High Court Kerala High Court

K. Narayanan Nair vs The Kerala State Handloom … on 16 November, 2009

Kerala High Court
K. Narayanan Nair vs The Kerala State Handloom … on 16 November, 2009
       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

RSA.No. 1170 of 2004(E)


1. K. NARAYANAN NAIR, S/O. SREEDEVI AMMA,
                      ...  Petitioner

                        Vs



1. THE KERALA STATE HANDLOOM DEVELOPMENT
                       ...       Respondent

                For Petitioner  :SRI.R.MANOJ

                For Respondent  :SC.KERALA STATE HANDLOOM DVP.CORPN.

The Hon'ble MR. Justice THOMAS P.JOSEPH

 Dated :16/11/2009

 O R D E R
                             THOMAS P. JOSEPH, J.
                            --------------------------------------
                               R.S.A.No.1170 of 2004
                            --------------------------------------
                  Dated this the 16th day of November, 2009.

                                      JUDGMENT

The Regular Second Appeal arises from judgment and decree of

learned Additional District Judge, Kozhikode in A.S.No.7 of 2001 confirming

judgment and decree of learned Munsiff, Kozhikode in O.S.No.125 of 1997.

Appellant sued the respondent for a declaration and prohibitory injunction

against realisation of the amount. According to the appellant his father, the late

Govindankutty Nair conducted agency business under the respondent at Mavoor

under the name and style ‘Sreeja, Mavoor’. Appellant’s mother, Sreedevi

Amma was a guarantor to the respondent in that transaction. Appellant’s father

died on 16.3.1988. On death of the father, it is contended, agency business

stood terminated and the showroom was closed. According to the appellant,

amount due from the late Govindankutty Nair could be realised only if a new

agency was created but creation of agency requested by the appellant was

refused by the respondent. Hence the amount if any due from the late

Govindankutty Nair is not recoverable. Appellant and his mother filed

O.S.No.950 of 1988 against realisation of the amount. In the meantime, the

mother died. Her legal representatives were not interested in joining the suit and

ultimately that suit was dismissed on 4.8.1993. Appellant wants a declaration

that on the death of Govindankutty Nair the agency business stood terminated

and thereon his liability towards respondent stood discharged, respondent has

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no right to realise any amount and for consequential injunction. Respondent

contended that the late Govindankutty Nair was conducting business in goods

supplied by it and his wife was a guarantor in that transaction. She created

equitable mortgage in favour of the respondent. On the death of Govindankutty

Nair his legal heirs are liable to discharge the liability as they have inherited

his property. The liability was not discharged and hence steps were taken for

recovery of the amount under the Revenue Recovery Act (for short, “the Act”). It

is contended that appellant unsuccessfully filed O.P.No.4695 of 1997 in this

Court against the respondent and the State but the same was dismissed.

Learned Munsiff held that the contention that on termination of agency by the

death of Govindankutty Nair his liability to the respondent stood discharged is

unsustainable and that respondent is entitled to realise the amounts from the

assets of the late Govindankutty Nair and the mortgaged properties and

dismissed the suit. Appellate court has confirmed judgment and decree and

hence the Second Appeal. Following substantial questions of law are framed for

a decision:

i. Whether the respondent is entitled to proceed against the

mortgaged properties without the intervention of court in view of the bar under

Section 69(1) of the Transfer of Property Act (for short, “the T.P.Act”)?

ii. Whether the respondent is entitled to recover the amount in view of

the decisions of the Apex Court in State of Kerala v. V.R.Kalliyanikutty (1999(2)

KLT 146) and Halimathu Beevi v. State of Kerala (1999(3) KLT 279)?

RSA No.1170/2004

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2. It is contended by learned counsel for appellant that only in

accordance with Section 69(1)(b) of the T.P.Act and when the mortgagee is the

Government, mortgagee could recover the amount by enforcing the mortgage

except through the process of court. In this case the Government not being the

mortgagee, respondent is not entitled to take recourse to the said provision

and hence the attempt to initiate revenue recovery proceedings under the Act is

illegal. Further contention raised by learned counsel is that at any rate, there is

no notification issued under Section 71 of the Act authorising recovery of the

amount allegedly due to the respondent by recourse to the provisions of the said

Act. Lastly it is contended that recovery of the amount if any due to the

respondent is barred by law of limitation and hence resort could not be had to

the provisions of the Act. Learned counsel has placed reliance on the decisions

of the Apex Court in State of Kerala v. V.R.Kalliyanikutty (1999(2)

KLT 146) and Halimathu Beevi v. State of Kerala (1999(3) KLT

279).

3. So far as the contention regarding want of notification under

Section 71 of the Act is concerned, learned counsel for respondent has brought

to my notice notification No.32706/B3/70/RD dated 24.5.1970 of the Government

of Kerala (Revenue (B) Department) wherein it is stated that in exercise of the

power conferred under Section 71 of the Act the Government of Kerala being

satisfied that it is necessary to do so in public interest have declared that the

provisions of the Act shall be applicable to recovery of the amount due from any

person to the ‘Kerala Handloom Finance Corporation Limited, Kannur’. A fresh

RSA No.1170/2004

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certificate of incorporation consequent to change of name was issued by the

Registrar of Companies. Learned counsel for respondent explained that

originally name of the respondent was ‘Kerala Handloom Finance Corporation

Limited’ which was incorporated under the Companies Act on 24.6.1968 and

thereafter its name was changed as ‘Kerala Handloom Finance and Trading

Corporation Limited’. That name has been changed as Kerala State Handloom

Developments Corporation Limited (respondent in the case on hand). Thus it is

clear that subsequent to the notification which I have referred to above, there

was change of name of the respondent Corporation which resulted in its present

name. The notification under Section 71 of the Act in respect of the original

name should enure to the benefit of the respondent since respondent

Corporation continues to be the same though its name has been changed.

4. More forcible contention raised by learned counsel is based on

Section 69(1) of the T.P.Act. That provision states the circumstance under

which without recourse to a court of law a mortgage can be enforced.

Respondent has no case that the mortgage in its favour created by the mother

of appellant came within the scope of Section 69 (1)(b) of the T.P. Act. But it is

contended that the said provision concerned enforcement of mortgage while

what is sought to be enforced under the Act is not enforcement of the mortgage.

5. The preamble to the Act states that the said Act is intended to

consolidate and amend the laws relating to recovery of arrears of public revenue

in the State of Kerala. The object of enactment of the Act is to provide speedier

and cheaper remedy for recovery of public revenue due on land and amounts

RSA No.1170/2004

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declared by notification issued under Section 71 of the Act. On receipt of a

requisition under Section 69 of the Act, the authorities mentioned in the Act

initiates action for recovery of the amount. When they proceeded against

movable properties of the defaulter, a notice under Section 7 and when it is

immovable properties a notice under Section 34 of the Act is required. The

attempt of the authorities under the Act is not the enforcement of the mortgage

as such but to recover the amount due from the defaulter and his surety by sale

of movable or immovable properties as the case may be belonging to them.

Except in the matter of deciding the period of limitation for recovery of the

amount, it makes no difference, so far as recovery under the Act is concerned

whether the property proceeded against is subject to a mortgage in favour of the

respondent, or not. Hence the contention that since the property of the mother

of the appellant has been mortgaged to the respondent recovery proceedings

under the Act is not permissible as it violates Section 69(1) of the T.P.Act

cannot stand.

6. It is then contended by learned counsel for appellant that the Act

contemplated proceeding against the properties of the ‘defaulter’ alone.

According to the learned counsel, appellant or his mother are not ‘defaulters’ to

the respondent. So far as appellant is concerned, he is a legal representative of

the defaulter, the late Govindankutty Nair and though the word ‘defaulter’ as

defined in the Act does not take in a legal representative, the settled position of

law informs me that a legal representative is none but a persona of the

deceased. Hence a legal representative also comes within the definition of the

RSA No.1170/2004

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word “defaulter”. So far as mother of appellant who is admittedly the guarantor

to the respondent is concerned, she squarely comes within the definition of

‘defaulter’ as it includes a ‘surety’ also.

7. It is then contended by learned counsel for appellant that

proceeding under the Act could be initiated only after crystallizing the amount

due to the respondent. Learned counsel referred to me the notice dated

10.9.1988 issued by the respondent regarding the amount allegedly due from

the late Govindankutty Nair. In that regard I may say that there is no challenge

in this proceeding to the amount payable to the respondent and at any rate, no

settlement of account was also sought for. Challenge to recovery of the

amount was only on the ground that on the death of Govindankutty Nair,

agency with him stood terminated and in the absence of fresh agency created in

the name of any of his legal representatives the liability would not survive. That

contention has no legs to stand as rightly found by the courts below.

8. According to the learned counsel for the appellant ‘amount due’

means the amount which is legally recoverable. Learned counsel contends that

appellant’s father died in the year 1988, his mother died on 26.7.1991 and

hence recovery of the amount has become time barred. Learned counsel for

respondent contends that respondent is entitled to the protection of Article 112

of the Limitation Act and that at any rate, pendency of cases at various levels at

the instance of appellant and his mother prevented recovery of the amount and

the said period is to be excluded. It is also argued that in any event, the period

of limitation for recovery of the amount due from the properties under mortgage

RSA No.1170/2004

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is 12 years.

9. There is no specific contention raised in the plaint that the amount

due to the respondent has become barred by limitation. That apart question

whether recovery of the amount is barred by limitation and hence the amount

could be legally recovered is a matter which the authorities mentioned under

Section 72 of the Act has to consider as it relates to the execution of the written

demand and that is not a matter which the civil court can entertain except when

the suit is brought on the ground of fraud. There is no allegation of fraud in this

case and hence the civil court cannot go into the question of legality of

recoverability of the amount by way of written demand for the reason that the

debt is barred by law of limitation. That is a matter which the appellant could

raise before the Collector or other authorities mentioned under Section 72 of

the Act.

10. I answer the substantial question of law raised in the Second

Appeal as above.

Resultantly, Second Appeal fails and it is accordingly dismissed. No cost.

I.A.No.2137 of 2004 will stand dismissed.

THOMAS P.JOSEPH,
Judge.

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