WP(C) Nos. 38446 of 2010 and 7207 of 2011 – Sasidharan Karunakaran & Sudheesan v. State of Kerala and others; Anil Prasad v. State of Kerala and others

WP(C) NO. 7207 OF 2011 & 38446/2010 1 # **IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT** **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN FRIDAY, THE 30[TH] DAY OF JULY 2021 / 8TH SRAVANA, 1943 WP(C) NO. 38446 OF 2010** ## **PETITIONERS:** 1 SASIDHARAN KARUNAKARAN, SHIBU NIVAS, MUTHANAN,, CHAVARCODE P.O., CHIRAYINKEEZHU,, THIRUVANANTHAPURAM DISTRICT. 2 SUDHEESAN AGED 55 YEARS SO. NATESAN ANUPAMA NIVAS, AYIROORPPARA, POTHENCODE,, THIRUVANANTHAPURAM DISTRICT. BY ADVS. SRI.V.V.RAJA SRI.R.RENJITH ## **RESPONDENTS:** 1 STATE OF KERALA SECRETARY, (TAXES DEPARTMENT), GOVT. SECRETARIAT,, THIRUVANANTHAPURAM-1. 2 THE EXCISE COMMISSIONER COMMISSIONERATE, THIRUVANANTHAPURAM-1. 3 THE ASSISTANT EXCISE COMMISSIONER KOLLAM-1. 4 THE DEPUTY TAHSILDAR REVENUE RECOVERY, TALUK OFFICE, KOLLAM-1. BY GOVERNMENT PLEADER SMT.SHEEJA C.S. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.07.2021, ALONG WITH WP(C).7207/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 7207 OF 2011 & 38446/2010 2 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN FRIDAY, THE 30[TH] DAY OF JULY 2021 / 8TH SRAVANA, 1943** **WP(C) NO. 7207 OF 2011** ## **PETITIONERS:** ANIL PRASAD, AGED 38 YEARS S/O.SIVAPRASAD, S.P.LAND, CHIRAYINKEEZHU, THIRUVANANTHAPURAM DIST. BY ADVS. SRI.R.RENJITH SRI.M.T.SURESHKUMAR ## **RESPONDENTS:** 1 STATE OF KERALA SECRETARY, TAXES DEPARTMENT,GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM -1. 2 THE EXCISE COMMISSIONER COMMISSIONERATE, THIRUVANANTHAPURAM -1. 3 THE ASSISTANT EXCISE COMMISSIONERKOLLAM -1 4 THE DEPUTY THAHASILDAR REVENUE RECOVERY TALUK OFFICE,KOLLAM-1 BY ADV GOVERNMENT PLEADER ## **OTHER PRESENT:** SMT.SHEEJA.C.S, GP **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30.07.2021, ALONG WITH WP(C).38446/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** WP(C) NO. 7207 OF 2011 & 38446/2010 3 ## **P.V.KUNHIKRISHNAN, J** **-------------------------------------------W.P.(C.) Nos.38446 of 2010 and 7207 of 2011 -------------------------------------------------Dated this the 30[th] day of July, 2021** ## **JUDGMENT** These writ petitions are connected and therefore, I am disposing these two writ petitions by a common judgment. 2. I will narrate the facts in W.P.(C.) No. 7207/2011. 3. The petitioner along with two others were successful bidders of the right to conduct sale of toddy with respect to shop Nos. 66 to 93 of group 1 to 10 (total 28 shops) of Excise Range, Chathannoor for the period from 1.4.1999 to 31.3.2000. They bid the right for an amount of Rs.2,15,10,000/. The auction was confirmed in their favour and an agreement to that effect was also entered into. Going by Chapter IV Rule 5(10) of the Abkari Shops (Disposal in auction) Rules, 1974 (for short ‘Rules’) an amount of Rs.64,53,000/- being the 30% of the bid amount was deposited by the purchasers on the date of auction itself. Apart from the above, a solvency certificate to the tune of WP(C) NO. 7207 OF 2011 & 38446/2010 4 Rs.66,00,000/- was also furnished by the purchasers. Exts.P1 to P3 are the documents. 4. Based on the license granted, the petitioner along with one Sasidharan and another Sudheeshan commenced business with effect from 1.4.1999. Sasidharan and Sudheesan are the petitioners in W.P.(C.) No.38446/2010. According to the petitioners, due to unforeseen situations, the business did not take off and they plunged into loss. 5. The petitioners were unable to pay the kist amount. Notice was issued by the 3[rd] respondent calling upon them to remit the kist amount or else to face the consequences, including the cancellation of license. At that stage, O.P.No.13811/2009 was filed by the petitioners in this writ petition before this Court. This Court was pleased to grant interim stay of the impugned order on condition that the petitioners remit the amount demanded. But even then there was no remittance. Subsequently, Ext.P4 order was passed cancelling the license. Later, as per order dated 24.5.1999 was passed by the 3[rd] respondent directing to adjust an amount of Rs.21,83,266/- with interest thereon to WP(C) NO. 7207 OF 2011 & 38446/2010 5 the kist amount. Ext.P5 is the proceedings. Later, as per order dated 27.7.1999, the 3[rd] respondent forfeited the balance amount available to the tune of Rs.44,72,236/- to the Government under Rule 6(28) of the Rules. Ext.P6 is the proceedings. Meanwhile, the shops were re-auctioned. The resale was confirmed in the name of one G.Biju for an amount of Rs.60,10,000/-. Ext.P7 is the order. It seems that it is not re-sale, but the above said Biju came forward and offered the amount and the sale was confirmed in his name. The original bid amount when the shop was allotted to the petitioner was Rs.2,15,10,000/-. According to the petitioners, an amount of Rs.64,53,000/- was remitted on the day of sale by the petitioners and later an amount of Rs.2,02,502/- was also remitted by them. It is the case of the petitioners that the Government was also able to collect an amount of Rs.60,10,000/- by conducting re-auction of the toddy shops. Therefore, the petitioners contend that the Government obtained a total amount of Rs **.** 1,26,66,502/- in connection with these toddy shops. 6. In the meanwhile, the proceedings were initiated WP(C) NO. 7207 OF 2011 & 38446/2010 6 against the petitioners in this writ petition to recover the amount. Notice under Sec.34 of the Revenue Recovery Act was issued. Proceedings under Secs.35 and 36 were also initiated. At that stage, the petitioners challenged those proceedings by filing O.P.No.871/2000. Interim order was granted in favour of the petitioners therein on condition that they will remit the amount claimed within a time frame. The amount was not paid as directed by this Court. Later, the properties were put to auction. Since, there is no bidders came forward to purchase the properties, the same was taken by the Government by remitting one Rupee each. Exts.P8 and P9 are the order of confirmation of sale of the immovable property by the State. 7. The contention of the petitioners is that the properties purchased by the State in the auction was worth Rs.66,00,000/-. According to the petitioners, as evident by Exts.P1 to P3, the properties were valued by the competent authority and the value was fixed as Rs.66,00,000/-. After Exts.P8 and P9, the properties are in the possession of the respondents. In the meanwhile, the petitioners challenged WP(C) NO. 7207 OF 2011 & 38446/2010 7 the revenue recovery proceedings by filing O.S.No.448/2005 before the Sub-Court, Thiruvananthapuram for settlement of accounts. The suit was admitted and notice was issued. Later, the suit was dismissed as withdrawn. Ext.P10 is the order passed by the Principal Sub Judge, Thiruvananthapuram in O.S.No.448/2005. 8. The definite case of the petitioners is that in the light of the fact that Exts.P1 to P3 solvency certificates in which, it is clearly stated that the value of the property is Rs.66,00,000/-, the respondents erred in not crediting that amount to the due amount of the petitioners. The counsel relied several judgments of this Court to substantiate his case. The counsel submitted that, this Court in **P.Gopalakrishnan v. State of Kerala and others** [2006 KHC 366] observed that the State should act reasonably, while conducting sale of the properties. The relevant portion of the judgment is extracted hereunder : 7. Revenue sale is conducted not only to wipe off the revenue dues but also to see that maximum price is fetched to the defaulter since in a revenue sale the interests of the intending purchaser, the defaulter and the mortgagee have to be safeguarded. Duty is cast on the officials to safeguard not only the interests of the Revenue but also the defaulter so as to fetch the maximum amount. Discretion conferred under WP(C) NO. 7207 OF 2011 & 38446/2010 8 S.75(2) has to be exercised by the authorities depending upon the facts of each case and the case has to be dealt with in a just and equitable manner. Revenue authorities should know that the defaulter is in distress and between devil and deep sea. Defaulter in a given case would not be in a position to repay the amount due to various reasons; such as labour unrest, lack of raw materials, unfavourable market conditions and host of other reasons. Defaulter in all situations may not be a cheat or swindler. Since revenue authorities are dealing with the properties of somebody else it is highly necessary that an attempt should be made by them to get maximum price for the property. 8. Legislature has enacted S.75(2) with that object in view. Failure to exercise the discretion by the Collector or other officers under S.75(2) in a given case may vitiate the sale. It is trite that when discretionary power is conferred on an authority, such authority must exercise that power, applying his mind in a just and equitable manner depending upon the facts and circumstances of the case. Failure to exercise the discretion in a given set of facts may vitiate the proceedings. Discretionary power has been conferred on an authority so as to exercise the same when occasion warrants. A number of statutes confer power on the administrative authority and officers to exercise their discretion. Lack of response to the sale notice may be due to lack of publicity. In such a situation, duty is cast on the authorities to carry out publication through newspaper having wide circulation therefore maximum price could be fetched, which is good for the defaulter and the mortgagee. Reference may also be made to the decision of this Court in Mahadevan Pillai v. Kerala Financial Corporation (1997 (2) KLT 46).” 9. The counsel also relied the judgment of this Court ## in **Ramachandran Nair B. and others v. State of Kerala** ## **and others** [2008 (4) KHC 528]. The relevant portion of the above judgment is also extracted hereunder : “2. Learned counsel for the petitioners contended that there is amnesty scheme introduced by the Government under which petitioners are willing to settle the entire liabilities with applicable rate of interest and they should be restored the land. On the other hand, learned Government Pleader submitted that since the defaulters did not challenge WP(C) NO. 7207 OF 2011 & 38446/2010 9 taking over of the land years back, Government is free to appropriate the land for it's own purposes and accordingly, the Government has distributed the land among various agencies and the said land cannot be restored. We are in agreement with the contention of the learned Government Pleader that petitioners have no right to challenge the purchase of the land by Government in RR proceedings at this distance of time, after Government has appropriated the land for various purposes, which are all public purposes. However, we find force in the contention of the petitioners that further recovery proceedings against them should not be allowed to be continued for more than one reason. In the first place, it is admitted that on sale of 12 acres of land to Governmental agencies at moderate price fetched the Government above Rs.75 lakhs, which accounts for almost 70% of the liabilities as on 31/03/1990. In fairness, the Government should have fixed reasonable value for the balance land assigned to various agencies and if the fair price was given credit in the arrear amount of the defaulters, then they would have got refund of massive amounts. It is admitted that all the properties are situated in and around Kottayam town and the value of 42 acres of land as of now would be crores of rupees. Probably the value of balance one acre of land taken over and still left with the Government will be sufficient to take care of the entire debt. However, it is impossible to restore the land to petitioners because out of 42 acres taken over by Government, 41 acres have already been assigned to various Governmental agencies mostly free of cost and balance for consideration, which has to be credited in the arrear account of the petitioners. Since assignment of 12 acres of land fetched the Government above Rs.75 lakhs in 1997, we have to necessarily assume that the fair market value as on that date for the balance 30 acres of land would have been multiples of liabilities due from petitioners and therefore it will be thoroughly inequitable to permit further recovery from petitioners, after allowing the Government to enjoy the properties taken over from the petitioners free of cost. In fact, in many cases, lands acquired by the Government years back and retained as bought in land were restored to defaulters on clearing the arrears, either by Government itself or though Court orders. In this case, it so happened that out of three major defaulters, two of them are dead and the other is around 90 years of age. In short, defaulters were either dead or did not have the capacity to resist the recovery steps taken against them. Moreover, we feel Government is the only beneficiary for the lapses on the part of the defaulters because their WP(C) NO. 7207 OF 2011 & 38446/2010 10 failure to contest resulted in property worth crores of rupees vesting in Government for Government's liberal appropriation for use by school and other Governmental agencies. Timely challenge of recovery proceedings would have led to restoration of land to defaulters and considering the value of the properties, defaulters would have gained substantially even after settling arrears with full interest. However, death of two defaulters and advanced age of the surviving one prevented them from taking any timely steps for settlement and restoration of property. In view of the substantial recovery and appropriation of defaulters land by Government, the value of which in our estimation is multiples of the balance arrears, we partly allow the writ petitions by quashing the further revenue recovery proceedings pending against the defaulters, guarantors and also against legal heirs of the deceased licensees, namely Mr. Mammen Koshy, whose 15 acres of land was taken over by the Government as bought in land and Mrs. Mary Sophy Koshy, whose 9.84 acres of land was acquired by the Government. 3. Incidentally, we feel that the RR Act requires amendment to deal with bought in land in RR proceedings, so that defaulters do not suffer at least after forfeiture of their entire land in recovery proceedings. We direct the Government to consider amendment to the statute for disposal of bought in land and for settlement of defaulter's liability or for use of the land for Government purposes only after crediting fair market value in the loan account of the parties.” 10. The counsel also relied the judgment of this Court in **Sali and others v. Santhosh** [2010 (1) KHC 482] to substantiate his contention that this Court has got wide powers under Article 226 of the Constitution of India. The counsel relied para 13 of the above judgment which is extracted hereunder : “13. This Court had adopted this procedure in exercise of its original as well as inherent jurisdiction. It is trite that there cannot be any fetters on this Court while exercising its powers under Art.226 of the Constitution on the specious WP(C) NO. 7207 OF 2011 & 38446/2010 11 plea that this procedure is not being followed ordinarily. Procedure is only a handmaid to justice. The Court has to always strive for pursuit of truth and equity in order to do justice to parties to the lis. Such pursuit may lead the Court to a path which is not most often trodden; but that does not mean that all untrodden paths are forbidden. Sometimes the journey may be through an alien terrain. But as long as the choice of the path is made with a clear vision of the destination ahead, the caravan of justice should move on; unmindful of the sceptic onlookers and wayfarers; because ultimately what matters is only rendering justice to a beleaguered litigant. Technical or procedural trivialities should never be allowed to frustrate a litigant who comes before the Court craving for justice. In our view, the situation might have been totally different if only the Family Court had bothered to show some pragmatism rather than going at a tangent dealing with unnecessary pedantics.” In the above circumstances, this writ petition is filed with the following prayers : _“_ a. Declare that the petitioner is not liable to pay any amounts as claimed by the respondents. b. Issue a writ in the nature of mandamus commanding the respondents 1 to 3 to assess the market value of the properties bought in by the Government in revenue recovery proceeding initiated against the petitioner and to credit the same to the alleged arrears of kist amount. c. Issue such other reliefs as this Hon'ble Court may deem fit and proper in the facts and circumstances of this case. d. And award costs to the litigation.” 11. The counsel for the petitioner also argued that the sale conducted by the respondents is not in a proper manner and it violates the statutory provisions. Admittedly, no application is filed to set aside the sale within the statutory period. WP(C) NO. 7207 OF 2011 & 38446/2010 12 12. The 3[rd] respondent filed a counter affidavit, in which the contentions of the petitioners are denied. The Government Pleader submitted that this is a case in which the recovery steps were initiated in the year 2000. Now, for the last 21 years, the petitioner is continuing with litigation after litigation. In such circumstances, the State was not able to recover the amount from the petitioner. The Government Pleader submitted that the petitioner is trying to evade the payment by filing writ petition after writ petition before this Court and representation before other authorities. The Government Pleader submitted that there is nothing to interfere in these writ petitions. The Government Pleader submitted that the prayers in the writ petition itself is not maintainable in the facts and circumstances of this case. The Government Pleader submitted that the sale is not challenged in this writ petition. The petitioner is praying for a declaration that the petitioner is not liable to pay any amount as claimed by the respondents. The Government Pleader submitted that what is the amount in dispute is not clear and documents by which recovery proceedings WP(C) NO. 7207 OF 2011 & 38446/2010 13 initiated are not even produced in the writ petition. Therefore, the Government Pleader submitted that the writ petition itself is not maintainable. The Government Pleader also submitted that the sale of the property as bought in land by the State is not even challenged in the writ petition. 13. It is an admitted fact that there was huge arrears from the petitioners to the State. The recovery steps were started in the year 2000. The petitioners filed two writ petitions before this Court earlier and also filed a suit before the civil court. They failed in all the writ petitions. Thereafter, they filed these two writ petitions on 22.12.2010 and 7.3.2011. There is no interim order passed in these writ petitions. Even then, the State has not continued with the recovery proceedings because of the pendency of the writ petitions. At this stage, the contentions of the petitioners cannot be entertained by this Court. If the petitioners have got any grievance, the petitioners ought to have approached the authorities concerned at the appropriate stage. The contentions raised in the writ petitions may look attractive. But this Court cannot entertain such a prayer at this belated WP(C) NO. 7207 OF 2011 & 38446/2010 14 stage. According to the petitioners, the State is in possession of the property covered by Exts. P1 to P3 solvency certificates. The petitioners submitted that the State already used one item of the property by distributing to landless people. According to the petitioners, the remaining two lands are even now in possession of the State. According to the petitioners, there are coconut trees and other valuable trees in the property and the State is getting income from the same. The value of the property and the income from it were not credited to the dues from the petitioners. The petitioners also submitted that, after cancelling the license with the petitioners, the toddy shops were re-auctioned and there was resale. About Rs.60,10,000/- was obtained by the State in the re-sale. That is also not adjusted. These cannot be considered by this Court at this belated stage. As I said earlier, the recovery proceedings initiated in the year 2000. Now, about 21 years lapsed. The sale of the property is not even challenged in this writ petition. In such circumstances, at this distance of time, this Court is not in a position to accept the contentions of the petitioners. The State is free to do in accordance to WP(C) NO. 7207 OF 2011 & 38446/2010 15 law. According to me, there is no merit in these writ petitions. Therefore, these writ petitions are dismissed. SD/- **P.V.KUNHIKRISHNAN JUDGE** SKS WP(C) NO. 7207 OF 2011 & 38446/2010 16 ## **APPENDIX OF WPC NO 38446 OF 2010** ## **PETITIONER'S EXHIBITS:** **EXT.P1 TRUE PHOTOSTAT COPY OF THE SOLVENCY CERTIFICATE DATED 3.3.1999 CERTIFIED BY THE TAHSILDAR CHIRAYINKEEZHU, ISSUED IN FAVOUR OF ONE ANIL PRASAD.** **EXT.P2 TRUE PHOTOSTAT COPY OF THE SOLVENCY CERTIFICATE DATED 5.3.1999, ISSUED IN FAVOUR OF THE 2ND PETITIONER, CERTIFIED BY THE TAHSILDAR.** **EXT.P3 TRUE PHOTOSTAT COPY OF THE SOLVENCY CERTIFICATE DATED 3.3.1999 ISSUED IN FAVOUR OF THE 1ST PETITIONER, CERTIFIED BY THE TAHSILDAR, CHIRAYINKEEZHU.** **EXT.P4 TRUE PHOTOSTAT COPY OF THE ORDER NO.Q41169/99 DATED 16.6.1999 PASSED BY THE 3RD RESPONDENT.** **EXT.P5 TRUE PHOTOSTAT COPY OF THE ORDER DATED 24.5.1999 PASSED BY THE 3RD RESPONDENT.** **EXT.P6 TRUE PHOTOSTAT COPY OF THE ORDER NO.241169/99 DATED 27.7.1999 PASSED BY THE 3RD RESPONDENT.** **EXT.P7 TRUE PHOTOSTAT COPY OF THE ORDER DATED** WP(C) NO. 7207 OF 2011 & 38446/2010 17 ## **27.9.1999 PASSED BY THE SECRETARY DEPARTMENT OF TAXES** **EXT.P8 TRUE PHOTOSTAT COPY OF THE ORDER OF CONFIRMATION OF SALE DATED 23.2.2001 ISSUED BY SUB COLLECTOR.** **EXT.P9 TRUE PHOTOSTAT COPY OF THE ORDER OF CONFIRMATION OF SALE OF IMMOVABLE PROPERTY DATED 8.2.2001 ISSUED BY THE ASST.COLLECTOR, THIRUVANANTHAPURAM.** **RESPONDENT'S EXHIBITS : NIL** WP(C) NO. 7207 OF 2011 & 38446/2010 18 ## **APPENDIX OF WPC NO.7207 OF 2011** ## **PETITIONER'S EXHIBITS:** **EXT.P1 TRUE PHOTOSTAT COPY OF THE SOLVENCY CERTIFICATE DATED 3.3.1999 CERTIFIED BY THE TAHSILDAR CHIRAYINKEEZHU, ISSUED IN FAVOUR OF THE PETITIONER** **EXT.P2 TRUE PHOTOSTAT COPY OF THE SOLVENCY CERTIFICATE DATED 5.3.1999, ISSUED IN FAVOUR OF THE SHRI SUDHEESAN, CERTIFIED BY THE TAHSILDAR.** **EXT.P3 TRUE PHOTOSTAT COPY OF THE SOLVENCY CERTIFICATE DATED 3.3.1999 ISSUED IN FAVOUR OF SHRI. SASIDHARAN, CERTIFIED BY THE TAHSILDAR, CHIRAYINKEEZHU.** **EXT.P4 TRUE PHOTOSTAT COPY OF THE ORDER NO.Q41169/99 DATED 16.6.1999 PASSED BY THE 3RD RESPONDENT.** **EXT.P5 TRUE PHOTOSTAT COPY OF THE ORDER DATED 24.5.1999 PASSED BY THE 3RD RESPONDENT.** **EXT.P6 TRUE PHOTOSTAT COPY OF THE ORDER NO.Q41169/99 DATED 27.7.1999 PASSED BY THE 3RD RESPONDENT.** WP(C) NO. 7207 OF 2011 & 38446/2010 19 **EXT.P7 TRUE PHOTOSTAT COPY OF THE ORDER DATED 27.9.1999 PASSED BY THE 1ST RESPONDENT.** **EXT.P8 TRUE PHOTOSTAT COPY OF THE ORDER OF CONFIRMATION OF SALE DATED 23.2.2001 ISSUED BY SUB COLLECTOR.** **EXT.P9 TRUE PHOTOSTAT COPY OF THE ORDER OF CONFIRMATION OF SALE OF IMMOVABLE PROPERTY DATED 8.2.2001 ISSUED BY THE ASST. COLLECTOR, THIRUVANANTHAPURAM.** **EXT.P10 TRUE PHOTOSTAT COPY OF THE ORDER PASSED BY THE PRINCIPAL SUB JUDGE THIRUVANANTHAPURAM ON 16.2.2011 IN IA 965 OF 2011 IN O.S. NO. 448/2005.** **RESPONDENT'S EXHIBITS :** **EXT.R1 DEMAND COLLECTION AND BALANCE STATEMENT**