V.R. Joy v. State of Kerala and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** ## **THURSDAY, THE 17TH DAY OF JULY 2014/26TH ASHADHA, 1936** ## **WP(C).No. 12094 of 2011 (J)** **----------------------------** ## **PETITIONER :** **--------------------** **V.R.JOY, AGED 46 YEARS, S/O.RAPHAEL, VITHAYATHIL HOUSE, PEECHANIKAD PO ANGAMALY, ALUVA TALUK.** **BY ADVS.SRI.K.S.HARIHARAPUTHRAN** **SRI.M.D.SASIKUMARAN SRI.GEORGE MATHEW SRI.DIPU JAMES SMT.K.V.RAMYA** ## **RESPONDENT(S) :** - **----------------------------** **1. STATE OF KERALA, REP. BY ITS PRINCIPAL SECRETARY, REVENUE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695 001.** **2. THE COMMISSIONER FOR LAND REVENUE, PUBLIC OFFICE BUILDINGS, MUSEUM JUNCTION THIRUVANANTHAPURAM - 695 033.** **3. KERALA KHADI & VILLAGE INDUSTRIES BOARD, REPRESENTED BY ITS SECRETARY, THIRUVANANTHAPURAM PIN - 695 001.** **4. THE DISTRICT COLLECTOR, ERNAKULAM, CIVIL STATION, KAKKANAD, PIN 682 030.** **5. THE SPECIAL TAHSILDAR (REVENUE RECOVERY) TALUK OFFICE, ALUVA, PIN -683 101.** **6. THE VILLAGE OFFICER, PARAKKADAVU VILLAGE PARAKKADAVU P.O., ALUVA TALUK, PIN 683 579.** **7. THE VILLAGE OFFICER, ANGAMALY VILLAGE, ANGAMALY P.O., ALUVA TALUK, PIN - 683 572.** **...2/-** **WP(C).No. 12094 of 2011 (J) -2-** **8. M/S.BHARAT VILLAGE INDUSTRIES CO-OPERATIVE SOCIETY PVT.LTD., NO. KVIND (E) 152, REPRESENTED BY ITS SECRETARY, KURUMASSERY KARA, PARAKKADAVU VILLAGE, ALUVA TALUK (DEFAULTER), PIN 683 579.** **R1, R2 & R4 TO R7 BY GOVT. PLEADER SRI. SHYSON P. MANGUZHA R3 BY ADVS. SRI.TOM K.THOMAS, SC SRI.K.P.HARISH, SC R8 BY ADVS. SRI. K.B. DAYAL SRI.S.SUDHISH KUMAR** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17-07-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Mn** **...3/-** **WP(C).No. 12094 of 2011 (J)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** **EXT.P1 : COPY OF SALE NOTICE DTD. 27.12.2007. EXT.P2 COPY OF THE NOTICE DTD. 13.7.2009. EXT.P3 COPY OF THE APPLICATION DATED 27.7.2009. EXT.P4 COPY OF THE INFORMATION NO. E-1663/2006 DATED NIL. EXT.P5 COPY OF THE REPRESENTATION DATED 3.8.2009. EXT.P6 COPY OF THE ORDER NO. B-16 18257/06 DATED 30.1.2010. EXT.P7 COPY OF THE 2.3.2010 IN WP(C) NO. 6647 OF 2010. EXT.P8 COPY OF THE ORDER DTD. 2.7.2010 DTD IN REV. PTN. NO. LR B719237/10. EXT.P9 COPY OF THE ORDER GO(MS) NO. 156/11/RD DTD. 22.3.2011.** ## **RESPONDENT'S EXHIBITS :** **EXT.R8(a) : COPY OF THE LETTER DATED 29-8-2011 ISSUED BY PUBLIC INFORMATION OFFICER, O/O. THE 5TH RESPONDENT.** **//TRUE COPY//** **P.A. TO JUDGE** **Mn** ## **K.VINOD CHANDRAN, J** - - - - - - - - - - - - - - - - - - - - W.P.(C).No. 12094 of 2011 - - - - - - - - - - - - - - - - Dated 17[th] July, 2014 - - - - - - - - - - - - - - - - - - - - - - - - ## **JUDGMENT** The petitioner is aggrieved by the forfeiture and the subsequent demand made for loss caused, as evidenced in Exhibit P2. 2. The petitioner was the bidder of a property, brought to sale as per Exhibit P1, by the Revenue Recovery authority of the State, under the Kerala Revenue Recovery Act, 1968 [for brevity “RR Act”]. The property brought to sale belongs to the 8[th] respondent and the recovery proceedings were initiated on the requisition made by the 3[rd] respondent. The auction was held on 07.02.2008, wherein the petitioner came out successful with a bid of Rs.20,10,000/-. The petitioner deposited Rs.3,01,500/-, being fifteen percent of the amount; on the auction being struck in favour of the petitioner. The **WP(C).12094/11** 2 petitioner was also required to pay the balance of the purchase money, within thirty days from the date of sale. Admittedly, such payment was not made. Subsequent fact, which is relevant, is that the property was again brought to sale and fetched an amount of Rs.15,01,000/- in the subsequent auction conducted on 29.08.2008. 3. The matters would have rested so; but the petitioner made an application for return of the fifteen per cent amount deposited immediately on declaration of the petitioner as the purchaser, in the auction held on 07.02.2008. The 5[th] respondent, who was the authority under the RR Act who conducted the auction, then issued a demand as per Exhibit P2. Exhibit P2 purportedly was a demand made under sub-section (5) of Section 49. The 5[th] respondent, by Exhibit P2, found that the petitioner had bid the property for Rs.20,10,000/- and the sale could **WP(C).12094/11** 3 not be carried out for reason only of the failure of the petitioner to remit the balance bid amount within the time stipulated under the RR Act. The subsequent sale fetched only Rs.15,01,000/-. Hence, the difference of the bid amount in the first auction, bid by the petitioner, and the second auction was quantified as the loss caused to the Government. The petitioner, hence, was directed to make good the amount of Rs.2,07,500/- after deducting the advance made, of Rs.3,01,500/-, as the total loss computed was at Rs.5,09,000/-. The petitioner would contend that neither was the Government entitled to make a further demand of Rs.2,07,5000/-, nor could it retain the advance money remitted by the petitioner. 4. With respect to the claim of retention of the advance money, the learned Government Pleader would refer to sub-section (3) of **WP(C).12094/11** 4 Section 49 of the RR Act. Sub-section (3) speaks of forfeiture of the amounts remitted as advance, on failure of the balance bid amount being remitted within the time stipulated. Sub-section (3) does not speak of any loss or expenses; but provides for an automatic forfeiture on the default of the successful bidder to make remittance of the balance bid amount. It is to be noticed that sub-section (3) enables the Government to forfeit the said amount so deposited as advance, on default to pay the balance. It is to be noticed that Exhibit P2 in fact adjusted the said amount as loss, against the petitioner. Though such forfeiture has not been made specifically by Exhibit P2; going by the specific provisions made in the statute, for such automatic forfeiture, this Court cannot pass an order for refund of such amount. **WP(C).12094/11** 5 5. The further contention is with respect to the loss assessed on the petitioner. A reading of sub-section (5) of Section 49 clearly indicates that the provisions of the said Section can be made applicable only in cases where the loss and expenses occur due to the earlier sale having not fructified; only for the default of the successful bidder in remitting the balance amount. To understand the loss caused to the Government, one has to only look at Exhibit P2 order. The dues to the 3[rd] respondent, even going by Exhibit P2, was only Rs.7,69,437/-. That stood satisfied, in any event, by the subsequent sale, which fetched Rs.15,01,000/-. Needless to say that, after adjusting the dues as also the expenses incurred in proceeding with the revenue recovery, the balance amount would be due to the 8[th] respondent, who is the owner of the property. The entire dues having been settled, there **WP(C).12094/11** 6 cannot be any loss computed for reason only of the sale value of the property having gone down. If Exhibit P2 is sustained, that would only lead to illegal enrichment, which even the State is not entitled to at the expense of a citizen. 6. The learned counsel for the petitioner would rely on a decision of a Division Bench of this Court in **District Collector, Aleppey and Others v. Subaida Beevi and Another (2010 (1) KHC 936)** to contend that the Government in the present case, having proceeded to recover the dues of an institution covered under Section 71 of the RR Act, cannot claim forfeiture of the advance amounts. The said decision was rendered in the context of a challenge being made as against the bought-in-land proceedings concluded under Section 50(2) of the RR Act. The requisition was of a Bank which was notified under Section 71. No bidders having turned up at **WP(C).12094/11** 7 the auction, Recovery Officer notified the property again, for sale and no bidders turning up even in the subsequent auction, the property was purchased by the Government under Section 50, for Rs.1/-. The defaulter having settled the arrears with the respondent Bank was before this Court claiming return of the property which was purchased as bought-in-land. This Court considered the claim and allowed it; however on the finding that if at all the proceedings under Section 50 was resorted to; then, the purchase should have been in favour for the Bank/creditor rather than the Government. It was only on such premise that the proceedings, under Section 50 concluded in the said case, was set aside. 7. In fact, it is to be noticed that the Division Bench came to such finding on the specific words employed in Section 50(2) which **WP(C).12094/11** 8 enabled the Officer to purchase “on behalf of the Government” which was found to be liable to be read as, “on behalf of the Institution concerned”. The Division Bench also categorically declared that “going by the Scheme of the Act, we are of the view that when a notification is issued under Section 71, the provisions of the Act apply mutatis mutandis to the recovery of the amounts due to the said institution” (SIC). In such circumstances, the forfeiture cannot be overturned on the dictum laid in the aforesaid decision which dictum is contrary to what is argued by the leaned counsel. 8. The learned counsel for the 8[th] respondent, however, would urge that due to the subsequent sale and the lowering of the bid amount, loss was caused to the 8[th] respondent. The primary fallacy in such a contention is **WP(C).12094/11** 9 that, sub-section (5) of section 49 of the RR Act does not contemplate recovery of loss caused to the defaulters, but only to Government in such proceedings. In the present case, it is to be noticed that the dues sought to be recovered was not public revenue due on land, but the dues to an institution which was notified under Section 71 of the RR Act. The said dues were satisfied in full by the second auction sale itself. The subsequent sale also fetched more money than that the upset price fixed, which was at slightly below Rs.9 Lakhs, as evidenced by Ext.P4. Neither the 3[rd] respondent nor the 8[th] respondent can seek for recovery of any loss sustained by them, nor is there discernible any such loss. 9. In any event, it is also to be noticed that the 8[th] respondent has not challenged the second sale conducted by the State. The RR Act **WP(C).12094/11** 10 provides for a challenge under Section 50 for any irregularity committed in the sale or for even fixing a low upset price for the property. No such proceedings have been initiated by the 8[th] respondent and the 8[th] respondent cannot raise any claim in the present writ petition filed by the original bidder of the property. For all the above reasons, the writ petition stands partly allowed, setting aside Exhibit P2, which raised a demand of Rs.5,09,000/- as loss and expenses under sub-section (3) of Section 49. However, it is made clear that the amounts which were deposited as advance, would remain forfeited to the Government. Parties are left to suffer their respective costs. Sd/- ## **K.VINOD CHANDRAN, Judge** Mrcs //True Copy//