T.B. Simson Chairman, Thandar & Sons Trust v. Kerala Khadi & Village Industries Board and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE AMIT RAWAL WEDNESDAY, THE 16[TH] DAY OF AUGUST 2023 / 25TH SRAVANA, 1945** ## **WP(C) NO. 14271 OF 2014** ## **PETITIONER/S:** T.B. SIMSON CHAIRMAN, THANDAR & SONS TRUST, REG.NO.A/45/88, THIRUMALABHAGAM P.O., THURAVOOR, NOW RESIDING AT NANDANAM, THIRUMALABHAGAM P.O., THURAVOOR,CHERTHALA, ALAPPUZHA-688540. BY ADV SRI.P.V.JAYACHANDRAN ## **RESPONDENT/S:** 1 THE KERALA KHADI & VILLAGE INDUSTRIES BOARD STATE OFFICE, THIRUVANANTHAPURAM-695001, REPRESENTED BY ITS SECRETARY. 2 THE DEPUTY TAHSILDAR (RR) TALUK OFFICE, CHERTHALA, ALAPPUZHA-688524. 3 THE VILLAGE OFFICER THURAVOOR THEKKU VILLAGE, CHERTHALA, ALAPPUZHA688532. BY ADVS. SRI.TOM K.THOMAS, SC KERALA KHADI & VILLAGE INDUSTRIES B SRI.M.SHARAFUDHEEN, SC, KERALA KHADI AND VILLAGE INDUSTRIES GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16.08.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: **WP(C) NO. 14271 OF 2014** 2 ## J U D G M E N T 1. Petitioner had obtained margin money loan in the year 1988 for Rs.1,30,000/- as per loan agreement dated 31.10.1989 from Kerala Khadi & Village Industries Board ('Khadi Board', for short), which was to be repaid in five years with 4% interest; 30% of which with interest was to be repaid at the end of the third year; 30% at the end of fourth year and the remaining 40% at the end of fifth year. 2. As per the provisions of Section 29A of the Kerala Khadi & Village Industries Board Act, 1957, in case of arrears/default, the amount can be recovered under the Kerala Revenue Recovery Act, 1968 ('KRR Act', for short), which envisaged that as and when any public revenue is due, the same can be recovered as arrears of land revenue. After disbursement of the loan in the year 1988, the five year period expired on 31.3.1993. At the best, respondents could have recovered the amount within another three years, i.e. by 31.3.1996. **WP(C) NO. 14271 OF 2014** 3 But, petitioner received demand notice dated 30.12.2009, Ext.P3, for realisation of the amount due as per the requisition dated 15.12.2009. Thereafter, on 8.5.2014, vide Exts.P6 and P7, petitioner was served with demand notices under Sections 7 and 34 of the Revenue Recovery Act demanding Rs.3,30,892/- with 5% collection charges. 3. Learned counsel appearing on behalf of the petitioner submitted that there was no acknowledgment of the debt within the extended period of limitation as per the provisions of Section 18 of the Limitation Act, 1963. Thus the action of the respondents for recovery of the amount due after almost more than 12 years from 1996 is wholly time barred, in view of the law laid down by the Hon'ble Supreme Court in State of Kerala v. Y.R.Kalliyanikutty [1999 (2) KLT 146 (SC)] . The whole purpose of recovery under the provisions of the KRR Act was to expedite recovery process, instead of resorting to civil remedy by filing suit. But, that would not call over the **WP(C) NO. 14271 OF 2014** **==> picture [7 x 9] intentionally omitted <==** authorities to recover the debt as per their own conveniences. The principles enunciated under the Limitation Act would definitely be applicable. 4. On the other hand, learned counsel appearing on behalf of the first respondent, Khadi Board, contested the aforesaid argument on the ground that petitioner accepted the demand notice vide acknowledgment, Ext.R1(a) dated 22.4.2010, wherein it was requested for waiver of interest and repayment in 20 installments, thus, in view of Ext.R1(a), the period of limitation to initiate recovery proceedings stood automatically extended as per the provisions of Section 18 of the Limitation Act. Recovery proceedings initiated in the year 2009 and subsequent thereto cannot be said to be time barred, much less the ratio decidendi culled out in the decision in Y.R.Kalliyanikutty (supra) relied upon by the petitioner would also not be applicable. 5. I have heard the learned counsel for the parties and apprised the paper book. 6. Concededly, the capital amount was **WP(C) NO. 14271 OF 2014** 5 disbursed to the petitioner in 1988, which was to be repaid in five years, which expired in 1993. In case of any default on behalf of the petitioner, cause of action accrued in favour of the first respondent Khadi Board to recover the amount within a period of three years unless there was acknowledgment, which would have extended period of limitation. The counter or arguments did not reveal any recovery steps taken within the aforesaid period of three years. The acknowledgement Ext.R1(a) is of 22.4.2010, whereas the requisition sent to the Tahsildar was one year before, i.e. in 2009. 7. Section 18 of the Limitation Act provides extension of period of limitation in case of acknowledgment of debt, but that too with the rider that acknowledgment has to be before expiry of the period of limitation for initiating steps for recovery by suit or other means. The provisions of Section 18 reads thus: “ 18. Effect of acknowledgment in writing .— (1) Where, before the expiration of the prescribed period for a suit or application in **WP(C) NO. 14271 OF 2014** 6 respect of any property or right, an acknowledgment of liability in respect of such property or right has been made in writing signed by the party against whom such property or right is claimed, or by any person through whom he derives his title or liability, a fresh period of limitation shall be computed from the time when the acknowledgment was so signed. (2) Where the writing containing the acknowledgment is undated, oral evidence may be given of the time when it was signed; but subject to the provisions of the Indian Evidence Act, 1872 (1 of 1872), oral evidence of its contents shall not be received. Explanation.—For the purposes of this section,— (a) an acknowledgment may be sufficient though it omits to specify the exact nature of the property or right, or avers that the time for payment, delivery, performance or enjoyment has not yet come or is accompanied by a refusal to pay, deliver, perform or permit to enjoy, or is coupled with a claim to set off, or is addressed to a person other than a person entitled to the property or right; (b) the word “signed” means signed either personally or by an agent duly authorised in this behalf; and (c) an application for the execution of a decree or order shall not be deemed to be an application in respect of any property or right.” **WP(C) NO. 14271 OF 2014** 7 8. The aforementioned provision thus would not come to the rescue of the respondents to extend the period of limitation to recover the amount in the manner and mode. The ratio decidendi culled out in Y.R.Kalliyanikutty (supra) was also to the same effect, wherein by noticing all the provisions of KRR Act, it was found that procedure prescribed is for expeditious recovery of the amount to ward off the payment of stamp duty by initiating procedure for recovering of the amount by filing suit. For the reasons aforementioned, the demand notices Exts.P3, P6 and P7 raised by the respondents are barred by limitation and hence, quashed. Writ petition stands allowed. Pending interlocutory applications, if any, in the writ petition would stand dismissed. Sd/AMIT RAWAL JUDGE jg 8 ## **WP(C) NO. 14271 OF 2014** ## **APPENDIX OF WP(C) 14271/2014** PETITIONER EXHIBITS P1: COPY OF THE PROCEEDING NO.K.B.4664/88/B13 DATED 31.3.1988. P2: COPY OF THE LOAN AGREEMENT DATED 31.10.89. P3: COPY OF THE DEMAND NOTICE DATED 30.12.2009. P4: COPY OF THE REPRESENTATION DATED 18.2.2010. P5: COPY OF THE COMMUNICATION NO.K.B.3809/07/R1 DATED 6.4.2010. P6: COPY OF THE SECTION 7 DEMAND NOTICE DATED 8.5.2014. P7: COPY OF THE SECTION 34 DEMAND NOTICE DATED 8.5.2014. ## **RESPONDENTS' EXHIBITS** R1(a) : TRUE COPY OF UNDERTAKING SUBMITTED BY THE PETITIONER ON 22.4.2010 TO THE FIRST RESPONDENT. R1(b) : TRUE COPY OF LETTER DATED 7.5.2010 ISSUED BY THE RESPONDENT OT THE EPETIITONER. R1(c) : TRUE COPY OF DEED OF HYPOTHECATION DATED 31.10.1989. R1(d) : TRUE COPY OF REQUISIION FOR INITIATING REVENUE RECOVERY DATED 22.10.2009.