W.P.(C).No.28545 of 2014 (P) & W.P.(C).No.4047 of 2015 -(E)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR** ## **TUESDAY, THE 11TH DAY OF JULY 2017/20TH ASHADHA, 1939** ## **WP(C).No. 28545 of 2014 (P)** ## **-------------------------------------------** - **PETITIONER(S) : --------------------------** **1. SADIC MOHAMMED, KARIKKANAKUDIYIL HOUSE, VELLOORKUNNAM P.O, MUVATTUPUZHA.** **2. V.N RAJESH, VARICKAKKAL HOUSE, EDAVETTY P.O, THODUPUZHA.** **3. JOSHY JOHN, VADAKKEKARA HOUSE, PERUMALLOOR P.O, MUVATTUPUZHA.** **4. FAISAL V.A, VELAKKOT PUTHEMPARA, MUVATTUPUZHA.** ## **BY ADV. SRI.M.A.FAYAZ** ## **RESPONDENT(S) :** - **----------------------------** **1. REGIONAL TRANSPORT OFFICER, CIVIL STATION, KAKKANAD, ERNAKULAM 682 030.** **2. DEPUTY TRANSPORT COMMISSIONER, CENTRAL ZONE-II, KAKKANAD, ERNAKULAM 682 030.** **3. STATE BANK OF TRAVANCORE, REPRESENTED BY ITS REGIONAL MANAGER, ERNAKULAM 682 036.** **R1 & R2 BY GOVERNMENT PLEADER SMT. JASMIN.M.M R3 BY ADV. SRI.SANTHOSH MATHEW** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 11-07-2017, ALONG WITH W.P(C).NO. 4047 OF 2015, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** Msd. ## **WP(C).No. 28545 of 2014 (P) -------------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS :** **EXHIBIT P1: PHOTOCOPY OF THE ORDER OF DELIVERY ISSUED BY THE 2ND RESPONDENT BANK IN RESPECT OF THE VEHICLE BEARING REGISTRATION NO. KL-7-AZ-7709 DATED 24.03.2010.** **EXHIBIT P1(A): PHOTOCOPY OF THE ORDER OF DELIVERY ISSUED BY THE 2ND RESPONDENT BANK IN RESPECT OF THE VEHICLE BEARING REGISTRATION NO. KL-7-BC-657 DATED 24.03.2010.** **EXHIBIT P1(B): PHOTOCOPY OF THE ORDER OF DELIVERY ISSUED BY THE 2ND RESPONDENT BANK IN RESPECT OF THE VEHICLE BEARING REGISTRATION NO. KL-7-BC-629 DATED 24.03.2010.** **EXHIBIT P1(C): PHOTOCOPY OF THE ORDER OF DELIVERY ISSUED BY THE 2ND RESPONDENT BANK IN RESPECT OF THE VEHICLE BEARING REGISTRATION NO. KL-7-BC-665 DATED 24.03.2010.** **EXHIBIT P2: PHOTOCOPY OF THE JUDGMENT DATED 29.10.2010 IN W.P(C).NO. 28062 OF 2010.** **EXHIBIT P3: PHOTOCOPY OF THE ORDER PASSED BY THE 1ST RESPONDENT IN RESPECT OF VEHICLE KL-7-AZ-7707 DATED 19.01.2012.** **EXHIBIT P4: PHOTOCOPY OF THE ORDER PASSED BY THE 1ST RESPONDENT IN RESPECT OF VEHICLE KL-07-BC-657 DATED 19.01.2012.** **EXHIBIT P5: PHOTOCOPY OF THE ORDER PASSED BY THE 1ST RESPONDENT IN RESPECT OF VEHICLE KL-07-BC-629 DATED 19.01.2012.** **EXHIBIT P6: PHOTOCOPY OF THE ORDER PASSED BY THE 1ST RESPONDENT IN RESPECT OF VEHICLE KL-07-BC-655 DATED 19.01.2012.** **EXHIBIT P7: PHOTOCOPY OF THE COMMON JUDGMENT IN W.P(C).NO. 4933 OF 2012 AND 7295 OF 2012 DATED 09.04.2012.** **EXHIBIT P8: PHOTOCOPY OF THE NOTICE ISSUED TO THE PETITIONERS HEREIN DATED 01.03.2011 BY THE 1ST RESPONDENT.** **EXHIBIT P9: PHOTOCOPY OF THE ORDER DATED 16.08.2012 OF THE 2ND RESPONDENT.** **EXHIBIT P10: PHOTOCOPY OF THE APPELLATE ORDER PASSED BY THE DEPUTY TRANSPORT COMMISSIONER DATED 09.11.2012. EXHIBIT P11: PHOTOCOPY OF THE AUCTION NOTICE DATED 06.02.2010. EXHIBIT P12: PHOTOCOPY OF THE APPLICATION SUBMITTED BY 1ST PETITIONER TO THE 1ST RESPONDENT DATED 29.10.2013.** **WP(C).No. 28545 of 2014 (P)** **-------------------------------------------** **EXHIBIT P13: PHOTOCOPY OF THE REPLY RECEIVED FROM THE 1ST RESPONDENT DATED 25.11.2013.** ## **RESPONDENT(S)' EXHIBITS & ANNEXURES :** **ANNEXURE R3(1): TRUE COPY OF THE ORDER DATED 05.06.2013 IN ORDER NO. B1/3418/TC/2013 OF THE TRANSPORT COMMISSIONER, KERALA.** **//TRUE COPY//** **P.A.TO JUDGE.** Msd. ## **A.K.JAYASANKARAN NAMBIAR, J.** **............................................................. W.P.(C).No.28545 Of 2014 -(P ) & W.P.(C).No.4047 Of 2015 -(E ) ............................................................. Dated this the 11[th] day of July, 2017** ## **J U D G M E N T** As both these writ petitions involve a common issue, they are taken up together for consideration and disposed by this common judgment. For the sake of convenience, the reference to facts and exhibits is from W.P.(C).No.4047 of 2015. 2. The petitioners, four in number, are the same in both the writ petitions. They had purchased four vehicles in an auction that was conducted at the instance of the 2[nd] respondent bank, pursuant to the final order in O.A.No.203 of 2007 and O.A.No.161 of 2008 before the Debt Recovery Tribunal, in proceedings under the Recovery of Debts Due to the Bank and Financial Institutions Act. The auction sale was preceded by an auction notice dated 16.02.2010 that fixed the auction sale on 05.03.2010. Thereafter, when the petitioners approached the 2[nd] respondent bank for -2- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** handing over registration certificates in respect of the vehicles, the 2[nd] respondent informed them that the originals of the registration certificates were not available with them, and that steps were being taken to approach the 1[st] respondent for the issuance of duplicate certificates. The petitioners were directed to approach the 1[st] respondent, in the meanwhile, for the issuance of NonLiability/Clearance Certificates, in respect of the vehicles purchased by them and simultaneously, the 2[nd] respondent bank also applied to the 1[st] respondent for the issuance of fresh registration certificates in respect of the vehicles. The 1[st] respondent appears to have refused the clearance certificates to the petitioners stating that an amount of approximately Rs.90,000/- was outstanding in respect of each of the vehicles towards arrears of motor vehicle tax. The petitioners, on receipt of the said communication, contended that no liability could be fastened on them towards arrears of motor vehicle tax dues since, as per the provisions of the Kerala Motor Vehicle Taxation Act, the liability to pay any arrears of tax was only on the registered owner of the vehicle or the person who, at the relevant point in time, was in possession and control of the vehicle. It was the contention of -3- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** the petitioners before the 1[st] respondent that, inasmuch as they had obtained ownership of the vehicle through the auction held on 05.03.2010, they could not be made liable for the arrears of motor vehicle tax dues in respect of the said vehicles. When the 1[st] respondent refused to accede to the request of the petitioners for exempting them from the liability to pay the arrears of motor vehicle tax, the petitioners approached this Court through W.P(C). No.28062 of 2010 challenging the order of the 1[st] respondent. By Ext.P1 judgment dated 29.10.2010, this Court relegated the petitioners to the 1[st] respondent, who was directed to decide the issue as regards the inter se liability between the petitioners, on the one hand, and the 2[nd] respondent bank, on the other, with regard to the outstanding dues towards motor vehicle tax in respect of the vehicles in question. By the said judgment, this Court also permitted the petitioners to obtain a transfer of ownership of the vehicles in their name subject to their furnishing a bank guarantee before the 1[st] respondent for the tax liability, and on condition that they kept the bank guarantee alive till such time as the issue of inter se liability between the petitioners and the 2[nd] respondent bank was decided by the 1[st] respondent authority. -4- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** 3. Pursuant to the directions of this Court in Ext.P1 judgment, the 1[st] respondent proceeded to pass Exts.P2 to P5 orders dated 19.01.2012 whereby, the liability to pay the arrears of tax was fixed on the 3[rd] respondent bank. Immediately on receipt of Exts.P2 to P5 orders, the petitioners approached this Court through W.P(C).No.4933 of 2012 seeking a return of the bank guarantee that had been furnished by them pursuant to Ext.P1 judgment referred above, as the 1[st] respondent had fixed the liability on the 3[rd] respondent bank. It would appear that the 3[rd] respondent bank also filed a separate writ petition (W.P(C). No.7295 of 2012) contending that Exts.P2 to P5 orders had been passed without notice to the bank. Both the aforementioned writ petitions were disposed by Ext.P11 judgment of this Court, whereby this Court disposed W.P(C).No.7295 of 2012 by quashing Exts.P2 to P5 orders and directing the 1[st] respondent to pass fresh orders in the matter after issuing notice to all the parties and hearing them. As regards W.P(C).No.4933 of 2012, it was found that directions for returning the bank guarantee could not be issued in view of the judgment in W.P.(C).No.7295 of 2012 as -5- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** noticed above. It was also made clear that while the petitioners had to keep the bank guarantees alive till orders are passed by the 1[st] respondent as directed, they could approach the official respondents claiming a return of bank guarantee, if ultimately the orders that were passed were in their favour. Pursuant to the directions in Ext.P11 judgment, the matter was once again before the 1[st] respondent, who this time around passed Ext.P7 order finding in favour of the petitioners on the issue of liability to pay the motor vehicle tax dues in respect of the vehicles in question. Against Ext.P7 order passed by the 1[st] respondent, the 3[rd] respondent bank preferred an appeal before the Deputy Transport Commissioner, the 2[nd] respondent herein. The said appeal, however, was dismissed by Ext.P8 order of the said respondent. It merits mention at this stage that on Ext.P8 order being passed, the petitioners once again approached this Court through W.P.(C). No.28545 of 2014 seeking a return of the bank guarantee that had been furnished by them consequent to the finding in Ext.P7 order, as affirmed by Ext.P8 order of the 2[nd] respondent. In the meanwhile, however, the 3[rd] respondent bank preferred a further revision against Ext.P8 order before the Transport Commissioner -6- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** (the 4[th] respondent herein). The 4[th] respondent by Ext.P10 order, allowed the revision by way of remand, and directed the 1[st] respondent to decide the issue of inter se liability between the petitioners and the 3[rd] respondent, afresh, in the light of the observations in Ext.P10 order. In W.P.(C).No.4047 Of 2015, the petitioners impugn Exts.P8 and P10 orders passed by the first appellate authority and the revision authority, inter alia, on the ground that, when this Court had by Ext.P1 judgment, as also Ext.P11 judgment, directed the 1[st] respondent to pass orders on the issue of inter se liability of the petitioners and the 3[rd] respondent, with regard to payment of motor vehicle tax dues in respect of the vehicles, and the 1[st] respondent had, in compliance with the directions in the said judgment, passed orders fixing the liability on the 3[rd] respondent bank, it was not open to the 3[rd] respondent bank to challenge the orders of the 1[st] respondent before the appellate and revisional authorities under the Motor Vehicle Taxation Act. It is further contended that the order passed by the 4[th] respondent is vitiated since the said order was passed without hearing the petitioners. -7- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** 4. I have heard the learned counsel appearing for the petitioners, learned Standing counsel for the 3[rd] respondent bank and also the learned Government Pleader appearing for the official respondents. 5. On a consideration of the facts and circumstances of the case as also the submissions made across the bar, I find that the principal issue, with regard to the entitlement of the State Government to a recovery of the motor vehicle tax dues that accrued in respect of the four vehicles, that were purchased by the petitioners in the auction that was held on 05.03.2010, has not been considered by any of the authorities in the orders that are impugned in the writ petition. The motor vehicle tax dues that accrue in respect of a motor vehicle, are recoverable as arrears of land revenue by virtue of the provisions of Section 13 of the Kerala Motor Vehicle Taxation Act read with S. 3 of the Kerala Revenue Recovery Act. S. 13 of the Motor Vehicles Taxation Act makes it very clear that any amount due under the Act or Rules shall be recoverable in the same manner as an arrear of public revenue to one land. Under Section 3 of the Kerala Revenue -8- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** Recovery Act, 1968, the public revenue due on any land is to be the first charge on that land, the buildings upon it and on produce thereof. It follows that, in the case of motor vehicle tax dues, the tax amount due in respect of any motor vehicle, would constitute a first charge on the motor vehicle itself. Accordingly, the entitlement of the State Government, to recover the tax arrears in respect of the vehicles in question, is established through the aforementioned statutory provisions. The State Government would, therefore, be justified in recovering the tax arrears in respect of the vehicles from the person who has the possession of the vehicles at any given point in time. Inasmuch as it is not in dispute that the petitioners have possession of the vehicles, consequent to the sale that was conducted on 05.03.2010, I am of the view that the State Government can realise the motor vehicles tax dues in respect of the said vehicles from the petitioners, on the basis of the charge that attaches to the vehicles in question. Resultantly, the petitioners shall pay the arrears of motor vehicle tax dues, in respect of the vehicles in their possession, to the State Government in four equal monthly instalments commencing from 24.07.2017. I make it clear that on the petitioners paying the -9- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** motor vehicle tax dues as above, the official respondents of the State Government shall return the bank guarantee furnished by the petitioners during the pendency of the proceedings before the statutory authorities. 6. Coming next to the issue of inter se liability of the petitioners, on the one hand, and the 3[rd] respondent bank, on the other, I find that, consequent to Ext.P10 order of the 4[th] respondent, the 1[st] respondent has by a separate order dated 28.01.2015 found that, as between the petitioners and the 3[rd] respondent, the petitioners, as auction purchasers, would be liable for the outstanding liabilities in respect of the vehicles in question. This order passed by the 1[st] respondent as early as on 28.01.2015, pursuant to Ext.P10 order of the 4[th] respondent, has not been impugned by the petitioners in any proceedings. It is significant to note that, in W.P.(C).No.4047 of 2015 that was preferred challenging Ext.P10 order of the 4[th] respondent, there was no stay granted by this Court against the operation of the Ext.P10 order, and hence, the consequential order passed by the 1[st] respondent cannot be said to be illegal. That apart, it is also relevant to note -10- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** that W.P.(C).No.4047 of 2015 itself was filed only on 06.02.2015, which is after the date of the consequential order passed by the 1[st] respondent (28.01.2015) and the date of communication of the said order on the petitioners (04.02.2015). In the absence of a challenge against the consequential order passed by the 1[st] respondent, I am of the view that the petitioners cannot now dispute the correctness of the said order at this belated stage. Resultantly, I find that the relief sought for in the writ petition cannot be granted, and the reliance by the petitioners on the decisions reported in **Rakesh Credits Ltd. v. State of Kerala [2012 (4) KLT 406]** cannot come to their aid in any manner in the instant writ petitions. The writ petitions therefore fail and are accordingly dismissed. While disposing these cases, I make it clear that nothing contained in this judgment shall stand in the way of the petitioners independently challenging the order dated 28.01.2015 of the 1[st] respondent in separate proceedings, for the limited purposes of establishing that the tax liability fixed against the petitioners in respect of the vehicles in question is excessive, or for the purpose -11- ## **W.P.(C).No.28545 Of 2014 & W.P.(C).No.4047 Of 2015** of showing that there could not have been any liability in respect of the vehicles in question for any particular period, on account of any exemption that the petitioners were entitled to. The said proceedings could be resorted to by the petitioners for claiming refund of any tax that is paid by the petitioners consequent to the directions in this judgment. Sd/- **A.K.JAYASANKARAN NAMBIAR JUDGE** mns/11.07.17