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1987 Supreme(Ker) 286
Judges : T.KOCHU THOMMEN
Chinna - Appellant
Versus
Sivarama Mudaliar - Respondent
Case No : S.A. No. 1069 of 1981-D
Decided On : 07/09/1987
Advocates Appeared :
C.M. Devan; A.M. Shaffique; For Appellant
The inclusion of notional income in identifying a 'debtor' under the Kerala Debt Relief Act, 1977 is unwarranted, and the Act does not postulate the inclusion of notional income in determining the status of a 'debtor'.
Headnote:
Debt Relief Act - Hypothecation Bond - Interpretation of 'Debtor' - Notional Income
Fact of the Case:
The defendant owed money under a bond and claimed benefit under the Kerala Debt Relief Act, 1977. The lower appellate court decreed the suit by adding notional income to the actual income of the defendant, which was disputed by the appellant.
Finding of the Court:
The trial court's determination of the defendant's income, excluding notional income, qualified the defendant as a 'debtor' under the Act, and the debt was wholly discharged. The lower appellate court's inclusion of notional income was deemed unwarranted.
Issues: Interpretation of 'debtor' under the Kerala Debt Relief Act, 1977 and the relevance of notional income in identifying a 'debtor'.
Ratio Decidendi: The Debt Relief Act does not postulate the inclusion of notional income in identifying a 'debtor'. Excluding notional income, the defendant qualified as a 'debtor' under the Act, and the debt was wholly discharged.
Final Decision: The decree of the lower appellate court was set aside, and that of the trial court was restored. The appeal was allowed with no costs.
1. The defendant in a suit for recovery of money on the strength of an hypothecation bond is the appellant. It is no longer in dispute that the defendant owed money under Ext.A1 bond dated 10-4-1975 for a sum of Rs.3,000/-. The defendant claims the benefit under the Kerala Debt Relief Act, 1977 (Act 17 of 1977) (the "Act").
2. Counsel for the appellant Shri. A.M. Shaffique submits that both the courts proceeded on the basis that the actual annual income of the defendant was only Rs.2,990/-. On that basis the suit was dismissed by the trial court holding that the defendant was a "debtor" within the meaning of the Act and the debt was wholly discharged. The lower appellate court, however, decreed the suit by adding to the actual income of Rs. 2,990/ a notional income of Rs.180/- attributed to the house in which the appellant resided in the property which was his sole asset. He submits that that was unwarranted, for the concept of notional income is irrelevant to the definition of "debtor." I am in complete agreement with the argument.
3. The trial court determined the income at Rs.2,990/- by taking into account the profits derived from the property. The building in which the appellant resided did not bring any profit from the property. No notional income could be attributed to the building under the statute. The Debt Relief Act does not postulate the inclusion of notional income in identifying a "debtor." The lower appellate court was, therefore, not justified in taking into account the notional income which it attributed to the building in which the defendant resided. Excluding the notional income, the income of the appellant, as found by both the courts, fell below Rs.3,000/ and he, therefore, in my view, qualified as a "debtor" under the Act and the debt was wholly discharged. In the circumstances, I set aside the decree of the lower appellate court and restore that of the trial court. The appeal is allowed. No costs.
