P.Nirathilingam
Vs. Annaya Nadar & Ors [2001] Insc 582 (31 October 2001)
D.P.
Mohapatra & K.G. Balakrishnan D.P.Mohapatra, J.
The
effect of institution of a civil suit by the creditor on the proceeding
initiated on the application filed by the debtor under the Tamil Nadu Debt
Relief Act, 1980 (Act XIII of 1980) (for short the Act), is the question that
falls for determination in this case.
A
learned single Judge of the High Court of Madras held that on filing of the
civil suit the Special Tahsildar who was the competent authority under the Act
ceased to have jurisdiction in the matter and the decision of the civil court
would be binding on the parties. The judgment was confirmed by the Division
Bench. Therefore, the debtor has filed this appeal assailing the judgment in
Writ Appeal No.971/96 confirming the judgment of the learned single Judge in
Writ Petition No.3409/1983.
The
short resume of the facts relevant for appreciating the case may be stated thus
:
The
appellant herein mortgaged his land measuring about 3.07 acres for a sum of
Rs.10,000/- in favour of one Ramummal wife of Madasami Raja on 28.2.1965. The
said mortgage was assigned in favour of the respondent No.1 for consideration
on 12.6.1974. The appellant filed the application dated 11.9.1980 before the
Special Tahsildar (Debt Relief), Sivakasi, seeking relief under the provisions
of the Act on the ground that the annual household income during 1979 was
Rs.3600/- and the immovable properties owned by him were worth Rs.22,840/-. The
assignee- creditor, respondent no.1 herein, opposed the application.
When
the application was pending before the Special Tahsildar the assignee creditor
filed O.S. No. 123/81 on 25.4.1981 in the Sub-Court, Ramanathapuram, which was
re-numbered as O.S.No.150/81 on the file of Sub-Court, Srivilliputhur.
The
Special Tahsildar, on inquiry came to the conclusion that the annual household
income of the appellants family during 1979 did not exceed Rs.4,800/- and the
value of the immovable properties did not exceed Rs.25,000/-, and therefore,
the appellant was entitled to the relief provided under the Act. The appeal
filed by the respondent No.1 (assignee-creditor) before the Revenue Divisional
Officer, Sivakasi, against the said order was dismissed on the ground of
limitation.
Aggrieved
by the said order the respondent No.1 filed Writ Petition No.3409/83 in which
the learned single Judge relying on the judgment of the Division Bench in
K.V.S.P. Subramanian Chettiar vs. R.D.O., Arantangi, Pudukottai District, (1982
II MLJ 375), held that the Special Tahsildar could not have passed the order
granting relief to the appellant on 8.1.1982 long after institution of the
civil suit by the respondent no.1 and during the pendency of the said suit
before the competent civil court. On the said finding the writ petition was
allowed and the order of the Special Tahsildar as confirmed by the appellate
authority was set aside. The learned single Judge left it to the parties to
vindicate their claims before the civil court in the pending civil suit. The
operative portion of the judgment of the learned single Judge runs as follows :
In
this view, the impugned orders are quashed. However, liberty is reserved to the
third respondent to seek adjudication before the civil court where the suit is
pending on the question as to whether he is entitled to the benefits of the
Act. If the court comes to the conclusion that the third respondent herein is
entitled to the benefits of the Act then the court has to dispose of the suit
in accordance with section 4 of the Act. The writ petition is allowed. No
costs.
On
appeal, filed by the appellant, the Division Bench of the High Court relying on
the decision in K.V.S.P. Subramanian case (supra) confirmed the judgment of the
learned single Judge. The Division Bench made the following observations on the
point :
The
fact remains that the suit was pending on the date when the second respondent
passed the order granting relief which had the consequence of nullifying the
civil suit filed and pending before the competent civil court. The learned
Judges of the Division Bench did not base their conclusions on the ground that
the suit had been filed earlier in point of time, the real test or criteria
being the pending of the suit dehors the date of its filing as on the date of
consideration by the competent authority.
When
the case is one of the total lack of jurisdiction, the fact that the creditor
participated in the proceedings or he kept quiet without objecting to the
jurisdiction had no significance, since it is a well settled principle of law
that the jurisdiction cannot be conferred on authorities by mere consent of
parties, where it is totally wanting and the statutory authorities could not
claim to have jurisdiction to function under an Act, merely because the parties
before them agreed to participate in the proceedings. For the same reason, we
are of the view that the reliance placed on Section 7 of the Act and the
finality given to the orders passed under the Act subject to the orders passed
on appeal, will not be of any help to the appellant where it is a case of
absolute and total want of jurisdiction on the original authority. The order
passed by the authority which suffered total want of jurisdiction would be a
nullity and there is no question of attaching any finality to such an order.
For all the reasons stated above, we see no merit in the above appeal. The
appeal, therefore, fails and shall stand dismissed.
On the
facts and circumstances discussed above the point formulated earlier arises for
determination.
We
have heard Mrs. Revathy Raghavan, learned counsel appeared for the appellant.
None appeared for the respondents despite service of notice. Since the question
involved in the case is of considerable importance determination of which
depends on interpretation of the relevant provisions of the Act, we requested
Mr. S. Ganesh, Senior Advocate to act as amicus curae, for assisting the Court
which he readily accepted.
Before
proceeding to consider the correctness or otherwise of the judgments rendered
by the High Court it will be convenient to notice some relevant provisions of
the Act.
In the
Preamble of the Act it is stated:
An Act
to provide for the relief of certain indebted persons in the State of Tamil Nadu.
Whereas
it is expedient to provide relief to certain indebted persons in the State of
Tamil Nadu from the usurious practices of pawnbrokers, money-lenders and other
non-institutional sources of credit and to give relief from the debts due to
such pawnbrokers, money-lenders, and other non-institutional sources of credit.
Section
3 of the Act contains definitions of different expressions used in the Act.
They are as under :
3(a)
annual household income means the aggregate of the gross annual income from all
sources of all the members of a family during the year ending on the 31st December, 1979.
3(b)
creditor means a person from or in respect of whom the debtor has borrowed or
incurred a debt and includes the heir of such person.
3(c)
debt means any liability in cash or in kind whether secured or unsecured and
whether decreed or not, but does not include arrears of taxes due to the
Central Government or a State Government or a local authority.
3(d)
debtor means any person from whom any debt is due and whose annual household
income does not exceed four thousand and eight hundred rupees.
The
proviso enumerates the class of persons who shall not be deemed to be debtor.
The proviso is not relevant for the purpose of the present case.
3(g)
person means an individual or a family.
3(i)
transferee of the creditor means any person (including an institution referred
to in clause (h) of section 12) to whom :-
(i) the
creditor has pledged the movable property pledged to him, by the debtor and
includes any subsequent transferee to whom such transferee has pledged such
movable property and also includes any person in possession of the property
pledged or;
(ii) the
creditor has transferred or otherwise assigned his interest in the property
mortgaged by the debtor and includes any subsequent transferee to whom such
transferee has transferred or otherwise assigned his interest in the property
mortgaged and also includes any person in possession of the property mortgaged.
Section
4 of the Act contains the provision regarding relief from indebtedness. It
reads as follows:
4.
Relief from indebtedness : (1) Notwithstanding anything contained in the Tamil Nadu
Agriculturists Relief Act, 1938 (Tamil Nadu Act I of 1938), the Tamil Nadu
Pawnbrokers Act, 1943 (Tamil Nadu Act XXIII of 1943) the Tamil Nadu
Money-Lenders Act, 1957 (Tamil Nadu Act XXIV of 1957) the Tamil Nadu Debt
Relief Act, 1972 (Tamil Nadu Act XXXVIII o 1972), the Tamil Nadu Debt Relief
Act, 1976 (Presidents Act XXXI of 1976), the Tamil Nadu Debt Relief Act, 1979
(Tamil Nadu Act XL of 1979) or in any other law for the time being in force or
in any contract or instrument having force by virtue of any such law and save
as otherwise expressly provided in this Act, and in particular sub- section(2)
with effect on and from the commencement of this Act-
(a) every
debt advanced or incurred before the first day of January, 1980 (including
interest, if any) and payable by the debtor to the creditor shall be deemed to
be wholly discharged.
(b) no
Civil Court shall entertain any suit or other
proceeding against the debtor for the recovery of any amount of such debt
(including interest, if any);
Provided
that where any suit or other proceeding is instituted jointly against the
debtor and any other persons, nothing in this section shall apply to the
maintainability, of such suit or proceeding in so far as it relates to such
other person;
(c) all
suits and other proceeding (including appeals, revisions, attachments or
execution proceedings) pending at the commencement of this Act against any
debtor for the recovery of any such debt (including interest, if any) shall
abate;
Provided
that nothing in this clause shall apply to the sale, in respect of any such
debt of (i) any movable property held and concluded before the commencement of
this Act (ii) any immovable property confirmed before such commencement.
(d)
every debtor under going detention in a civil prison in execution of any decree
for money passed against him a Civil Court in respect of any such debt
(including interest, if any) shall be released;
(e) every
movable property pledged by a debtor shall stand released in favour such debtor
and the creditor shall be bound to return the same, to the debtor forthwith;
(f) every
mortgage executed by the debtor in favour of the creditor shall stand redeemed
and the mortgaged property shall be released in favour of such debtor.
Explanation : Nothing in this section shall be
construed as entitling any debtor for refund of any part of any debt repaid or
interest paid already by him or recovered from him before the commencement of
this Act.
(2)
Nothing contained in this Act shall apply to any debtor who is entitled to the
benefits of the Tamil Nadu Debt Relief Act, 1976 (Presidents Act XXXI of 1976)
only in so far as any debt to which the Act applies, is concerned.
Section
5 makes provision for the debtors to make application for the return of the
movable property pledged by them. In sub-section (1)(a) it is laid down that
every debtor referred to in clause (e) of sub-section (1) of section 4 shall
make an application in such form and containing such particulars as may be
prescribed to the Tahsildar having jurisdiction over the area where his
creditor has his ordinary place of business for an order for the return of the
movable property pledged by the debtor.
In
sub-section(2) of the said section power has been vested in the Tahsildar to
pass an order after giving a reasonable opportunity to the creditor concerned
and the debtor to make their representations for return of the immovable
property pledged by the debtor if he is satisfied that the debtor is entitled
to relief under section 4 and to pass an order dismissing the application if he
is satisfied that the debtor is not entitled to such relief.
Under
sub-section(3) it is laid down that where the Tahsildar has passed an order
under sub-section(2) dismissing the application the creditor may subject to the
provisions of sub-section (3) of section 8, dispose of in accordance with the
provisions of the Tamil Nadu Pawnbrokers Act, 1943 (Tamil Nadu Act XXIII of
1943) or any other law for the time being in force relating to the sale of
pledged articles, the movable property for the return of which the said
application was made.
In
clause (d) of sub-section(3) it is provided that where any debtor referred to
in clause (e) of sub-section (1) of section 4, has not made any application in
accordance with the provisions of and within the time specified in sub-
section(1), then, such debtor shall not be entitled to relief under this Act.
The
Act, as noticed earlier, is intended for giving relief to a certain class of
indebted persons in the State. For that purpose procedure has been laid down in
the Act for filing of application and for dealing with the same. The Tahsildar
is vested with the power to decide whether the applicant-debtor is entitled to
relief under the Act and if he is satisfied that the applicant-debtor is
entitled to such relief, he is to pass an order releasing the mortgaged
property and granting a certificate of redemption in the prescribed form. The
said certificate is to be taken as admissible evidence of such redemption in
any proceeding before any Court or other authority. If, on the other hand, the Tahsildar
finds that the applicant-debtor is not entitled to the relief under the Act he
is to pass an order dismissing the application. Finality is attached to the
order of the Tahsildar subject to the appeal under section 8 of the Act.
Further, the order passed by the Tahsildar is not to be questioned in any
Court. A similar provision is made that the order of the appellate authority
shall be final and shall not be questioned in any Court.
From
the provisions of the Act the legislative scheme is clear that the scheme is
not to allow interference by any Court with determination of the question of
eligibility to receive benefit under the Act by the applicant-debtor by the Tahsildar
and his order is made final subject to an appeal under section 8. The
legislative intent is to vest the jurisdiction to determine the question
relating to eligibility for the benefits under the Act in the statutory
authorities, to the exclusion of the Court so that a debtor who is entitled to
the benefits under the Act is able to enjoy such benefit without a hassle of a
protracted litigation in a civil court or revenue court. The view taken by the
High Court that if a civil suit for realisation of the amount or any other
relief based on the debt in question has been filed or on the filing of such a
suit the Tahsildar would lose his jurisdiction to deal with the matter if
accepted will defeat the very purpose for which the legislature enacted the
statute, that is, to grant relief to a certain class of debtors. If the view
taken by the High Court is accepted then it would be easy for a creditor to
prevent the debtor from getting benefits granted under the Act by filing civil
suit relating to the debt. On the other hand in section 4(b) a declaration is
made that any Civil Court which entertain any suit or other proceeding against
the debtor for recovery of any amount of such debt (including interest, if
any); all suits and other proceedings (including appeals, revisions,
attachments or execution proceedings) pending at the commencement of this Act
against any debtor for the recovery of any such debt, (including interest, if
any) shall abate.
The
principle is well settled that an interpretation of the statutory provision
which defeats the intent and purpose for which the statute was enacted should
be avoided. The decision of the Madras High Court in K.V.S.P Subramanian case
(supra), holding that since the creditor had already filed suits for recovery
of the mortgage amount and the suits were pending, the debtor, who is the
defendant in those suits, has to seek adjudication before the Civil Court on
the question as to whether he is entitled to the benefit and if the Court comes
to the conclusion that he is entitled to the benefit of the Act then the Court
has to dispose of the suit in accordance with section 4 of the Act, in our
view, does not lay down the law correctly. Accepting this view will render the
provision regarding abatement of the suit redundant.
We are
conscious of the position that the view taken by the Division Bench of the
Madras High Court in K.V.S.P.Subramanian case (supra) has held the field for a
good length of time. But as discussed earlier, the decision runs counter to the
very intent and purpose for which the enactment was made. In such a situation
the decision needs to be corrected and this has to be done despite the lapse of
time.
The
further question that arises for consideration is what is the appropriate
course to be followed in a suit which was filed by the creditor against the
debtor before the debtor made the application to the Tahsildar seeking relief
under the Act; should it be dismissed immediately on filing or should it be
suspended/stayed till the Tahsildar disposes of the application filed by the
debtor. It is our view that in such a case the proper and reasonable course to
be followed is to stay the proceeding in the suit till the Tahsildar/appellate
authority disposes of the proceeding under the statute. If it is held in that
proceeding that the debtor is not entitled to the benefit under the Act then
the civil suit may be proceeded with, if on the other hand it is held that the
debtor is entitled to the benefits provided in the Act then the suit has to be
dismissed under section 4. In no case can it be held that by filing a civil
suit for realisation of the mortgage amount the proceeding pending before the Tahsildar
or the appellate authority is to be dismissed without adjudication.
On the
discussions in the foregoing paragraphs the inescapable conclusion is that the
judgment of the learned single judge as confirmed by the Division Bench is
unsustainable. Accordingly, the appeal is allowed. The Judgment under challenge
is set aside. Hearing fee is assessed at Rs.10,000/-.
We are
beholden to Shri S.Ganesh, Senior Advocate for the assistance rendered to us in
the case.
...J.
(D.P.Mohapatra)
......J.
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