in actual possession of the land.