VIJAYA BANK v. STATE OF KERALA AND OTHERS

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE GOPINATH P.** **MONDAY, THE 1[ST] DAY OF APRIL 2024 / 12TH CHAITHRA, 1946 WP(C) NO. 16405 OF 2013** ## **PETITIONER:** **VIJAYA BANK REPRESENTED BY SENIOR BRANCH MANAGER, BORADWAY BRANCH, ERNAKULAM.** **BY ADVS. SRI.R.S.KALKURA SRI.GENS GEORGE ELAVINAMANNIL SRI.HARISH GOPINATH SRI.M.S.KALESH SMT.A.V.PRIYA** ## **RESPONDENTS:** - **1 STATE OF KERALA REPRESNTED BY THE SECRETARY TO REVENUE, GOVERNMENT OF KERALA, SECRETRIAT, TRIVANDRUM-695 001.** - **2 THE COMMISSIONER OF LAND REVENUE PUBLIC OFFICE BUILDING, MUSEUM JUNCTION, THIRUVANANTRHAPURAM-695 033.** - **3 THE SPECIAL DEPUTY TAHSILDAR HOASDURG-671 315.** - **4 KERALA STATE CIVIL SUPPLIES CORPORATION LIMITED REPRESENTED BY ITS MANAGING DIRECTOR, P.B.NO.2030, MAVELI BHAVAN, MAVELI ROAD, GANDHI NAGAR, KOCHI-682 020.** - **5 B.FATHIMA W/O.LATE MOHAMMED KUNJHI, REHMATH MANZIL, MANGATT HOUSE, P.O.BARE, VIZ. UDUMA, KSARAGOD-677 121.** - **6 M.M.AISHYA W/O.PONNIRIKATHU ABDUL REHMAN, MANGATTU HOUSE, POST BARE,VIZ. UDUMA, KSARAGOD-677 121.** W.P.(C)No.16405/2013 2 - **7 NAFEESA W/O.ABDUL KUNHI, CHATHANSHAL HOUSE, THEKKIL P.O., KASARAGOD DISTRICT-671 541.** - **8 ABDUL REHMAN S/O.MUHAMMED KUHI, MANGATTU HOUSE, POSTE BARE,,VIZ. UDUMA, KSARAGOD-677 121.** - **9 M.ABDUL SAMEED MANGATTU HOUSE, POSTE BARE,,VIZ. UDUMA, KSARAGOD677 121.** - **10 KADIJA W/O.MUNIR,D.P.HOUSE,KALLAMNADI, KSARAGOD - 6771 112.** - **11 UMMUKULZU W/O.SHERIFF, MELEPARAMBU, KARANADU P.O., KASARAGOD DISTRICT-671 112.** **BY ADVS. SHRI N.D.PREMACHANDRAN,SC,SUPPLYCO SHRI N.D.PREMACHANDRAN, SC, SUPPLYCO** ## **OTHER PRESENT:** **SRI. VENUGOPAL V (GP)** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.04.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** W.P.(C)No.16405/2013 3 ## **JUDGMENT** The petitioner is a Nationalized Bank which has now merged with another Nationalized Bank namely, the Bank of Baroda. One Mohammed Kunhi (now deceased) was conducting a transporting business in the name and style of 'M/s. Ye Yen Yes Transport', which was a proprietary concern. The 5[th] respondent is the wife of Late Mohammed Kunhi and respondents 6 to 11 are other legal heirs of late Mohammed Kunhi. Late Mohammed Kunhi had obtained certain credit facilities from the Bank. The same was secured by mortgaging 55 cents of property comprised in Re-Sy.No.205/1-C/1 of Bare Village, Hosdurg Taluk, Kasaragod District. Late Mohammed Kunhi passed away on 28.8.1999. 2. On default being committed, the petitioner Bank filed O.A.No.72/2000 before the Debts Recovery Tribunal against the legal heirs of late Mohammed Kunhi. This Original Application was allowed on 6.2.2004 permitting the Bank to recover the entire amount together with interest by sale of the mortgaged property. 3. According to the petitioner Bank, when it was taking steps to realise the amounts due to it by sale of the mortgaged property, it realised that the property had been attached in revenue recovery proceedings initiated against late Mohammed Kunhi and others for recovery of certain amounts W.P.(C)No.16405/2013 4 due to the 4[th] respondent namely, the Kerala State Civil Supplies Corporation Limited. Though the petitioner Bank filed a claim petition, the same was rejected by the revenue authorities. The mortgaged property together with other properties belonged to late Mohammed Kunhi were sold in the revenue recovery proceedings on 25.1.2003. The petitioner bank approached this Court by filing O.P.No.32733/2002 which was disposed of by Ext.P7 judgment directing the Special Deputy Tahsildar, Hosdurg to consider the claim of the petitioner Bank and to take a decision after verifying the records, it was found that, if the mortgage by deposit of title deeds was prior to attachment for the Corporation, the amounts received by sale of the mortgaged properties have to be released to the Bank. The Deputy Tahsildar rejected the claim of the petitioner Bank by Ext.P8 order. A revision petition filed by the petitioner Bank before the Land Revenue Commissioner was rejected by Ext.P9 order and further revision filed before the Government of Kerala was rejected by Ext.P10 order. It is thus challenging Exts.P8, P9 and P10 orders that the petitioner Bank has approached this Court by filing the above writ petition. 4. The learned counsel appearing for the petitioner Bank would submit that the mortgage of 55 cents of land referred to above was on 19.3.1998. It is submitted that the claim of the 4[th] respondent Corporation relates to a contract entered into with late Mohammed Kunhi in the year of W.P.(C)No.16405/2013 5 1999 and no stretch of imagination can be said that any claim arising out of a contract entered into with late Mohammed Kunhi in the year 1999 can have priority over a mortgage created in favour of the Bank on 19.3.1998. 5. The learned Standing Counsel appearing for the 4[th] respondent Corporation would submit that the 4[th] respondent Corporation is an entity notified under Section 71 of the Kerala Revenue Recovery Act, 1968 (hereinafter referred to as the KRR Act). It is submitted the priority granted by the provisions of Section 3 of the Revenue Recovery Act would indicate that arrears of land revenue have priority over all other claims. It is submitted with reference to the judgment of the Supreme Court in _**Central Bank of India v. State of Kerala; (2009) 4 SCC 94**_ that the Bank cannot claim priority as the 4[th] respondent Corporation is a State owned Corporation and its dues will have priority over the claim of the Bank. 6. The learned Government Pleader also supports the contentions taken by the learned counsel appearing for the 4[th] respondent. He refers to Exts.P8, P9 and P10 orders to contend that the claim of the petitioner Bank have been properly considered by the authorities. It is submitted that there is no legal defect in Exts.P8, P9 and P10 orders warranting the interference with it in the exercise of the jurisdiction vested in this Court under Art.226 of the Constitution of India. It is submitted that, only an extent of 55 cents in Re.Sy.No.205/1-C/1 of Bare Village, Hosdurg Taluk, Kasaragod District was W.P.(C)No.16405/2013 6 mortgaged to the petitioner Bank. It is submitted that some other extents of land were also sold in the revenue recovery proceedings and the petitioner Bank cannot have any claim over the same. To a specific question from the Court, the learned Government Pleader submits that all the properties were sold as one lot for a total sum of Rs.12,00,200/- and if at all this Court were to uphold the claim of the petitioner Bank, only the proportionate amount having regard to the extent of land that was mortgaged to the Bank can be released to the petitioner Bank. The learned Government also points out that the entire amount is lying in deposit with the Corporation from 10.6.2003 after deducting the collection charge. The learned Government Pleader brings to my specific attention to the averments in paragraph 3 of the counter affidavit filed by the 2[nd] respondent wherein it is stated as follows:- _"The auction sale of 0.18 Acres of land in Re-Survey No.205/1A Pt.0.55 Acres of land in Re-survey No.205/1C1,0.44 Acres of land in Re-Survey No.207/6Pt and 0.14 acres of land in Re-Survey No.207/78 Pt was knocked down by the highest bidder Sri. Abdullakunhi, S/o Abdul Kader Musliyar, Melparamba, Kalanad Village, Kasaragod District for an amount of Rs. 12,00,200/(Rupees Twelve Lakh and Two Hundred only) fifteen percentage sale amount deposited in same day at Village Office, Uduma on 25.01.2003."_ 7. The learned counsel appearing for the petitioner Bank would submit that the claim of the petitioner Bank is restricted to the amount received by sale to the mortgaged property and it has no other claim over the amount received by other extents of land. W.P.(C)No.16405/2013 7 8. Having heard the learned counsel for the petitioner Bank, the learned Government Pleader appearing for the official respondents and the learned Standing Counsel appearing for respondents 1 to 4, I am of the opinion that the petitioner Bank is entitled to relief. Despite service of notice, there is no representation for the private party respondents. It is not disputed before me that an extent of 0.55 acres of land in Re.Sy.No.205/1-C/1 of Bare Village, Hosdurg Taluk, Kasaragod Taluk was mortgaged in favour of the petitioner Bank on 19.3.1998. The claim of the 4[th] respondent Corporation arises out of a contract entered into with late Mohammed Kunhi in the year 1999. This is also not disputed. The contention that the claim of the Corporation stands on a priority over the right of the petitioner Bank in terms of the mortgage, in the light of the provisions contained in Section 3 of the KRR Act cannot be accepted. Section 3 of the Revenue Recovery Act, no doubts, creates a priority in respect of land revenue. The fact that the 4[th] respondent Corporation is an institution notified under Section 71 of the KRR Act does not mean that the amounts due to the 4[th] respondent Corporation shall be treated as arrears of land revenue. The provisions indicate that it can only be recovered as arrears of land revenue. In other words, the amounts due to the Corporation cannot attain a greater status on account of the fact that the Corporation is a notified institution under Section 71 of the KRR Act. The decision of the Supreme Court in _**Central Bank of India (supra)**_ on W.P.(C)No.16405/2013 8 which considerable reliance was placed by the learned counsel appearing for the 4[th] respondent Corporation has no application as that decision dealt with certain taxation statutes which had provisions creating a statutory first charge over any other claim. The 4[th] respondent Corporation has no case that there is any provision in any law creating any statutory first charge in respect of amounts due to the Corporation on account of contractual relationship entered into with the defaulter. Therefore, the law laid down in _**Central Bank of India (supra)**_ has no application to the facts of the case. It is clear from the counter affidavit of the 2[nd] respondent that four out of the six properties sold including 0.55 acres comprised in Re.Sy.No.205/1-C/1 of Bare Village, Hosdurg Taluk, Kasaragod District were purchased by one Abdulla Kunhi. The petitioner Bank has not filed any application for setting aside the sale in respect of 0.55 acres of land in Re.Sy.No.205/1-C/1 of Bare Village, Hosdurg Taluk, Kasaragod District. Its only claim is for the amount received by the sale of the property mortgaged to it. The amounts which have been recovered by sale of the property including the mortgaged property has already been paid to the 4[th] respondent Corporation by the revenue recovery authorities after deducting the recovery charges. Since the four items of property including the mortgaged property were purchased by one Sri. Abdulla Kunhi. Going by the counter affidavit of the 2[nd] respondent, this writ petition will stand disposed of directing that out of the amounts received by 9 W.P.(C)No.16405/2013 the 4[th] respondent Corporation from the sale of properties to Sri. Abdulla Kunhi (after deducting the revenue recovery charges), the amount proportionate to 0.55 acres of land in Re.Sy.No.205/1-C/1 shall be paid to the petitioner Bank (now Bank of Baroda) on an application being made by the authorized officer of that Bank, before the 4[th] respondent Corporation. **sd/-** **GOPINATH P. JUDGE** acd W.P.(C)No.16405/2013 10 ## **APPENDIX OF WP(C) 16405/2013** ## **PETITIONER EXHIBITS** **EXHIBIT P1. TRUE COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEED DATED 19/3/1998.** **EXHIBIT P2. TRUE COPY OF THE ATTACHMENT NOTICE DATED 13/09/2002.** **EXHIBIT P3. TRUE COPY OF THE CLAIM PETITION FILED BY THE PETITIONER BEFORE THE 3RD RESPONDENT** **EXHIBIT P4. TRUE COPY OF THE POSTAL ACKNOWLEDGEMENT INDICATING THE RECEIPT OF THE SAME GIVEN BY THE 3RD RESPSONDENT** **EXHIBIT P5. TRUE COPY OF THE NOTICE ISSUED BY THE 4TH RESPONDENT TO RESPONDENTS 5 TO 11 DATED 7/5/2002 CLAIMAING THE SAID AMOUNT.** **EXHIBIT P6. TRUE COPY OF THE COMMUNICATION DATED 5/10/2002 ISSUED BYT HE 3RD RESPONDENT TO THE PETITIONER.** **EXHIBIT P7. TRUE COPY OF THE JUDGMENT DATED 20/8/2009 IN OP NO.32733/2002.** **EXHIBIT P8. TRUE COPY OF THE ORDER DATED 10/2/2010 INN PROCEEDINGS NO.E4/01/320/02-03 ON THE FILE OF THE TAHSILDAR, HOSDURG.** **EXHIBIT P9. TRUE COPY OF THE ORDER DATED 11/6/2012 IN LR(B)5-35190/10 PASSED BY THE 2ND RESPONDENT** **EXHIBIT P10. TRUE COPY OF THE G.O.(MS) NO.174/13/RD TRIVANDRUM DATED 3/5/2013 PASSED BY THE 1ST RESPONDENT**