High Court of KeralaSingle Judge2014-01-16Writ petition allowed; notices and proceedings ...

Varghese v. State of Kerala and Others (WP(C).No. 35026 of 2007 (T))

Case / Petition Number:WP(C).No. 35026 of 2007 (T)

Neutral Citation::null

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: A. V. Ramakrishna Pillai
Judgment Date: 2014-01-16
Court Decision / Holding: W.P.(C) No. 35026 of 2007 is allowed. Ext.P2 series of demand notices and Exts.P5 and P6 proceedings are quashed. It is declared that the proceedings under Exts.P2, P2(a), and P2(b) against the property purchased by the petitioner under Ext.P1 are illegal, and the petitioner is exonerated from payment as per those notices. It is left open for the respondent Board to proceed against the fifth respondent’s property in accordance with law, if so advised.
Final Disposition: Writ petition allowed; notices and proceedings quashed; petitioner exonerated; recovery may proceed against fifth respondent’s property by lawful means if advised.

Parties to the Case

Appellants / Petitioners

Varghese, aged 53 years, S/o Paily, Pandalil House, Karakode, Piravom Village and Post, Ernakulam District

Respondents

State of Kerala represented by the Secretary, Department of Revenue, Government of Kerala, Trivandrum
District Collector, Ernakulam
Tahsildar, (RR) Muvattupuzha
Additional District Executive Officer, Motor Transport Workers' Welfare Fund Board, Ernakulam
Sabu Kuriyakose, S/o Kuriyakose, aged 38 years, Piravom Village and Post, Presently at KPTC, Safat, Kuwait

Legal Representation & Advocates

Counsels for Petitioners

• Sri Abraham P. George
• Smt. K. V. Lekshmy
• Sri K. Vinodkumar (707/89)

Counsels for Respondents

• Sri P. V. Elias
• Sri P. Ramakrishnan, SC, KMTWF Board

Case Synopsis & Summary

Varghese, the petitioner, purchases nine cents of property from the fifth respondent on 24.10.2000 (Ext.P1) and obtains an encumbrance certificate stating the property is free from encumbrances. Subsequently, the petitioner received demand notices under the Kerala Motor Transport Workers' Welfare Fund Act (KMTWWF Act) from the Board for arrears relating to the fifth respondent for periods 1998–2000, 2000–2001, and 2001–2003, totaling substantial sums. The petitioner contends that these arrears accrued after the sale and therefore cannot be recovered from the purchaser’s property; he asserts the fifth respondent has sufficient means to settle the dues and seeks protection against recovery against the purchased property. The fourth respondent argues that the fifth respondent’s assessments and final determination orders dated 28.05.2003, 16.06.2003, and 20.10.2003 were final; revenue recovery certificates were issued to recover the amounts, and the sale cannot defeat these actions. The court relies on Jameela Bose v. State of Kerala to interpret Section 44 of the Revenue Recovery Act, holding that a "written demand" means the date of service of a written demand, not the date of the initial demand under Section 34 and, since the sale predated the written demand, the petitioner’s purchaser’s rights are protected. The petition is allowed: Exts.P2, P2(a), P2(b) and related revenue proceedings are quashed, and the petitioner is exonerated from payment, with the Board free to proceed against the fifth respondent’s property by lawful means.

Provisions of Law Cited

Revenue Recovery Act, 1968 (Kerala) Section 44Revenue Recovery Act, 1968 (Kerala) Section 34Kerala Motor Transport Workers' Welfare Fund Act (KMTWWF Act)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that the arrears demanded by the Motor Transport Workers' Welfare Fund Board post-date the sale of the property to him on 24.10.2000, and the demand notices issued under the Revenue Recovery Act are not maintainable against the purchaser. He relies on the interpretation of "written demand" under Section 44 to mean service of a written demand, not mere issue of a demand under Section 34, as clarified in Jameela Bose v. State of Kerala. The sale certificate and encumbrance certificate, coupled with the subsequent recovery attempts, create a protective effect for the purchaser against pre-sale liabilities.

Contentions of Respondents

The respondents argue that the arrears are due from the fifth respondent under the Act and that revenue recovery certificates were issued against him. They contend that the sale does not absolve the defaulter from liability and that the revenue recovery mechanism can proceed against the fifth respondent’s assets, including property, unless a court holds otherwise. The Board maintains that the fifth respondent’s failure to remit amounts in various periods justifies recovery actions, and they rely on the legality of final determination orders and prior assessments.

Cited Precedents (1)

Case Name	Citation	Treatment	Explanation
Jameela Bose v. State of Kerala	2012 (1) KLT 258	Positive	Court relied on Jameela Bose to interpret Section 44 of the Revenue Recovery Act as the date of service of a written demand, and not the date of issue of a demand under Section 34, to determine the validity of recovery against the purchaser prior to the sale.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE A.V.RAMAKRISHNA PILLAI** **THURSDAY, THE 16TH DAY OF JANUARY 2014/26TH POUSHA, 1935** **WP(C).No. 35026 of 2007 (T) ----------------------------** **PETITIONER :** - **----------** **VARGHESE, AGED 53 YEARS, S/O. PAILY, PANDALIL HOUSE, KARAKODE PIRAVOM VILLAGE AND POST, ERNAKULAM DISTRICT.** **BY ADVS.SRI.ABRAHAM P.GEORGE SMT.K.V.LEKSHMY SRI.K.VINODKUMAR (707/89)** **RESPONDENTS:** - **-----------** **1. STATE OF KERALA,REPRESENTED BY THE SECRETARY DEPARTMENT OF REVENUE GOVERNMENT OF KERALA, TRIVANDRUM.** **2. DISTRICT COLLECTOR, ERNAKULAM.** **3. TAHSILDAR, (RR) MUVATTUPUZHA.** **4. ADDITIONALL DISTRICT EXCUTIVE OFFICER, MOTOR TRANSPORT WORKERS' WELFARE FUND BOARD ERNAKULAM.** **5. SABU KURIAKOSE, S/O. KURIAKOSE, AGED 38 YEARS, KALARIKAL HOUSE, PIRAVOM VILLAGE, AND POST, PRESENTLY AT KPTC, PB NO. 28690 CODE NO.13147, SAFAT, KUWAIT.** **R1 TO R3 BY GOVERNMENT PLEADER SRI.P.V.ELIAS R4 BY ADV. SRI.P.RAMAKRISHNAN, SC,KMTWF BOARD** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16-01-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **BP** ## **WP(C).No. 35026 of 2007 (T)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** **P1: COPY OF THE SALE DEED DT 24/10/2000 EXECUTED BY THE R5. P1(a):COPY OF THE POWER OF ATTORNEY EXECUTED BY THE R5.** **P2: COPY OF THE DEMAND NOTICE UNDER THE RRACT DT 25/6/2003 P2(a):COPY OF THE DEMAND NOTICE UNDER THE RRACT DT 21/11/2003. P2(b):COPY OF THE DEMAND NTOICE UNDER THE RRACT DT 29/4/2004.** - **P3: COPY OF OBJECTION DT 9/12/05 SUBMITTED BY THE PETITIONER BEFORE R2.** - **P4: COPY OF REPRESENTATION DT NIL SUBMITTED BEFORE THE R2.** - **P5: COPY OF THE ORDER DT 28/12/05 OF THE R3 ON EXT P3.** - **P6: COPY OF THE ORDER OF THE R2 DT 23/1/06 ON EXT.P4.** - **P7: COPY OF ENCUMBRANCE CERTIFICTE DT 18/11/05 IN RESPECT OF THE PROPERTY COVERED BY EXHIBIT P1 SALE DEED.** - **P8: COPY OF REPRESENTATIOND T 27/10/2007 SUBMITTED BY THE PETITIOENR BEFORE THE R2.** ## **RESPONDENT'S EXHIBITS :** **NIL.** **//TRUE COPY//** **P.A. TO JUDGE** **BP** **A.V. RAMAKRISHNA PILLAI, J. -------------------------------------------------W.P.(C) No. 35026 of 2007 -------------------------------------------------Dated this the 16[th] day of January, 2014** ## **J U D G M E N T** Exts.P2, P2(a) and P2(b) demand notices as well as Ext.P5 and P6 proceedings of 3[rd] and 2[nd] respondents respectively are under challenge in this writ petition. 2. The petitioner is the purchaser of nine cents of property from the 5[th] respondent. The purchase was effected on 24.10.2000 as per Ext.P1 sale deed on the strength of the encumbrance certificate issued to him by the SRO concerned, stating that the property was free from all encumbrances from that date. However, the petitioner received Ext.P2 series demand notices from the 3[rd] respondent on a requisition made by the 4[th] respondent Board, the details of which are as under; |Period|Amount Due|No. & Details of requisition| |---|---|---| |1998-2000|₹52,761/-|No.EE-22(C)/RR/98/2000 dt.23.5.2003 of the Addl.Exe. Officer, KMTWWF Board, Ernakulam| W.P.(C) No. 35026 of 2007 ..2.. |Period|Amount Due|No. & Details of requisition| |---|---|---| |2000-2001|₹29,047/-|No.EE-22 C/RR/2000-01 dt.29.10.03 of the Addl.Exe. Officer, KMTWWF Board, Ernakulam| |2001-2003|₹61,975/-|No. nil, dt.08.01.2004 of the Addl.Exe. Officer, KMTWWF Board, Ernakulam| The aforesaid arrears accrued on account of contributions to be made by the 5[th] respondent to the respondent Board under the Kerala Motor Transport Workers' Welfare Fund Act. According to the petitioner, the arrears made mention of above accrued subsequent to the sale of the property in his name and; therefore, it is not recoverable from his property and hence, Exts.P2(a) and P2(b) demand notices are not maintainable. It is the further case of the petitioner that he had proved before the 2[nd] and 3[rd] respondents that the 5[th] respondent is having sufficient means to settle the demand. However, this did not invoke any positive response and it was in this context, the petitioner has approached before this Court. 3. The 4[th] respondent had filed a statement, wherein the following contentions were raised; W.P.(C) No. 35026 of 2007 ..3.. “3. The 5[th] respondent is the owner of the stage carriage bearing No.KL 07 F 9252. This respondent has assessed the 5[th] respondent under the Act for the period of 1998-2000 and final determination order dated 28.05.2003 was issued to him for the above period for an amount of ₹ 52,761/-. The 5[th] respondent has not filed any appeal against the FDO dated 28.05.2003 nor has he challenged the same before any authorities. Therefore, the above FDO dated 28.05.2003 has become final. Since no amount was remitted in pursuance to the assessment in respect of the above stage carriage by the 5[th] respondent, revenue recovery certificate dated 24.05.2003 was issued from this office to the 2[nd] respondent to recover the above amount from the 5[th] respondent. 4. Thereafter, the 5[th] respondent was again assessed under the Act for the periods 2000-01 and 2001-03 by issuing Final determination orders dated 16.06.2003 for an amount of 29,047/- and 20.10.2003 for an amount of ₹ ₹ 61,975/- respectively. The 5[th] respondent has neither filed appeal nor challenged the above final determination orders before any authority. Hence the above FDOs dated 16.06.2003 and 20.10.2003 have become final. Since no amount is seen remitted by the 5[th] respondent, revenue recovery certificates dated 16.10.2003 and 08.01.2004 was issued by this respondent to the 2[nd] respondent to recover the amounts due from the 5[th] respondent. 5. It is submitted that Exhibits P-2, P-2(a) and P-2 (b) demand notices have been issued by the 3[rd] respondent to recover the amounts due from the 5[th] respondent under the Act. The KMTWWF Act has been constituted for the welfare of the workers of motor transport undertakings. It is a contributory fund. The workers of the above stage carriages owned and possessed by the 5[th] respondent could be granted benefits under the Act only if payment is made by him as assessed under the Act. Prompt actions were initiated to recover the amount from the 5[th] respondent. This respondent is not aware of any transfer of the properties of the 5[th] respondent to the petitioner.” 4. The respondent State has also filed a separate counter affidavit, which practically supports the stand taken by the respondent Board. W.P.(C) No. 35026 of 2007 ..4.. 5. Arguments have been heard. 6. Admittedly, the petitioner purchased a property as per Ext.P1 sale deed dated 24.10.2000, which is now being proceeded against by the respondents. The stand taken by the contesting respondents is that the requisition was made for the arrears, which fell due prior to the date of Ext.P1 sale deed. Therefore, they maintain the stand that the initiation of proceedings under the Revenue Recovery Act is perfectly maintainable. 7. In answer to the said argument, the learned counsel for the petitioner invited my attention to a decision of this Court in **Jameela Bose v. State of Kerala** [2012 (1) KLT 258], wherein the words “written demand” appearing in S.44 of the Revenue Recovery Act 1968 (Kerala) was interpreted. This Court was of the view that the words “written demand” mentioned in Section S.44 has to be construed as the date when the appropriate authority serves a written demand on defaulter and not the date when the revenue recovery W.P.(C) No. 35026 of 2007 **==> picture [20 x 8] intentionally omitted <==** authorities issue a demand notice under S.34. 8. In the instant case, the sale was complete as early as on 24.10.2000. The contesting respondents have no case that prior to 24.10.2000, they have served a written demand on the defaulter and the sale deed was executed to defraud the respondent Board. In that view of the matter, the petitioner is entitled to succeed. It was also pointed out by the learned counsel for the petitioner that the 5[th] respondent was owning yet another vehicle and a property, which was sold off by him in the year 2006, i.e., after the issuance of demand notices. Therefore, this writ petition is allowed. Ext.P2 series of demand notices as well as Exts.P5 and P6 proceedings of respondents 3 and 2 respectively are hereby quashed. It is hereby declared that the proceedings of respondents 2 to 4 pursuant to Exts.P2, P2(a) and P2(b) demand notices against the property purchased by the petitioner under Ext.P1 sale deed are illegal and; the W.P.(C) No. 35026 of 2007 **==> picture [20 x 8] intentionally omitted <==** petitioner is exonerated from making payment as per Exts.P2, P2(a) and P2(b) demand notices. It shall be open to the respondent Board to proceed against the property of the 5[th] respondent in accordance with law, if so advised. Sd/- **A.V. RAMAKRISHNA PILLAI, JUDGE** bka/-