A.R. Vinsithurthan Chettiar vs The Government of Tamil Nadu and Others

G. Ramanujam, J.—The petitioner herein is challenging the order of the second respondent, dated 29th June, 1981, holding that the 4th

respondent is entitled to the benefits of the Tamil Nadu Debt Relief Act, 1980 and passing an order of discharge in relation to the promissory note

loan said to have been taken by the 4th respondent from the petitioner.

The circumstances under which the said order came to be passed by the second respondent may be briefly stated. The 4tb respondent herein

had taken a loan of Rs. 1,000 under a promissory note from the petitioner. Based on the promissory note the petitioner has filed a suit O.S. No.

336 of 1969 and obtained a decree. In execution of that decree, the 4th respondent''s property had been attached and brought to sale and his

properties had been purchased in Court-auction by a third party. The sale proceeds obtained in the said sale of the 4th respondent''s property

were sufficient to fully discharge the decree debt due to the petitioner. All these have taken place before 1978, even before the Tamil Nadu Debt

Relief Act, 1980 came into force.

After the Act came into force the 4th respondent has filed a petition for a certificate of discharge of the promissory note debt from the Tahsildar

u/s 5 of the Act. Before the Tahsildar the petitioner has appeared and stated that the entire debt has already been discharged in full by the sale of

the judgment-debtor''s property and there is no subsisting debt due to him from the debtor and therefore, the application filed before the Tahsildar

is not maintainable. The Tahsildar talking note of the stand taken by the petitioner who has been cited as a creditor has held that as there is no debt

due by the 4th respondent as on the date of the application, there is no question of giving a declaration of discharge of a debt which is not

subsisting, and in that view he dismissed the application filed by the 4th respondent.

The 4th respondent took the matter in appeal and the appellate authority, the second respondent herein, has allowed the appeal and granted a

declaration of discharge of a debt which is not subsisting. The appellate authority has taken the view that the Tahsildar was not right in accepting

the evidence of the creditor that no amount is due to him, that unless some amount is due to the creditor, the debtor would not have filed an

application and therefore, the decree debt should be taken to be subsisting on the date of the application and as the household income of the 4th

respondent was only Rs. 3,300, he should be declared to be eligible for getting the relief under the Act. Aggrieved against the order of the

appellate authority the petitioner has filed this present writ petition seeking to quash the same.

According to the learned Counsel for the petitioner when the creditor himself says that no amount is due to him and no proceedings, are pending

for realisation of any debt as-against the 4th respondent, the appellate; authority has no jurisdiction to assure the debt to be subsisting and grant the

relief by way of discharge to the 4th respondent. It is pointed, out by learned Counsel that once the debt has. been sued upon and a decree has

been obtained by the creditor and the decree debt has been, realised fully by the sale of the judgment-debtor''s properties long before the coming

into force of the Act, it is not open to the Appellate Authority to assume that the debt is subsisting and give a declaration of discharge in relation of

that assumed debt.

In the writ petition notice has been served on the 4th respondent on 13th August, 1981, but he has not appeared either in person or through

counsel. The second respondent whose order is challenged is represented by the Government Pleader and the Government Pleader does not seek

to support that order. Even assuming that the 4th respondent is a. person who will come within the definition of ''debtor'' as defined under the Act

as his income has been found to be less than Rs. 4,000'' per year, as there is no subsisting debt on the date of application before the Tahsildar,

there is no question of a non-existing debt being discharged by an order passed under the provisions of the Act. The creditor has deposed'' that no

amount is due to him and his decree debt has been discharged long before by the sale of the judgment-debtor''s property in court-auction and

there is no proceeding at all pending as against the judgment-debtor. The Appellate Authority is in error in assuming a1 debt to be existing merely

because the 4th respondent has filed an application. Simply because an application has been filed u/s 5 of the Act it is not possible to assume the

existence of a debt when there is no subsisting debt as on the date of the application. By filing an application u/s 5 of the Act, the 4th respondent

cannot reopen the execution proceedings as against him which have ended by the sale of the property in court-auction to a third party and the

decree-holder realising the amount due to him fully. The Appellate Authority obviously committed an error in assuming that the execution

proceeding as against the 4th respondent is still pending and therefore, it has power to declare the debt to have been discharged. We are clearly of

the opinion that the order of the second respondent, dated 29th June, 1981, is erroneous and the order passed by the initial authority, the third

respondent herein, holding that there is no subsisting debt, is right. The writ petition is allowed accordingly. No costs.