SMT. Shakunthala.R. v. Tahsildar (RR), Taluk Office, Mannarkad; The State Bank of India

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT:- THE HON'BLE THE CHIEF JUSTICE DR. MANJULA CHELLUR & THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 26TH DAY OF AUGUST 2013/4TH BHADRA, 1935 ## **W.A.No.1188 of 2013** -------------------------------------- AGAINST THE JUDGMENT IN W.P.(C).NO.7706/2013, DATED 19-03-2013, OF HIGH COURT OF KERALA. ------------------ ## **APPELLANT/** PETITIONER:- ---------------------------------------- SMT.SHAKUNTHALA.R., W/O.MOHANDAS, PUTHANPURAKKAL HOUSE, THENKARA, MANNARKKAD - 678 581, PALAKKAD DT. BY ADV. SRI.A.MOHAMED MUSTAQUE. ## **RESPONDENTS/** RESPONDENTS:- -------------------------------------------------- 1. THE TAHSILDAR (RR), TALUK OFFICE, MANNARKKAD, PALAKKAD - 679 581. 2. THE STATE BANK OF INDIA, POTTASSERI BRANCH, PALAKKAD - 6789 593, REPRESENTED THROUGH ITS MANAGER. R1 BY SPECIAL GOVERNMENT PLEADER SMT.GIRIJA GOPAL. R2 BY STANDING COUNSEL SRI.P.V.SURENDRANATH. THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 26-08-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:- Manjula Chellur, C.J. & K.Vinod Chandran, J. -------------------------------W.A.No.1188 of 2013 --------------------------------Dated this, the 26[th] day of August, 2013 ## JUDGMENT ## K.Vinod Chandran,J. Admittedly the appellant has availed of an agricultural loan from the 2[nd] respondent-Bank, which is in default and upon the failure to pay off the arrears, the respondent-Bank had first initiated proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 [for brevity “SARFAESI Act”] and then under the Revenue Recovery Act, 1968 [for brevity “R.R.Act”]. Before the learned Single Judge, the only prayer was with respect to an instalment facility, which was granted, but remains not complied with by the appellant. 2. Before us, the contentions raised against the recovery proceedings are three-fold. The appellant contends that in view of Exhibit P3 order passed by the Debts Recovery Tribunal (hereinafter referred to as “the Tribunal”) directing status-quo with respect to the sale notice issued under the SARFAESI Act; the respondent-Bank is precluded from proceeding under the R.R.Act. - 2 - W.A.No.1188 of 2013 The next contention is that there is no notification making the R.R.Act applicable to the instant transaction. The last contention is that there is a dispute with respect to the quantum and in the teeth of such dispute, no revenue recovery proceedings can be initiated, since it is incumbent upon the respondent-Bank to first to ensure adjudication of the amounts due and then proceed for recovery under the R.R.Act. 3. It is seen from Exhibit P3 order that on initiation of proceedings under the SARFAESI Act, the appellant was before the Tribunal contending that the property mortgaged is an agricultural land and the same is not liable to be proceeded with under the said Act. An alternate contention also was raised with respect to the entitlement for the benefit under the Agricultural Debt Waiver and Debt Relief Scheme, 2008, issued by the Government of India. The Tribunal itself has found that as per Annexure A4 produced before the Tribunal, it is clear that whatever relief that was available under the Relief Scheme, was granted. But, however, considering the issue that the agricultural property cannot be proceeded with under the SARFAESI Act, a status-quo order was issued; but however “with regard to the impugned proceedings against the subject secured asset ...” ( _sic_ ). This would make it abundantly clear that the - 3 - W.A.No.1188 of 2013 status-quo order was only with respect to the proceedings initiated under the SARFAESI Act. The respondent-Bank is perfectly entitled to proceed with any other recovery which does not restrict agricultural land being proceeded against for realization of debts due. 4. It was in this context that the respondent-Bank proceeded under the R.R.Act. It cannot be gainsaid that there is no notification issued under Section 71 of the R.R.Act to bring the disputed loan transaction under the purview of the R.R.Act. The learned counsel for the Bank has brought our attention to S.R.O.797/79, which specifically provides that any amounts due to any Bank in any loan advanced for agriculture or agricultural purposes can be proceeded against under the R.R.Act. The appellant cannot at all dispute that the loan availed of by the appellant was other than an agricultural loan in view of the specific contentions made before the Tribunal and also before this Court. 5. The learned counsel for the appellant would place reliance on a decision reported in _**Shriram Engineering Construction Co. Ltd. v. K.S.I.D.C.**_ **[2007 (2) KLT 388]** to urge the contention that without adjudication, no recovery is possible under the R.R.Act. In the cited decision, the recovery under the R.R.Act - 4 - W.A.No.1188 of 2013 was taken; with respect to damages allegedly caused to a Government company by reason of the petitioner therein not having fulfilled certain contractual obligations. The petitioner therein had also approached the Civil Court and it was the contention that without adjudication as to the loss caused by reason of the alleged default in complying with the contractual obligations; no determination of amount of damages is permissible unilaterally by the Government company. A Division Bench of this Court accepted the above proposition, according to us, on the facts that are disclosed in the said case. That dictum will not be applicable in the instant case where the R.R.Act has been specifically notified as applicable to recovery of dues to the Bank, in loans advanced for agricultural purposes; as arrears of land revenue. 6. The Supreme Court judgment in _**State of Kerala v.**_ _**Kalliyanikutty**_ **[1999 (2) KLT 146 (SC)]** has been relied on and the following paragraph has been extracted: “The Kerala Revenue Recovery Act does not create any new right. It merely provides a process for speedy recovery of moneys due. Therefore, instead of filing a suit, (or an application or petition under any special Act), obtaining a decree and executing it, the bank or the financial institution can now recover the claim under the Kerala Revenue Recovery Act. Since this Act does not create any new right, the person claiming recovery - 5 - W.A.No.1188 of 2013 cannot claim recovery of amounts which are not legally recoverable nor can a defence of limitation available to a debtor in a suit or other legal proceeding be taken away under the provisions of the Kerala Revenue Recovery Act”. The said decision is more apposite on the facts of the instant case. The Hon'ble Supreme Court noticed that under Section 71, provisions of the R.R.Act is made applicable to the recovery of amounts due from any persons to any specified institution; under public interest. The expediency of recovering amounts granted as loans to further public policy of the State, rather than as ordinary banks; so as to again make advances to the marginalized sector was highlighted to sustain the provisions of the R.R.Act and the notifications made thereunder. In fact the judgment in the context of deciding the applicability of the Limitation Act in recovery under R.R.Act specifically made the following observation in para 16: “Although the necessity of filing a suit by a creditor is avoided, the extent of the claim which is legally recoverable is not thereby enlarged” (sic). 7. It is very clear that the three-Judge Bench upheld the entitlement of the Bank in proceeding for recovery under the Act even without filing a suit or obtaining a decree and executing it. The amounts due in the loan availed of by the appellant, is as per the accounts of the Bank, regularly maintained in the course of - 6 - W.A.No.1188 of 2013 business. It cannot be gainsaid that the minute a dispute is raised with respect to the quantum, the Bank is rendered helpless unless it gets a decree from the competent Civil Court. It is for the debtor to approach the Civil Court or other appropriate forum for the purpose of adjudicating the actual dues and mere raising of a dispute with respect to the quantum cannot render unenforceable a method of recovery validly available to the creditor-Bank. In fact such remedy is provided under Section 70(3) to even a person making payment under protest. 8. We also notice that sub-section (2) of Section 34 of the R.R.Act specifically speaks of an objection with respect to the demand made under the Act, whether it be on the whole or part of the demand, which could be validly raised before the District Collector. The appellant has not availed of any such remedies and has rushed to this Court under Article 226 of the Constitution of India. It is contended that even before the Tribunal, it was submitted that there was a dispute with respect to the quantum. We do not, on a reading of Exhibit P3, find any dispute having been raised before the Tribunal. We do not think that the contention of the appellant that the respondent-Bank is not entitled to invoke the R.R.Act for want of notification or for want of adjudication, can be sustained. - 7 - W.A.No.1188 of 2013 In the circumstances of the findings rendered above, we are of the opinion that the judgment of the learned Single Judge is perfectly in order. We confirm the judgment of the learned Single Judge, dismissing the writ petition with the additional reasons mentioned above; in answer to the contentions raised by the appellant before us. We, however, hasten to add that our judgment may not be taken as forestalling the appellant from taking any appropriate remedies to challenge the recovery proceedings. The jurisdiction under Article 226, however, stands declined and the appeal stands dismissed, leaving the parties to suffer their respective costs. Sd/Manjula Chellur, Chief Justice Sd/K.Vinod Chandran, Judge. vku/- ( true copy )