1. This writ petition coming on for hearing on this day upon perusing the petition and the affidavit filed in support thereof the order of the High Court, dated 29-5-1981 and made herein and affidavit filed herein and the records of the respondent relating to the order in proceedings No. N. K. 7/81 May 81 pending before the second respondent filed by the 3rd respondent against the petitioner comprised in the return of the respondents to the writ made by the High Court, and upon hearing the arguments of Mr. A. Subrahmanya Iyer, Advocate for the petitioner and of Mr. S. Jagadeesan for Government Pleader on behalf of the respondents 1 and 2 and the 3rd respondent not appearing in person or by advocate, the Court made the following order :
The petitioner herein advanced a sum of Rs. 3000/- to the 3rd respondent on a mortgage of his property. In respect of that debt, the 3rd respondent filed an application before the Special Tahsildar (Debt Relief) Chengalpattu, claiming the benefits under section 6 of Tamil Nadu Act 13 of 1980 and also a certificate of discharge in relation to the said mortgage debt. It is at this stage that the petitioner, who is the creditor, has approached this court for the issue of a writ of declaration declaring Tamil Nadu Act 13 of 1980 as unconstitutional. The validity of the Act has been upheld already by a Division Bench of this court in W. P. No. 6351 of 1980 etc., batch (Judgment dated 10-12-1981).
2. Taking note of the fact that the validity of the act has been upheld by this court, the learned Counsel for the petitioner contends that the mortgage debt in this case is a debt exempted from the provisions of the Act under S. 12 (1) Section 12 (1) is 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 of property whether movable or immovable purchased by a debtor or any amount due under a hire-purchase agreement.'
3. According to the learned counsel for the petitioner, the sum of Rs. 3000/- advanced by him was to salvage the property from the clutches of an earlier creditor who wanted to bring the property to sale in Court auction and but for his advancing the sum of Rupees 3,000/- as loan the entire property would have been lost to the debtor and therefore, the sum of Rs. 3,000/- advanced by him, though on a mortgage of the 3rd respondent's property, should be taken to be purchase price as contemplated by Section 21 (1). Even assuming that the loan advanced by the petitioner to the 3rd respondent was to save the property from being sold in court auction at the instance of an earlier creditor, still we do not see how it can be treated as purchase price of the property.
In this case, there is no question of any purchase of the property by the debtor and the amount advance to him by the petitioner representing a portion of the purchase price. The above clause of exemption will apply only if the full or a portion of the purchase price payable by the debtor is retained by him and not in a case where the debtor borrowed for safeguarding his property or saving the property from being sold in Court auction sale. We are, therefore, of the view that the debtor in this case cannot come within the exemption provided in section 12 (1). However, in this case, there is so far no decision by the Special Tahsildar holding that the 3rd respondent is entitled to the benefits of the Act. The application before the Tahsildar is still pending. Therefore, the 3rd respondent has to prove his entitlement for the benefits of the Act before the Tahsildar where the application under S. 6 is said to be pending.
4. The Writ Petition is dismissed. The dismissal of the writ petition, however, will not prejudice the petitioner in establishing his case that the debtor, the 3rd respondent, is not entitled to the benefits of the Act, before the Tahsildar concerned. There will be no order as to costs.
5. Petition dismissed.