Kerala High Court
Subhadra vs State Of Kerala And Ors. on 30 November, 1994
Equivalent citations: AIR1995KER245, AIR 1995 KERALA 245, 1995 (1) KERLT 32 (1994) 2 KER LJ 1068, (1994) 2 KER LJ 1068
JUDGMENT Ramakrishnan, J.
1. The question raised in this appeal by the plaintiff in a suit for declaration and injunction is whether the plaint schedule property assigned to her by her late husband can be proceeded against and sold under the Revenue Recovery Act, 1968 (for short the "RR Act") for realisation of dues outstanding from her husband under the Kerala Toddy Workers' Welfare Fund Act (for short "the Welfare Fund Act"). The appeal is before us on a reference made by Sankaran Nair, J. since the learned Judge was of the opinion that an authoritative pronouncement is called for on the point.
2. Briefly stated the relevant facts are thus : The plaintiff has purchased the plaint schedule property from her late husband as per Ext. A1 sale deed dt. 25-1-1979. Plaintiff received from the second defendant-Tahsil-dar, Kunnathunadu Ext. A2 notice dt. 17-12-1982 informing her that an amount of Rs. 13,838.04 is outstanding as arrears towards Toddy Workers' Welfare Fund from the plaintiff's late husband and calling upon her to show cause why revenue recovery proceedings should not be taken against the plaint schedule property since she has purchased the same from her husband. Plaintiff submitted her objection stating that she is a bona fide purchaser of the property and the property is not liable to be proceeded against under the RR Act since the amount alleged to be due from her late husband is not "public revenue due on land". Overruling the objections, property was attached on 14-2-1983. On such attachment plaintiff filed the suit for a declaration that the plaint schedule property is not liable for the arrears alleged to be due from her husband and as such the attachment effected on 14-2-1983 is illegal. A consequential injunction to restrain the defendants from proceedings with the revenue recovery proceedings was also sought for in the suit. Both the Courts below have dismissed the suit finding that the revenue recovery proceedings are valid and sustaina-ble in law. As regards the nature of the transaction the trial Court found that it is a transaction created only for the purpose of avoiding sale for the realisation of the amount due from the husband. But the appellate authority found that it is a transaction intend to defeat and delay the creditors of the assignor.
3. Arguing the appeal, Shri V. J. Josph, learned counsel for the appellant has mainly pressed only one point. It was submitted that the amount alleged to be due from the late husband of the plaintiff is not an arrear of 'public revenue due on land' as defined in Section 2(j) of the RR Act. Since the amount due is not 'public revenue due on land' as defined in Section 2(j) of the RR Act, there was no charge statutorily created on the land prior to the date of transfer as per Ext. A1 assignment deed. The attachment was admittedly subsequent to the assignment. As such Section 44(3) of the RR Act may not have any application to the case on hand. Section 44 will apply only to cases where revenue recovery proceedings are initiated for realisation of 'arrears of public revenue due on land' and not for realisation of 'public revenue' or other amounts statutorily declared to be realisable under the RR Act. In such cases it was submitted that without setting aside the transfer by instituting a suit the property transferred cannot be proceeded against under the RR Act. Strong reliance was placed by the learned counsel on the decisions reported in Baby v. State of Kerala (1991 KLT 510) and Gourikutty v. District Collector (1974 KLT 103) in support of the contention.
4. The terse reply of Shri Sankara Menon, learned senior Government Pleader was that Section 68(4) of the RR Act is a complete answer to the contention raised and the question whether the amount due from the late husband of the plaintiff is arrears of public revenue due on land as defined under Section 2(j) of the RR Act or not is not relevant at all in the light of the provisions contained in Section 9 of the Welfare Fund Act and Section 68(4) of the RR Act. It was submitted that in the light of the special provision contained in Section 68(4) of the RR Act, Section 44 of the RR Act would apply even in cases where the provisions of the RR Act are enforced for the realisation of amounts not falling strictly under the definition of the words 'public revenue due on land' contained in Section 2(j) of the RR Act. Learned counsel submitted that it has been so held by a Division Bench of this Court authoritatively as early as in 1975 in the decision reported in Gourikutty v. District Collector (1975 KLT 29) which was not brought to the notice of the learned single Judge at the time when the matter was referred.
5. Relevant provisions of the RR Act and the Welfare Fund Act with reference to which the question is to be decided are thus:
"Section 2(j): "public revenue due on land" means the land revenue charge on the land and includes all other taxes, fees and cesses on land, whether charged on land or not, and all cesses or other dues payable to the Government on account of water used for purposes of irrigation.
Section 44(3): Where a defaulter transfers immovable property to a near relative or for grossly inadequate consideration after public revenue due on any land from him has fallen in arrear, it shall be presumed until the contrary is proved, that such transfer is made with intent to defeact or delay the recovery of such arrear, and the Collector or the authorised officer may, subject to the orders of a competent court, proceed to recover such arrear of public revenue by attachment and sale of the property so transferred, as if such transfer had not taken place:
Provided that, before proceeding to attach such property, the Collector or the authorised officer shall -
(i) give the defaulter an opportunity of being heard; and
(iii) record his reasons therefor in writing.
Section 68(1) and (4): Application of the Act for the recovery of certain other dues to Government -- (1) All sums due to the Government on account of quit rent or revenue, other than public revenue due on land;
all moneys due from any person to the Government which under a written agreement executed by such person are recoverable as arrears of public revenue due on land or land revenue, and all specific pecuniary penalties to which such person renders himself liable under such agreement or contract.
all sums declared by any other law for the time being in force to be recoverable as arreas of public revenue due on land or land revenue; and all fees and other dues payable by any person to the Government may be recovered under the provisions of this Act.
(4) For the removal of doubts, it is hereby declared that the provisions of Sections 44 and 50 shall apply in the case of recovery of any sum under the provisions of this section.
Section 9. Mode of recovery of moneys due from employers : Any amount due from the employer in pursuance of the provisions of this Act or the scheme may, if the amount is in arrear, be recovered in the same manner as an arrear of land revenue."
6. From Section 9 of the Welfare Fund Act, it is clear beyond doubt that the amount due under that section is statutorily declared to be recoverable as land revenue and as such can be recovered through any of the modes prescribed for recovery under the RR Act. The object of the RR Act is to recover not only 'public revenue due on land' but also land revenue and all other amounts declared to be recoverable under that Act by any other law for the time being in force. Money due under the Welfare Fund Act though not public revenue due on land as defined under Section 2(j) of the RR Act, will certainly fall under the category of other amounts declared to be recoverable under RR Act by the Welfare Fund Act. It has been so held by Dr. Kochu Thommen, J. (as he then was) even in the decision of Baby v. State of Kerala (1981 KLT 510) where his Lordship has brought out with felicity and clarity the subtle distinction between dues falling under the category of 'public revenue due on land' and other dues declared to be recoverable 'in the same manner' as an arrear of land revenue. The following observations in the above decision would make the position clear :
"Likewise, money due under Section 9 of the Welfare Fund Act is not public revenue due on land and Section 3 creating a charge under the RR Act is not attracted, although the amount as such is recoverable as in the case of any other land revenue, which would mean that, land revenue being part of the definition of public revenue due on land, it is recoverable by any of the modes prescribed for recovery of the latter. The object of the RR Act is to recover not only public revenue due on land to which Section 3 is attracted, but also all other amounts declared to be recoverable under the Act. Money due under the Welfare Fund Act is of that character. But it does not enable the Recovering Officer to claim priority over other creditors."
(Emphisis supplied) If that is the legal position, there cannot be any doubt about the applicability of the provisions contained in the RR Act regulating recovery under that Act for recovery of the amounts due under Section 9 of the Welfare Fund Act. Section 44 of the RR Act is evidently one of the provisions incorporated in the Act to make the modes of recovery prescribed under the Act effective and decisive. The scheme of the provisions contained in Section 44 of the RR Act is to declare all engagements entered into by the defaulter with any one in respect of any immovable property after the service of the written demand on him as not binding upon the Government. Sub-section (2) of Section 44 declares that transfer of immovable property made by a defaulter after public revenue due on any land from him has fallen in arrear with intent to defeat or delay the recovery of such arrear shall not be binding upon the Government. Sub-section (3) of Section 44 incorporates a presumption in favour of the Government in all cases where a defaulter transfers immoveable property to a near relative or for grossly inadequate consideration after public revenue due on any land from his has fallen in arrear, the effect that such transfers shall be presumed until contrary is proved, to be transfers made with intent to defeat or delay the recovery of such arrear. The sub-section also enables the Collector or the authorised officer to proceed to recover such arrear of public revenue by attachment and sale of property so transferred as if such transfer had not taken place subject to the orders of a competent court and after issuing a notice to the defaulter and giving him an opportunity to be heard in the matter. Though the wording of the provisions contained in Sub-sections (2) and (3) would prima facie justify the contention of the learned counsel that Sub-sections (2) and (3) of Section 44 of the RR Act will have application only to cases where proceedings are initiated for recovery of public revenue due on land as defined in Section 2 (j) of the RR Act, the same cannot be accepted in the light of the specific provisions contained in Section 68(4) of the RR Act. It is specifically to remove all doubts and to avoid such contentions that Section 68(4) was incorporated in the Act declaring that the provisions of Sections 44 and 50 shall apply in the case of recovery of all sums liable to be recovered under the provisions of the RR Act as provided in Section 68(1). In the circumstances, it has to be held that Section 44 of the RR Act would apply to all proceedings initiated under the RR Act for recovery of all sums referred to or indicated in sub-section (1) of Section 68 by virtue of Sub-section (4) of Section 68 of the RR Act. Accordingly, we would hold that Section 44 of the RR Act would apply to the proceedings initiated in this case under the RR Act for the recovery of amounts due from the late husband of the appellant under Section 9 of the Welfare Fund Act.
7. We would like to point out that in Baby's case (1981 KLT 510) the learned Judge was considering specifically only the question whether the dues under Section 9 of the Welfare Fund Act can be recovered in priority to other debts and the question whether Section 44 of the RR Act will have operation to the revenue recovery proceedings initiated for recovery of amounts due under Section 9 of the Welfare Fund Act was not considered at all in that decision. In fact the observations we have already quoted would indicate that the learned Judge has also found that all provisions in the RR Act dealing with recovery of dues under that Act would apply to the recovery of money due under Section 9 of the Welfare Fund Act also. In this connection we would point out that after the decision in Gourikutty Amma v. District Collector(1975 KLT 29) whereby the decision in Gourikutty Amma. v. District Collector (1974 KLT 103) was reviewed by the same Division Bench, there cannot be any doubt about the applicability of Section 44 of the RR Act to the proceedings initiated under the the RR Act for the realisation of sums declared by any other law as arrear of public revenue due on land or land revenue or other dues declared to be recoverable under the Act by any other law for the time being in force. In fact if the decision in Gourikutty Amma. v. District Collector (1975 KLT 29) and the provisions contained in Section 68 (4) of the RR Act were brought to the notice of the learned single Judge, the reference itself could have been avoided.
In this view, we find no merit in the Second Appeal and the same will stand dismissed with no order as to costs.