Kerala High Court
Perumbavoor Municipality vs Ther Asst.Engineer on 27 November, 2013
Bench: Antony Dominic, K.Ramakrishnan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE ANTONY DOMINIC
THE HONOURABLE MR. JUSTICE K.RAMAKRISHNAN
&
THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN
THURSDAY, THE 23RD DAY OF OCTOBER 2014/1ST KARTHIKA, 1936
WP(C).No. 17300 of 2013 (J)
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PETITIONER(S):
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PERUMBAVOOR MUNICIPALITY
PERUMBAVOOR P.O., PIN - 683 542
REPRESENTED BY ITS SECRETARY.
BY ADVS.SRI.V.M.KURIAN
SRI.MATHEW B. KURIAN
SRI.K.T.THOMAS
SRI. SUNIL.N
RESPONDENT(S):
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1. THER ASST.ENGINEER
ELECTRICAL SECTION, KERALA STATE ELECTRICITY BOARD
PERUMBAVOOR, PIN - 683 542.
2. THE REVENUE RECOVERY OFFICER,
TALUK OFFICE, KUNNATHUNAD, PERUMBAVOOR.P.O.
PIN - 683 542.
R1 BY ADV. SMT.NAZEEBA.O.H., KERALA STATE ELECTRICITY BOARD
R1 BY ADV. SRI.RAJU JOSEPH (SR.)
R1 BY ADV. SRI.K.T.PAULOSE, SC, KSEB
BY GOVERNMENT PLEADER SRI.S.JAMAL
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23-10-2014,
ALONG WITH WPC. 28558/2013 & WA No.1848/12, THE COURT ON THE SAME DAY
DELIVERED THE FOLLOWING:
"C.R."
C.K. ABDUL REHIM, J.
------------------------------------------------- W.P.(c) Nos. 17300 & 28558 OF 2013
------------------------------------------------- DATED THIS THE 27th DAY OF NOVEMBER, 2013 REFERENCE ORDER Challenge in both these writ petitions are against the revenue recovery steps initiated for realising arrears of electricity charges due to the Kerala State Electricity Board (KSEB). In W.P (c) No.28558/2013 there is also challenge against the validity of Section 71 of the Kerala Revenue Recovery Act, 1968 (KRR Act for short). In W.P (c) No.17300/2013 challenge is raised on the ground of bar under Section 56 (2) of the Electricity Act, 2003.
2. Eventhough this court is not prima facie satisfied to entertain challenge on the question of validity of Section 71 of the KRR Act or on the challenge based on Section 56 (2) of the Electricity Act, there is a common issue involved as to whether the revenue recovery can be initiated after expiry of the period of limitation prescribed under the Limitation Act, 1963.
W.P.(c) Nos.17300 & 28558/20013 -2-
3. The petitioners placed reliance on the decision of the Hon'ble Supreme Court in State of Kerala V. V.R. Kalliyanikutty (1999 (2) KLT 146 (SC). Based on the dictum that provisions contained in KRR Act do not create any new right but only provides a process of speedy recovery, it is contended that KSEB cannot recover any amount which they cannot recover through a suit or other legal proceedings. The apex court held that the KRR Act only provides a coercive method of recovery which only enables recovery of amounts which are not time barred and are legally recoverable. It is held that under Section 71 of the KRR Act, claims which are time barred on the date when the requisition is issued under Section 69 (2), cannot be recovered, because they are not amounts due under Section 71. Based on the dictum it is contended that the arrears in these cases remain barred by limitation as on the date of requisition issued under Section 69 (2).
4. In the above context, dispute arises as to what is the period of limitation applicable to KSEB. Is it the period W.P.(c) Nos.17300 & 28558/20013 -3- of 3 years prescribed under Article 113 or the period of 30 years prescribed under Article 112 of Part IX and X in the schedule appended to the Limitation Act, is the question. Learned counsel for the petitioners contended that Article 112 is applicable only with respect to suits filed by or on behalf of State Government. The KSEB, eventhough is a 'State' coming within Article 12 of the Constitution of India, is not a Government and the provisions of Article 112 will not apply, is the contention. It is contended that SRO No.169/69 issued under Section 71 of the KRR Act making provisions of the said Act applicable to KSEB cannot have any effect on the period of limitation. Such notification or provisions of the KRR Act do not create any new right on KSEB to recover any amount which remains time barred. In support of the said proposition, the petitioners placed heavy reliance on a recent decision of this court in Siddique V. Tahsildar (2013 (2) KLT 544). A learned judge of this court had followed dictum contained in the apex Court decision in Kalliyanikutty's case (cited supra) to hold the W.P.(c) Nos.17300 & 28558/20013 -4- question in favour of the petitioners.
5. A brief scanning of the legal precedents related to the issue may be of beneficial. One of the first decisions on the point, rendered by this court is in A.K. Nanu and others V. State of Kerala and others (1987 (2) KLT
921). A Division Bench of this court held that the KRR Act cannot be invoked to recover a debt which is barred by limitation, based on any notification issued under Section
71. In the absence of any provision creating a substantive right to recover time barred debts the Act providing for summary recovery is of no avail, once the period of limitation prescribed under the Limitation Act had expired. The Act only provides for an easy recovery, not a recovery at any time.
6. But a Full Bench of this court in Kerala Fisheries Corporation Ltd. V. P.S. John and others (1996 (1) KLT 814 (FB) had taken a different view. But the Full Bench decision was reversed by the apex Court in Kalliyanikutty's case (cited supra). Another Division W.P.(c) Nos.17300 & 28558/20013 -5- Bench decision in Godan Namboothiripad V. Kerala Financial Corporation & others (AIR 1998 Ker. 31), which followed the Full Bench in the Fisheries Corporation's case (supra) also stands reversed by virtue of the decision in Kalliyanikutty's case. Therefore, legal position remains settled prohibiting recovery of any amount due to the KSEB which remains barred by limitation, by recourse to revenue recovery steps initiated by virtue of notification under Section 71 of the KRR Act.
7. Coming back to the debated question as to which is the relevant Article of the Limitation Act, applicable to the KSEB, an appraisal of the relevant provisions in the electricity laws is essential. Provisions contained in Regulation 19 (4) and 36 (12) of the KSEB Terms and Conditions of Supply, 2005 assumes importance. Regulation 19 (4) provides that all dues to the Board from a consumer shall be the first charge on his assets. It further provides that all the dues including interest shall be realized as arrears of revenue recovery. Regulation 36 (12) provides W.P.(c) Nos.17300 & 28558/20013 -6- that in case any amounts due fall into arrears, the Board will be entitled to realize the same as arrears of land revenue as per the Revenue Recovery Act.
8. On behalf of the Board reliance is placed on a Division Bench decision of this court in Kerala Motor Transport Workers Welfare Fund Board V. William Raynold (2004 (3) KLT 1083). Referring to Section 10 of the Kerala Motor Workers Welfare Fund Act, 1995, which provides that arrear due from an employer should be recovered in the same manner as an arrear of public revenue due on land, this court held that all the provisions of the KRR Act would become applicable. This is especially because of the fact that Section 68 of KRR Act provides that all sums declared by any other law for the time being in force will be recoverable as arrears of public revenue due on land or as land revenue. Following the dictum, another Division Bench of this Court in Inspector, Toddy Workers Welfare Fund Board V. M.S. Vijayan and others (2009 (1) KHC 465 (DB) held that, Section 9 of the Toddy W.P.(c) Nos.17300 & 28558/20013 -7- Workers Welfare Fund Act, which is an identical provision, creates a fiction that the amounts due to the Board, which is otherwise not land revenue stricto sensu, are deemed to be land revenue and is recoverable as such. Therefore the period of limitation applicable will be the period prescribed in relation to amounts due to the Government, under Article 112, is the finding. A same view was seen followed in the judgments of this Court in W.P (c) No.28751/2008 (dated 07-02-2011) and in W.A No.211/2008 (dated 09-02-2012).
9. In Siddique's case (supra) the learned Judge observed that the decision in Toddy Workers Welfare Fund Board's case (supra) was rendered without noticing the decision of the apex court in Kalliyanikutty's case (supra). Further it is held that, the decision in Toddy Workers Welfare Fund Board's case was rendered relying on the Motor Transport Workers Welfare Fund Board's case which only held that, the dues to the said Board can be recovered under the provisions of Revenue Recovery Act. It is found that this court is bound by W.P.(c) Nos.17300 & 28558/20013 -8- principles laid down by the apex court, which has not been noticed by the Division Bench.
10. Crucial aspect is the effect of declaration contained in any law to the extent of making the arrears due to any institution, which is not Central or State Government, which is otherwise not land revenue or public revenue due on land, recoverable as public revenue due on land. Whether such a declaration will change the characteristics of the arrears/debt is the question. In Kalliyanikutty's case the Hon'ble apex court had categorically held that the KRR Act does not create any right, but it merely provides a process for speedy recovery. Since the Act does not create any new right the person claiming recovery cannot recover any amount which is not legally recoverable, nor can a defence of limitation available to a debtor in a suit or other legal proceedings be taken away under the provisions of the KRR Act. If the said principle is adopted, merely because any statute provides for recovery of arrears as if it is public revenue due on land W.P.(c) Nos.17300 & 28558/20013 -9- or land revenue, characteristics of the debt will not be changed, is the argument. If the characteristics of the debt is not changed and if it will not create any right on the institution, whether the period available to the institution will change, is the question.
11. Yet another contention on behalf of the Board is that in view of Regulation 19 (4) of the Terms and Conditions of Supply which provides that dues to the Board will be first charge on the assets of the consumer, it has to be presumed that there exist a charge on the property in which the connection is provided. On the basis of charge created on the property of the premise where the connection is provided, it is contended that the period of limitation will be more than 3 years. But the Hon'ble Supreme Court in the decision in Isha Marbles V. Bihar State Electricity Board and another (1995 KHC 1280) held that, there is no charge over the property under the provisions of the Electricity Act and what matters is the contract entered into by the consumer with the Board. It is W.P.(c) Nos.17300 & 28558/20013 -10- held that Board cannot seek enforcement of contractual liability against any third party. In a subsequent decision in Paschimanchal Vidyut Vitran Nigam Ltd. and others V. M/s. DVS Steels & Alloys Pvt. Ltd. and others (AIR 2009 SC 647) the Hon'ble Supreme Court observed that supply of electricity to a consumer is a sale of goods. The owner/occupier of the premises with whom the distributor enters into a contract for supply of electricity are only the parties to the contract. A transferee of the premises or the subsequent occupant of a premises with whom the supplier has no privity of contract cannot obviously be asked to pay the dues of his predecessor in title or possession, because the amount payable does not constitute a charge on the premises. In the absence of any contract to the contrary the supplier can neither file a suit nor initiate revenue recovery against the transferee of the premises for the outstanding electricity dues of the vendor. In a latest decision in Special officer, Commerce, North Eastern Electricity Company of Orissa and another V. M/s. Raghunath Paper W.P.(c) Nos.17300 & 28558/20013 -11- Mills Private Limited and another (2012 KHC 4657) the above dictum has been reiterated. However it is clarified that the distributor can insist upon any stipulations in the terms and conditions for clearance of the arrears of previous owner or occupant, for providing a new connection. The case may be different when a charge is created by virtue of a minimum guarantee agreement or by virtue of any other indenture. But in a normal cases when there is no charge created by virtue of any agreement, characteristics of the dues/debt may not change and consequently the limitation period also cannot have a deviation from what is provided under Article 113.
12. In view of the discussions as above, this court feel inclined to follow the view taken in Siddique V. Tahsildar (supra). But at the same time the decision in Toddy Workers Welfare Fund Board's case, which is a Division Bench decision has taken a contrary view. In Siddique's case the learned Judge observed that the Toddy Workers Welfare Fund Board's case has not referred the W.P.(c) Nos.17300 & 28558/20013 -12- apex court decision in Kalliyanikutty's case. But on a close research it is evident that the decision in Kalliyanikutty's case was referred to by the Division Bench which rendered the decision in Toddy Workers Welfare Fund Board's case. Under such circumstances this court feel that the question whether the dictum contained in Toddy Workers Welfare Fund Board's case will go contrary to the legal principle settled in Kalliyanikutty's case, is a matter which requires re- consideration by a Bench of this court.
13. Under the above mentioned circumstances these cases are referred for consideration by a Division Bench on the question as to whether decision in Inspector, Toddy Workers Welfare Fund Board V. M.S. Vijayan and others (2009 (1) KHC 465 (DB) is contrary to the decision of the Hon'ble Supreme Court in State of Kerala V. V.R. Kalliyanikutty (1999 (2) KLT 146 (SC) and to decide on the question as to whether any arrears due to the KSEB for which the revenue recovery requisition was not W.P.(c) Nos.17300 & 28558/20013 -13- made within a period of 3 years from the date on which such amount became due, can be recovered under the provisions of the Kerala Revenue Recovery Act, 1968.
The registry will take necessary steps to post the case for consideration by the Division Bench.
Sd/-
C.K. ABDUL REHIM, JUDGE.
AMG True copy P.A to Judge