1. The petitioner herein filed an application under Section 6(1) of the Tamil Nadu Act 13 of 1880 hereinafter referred to as the 1880 ACt, before the second respondent claiming benefits under the 1980 Act, and seeking a certificate of redemption in respect of a mortgage debt of Rs. 2200 which she had borrowed from the third respondent herein, on a mortgage of her property. In those proceedings the creditor remained ex parte and the second respondent , Tahsildar, treating the application as one filed under the Tamil Nadu Act 21 of 1976, hereinafter referred to as the 1976 Act, dismissed the same on the ground that the loan was obtained on 19-3-1972, that the petitioner was a small farmer and that as such she was not entitled to any benefits under the 1980 Act. The matter was taken up in appeal to the first respondent by the petitioner. The first respondent took the view that as the mortgage loan was obtained for the purchase of three certain other lands, the loan amount should be taken to represent the price of immovable property purchased by the petitioner-debtor and that therefore it was not a debt within the meaning of the Debt Relief Act, but one exempted by the provisions in S. 12 (d) of the 1980 Act. The first respondent also held that since the loan was incurred in the year 1973, prior to the commencement of the 1976 Act, the petitioner-debtor, who owned more than one unit of land was not entitled to the benefits of that Act. The said decision by the appellate authority has been challenged by the petitioner-debtor in the present writ petition on the ground that the authorities below have erred in proceeding on the basis that the petitioner has claimed benefits under the 1976 Act while the application filed by her was only under S. 6 of the 1980 Act.
2. In this case, the question is whether the order of the appellate authority is liable to be quashed by this court as arbitrary and illegal. The reasons given by the first respondent - the appellate authority for rejecting the petitioner's claim for benefits under S. 6 of the 1980 Act are -
1. that the debt in question is one of the exempted debts set out in S. 12 (e) and that therefore the petitioner is not entitled to claim the benefit in respect of the said debt;
2. that the debt having been incurred in 1972, prior to the commencement of 1976 Act, the case of the petitioner has to be dealt with only under the 1976 Act, and
3. that the petitioner owns more than one acre of double crop land and that therefore her total holding exceeds one unit and she is not entitled to the benefit under the 1976 Act.
It is seen that the mortgage debt was incurred by the petitioner for purchasing some other lands. Though the petitioner originally disputed the fact that the money was borrowed for purchase of lands, the recital in the document clearly indicated that the mortgage debt was incurred by the petitioner only for purchasing other lands. The first respondent has taken the view that since the loan was taken for the purpose of purchasing an immovable property, it should be taken to be the purchase price of the property purchased by the petitioner. We are not inclined to agree with the said view of the first respondent. The fact that the borrowing was for the purpose of enabling the petitioner to purchase an immovable property does not make the debt as one representing the purchase price of the property. Normally purchase price is payable to the vendor and the debt can be said to represent the purchase price is payable to the vendor and the debt can be said to represent the purchase price only if the consideration for the sale due to the vendor is outstanding. In this case, merely because the loan was taken for the purchase of immovable property, the said loan amount cannot be taken to represent the purchase price of the property purchased by the petitioner. The object for which the loan was taken cannot make the debt as one representing the sale price of the property purchased. Therefore the said reasoning of the first respondent is legally untenable.
4. Once the debt is found to be a debt covered by the 1980 Act, then the question will arise whether the petitioner is entitled to the benefits of the 1980 Act. The first respondent has taken the view that since the debt in question is prior to 1976, it should be dealt with only under the 1976 Act. We do not see any support for the view from the provisions of the 1980 Act. No distinction is made between pre-1976 debt and post-1976 debt for the purpose of application of the 1980 Act. No distinction is made between pre-1976 debt and post-1976 debt for the purpose of application of the 1980 Act. It is no doubt true that S. 4(2) of the 1980 Act states that where a debtor is entitled to claim the benefits of the 1976 Act, he cannot claim the benefits of the 1980 Act. That provision in terms cannot be understood as making a distinction between pre-1976 debts, as has been interpreted by the first respondent.
5. For the application of the 1980 Act, one has to consider whether the debtor is barred by the provisions of S.4(2) of the 1980 Act, to claim the benefits under the 1980 Act. It is in the light of that provision, we have to find out whether the petitioner can claim the benefits of 1980 Act and whether the 1976 Act is a bar so far as she is concerned. The appellate authority has specifically found that the petitioner owns one acre of double crop wet land and 1.33 acres of dry lands, totaling more than one unit of land S. 3(1) of the 1976 Act defines 'small farmer' as a person owning less than one unit of land, if he does not belong to any of the scheduled tribes. Therefore, the debtor in this case is not a small farmer, who has borrowed or incurred a debt before the commencement of the 1976 Act. On the finding of the first respondent himself that the petitioner is not a small farmer, as she is holding more than one acre of wet land, she is not a debtor as defined in the 1976 Act, and she is not entitled to claim any benefit under the 1976 Act. Hence S.4(2) of the 1980 Act is not a bar for the petitioner claiming the benefits under the 1980 Act.
6. In this view, we allow the writ petition and quash the proceedings of the first respondent, with a direction to the first respondent to decide the appeal afresh in the light of the observations made above. There will be no order as to costs.
7. Petition allowed.