State of Kerala v. Vanitha Dairy Central Society & Ors.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE T.V.ANILKUMAR** **TUESDAY, THE 06TH DAY OF OCTOBER 2020 / 14TH ASWINA, 1942** ## **Ex.FA.No.6 OF 2015** **AGAINST THE ORDER IN E.A.NO.42/2014 IN E.P.NO.30/2013 IN OS 99/2009 OF SUB COURT, MUVATTUPUZHA** ## **APPELLANT/PETITIONER:** **STATE OFKERALA, REP.BY TAHSILDAR, KOTHAMANGALAM. BY SR.GOVERNMENT PLEADER SRI.M.V.ANANDAN** ## **RESPONDENTS/RESPONDENTS 1 AND 2 & ADDL.RESPONDENTS 3 TO 12:** **1 THE SECRETARY, NIRMALGRAM VANNITH DAIRY CENTRAL SOCIETY KEERAMPARA, KOTHAMANGALAM - 686 691. 2 M/S.OIKO CREDIT ECUMENICAL DEVELOPMENT CO-OPERATIVE SOCIETY U.A., NETHERLAND, REP.BY ITS INDIAN REGIONAL MANAGER, NAJVS SUNDARA RAO, AGED 59 YEARS, S/O.N.RAJA RAO, BLOCK NO.197, PRASANAN NAGAR JUBILEE HILLS, ROAD NO.72, HYDERABAD -500 001.** |**3**|**FR.JOY ARAMBANKUDY**| |---|---| ||**AGED 55 YEARS**| ||**S/O.MATHAI, EXECUTIVE DIRECTOR, NIRMALGRAM**| ||**VANITHA DAIRY CENTRAL SOCIETY, RESIDING AT**| ||**NIRMALGRAM ASHARAM, BHOOTHATHANKETTU P.O,**| ||**KOTHAMANGALAM - 686691.**| ## **Ex.F.A.No.6 of 2015** ## **:-2-:** - **4 ANNAMMA JACOB, W/O.JACOB AGED 65 YEARS** - **PRESIDENT, NIRMALGRAM VANITHA DIARY CENTRAL SOCIETY RESIDING AT MANACHERY PUTHAYATHIL HOUSE, OONNUKAL P O, NAMBOORIKUP, KOTHAMANGALAM - 686 691** - **5 JOSE EUGINE JOSEPH, S/O.JOSEPH, AGED 49 YEARS CHIRAYIL HOUSE, KIZHAKKUMBHAGOM, ETTUMANOOR P.O. KOTTAYAM DISTRICT (DIED) - 686 631.** - **6 PETER DAMIYAN, S/O.JOSEPH AGED 54 YEARS** - **CHIRAYIL HOUSE, KIZHAKKUMBHAGOM, ETTUMANOOR P.O. KOTTAYAM DISTRICT - 686 631.** - **7 GEORGE, S/O.JOSEPH AGED 73 YEARS** - **CHIRAYIL HOUSE, KIZHAKKUMBHAGOM, ETTUMANOOR P.O. KOTTAYAM DISTRICT - 686 631.** - **8 BANK OF BARODA KOTHAMANGALAM BRANCH, REP.BY ITS SENIOR MANAGER POTHANIKKAD BUILDING, HIGH RANGE JUNCTION KOTHAMANGALAM P.O. 686 691** - **9 SHIRLY, W/O. LATE JOSE EUGINE JOSEPH CHIRAYIL HOUSE, KIZHAKKUMBHAGOM, ETTUMANOOR P.O. KOTTAYAM DISTRICT - 686 631.** - **10 AMMU, D/O.LATE EUGINE JOSEPH AGED 26 YEARS** - **CHIRAYIL HOUSE, KIZHAKKUMBHAGOM, ETTUMANOOR P.O. KOTTAYAM DISTRICT - 686 631.** - **11 OUSEPH, S/O.LATE EUGINE JOSEPH AGED 24 YEARS CHIRAYIL HOUSE, KIZHAKKUMBHAGOM, ETTUMANOOR P.O. KOTTAYAM DISTRICT - 686 631,** **Ex.F.A.No.6 of 2015** ## **:-3-:** **12 CHINNU, D/O.LATE EUGINE JOSEPH AGED 22 YEARS CHIRAYIL HOUSE, KIZHAKKUMBHAGOM, ETTUMANOOR P.O. KOTTAYAM DISTRICT - 686 631,** **BY ADV. DR.GEORGE ABRAHAM CAVEATOR** ## **OTHER PRESENT:** **ADV.SRI.M.V.ANANDAN, SR.GOVERNMENT PLEADER.** **THIS EXECUTION FIRST APPEAL HAVING BEEN FINALLY HEARD ON 30-09-2020, THE COURT ON 06-10-2020 DELIVERED THE FOLLOWING:** **Ex.F.A.No.6 of 2015** ## **:-4-:** ## **Dated this the 6[th] day of October, 2020** ## **J U D G M E N T** The claim petition filed under Order 21 Rule 58 of the CPC by the Tahsildar, Kothamangalam was dismissed by the Sub Judge, Muvattupuzha, in E.P.No.30/2013 by order dated 20.12.2014. The State challenges the order in this appeal. 2. The first respondent, Vanitha Dairy Central Society owns the schedule property extending 1 acre and 17 cents of land with factory building and machineries. The second respondent which is a Cooperative Society, Huderabad, obtained a decree in O.S.No.99/2009 against the first respondent for realisation of money charged on the property. The decree holder brought the property for sale and on 5.3.2014, the sale proclamation was settled also. The appellant, the State claims to be aggrieved by the order dated 5.3.2014. ## **Ex.F.A.No.6 of 2015** **:-5-:** 3. According to the appellant, the first respondent defaulted payment of huge arrears of sale tax as well as electricity charges to the tune of Rs.45,75,307/- which is a public revenue due on land and the State being the first charge holder has right to proceed against the schedule property for realisation of the amount under the provisions of the Kerala Revenue Recovery Act, 1968 (for short, 'the R.R. Act'). 4. The respondents 3 to 7 and 9 to 12 are persons representing the first respondent Vanitha Dairy Central Society. The eighth respondent is the Bank of Baroda, Kothamangalam Branch, which was impleaded as additional party on the claim that it has also got some mortgage interest in respect of the property. 5. The main contestant in the claim petition is the second respondent. It filed objection ## **Ex.F.A.No.6 of 2015** ## **:-6-:** questioning the competency of the Tahsildar to file the claim petition and also contended that the claim was barred by limitation also. The main contention advanced before the court below was that the electricity charges due to the KSEB are not public revenue due on land within the meaning of Section 2(j) of the R.R. Act and therefore no first charge could be claimed on the land. 6. The court below examined the Tahsildar as PW1 and another official as PW2. Exts.A1 to A6 were marked as evidence on the side of the appellant. On the side of the respondents, RW1 and Exts.B1 to B11 are the evidence tendered. 7. The court below dismissed the claim petition accepting the plea of the second respondent that the claim petitioner was not an authorised officer to institute the proceedings on behalf of the State. It also held that the claim ## **Ex.F.A.No.6 of 2015** ## **:-7-:** was barred by limitation and further the alleged debt due to the State did not create a first charge on the land since the amount cannot be considered to be a public revenue due on land. It also went to the extent of holding the claim petitioner to be personally liable for payment of cost after finding him to be responsible for the delay of execution of the decree. 8. It was submitted by the learned counsel for the second respondent that the liability of first respondent towards payment of sales tax arrears has already been discharged by the second respondent. This was conceded by the learned Government Pleader also. Further, the submission made as to discharge of debt was, already taken note of by the court below also in paragraph No.13 of the impugned order. Therefore what survives is only the alleged right of the State to proceed to recover the ## **Ex.F.A.No.6 of 2015** **:-8-:** electricity charges allegedly due from the first respondent. 9. The main question that arises for consideration in this appeal is whether the electricity charges that are due to the KSEB could be reckoned as a public revenue due on land within the meaning of Section 2(j) of the R.R. Act. 10. I heard the learned Government Pleader for the State and the learned counsel for the second respondent. 11. It was submitted by the learned counsel for the appellant that the claim petitioner was duly authorised by the State and he has authority to lodge claim petition. It was urged that there were proceedings pending against the State challenging the validity of demand for arrears of electric charges in O.P.No.12954/2003 and an interim order of stay was also in force. Until the original ## **Ex.F.A.No.6 of 2015** ## **:-9-:** petition was disposed of on 20.9.2011, the State was not in a position to go ahead with the proceedings and therefore the State was entitled to exclusion of time by virtue of Section 15 of the Limitation Act, 1963. It was also contended that if in any event, the debt could not be brought within the meaning of Section 2(j) of the R.R. Act, it will nevertheless be an amount due to the KSEB as the first charge on the assets of the consumer by virtue of the Clause 15(d) of the Regulations relating to conditions of supply of electrical energy, 1990. 12. The learned counsel for the second respondent contended that the Clause 15(d) relied on by the learned Government Pleader cannot apply since it ceased to operate after the repeal of the Electricity (Supply) Act, 1948, by virtue of Section 185 of the Electricity Act, 2003. ## **Ex.F.A.No.6 of 2015** ## **:-10-:** 13. In order for a debt to become public revenue due on land under Section 2(j) of the R.R. Act, it must essentially be an amount payable to the Government. The dues in question cannot be said to be amounts payable to Government. It is an amount due to the KSEB which is a Company incorporated under the provisions of the Companies Act, 1956. Only because the State is given the authority to recover the amount by resort to the R.R. Act on the force of the notification issued under Section 71 of the R.R. Act, the amount which is otherwise due to the Board cannot acquire the status of an amount which is payable to the State. While considering the legal impact of notification issued under Section 71 with reference to power to recover dues arising under Motor Transport Workers Welfare Fund Act, 1985 (Kerala), a Full Bench of this Court in **Raveendran Nair M.G. v. State of** ## **Ex.F.A.No.6 of 2015** ## **:-11-:** **Kerala & ors. [(2014(4)KHC 518(FB)]** held that only because State is empowered to recover the amount due to a Department by virtue of Section 71 of the R.R. Act, the amount does not _ipso facto_ become public revenue due on land. Applying this principle, it is no longer open to the appellant to contend that the electrical charges due to the Board can acquire first charge over the schedule property. **==> picture [402 x 13] intentionally omitted <==** relating to conditions of supply of electrical energy, 1990, however provides that all dues to the Electricity Board from a consumer shall be the first charge on the assets of the consumer. All dues including the penalty shall be recovered as public revenue due on land. This contention raised by the learned Government Pleader was resisted by the learned counsel for the second respondent ## **Ex.F.A.No.6 of 2015** ## **:-12-:** relying on Section 185 of the Electricity Act, 2003 which provides that the Electricity (Supply) Act, 1948, under which the Regulations relating to conditions of supply of electrical energy, 1990, were framed, stood repealed w.e.f. 10.6.2003 except to the extent as saved by the Act. It is however an admitted fact that no provision analogous to Clause 15(d) was enacted in the Act, 2003. 15. The first respondent Vanitha Dairy Central Society is alleged to have incurred electricity charges with the KSEB right from 1996. When demand for the charges due was made, the first respondent contended that it was the beneficiary of pre 92 tariff for a period of five years from the date of installation of electric connection. When disconnection notices dated 7.4.2003 were issued, they challenged the legality of the action in O.P.No.12954/2003 before this Court and the ## **Ex.F.A.No.6 of 2015** **:-13-:** operation of notices was stayed. The original petition was finally disposed of on 20.9.2011 with a direction to the Board to reconsider the liability of the first respondent in accordance with law. Accordingly, a revised demand notice was issued to the first respondent by the Board on 21.5.2012 claiming arrears of electricity charges due right from 1996 till the month of September, 2008. 16. The question now arising for consideration is whether notwithstanding the repeal of Electricity (Supply) Act, 1948, w.e.f. 10.6.2003 and a provision parallel to Clause 15(d) was not made in Act, 2003, the amount of arrears now claimed after the judgment in O.P.No.12954/2003 could be recovered as first charge as public revenue due on the schedule property by resort to any saving provision in Section 185 of the ## **Ex.F.A.No.6 of 2015** ## **:-14-:** Electricity Act, 2003. 17. The disconnection notice dated 7.4.2003 came to be issued while the repealed Electricity (Supply) Act, 1948 was in force. It is not a disputed fact that under the revised demand dated 21.5.2012, the electricity dues claimed covers the periods during which the 1948 Act was in force. Section 185(2) of Electricity Act, 2003, provides that notwithstanding the repeal, anything done or any action taken or purported to have been taken etc. shall stand saved unless it is not inconsistent with the provisions of the repealing Act. 18. The disconnection notice issued while the un-repealed Act, 1948, being in force was challenged and set aside in O.P.No.12954/2003 before this Court and it resulted in a direction being issued to the authorities to reconsider its ## **Ex.F.A.No.6 of 2015** **:-15-:** action and re-examine the liability of the consumer. The liability of the first respondent was reconsidered only after Section 185 which repealed the Electricity (Supply) Act, 1948, came into effect and in my opinion, liability for which the defaulter was actually due could be ascertained or quantified only when revised demand notice was prepared and issued on 21.5.2012. This being the position, the action taken preceding the revised demand notice cannot be said to be one taken under the un-repealed Act, 1948 or Clause 15(d) of the Regulations, 1990. Therefore, action taken by the authorities against the first respondent could not be said to have been one saved by the repealing Act. 19. In view of what has been said above, I hold that the State failed to establish that electricity charges recoverable are public revenue due on land ## **Ex.F.A.No.6 of 2015** ## **:-16-:** having first charge over the scheduled property. It goes without saying that the debt incurred by the first respondent could be recovered only by resort to other legal modes. 20. The learned Government Pleader contended that the finding that the claim was barred by limitation is erroneous and further, the claim petitioner had authority under law to initiate the claim as authorised by the Government. The learned counsel for the second respondent did not pursue his objection in respect of both these aspects and therefore I do not propose to deal with them here. 21. It suffices to say that since the State or KSEB has not acquired any first charge over the schedule property, the second respondent/ decree holder must be allowed to proceed with the sale of the property. 22. The contention raised by the Bank of ## **Ex.F.A.No.6 of 2015** **:-17-:** Baroda, Kothamangalam Branch, which is the additional eighth respondent was rightly rejected by the court below on the ground that it was already a party in O.S.No.99/2009 and suffered decree in favour of the second respondent. The mortgage right set up in respect of the property was impliedly rejected by the judgment dated 9.11.2012 by the learned Sub Judge, Moovattupuzha. 23. For all these reasons, I hold that there is no reason to interfere with the impugned order passed in E.P.No.30/2013. **==> picture [402 x 13] intentionally omitted <==** dismissed. All pending interlocutory applications are closed. Sd/- ## **T.V.ANILKUMAR JUDGE** ami/