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1978 DIGILAW 25 (KER)

NARAYANAN v. ELUNNY

1978-01-23

K.K.NARENDRAN, V.BALAKRISHNA ERADI

body1978
Judgment :- 1. The appellant before us purchased in a court auction sale held in execution of the decree passed in O.S. No. 147 of 1969 on the file of the Sub Court, Trichur the equity of redemption over the decree schedule properties which were subject to a mortgage in enforcement of which the mortgagee had already obtained a decree in O.S. No 193 of 1971 of the same court When the mortgagee applied for sale of the property in execution of the mortgage decree the appellant applied to the executing court as per E A. No. 723 of 1976 for a stay of the proceedings under S.3 of the Kerala Debtors (Temporary Relief) Act, 19 5 Act 30 of 1975. In that application he contended that he is a "debtor" within the meaning of the Act and that the liability due under the mortgage decree falls squarely within the definition of the expression "debt" contained in S.2 (4) of the said Act and hence the proceedings are liable to be stayed. The lower court dismissed the application on the ground that even though the appellant (applicant) has become entitled to the rights of the mortgagor by virtue of the court auction purchase in O.S. No. 147 of 1969, inasmuch as there was no contract between the applicant and the decree-holder and their relationship was only one through property, the applicant cannot be regarded as a person who is liable to pay the mortgage debt to the mortgagee-decree-holder. In the view of the learned Subordinate Judge there should exist a personal liability on the part of the applicant if he is to be regarded as a "debtor" for the purpose of Act 30 of 1975. The correctness of this view is called in question by the appellant in this appeal. 2. In the view of the learned Subordinate Judge there should exist a personal liability on the part of the applicant if he is to be regarded as a "debtor" for the purpose of Act 30 of 1975. The correctness of this view is called in question by the appellant in this appeal. 2. The expression "debtor" has been defined in S.2(5) of the Act as follows: "(5) "debtor" means any person who has an interest, other than as a simple mortgagee, in any agricultural land in the State of Kerala, from whom any debt is due and includes (a) a landless labourer; (b) an artisan, and (c) a kudikidappukaran, but does not include (i) any person assessed to sales-tax on a turnover which in the aggregate is not less than twenty thousand rupees in any two years within the three years immediately preceding the commencement of this Act, under the Kerala General Sales Tax Act, 1963, or the Central Sales Tax Act, 1956, or the law of any other State relating to sales tax; [ii] any person assessed to income-tax under the Income-tax Act, 1961, in any two years within the three years immediately preceding the commencement of this Act and whose total income for the purposes of the said Act exceeded eight thousand rupees per annum [iii] any person assessed to agricultural income tax in any two years within the three years immediately preceding the commencement of this Act, under the Agricultural Income-tax Act, 1950, or under any other law relating to agricultural income-tax, on an income exceeding eight thousand rupees per annum. Explanation: -Notwithstanding anything contained in the Indian Evidence Act, 1872 where a creditor proves that his debtor is a person assessed to the tax mentioned in sub-clause [i] or sub-clause [ii] or sub-clause [ii] for the period referred to in that sub-clause, the burden of proving that such debtor does not fall under the category specified in that sub-clause shall lie on the debtor; [iv] a firm registered under the Indian Partnership Act, 1932, or a company as defined in the Companies Act, 1P56, or a corporation formed in pursuance of an Act of Parliament of the United Kingdom or of any special Indian Law Explanation: For the purposes of this clause, the term "person" shall include a family, provided that sub-clauses [i] to [iii], in their application to a family consisting of not less than five members, shall have effect as if for the turnover, total income or income specified therein, twice such turnover, total income or income, as the case may be, were substituted;" The question for decision is whether the words "from whom any debt is due" would take in only persons who have a personal liability to pay up the debt. The identical question had come up for consideration by this Court in Rahina Beevi v. Liquidator (1957 K.L.T. 809). In that case speaking for the Division Bench consisting of himself and Mr. Justice Vaidialingam, Koshi C J. after referring to the decision of the Supreme Court in Nageswaraswami v. Viswasundara (AIR. 1953 SC 370) as well as the ruling of a Division Bench of Madras High Court in Perianna Goundan v. Sellappan Goundan (AIR 1939 Madras 186) held that in using the words "due form an agriculturist" in S.2(b) of the Indebted Agriculturists Relief Act (III of 1956 TC.) in using the words it could not have been the intention of the Legislature to limit the relief under the Act to cases where a person was personally liable for the debt. The same view has been reiterated in a later ruling of a Division Bench of this Court reported in Varghese v Palai Central Bank Ltd (1959), KLT. 955). In that case the 3rd defendant, who was the appellant before the High Court, had become the owner of the equity of redemption in a mortgaged property by virtue of a purchase effected subsequent to the creation of the mortgage. 955). In that case the 3rd defendant, who was the appellant before the High Court, had become the owner of the equity of redemption in a mortgaged property by virtue of a purchase effected subsequent to the creation of the mortgage. Dealing with the question whether he could be said to be a "debtor" for the purpose of Kerala Act 31 of 1958 the learned judges following the dictum laid down by this Court in Rahina Beevi v. Liquidator (1957 KLT. 809) held that the liability of the property, of which the 3rd defendant had become the purchaser, was sufficient to attract the definition. 3. The learned Advocate appearing for the respondent relied strongly on an unreported decision of a Division Bench of this Court in E.F.A. No. 54 of 1976 as lending support to bis contention that the appellant herein who has purchased the equity of redemption under the mortgage during the pendency of the proceedings in the mortgage suit cannot be regarded as a "debtor". We have carefully gone through the judgment of the Division Bench and we find that the dictum laid down therein is only to the effect that a person who had entered into a voluntary transaction of purchase of a property attached in execution of a simple money decree cannot be said to get the status of a 'debtor' in relation to the decree debt. It was so held because the purchase effected during the subsistence of the attachment was hit by S.64 of the Civil Procedure Code and would not hold good against the decree holder and secondly the decree that was under execution was only a simple money decree and the mere producing of an item of property under attachment did not create a nexus as between the purchaser and the decree debtor since the property was not charged with the liability of satisfying the decree The question canvassed before the Division Bench was whether the purchaser being an assignee from the judgment debtor was not entitled to be regarded as a "debtor" and it was rightly answered by the Division Bench in the negative. We are not concerned with any such question in the present case. We are not concerned with any such question in the present case. Here, the appellant before us acquired the equity of redemption in respect of the mortgaged property by purchase in court auction sale and by virtue thereof he has now become the owner of the properties which are sought to be sold in execution of the mortgage decree. The liability under the decree being charged on the properties belonging to the appellant, the case before us is directly governed by the principles laid down in the two earlier Division Bench rulings reported in Rahina Beevi v. Liquidator (1957 KLT. 809) and Varghese v. Palai Central Bank Ltd. (1959 KLT. 955). We accordingly hold that the lower court was in error in holding that the appellant is not a "debtor" entitled to claim relief under S.3 of the Kerala Act 30 of 1975.- The order under appeal is accordingly set aside. The proceedings taken in the court below for bringing the mortgaged property to sale during the period of operation of a statutory stay imposed by S.3 of the aforementioned Act must be regarded as null and void. Since the Kerala Debtors (Temporary Relief) Act, has subsequently been repealed and there is no statutory bar to the proceedings being now proceeded with, it will be open to the decree-holder to bring the mortgage properties to sale afresh in execution of the mortgage decree. The parties will bear their respective costs. Allowed.