{"id":99701,"date":"2008-11-21T00:00:00","date_gmt":"2008-11-20T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-bank-of-india-vs-state-of-kerala-on-21-november-2008-2"},"modified":"2017-04-16T21:18:45","modified_gmt":"2017-04-16T15:48:45","slug":"state-bank-of-india-vs-state-of-kerala-on-21-november-2008-2","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-bank-of-india-vs-state-of-kerala-on-21-november-2008-2","title":{"rendered":"State Bank Of India vs State Of Kerala on 21 November, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Kerala High Court<\/div>\n<div class=\"doc_title\">State Bank Of India vs State Of Kerala on 21 November, 2008<\/div>\n<pre>       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nWP(C).No. 27042 of 2005(T)\n\n\n1. STATE BANK OF INDIA, KOTTAYAM BRANCH,\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. STATE OF KERALA, REPRESENTED BY ITS\n                       ...       Respondent\n\n2. THE DISTRICT COLLECTOR,\n\n3. DEPUTY TAHSILDAR,\n\n4. THE RECOVERY OFFICER,\n\n5. SALES TAX OFFICER,\n\n6. M\/S.WOOD SYSTEM (INDIA) PVT. LTD.,\n\n7. MRS.SARAMMA THOMAS, DIRECTOR,\n\n8. PUNNEN P.MARKOSE, DIRECTOR,\n\n                For Petitioner  :SRI.P.V.SURENDRANATH\n\n                For Respondent  :SRI.P.RADHAKRISHNAN (1)\n\nThe Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR\n\n Dated :21\/11\/2008\n\n O R D E R\n                  C.N. RAMACHANDRAN NAIR, J.\n                  --------------------------------------------\n                W.P.C. NO. 27042\/2005 &amp; 37536\/2007\n                  --------------------------------------------\n               Dated this the 21st day of November, 2008\n\n                                JUDGMENT\n<\/pre>\n<p>      Connected cases are filed, one by the creditor-Bank and the other<\/p>\n<p>by the purchaser of properties of defaulter sold by the Recovery Officer<\/p>\n<p>pursuant to the orders of Debt Recovery Tribunal for recovery of<\/p>\n<p>arrears due to the State Bank of India, Kottayam Branch.          When<\/p>\n<p>Recovery Officer tried to sell the property, the borrower appears to<\/p>\n<p>have brought to the notice of the Recovery Officer that substantial<\/p>\n<p>amount of sales tax is due to the State Government. Bank therefore<\/p>\n<p>approached this Court for direction to the fourth respondent to sell and<\/p>\n<p>remit the sale proceeds with the Bank. However, this Court taking note<\/p>\n<p>of the prior charge of the State Government directed the Recovery<\/p>\n<p>Officer to retain Rs. 13 lakhs being the approximate sales tax liability<\/p>\n<p>due from the borrower. Accordingly the Recovery Officer sold the<\/p>\n<p>property to the petitioner in WPC No. 37536 of 2007 and after<\/p>\n<p>retaining Rs. 13 lakhs in terms of interim order of this Court dated<\/p>\n<p>9.9.2005, paid the balance to the Bank. Later on 6.2.2008 this Court<\/p>\n<p><span class=\"hidden_text\">                                     2<\/span><\/p>\n<p>released the amount to the recovery authorities.           So far as WPC<\/p>\n<p>No.27042 of 2005 is concerned, since State Government has priority<\/p>\n<p>over the mortgage debt, sale proceeds are rightly ordered to be adjusted<\/p>\n<p>towards tax liability. Even though counsel for the Bank submitted that<\/p>\n<p>bank&#8217;s liability started in 1979 and sales tax liability from 1990-91, I do<\/p>\n<p>not think it makes any difference because recovery and sale took place<\/p>\n<p>in 2006 by which time sales tax liability had accrued on the defaulter.<\/p>\n<p>This Court has taken the view that even the prior charge over the<\/p>\n<p>property under mortgage will not stand in the way of State Government<\/p>\n<p>getting first charge over the borrower&#8217;s property. However, since the<\/p>\n<p>same issue is pending before the Supreme Court, it will be open to the<\/p>\n<p>Bank to make claim depending upon the outcome of the decision of the<\/p>\n<p>Supreme, as and when it is rendered. In view of the judgment, the<\/p>\n<p>interim order of this Court directing retention of Rs. 13 lakhs and later<\/p>\n<p>releasing of that amount towards tax liability to the State Government<\/p>\n<p>is perfectly in order. W.P.C.No. 27042 of 2005 is therefore disposed of<\/p>\n<p>making the interim order absolute and part of judgment.<\/p>\n<p>      2.   So far as WPC 37536 of 2007 is concerned, additional<\/p>\n<p><span class=\"hidden_text\">                                    3<\/span><\/p>\n<p>demand of tax which is stated to represent interest is paid only as an<\/p>\n<p>interim arrangement for the petitioner to get mutation done. Petitioner<\/p>\n<p>being the purchaser of the property got the property free of charges<\/p>\n<p>because at the time of sale this Court ordered retension of Rs. 13 lakhs<\/p>\n<p>from out of sale proceeds towards sales tax liability. When this is done<\/p>\n<p>by the Recovery Officer in terms of the interim order, there is no more<\/p>\n<p>charge over the property towards tax liability. Therefore petitioner in<\/p>\n<p>WPC No. 37536 of 2007 is entitled to get release of the deposit<\/p>\n<p>receipts from the Village Officer and Village Officer is directed to do<\/p>\n<p>so on production of a copy of this judgment by the petitioner.<\/p>\n<p>      3. Government Pleader submitted that State is entitled to recover<\/p>\n<p>arrears of interest for the balance period. I do not think State after<\/p>\n<p>getting interim orders from this Court on 9.9.2005 can demand interest<\/p>\n<p>on Rs. 13 lakhs either from the Bank or from the purchaser of the<\/p>\n<p>property. Since defaulters have not taken any steps for adjustment of<\/p>\n<p>deposited amount towards tax arrears, interest if any payable is to be<\/p>\n<p>recovered from the defaulters. However, there will be no charge for tax<\/p>\n<p>arrears on the property of the defaulters sold by the Recovery Officer to<\/p>\n<p><span class=\"hidden_text\">                                  4<\/span><\/p>\n<p>the petitioner in WPC 37536 of 2007.        Recovery authorities are<\/p>\n<p>directed to proceed against borrowers and against their personal assets,<\/p>\n<p>if the same are recoverable under law. W.P.C.No. 37536 of 2007 is<\/p>\n<p>disposed of as above.\n<\/p>\n<\/p>\n<p>                                   (C.N. RAMACHANDRAN NAIR)<br \/>\n                                                Judge<br \/>\nkk<\/p>\n<p><span class=\"hidden_text\">5<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kerala High Court State Bank Of India vs State Of Kerala on 21 November, 2008 IN THE HIGH COURT OF KERALA AT ERNAKULAM WP(C).No. 27042 of 2005(T) 1. STATE BANK OF INDIA, KOTTAYAM BRANCH, &#8230; Petitioner Vs 1. STATE OF KERALA, REPRESENTED BY ITS &#8230; Respondent 2. THE DISTRICT COLLECTOR, 3. DEPUTY TAHSILDAR, 4. THE [&hellip;]<\/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-99701","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Bank Of India vs State Of Kerala on 21 November, 2008 - Free Judgements of Supreme Court &amp; 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\/state-bank-of-india-vs-state-of-kerala-on-21-november-2008-2\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Bank Of India vs State Of Kerala on 21 November, 2008 - Free Judgements of Supreme Court &amp; 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