O.K. Shibindas v. Kerala Small Industries Development Corporation Ltd. (and State of Kerala, Tahsildar)

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE M.L.JOSEPH FRANCIS FRIDAY, THE 7TH DAY OF JUNE 2013/17TH JYAISHTA 1935 RSA.No. 699 of 2005 & CO. 56/2006 ------------------------------------------------------- AS 195/2003 of DISTRICT COURT,KOZHIKODE OS 303/2001 of II ADDL.SUB COURT,KOZHIKODE APPELLANTS/RESPONDENTS 3 & 4/DEFENDANTS 3 & 4: ----------------------------------------------------------------------------- ## 1. KERALA SMALL INDUSTRIES DEVELOPMENT - CORPORATION LTD., REP. BY ITS MANAGING DIRECTOR SANTHI NAGAR, TRIVANDRUM-695 001. ## 2. CHIEF ENGINEER, KERALA SIDCO, SANTHI NAGAR, TRIVANDRUM-695 001. BY ADVS.SRI.M.A.MANHU, SC, SIDCO SRI.R.T.PRADEEP, SC FOR SIDCO RESPONDENTS/APPELLANT AND RESPONDENTS 1 & 2/PLAINTIFF & DEFENDANTS 1&2 ---------------------------------------------------------------------------------------------------------------------- ## 1. O.K.SHIBINDAS, S/O.O.K.VELAYUDHAN, - ORALAKOTT, POOVAMTHUM PARAMBA P.O. CHERUKULATHUR AMSOM, KOZHIKODE. ## 2. STATE OF KERALA, REPRESENTED BY - DISTRICT COLLECTOR, KOZHIKODE, CIVIL STATION CALICUT. ## 3. THE TAHSILDAR (RR), TALUK OFFICE, KOZHIKODE. R,R1 BY ADV. SRI.JACOB ABRAHAM BY ADV. GOVERNMENT PLEADER SRI.REJI JOSEPH (R2 & R3) THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 28.5.2013 ALONG WITH CO. 56/2006, THE COURT ON 07-06-2013 DELIVERED THE FOLLOWING: ## **M.L.JOSEPH FRANCIS, J. -----------------------------------------------** ## **R.S.A. No.699 of 2005 &** ## **Cross Objection No.56 of 2006 ----------------------------------------------Dated 7[th] June, 2013.** ## **J U D G M E N T** Defendants 3 and 4 in O.S. No.303 of 2001 on the file of the II Additional Sub Court, Kozhikode are the appellants. The above suit was filed by the 1[st] respondent herein for a declaration that the Revenue Recovery Proceedings initiated against him for realisation of `1,65,026/- is illegal, void and unenforceable and for a consequential injunction restraining the appellants and respondents 2 and 3 from enforcing the demand. 2. The plaint allegations are that the defendants 3 and 4 invited tender for construction of an overhead tank, pump house and open well and to connect the water supply arrangement in the development plot at Andoor in Kannur District. The plaintiff after examining the tender schedule and inspecting the work site offered to execute the work at 33% above the rate and executed Ext.B10 agreement on 6.5.1994 undertaking to complete the work on or before 15.9.1994. But the plaintiff could not commence the work since the 2 R.S.A. No.699 of 2005 & C.O.56/06 defendants 3 and 4 did not hand over the work site in time. The 4[th] defendant changed the idea of digging an open well and instead dug a bore well in a plot allotted to third party in the year 1997 which was objected to by the third party. The plaintiff could not start the remaining work as the defendants 3 and 4 could not settle the dispute with the third party for a considerable time. The plaintiff issued several letters to defendants 3 and 4 for handing over the work site to enable him to commence the work and to locate spot where the well could be dug. Delay in completing the work was attributed to defendants 3 and 4. The fourth defendant terminated the contract and intimated the plaintiff that the balance work will be rearranged at his risk and cost after adjusting the security deposit and retention money towards the expenditure incurred by defendants 3 and 4 for rearranging the work. The plaintiff was not responsible for any delay and negligence and the delay was caused solely by defendants 3 and 4 and that requisition to defendants 1 and 2 to realise the amount of `1,65,026/incurred by defendants 3 and 4 for rearranging the balance work under the Revenue Recovery Act is illegal and the 3 R.S.A. No.699 of 2005 & C.O.56/06 Revenue Recovery Proceedings have been initiated to vex and harass the plaintiff and therefore the plaintiff prayed for a decree declaring that the demand notice dated 6.9.2001 is null, void and illegal and to grant a prohibitory injunction restraining the defendants from enforcing the demand. 3. Defendants 1 and 2 filed a joint written statement contending that the suit is not maintainable as the plaintiff has to exhaust the remedies under the Revenue Recovery Act and that they have initiated steps for recovery on the basis of a requisition made by defendants 3 and 4. The suit challenging the revenue recovery proceedings is barred and prayed for dismissal of the suit. 4. Defendants 3 and 4 filed a joint written statement contending that the suit filed without exhausting the remedy provided under the Revenue Recovery Act is not maintainable. The Civil Court has no jurisdiction to entertain a suit against the Revenue Recovery Proceedings as there is bar under Section 72 of the Revenue Recovery Act. The plaintiff after examining the schedule and inspecting the work site submitted the tender for the work of construction of the water tank, pump house etc. 4 R.S.A. No.699 of 2005 & C.O.56/06 and that the work was awarded to the plaintiff. The plaintiff executed Ext.B10 agreement dated 6.5.1994 undertaking to complete the work within 15.9.1994. After issuing the work order, the work site was handed over to the plaintiff on 6.5.1994 and the plaintiff did not commence the work even after a lapse of 11 months. The plaintiff requested to extend the period on the ground that he could not procure the workers in Kannur District and the period was extended. The plaintiff had not complained that the work site was not handed over in time or there is any lapse on the part of defendants 3 and 4. The plaintiff brought his tools and men to the work site only in January 1996 and in spite of the inordinate delay and failure to carry out the work, defendants 3 and 4 passed bill for payment. The plaintiff did not respond to repeated instructions to resume the work and final notice dated 10.4.1996 was issued requiring the plaintiff to resume the work. But the plaintiff did not resume the work even after that. As the plaintiff appeared to have abandoned the work, the fourth defendant terminated the contract by Ext.B21 proceedings dated 20.5.1996 and required him to attend the measurement at the site and also intimated R.S.A. No.699 of 2005 & C.O.56/06 5 that the balance work will be rearranged at his risk and cost and the balance work was rearranged at a cost of `2,14,214/and the security deposit and retention amount of `81,439/- was adjusted towards the cost of rearranging the balance work. On account of negligence and abandonment of the work by the plaintiff, defendants 3 and 4 incurred a loss of `1,32,775/- after deducting the security deposit and deposit. Defendants 3 and 4 made a requisition to defendants 1 and 2 for recovery of the loss of rearrangement together with interest under Revenue Recovery Act from the plaintiff and submitted that recovery steps initiated under the Revenue Recovery Act is legal and valid that a civil suit is barred under Section 72 of the Revenue Recovery Act and prayed for dismissal of the suit with costs. 5. Before the Sub Court, no oral evidence was adduced from both sides. Exts.A1 to A5, X1 and B1 to B24 were marked. The learned Additional Sub Judge, on considering the evidence on record, dismissed the suit on the ground that the fraud alleged in the plaint is not proved. Against that judgment and decree dismissing the suit, the plaintiff filed A.S.195 of 2003 before the District Court, Kozhikode, which was 6 R.S.A. No.699 of 2005 & C.O.56/06 allowed without costs and the suit was decreed without costs declaring that the demand notice dated 6.9.2001 is null and void and unenforceable and the respondents in that appeal were restrained by a decree of prohibitory injunction from enforcing the demand notice dated 6.9.2001. Against that judgment and decree, respondents 3 and 4 in that appeal filed this Second Appeal. The appellant/plaintiff filed Cross Objection No.56/2006 claiming costs of the appeal. 6. Heard the learned counsel for the appellants and the learned counsel for the contesting respondents. 7. The learned counsel for the appellants submitted that the lower appellate court, without considering the fact that when breach was admitted by the plaintiff and to ascertain the loss on re-arrangement of balance work does not involve any enquiry or assessment as the loss incurred by defendants 3 and 4 is ascertained by taking the difference between the amount originally fixed and the amount incurred in re-arranging the balance work which is purely a matter of simple arithmetics wrongly applied the ratio of the decisions to the facts of the case allowed the appeal, which is patently erroneous and liable R.S.A. No.699 of 2005 & C.O.56/06 7 to be set aside on the ground that Section 72 of the Kerala Revenue Recovery Act clearly bars the maintainability of the suit. 8. The learned counsel for the appellants, relying on the decision of this Court in **Special Tahsildar v. Vasu** (2006 (4) KLT 557) argued that the written demand issued under the Kerala Revenue Recovery Act is a matter required by Section 72 of the Act to be determined by the Collector or any authority mentioned in that Act. The learned counsel for the contesting 1[st] respondent supported the judgment of the lower appellate court and submitted that the lower appellate court ought to have allowed the costs of the appeal. 9. There is no dispute that Ext.B10 is the agreement dated 6.5.1994 entered into between the plaintiff and the defendants 3 and 4, by which the plaintiff undertook to complete the construction work of the structures before 15.9.1994. But, the plaintiff could not complete the construction work due to various reasons. In Clause 3 of Ext.B10, it is stated that time is considered to be the essence of the contract and the plaintiff has to commence his work as soon 8 R.S.A. No.699 of 2005 & C.O.56/06 as the site is handed over. Clause 2 of Ext.B10 agreement provides that if the plaintiff neglected or failed to proceed with due diligence, the Deputy Manager of the third defendant shall terminate the contract and the work will be arranged otherwise at the risk and costs of the plaintiff. Clause 5 of the special conditions attached to Ext.B10 states that arbitration Clause 19 of the Tender Conditions is cancelled and that all the disputes and differences arising out of the contract shall be settled by the civil court. A Division Bench of this Court in the decision reported in **Special Tahsildar v. Vasu** (2006(4) KLT 557) held thus : “Any question relating to execution, discharge or satisfaction of a demand under the Act, arising between the Collector or the Authorised Officer and the defaulter or his representative or any other person claiming any right through the defaulter is outside the purview of adjudication by the civil court. Those are matters to be considered either by the District Collector or by the Board of Revenue. The only situation where a suit is maintainable challenging the revenue recovery under the provisions of the Kerala Revenue Recovery Act is where a question of fraud is involved. As the plaintiff has no such 9 R.S.A. No.699 of 2005 & C.O.56/06 case, the suit is not maintainable.” 10. In the present case, it is alleged in the plaint that the whole revenue recovery proceedings is the result of fraud played by the 4[th] defendant. The term “fraud” is not defined in the Kerala Revenue Recovery Act. According to Section 17 of the Indian Contract Act, the following are essentials of a fraud : (i) There should be a false statement of fact by one person who himself does not believe the statement to be true. (ii) The statement should be made with a wrongful intention of deceiving another party thereto and inducing him to enter into the contract on that basis. 11. According to Order VI Rule 4 of the Code of Civil Procedure, a party pleading relies on fraud should give particulars with dates and items if necessary be stated in the pleadings. In the present case, the particulars regarding fraud are not stated in the plaint and the plaintiff has not adduced any oral evidence to prove the same with reference to documents. Hence, the fraud alleged is not proved. Therefore, the lower appellate court is not justified in allowing the appeal R.S.A. No.699 of 2005 & C.O.56/06 10 and decreeing the suit by setting aside the judgment and decree of the II Additional Sub Court, Kozhikode, dismissing O.S.No.303 of 2001. In that view of the matter, the appellant in that appeal who is the first respondent herein is not entitled to get his costs in that appeal. Accordingly, this Second Appeal is allowed and the judgment and decree in A.S.195 of 2003 before the District Court, Kozhikode is set aside and that appeal is dismissed. The judgment and decree dismissing O.S.No.303 of 2001 on the file of the II Additional Sub Court, Kozhikode is restored. Cross Objection No.56 of 2006 is dismissed without costs. There is no order as to costs in this Second Appeal. Sd/- ## **M.L.JOSEPH FRANCIS, JUDGE.** tgs (true copy)