Ajith A. and Others v. Tahsildar (Revenue Recovery), Kasaragod; State of Kerala; Assistant Excise Commissioner, Kasaragod; Kasaragod Taluk Kalluchethu Vyavasaya Thozhilali Co-operative Society Ltd. (represented by its Secretary Sri. T. K. Shajahan, Sr. GP)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE V.G.ARUN** ## **MONDAY, THE 09TH DAY OF MARCH 2020 / 19TH PHALGUNA, 1941** ## **WP(C).No.15456 OF 2015(F)** ## **PETITIONERS:** |**1**|**AJITH A.,**| |---|---| ||**AGED 45 YEARS,**| ||**S/O. APPU, ADHUR PALLAM,**| ||**ADHUR P. O., MULLERIA VIA,**| ||**KASARAGOD DISTRICT.**| |**2**|**BABU POOJARI M.,**| ||**AGED 61 YEARS,**| ||**S/O. MONA POOJARI, MAYYALA BAVA HOUSE,**| ||**DELAMPADI, MULLERIA, KASARAGOD DISTRICT.**| |**3**|**RAVEENDRAN P.,**| ||**AGED 51 YEARS,**| ||**S/O. APPAKUNHI NELAPPADI , EDNEER P.O.,**| ||**CHANGALA VIA, KASARAGOD DISTRICT.**| |**4**|**RAMAKRISHNAN T. M,**| ||**AGED 64 YEARS,**| ||**S/O. MADHAVAN, THOTTAPPALLI HOUSE,**| ||**BENDADKA P.O., CHANGALA VIA,**| ||**KASARAGOD DISTRICT.**| |**5**|**VIJAYAN N. E.**| ||**AGED 55 YEARS,**| ||**S/O. NARAYANAN, PANDARA PALLAM,**| ||**KUNDAMKUZHI P. O., CHANGALA VIA,**| ||**KASARAGOD DISTRICT.**| |**6**|**SURESH P.,**| ||**AGED 42 YEARS,**| ||**S/O. KRISHNAN, PADIKKAL HOUSE,**| ||**KUMBADAJE,**| ||**ETHIADUKKA P.O., PERDALA,**| ||**KASARAGOD DISTRICT.**| ||**BY ADV. SRI. M. SASINDRAN**| **WP(C).No.15456 OF 2015(F)** **2** ## **RESPONDENTS:** |**1**|**THE TAHSILDAR (REVENUE RECOVERY)**| |---|---| ||**KASARAGOD, KASARAGOD DISTRICT - 671 121.**| |**2**|**STATE OF KERALA,**| ||**REPRESENTED BY SECRETARY TO GOVERNMENT,**| ||**DEPARTMENT OF TAXES,**| ||**THIRUVANANTHAPURAM – 695 001.**| |**3**|**THE ASSISTANT EXCISE COMMISSIONER,**| ||**KASARAGOD - 671 121.**| |**4**|**KASARAGOD TALUK KALLUCHETHU VYAVASAYA**| ||**THOZHILALI CO-OPERATIVE SOCIETY LTD. NO.S.311**| ||**REPRESENTED BY ITS SECRETARY-671 121.**| ||**SRI. T. K. SHAJAHAN, SR. GP.**| **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 09.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.15456 OF 2015(F)** **3** ## **JUDGMENT** ## **Dated this the 9th day of March 2020** The petitioners were members of the Board of Directors of the 4[th] respondent Society during 2000-2001, during which period the Society bid in Abkari auction and was allotted toddy shops in Kasaragod, Kumbala and Badiadke Ranges of Kasaragod Division. The security amounts for the toddy shops in the three ranges was fixed at Rs.5,56,700/-, Rs.9,85,000/- and Rs.17,10,600 respectively. Of this only an amount at Rs.5,45,000/- could be remitted by the 4[th] respondent Society. Consequently, the licence for conduct of toddy shops issued in favour of the 4[th] respondent Society was cancelled on 30.05.2001. For the unremitted portion of the security amount and the kist amount due, revenue recovery proceedings were initiated and Ext.P1 notice was issued to the then President of the Society for realisation of the arrear amount by proceeding against his personal properties. The President challenged the Revenue Recovery proceedings before this **WP(C).No.15456 OF 2015(F)** **4** Court and by Ext.P3 judgment the authorities were directed to look into the explanation offered by the petitioner therein, with reference to the decision in _**Suseelan v. State of Kerala**_ [2002(1) KLT 226], and to pass reasoned order. But contrary to the direction, Revenue Recovery proceedings was again initiated against the President, who thereupon filed W.P(C) No.7797 of 2009 challenging the proceedings. By Ext.P4 judgment this Court found the Revenue Recovery steps initiated against the personal properties of the President to be unsustainable and quashed the notices under challenge. It was made clear that the respondents will be free to proceed against the 4[th] respondent Society for realisation of the arrears by resorting to methods available under law or against the sureties if any, who had stood as guarantors for payment of amounts due under the agreement. 2. The grievance of the petitioners is that pursuant to Ext.P4 judgment, wherein it was specifically directed that proceedings can be initiated against the 4[th] respondent Society, as per Ext.P6 revenue recovery proceedings is **WP(C).No.15456 OF 2015(F)** **5** initiated against the petitioners in their capacity as members of the Board of Directors of the 4[th] respondent Society. With reference to Ext.P5, the agreement entered into by the Society at the time of allotment of the toddy shops, it is submitted that none of the petitioners are parties to the agreement either in their capacity as licensees or as guarantors. It is contended that the issue with respect to the personal liability of the members of the Board of Directors stands concluded with Ext.P4 judgment, though the judgment was rendered on the basis of the challenge raised by the President of the Society. Reliance is placed on the Division Bench decision in _**Suseelan v. State of Kerala**_ [2002(1)KLT 226], in support of the proposition that the members of the managing committee cannot be mulcted with personal liability for the dues of the Society. 3. The learned Government Pleader would submit that admittedly amounts are due to the Government and that the rights of the Government for realisation of the amount may not be foreclosed by the decision in the **WP(C).No.15456 OF 2015(F)** **6** instant writ petition. 4. I find substantial force in the contention raised on behalf of the petitioners. A Co-operative Society is a legal entity as provided under Section 9 of the Co-operative Societies Act. As per Section 79(2) of the Co-operative Societies Act the liability of the members of the Society or it’s office bearers is limited to the extent of the share held by them. In such circumstances, as held by this Court in Ext.P4 judgment, revenue Recovery steps for realisation of the arrears due from the Society cannot be initiated by proceeding against the personal properties of the petitioners. The law on the point is well settled by the decision of this Court in _**Suseelan v. State of Kerala**_ . 5. In the result Ext.P6 is quashed making it clear that no proceedings for recovery shall be initiated against the petitioners for recovery of the dues of the 4[th] respondent Society with respect to the allotment of toddy shops on the basis of Ext.P5 agreement. It is made clear that respondents 1 to 3 will be free to proceed against the persons who had stood surety to ensure payment of the **WP(C).No.15456 OF 2015(F)** **7** amounts due to the Government for allotment of toddy shops to the 4[th] respondent society during 2000-2001. With the above observations the writ petition is dismissed **.** ## **Sd/-** **V.G.ARUN JUDGE** SPR **WP(C).No.15456 OF 2015(F)** **8** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1** **TRUE COPY OF THE NOTICE DATED 15.04.2002 ISSUED TO THE THEN PRESIDENT OF THE SOCIETY.** - **EXHIBIT P1 (A) A TRUE COPY OF THE TRANSLATION OF EXHIBIT P1.** **EXHIBIT P2 A TRUE COPY OF THE REPLY DATED 23.05.2002.** - **EXHIBIT P3 A TRUE COPY OF THE JUDGMENT DATED 07.02.2007 IN O.P NO.2972 OF 2003.** - **EXHIBIT P4 A TRUE COPY OF THE JUDGMENT DATED 31.01.2013 IN WPC NO. 7797 OF 2009.** - **EXHIBIT P5** - **A TRUE COPY OF THE AGREEMENT FORM, EXECUTED BETWEEN THE PETITIONER IN EXT.P4 AND THE ASSISTANT EXCISE COMMISSIONER.** - **EXHIBIT P5 (A) A TRUE COPY OF THE TRANSLATION OF EXHIBIT P5.** **EXHIBIT P6** - **A TRUE COPY OF THE NOTICE NO. 2015/11792/14 DATED 12.05.2015 ISSUED BY THE FIRST RESPONDENT WITH PETITIONERS AND THE THEN PRESIDENT OF THE SOCIETY.** ## **RESPONDENT'S/S EXHIBITS: NIL.**