The main legal point established in the judgment is the total exclusion for the period of limitation under section 34 of the 1979 Act and the limitation on the availability of protection for debts incurred after the Act has come into force.

P. Shanmugham, J.

1. To resolve the conflict of views on the interpretation of Section 34 of the Tamil Nadu Debt Relief Act (Act 40 of 1979), this Full Bench has been constituted.

2. Several enactments have been made to provide relief to the indebted agriculturists and persons right from Act 4 of 1938, the Tamil Nadu Agriculturists Relief Act. We are presently concerned with the debt relief legislations namely Ordinance 1 of 1975 replaced by the Tamil Nadu Indebted Agriculturists (Temporary Relief) Act 10 of 1975, the Tamil Nadu Indebted Agriculturists (Temporary Relief) Act 15 of 1976 as amended by the Tamil Nadu Debt Relief Laws (Amendment) Act of 1977, the Tamil Nadu Debt Relief Laws (Second Amendment) Act of 1977, The Tamil Nadu Debt Relief Laws (Amendment) Act of 1978 and the Tamil Nadu Debt Relief Act 40 of 1979. A moratorium has been imposed by the provisions of these Acts against institutions of suits during the subsistence of these Acts for a total period of 4 years, 4 months and 27 days. The last of the Act that we are concerned with namely the Tamil Nadu Debt Relief Act, 1979 excludes the time for limitation and dissolution of stay proceeding in respect of certain suits and applications from 15th January, 1976 to 13th June, 1979. The question that arises for consideration here is whether there is a total bar of filing a suit under the Tamil Nadu Debt Relief Act 40 of 1978 so as to save the period of limitation from 15th January, 1976 to 15th June, 1979.

3. This Court, in Sivasubramanian Alias Kandaswamy v. Mohindeed Pichai, 1986 (99) L.W. 198, Sri Varalakshmi Finance Syndicate v. R. Govindarajulu, 1990 (2) L.W. 351, Gangan v. Kannamal, 1996

(2) L.W. 92 and Manickam Chettiar v. Raamanatha Thevar, 1996 (2) CTC 373 : 1996 (2) L.W. 406, have taken the view that in respect of cases coming within the purview of scaling down provisions, the period from 15.1.1976 to 13.6.1979 has to be excluded.

4. However, in Sri Agastheeswarswami Devasthnam v. Rajagopal Konar, 1992 (1) L.W. 71, a different view was taken, holding that the expression "barred" cannot be construed to cover even cases in which a suit could have been filed for scaled down amounts, and therefore, the suits which were completely barred by the provisions of Act 40 of 1978 are alone entitled to have the benefit of exclusion of the entire period between 15.1.1976 and 13.6.1979.

5. The Tamil Nadu Debt Relief Act 1978 (Act 40 of 1978) was enacted to provide relief for certain indebted persons in the State of Tamil Nadu. The said Act came into force from 15.7.1978. Chapter II of the said Act dealt with the relief of indebtness and the scaling down of debts. As per section 6 of the said Act, all debts payable by any debtor on 4.7.1978 shall be scaled down in accordance with the provisions of Chapter II. Section 7(1)(a) providing for scaling down declared that where the principal amount advanced does not exceed Rs.500, the whole of the principal amount together with interest thereon shall be deemed to be wholly discharged. Section 7(2)(i) also provided for the discharge of the amount if the amounts already paid by the debtor towards the principal or interest or both are equal to or exceeds the aggregate amount as so scaled down. Section 7(1)(b) states that where the principal amount exceeds Rs 500 but does not exceed Rs. 5000 one-half of the principal amount so advanced shall be deemed to be discharged and only the balance shall be repayable. Section 7(1)(c) provided that where then principal amount exceeds Rs. 5000. but does not exceed Rs. 10,000 the interest shall be deemed to be wholly discharged and only the principal amount shall be repayable.

6. Thus, the Act contemplated the discharge of certain amounts and recovery of the scaled down amounts. The provisions of this Act, provided for permanent debt relief by way of liquidation or scaling down of debts as the case may be to specific classes of weaker sections of society consisting of agriculturists and ot