Judgment :- 1. Omitting clauses (a) to (n), S.2(3) of the Kerala Debt Relief Act, 1977 defines "debt" as follows: "debt" means any liability in cash or kind, whether secured or unsecured, due from or incurred by a debtor on or before the date of commencement of this Act, whether payable under a contract, or under a decree or order of any court, or otherwise, and subsisting on that date, but does not include" S. 2(4) defines "debtor" and it reads: " "debtor" means any person whose annual income does not exceed three thousand rupees, from whom any debt is due, but does not include (i) any person from whom debt or debts exceeding three thousand rupees (excluding interest) is or are due; (ii) a firm registered under the Indian Partnership Act, 1932, or a company as defined in the Companies Act, 1956, or a corporation formed in pursuance of an Act of Parliament of the United Kingdom or of any special Indian Law. 'Explanation. For the purpose of this clause, the term "person" shall include a family;" The main question to be considered in this Civil Revision Petition is whether the word "debt" used in S.2(4)(i) should be understood in its ordinary or popular sense, or whether it should be understood in the sense given to it by S.2(3). 2. The petitioner is the judgment-debtor. When execution was taken out, he contended that he was a debtor entitled to the benefit of S.3 of Act 17/77. The decree-holder pointed out that the total indebtedness of the petitioner exceeded three thousand rupees. The petitioner's case is that the assessment of his total indebtedness takes in an amount due to the Syndicate Bank, that a liability of that kind is not a debt as defined in S.2(3) because of the exclusions in clauses (a) to (n) thereof, and that if that liability is excluded, the rest of his indebtedness is less than three thousand rupees. The court below held that the term "debt" in S.2(4) should be given its ordinary meaning and not the restricted meaning given in S.2(3). In this view, it found that the petitioner was not a debtor as his total indebtedness exceeded three thousand rupees. It is the correctness of this view that is now under challenge. 3.
The court below held that the term "debt" in S.2(4) should be given its ordinary meaning and not the restricted meaning given in S.2(3). In this view, it found that the petitioner was not a debtor as his total indebtedness exceeded three thousand rupees. It is the correctness of this view that is now under challenge. 3. There is a direct decision against the petitioner on this point, by my learned brother Viswanatha Iyer J., in Baby v. Sidhardhan (1979 KLT. 869). Counsel for the petitioner suggests that the view taken therein requires reconsideration. 4. Shorn of details, a debt as defined in S.2(3) is a liability incurred by a debtor; and S.2(4) defines 'debtor' as a person whose annual income does not exceed three thousand rupees and whose debt also does not exceed the said amount. It is contended that when a term is defined in a statute, the special meaning given to that term by the legislature in the definition clause should apply to the understanding of that term wherever it is used elsewhere in the statute. This is a well-recognised rule of interpretation; the purpose of any definition is to provide a special dictionary for that term for the purposes of the enactment. But that rule cannot be usefully applied to the definitions in S.2 (3) and S 2 (4), because debt is defined as a liability incurred by a debtor, and debtor is defined as a person from whom a debt is due. To understand what a debt is one has to understand who a debtor is; and to understand who a debtor is, one has to fix up what a debt is. This is what Viswanatha Iyer J. has characterised as "arguing in a vicious circle". The normal rule of interpretation referred to by counsel for the petitioner therefore breaks down in this case. 5. The only possible approach is to find out what exactly the intention of the legislature was, in framing the statute; and the preamble provides the key to this question. The Act was passed because the legislature thought that it was "expedient to provide relief from indebtedness to certain persons in the State of Kerala".
5. The only possible approach is to find out what exactly the intention of the legislature was, in framing the statute; and the preamble provides the key to this question. The Act was passed because the legislature thought that it was "expedient to provide relief from indebtedness to certain persons in the State of Kerala". S.3 gives effect to this intention by providing that every debt payable by a debtor to a creditor shall be deemed to be wholly discharged, that no civil court shall entertain any suit or other proceedings against the debtor for the recovery of any debt, that all such suits and proceedings pending at the commencement of the Act against any debtor shall abate, that every debtor undergoing detention in civil prison in execution of a decree for a debt shall be released and that properties pledged or mortgaged by a debtor shall stand released or redeemed, as the case may be. The emphasis in S.3 is on the debtor. Read along with the preamble, the position seems to be that the legislature wanted to relieve certain persons in the State from indebtedness by putting an end to all proceedings against them for enforcement of certain types of liabilities, and preventing institutions of fresh proceedings. The thrust of the whole legislative scheme is towards the granting of relief to certain persons who are indebted; and the primary task is therefore to find out who those persons are. The vicious circle referred to earlier should therefore be broken by making a beginning at this point. Obviously, the legislature does not want to relieve all indebted persons from their liabilities. It has placed a limit on the extent of indebtedness which qualifies or disqualifies a person from claiming relief under the Act. It is that limit that is referred to in clause (i) of S.2 (4). As already noticed, a debtor under S.2 (4) is one who has to satisfy two tests: (1) his annual income should not exceed three thousand rupees; and (2) he should not be a person from whom debt or debts exceeding three thousand rupees are due.
It is that limit that is referred to in clause (i) of S.2 (4). As already noticed, a debtor under S.2 (4) is one who has to satisfy two tests: (1) his annual income should not exceed three thousand rupees; and (2) he should not be a person from whom debt or debts exceeding three thousand rupees are due. The fixation of qualification with reference to the annual income of a person, as also the extent of his total indebtedness, makes it clear that the class of persons the legislature wants to protect is that class whose annual income and whose capacity to incur debts are within a low limit. In other words, the legislature does not want to protect persons with larger incomes whose capacity to incur debts will be higher So understood, the purpose of clause (i) of S.2(4) seems to be to draw an arbitrary line between those who should get the protection of the Act and those who should not. In drawing that line, it cannot be presumed that the legislature wanted to go by the restricted meaning given to the term 'debt' in S.2(3), and thereby bring in persons whose indebtedness is adjudged with reference to the character of their creditors, and not with reference to the capacity to incur and discharge liabilities. The intention is to exclude persons whose total indebtedness is above three thousand rupees whatever be the nature of the liability. 6. Mr. Ejman points out that the Act is a beneficial piece of legislation, and the attempt should be to bring in as many persons as possible within the purview of the term "debtor". If debts excluded by clauses (a) to (n) of S.2(3) are also excluded for the purpose of assessing the indebtedness of a person in the aggregate, possibly, a larger number of people could be benefited by the provisions of the Act. But this contention is to be balanced against the equally well-recognised rule that expropriatory provisions should be strictly construed. It cannot be disputed that the Act is expropriatory so far as the operation of S.3 is concerned. The section wipes out debts.
But this contention is to be balanced against the equally well-recognised rule that expropriatory provisions should be strictly construed. It cannot be disputed that the Act is expropriatory so far as the operation of S.3 is concerned. The section wipes out debts. And in its anxiety to extend the statutory protection to more and more people, no court could apply a rule of interpretation which, as noticed earlier, would make it almost impossible to correlate the two definition clauses I see no grounds to differ from the view taken by Viswanatha Iyer J. with which I am in respectful agreement. 7. A subsidiary contention raised is that a liability becomes a debt as per S.2 (3) only after it has become due, f. e. atleast, only after a demand has been made by the creditor. It is pointed out that one of the petitioner's creditors has not made any demand at all, and that the amount payable to that creditor should also go out of the reckoning for the purpose of S.2 (4). The definition clause shows that any liability due from or incurred by a debtor and subsisting on the date of commencement of the Act, is a debt. It is not necessary that in all cases the debt should become due; it is sufficient if the liability has been incurred and it subsists on the crucial date. That apart, in the view that I have taken that S.2 (4) only attempts to classify persons entitled to the benefit of the Act by drawing an outer limit of three thousand rupees, both as regards income and indebtedness, the proper question to be asked will be whether the debtor concerned has an admitted liability, and not whether it is ripe for being discharged. This Contention also therefore fails. The CRP. is therefore dismissed. Parties will however bear their own costs. Dismissed.