Excel Cattlefeeds v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT :** ## **THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON** ## **TUESDAY, THE 28TH SEPTEMBER 2010 / 6TH ASWINA 1932** ## **WP(C).No. 7694 of 2010(J)** ## **-------------------------** ## **PETITIONER :** - **------------------** **EXCEL CATTLEFEEDS, REPRESENTED BY MANAGING PARTNER, M.RAJESH, 'KISMAT', P.O.ELAPPULLY, PALAKKAD DISTRICT.** **BY ADV. SRI.P.VIJAYAKUMAR** ## **RESPONDENT(S):** - **------------------------** **1. STATE OF KERALA REPRESENTED BY PRINCIPAL SECRETARY (FINANCE), GOVERNMENT SECRETARIAT, TRIVANDRUM.** **2. DISTRICT COLLECTOR, PALAKKAD.** **3. REVENUE DIVISIONAL OFFICE, PALAKKAD.** **4. TAHSILDAR (RR), POST CHITTOOR PALAKKAD DISTRICT.** ***ADDITIONAL R5 & R6 IMPLEADED** **5. M. DINESH, 'KISMAT', P.O. ELAPULLY, PALAKKAD DISTRICT.** **6. M. HARISH, 'KISMAT', P.O. ELAPULLY, PALAKKAD DISTRICT.** - ***ADDL. R5 & R6 ARE IMPLEADED AS PER ORDER DATED 8/7/10 IN** - **I.A.NO.8462/10.** **R1 TO R4 BY GOVT. PLEADER SRI. M.R. SABU BY ADDL.ADVOCATE GENERAL SRI. RENJITH THAMPAN** **R5 & R6 BY ADV. SRI.K.M.KURIAN** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18/08/2010, ALONG WITH RP NO. 485/2010, THE COURT ON 28/09/2010 DELIVERED THE FOLLOWING:** **Mn** **...2/-** ## **WP(C).No. 7694 of 2010(J) -2-** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **EXT.P1 : COPY OF THE STATEMENT OF ACCOUNTS ISSUED BY THE 4TH RESPONDENT SHOWING THE PAYMENT DETAILS AND CALCULATIONS AS ON 30-12-09.** - **EXT.P2 : COPY OF THE PROCEEDINGS NO. S 5882/04 DATED 7-12-04 OF THE 3RD RESPONDENT CONFIRMING THE SALE.** - **EXT.P3 : COPY OF THE REPRESENTATION DATED 7-1-2010 SUBMITTED BY THE PETITIONER BEFORE THE STATE FINANCE MINSTER/GOVERNMENT.** - **EXT.P4 : COPY OF THE REPRESENTATION DATED 23-1-2010 BEFORE THE 2ND RESPONDENT.** - **EXT.P5 : COPY OF THE RECEIPT DATED 11-1-2010 ON TAKING POSESSION ISSUED BY NALLEPPULLY VILLAGE OFFICE.** - **EXT.P6 : COPY OF THE LETTER NO. D5-2006/26663/9 DATED 25-2-2010 ISSUED BY 2ND RESPONDENT.** - **EXT.P7 : COPY OF THE NOTICE NO. C5-95/01, 60/02, 107/02 DATED 18-2-2010 ISSUED BY 4TH RESPONDENT.** - **EXT.P8 : COPY OF THE RECEIPT DATED 15-3-2010 ISSUED BY THE 4TH RESPONDENT.** - **EXT.P9 : COPY OF THE REPRESENTATION DATED 4-6-10.** ## **RESPONDENT'S EXHIBITS:** - **EXT.R4(a) : COPY OF GOVERNMENT ORDER G.O.(MS) NO.578/REV, THIRUVANANTHAPURAM DATED 30-6-65.** - **EXT.R4(b) : COPY OF GOVERNMENT ORDER G.O.(MS)NO. 88/68/RD DATED 9-2-1968.** - **EXT.R4(c) : COPY OF THE LETTER NO. 49761/S3/07/REV. DATED 4-8-2008.** ## **//TRUE COPY//** **P.S. TO JUDGE** **Mn** ## **P.R. RAMACHANDRA MENON, J.** .............................................................................. **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** ......................................................................... **Dated this the 28[th] September, 2010** ## **J U D G M E N T** The writ petitioner was running a Small Scale Industry under the name and style as M/s. Excel Cattlefeeds. The plant and machinery were set up in the building located in the 35 cents of land, which was owned by the petitioner's brother by name M. Dinesh( another partner of the firm) and who was subsequently impleaded as the Addl. 5[th] respondent. The unit started its production in the year 1993, but plunged into losses from 1996 onwards due to various reasons and discontinued the business w.e.f. 2003 2. During the course of the business as aforesaid, there arose some default in respect of the sales tax, which fell in arrears during the period 1996-97 to 1999-2000, leading to recovery proceedings for realisation of a sum of Rs. 2,33,428/- **2** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** as shown in the notice dated 05.03.2001 with further interest and collection charges. The petitioner was also confronted with the steps taken by the Financier Bank for realisation of the due amount. Challenging the recovery proceedings initated under the Revenue Recovery Act for realisation of the tax arrears, the petitioner approached this Court by filing O.P.No. 11080 of 2001, wherein interference was made, enabling the petitioner to clear the liability by way of installments. It is stated that the petitiner could not satisfy the same as specified and sdubsequently, on approaching the Government, the petitioner was permitted to satisfy a portion of the liability and to clear the balance by way of installments. Since the opportunity given to the petitioner to clear the liability in a phased manner as above, could not be made use of in an effective manner, further proceedings were pursued and the property was sought to be sold in public auction. Since there were no bidders, the sale was adjourned on different occasions and finally, the property was bid by the Government as 'bought in land' under Section 50(2)(i) of **3** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** the Kerala Revenue Recovery Act. Later the sale was confirmed as per Ext. P2 order dated 07.12.2004. 3. In the meanwhile, before the confirmation of the sale of the property as aforesaid, out of the total sum of Rs. 2,33,428/- shown in the Revenue Recovery notice, the petitioner had actually effected payment of a sum of Rs.2,09,000/- and the balance amount, as on the date of sale, was only Rs. 24,428/-, and it is in respect of the said liability, that the industrial unit of the petitioner with the land, building and machinery worth nearly Rs. 45 lakhs was caused to be sold and was taken over by the Government for a token amount of 'Re. One' as 'bought -inland'. Subsequently, on getting some employment abroad, to one brother of the petitioner (partner of the firm), the petitioner made some alternate arrangements to procure necessary funds and approached the other respondents seeking to re-convey the property, expressing willingness to clear the entire amount due to the State. It is also contended that in spite of confirmation of the sale effected on 07.12.2004, the 'de facto' possession of **4** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** the property is still vested with the petitioner, who was pursuing the business, effecting some local sales, finding means to meet the livelihood of the workers. 4. After filing Ext.P4 representation before the second respondent for re-conveyance, Ext.P7 notice was issued by the fourth respondent on 18.02.2010 causing to sell the machinery in the plant on 10.03.2010 which were already attached. Ext. P4 application preferred by the petitioner was immediately rejected by the second respondent as per Ext. P6 reply dated 25.02.2010 stating that it was belated, which made the petitioner to approach this Court by filing the present Writ Petition seeking for a positive direction to re-convey the property to the petitioner, expressing willingness to clear the liability to the State. The petitioner is also challenging the constitutional validity of Section 50(2)(i) of the Kerala Revenue Recovery Act. 5. When the matter came up for consideration on 09.03.2010, it was brought to the notice of this Court that the **5** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** left over amount of Rs.24,428/-, as on the date of sale had gone upto Rs.4,87,460/- in view of the mounting interest, collection charges and other elements. The Writ Petition was admitted on that day, granting interim order intercepting all further coercive steps pursuant to Ext.P7, on condition that the petitioner deposited the entire outstanding liability of Rs.4,87,460/- within one week, which is stated as complied with. Thereafter, the petitioner filed I.A.No. 5809 of 2010 seeking to direct the respondents 2 to 4 to put the petitioner back in possession of the industrial assets including the land, building and machinery on a provisional basis. Afer considering the I.A., observing that the entire amount shown in Ext. P7 notice in respect of the sales tax arrears, coming to an extent of Rs. 4,87,460/- had already been satisfied, the unit, which was taken over only in Janunary 2010 was ordered to be returned on a 'provisional' basis; subject to final decision with regard to the right to have re-conveyance, to be considered and decided in the Writ Petition. It was also made clear in the said interim **6** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** order that the petitioner should satisfy the balance liability, if any, within two weeks from the date of communication to be issued by the respondents in this regard,. 6. The respondents in the I.A/Writ Petition have filed Review Petition No.485 of 2010 seeking to review the interim order dated 17.05.2010 in I.A. No. 5809 of 2010, as aforesaid, stating that there is an 'error apparent on the face of the records', in so far as re-conveyance of the land was sought to be made much belatedly; while the Government Orders/Circulars provide for such re-conveyance, only if the application is filed within two years from the date of confirmation of sale. It was also pointed out that the brother of the petitioner by name Dinesh (who was subsequently impleaded as Addl. 5[th] respondent in the Writ petition) had filed O.S.No.86 of 2010 before the Munsiff's Court, Chittoor, praying for a mandatory injunction for the re-conveyance of the property taken as 'bought- in- land' to him. Since the title was disputed, it was stated as apprehended that it might lead to another legal problem; thus seeking to **7** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** review the interim order. 7. It was in the said circumstance, that the writ petitioner chose to implead the other partners (who are none other than the brothers of the petitioner) by filing I.A.No. 8462 of 2010 which was allowed and they were impleaded as additional respondents 5 and 6 respectively. The said additional respondents have filed a counter affidavit expressing solidarity with the petitioner; simultaneously pointing out that the civil suit filed before the Munsiff's Court, Chittur had been sought to be withdrawn by filing I.A.No.1284 of 2010, which was allowed as not 'opposed' by the Government and accordingly, the said O.S.86/2010 was dismissed as 'withdrawn' vide order dated 29.06.2010. It has also been asserted in paragraph No. 8 of the counter affidavit that the said additional respondents , had unconditionally acknowledged the right of the petitioner in the Writ Petition to obtain the reliefs sought for and that they do not have any adverse claim or interest to that of the petitioner in the Writ Petition. ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** ## **8** 8. The respondents 2 and 4 in the Writ Petition have filed a counter affidavit producing copies of the relevant Government orders, regarding re-conveyance of the 'bought-in-land' as Exts. R4(a), R4(b) and R4(c). The sequence of events has been narrated, particularly with reference to the lapses on the part of the petitioner leading to taking over the property as 'boughtin-land'. 9. Heard the learned Counsl for the parties concerned, including Mr. Renjith Thampan, the learned Addl. Advocate General for the other respondents. 10. During the course of hearing, it was brought to the notice of this Court that, a Division Bench of this Court, as per the decision reported in _**State of Kerala v. George Jacob**_ (2010 (3) KLT 483), has passed favourable orders providing for re-conveyance of the 'bought- in- land' subject to realisation of the notional value of the property fixed by the Court, which was earlier set off against 'interest', while extending the benefit of the Amnesty Scheme, enabling the party concerned to discharge **9** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** the liability of Abkari arrears. It was also specifically obseved by the Division Bench that the property taken over was rubber plantation, which however was not made use of to generate income, either directly or by letting it out. It was further observed that, much belatedly the Government valued the said property at a notional value of Rs. 8,44,800/- which was credited under the loan account while extending the benefit of the Amnesty Scheme and the property was ordered to be reconveyed, if the defaulter remitted the said amount of Rs.8,44,800/- without any interest or cost within the specified time . 11. Applying the very same logic and reasoning to the present case, the fact remains that the petitioner's plant and machinery were taken over by the Government as 'bought-inland' way back in the year 2004 and was left in 'as is where is ' condition without, exploring the chance to generate any income or without fixing any notional value of the property (as fixed in the case dealt with by the Division Bench). It is also to be noted **10** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** that the total arrears of sales tax as given in the Revenue Recovery notice was Rs.2,33,428/-, out of which, the petitioner had remitted a sum of Rs. 2,09,000/- and the balance amount to be satisfied at the time of the sale was only Rs.24,428/- with further interest and cost, if any. This amount, by passage of time got mounted up to Rs.4,87,460/- as shown in Ext. P7 notice dated 18.02.2010. Pursuant to the interim order passed by this Court, while intercepting coercive proceedings on 09.03.2010, the entire amount of Rs.4,87,460/- was satisfied and it was in the said circumstance, that an interim order was passed on 17.05.2010 in I.A.No.5809 of 2010 directing to hand over the possession on a 'provisional' basis, simultaneously directing the petitioner to satisfy the remaining liability, if any, as specified. Considering the facts and circumstances, as aforesaid, the entire liability to the State towards sales tax arrears, interest, collection charges in respect of the revenue recovery proceedings etc., stands almost satisfied. This being the position, the condition for effecting re-conveyance, as ordered by the ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** ## **11** Division Bench in the decision cited supra stands satisfied by the petitioner as well, subject to the liability to clear the balance amount, if any, which is still to be communicated by the respondents inspite of the direction given by this Court as per the interim order dated 17.05.2010 in I.A.No.5809 of 2010. 12. In the above circumstance, it is declared that the petitioner also is entitled to get the relief as extended by the Division Bench of this Court in the decision cited supra. The respondents are directed to intimate the petitioner, if any further amount is liable to be satisfied towards interest/cost /recovery charges, in connection with the proceedings, after the remittance of Rs.4,87,460/- as shown in Ext. P7. This shall be done within a period of 'two weeks' from the date of receipt of a copy of the judgment. On receipt of the intimation as aforesaid, the said amount shall be cleared by the petitioner within 'two weeks' thereafter . On satisfaction of the balance amount, if any, as above , the respondents are directed to effect reconveyance of the property covered by Ext. P2, completing all the formalities **12** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** in this regard within a further period of one month thereafter. The Writ Petition is allowed as above. No cost. ## **R.P.No. 485 OF 2010** : 13. As observed hereinbefore, this Review Petition is in respect of the interim order dated 17.05.2010 in I.A. 5809 of 2010 preferred in the Writ Petition. Obviously, since no reconveyance was ordered to be effected, as per the order in I.A No.5809 of 2010, but for ordering to hand over the physical possession taken over in January, 2010 on a provisional basis and the entire liability of Rs.4,87,460/- as shown in Ext. P7 sale notice having been satisfied, there is no error apparent on the face of the records. The other partners who are none other than the brothers of the writ petitioner have already been impleaded as additional respondents 5 and 6 and they have filed a counter affidavit making it clear that they have no objection with regard to the prayers sought for by the writ petitioner . Hence the apprehension expressed in the Review Petition as to the alleged dispute over the title is no more relevant. That apart, **13** ## **W.P.(C) 7694 OF 2010 & R.P. No. 485 OF 2010** the reference made to the civil suit stated as pending before the Munsiff's court, Chittur (O.S.No. 86 OF 2010) is also of having no relevance, since the said suit is stated as dismissed as withdrawn as pointed out in paragraph 7 of the counter affidavit filed by the additional respondents. Above all, the Writ Petition itself was finally heard and stands decided by this Court today. As such, the Review Petition filed against the interim order dated 17.05.2010 in the I.A. has lost its significance. It is dismissed accordingly. **P.R. RAMACHANDRA MENON, JUDGE.** lk