ORDER
K.A. Nayar, J.
1. Man is born free, but it is the price he has to pay for a peaceful co-existence in a welfare State governed by rule of law that his freedom is subjected to reasonable restrictions. The question whether the restrictions imposed is fair and reasonable is a matter under our Constitution subject to judicial audit. For non-discharge of liability due to the State or other authority, provision is made to recover the same under the Kerala Revenue Recovery Act, 1968 which include the provision for arrest of defaulter in case of wilful and fraudulent non-payment of arrears. Arrest can be made, provided the conditions mentioned in Section 65 of the Kerala Revenue Recovery Act, 1968 is satisfied.
2. The petitioner in this case has been arrested and detained in civil prison for nonpayment of contribution towards Toddy Workers Welfare Fund in respect of Toddy Shop Nos. 26 to 48 of Narakkal Range, of Rs. 2,79,344/- plus interest for the years 1973 and 1974. Ext. P. 11 is the order authorising issue of warrant of arrest under Section 65 of the Revenue Recovery Act by the District Collector, the validity of which is challenged in this petition.
3. In the decision reported in Jolly George Varghese v. Bank of Cochin (1980) KLT 375 : (AIR 1980 SC 470) the Supreme Court, speaking through Krishna Iyer, J. observed at page 475 :
“……..It is too obvious to need elaboration that to cast a person in prison because of his poverty and consequent inabiiity to meet his contractual liability is appalling. To be poor in this land of daridra Narayana, (land of poverty) is no crime and to recover debts by the procedure of putting one in prison is too flagrantly violative of Article 21 unless there is proof of the minimal fairness of his wilful failure to pay in spite of his suficient means and absence of more terribly pressing claims on his means such as medical bills to treat cancer or other grave illness.”
His Lordship continued that to detain a person in prison for not discharging his liability,
“….The simple default to discharge is not enough. There must be some element of bad faith beyond mere indifference to pay, some deliaberate or recusant disposition in the past or, alternatively, current means to pay the decree or a substantial part of it. The provision emphasises the need to establish not mere omission to pay but an attitude of refusal on demand verging on dishonest disowning of the obligation under the decree. Here considerations of the debtor’s other pressing needs and straitened circumstances will play prominently. We would have, by this construction, caused law with justice, harmonised Section 51 with the Covenant and the Constitution.”
Petitioner bid in auction toddy shop. Nos. 26 to 48 of Njarakkal Range for the year 1973-74. According to him, he was paying the kists, tree tax, contribution towards welfare fund, etc. regularly. But he was paying welfare fund amount through one of the union leaders who, according to the petitioner fraudulently failed to remit the amount. There was labour unrest in which petitioner was gheraoed and therefore, he was not in a position to produce relevant records before the authorities. An amount of Rs. 2,79,344/- was assessed as contribution due from the petitioner to the Toddy Workers Welfare Fund for the period 1973-74. Proceedings of the Welfare Fund Inspector dated 18-6-1976 is produced as Ext. P1. The contention of the petitioner, as seen from Ext. P1, before the Inspector was that he is not in a position to furnish information regarding earning of the workers and the amount of welfare fund contribution payable by him, as all the records relating to the business including the records relating to payment of wages have been seized by the C. I. T. U. Union by gheracing him during the agitation carried on against him.
4. The Inspector worked out the contribution of the workers on the basis of the account furnished by the workers and quantified the amount of contribution payable at Rs. 2,79,344/- for the period from 1-4-1973 to 31-3-1974. The Welfare Fund Inspector directed the petitioner to pay the same within 7 days. This was by Ext. P 1 order dated 18-6-1976. In this case I am not concerned with the validity of Ext. P 1. Since the petitioner had no money, it is submitted that the amount could not be paid. The Revenue Recovery Authorities attached the share of the petitioner in the property inherited by him from his father and that was sold in auction and realised an amount of Rs. 13,432.30 which was credited to the petitioner’s account in reduction of the liability. The auction sale was confirmed on 11-7-1985. In the meantime, the District Collector sent a show cause notice under Section 65 of the Revenue Recovery Act dt. 10-3-1983 stating, why warrant of arrest should not be issued against him. He filed a detailed objection. An opportunity for a personal hearing was given to the petitioner on 25-3-1983. The District Collector was then satisfied that the defaulter is wilfully withholding payment of arrears and that the arrears of revenue due from the above defaulter can be realised from him only by a civil arrest and detention of the defaulter. The District Collector issued a warrant of arrest under Section 65 of the Revenue Recovery Act by Proceedings No. 21700/81 dt. 25-3-1983. Petitioner then filed O. P. No. 2612/83 before this court and obtained a stay in C.M.P. No. 8093 of 1983 in the said Original Petition for 3 days. Stay was extended by one more week subject to the condition, the petitioner remitting an amount of Rs. 25,000/- within a week from 30-3-1983. The stay was again extended for one more month as per order in C.M.P. No. 8957/83 subject to the very same condition. On 17-5-83, it was again ordered by this court in C.M.P. No. 11520/83 in C. M. P. No. 8093/ 83 that stay would continue on condition that petitioner depositing a sum of Rs. 5,000/- within a month. The petitioner could not remit even that amount. At that time, petitioner approached the Board of Revenue, and the recovery proceedings were stayed by the Board of Revenue by order dt. 9-6-1983, since the petitioner approached the Board of Revenue and availed of alternative remedy under the statute, the Original Petition was dismissed on 15-10-1986. The Revision Petition filed before the Board of Revenue was also dismissed on 22-4-1989.
5. Tt would appear that no further attempt has been made to enforce the warrant order on 25-3-83. But after a lapse of nearly 2 years from the dismissal of the Revision Petition by the Board, fresh proceedings were taken under Section 65 of the Revenue Recovery Act. A show cause notice dt. 26-11-91 was once again issued directing the petitioner to show cause why he should not be committed to Civil Prison. Petitioner produced that notice as Ext. P3. It says that the petitioner has dishonestly transacted the property. It narrates the satisfaction required for issuing arrest warrant under Section 65 as under:
“And whereas I am satisfied that you are withholding payment of the arrears, you have dishonestly transacted your property and you have been guilty of fraudulent conduct in order to evade payment. You have also the means to pay the arrears but are refusing or neglecting to pay the same and as the proceeds of the sale of your property are not sufficient to liquidate the arrears with interest thereon and cost of process as detailed in the tentative findings furnished herewith, it is proposed to arrest and imprison you in Civil Prison.”
A statement showing the grounds for the
issuance of notice under Section 65 of the Act was
also sent along with the notice. It is produced
by the petitioner as Ext. P4. Petitioner submitted detailed objection to Ext. P3 and P4
evidenced by Ext. P5. He has stated that he
has not evaded payment of amount due to the
Department so as to attract Section 65. The
circumstances under which the amount could
not be paid are also mentioned. The averments in the statement that there was a
benami business done by the petitioner was
denied. The circumstances in which the properties jointly owned by the petitioner along
with other family members were sold is also
seen detailed in the objection.
6. According to the petitioner, without considering the evidence adduced, the District Collector passed an order directing the arrest and detention of the petitioner. Ext. P 11 is the said order. The order was shown to the petitioner on 9-4-92 when he was produced before the District Collector and the District Collector, by separate order, sent petitioner to Civil Prison, Viyyur Central Jail. At that time petitioner filed this Original Petition for quashing Ext. P11.
7. On a perusal of Ext. P 11 it is seen that the District Collector passed the order after being satisfied that petitioner was wilfully evading payment of arrears due to the Government. The concluding portion of Ext. P 11 is as under:
“The District Collector is satisfied that the defaulter is wilfully withholding payment of arrears and that the arrears of revenue due from the above defaulter can be realised from him only by a civil arrest and detention of the defaulter.”
Under Section 65 arrest in case of wilful and fraudulent non-payment of arrears can be made if the District Collector
“is satisfied that the defaulter is wilfully withholding payment of the arrears of has dishonestly transferred any part of his property or has been guilty of fraudulent conduct in order to evade payment or that the defaulter has the means to pay the arrears or some substantial part thereof and refuses or neglect to pay the same, or the proceeds of the sale of the property of the defaulter and his surety are not sufficient to liquidate the arrears, the interest thereon and cost of process.”
The petitioner was served notice under Section 34 of the Act on 27-5-82. Notice under Section 7 of the Revenue Recovery Act was also served on an earlier occasion on 10-3-83. It is the case of the Department that the defaulter dishonestly sold his right in respect of 35 cents of land, ignoring his civil liability to pay arrears, on 26-12-80 The 35 cents of land, the sales of which have been referred in Ext. P 11 are the sales evidenced by Exts. P 7 and P 8. Ext. P7 relate to the sale of 18 cents of land belonging to 4 persons including the petitioner for Rs. 36,000/- and Ext. P8 is the sale of 17 cents of land belonging to 4 persons including the petitioner for Rs. 42,500/-. In the sale deed itself, it is mentioned that there was an agreement on 7-7-1980. It is stated that part of the consideration had to be used to discharge the liability of the petitioner. In short, Exts. P7 and P8 would show that petitioner had only 1/4 right in the property, which was the subject matter of Exts. P 7 and P 8 and he joined in the sale to complete the sale. There was prior liability also to the petitioner to be discharged. Therefore, it was the submission of the petitioner that from the sale deed, it cannot be concluded that the petitioner has dishonestly sold his right in respect of 35 cents of land ignoring his liability. The sales have been effected well before his receipt of the notice under Section 34 and also the notice under Section 7. Therefore, it cannot be considered that the petitioner has been guilty of fraudulent conduct in order to evade payment. It is also seen that there is at least an averment in the sale deed itself that property is to be sold by petitioner and 3 others to meet certain personal liabilities of the petitioner. In the decision reported in Baby v. State of Kerala, 1981 KLT 510 it is held that money due under the Kerala Toddy Workers Welfare Fund Act cannot claim priority over other creditors. Therefore, if the petitioner joined the sale for disposal of the property belonging to 4 persons including the petitioner and for the purpose of getting his share of the sale consideration to discharge other liabilities it cannot be considered that petitioner has dishonestly transferred the property of the petitioner. In any case, the property transferred is not the property wholly belonging to the petitioner. He is only a co-sharer in the property along with 3 others and it is averred in the sale deed itself that there were prior credits also to be satisfied.
8. On a perusal of Ext. P 11, it is seen that the District Collector passed the order on the finding that defaulter is wilfully withholding the payment of arrears due to Government and the satisfaction that the arrears of revenue due from the defaulter could be realised from him only by a civil arrest. At an earlier occasion also a similar arrest procedure has been adopted and even an amount of Rs. 5,000/- could not be recovered from him. The fact that when stay of arrest was given by this court on payment of Rs. 5,000/- and that amount could not be paid also, is indication that the amount cannot be recovered even if the procedure contemplated under Section 65 is adopted.
9. In the decision reported in Bijilo Joseph v. District Collector, Kottayam, 1974 KLT S. N. Case No. 35, this court held that —
“the arrest and detention of a defaulter under Section 65 should not be a matter of course, that before directing such arrest the authority concerned should anxiously consider the materials available to it to come to adecision, that prior to reaching that decision a notice should be given to the defaulter drawing his attention to the materials available so as to afford him an opportunity for effective reply and that it is only after a proper disposal is made and communicated that any arrest should follow.”
It was further held that —
“If the case is that by disposing of the property, the amount due or a substantial portion thereof could be paid off then again materials available must show that the properties are such as are marketable and sufficient for such discharge. If it is any other source of funds available to the defaulter that is relied on specific reference must be made to it, so that the Court may be in a position to determine the relevance of such material to the finding.”
The notices Exts. P3 and P4 indicated that the petitioner had property which he owned jointly and possessed along with his brothers and that was sold on 26-12-1980. The further contention is that the defaulter was running a benami shop in the name and style “Lime Coke Traders” very close to his house. But the details relating to this has not been furnished. Mere averments are not sufficient.
10. The land belonged to the petitioner as well as three others who are his brothers. He only joined in the sale to realise, the amount and get his share. That was before the notice was issued either under Section 7 or Section 34 and the amount has been used for the discharge of the prior liabilities. As observed by Supreme Court in Jolly George Varghese v. Bank of Cochin 1980 KLT 375 (SC) : (AIR 1980 SC 470) referred to the above, considerations of the debtor’s other pressing needs and straitened circumstances will play a prominent part in considering whether the petitioner should be ordered to be arrested and detained. If the proceeds from sale effected by Exis. P7 and P8 were appropriated for purposes of satisfying prior debts or pressing needs the conduct of the petitioner cannot be considered as offending to attract Section 65.
11. As observed in the unreported decision in O. P. No. 4421/1975 by a learned single Judge:
“Arrest and detention of a defaulter in civil prison under Section 65 of the Act are something which should be resorted to only if there is sufficient material to prove beyond a shadow of doubt that the ingredients required to be satisfied by Section 65 of the Act are well-established.”
On going through Ext. P11, I am satisfied that adequate consideration has not been given in this regard by the authority, which ordered arrest and detention of the petitioner. It is not established that satisfaction of the District Collector was made after an objective consideration and assessments of the facts. Mere averment that he satisfied himself is not sufficient. It should be based on objective assessment of facts which should be revealed from records. The facts discussed in Ext. P11 will not indicate that such objective assessment has been made by the authority in this case. Large amount is sought to be recovered. Ext. P1 is the order dated 18-6-1976. At an earlier occasion, recovery proceedings were taken even under Section 65. At that time, even Rs. 5,000/- could not be recovered by arrest and detention. The proceedings under Section 65 was once again taken to recover the ‘amount’ due under Ext. P1 dated 18-6-1976. That is on 26-11-1991 after a period of 15 years.
12. ‘Withhold’ means to hold back or to keep back or to refuse to give. There must, be clear proof that the petitioner has the means, to pay. This is not seen established in this case. Whether, at this distance of time, once again the procedure under Section 65 should be initiated to recover the amount is a matter for the authorities to consider. If the authority has a case that the sales were effected after the issue of notice under the Revenue Recovery Act, there are adequate provisions for avoiding such sales and bringing the property for sale. This matter should be considered by the respondent. I am concerned in this case only with the validity of Ext. P11. The condition precedent for exercising the power under Section 65 and ordering arrest and detention of the petitioner has not been established clearly in this case.
13. The Constitution of India is the corner stone of our nation and part III relating to fundamental rights is the soul of the Constitution. Article 21 mandates that no person shall be deprived of his life and personal liberty except according to the procedure established by law. The object of Article 21 is to prevent encroachment upon personal liberty by the executive without compliance of the requirements of the law. Before a person is deprived of his personal liberty, the procedure established by law must be strictly followed and must not be departed from to the disadvantage of the person affected. Whenever a complaint regarding deprivation of personal liberty is raised before court, it is the duty of the Court as a sentinel on the qui vive to satisfy itself that all safeguards provided by law have been scrupulously observed. After referring to the leading decision of Maneka Gandhi and other cases in the decision reported in Francis Coralie Mullin v. The Administrator, Union Territory of Delhi AIR 1981 SC 746: (1981 Cri LJ 306) the Supreme Court summarised the position as under (at page 750) :–
“………The position now is that Article 21 as interpreted in Maneka Gandhi’s case (supra) requires that no one shall be deprived of his life or personal liberty except by procedure established by law and this procedure must be reasonable, fair and just and not arbitrary, whimsical or fanciful and it is for the Court to decide in the exercise of its constitutional power of judicial review whether the deprivation of life or personal liberty in a given case is by procedure, which is reasonable, fair and just or it is otherwise. The law of preventive detention has therefore now to pass the test not only of Article 22, but also Article 21 and if the constitutional validity of any such law is challenged, the Court would have to decide whether the procedure laid down by such law for depriving a person of his personal liberty is reasonable, fair and just.”
The fair, just and reasonable procedure implicit in Article 21 creates a corresponding right in the person for a speedy action.
14. I have already held that Ext. P11 is vitiated in the sense, it is not a considered order and the conditions precedent for exercise of power under Section 65 for arrest and detention have not been factually established in an objective basis. I am satisfied in this case that Ext. P11 will have to be quashed. Hence, I quash Ext. P11. The result is, the petitioner who has been detained in civil prison will have to be released. There shall be a direction to that effect. The petitioner is set free. This will not prevent the respondents from taking fresh steps to recover the amount due under the Revenue Recovery Act.
Original Petition is disposed of as above.
The operative portion of the judgment shall be communicated to the District Collector forthwith at the cost of the petitioner.