Kerala High Court
Mr.Kurianm Jose vs The Kerala State Financial Corporation on 22 July, 2009
Author: C.N.Ramachandran Nair
Bench: C.N.Ramachandran Nair
IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 10871 of 2004(T)
1. MR.KURIANM JOSE, PROPRIETOR,
... Petitioner
Vs
1. THE KERALA STATE FINANCIAL CORPORATION,
... Respondent
2. THE DEPUTY TAHSILDAR (REVENUE RECOVERY)
3. THE KADUNGALLOOR GRAMA PANCHAYATH,
4. THE ASST. EXECUTIVE ENGINEER,
For Petitioner :SRI.GEORGE THOMAS (MEVADA)
For Respondent :SRI.SAJEEV KUMAR K.GOPAL
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
Dated :22/07/2009
O R D E R
C.R.
C.N.RAMACHANDRAN NAIR, J.
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W.P.(C) No.10871 of 2004
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Dated this the 22nd day of July, 2009.
JUDGMENT
W.P.(C) is filed by the petitioner who purchased an industrial plot with buildings thereon sold by the KFC in Revenue Recovery proceedings for recovery of arrears due from the borrower. Even though petitioner paid full sale consideration to KFC, the Panchayat has demanded arrears of property tax due from the previous owner for the buildings situated therein. The Kerala Water Authority also seems to be demanding arrears of water charges payable by the previous owner. It is against these demands the W.P. is filed. I heard Sri.George Thomas, counsel appearing for the petitioner and Government Pleader appearing for the State.
2. The contention of counsel for the petitioner is that purchase under the Revenue Recovery Act is subject to Section 60 of the Act which entitles the purchaser to get the immovable property purchased in Revenue sale free of all encumbrances and so much so, neither the Panchayat nor the Water Authority are entitled to demand property tax for the buildings or arrears of water charges payable by the previous owner. I find that sub-section (3) of Section 203 of the Kerala Panchayat Raj Act creates a charge on the 2 building for the property tax liability. Section 203 is as follows:
"S.203. Property Tax:- (1) Every Village Panchayat shall in accordance with the rules prescribed for the purpose levy a property tax on all buildings and land appurtenant thereto situated within the Panchayat area and not exempted under this Act at such percentage as may be determined by the Village Panchayat on the net annual value determined on the basis of the plinth area and considering the site of the building, its use, type of construction and other determined factors;
Provided that in the case of buildings given on rent, tax shall be levied by adding twenty five percentage also for the net annual value calculated according to plinth area.
(2) The building tax shall be levied annually and be payable in two equal half yearly instalments.
(3) The building tax, and the surcharge on building tax, if any levied under section 208, shall subject to the prior payment of the land revenue, if any, due to the Government in respect of the site of the building, be a first charge upon the building and upon the movable property, if any, found within or upon the same and belonging to the person liable to such tax."
The question to be considered is whether the encumbrance referred to in Section 60 of the R.R. Act takes in statutory charge for property tax covered under Section 203(3) of the Panchayat Raj Act. Section 60 of the R.R. Act does not exclude operation of provisions of other statutes for the property sold in R.R. proceedings and therefore, the property sold will be subject to all statutory charges. So much so, the encumbrance referred to in Section 60 of the R.R. Act should take in liabilities other than charge created by 3 separate statute. By virtue of operation of Section 203(3) of the Panchayat Raj Act, the buildings purchased by the petitioner will be subject to tax liability and so much so, petitioner is liable to pay the accrued arrears and tax payable for the period subsequent to his purchase. However, since KFC confirmed the sale under Section 54 of the R.R. Act without reference to existing statutory liabilities and since the Panchayat also did not intervene with the Revenue sale for recovery of arrears of tax, I feel petitioner can be exonerated from liability for interest for the belated payment of arrears of tax. Interest for the arrears of property tax is, therefore, waived on condition that petitioner pays the entire arrears before 31.10.2009. However, if payment is not made as above, then petitioner will forfeit the waiver of interest granted by this court in this judgment.
3. So far as arrears of water charges is concerned, there is nothing on record to indicate that there are arrears due to the Kerala Water Authority. It is not known whether petitioner has obtained connection from Water Authority under interim order dated 30.3.2004 issued by this court. Therefore, this issue is left open for the petitioner to raise before the Executive Engineer of Water Authority after the Assistant Engineer gives details of arrears due in respect of the property. The petitioner is directed to approach the Assistant Engineer for him to consider petitioner's 4 contentions and to pass adjudication order on amounts payable and the period to which such arrears relate. It is open to the petitioner to clear the arrears or to contest the same in appeal before the Executive Engineer.
W.P. is disposed of as above.
C.N.RAMACHANDRAN NAIR Judge pms