SAJ Flight Services Private Limited v. Kerala State Industrial Development Corporation Limited and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR** **TUESDAY, THE 24TH DAY OF MAY 2016/3RD JYAISHTA, 1938** **WP(C).NO. 15875 OF 2009 (D) ----------------------------** **PETITIONER(S):** **-------------** **SAJ FLIGHT SERVICES PRIVATE LIMITED, AIR PORT, THIRUVANANTHAPURAM,, REP. BY ITS DIRECTOR REJI K.VARGHESE.** **BY ADVS.SRI.K.P.DANDAPANI (SR.) SRI.MILLU DANDAPANI** **RESPONDENT(S):** **--------------** **1. KERALA STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED,, KESTON ROAD, KOWDIAR, THIRUVANANTHAPURAM-695 003, REP. BY ITS MANAGING DIRECTOR.** **2. THE SECRETARY,** **DEPARTMENT OF INDUSTRIES,, GOVERNMENT OF KERALA, SECRETARIAT,, THIRUVANANTHAPURAM.** **3. THE SECRETARY, MINISTRY OF FOOD PROCESSING INDUSTRIES, GOVERNMENT OF INDIA, PANCHSHEEL BHAWAN, AUGUST KRANTI MARG, NEW DELHI-110 049.** ## **ADDITIONAL 4TH RESPONDENT IMPLEADED:** ## **ADDL R4: THE DEPUTY TAHSILDAR(RR) THIRUVANANTHAPURAM** **(ADDITIONAL 4TH RESPONDENT IMPLEADED AS PERE ORDER DATED 15.12.2009 IN I.A.NO.15788/09)** **R3 BY ADV. SRI.T.P.M.IBRAHIM KHAN,ASST.S.G OF INDI R1 BY ADV. SRI.M.PATHROSE MATTHAI (SR.) R3 BY ADV. SRI.T.P.M.IBRAHIM KHAN,ASST.S.G OF INDI BY SRI.SAJEEV VARGHESE, SC BY SRI.SAJEEV VARGHESE, SC BY GOBERNMENT PLEADER SRI.BUIJU MEENATOOR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24-05-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 15875 of 2009 (D)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXT.P1: TRUE COPY OF THE ORDER DATED 28.10.2005 ISSUED BY THE FIRST RESPONDENT** **EXT.P2: TRUE COPY OF THE LETTER DATED 13.2.2008 ISSUED BY THE 3RD RESPONDENT TO 1ST RESPONDENT** **EXT.P3: TRUE COPY OF THE ORDER DATED 8.11.2006 ISSUED BY THE 2ND RESPONDENT** **EXT.P4: TRUE COPY OF THE LETTER DATED 16.10.2006 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT** **EXT.P5: TRUE COPY OF THE LETTER DATED 7.11.2006 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT** **EXT.P6: TRUE COPY OF THE LETTER DATED 26.12.2006 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT** **EXT.P7: TRUE COPY OF THE APPLICATION DATED 7.9.2005 SUBMITTED TO THE 1ST RESPONDENT** **EXT.P8: TRUE COPY OF THE LETTER DATED 23.09.2005 ISSUED BY THE ADFIK TO THE PETITIONER** **EXT.P9: TRUE COPY OF THE LETTER DATED 31.01.2007 ISSUED BY ADFIK ISSUED TO THE PETITIONER** **EXT.P10: TRUE COPY OF THE LETTER DATED 22.02.2007 ISSUED BY THE THE PETITIONER TO THE ADFIK** **EXT.P11: TRUE COPY OF THE LETTER DATED 23.09.2005 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER** **EXT.P12: TRUE COPY OF THE LETTER DATED 10.03.2008 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT** **EXT.P13: TRUE COPY OF THE LETTER DATED 4.4.2008 ISSUED BY THE 1ST RESPONDENT** **EXT.P14: TRUE COPY OF THE LETTER DATED 11.04.2008 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER** **EXT.P15: TRUE COPY OF THE LETTER DATED 17.4.2008 ISSUED BY THE 3RD RESPONDENT** **EXT.P16: TRUE COPY OF THE LETTER DATED 23.4.2008 ISSUED BY THE 3RD RESPONDENT TO THE 1ST RESPONDENT** **EXT.P17: TRUE COPY OF THE LETTER DATED 13.5.2008 ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT** **EXT.P18: TRUE COPY OF THE LETTER DATED 21.5.2008 ISSUED BY THE** ## **WP(C).No. 15875 of 2009 (D)** **PETITIONER TO THE 3RD RESPONDENT** **EXT.P19: TRUE COPY OF THE NOTICE DATED 14.5.2009 ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER** **EXT.P20.TRUE COPY OF THE REPRESENTATION DATED 25.5.2009 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT** **EXT.P21: PHOTOCOPY OF STATEMENT AS PER THE DATA PROVIDED BY HDFC BANK AS ON 2.7.2009 REFERRED TO IN THE REPLY AFFIDAVIT** **EXT.P22: PHOTOCOPY OF COMPLAINT SUBMITTED BY THE PETITIONER BEFORE THE HONOURABLE MINISTER FOR INDUSTRIES, KERALA** ## **RESPONDENTS' EXHIBITS: NIL** ## **//TRUE COPY//** **P A TO JUDGE** **A.K.JAYASANKARAN NAMBIAR, J. ............................................................. W.P.(C).No.15875 of 2009 ............................................................. Dated this the 24[th] day of May, 2016** ## **J U D G M E N T** The petitioner in the writ petition had availed of a credit facility from the 1[st] respondent Corporation. It would appear that, pursuant to a default committed by the petitioner in the repayment of the loan amounts, the respondent corporation had initiated proceedings against the petitioner for recovery of the defaulted loan amount. The said recovery proceedings were initiated under the Kerala Revenue Recovery Act. In the writ petition, the petitioner impugned the steps taken by the respondent Corporation under the Revenue Recovery Act on various grounds which are narrated in the writ petition. During the pendency of the writ petition before this Court, however, the petitioner, pursuant to an interim order dated 17.02.2011, cleared the entire liability due to the respondent Corporation. The only issue that remains to be considered is the legality of the demand made by the 1[st] respondent Corporation on the petitioner, pursuant to a like demand raised on the 1[st] respondent by the 2[nd] respondent, towards the revenue -2- W.P.(C). No.15875 of 2009 recovery charges for the alleged use of the State machinery for recovering the amounts due to the 1[st] respondent. It is stated that an amount representing 7.5% of the total dues that were outstanding to the 1[st] respondent was demanded towards recovery charges by the 2[nd] respondent and this amount was in turn demanded by the 1[st] respondent from the petitioner. It is not in dispute that pursuant to the interim order passed by this Court, the amounts that were due to the 1[st] respondent Corporation were paid directly by the petitioner to the 1[st] respondent Corporation, and therefore, there was no payment that was recovered through the Government machinery under the Revenue Recovery Act. The issue as to the amount that can be collected by the 2[nd] respondent by way of collection charges under the Revenue Recovery Act has been considered by a Division Bench of this Court in the decision reported in **Deputy Tahsildar and Another v. Vijaya Builders and Others [2016 (1) KHC 897]** wherein it was held as follows: “15. There is no dispute about the fact that when recovery is being effected by revenue recovery authorities, they are entitled to collect all the amounts as specified in items (i) to (viii) which are applicable. Rule 5(1) permits collection charges to be levied when recovery proceedings have been taken at the instance of any institution notified under section 71 or collected on behalf of any institution under Section 68. 16. The facts of this case disclose that the petitioners had paid the amount under an OTS -3- W.P.(C). No.15875 of 2009 though the petitioner could not pay the amount within the specified time. By Ext.P16 dated 02/03/2006, the revenue recovery authorities had released the attachment stating that the defaulters had closed the loan account under OTS and they had also remitted the collection charges. The contention urged on behalf of the writ petitioners is that the recovery of collection charges was totally illegal as no recovery was made based on revenue recovery proceedings. Ext.P6 is the letter dated 05.08.2005 issued by KFC termed as OTS extension letter, where they have called upon the petitioners to remit the revenue recovery charges and Court expenses, if any. 17. But, it is relevant to note that, going by the scheme of revenue recovery, collection charges can be recovered only if any amount is recovered through revenue recovery proceedings. Rule 4 itself takes care of various stages where demand notice had been issued, when there is attachment and sale of immovable property, publication charges, transport charges and other charges. But, apparently, it may not be possible for the Government to quantify the actual infrastructural expenses involved in the matter. When revenue recovery proceedings are initiated, there is every possibility of the officers spending their time for taking various steps under the Revenue Recovery Act and the Rules framed thereunder. Such expenditure cannot be quantified. Only such expenses relating to publication in newspaper and other items mentioned in Table to Rule 4 are capable of quantification. But, it is not possible for this Court to suggest any method to arrive at the actual cost. Since Rules have already been framed, it is possible for the Government to compute the actual expenditure, if no recovery is effected by way of revenue recovery proceedings. Under such circumstances, we are of the view that the learned Single Judge was justified in directing recovery of the actual expenditure involved in the matter and to refund the balance amount.” -4- W.P.(C). No.15875 of 2009 2. Taking cue from the said judgment and on the facts of the instant case, I am of the view that, the 2[nd] respondent can insist only on the recovery of such expenses as had been actually incurred by the authorities under the Revenue Recovery Act for the purposes of attempting a recovery of the dues of the petitioner to the 1[st] respondent Corporation. The learned Government Pleader has not been able to get instructions as regards the actual amount incurred by the Government in this regard. Accordingly, I dispose the writ petition with the following directions: i) The 2[nd] respondent shall, based on the judgment of the Division Bench of this Court in the decision referred above quantify the expenses, if any incurred by it, in connection with the steps taken for recovery of amounts due to the 1[st] respondent Corporation from the petitioner herein. The said computation of charges shall be in accordance with Rules 4 and 5 of the Revenue Recovery Rules, 1968 (Kerala) and shall be done within a period of six weeks from the date of receipt of a copy of this judgment. ii) The 2[nd] respondent shall intimate the details of the amount so quantified to the 1[st] respondent who, in turn, shall intimate the petitioner of the amount so quantified by the -5- W.P.(C). No.15875 of 2009 Government within a further period of one month from the date of receipt of the intimation from the 2[nd] respondent. The petitioner shall then be granted a further period of one month for discharging the liability, if any, to the 2[nd] respondent. On the petitioner satisfying the said demand, the 1[st] respondent shall release the security by way of immovable property that has been retained by them during the pendency of this writ petition. iii) Taking note of the fact that the writ petition itself has been pending since 2009, the 2[nd] respondent is directed to adhere to the time limit stipulated in this judgment strictly and it is made clear that if the 2[nd] respondent fails to provide a quantification of the liability within the period granted in this judgment, then the 2[nd] respondent, and consequently the 1[st] respondent, shall after the expiry of the aforesaid period, cease to be entitled to collect any amount towards recovery charges from the petitioner or the 1[st] respondent. Sd/- **A.K.JAYASANKARAN NAMBIAR JUDGE** mns/24.05.16 -6- W.P.(C). No.15875 of 2009