Aji Kochupparambil v. Kerala Financial Corporation & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT THE HONOURABLE MR.JUSTICE N.NAGARESH** **FRIDAY, THE 3[RD] DAY OF DECEMBER 2021 / 12TH AGRAHAYANA, 1943 WP(C) NO. 17670 OF 2021** ## **PETITIONER:** **AJI KOCHUPARAMBIL AGED 48 YEARS** **S/O RAJU K GEORGE, FLAT NO 6C, PANJOS GARDEN, EDAPALLY P.O.KOCHI-682 024.** **PRESENT ADDRESS. NO 007, D BLOCK RAHEJA ENCLAVE, RACE COURSE ROAD, COIMBATORE, TAMIL NADU-641 018. BY ADVS. K.T.THOMAS MATHEW BOB KURIAN** ## **RESPONDENTS:** - **1 THE KERALA FINANCIAL CORPORATION, VELLAYAMBALAM, THIRUVANANTHAPURAM-695 001. REPRESENTED BY ITS MANAGING DIRECTOR.** - **2 THE CHIEF MANAGER, KERALA FINANCIAL CORPORATION, ROOM NO 1/740. C7 FIRST FLOOR, GEORGE TOWN, VENGALLOOR P.O,THODUPUZHA-685 608.** - **3 THE DISTRICT COLLECTOR, CIVIL STATION, KAKKANAD, ERNAKULAM - 682030 IS IMPLEADED AS PER ORDER DATED 05-11-2021 IN I.A 1/2021** - **4 THE DEPUTY TAHSILDAR KERALA FINANCIAL CORPORATION, CENTRAL ZONE, ERNAKULAM, KOCHI - 682018 IS IMPLEADED AS PER ORDER DATED 05-11-2021 IN I.A 1/2021** - **BY ADVS. BASANT BALAJI SHRI.M.R.VENUGOPAL, SC, KFC GOVERNMENT PLEADER DHANYA P.ASHOKAN** **SMT.VINITHA B SR.GP** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 03.12.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.17670/2021** **2** ## **JUDGMENT** **Dated this the 3[rd] day of December, 2021** The short question raised in this writ petition is the rate at which the revenue recovery charges are to be levied in respect of discharge of debt of the petitioner to the 2[nd] respondent. 2. The petitioner obtained a loan of Rs.3.30 Crores from the 2[nd] respondent_Kerala Financial Corporation in the year 2011. A One Time Settlement was offered to the petitioner for an amount of Rs.1.59 Crores in the year 2018. But, the petitioner could remit only Rs.1.43 Crores in response to that One Time Settlement proposal. Again in March, 2021, the 2[nd] respondent offered another One Time Settlement **WP(C).No.17670/2021** **3** proposal to the petitioner for an amount of Rs. 3.62 Crores. The petitioner honoured the One Time Settlement and discharged his liability by paying Rs.3.62 Crores. The petitioner remitted Rs.3.62 Crores towards full and final settlement and also remitted 1% of the settlement amount as revenue recovery service charges. 3. When the petitioner sought for return of documents deposited with the 2[nd] respondent and kept as security for the loan facility, the 2[nd] respondent took a stand that the petitioner has to remit 7.5% more towards revenue recovery charges. Aggrieved by the said demand, the petitioner is before this Court. The petitioner's case is that no amount was recovered through the revenue recovery proceedings and the entire debt was discharged on the basis of One Time Settlement and paid directly to the 2[nd] respondent. Therefore, the demand for 7.5% revenue recovery charges is unsustainable, contended the petitioner. 4. The 4[th] respondent filed a statement, in which it is **WP(C).No.17670/2021** **4** stated that even though the Deputy Tahasildar directed the defaulter to remit the due several times, no amount was remitted. Instead, the defaulter entered into an agreement with the 2[nd] respondent and availed facility of One Time Settlement. On 24.09.2021, the 2[nd] respondent informed that the defaulter paid a portion of the due and requested that the revenue recovery proceedings be kept pending. The 2[nd] respondent issued letter dated 22.02.2021 requiring that the revenue recovery proceedings be revived against the defaulter. The 1[st] respondent has not informed the 4[th] respondent about the discharge of debt. The collection charge of 7.5% should therefore be remitted by the defaulter or the Kerala Financial Corporation for the amount paid up to that point, in view of Rules 4 and 5 of the Kerala Revenue Recovery Rules. 5. The 2[nd] respondent filed a counter affidavit. The 2[nd] respondent stated that a letter was issued to the Deputy Tahasildar (RR) (KFC), requesting to inform the amount to be **WP(C).No.17670/2021** **5** remitted towards the revenue recovery charges, on 31.03.2021. In response to the said letter, the Deputy Tahasildar has issued a reply stating that the amount to be remitted by the petitioner is 1% of the amount collected towards One Time Settlement and 7.5% of the collected amount in respect of amount remitted by the petitioner after the revenue recovery was initiated. The 2[nd] respondent stated that the petitioner remitted Rs. 505 lakhs after initiation of the revenue recovery action. It is because of the demand made by the revenue recovery authorities that the documents are not released to the petitioner. 6. I have heard the learned counsel for the petitioner and the learned Government Pleader representing the 3[rd] and 4[th] respondent. I have also heard the learned Standing Counsel representing the 1[st] and 2[nd] respondents. The question of levy of revenue recovery charges in respect of notified institution came up for consideration before this Court in **Ashokan V.P v. Tahsildar (RR), Vatakara, Kozhikode and** **WP(C).No.17670/2021** **6** **others** (2020 KHC 2172). This Court found that when revenue recovery proceedings were initiated and the amount were not collected under the revenue recovery action, the authority is entitled to collect 1% towards the collection of service charges as per Sub-Rule 3 of Rule 5 of the Kerala Revenue Recovery Rules, 1968. This Court held that when it is admitted that the entire amount was paid by the debtor directly to the requisitioning authority, the maximum amount that could have been collected towards the collection charges is 1% as is contemplated under Rule 5(3). The aforesaid judgment of this Court squarely covers the issue involved in this writ petition. In view of the judgment in **Ashokan V.P** (supra), the petitioner is entitled to get his documents released without paying any more revenue recovery charges. 7. However, it is not discernible from the pleadings whether the petitioner has remitted 1% collection charge in respect of payment of Rs.1.43 Crores made by the petitioner in the year 2018. If that be the case, the petitioner will be liable **WP(C).No.17670/2021** **7** to pay 1% revenue recovery charges for the said remittance also. 8. In the said circumstances, the writ petition is allowed. It is declared that respondent Nos. 1 and 2 are not entitled to retain or withhold the title documents relating to the loan availed and settled by the petitioner in terms of Ext.P1 communication if the petitioner has remitted 1% revenue recovery charges for the amounts remitted directly after initiation of revenue recovery proceedings. Consequently, there will be a direction to respondents 1 and 2 to return the title documents and other documents relating to the loan availed and settled by the petitioner immediately, if the petitioner has remitted 1% revenue recovery charges for the amounts remitted after initiation of revenue recovery proceedings. If any amount is still found due towards 1% of revenue recovery charges, then respondent 1 and 2 shall release the documents of the petitioner within a period of two **WP(C).No.17670/2021** **8** weeks from the date on which the petitioner remits the balance collection charges as directed above. Sd/- **N. NAGARESH** **JUDGE** rps/ **WP(C).No.17670/2021** **9** ## **APPENDIX OF WP(C) 17670/2021** **PETITIONER EXHIBITS** **Exhibit P1 TRUE COPY OF THE COMMUNICATION DATED NIL ISSUED BY THE 2ND RESPONDENT Exhibit P2 TRUE COPY OF THE REPRESENTATION DATED 15.5.2021 SUBMITTED BY PETITIONER Exhibit P3 TRUE COPY OF THE EMAIL COMMUNICATION DATED 16.5.2021 ISSUED BY 1ST RESPONDENT** **Exhibit P4 TRUE COPY OF THE EMAIL COMMUNICATION DATED 13.8.2021 SUBMITTED BY PETITIONER** ## **RESPONDENT EXHIBITS** **Exhibit R2(a)** **TRUE COPY OF THE LETTER DATED 31/03/2021 ISSUED BY THE SECOND RESPONDENT TO THE DEPUTY TAHASILDAR (RR) (KFC).**