M.S. Pareeth v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.R.RAMACHANDRA MENON** ## **THURSDAY, THE 31ST DAY OF MAY 2012/10TH JYAISHTA 1934** ## **WP(C).No. 11209 of 2012 (A)** **---------------------------** **PETITIONER:** ## **------------------** **M.S.PAREETH, AGED 42 YEARS S/O. M.M.SEEDI, MADATHIL HOUSE, NADAKKAL P.O. ERATTUPETTA, KOTTAYAM DISTRICT.** **BY ADVS.SRI.G.SREEKUMAR (CHELUR) SMT.PREETHY KARUNAKARAN SRI.K.RAVI (PARIYARATH)** **RESPONDENTS:** **----------------------** **1. THE STATE OF KERALA REPRESENTED BY THE SECRETARY TO THE GOVERNMENT REVENUE DEPARTMENT, GOVERNMENT SECRETARIAT THIRUVANANTHAPURAM-695 001.** **2. THE COMMISSIONER OF LAND REVENUE PUBLIC OFFICES BUILDING, VIKAS BHAVAN P.O. THIRUVANANTHAPURAM-695 001.** **3. THE TAHSILDAR (REVENUE RECOVERY) TALUK OFFICE, PALA-686 575.** **4. THE VILLAGE OFFICER ERATTUPETTA VILLAGE OFFICE, PIN-686 121.** **BY GOVERNMENT PLEADER, SRI. NOBLE MATHEW** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31-05-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **BP** **WPC 11209/2012 (A)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1: A TURE COPY OF THE ASSIGNMENT DEED NO. 1815/09 DATED 26.11.09 OF THE POONJAR S R O IN FAVOUR OF THE PETITIONER.** **EXHIBIT P2: A TURE COPY OF THE ORDER PASSED BY THE THIRD RESPONDENT DATED 21.1.2011.** **EXHIBIT P3: A TRUE COPY OF THE ORDER PASSED BY THE SECOND RESPONDENT DATED 16.7.2011.** **EXHIBIT P4: A TRUE COPY OF THE REVISION PETITION FILED BY THE PETITIONER BEFORE THE FIRST RESPONDENT DATED 25.7.2011.** **EXHIBIT P5: A TRUE COPY OF THE ORDER PASSED BY THE FIRST RESPONDENT DATED 15.2.2012.** ## **RESPONDENTS' EXHIBITS : NIL** **//TRUE COPY//** **P.A. TO JUDGE** **BP** ## **P.R. RAMACHANDRA MENON, J.** ## **---------------------------------------** ## **W.P.(C). No.11209 of 2012 ----------------------------------------** ## **Dated this the 31[st] day of May, 2012** ## **JUDGMENT** Cancellation of Ext.P1 sale deed by declaring the same as null and void, with the net result that it does not convey any title to the petitioner, by passing Ext.P2 order, as confirmed by way of the revisional orders passed by Commissioner of Land Revenue and the Government respectively vide Ext.P3 and P5, forms the subject matter of challenge in this writ petition. 2. The case of the petitioner is that, he is a bonafide purchaser of the property having an extent of 29.9 cents of land from the vendor by name Thahira Pareeth as per Ext.P1 sale deed dated 26.11.2009 of Poonjar SRO and is enjoying the same ever since then, with absolute ownership and possession. But, on a fine morning, the petitioner was served with a notice issued by the third respondent referring to the proceedings under Section 44 of the R.R. Act and the provisions of the KGST Act, seeking for explanation, why the document shall not be declared as null and W.P.C. No. 11209 of 2012 -2- void, as the vendor on the relevant date was virtually prevented from effecting any such conveyance, by virtue of the statutory bar. 3. The petitioner submitted the statement of objections and the matter was finally heard and decided by the third respondent, who passed Ext.P2 order on 21.01.2011 observing that, the vendor was a chronic defaulter and huge amounts were due towards arrears under the KGST Act in respect of the period from 1997-1998 to 2002-2003. As the steps to get the amount recovered did not turn to be fruitful, the departmental authority had sent requisition under the R.R. Act/Rules to the revenue authorities on 15.10.2009 for appropriate steps. Pursuant to the same, the defaulter was served with a notice demanding to satisfy the due amount on 02.01.2010, which was never satisfied. 4. The third respondent observed that the conveyance effected by the vendor was in the mean while, i.e., on 26.11.2009, when she knew it very well that she was a defaulter and the intention to defeat the revenue was very much obvious, thus satisfying the requirement under Section 44(2) of the R.R. Act. That apart, there was a statutory hurdle by virtue of W.P.C. No. 11209 of 2012 -3- Section 26 A of the KGST Act, which prevented any person, who is a defaulter from transferring/conveying any properties, after the tax has fallen in arrear. Applying the relevant provisions of law to the given facts and circumstances, a finding was arrived at, as per Ext.P2 that, Ext.P1 title deed was null and void and necessary declaration was given in this regard. 5. Being aggrieved of Ext.P2 order, the petitioner filed a revision petition before the second respondent under Section 83 (1) of the R.R. Act. The matter was considered in detail, along with the revision petition filed by the defaulter. After hearing the parties concerned, the revisional authority also arrived at a clear finding that there was an intention to defeat the revenue, by the vendor and that, the conveyance was very much hit by Section 44(2) of the R.R. Act. Accordingly, interference was declined and revision petition was dismissed. A copy of the order is produced along with this writ petition as Ext.P3. 6. The petitioner pursued the matter further by filing second revision as borne by Ext.P4, invoking the power and procedure under Section 83(2) of R.R. Act by approaching the Government. The first respondent/Government also considered W.P.C. No. 11209 of 2012 -4- the matter and referring to the relevant provisions of law, interference was declined and the revision petition was dismissed as per Ext.P5 order dated 15.02.2012. The petitioner is challenging the orders passed by the concerned respondents as above in this writ petition. 7. The learned counsel for the petitioner submits that, even though the third respondent considered the scope of Section 26 A along with Section 44(2) while passing Ext.P2 order, the revisional authorities have not considered the said question. It is pointed out that the persons like the petitioner do not have any opportunity to raise their voice against Section 26 A, as the impediment created by the statute is only upon the vendor or the person concerned. It is stated that the petitioner had verified all the relevant records and satisfied that there was no encumbrance whatsoever, as recorded in the relevant record of the Sub Registry and the petitioner was never given to understand as to any liability towards the sales tax arrears, nor was in a position to ascertain the same by virtue of any prescribed means. It was accordingly that the sale consideration was paid and Ext.P1 sale deed was got executed. The learned counsel further submits W.P.C. No. 11209 of 2012 -5- that, in view of the law declared by this Court as per the decision reported in **Thankamma Joseph and Others v. State of Kerala and Others (2010 (1) KHC 490),** in order to attract the bar under Section 44 (2), a specific finding has to be arrived at with regard to the 'intention of defeat' the revenue, which is stated as missing in Ext.P2. With reference to the other two circumstances, i.e., Sub section (1) of Section 44, it is stated that, the same is not attracted as the demand was served upon the defaulter admittedly on 02.01.2010 as discernible from the opening paragraph of Ext.P2 order, whereas the conveyance effected in the case of the petitioner was on 26.11.2009. Coming to the circumstance dealt with by Sub section (3) of Section 44, though there is striking similarity in the names of the petitioner and that of the husband of the vendor, they are not related in any manner and as such, Sub section (3) of Section 44 is not attracted to the case in hand. The learned counsel also submits that, the liability itself is barred by limitation as contended by the defaulter before the concerned authorities, which aspect has not been considered by the concerned respondents while passing the impugned orders. W.P.C. No. 11209 of 2012 -6- 8. The learned Senior Government Pleader submits on the other hand, that the adverse circumstance projected by the petitioner with reference to the lack of opportunity to question the proceedings under Section 26 A and such other circumstances has already been considered by this Court, when the constitutional validity of the said provision was challenged and it has been answered in favour of the Revenue as per the decision rendered by this Court reported in **Jaya v. State of Kerala** ( **2005(2) KLT 543).** 9. With regard to the other aspects, particularly the ingredients of Section 44(2) of the R.R. Act, even though the written demand was served upon the defaulter only on 02.01.2010, the case is squarely covered by the mandate of Section 26 A of the KGST Act and as such, the orders passed by the concerned authorities are not assailable under any circumstance. 10. After hearing both the side and also going through the materials on record, this Court finds that, there is no dispute with regard to the sequence of events and the proceedings finalized. With regard to the satisfaction of the ingredients under Section W.P.C. No. 11209 of 2012 -7- 44(2), this Court finds that, the issue has been properly dealt with by the concerned authorities. Reading the impugned order as a whole, it is revealed that the requirement has been very much satisfied, in so far as the liability is in respect of the years 1997-1998 to 2002 to 2003; with regard to which the defaulter/vendor was very much aware of, that the due amount was required to be satisfied as on the relevant date. The liability to satisfy tax arrears does not accrue upon service of notice under the R.R. Act, but when the taxable instance takes place, i.e., at the time of sale. That apart, the case in hand is also governed by the situation contemplated under Section 26 A of the KGST Act, which reads as follows” ## _“[_ _**26A. Certain transfers to be void** :-_ _(1) Where, during the pendency of any proceedings under this Act or after the completion thereof, any assessee creates a charge on, or parts with the possession (by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever), of any of his assets in favour of any person, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the assessee under this Act.”_ W.P.C. No. 11209 of 2012 -8- By virtue of the above provision, there is an absolute bar on the vendor/defaulter/assessee in effecting any conveyance of the property, once the amount becomes due. The said provision does not refer to necessity of having issued any written demand or notice, unlike a situation covered by Sub section (1) of Section 44. Both are independent provisions and as such, the respondents are perfectly justified in having reached at the inference as mentioned therein, which does not call for any interference. 11. With regard to the applicability of the decision reported in **Thankamma Joseph and Others v. State of Kerala and Others (2010 (1) KHC 490)** , true an observation has been made by this Court that all the ingredients as stipulated under the different Sub sections have to be satisfied and a clear finding as to the intention to defeat the Revenue under Sub section (2) of Section 44 is to be rendered. The satisfaction of said ingredient has been adverted to as revealed from the proceedings; particularly in view of the observations made by the second respondent in Ext.P3 order itself. That apart, the decision cited supra was a case where the liability was in respect of the W.P.C. No. 11209 of 2012 -9- provisions of the Agricultural Income Tax Act, where there is no provision like Section 26 A of the KGST Act and the situation can only be dealt with, with reference to the circumstances contemplated in Section 44 of the R.R. Act. Existence of any such provision in the statute dealt with by this Court in the said case is not brought to the notice of this Court. Similarly, no reference was made to Section 26 A of the KGST Act and no argument was addressed in this regard, when the issue was considered in the said case. The case of department in the instant case stands on a different pedestal, by virtue of Section 26 A, where there is an absolute bar, which comes into play. 12. With regard to the question of limitation, referring to the necessity to have passed the assessent within 'four years', as put forth by the defaulter, it is to be noted that the liability in respect of assessment year 1997-98 to 2002-2003 has already become final and there is no challenge with regard to the same. The assessment having become final, the only remaining question is with regard to recovery. The recovery, as far as public arrears due on land is concerned, the period of limitation is '30 years', by virtue of the mandate under Article 112 of the Limitation Act. W.P.C. No. 11209 of 2012 -10- This being the position, the argument advanced by the learned counsel for the petitioner with reference to the plea of limitation does not hold any water at all. In the above circumstances, this Court finds that the challenge raised by the petitioner against Exts.P2, P3 and P5 fails. None of the grounds raised in support of the writ petition does serve the purpose. Interference is declined. Writ petition is dismissed accordingly. **P.R. RAMACHANDRA MENON, JUDGE.** Kp/-