S. Abraham vs State of Tamil Nadu and Others

Ramanujam, J.—The petitioner herein seeks a writ of certiorari from this court quashing the order of the second respondent dated

31.03.1981 confirming the order of the third respondent dated 21.07.1980 holding that the fourth respondent herein is entitled to the benefit of S.6

of Tamil Nadu Act XIII of 1980.

The petitioner herein had advanced a sum of Rs.15,000 on a house property owned by one Alagappa Pillai the said Alagappai Pillai has sold

the said house property to the fourth respondent for Rs. 31,500. In the sale deed executed by Alagappa Pillai in favour of the fourth respondent

the mortgage amount payable to the petitioner has been deducted to discharge the mortgage. That the mortgage amount payable to the petitioner

has been retained by the fourth respondent out of sale consideration, is not in dispute. After the purchase, the fourth respondent who has retained a

sum of Rs.15,000 representing the entire mortgage amount with him out of the sale consideration has filed an application u/s 6 of the Tamil Nadu

Act XIII of 1980 for a certificate of discharge of the mortgage on the ground that his annual house-hold income is less than Rs.4,800 and therefore

his is entitled to the benefit of the Act. The said application was resisted by the petitioner on the ground that the sum of Rs.15,000 payable by the

fourth respondent representing a portion of the purchase price which has been retained by him for payment to the petitioner as a mortgagee and as

the said amount is a portion of the purchase price his is exempted from the provisions of the Act and therefore whether the fourth respondent is a

debtor or not under the Act, the debt in question is not liable to be discharged. In view of the fact that the petitioner sought exemption of this debt

from the provisions of the Act, he did not adduce evidence as regards the value of the property purchased by the fourth respondent and on the

question whether the worth of the property will disentitle him from claiming the benefits under the Act.

Both the initial authority and the appellate authority have gone into the question whether the fourth respondent''s annual income is less than

Rs.4,800/- and whether the fourth respondent is a debtor as defined in the Act, and after holding that the annual income of the fourth respondent is

less than Rs.4,800 they have proceeded to grant the relief sought for by the fourth respondent without going into the question whether the debt in

question represents the purchase price of the property purchased by the fourth respondent and whether such a debt is excluded from the

provisions of the Act.

According to the learned counsel for the petitioner, the debt in respect of which a certificate of discharge is sought for by the fourth respondent

is a debt failing within S. 12 (i) of 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 property whether movable or immovable purchased by a debtor or any amount due under a hire-purchase

agreement.......

From the facts set out above it will be clear that a sum of Rs.15,000 which is payable to the petitioner by the original mortgagor Alagappa Pillai

has been undertaken to be paid by the fourth respondent the vendee and the has also retained the said sum of Rupees 15,000/- out of the sale

consideration or purchase money payable by him towards the purchase of the mortgage property. That the sum of Rs.15,000/- represents a part

of the purchase price, is not disputed by the learned counsel for the fourth respondent. But what is contended on his behalf is that the debt does

not represent a portion of the purchase money payable to the petitioner as the property has not been purchased from him.

Section 12(i) merely says that if the debt represents the price of property purchased by a debtor that is exempted form 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 fourth respondent, it is only when

the vendor seeks to recover the balance of the purchase price, that provision will come into operation and no then 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 debt

representing the purchase price of a property will not get the benefit of the exemption provision contained in S. 12(i). The said provision exemption

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. In this case the fourth

respondent has retained the sum of Rs.12,000/- out of the sale consideration payable by him to the vendor and he has undertaken to discharge the

liability of the vendor to pay the said mortgage amount of Rupees 15,000/- to the mortgagee the petitioner herein, the vendor can file a suit and

recover the entire amount of Rs.15,000/- notwithstanding the provisions of Act XIII of 1980. Therefore, the fourth respondent who has

undertaken to discharge the liability to pay Rupees.15,000/- on behalf of his vendor, cannot now take advantage of the provisions of the Act,

ignoring the provisions in S.12(i). If the provisions 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 with holding the price of the property, will be completely

defeated. In this view of the matter we have to hold that the fourth respondent is not entitled to claim the benefit of S.6of the Act, in view of the

exemption provision contained in S.12(i).

Therefore, the writ petition has to be and is accordingly allowed and the orders of both the second respondent and the third respondent are

quashed. There will be no order as to costs.

Petition allowed.