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
RSA No.1170/2004
2
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
3
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
4
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
5
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
6
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
7
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.
cks