Chacko vs Subramania Iyen

Madhavan Nair, J.—The appellant''s father had mortgaged landed properties to the late father of the respondent for Rs. 42,500/- and taken them back on a lease under the mortgagee. On the averment that the consideration for the mortgage represented old debts under promissory notes and hypothecations and that on proper account being taken of the actual advances and the returns by way of interest and towards the principal nothing remained due to the respondent, the appellant filed an application u/s 8 of the Kerala Agriculturists Debt Relief Act, 1958 (hereinafter referred to as ''the Act'') praying for a declaration that the debt between the parties had been discharged and, in case the court finds any amount remaining due, for leave to discharge the same in installments u/s 4 of the Act. The respondent raised a preliminary objection that such an application does not lie u/s 8 of the Act. The court below has accepted that objection and dismissed the application as incompetent. In this appeal, the appellant canvasses the correctness of that order. Sub-sections (1) to (3) and (5) of Section 8 of the Act run thus:

(1) Any debtor or creditor may apply to the Court for an order fixing the amount payable u/s 4 and in that application he shall state what is the correct amount payable according to him.

(2) (a) If the debt is covered by a decree, the application shall be made to the Court which passed the decree or to the Court to which the decree has been sent for execution.

(b) If the debt is not covered by a decree, the application shall be made to the Court competent to pass a decree for the recovery of the debt.

(3) An application made by a debtor under sub-section (1) shall be dismissed if the debtor fails to deposit with the Court, before which such application is pending, the amount of any installment which on his admission is payable by him under the provisions of this Act and has accrued due and no second application for the same purpose shall be entertained:

Provided that the Court may extend the time for making the deposit for any just and sufficient cause.

...

(5) The Court shall by its order determine the amount which the debtor has to pay under the provisions of section 4 and the time within which such payment shall be made and any payment made in accordance with such order shall be deemed to be a valid payment for purposes of section 4.

Obviously, an application contemplated in the above provision is one to fix the amount of the debt to be paid u/s 4 of the Act. Debt is defined in Section 2(c) of the Act as ''any liability in cash or kind.........'' Where there is no liability there is no debt as defined in the Act, and therefore no ''amount payable u/s 4'', which relates to payment of debts in installments. The insistence on a statement, in an application by a debtor, of the correct amount payable according to him and on punctual deposits with the Court of all installments payable by him under the Act, of such admitted amount also indicates that the application must relate to a subsisting debt. If the appellant owes no amount to the respondent, he cannot call the Court to fix the amount payable by him to the respondent. That will be a mockery in legal proceeding. Zero may be a positive infinitesimal in mathematics, but is non est in law. If zero can be the amount of debt, anybody can call another a debtor of his for that amount, which will be a mere farce in law. Section 8 does not, in our opinion, concern with such notional debts, but only with debts that are real.

Counsel for the appellant relied on a Full Bench ruling of the erstwhile Travancore High Court in Gourikutty Amma v. Sankara Iyer (1947 T. L. R. 348) construing an almost parallel section in the Travancore Debt Relief Act, 1116. There, Krishnaswami Aiyar C. J. held:

Undoubtedly the Act requires an admission of the relationship of a debtor and creditor and if that is admitted any dispute or doubt relating to the amount of the debt could be resolved u/s 15. A plea regarding the discharge of a debt is not a plea denying the existence of the debt.................. a doubt or dispute occasioned by A, plea that a debt has been discharged ought not to be construed as amounting to a plea where the relationship of a debtor and a creditor is denied.

Krishna Pillay J. (as he then was) observed :

A plea of discharge is not a plea in negation of the debt;

and the third Judge, Sankaran J. (as he then was) agreed with the latter.

Where a debt is defined as a ''liability'' it is very difficult to say that a liability, that has been fully discharged, continues a liability and keeps up the relationship of debtor-creditor between the parties concerned. In our view, after discharge there can be no debt, and no debtor-creditor relationship. By the expression of Section 8 of the Act an application thereunder can only be by a debtor or creditor, that is to say, by either of the parties between whom there exists a liability to pay.

We find that prior to the Full Bench decision mentioned above, four learned Judges of the Travancore High Court, sitting in two Divisional Courts, have expressed the contrary view and that none of those four was a party to the Full Bench. Ramakrishna Iyer J. speaking for himself and Lukose J. held in Parameswaran Pillai v. Kalyani Amma Kunjukutty Amma (57 T. L. R. 474):

When Sections 8 and 9 provide for payment of debts in particular installments and Section 15 gives the power to the court to ascertain the amount actually due when ''there is a doubt or dispute in respect of the amount payable,'' it appears to us that the only reasonable interpretation Section 15 is susceptible of is that its applicability is confined to cases where the applicant admits that he is a debtor and seeks the aid of the court in ascertaining the extent of his liability.

This was followed by Joseph Thaliath C. J. and Abraham J. in Chacko Ouseph v. Ouseph Thommakutty (57 T. L. R. 1117). It is pertinent to note here that the Madras Agriculturists Relief Act, 1938, which the Kerala Agriculturists Debt Relief Act, 1958, has repealed, and followed in substantial re-enactment, had provided in its Section 19A thus:

(1)................ the debtor or the creditor may apply to the court having jurisdiction for a declaration of the amount of the debt due by the debtor on the date of the application

(2) The provisions of sub-section (I) shall apply also to any person claiming to be such an agriculturist who contends that any such debt due by him has been discharged.

But in the Kerala Agriculturists Debt Relief Act, there is no provision parallel to the sub-section (2) quoted above. The omission is significant and is indicative of the legislative intent in the re-enactment in section 8 of the latter Act that a ''debtor'' is not a person who contends that the debt due by him has been discharged.

We accept the construction put upon Section 8 by the court below and hold that one who does not admit any amount as payable by him u/s 4 cannot move an application under that section. The appeal fails and is dismissed hereby.