TAMIL NADU DEBT RELIEF ACT, 1972
This Act may be called the Tamil Nadu Debt Relief Act, 1972.
In this Act, unless the context otherwise requires,-
(1) “creditor” includes his heirs, legal representatives and assigns;
(2) “debt” means any liability in cash or kind, whether secured or unsecured, due from a debtor whether payable under a decree or order of a civil or revenue Court or otherwise but does not include rent as defined in clause (9);
(3) “debtor” means any person whom any debt is due;
Provided that a person shall not be deemed to be debtor, if he, --
(i) has
Nothing in this Act shall affect debts and liabilities of any debtor falling under the following heads. –
(a) any revenue, tax or cess payable to the State Government or any other sum due to them by way of loan or otherwise;
(b) any revenue, tax or cess payable to the Central Government or any other sum due to them, by way of loan or otherwise;
(c) any tax or cess payable to any local authority or any other sum due to them, by way of loan or otherwise;
(d) any liability in respect of any sum due to any co-operative society including a land development bank register
Where an undivided Hindu family other than a marumakkattayam or aliyasantana tarward or tavazhi falls within the purview of any of the provisos to Section 2(3), no person who was a member of the family on the 1st March 1972 shall be deemed to be a debtor for purposes of this Act except Section 12.
Where in an undivided Hindu family other than a marumakkattayam or aliyasantana tarward or tavazhi which is a debtor within the meaning of section 2 (3), any member of the family is not a debtor, then, none of his heirs shall be deemed to be a debtor for purposes of sections 6 to 11 and 15 to 25 of this Act.
Notwithstanding any law, custom, contract or decree of court to the contrary, all debts payable by any debtor on the publication of this Act, shall be scaled down in accordance with the provisions of this Chapter.
No sum in excess of the amount as so scaled down shall be recoverable from him or from any land or interest in land belonging to him, nor shall his other property be liable to be attached and sold or proceeded against in any manner in the execution of any decree against him in so far as such decree is for an amount in excess of the sum as scaled down under this Chapter.
NOTES
S.6 – Debtor cannot claim protection with reference to a decree passed after the commencement of the Act – (1979
Debts incurred before the 1st March 1972, shall be scaled down in the manner mentioned hereunder, namely: --
(1) When any debtor has paid to any creditor twice the amount of the principal whether by way of principal or interest or both, such debt including the principal, shall be deemed to be wholly discharged.
(2) Where the sums repaid by way of principal or interest or both fall short of twice the amount of the principal such amount only as would make up such shortage or the principal amount to such portion of the principal amount as is outstanding, whichever is smaller, shall be repayable.
(3) Subject to the provisions of Sections 18 to 21, nothing con
(1) This section applies to all mortgages executed at any time before the 1st March 1972 and by virtue of which the mortgagee is in possession of the property mortgaged to him or any portion thereof –
(a) where no rate of interest is stipulated for as due to the mortgagee, or
(b) where a rate of interest is stipulated for as due to the mortgagee in respect of the principal amount secured by the mortgage or my portion thereof, in addition to the usufruct from the property or in respect of any other sum payable to the mortgagee by the mortgagor in his capacity as such.
Explanation. – A mortgagee shall be deemed to be in possession of the property mortgaged
Nothing contained in section 7 shall affect, --
(i) any mortgage of the description referred to in sub-section (1) of section 8, except to the extent provided for in that section; or
(ii) any liability for which a charge is provided under section 55, clause (4), sub-clause (b) of the Transfer of Property Act, 1882 (Central Act IV of 1882).
Where a debt payable by any debtor includes any sum decreed as costs by any court, or sums lawfully expended by a mortgagee or other person in order to preserve the property mortgaged, such sum or sums shall be recoverable in addition to the sum recoverable under the provisions of section 7.
All debts which have been scaled down under the provisions of this Act shall, so far as any sum remains payable thereunder, carry from the date up to which they have been scaled down, interest on the principal amount due on that date at the rate previously applicable under law, custom, contract or otherwise or at the rate of nine per cent per annum simple interest whichever is less.
In any proceeding for recovery of a debt, the court shall scale down all interest whether paid or payable on any debt incurred by any debtor on or after the 1st March 1972, so as not to exceed a sum calculated at nine per cent per annum simple interest.
Provided that the Government may, by notification, alter and fix any other rate of interest from time to time.
Explanation I. – For the purposes of this section, the definition of “debtor” in section 2(3) shall be read as if in the first proviso to the said section –
(i) in clause (i) for the expression “31st March 1972” the expression “31st March immediately preceding the date on which the debt is incurred” were substituted;
(ii) in clause (ii) and (ii
Subject to the provisions of section 4 and 5 where in a Hindu family, whether divided or undivided, some of the members liable in respect of a family debt are not debtors’ while others are debtors, the creditor shall, notwithstanding any law to the contrary, be entitled to proceed –
(a) against the non-debtor member or members and his or their share of the family property, to the extent only of his or their proportionate share of the debt; and
(b) against the debtor member or members and his or their share of the family property, to the extent only of his or their proportionate share of the debt which shall be scaled down in accordance with the provisions of this Act.
(1) Where a decree is passed against any debtor in a suit instituted on or after the 1st March 1972, the court shall allow only such costs as would have been allowable if the suit had been filed for the amount of the debt as scaled down in accordance with the provisions of this Act, and wherein any such case a decree has been passed before the publication of this Act the court shall on application by the judgment debtor within six months from the publication of this Act, amend the decree accordingly.
(2) Nothing in sub-section (1) shall apply to any suit instituted on or after the 1st March 1972 and before the publication of this Act in respect of a claim which would be barred by limitation before the date of such publication.
(1) Where before the publication of this Act, a court has passed a decree for the repayment of a debt, it shall, on the application of any judgment debtor who is a debtor within the meaning of this Act, or in respect of a Hindu joint family debt, on the application of any member of the family whether or not he is the judgment-debtor or on the application of the decree-holder within six months from the date of publication of this Act, apply the provisions of this Act to such decree and shall, notwithstanding anything contained in the Code of Civil Procedure, 1908 (Central Act V of 1908), amend the decree accordingly or enter satisfaction, as the case may be:
Provided that all payments made or amounts recovered, whether before or after the publication of this Act in respect of any such decree shall first be applied in payment of all cost
Every court executing a decree passed against a person entitled to the benefits of this Act shall, on application, stay the proceedings until the court which passed the decree has passed orders on an application made or to be made under section 15:
Provided that where within sixty days after the application for stay has been granted, the judgment debtor does not apply to the court which passed the decree for relief under section 15 or where an application has been so made and is rejected, the decree shall be executed as it stands notwithstanding anything contained in this Act to the contrary.
Explanation. – The expression “the court which passed the decree” shall have the same meaning as in the Code of Civil Procedure, 1908 (Central Act V of 190
(1) Nothing contained in this Act shall apply to the debts payable by any person who has been adjudicated an insolvent, if proper to the publication of this Act a dividend has been declared out of this assets.
(2) If a dividend has not been so declared, the court shall, on application made within six months from the publication of this Act, by the insolvent debtor, the Official Assignee or Official Receiver in whom the property of such debtor has vested, or any other persons interested, apply the provisions of this Act to the debts payable by the insolvent debtor if he would have been a debtor within the meaning of this Act but for this adjudication in insolvency.
(3) If the application aforesaid is not made by the Official Assignee or Official
Where in execution of any decree, any movable property of any debtor has been sold on or after the 1st March 1972, any judgment debtor may, within six months from the publication of this Act, apply to the decree, and the court, shall, if satisfied that the applicant is a debtor entitled to the benefits of those sections, apply the applicant is a debtor entitled to the benefits of those sections, apply the same and order the decree holder to refund any sum received by him on or after the 1st March 1972 in excess of the amount to which he would have been entitled if the property had not been sold;
Provided that no such order shall be made without notice to the decree holder and without affording him an opportunity to be heard in the matter.
Where in execution of any decree any immovable property, in which a debtor entitled to the benefits of this Act had an interest, has been sold or foreclosed on or after the 1st March 1972, and the sale has not been confirmed before the publication of this Act in the Tamil Nadu Government Gazette or ninety days have not elapsed from the confirmation of the sale or from the foreclosure, at such publication then, notwithstanding anything contained in the Limitation Act, 1963 (Central Act V of 1908) and notwithstanding that the sale has been confirmed any judgment debtor claiming to be entitled to the benefits of this Act, may apply to the court within ninety days of such publication or of the confirmation of the sale, whichever is later, to set aside the sale or foreclosure of the property, and the court shall if satisfied that the applicant is a debtor entitled to the benefits of his Act, order the sale or foreclosure to be set
Where a sale is set aside under Section 19 a purchaser shall be entitled to an order for repayment of any purchase money paid by him against the person to whom it has been paid:
Provided that no poundage shall be payable in respect of any such sale and where poundage has been collected, the court shall direct the same to be refunded.
If in any suit or proceeding for the recovery of a debt, the court is satisfied that the claim therein is made in evasion of the provisions of this Act and that the document upon which the claim is based, although purporting to be executed by a different debtor or in favour of a different creditor, was in fact in renewal or part renewal of a prior debt to which the provisions of this Act would have applied, the court shall dissolve the costs;
Provided that where in any such suit or proceeding two or more distinct claims are made the provisions of this Section shall apply separately in respect of each such claim.
All alienations of immovable property made by any debtor on or after the 1st March 1972 shall be invalid as against every creditor whose sale in execution or fore-closure decree has been set aside under Section 19 or who became entitled to ratable distribution of the proceeds of such sale under Section 73 of the Code of Civil Procedure, 1908 (Central Act V of 1908)
(1) An appeal shall lie from any of the following orders passed by a court under this Act, as if such order related to the execution, discharge or satisfaction of a decree within the meaning of Section 47 of the Code of Civil Procedure, 1908 (Central Act V of 1908) –
(a) An order under sub-Section (1) of Section 14 amending or refusing to amend a decree;
(b) An order under Section 15 amending or refusing to amend a decree or entering or refusing to enter satisfaction in respect of a decree;
(c) An order under Section 18 directing or refusing to direct the refund of any excess realized in execution of a decree;
Any creditor may apply to the Collector of the district in which the creditor believes his debtor to have been or to be assessed to income tax or is an agriculturist for information as to the above fact and the Collector shall thereupon ascertain such information and grant to such creditor a memorandum in the prescribed form as to whether the debtor has been so assessed to income-tax or such debtor is an agriculturist or not. Such information shall be received in every court as evidence of the facts stated therein.
Any creditor may apply to the executive authority of municipality, a panchayat, a panchayat union or a town-ship or the Revenue Officer of Commissioner of the Municipal Corporation of Madras or of Madurai for information as to whether his debtor was or is assessed to profession, property or house tax in terms of clauses (ii) and (iii) of the first proviso to section 2 (3), and the executive authority, or Revenue Officer or Commissioner shall thereupon grant to such creditor a certificate in the prescribed form as to whether the debtor, named in the application has been so assessed to profession, property or house tax. Such certificate shall be received in every court as evidence of the facts stated therein.
Save as otherwise provided in this Act, the provisions of this Act shall be in addition so, and shall not be in derogation of, any law for the time being in force in this State relating to debt relief.
(1) The Governent may make rules to carry out the purpose of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for –
(a) all matters expressly required or allowed by this Act to be prescribed; and
(b) the form of, and the fees to be paid in respect of, applications under this Act.
(1)
(a) All rules made under this Act shall be published in the Tamil Nadu Government Gazette, and unless they are expressed to come into force on a particular day, shall come into force on the day on which they are so published.
(b) all notifications issued under this Act shall unless they are expressed to come into force on a particular day, come into force on the day on which they are published.
(2) Every rule made or notification issued under this Act shall, as soon as possible after it is made or issued, be placed on the table of both Houses of the Legislature, and if, before the expiry of the session in which it is so placed or the next session, both Houses agree in making any modification in any such rule or notification or both House
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