Dhanalakshmi Ammal vs Krishnammal

Ratnam, J.—This civil revision petition at the instance of the decree holder in O.S. 71 of 1974, Sub Court, Tirupattur, has been preferred against the order of the learned District Judge, North Arcot at Vellore in C.M.A. 76 of 1981, reversing the dismissal of I.A. 411 of 1980 in O.S. 71 of 1974, and holding that the respondent is entitled to the benefits of Tamil Nadu Debt Relief Act (Act XL of 1979). Briefly stated, the facts giving rise to this civil revision petition are as follows�

On 15.12.1969, one Sivakami Ammal and her son Ganesan executed a mortgage for Rs. 12000 in favour of the petitioner herein over old door No. 159, new door No. 14, V.K.S. Mani Chairman St., Idayampatti, within Jolarpet Panchayat area. The respondent herein purchased the mortgaged property on 21.1.1971, subject to the mortgage sum undertaking to discharge the mortgage in favour of the petitioner herein. Subsequently, Sivakami Ammal died, leaving behind her two, sons Narayanasami and Gurumurthi, besides Ganesan, one of the mortgagors. In O.S. 71 of 1974 Sub Court Tirupattur, the petitioner sought to recover the amount due to her on the basis of the mortgage dated 15.12.1969 executed in her favour and to this suit, one of the mortgagors, Ganesan and two of the legal representatives of deceased Sivakami Ammal viz., Narayanaswami and Gurumurthi and the respondent herein were made parties. The sons of deceased Sivakami Ammal having remained ex-parte, the respondent alone contested the suit accepting that she has purchased the property subject to the mortgage and that she had undertaken to discharge the mortgage, but stating, that she will be entitled to the benefits of Tamil Nadu Agriculturists Relief Act (Act IV of 1938). The respondent also expressed her readiness and willingness to discharge the mortgage debt, though according to the provisions of the Tamil Nadu Agriculturists Relief Act, (Act IV of 1938). On 30-6-1979 the learned Subordinate Judge, Tirupattur, granted a decree in favour of the petitioner herein for the recovery of a sum of Rs. 32077-30 after holding that the respondent herein is not entitled to the benefits of Tamil Nadu Agriculturists Relief Act (Act IV of 1938). Thereafter, the respondent herein filed I.A. 411 of 1979 in O.S. 71 of 1974 purporting to be under S.7, 8 and 15 of Tamil Nadu Debt Relief Act (Act XL of 1979) (hereinafter referred to as the Act) for scaling down the decree debt in O.S. 71 of 1974. In the affidavit filed in support of that application, the respondent claimed that she is a debtor and was not otherwise disqualified and that she is therefore, entitled to the benefits of the Act, and the decree should be scaled down in accordance with the provisions of the Act. This application was resisted by the petitioner on the ground that the petitioner is not a debtor and that the application is also not maintainable.

The learned Subordinate Judge, Tirupattur, on a consideration of the documentary evidence, found that the respondent is not a debtor as she had been assessed to property tax between 1.4.1976 and 31-3-1978 on an annual rental value of more than Rs. 1200, and, in that view, dismissed the application filed by the respondent. However, on appeal by the respondent in C.M.A. 76 of 1981, the learned District Judge took the view that it had not been established that the houses in respect of which the respondent had been assessed to property tax on an annual value in excess of Rs. 1200, belonged to her and, therefore, the respondent cannot be held to be disqualified to claim the benefits of the Act as a debtor. While allowing the application for amendment filed by the respondent in I.A. 411 of 1980, the learned District Judge directed her to file a calculation memo as well. It is the correctness of this that is questioned in this civil revision petition.

Learned counsel for the petitioner contended that the decree debt in O.S. 71 of 1974 would fall within S.4(h) of the Act, and, would, therefore, be exempt from the operation of the provisions of the Act. Strong reliance in this connection was also placed on the decision in Abraham v. State of Tamil Nadu 96 L.W. 73, interpreting a similar provision in the Tamil Nadu Debt Relief Act (Act XIII of 1980). On the other hand, learned counsel for the respondent submitted that the question as regards the availability of the exemption from the provisions of the Act in respect of the decree debt in O.S. 71 of 1974 had not been raised earlier and that the decision relied on related to the provisions of Tamil Nadu Debt Relief Act (Act XIII of 1980), which were materially different from the provisions of the Act, and, therefore, no reliance could be placed upon that decision. That there was a mortgage in favour of the petitioner herein on 15.12.1969 and that the respondent purchased the property on 21.1.1971, subject to the mortgage, and undertaking to discharge the mortgage in favour of the petitioner, are not in dispute and cannot also be disputed. Indeed, it is seen from para 4 of the written statement filed by the respondent in the suit that she had admitted the purchase of the property subject to the mortgage and had undertaken to discharge the mortgage in favour of the petitioner. Therefore, in view of the purchase of the property by the respondent and her undertaking to discharge the mortgage in the normal course, she will be bound to discharge the same. Now, the question is, whether the respondent having purchased the property, subject to mortgage, and also retained the consideration payable to the vendors for payment to the mortgagee, that is the petitioner herein, can claim the benefits of the Act. Under S.4 (h) of the Act, nothing contained in this Act, shall apply to the following categories of debts and liabilities of any debtor, namely....(h) any debt, which represents the price of property, whether movable or immovable, purchased by a debtor or any amount due under a hire purchase agreement. It would be useful at this stage to refer to a similar provision under S.12(i) of Tamil Nadu Debt Relief Act (Act XIII of 1980), which runs as follows:�''Nothing in this Act shall apply to the following categories of debts and liabilities of a debtor, namely:-......(i) any debt, which represents the price of property, whether movable or immovable, purchased by a debtor or any amount due under a hire purchase agreement''. It is thus seen that S. 4(h) of the Act and S. 12 (i) of Tamil Nadu Debt Relief Act, (Act XIII of 1980) are couched in identical terms. There is absolutely no difference whatsoever between the two. In Abraham v. State of Tamil Nadu 96 L.W. 73, the petitioner advanced amounts on a mortgage of a house property owned by one Alagappa Pillai, who later sold the same to the 4th respondent, and in the sale deed, the mortgage amount payable to the petitioner had been deducted out of the sale consideration, as the purchaser had been directed to discharge the mortgage. After the purchase, the purchaser, who had retained amounts with him to be paid to the mortgagee, filed an application under S.6 of Tamil Nadu Debt Relief Act (Act XIII of 1980) for a certificate of discharge of the mortgage on the ground that he came within the definition of ''debtor''. That was resisted by the petitioner on the ground that the amount retained by the 4th respondent, represented a portion of the purchase money for payment to the petitioner, as a mortgagee, and it would be exempt from the provisions of the Act, and, therefore, irrespective of whether the 4th respondent is a debtor or not under the Act, the debt in question is not liable to be discharged. The authorities below proceeded to grant the relief and, when the matter came up before this Court, the Division Bench pointed out as under--

Sec. 12 (i) merely says that if the debt represents the price of property, purchased by a debtor, that is exempted from the provisions of the Act. It does not refer to the person, who is seeking to recover the debt. According to the learned counsel for the 5th respondent, it is only when the vendor seeks to recover the balance of the purchase price, that provision will come into operation and not when a third party to the contract of purchase files a suit for recovery of the part of the price. If the contention of the learned counsel is accepted, even the assignee of a debtor presenting the purchase price of a property will not get the benefit of the exemption provision contained in S.12(i). The said provision exempting the debt representing the portion of the purchase price of the property purchased by a debtor is intended to see that the debtor does not make an unjust gain by withholding the price of the property purchased by him taking advantage of the provisions of the Act. If the provision in S.12 (i) is restricted to a claim made only by the vendor himself, the object of that provision, which, as we said, is to see that the debtor does not make an unlawful or unjust gain by withholding the price of the property, will be completely defeated.

The aforesaid observations made with reference to S.12 (i) of Tamil Nadu Debt Relief Act (Act XII of 1980) would also apply to S.4 (h) of the Act, especially when in the case also, there is no dispute that the respondent had purchased the property subject to a mortgage and undertaking to discharge the mortgage and had retained a part of the consideration for the purpose of paying off the petitioner. Applying the principles laid down in the decision referred to above, it follows that in this case also, the decree debt will be exempt from the provisions of the Act under S.4 (h) of the Act. On the undisputed facts of this case, the principles of the decision referred to above, would squarely apply and there is no substance in the objection that the availability to the exemption from the provisions of the Act was not raised earlier. The lower appellate Court was, therefore, in error in having concluded that the respondent will be entitled to claim the benefits of the Act and also to a scaling down of the decree debt. Though the learned counsel for the petitioner argued that the respondent would not be a debtor as she had been assessed to property in the relevant assessment years on an annual value exceeding Rs. 1200 and that the application for scaling down is not maintainable, it is unnecessary to go into those matters, as the decree debt has earlier been held to be exempt from the provisions of the Act. Consequently, the civil revision petition is allowed, the judgment and decree of the learned District Judge are set aside and those of the trial Court will stand restored with costs throughout.