Judgment : The appellants are aggrieved by the order of the Courts below, by which adjudication of the respondents 1 and 2 as insolvents, was set aside invoking Section 35 of the Provincial Insolvency Act. It is not in dispute that the respondents 1 and 2 were adjudicated as insolvents by an order made on 18. 2. 1977. The courts below have ordered annulment of that order on the ground that the debts owed by the insolvents on the date of adjudicate on to the petitioning creditors were wiped out by reason of the enactment of Tamil Nadu Debt Relief Act (Act 13 of 1980) which came into force with effect from 2. 1980. 2. The argument advanced for the appellants is that once the order of adjudication is made, the state of the insolvent is vested with the Official Receiver and thereafter the insolvent cannot claim any right in respect of the estate and the insolvent is therefore, prevented from invoking the provision of subsequent enactment though it would have been applicable to such insolvent had he not been declared as insolvent. Learned Counsel for the appellants relied upon a decision of Allahabad High Court, in the case of Kripa Nath v. Ganga Prasad , A.I.R.1962 All. 256 in support of his submission. It was held in that case that, “vesting of a property in the court or the receiver not only gives the courts or the receiver the right to take possession of the property and deal with it in a certain manner, but amounts to a legal transfer of the right, title and interest of the insolvent to the court or to the receiver as the case may be”. 3. Learned counsel, appearing for the respondents, on the other hand, submitted that Sec.35 of the Provincial Insolvency Act enables the insolvent to obtain annulment of the order of adjudication not only when the order of adjudication, in the opinion of the court, ought not to have been made, but also when the debts of the insolvent have been paid in full. Such ‘payment’ it was submitted, need not be actual payment resulting in the discharge of the debts, but would also cover cases of discharge brought about without actual payment of the debt, by reason of the operation of law, and even if the enactment was subsequent to the debt, provided the debt continued to subsist at the time, the enactment come into force. 4. Section 35 of the Provincial Insolvency Act reads as follows:- “Power to annual adjudication of insolvency; where, in the opinion of the court a debtor ought not to have been adjudged insolvent or where it is proved to the satisfaction of the court that the debts of the insolvent have been paid in full, the court shall on the application of the debtor or of any other person interested; by order in writing annul the adjudication and the court, may of its own motion or on application made by the receiver or any creditor, annul any adjudication made on the petition of a debtor who was, by reason of the provisions of sub-section (2) of Section 10 not entitled to present such petition.” The legislative intention in enacting Sec.35 of the Act is to vest power in the court to annul an order adjudicating a person as insolvent, if the order of adjudication was made without jurisdiction or there was illegality in the procedure adopted or it was obtained fraudulently or for like reasons; and in cases where it is provided to the satisfaction of the court that the debts of the insolvent have been paid in full. 5. The reason for a person being declared an insolvent is the inability on his part to pay his debts. Where the debt ceases to exist by reason of payment in full or on account of statutory discharge without payment, there is no ‘inability’ to day, continuing to treat such a person as insolvent would be wholly opposed to the policy of the Act. 6. Where the debt ceases to exist by reason of payment in full or on account of statutory discharge without payment, there is no ‘inability’ to day, continuing to treat such a person as insolvent would be wholly opposed to the policy of the Act. 6. The words ‘paid in full’ used in S.35 emphasis the fact that at the time debtor seeks annulment, the applicant should no longer be in the position of ‘debtor’ viz’ that he is not a person who owes money to a creditor who in law is entitled to enforce the recovery of the same.” The word “debt” in the Section can only refer to the debt lawfully recoverable and not to any other sum. 7. Even after the estate of the insolvent vests in the Official Receiver, the debts which the receiver is empowered to discharge from and out of the amount realised to the credit of the estate are the debts which had been incurred by the insolvent, and not any other debts. The debts incurred by the insolvent are therefore to be discharged from the amounts realised for the benefit of the estate, for which purpose the estate is vested with the Receiver. By reason of the order of adjudication of the insolvent, the creditors of the insolvent cannot initiate or continue to proceed against the insolvent personally. The creditors of the insolvent can only bring their claims before the Official Receiver who is empowered to adjudicate the same and discharge these debts to the extent to which payment can be made from the funds available in the estate of the insolvent. Secured creditors may however enforce their securities to recover the amounts due from the insolvent. 8. As the debts owed by the insolvent continue to be the debts of the insolvent, even after the estate vests with the Official Receiver the benefits of subsequently enacted legislation wiping off the debts cannot be denied to the insolvent merely on the ground that the estate of the insolvent has vested in the Official Receiver. By the operation of subsequently enacted law, the debt ceases to exist and the creditor cannot make or enforce a claim before the Receiver nor can the Receiver recognise such a claim or debt whose existence has been erased by the operation of law. 9. By the operation of subsequently enacted law, the debt ceases to exist and the creditor cannot make or enforce a claim before the Receiver nor can the Receiver recognise such a claim or debt whose existence has been erased by the operation of law. 9. The Debt Relief Act is a beneficial legislation and the terms of that enactment, having regard to its object, are required to be construed liberally. The Act is intended to benefit persons who fall within the scope of the term ‘debtor’ as defined in the Act. If such debtor had become insolvent at the time the enactment was brought into force, his debts-if they continue to exist on the date of enforcement of the statute would still be a debt in respect of which the beneficial provision of the enactment w ould operate. The insolvent qualifies as a debtor for the purposes of the Debt Relief Act as the debts continues to be his, even though recovery can only be through the Official Receiver provided he fulfills the other conditions stipulated in the Act. 10. Similar view has been taken by a learned single Judge of Andhra Pradesh High Court, in the case of Padmavathamma v. Official Receiver , 1993 (1) ALT 143, relied upon by the learned counsel for the respondents. 11. The Courts below are, therefore, right in holding that the debt of the insolvent was wiped out by reason of the Tamil Nadu Debt Relief Act, Act 13 of 1980 and the order of adjudication was therefore required to be annulled. 12. In the result, the appeal fails and is dismissed, but without any order as to costs.