Alleppy Company Ltd & William Godacre Sons India Pvt. Ltd. v. Chief Executive, Kerala Coir Workers Welfare Fund Board & Deputy Tahsildar, RR Ambalappuzha (W.A. No. 519 of 2016) against the judgment WPC 8026/2006 of the High Court of Kerala

W. A. No. 519 of 2016 -1- # **`IN THE HIGH COURT OF KERALA AT ERNAKULAM`** # **`PRESENT`** ``` THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR ``` ``` & ``` ``` THE HONOURABLE MR. JUSTICE SHAJI P.CHALY ``` ``` TUESDAY, THE 6[TH] DAY OF DECEMBER 2022 / 15TH AGRAHAYANA, ``` ## **`1944`** ``` WA NO. 519 OF 2016 ``` ``` AGAINST THE JUDGMENT WPC 8026/2006 OF HIGH COURT OF KERALA APPELLANT/S: ``` |**`1`**|**`THE ALLEPPEY COMPANY LTD`**| |---|---| ||**`TAC HOUSE, ALLEPPEY, REPRESENTED BY ITS DIRECTOR,`**| ||**`MR. N.VENUGOPAL.`**| |**`2`**|**`WILLIAM GODACRE SONS INDIA PVT. LTD.`**| ||**`P.B.NO.4606, ALLEPPEY-688012, REPRESENTED BY ITS`**| ||**`MANAGING DIRECTOR SRI. VIVEK VENUGOPAL.`**| ||**`BY ADVS.`**| ||**`SRI.M.GOPIKRISHNAN NAMBIAR`**| ||**`SRI.P.BENNY THOMAS`**| ||**`SRI.K.JOHN MATHAI`**| ||**`SRI.JOSON MANAVALAN`**| ||**`SRI.KURYAN THOMAS`**| ## **`RESPONDENT/S:`** ``` 1CHIEF EXECUTIVE KERALA COIR WORKERS WELFARE FUND BOARD, ALLEPPEY- 688001. 2THE DEPUTY TAHSILDAR R.R AMBALAPPUZHA-688561. BY ADVS. SRI.P.M.M.NAJEEB KHAN, SC, KHWWB SRI.P.SHANES METHAR, SC, KCWWFB SRI. V. TEKCHAND, SR. GP ``` ## **`THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON`** ``` 06.12.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` W. A. No. 519 of 2016 -2- ## **J U D G M E N T** ## S. Manikumar, C. J. Before the writ court, petitioners have sought for the following reliefs:- “i) Issue a writ of certiorari or other appropriate writ, order or direction, calling for the records leading at Exts. P1, P2 and P5 and quash the same; iii) Issue writ of mandamus or other appropriate writ, order or direction, directing the 1[st] respondent to adjust the excess payment towards the petitioners' contribution for the period covered by Exts.P1 and P2 and also adjust the balance available towards the future liability under the Act; iii) Stay all further proceedings pursuant to Exts.P1, P2 and P5, pending disposal of the writ petition.” 2. Short facts leading to the filing of the writ petition are as under:- 2.1. According to the writ petitioners / appellants, they are companies incorporated under the Companies Act, 1956, and are mainly engaged in the manufacture and export of Coir, Jute and other W. A. No. 519 of 2016 -3- floor covering items. In 1987, the State Legislature had enacted the Kerala Coir Workers Welfare Fund Act (hereinafter referred to as the 'Act’ for short) to provide for the constitution of a fund for grant of relief to, to promote the welfare of, and to pay pension to coir workers and self employed persons in the Coir Industry in the State of Kerala. After this Act was brought into force with effect from 01.04.1987, the Act was amended by the Kerala Coir Workers Welfare Fund Act, 1998, effective from 30.09.1997. Petitioners, being covered under the provisions of the Act, were regularly filing returns, as contemplated in the Act, and were also paying their contributions as provided therein. 2.2 Petitioners have submitted that while so, a batch of original petitions were filed before this Court by a group of exporters, challenging the constitutional validity of Section 4(2) of the amended Act, in so far as it imposed liability to pay contribution on dealers and exporters, on the basis of their turnover. These original petitions were heard by a Hon’ble Division Bench of this Court and by common judgment rendered on 03.07.2003, the original petitions were allowed holding that Section 4(2) of the amended Act, in so far as it imposed liability to pay contribution on dealer and exporter on the basis of the W. A. No. 519 of 2016 -4- turnover, as unconstitutional, and beyond the Legislative competence of the State under Entry 23 of List III of the Constitution of India. In paragraphs 9 and 10 of the judgment, it has been held as follows:- “9. In view of the above, the demands challenged are set aside. The Coir Workers Welfare Fund Board can take steps to make fresh assessment according to law for the past payment, if any, within three months from today. 10. Learned Senior Counsel Sri.T.P. Kelu Nambiar appearing for the Coir Workers Welfare Fund Board submits that in some of the cases amounts were realized from the parties and some benefits also were given to the workers. As held by the Supreme Court in paragraph 24 of the decision reported in (2002 (1) KLT 658 (SC) (2002) 2 SCC 459 (supra), if any amount was realized from dealers or exporters that need not be refunded." 2.3. It is further submitted that as far as the petitioners are concerned, based on the provisions of the Act which has been held to be by this Court, for the period 01.10.2000 to 30.09.2001, the 1[st] petitioner had remitted an amount of Rs.6,52,024/-, the receipt of which has been acknowledged by Chief Executive, Kerala Coir Workers Welfare Fund Board, Alappuzha, the 1[st] respondent. Similarly, the 2[nd] petitioner had also remitted an amount of W. A. No. 519 of 2016 -5- Rs.7,11,112/- for the period 01.04.2000 to 30.06.2001, the receipt of which has been acknowledged by the 1[st] respondent. However, for the latter period, when the original petitions were pending, there was no demand from any exporter and there has not been any payment also. 2.4. That apart, it is submitted that after the disposal of the original petitions, by judgment dated 03.07.2003, the 1[st] petitioner received a notice dated 03.05.2005, calling upon it to pay an amount of Rs.2,13,750/- for the period 01.10.2000 to 31.03.2005, which is at the rate of Rs.47,500/- per year. Similarly, the 2[nd] petitioner also received a notice dated 03.05.2005, demanding remittance of Rs.50,000/- for the period 01.04.2001 to 31.03.2005, which is at the rate of Rs. 12,500/per year. On receipt of Ext.P1, the 1[st] petitioner, by letter dated 14.05.2005, replied to Ext.P1, requesting that the excess remittance made by it during the period 01.10.2000 to 30.09.2001 may be adjusted for the period covered by Ext.P1 notice and towards its future liability. However, there has not been any response to Ext.P3 so far. Insofar as the 2[nd] petitioner is concerned, on receipt of Ext.P2, the petitioner submitted its reply dated 17.05.2005, making identical request as contained in Ext.P3. W. A. No. 519 of 2016 -6- 2.5. It is further submitted that after receipt of Exts. P3 and P4, as the 1[st] respondent did not initiate any further correspondence, it was assumed by the petitioners that request was accepted. However, the 2[nd] petitioner was surprised to receive a notice under Section 7 of the Revenue Recovery Act from the 2[nd] respondent threatening to recover Rs.62,050/- stated to be the dues for the period April 2001 to March 2005. It is submitted that the proceedings culminating in Ext.P5 are illegal, arbitrary and are liable to be quashed. 2.6. It is also submitted that considering the submission on behalf of the 1[st] respondent, when this Court directed that if any amount was realized from dealers or exporters that need not be refunded, this Court was well aware of clause 18 of the Scheme, and therefore, by the direction as contained in paragraph 10 of the judgment, this Court was not depriving exporters like the petitioners, its right for adjustment as contained in clause 18 of the Scheme. Therefore, the coercive action initiated to recover amounts without adjusting the excess collection is illegal and is arbitrary. 3. Adverting to the rival submissions and taking note of the decisions in **Koluthara Exports Ltd. v. State of Kerala [2002 (1)** W. A. No. 519 of 2016 -7- **KLT 658]** and **Charangat Coir Manufacturing Companty (P) Ltd.** **v. State of Kerala [ 2004 (1) KLT 312]** , and also clause 18 of the Scheme, writ court, by judgment, in W. P. (C) No. 8026 of 2006 dated ## 19.10.2015, ordered as under: “6. It is apposite to quote clause 18 of the Scheme which reads as follows : “18. Refund of contribution- The contribution to the Fund is not refundable otherwise by way of refund ordered on scrutiny of annual return of accounts or on refusal of membership and shall not bear any interest: Provided that any contribution made in excess of what is due to be paid by a coir worker or self employed person, or employer or producer of coir products or dealer in accordance with the rules and the scheme, may be adjusted against future contribution.” 7. This Court is of the view that clause 18 has no application in this matter. Clause 18 would apply only if there is any excess payment, which means the payment has a colour of legality when it is made and it can be adjusted when it is subsequently found that the payment was excess. In this case, the payment has no legal colour in the sense, the Court has declared the levy as unconstitutional. Further, the petitioners ought to have brought clause 18 to the notice of the Division Bench. When the Division Bench, in clear terms, held that the amount need not be refunded, this Court has to assume that the Division Bench was aware of clause 18 of the Scheme. 8. In fact, the Division Bench has relied on the judgment of the Hon'ble Supreme Court in **Koluthara Exports Ltd Vs. State of Kerala [2002(1) KLT 658]** wherein Hon'ble Supreme Court held that the amount need not be refunded as the amount has been already expended by the Board. It appears that the Division Bench, following the dictum in **Koluthara's** case on the W. A. No. 519 of 2016 -8- premise that the amount has been already expended, ordered that it need not be refunded. The Division Bench did not make a distinction between the refund and adjustment for the purpose of future liability. Once the Division Bench held that the amount need not be refunded, it is inappropriate for this Court to order otherwise holding that amount shall be adjusted against future liability of the members. If the petitioners want to have a clarification, the remedy was to seek appropriate clarification before the Division Bench in **Charangat's** case and not by way of filing fresh writ petitions. In that view of the matter, the writ petitions are dismissed as the petitioners cannot claim adjustment of the amount for any future liability.” 4. Being aggrieved, writ petitioners have preferred the instant writ appeal. 5. On this day, when the matter came up for hearing, though Mr. Pranoy, learned counsel for the appellants, advanced arguments relying on clause 18 of the Scheme, and submitted that the appellants are not claiming for refund, but only seeking adjustment against future liabilities, on going through the said clause, it is clear that clause 18 would apply only if there is any excess payment, and it can be adjusted when it is subsequently found that the payment was excess. Paragraph (7) of the judgment extracted supra, answers the grounds raised. 6. However, in the instant case, the Hon’ble Division Bench, after considering the decision of the Hon’ble Supreme Court in W. A. No. 519 of 2016 -9- **Koluthara Exports Ltd. v. State of Kerala [2002 (1) KLT 658]** , wherein it is held that the amount need not be refunded as the amount has been already expended by the Board, declared that the levy is unconstitutional, and further ordered that the amount realized from the dealers for exporters need not be refunded. 7. Moreover, the appellants cannot reopen the said issue in another writ petition / writ appeal. Once the Hon’ble Division Bench held that the amount need not be refunded, it has become final. In the light of the above discussion and decision, we are not inclined to interfere with the judgment of the learned Single Judge. Accordingly, instant writ appeal is dismissed. **Sd/S. MANIKUMAR CHIEF JUSTICE** **Sd/SHAJI P. CHALY JUDGE** Eb ///TRUE COPY/// P. A. TO JUDGE