Salamma L. v. Kerala Financial Corporation & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE ANTONY DOMINIC** ## **FRIDAY, THE 18TH DAY OF JANUARY 2013/28TH POUSHA 1934** ## **WP(C).No. 35068 of 2011 (G)** **---------------------------** ## **PETITIONER(S):** **----------------------** **SALAMMA.L W/O.LATE GANGADHARAN, PALAKKASERI VEEDU KANJAVELI POST,THRIKKARUVA VILLAGE, KOTTAYAM DISTRICT** **BY ADVS.SRI.MATHEW JOHN (K) SRI.DOMSON J.VATTAKUZHY** **RESPONDENT(S) :** **1. THE KERALA FINANCIAL CORPORATION REPRESENTED BY ITS MANAGING DIRECTOR VELLAYAMBALAM, THIRUVANANTHAPURAM** **2. THE DISTRICT COLLECTOR, COLLECTORATE,CIVIL LINES,CUTCHERY P.O KOLLAM 691 013** ## **3. THE MANAGER,** - **KERALA FINANCIAL CORPORATION Y.M.C.A. BUILDINGS,CHINNAKKADA,KOLLAM 691 001** **4. THE DEPUTY TAHSILDAR, (REVENUE RECOVERY) KERALA, FINANCIAL CORPORATION BEACH ROAD KOLLAM 691 001** **5. THE DEPUTY COLLECTOR(R.R) KERALA FINANCIAL CORPORATION, THIRUVANANTHAPURAM** **6. AJITHA,W/O.SURESHKUMAR, THAMPURATTY,CHENDAPPORT PUNTHALATHAZHOM P.O THRIKOVILVATTOM VILLAGE, KOLLAM DISTRICT 691 001** ## **WP(C).No. 35068 of 2011 (G)** ## **7. HARIDASAN,** **HARIGIRI,MAYYANAD POST, KOLLAM 691 001 R1 & 3 BY ADV. SRI.MOLLY JACOB, SC, KERALA FINANCIAL CORPORATION R2,R4 & R5 BY ADV. GOVERNMENT PLEADER SMT.SAMJEETHA R6-R7 BY ADVS. SRI.K.SHAJ SRI.SAJJU.S** **R BY SRI.A.A.ABUL HASSAN, SC, KERALA FINANCIAL CORPORATION** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18-01-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **BP** ## **WP(C).No. 35068 of 2011 (G)** ## **APPENDIX** ## **PETITIONER(S) EXHIBITS** **EXT.P1 A TRUE COPY OF THE JUDGMENT DATED 17.8.2011 IN WPC 19367 OF 2011 EXT.P2 A TRUE COPY OF THE ORDER ISSUED BY THE 5TH RESPONDENT DATED 28.11.2011 EXT.P3 A TRUE COPY OF THE VALUATION REPORT DATED 11.1.2011** ## **RESPONDENTS' EXHIBITS :** **EXT.R5(a): COPY OF THE CIRCULAR NO. 7494/H3/10REV. DT 02/02/2010. EXT.R5(b): COPY OF THE VALUATION REPORT DT 24/9/2010. EXT.R5(c): COPY OF THE VALUATION REPORT DT 16/7/2011.** **//TRUE COPY//** **P.A. TO JUDGE** ## **BP** ## **ANTONY DOMINIC,J** **--------------------------------** **W.P.(C) No. 35068 of 2011 ------------------------------------Dated this the 18[th] day of January, 2013** **JUDGMENT** Heard the learned counsel for the petitioner, learned standing counsel appearing for the first respondent, learned Government Pleader appearing for respondents 2, 4 and 5 and learned counsel appearing for respondents 6 and 7. 2. The deceased husband of the 6[th] respondent, availed of loan from the first respondent and respondents 6 and 7 were co-obligants to the loan. As security for the loan, among other properties, 22.20 Ares of property and the building therein comprised in R.S.No.102/6 of Thrikkovilvattom Village in Kollam Taluk was also mortgaged. Default was committed and Revenue Recovery proceedings were initiated. 3. From the submission made by the learned standing counsel for the first respondent, it is seen that as W.P.(c) No.35068 of 2011 : 2 : on November, 2011, total liability due was Rs.96.9 lakhs and the upset value fixed for the property was Rs.42.99 lakhs. Finally, in the sale that was conducted on 18.04.2011, the petitioner, who had offered Rs.29.50 lakhs was the highest bidder. She deposited the value in full. There was delay in confirming the sale in her favour. Therefore, she filed W.P.(c) No. 19367 of 2011 before this Court. By Ext.P1 judgment, this Court directed the fifth respondent to finalise the proceedings in accordance with law. 4. Accordingly, fifth respondent heard the petitioner, the third respondent, husband of the 6[th] respondent, 1[st] respondent, respondents 2 and 3 and the 7[th] respondent. Thereafter, he passed Ext.P2 order setting aside the sale in exercise of his powers under the proviso to Section 54 of the Revenue Recovery Act. He also directed the third respondent to return the amount deposited by the petitioner and the fourth respondent was directed to initiate W.P.(c) No.35068 of 2011 : 3 : action for a fresh sale of the property. It is this order, which is under challenge in this writ petition. 5. Reading of this order shows that the fifth respondent found the attachment invalid, the sale invalid, adjournment of the sale invalid and according to him, there was gross under valuation of the property. Although, arguments were addressed by the learned counsel for the parties on all the issues dealt with in Ext.P2 order, it may not be necessary for me to deal with all those aspects. 6. The first ground of irregularity mentioned in Ext.P2 order is the illegality in the attachment of the property, the relevant finding in this respect is contained in paragraph 8.2 of the order, which reads thus: _There is no original copy of the notice of attachment under Section 36(2) of the RR Act is included in the file. Only a photocopy, that too without the date of publishing at site. The attachment becomes effective only from the date of publishing the attachment notice at site, according to the RR Act. In order to make the_ W.P.(c) No.35068 of 2011 : 4 : _matter worse, the same attachment notice is applicable for 2 distinct properties in 2 separate Villages viz. one property Thrikkovilvattom Village and the 2[nd] property in the Mayyanadu Village. The 2[nd] property attached vide the notice of attachment in Sy.No.73/4 - 17 Are is not in the name of any of the 3 defaulters, as per the report dated 30.11.2009(page 43 of file) of the Village Officer, Mayyanadu and hence the said notice of attachment is defective to that extent. Though attachment is claimed, the mahazar is not seen to have been prepared at the time of attachment, or alteast prior to the first date posted for auction sale. The mahazar is seen prepared belatedly on 27.09.2010(page 235 of file). There is material irregularity in effecting the attachment._ 7. There is absolutely no material before this court to disagree with the view taken by the fifth respondent. Section 49, authorises the sale of only attached properties. Therefore, if the attachment is illegal, the sale conducted will also be illegal. In view of the facts noticed above, I should uphold this finding of the fifth respondent. W.P.(c) No.35068 of 2011 : 5 : ## 8. Fifth respondent has also found in paragraph 8.4 of the order as follows: _As per the records, the auction sale was posted on 30.01.2010, 24.02.2010, 18.08.2010, 18.11.2010, 08.12.2010, 12.01.2011, 21.02.2011, 21.03.2011 and finally on 18.04.2011. The sale was adjourned sine die a few times including the last but one occasion of auction sale. The adjournment sine die is illegal as per Section 49(4) of the Kerala RR Act, 1968._ ## 9. This finding of the fifth respondent is based on Section 49(4) of the Revenue Recovery Act, which reads thus: _The officer conducting the sale may, in his discretion, adjourn the sale to a specified day and hour, recording his reasons therefor. If the date to which the sale is so adjourned is within sixty days of the original sale, notice of the adjourned sale shall be published in the taluk and village offices concerned, in the office of the local authority within whose jurisdiction the property is situate and also on some conspicuous part of the immovable property_ W.P.(c) No.35068 of 2011 : 6 : _brought to sale. If the date of the adjourned sale is beyond sixty days of the original sale, fresh notice shall be served and published as if it were the original sale._ 10. A reading of this provision shows that an adjourned revenue sale should be within 60 days of the first date specified for the sale and if sale is to be conducted beyond 60 days, fresh notice is required to be served and published as provided in the Act. The legal position in this behalf has been clarified by this Court in the judgment in **Asha v. District Collector(1990(2) KLT 289)** , where it has held thus. _From the plain language employed in the Section it must be held that no sale which takes place beyond sixty days of the original sale, would be valid unless fresh notice was served and published, as if the said sale was an original sale. Here admittedly the sale took place on a date beyond sixty days. On a perusal of the files, it can however, be seen that no fresh .notice as envisaged under subsection (4) proceeded the sale. The sale for_ W.P.(c) No.35068 of 2011 : 7 : _this reason alone must be declared to be an invalid sale. The counsel for the petitioner nonetheless argued that, since the sale took place on a date which was fixed on a date which fell within sixty days of the original sale fresh notice cannot be insisted upon. He in this connection made reference to the first limb of sub-section (4) of S.49. This limb provides that, if the date to which the sale is adjourned is within the sixty days of the original sale, it is enough if the notice of the adjourned sale is published in the Taluk and Village Offices concerned, in the office of the local authority within whose jurisdiction the property is situate and also on some conspicuous part of the immovable property brought to sale. This procedure has been complied with while adjourning the sale to 23-2-1989, the counsel submits. I am not impressed by this argument. A sale can be adjourned from time to time without insisting upon a fresh notice provided the sale takes place on an adjourned date which falls within sixty days of the original sale. But when once the sale is adjourned to a date beyond sixty days of the original sale, the sale will not be a valid one unless it be, that it_ W.P.(c) No.35068 of 2011 : 8 : _was proceeded by a fresh notice contemplated under the last sentence in the section. The sale here, inasmuch as the same took place on a date beyond sixty days of the original sale, has rightly been declared by the third respondent, as an invalid sale._ ## 11. This judgment has been confirmed by a Division Bench of this Court in **Aboobacker v. State of Kerala (2006(2) KLT SN 81)** , where it has held thus: _Once the sale is adjourned to a date beyond sixty days of the original sale, the sale will not be valid one unless it be that it was preceded by a fresh notice contemplated under the last sentence in sub-s.(4) of S.49. Once adjourned sale is beyond sixty days of the original sale, fresh notice shall be served and published as if it were the original sale. This is a mandatory requirement. Failure to comply with the requirement would render the sale invalid._ 12. Reading of paragraph 8.4 of Ext.P2 order shows that except on few times, rest of the adjournments of the sale were sine die. Such adjournments could not have been W.P.(c) No.35068 of 2011 : 9 : ordered in the light of Section 49(4) and at any rate, any sale after 60 days from 30.01.2010 could not have been conducted without a fresh sale notice. This requirement has not been satisfied in this case and for that reason also the sale was invalid. 13. When the writ petition was heard, it was noticed that as against the liability of Rs.96.96 lakhs and the upset value of Rs.42.99 lakhs, the sale was fixed in favour of the petitioner, for Rs.29.5 lakhs. The legality of such a sale has to be assessed in the light of Section 50 of the Revenue Recovery Act, which reads thus: _- 50. Bidding on behalf of Government: (1) when an immovable property is put up for sale at the time and place specified in the notice under clause(2) of Section 49 for the recovery of arrears of public revenue due on land, if there be no bid or if the highest bid be insufficient to cover the said arrears and those subsequently, accruing due upto the date of sale, together with interest and cost of process, the officer conducting the sale shall_ W.P.(c) No.35068 of 2011 : 10 : _postpone the sale to another date which shall not be later than sixty days from the date of the first sale and give notice of the subsequent sale as required under clause(4) of Section 49._ - _(2) When the property is put up for sale on the date to which it was postponed under subsection(1), at the time and place specified in the notice,_ - _(i) if there be no bid, the officer conducting the sale may purchase the property on behalf of the Government for an amount of ten paise._ - _(ii) if the highest bid be insufficient to cover the arrears referred to in sub-section(1) and those subsequently accruing due upto the date of the sale and interest and cost of process, such officer may bid on behalf of the Government for an amount higher than such bid by ten paise,_ - _and in either case the Government shall acquire the property subject to the provisions of this Act._ - _(3) The provisions of clause(3) of Section 49 and Section 84 shall not apply to cases where immovable property is purchased on behalf of_ W.P.(c) No.35068 of 2011 ## : 11 : _the Government under this section._ _(4) Notwithstanding anything contained in this Act, after the confirmation of the sale, all the right, title and interest of the defaulter, purchased on behalf of the Government, shall be deemed to have vested in the Government from the date of purchase and if the defaulter is in actual possession of the property or if he is entitled to possession, the Collector or the authorised officer shall, immediately after the confirmation of the sale, take possession of the property. If the Collector or the authorised officer is opposed or impeded in taking possession, he shall, if a Magistrate, enforce the surrender of the land to himself and, if not a Magistrate, he shall apply to a Magistrate, and such Magistrate shall enforce the surrender of the land to the Collector or the authorised officer, as the case may be._ 4. Reading of Section 50(1) shows that when the highest offer received was insufficient to cover the arrears, the sale is required to be postponed. Sub section (2) shows that on the adjourned date also if the highest bid is W.P.(c) No.35068 of 2011 : 12 : insufficient to cover the arrears referred to in sub section(1) and the other charges, the officer conducting he sale may bid, on behalf of the Government for an amount of higher than such bid by ten paise. Insofar as this case is concerned, admittedly the arrears was more than Rs.96 lakhs as against this the property has been sold infavour of the petitioner for 29.5 lakhs. One does not need any explanation to hold that in this case, Section 50 also has been violated. Consequently, the conclusions in Ext.P2 deserves to be upheld. If that be so, since the sale in favour of the petitioner was illegal, writ petition deserves dismissal and I do so. Sd/- **ANTONY DOMINIC, JUDGE** ln