K.S. JOSEPH v. Deputy Tahsildar (RR) and Others, Kerala Financial Corporation

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC MONDAY, THE 18TH DAY OF MARCH 2013/27TH PHALGUNA 1934 WP(C).No. 34043 of 2011 (E) -------------------------------------- PETITIONER(S): -------------------------- K.S. JOSEPH, RUBBER PRODUCTS & MANAGING PARTNER, M/S.GENERAL RUBBER WORKS), IX/420-A KANIYARKODE P.O., THIRUVILWAMALA, THRISSUR-690 594. BY ADVS.SRI.G.SHRIKUMAR (SR.) SRI.SREEJITH S.NAIR SRI.K.G.JITHU JAGANNATH RESPONDENT(S): ---------------------------- 1. THE DEPUTYTAHSILDAR (RR) AND OTHERS KERALA FINANCIAL CORPORATION, SMART CENTRE, KOKKALA THRISSUR-21. 2. THE DISTRICT COLLECTOR, THRISSUR, PIN-690 001. 3. THE KERALA FINANCIAL CORPORATION BRANCH OFFICE, SMART CENTRE, KOKKALA THRISSUR, PIN-690 021, REPRESENTED BY ITS CHIEF MANAGER IN - CHARGE. R3 BY ADV. SRI.M.M.SAYED MUHAMMED, SC, KFC R3 BY ADV. SRI.MOLLY JACOB, SC, KERALA FINANCIAL CORPORATION R1 & R2 BY ADV. GOVERNMENT PLEADER SRI.JOSEPH GEORGE THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18-03-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 34043 of 2011 (E) :: :: ## APPENDIX ## PETITIONERS' EXHIBITS: EXT.P1: TRUE COPY OF THE DEMAND NOTICE DT.14-6-2010 ISSUED BY 1ST RESPONDENT U/S 7 AND 34 OF THE REVENUE RECOVERY ACT. EXT.P2: TRUE COPY OF THE COMMUNICATION DT.29-6-2011 ISSUED BY 3RD RESPONDENT. EXT.P3: TRUE COPY OF THE COMMUNICATION DT.23-8-2011 ISSUED BY 3RD RESPONDENT. EXT.P4: TRUE COPY OF THE NOTICE OF ATTACHMENT DT.29-8-2011 ISSUED BY 1ST RESPONDENT. EXT.P5: TRUE COPY OF THE LAWYER NOTICE DT.6-9-2001 ISSUED BY THE LAWYERS OF THE PETITIONER.. EXT.P6: TRUE COPY OF THE REPLY NOTICE DT.14-9-2011 ISSUED BY 1ST RESPONDENT. EXT.P7: TRUE COPY OF THE GOVERNMENT NOTIFICATION DATED 24-4-2008. RESPONDENTS' EXHIBITS: NIL //true copy// ## P.S. To Judge sk/- ## **ANTONY DOMINIC,J** ## **--------------------------------** ## **W.P.(C) No. 34043 of 2011** ## **------------------------------------Dated this the 18[th] day of March, 2013** ## **JUDGMENT** Heard the learned senior counsel for the petitioner, the learned Government Pleader appearing for respondents 1 and 2 and the learned standing counsel appearing for the third respondent. 2. Petitioner was a defaulter to the third respondent. To recover the dues, proceedings under the Revenue Recovery Act were initiated and Ext.P1 notices under Sections 7 and 34 were issued on 14.06.2010. At that stage, a scheme for One Time Settlement was prevailing in the third respondent establishment and the petitioner had already made an application dated 01.04.2011 for settling the liability under the said scheme. His request was accepted by the third respondent and by Ext.P3, he was asked to remit the amount due along with revenue recovery collection charges. The petitioner remitted the W.P.(c) No.34043 of 2011 : 2 : amount due to the third respondent and the third respondent accordingly issued Ext.P3 communication dated 23.08.2011 informing the petitioner that they have no objection in releasing the documents mortgaged by him subject to the production of a NOC from the Revenue Recovery authorities. After the issuance of Ext.P3, Ext.P4 notice under Section 36 of the Revenue Recovery Act for sale of the property mentioned in Ext.P1 notices were issued on 29.08.2011. On the ground that he had settled the liability under the One Time Settlement Scheme, the petitioner sought waiver of the collection charges. That request was not allowed and therefore, this writ petition is filed. 3. Contention of the counsel for the petitioner is that the petitioner having settled the liability otherwise than in the course of the revenue recovery proceedings, is not liable to pay collection charges, for the realisation of W.P.(c) No.34043 of 2011 : 3 : which, Revenue Recovery proceedings are now continued. It is also his case that Ext.P4 notice under Section 36 was issued on 29.08.2011 after the liability was settled with the third respondent. 4. However, the learned Government Pleader, who has obtained instructions in the matter states that the KFC intimated the District Collector about the settlement only by their letter dated 22.10.2011 and that even prior to the receipt of the letter, Ext.P4 notice under Section 36 was issued. Therefore, he says that the petitioner is liable to pay collection charges of 1% on the liability and for the recovery of which, Revenue Recovery proceedings were initiated. 5. Thus, the only question that arises for consideration is whether the petitioner is liable to pay the collection charges on the amount that was due from him. W.P.(c) No.34043 of 2011 : 4 : 6. Ext.P1 shows that the revenue recovery proceedings were initiated against the petitioner by issuing notices under Sections 7 and 34 on 14.06.2010. Ext.P3 issued by the KFC on 23.08.2011 shows that the liability was already settled by the petitioner availing of the benefit of a One Time Settlement Scheme and it was thereafter that Ext.P4 notice under Section 36 was issued on 29.08.2011. These facts, therefore, demonstrate that the liability was settled by the petitioner directly with KFC immediately after notices were issued under Sections 7 and 34. In such a case, in view of the principles laid down by a Division Bench of this Court in **Malabar Organics Ltd. v. State of Kerala(2009(4) KLT 328),** the petitioner cannot be held liable for collection charges. The Division Bench has explained the matter thus: “ _We have made it clear in several judgments(W.P.(c)No.22509/08 and other connected cases) that there is no liability to pay_ W.P.(c) No.34043 of 2011 : 5 : _collection or service charges in case the defaulters pay the arrears directly to the institution pursuant only to a notice under Section 7 or 34. In other words, the liability to pay such charges arises only in cases where further steps towards attachment or sale are taken.”_ ## 7. Although, the learned Government Pleader pointed out that an SLP filed against the Division Bench judgment is pending before the Apex Court, having regard to the law laid down by another Division Bench of this Court in _**Abdu Rahiman v. District Collector, Malappuram (2009(4) KLT 485)**_ , irrespective of the pendency of the SLP, this Court is bound to follow the Division Bench judgment. In view of the above, the petitioner is entitled to succeed. Therefore, this writ petition is disposed of setting aside the recovery proceedings initiated against the petitioner for realising the collection charges in W.P.(c) No.34043 of 2011 : 6 : respect of the liability which he has already settled with the KFC. It is directed that on the production of a copy of this judgment, the third respondent will release to the petitioner, documents mortgaged by him as security for the loan availed. Sd/- **ANTONY DOMINIC, JUDGE** ln