{"id":121931,"date":"2010-02-25T00:00:00","date_gmt":"2010-02-24T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/salini-ravindran-vs-the-deputy-tahsildar-r-r-on-25-february-2010"},"modified":"2017-07-30T21:47:31","modified_gmt":"2017-07-30T16:17:31","slug":"salini-ravindran-vs-the-deputy-tahsildar-r-r-on-25-february-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/salini-ravindran-vs-the-deputy-tahsildar-r-r-on-25-february-2010","title":{"rendered":"Salini Ravindran vs The Deputy Tahsildar (R.R.) on 25 February, 2010"},"content":{"rendered":"
Kerala High Court<\/div>\n
Salini Ravindran vs The Deputy Tahsildar (R.R.) on 25 February, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nWA.No. 2078 of 2007()\n\n\n1. SALINI RAVINDRAN, W\/O. T.P.RAVINDRAN,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. THE DEPUTY TAHSILDAR (R.R.),\n                       ...       Respondent\n\n2. THE KERALA FINANCIAL CORPORATION,\n\n                For Petitioner  :SRI.MILLU DANDAPANI\n\n                For Respondent  :SRI.V.B.UNNIRAJ, SC, KFC\n\nThe Hon'ble MR. Justice K.BALAKRISHNAN NAIR\nThe Hon'ble MR. Justice P.N.RAVINDRAN\n\n Dated :25\/02\/2010\n\n O R D E R\n                                                            C.R.\n\n     K. BALAKRISHNAN NAIR & P.N.RAVINDRAN, JJ.\n\n                  ------------------------------\n                       W.A.No.2078\/2007\n                  ------------------------------\n\n             Dated this, the 25th day of February, 2010\n\n\n                           JUDGMENT\n<\/pre>\n
Balakrishnan Nair, J.\n<\/p>\n
      The writ petitioner is the appellant. The Writ Petition was<\/p>\n
filed by her, challenging Ext.P9 order of the Deputy Tahsildar<\/p>\n
(Revenue Recovery), Kerala Financial Corporation, Kozhikode<\/p>\n
and Ext.P10 notice issued under Section 36 of the Kerala<\/p>\n
Revenue Recovery Act.\n<\/p>\n
      2. The brief facts of the case are the following:<\/p>\n
The appellant was a Director of M\/s. Southern Poly Bags Private<\/p>\n
Limited (hereinafter referred to as “the Company”). According to<\/p>\n
her, she was in its Board only for a period of one year from<\/p>\n
14.2.1987. The Company availed a term loan of Rs.26,20,000\/-<\/p>\n
and a bridge loan of Rs.3,52,000\/- from the Kerala Financial<\/p>\n
Corporation (for short “KFC”). According to the appellant, the<\/p>\n
term loan was availed on 2.2.1987 and the bridge loan on<\/p>\n
18.3.1988, when she was not a member of the Board of<\/p>\n
WA No.2078\/2007\n<\/p>\n
                               – 2 –\n<\/p>\n
Directors of the Company. Since the Company defaulted to pay<\/p>\n
the amounts due under the loan agreements, the 2nd respondent<\/p>\n
KFC took over the factory run by the Company under Section<\/p>\n
29 of the State Financial Corporations Act, 1951, in 1991. In<\/p>\n
March, 1994, the properties of the Company were auctioned for<\/p>\n
an amount of Rs.18,10,000\/-. Since the amount so raised by<\/p>\n
auction was not sufficient to wipe off the liability of the KFC,<\/p>\n
revenue recovery proceedings were taken against the appellant,<\/p>\n
on the ground that she was a guarantor for the said loans.<\/p>\n
There is some dispute regarding the date of service of notice by<\/p>\n
affixture. But, it is common ground that the same was served<\/p>\n
by affixture in 1995, at the last known address of the appellant.<\/p>\n
The appellant owned a landed property with a building thereon<\/p>\n
in Kozhikode district. That property was sold by her to a third<\/p>\n
party by sale deeds dated 3.9.1995, 2.10.1995 and 4.10.1995.<\/p>\n
The revenue recovery officials took steps against the property<\/p>\n
covered by those sale deeds, ignoring the sale made to the third<\/p>\n
party. In that context, motion was made before this Court and<\/p>\n
as per the direction of this Court, Ext.P9 order was passed by<\/p>\n
WA No.2078\/2007\n<\/p>\n
                               – 3 –\n<\/p>\n
the Deputy Tahsildar (Revenue Recovery), KFC, Kozhikode. The<\/p>\n
said officer decided to ignore the sale deeds, for the reason that<\/p>\n
the transfer was made after the notice of default was served on<\/p>\n
the appellant. Pursuant to Ext.P9, notice of attachment under<\/p>\n
Section 36 of the Revenue Recovery Act was served as per<\/p>\n
Ext.P10. In the above context, the Original Petition was filed,<\/p>\n
challenging Exts.P9 and P10. The learned Single Judge<\/p>\n
dismissed the Original Petition, taking the view that since the<\/p>\n
property was sold by the appellant after the initiation of the<\/p>\n
Revenue Recovery proceedings, by virtue of Section 44 of the<\/p>\n
Revenue Recovery Act read with Section 53 of the Transfer of<\/p>\n
Property Act, the transaction was invalid.         Therefore, the<\/p>\n
Original Petition was dismissed. Challenging the said judgment,<\/p>\n
this Writ Appeal is preferred.\n<\/p>\n
     3. We heard the learned senior counsel Sri.K.P.Dandapani<\/p>\n
for the appellant and learned standing counsel for the 2nd<\/p>\n
respondent KFC.      We also heard the learned Government<\/p>\n
Pleader for the 1st respondent. The learned senior counsel<\/p>\n
mainly raised two points before us. The first point was that in<\/p>\n
WA No.2078\/2007\n<\/p>\n
                               – 4 –\n<\/p>\n
view of the interpretation given to Section 34(2) of the<\/p>\n
Recovery of Debts Due to Banks and Financial Institutions Act,<\/p>\n
1993 (hereinafter referred to as”the Act”), the provisions of the<\/p>\n
Kerala Revenue Recovery Act cannot be invoked. It is brought<\/p>\n
to our notice that the Apex Court in Unique Butyle Tube<\/p>\n
Industries (P) Ltd. v. U.P. Financial Corporation<\/a> [(2003)2<\/p>\n
SCC 455] held that for recovery of moneys due to the U.P.<\/p>\n
Financial Corporation, the provisions of U.P. Public Moneys<\/p>\n
(Recovery of Dues) Act, 1972 cannot be invoked, as the said Act<\/p>\n
is not specifically mentioned in sub-section (2) of Section 34 of<\/p>\n
the Act. Going by the said reasoning, the learned senior counsel<\/p>\n
submitted that in the absence of specific saving of the Kerala<\/p>\n
Revenue Recovery Act, the provisions of the same cannot be<\/p>\n
pressed into service, to recover the amounts due to the 2nd<\/p>\n
respondent.    The second point urged by the learned senior<\/p>\n
counsel was that the loan was barred by limitation and<\/p>\n
therefore, a time barred debt cannot be recovered invoking the<\/p>\n
provisions of the Revenue Recovery Act.       In support of that<\/p>\n
submission, reliance was placed on the decision in State of<\/p>\n
WA No.2078\/2007\n<\/p>\n
                              – 5 –\n<\/p>\n
Kerala v. R.Kalliyanikutty<\/a> [1999(2)           KLT   146    (SC)].<\/p>\n
Therefore, the learned senior counsel prayed for allowing the<\/p>\n
appeal.\n<\/p>\n
     4. The learned standing counsel for the 2nd respondent, on<\/p>\n
the other hand, submitted that the first point regarding<\/p>\n
inapplicability of the Revenue Recovery Act for recovering the<\/p>\n
moneys due to the KFC, is covered by the decision of this Court<\/p>\n
in Amritha Cyber Park (P) Ltd. v. Kerala Financial<\/p>\n
Corporation<\/a> [2006(2) KLT 394] and the Division Bench<\/p>\n
decision of this Court in Usman v. Kerala Financial<\/p>\n
Corporation<\/a> [2007(2) KLT 604]. The learned standing counsel<\/p>\n
also submitted that since the loan sanctioned was to be repaid<\/p>\n
in 94 monthly instalments commencing from 10.3.1990 and<\/p>\n
ending on 10.2.1997, the recovery of the loan was not time-<\/p>\n
barred in 1994-95, when steps were taken under the Revenue<\/p>\n
Recovery Act.\n<\/p>\n
     5. The learned senior counsel for the appellant, in answer,<\/p>\n
submitted that the decision of the Division Bench of this Court in<\/p>\n
Usman (supra) cannot stand with the decision of the Apex<\/p>\n
WA No.2078\/2007\n<\/p>\n
                               – 6 –\n<\/p>\n
Court in Unique Butyle Tube Industries (P) Ltd. (supra). So,<\/p>\n
the said decision requires re-consideration.<\/p>\n
     6. We considered the rival submissions made at the Bar<\/p>\n
and perused the materials on record. We will first deal with the<\/p>\n
contention of the appellant regarding limitation. In para 3 of<\/p>\n
the counter affidavit filed by the 2nd respondent, it is stated as<\/p>\n
follows:\n<\/p>\n
           “Without prejudice to the aforesaid objection<\/p>\n
     the 2nd respondent respectfully submits as follows.<\/p><\/blockquote>\n
     The petitioner was one of the directors of a private<\/p>\n
     limited company by its name M\/s. Southern Poly<\/p>\n
     Bags Pvt. Ltd. The said company had availed of a<\/p>\n
     term loan of Rs.26,20,000\/- and bridge loan of<\/p>\n
     Rs.3,52,000\/- from the respondent Corporation for<\/p>\n
     the purpose of setting up an industrial unit.       The<\/p>\n
     borrower    company      had   executed   agreements<\/p>\n
     undertaking to repay the loan in 94 monthly<\/p>\n
     instalments commencing from 10.3.1990 and ending<\/p>\n
     on 10.2.1997. The petitioner and other directors of<\/p>\n
     the company had executed a deed of guarantee<\/p>\n
     dated 2.3.1987 by which          they had personally<\/p>\n
     guaranteed the repayment of all the amounts due<\/p>\n
     from the borrower company to the 2nd respondent<\/p>\n
WA No.2078\/2007\n<\/p>\n
                              – 7 –\n<\/p>\n
    Corporation. A true copy of the deed of guarantee<\/p>\n
    dated 2.3.1987 is produced herewith and marked as<\/p>\n
    Exhibit R2(a). The borrower company had mortgaged<\/p>\n
    and hypothecated immovable and movable properties<\/p>\n
    in favour of the Corporation towards security. The<\/p>\n
    borrower company and the guarantors including the<\/p>\n
    petitioner had committed default of payment of<\/p>\n
    instalments of principal and interest due under the<\/p>\n
    agreements      executed   by   them.      In  these<\/p>\n
    circumstances the respondent Corporation took<\/p>\n
    possession     of  the  properties  mortgaged    and<\/p>\n
    hypothecated by the borrower company. Therefore<\/p>\n
    the respondent Corporation took possession of the<\/p>\n
    assets in exercise of the powers under Sec.29 of the<\/p>\n
    State Financial Corporations Act.     Thereafter the<\/p>\n
    aforesaid properties were sold for a sum of<\/p>\n
    Rs.18,10,000\/- and sale proceeds were credited in<\/p>\n
    the account of the company on 21.3.1994. After<\/p>\n
    giving credit to the sale proceeds a sum of<\/p>\n
    Rs.42,69,225\/- was outstanding in the loan account<\/p>\n
    of the      company.   The 2nd respondent issued a<\/p>\n
    requisition dated 3.11.1994 to the District Collector<\/p>\n
    for initiating revenue recovery proceedings under the<\/p>\n
    Kerala Revenue Recovery Act against the petitioner<\/p>\n
    and other guarantors for realisation of the balance<\/p>\n
WA No.2078\/2007\n<\/p>\n
                                 – 8 –\n<\/p>\n
     amount due under the loan account. Accordingly the<\/p>\n
     1st respondent initiated proceedings under the<\/p>\n
     Revenue      Recovery Act against the petitioner and<\/p>\n
     other Directors and their assets. It is submitted that<\/p>\n
     there is no illegality or irregularity in the action taken<\/p>\n
     by the respondents.”\n<\/p>\n
Since the time for repayment of the loan granted was to end<\/p>\n
only on 10.2.1997, it is manifest that the recovery of the<\/p>\n
amounts due under the loan was not barred by limitation, as the<\/p>\n
proceedings were initiated to recover the amounts under the<\/p>\n
Revenue Recovery Act during 1994-95. So, the said plea fails.<\/p>\n
      7. The next point to be considered is whether the decision<\/p>\n
of the Apex Court in Unique Butyle Tube Industries (P) Ltd.<\/p>\n
(supra), relied on by the learned senior counsel, will apply to<\/p>\n
the facts of this case. It was a case of recovery of amounts due<\/p>\n
to the U.P. State Financial Corporation, which is admittedly, a<\/p>\n
Corporation constituted under the State Financial Corporations<\/p>\n
Act, like the 2nd respondent herein. The amounts were sought<\/p>\n
to be recovered, invoking the provisions of the U.P. Public<\/p>\n
Moneys (Recovery of Dues) Act,1972. The Apex Court, after<\/p>\n
WA No.2078\/2007\n<\/p>\n
                               – 9 –\n<\/p>\n
referring to Section 32 of the Act, held that since the U.P. Public<\/p>\n
Moneys (Recovery of Dues) Act, 1972 is not mentioned in sub-<\/p>\n
section (2) of Section 34, the recovery was bad. According to<\/p>\n
the learned senior counsel, the provisions of the Kerala Revenue<\/p>\n
Recovery Act are similar to the provisions of the U.P. Public<\/p>\n
Moneys (Recovery of Dues) Act, 1972.          Therefore, the said<\/p>\n
decision of the Apex Court will squarely apply to the facts of this<\/p>\n
case.\n<\/p>\n
     8. Section 34 of the Act reads as follows:<\/p>\n
           “34. Act to have over-riding effect:–(1) Save<\/p>\n
     as provided under sub-section (2), the provisions of<\/p>\n
     this Act shall have effect notwithstanding anything<\/p>\n
     inconsistent therewith contained in any other law for<\/p>\n
     the time being in force or in any instrument having<\/p>\n
     effect by virtue of any law other than this Act.<\/p>\n
           (2) The provisions of this Act or the rules made<\/p>\n
     thereunder shall be in addition to, and not in<\/p>\n
     derogation of, the Industrial Finance Corporation<\/p>\n
     Act,1948    (15   of   1948),   the   State    Financial<\/p>\n
     Corporations Act, 1951 (63 of 1951), the Unit Trust<\/p>\n
     of India Act, 1963 (52 of 1963), the Industrial<\/p>\n
     Reconstruction Bank of       India Act, 1984 (62 of<\/p>\n
WA No.2078\/2007\n<\/p>\n
                               – 10 –\n<\/p>\n
     1984), the Sick Industrial Companies (Special<\/p>\n
     Provisions) Act, 1985 (1 of 1986) and the Small<\/p>\n
     Industries Development Bank of India Act,1989 (39<\/p>\n
     of 1989).”\n<\/p>\n
So, the provisions of the Act are not in derogation of the<\/p>\n
provisions of the various enactments mentioned in sub-section<\/p>\n
(2),   quoted above. The same includes the State Financial<\/p>\n
Corporations Act, 1951.      Section 32G of the State Financial<\/p>\n
Corporations Act, 1951 reads as follows:<\/p>\n
           “32G.     Recovery of amounts due to the<\/p>\n
     Financial Corporation as an arrear of land revenue:–<\/p>\n
     Where     any   amount    is   due to  the   Financial<\/p>\n
     Corporation    in   respect   of any  accommodation<\/p>\n
     granted by it to any industrial concern, the Financial<\/p>\n
     Corporation or any person authorised by it in writing<\/p>\n
     in this behalf, may, without prejudice to any other<\/p>\n
     mode of recovery,make an application to the State<\/p>\n
     Government for the recovery of the amount due to<\/p>\n
     it, and if the State Government or such authority, as<\/p>\n
     that Government may specify in this behalf, is<\/p>\n
     satisfied, after following such procedure as may be<\/p>\n
     prescribed, that any amount is so due, it may issue a<\/p>\n
     certificate for that amount to the Collector, and the<\/p>\n
WA No.2078\/2007\n<\/p>\n
                                – 11 –\n<\/p>\n
     Collector shall proceed to recover that amount in the<\/p>\n
     same manner as an arrear of land revenue.”<\/p>\n
Going by the above provision, any amount due to the KFC can<\/p>\n
be recovered, in the same manner, as recovering arrears of<\/p>\n
land revenue. Arrears of land revenue are recoverable under<\/p>\n
the provisions of the Kerala Revenue Recovery Act.      Since the<\/p>\n
provisions of the State Financial Corporations Act, including<\/p>\n
Section 32G, are not affected by the provisions of the Act, we<\/p>\n
find nothing illegal in the 2nd respondent invoking the provisions<\/p>\n
of the Kerala Revenue Recovery Act, to recover the amounts<\/p>\n
due to it. A decision is an authority for what it decides and not<\/p>\n
what logically flows from it. So, in the face of Section 32G, the<\/p>\n
decision in Unique Butyle Tube Industries (P) Ltd. (supra)<\/p>\n
cannot be pressed into service, to contend that the provisions of<\/p>\n
the Kerala Revenue Recovery Act cannot be invoked, to recover<\/p>\n
the amounts due to the KFC.          This view taken by us finds<\/p>\n
support from the decision in Usman v. Kerala Financial<\/p>\n
Corporation<\/a> [2007(2) KLT 604], wherein a Division Bench of<\/p>\n
this Court upheld the decision of the learned Single Judge in<\/p>\n
WA No.2078\/2007\n<\/p>\n
                             – 12 –\n<\/p>\n
Amritha Cyber Park (P) Ltd. v. Kerala Financial<\/p>\n
Corporation<\/a> [2006(2) KLT 394] that recovery proceedings<\/p>\n
under the Revenue Recovery Act can be resorted to recover the<\/p>\n
amounts due to the KFC. In view of the above position, the<\/p>\n
second ground urged by the appellant also cannot be accepted.<\/p>\n
    In the result, the Writ Appeal fails and it is dismissed.<\/p>\n
                                      K. Balakrishnan Nair,
\n                                                Judge.\n<\/p>\n
                                          P.N.Ravindran,
\n                                                Judge.\n<\/p>\n
nm.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court Salini Ravindran vs The Deputy Tahsildar (R.R.) on 25 February, 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM WA.No. 2078 of 2007() 1. SALINI RAVINDRAN, W\/O. T.P.RAVINDRAN, … Petitioner Vs 1. THE DEPUTY TAHSILDAR (R.R.), … Respondent 2. THE KERALA FINANCIAL CORPORATION, For Petitioner :SRI.MILLU DANDAPANI For Respondent :SRI.V.B.UNNIRAJ, SC, KFC […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-121931","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nSalini Ravindran vs The Deputy Tahsildar (R.R.) on 25 February, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/salini-ravindran-vs-the-deputy-tahsildar-r-r-on-25-february-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Salini Ravindran vs The Deputy Tahsildar (R.R.) on 25 February, 2010 - 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