Kerala High Court
Pudunagaram Grama Panchayat vs Saleem on 6 September, 2005
Equivalent citations: 2005(4)KLT415
Author: V. Ramkumar
Bench: K. Padmanabhan Nair, V. Ramkumar
JUDGMENT V. Ramkumar, J.
1. The Secretary, Pudunagaram Grama Panchayat who was the complainant in S.T. Case No. 2305/96 on the file of the Court of the Judicial Magistrate of First Class, Chittur, is the appellant in this appeal. The first respondent herein who was the accused in the said case was prosecuted by the appellant under Section 74 of the Kerala Panchayats Act, 1960 read with Rule 26 of the Kerala Panchayats (Taxation and Appeal) Rules, 1963.
The Prosecution case
2. The case of the prosecution can be briefly stated as follows:
The accused was the highest bidder in the auction held by the complainant/ Panchayath to conduct the fish market in the said Panchayath for the one year period commencing from 1-4-1995 and ending on 31-3-1996. The total bid amount was Rules. 30,100/-. On 20-3-1995 he deposited Rs. 10,040/-. He ought to have paid the balance amount on or before 30-9-1995. But he committed default in the payment of the balance amount. As on 30-9-1995 a sum of Rs. 20068.75 including notice charges was due from him. Eventhough distraint proceedings were attempted by the Panchayath, the same were in vain since he had no properties to be proceeded against. It was thereafter that the present a prosecution was launched under Section 74 of the Kerala Panchayaths Act, 1960 read with Rule 26 of the Kerala Panchayaths (Taxation and Appeal) Rules, 1963.
The Trial
3. On the accused pleading not guilty to the particulars of the offence read over and explained to him, the prosecution was permitted to adduce evidence in support of its case. The prosecution examined 4 witnesses as PWs. 1 to 4 and got marked seven documents as Exts.P1 to P7.
4. After the conclusion of the prosecution evidence the accused was questioned under Section 313 Cr.P.C. with regard to the incriminating circumstances appearing against him in the evidence for the prosecution. He denied those circumstances and maintained his innocence.
5. The learned Magistrate, after trial, as per judgment dated 4-11-1998 held that the accused was a defaulter as alleged by the complainant but found that the complaint filed under the provisions of the Kerala Panchayats Act, 1960 (hereinafter referred to as "the Old Act" for short) after the coming into force of the Kerala Panchayat Raj Act, 1994 (hereinafter referred to as "the New Act" for short) was not maintainable and accordingly acquitted the accused under Section 255 (1) Cr.P.C. It is the said judgment which is assailed in this appeal by the complainant Panchayath.
This Appeal
6. When this appeal came up for hearing before a learned Single Judge (Sri. J.M. James, J.) the respondent/accused made an attempt to sustain the order of acquittal by placing reliance on the decisions reported in Peravoor Grama Panchayath v. Rafi, and Thalavoor Grama Panchayath v. Salim, . But the learned Single Judge was of the view that if the ratio decided in these two decisions were to be followed it would bring about heavy loss to the Panchayats in the State and felt that those decisions require re-consideration by a Bench. Accordingly, this appeal was referred for consideration by a Bench as per the order of reference dated 12-1-2005. That is how the matter has come up before us.
7. We heard Adv. Sri. Prasoon, representing Adv. Sri. P. Vijayabhanu, the learned Counsel appearing for the Panchayath and Adv., Sri. Mohanakannan, the learned Counsel appearing for the first respondent/accused.
Arguments of the Accused
8. Adv. Sri. Mohanakannan, the learned Counsel appearing for the first respondent/ accused made the following submissions before us to sustain the order of acquittal:-
Ext.P4 demand notice issued under the provisions of the Kerala revenue recovery Act is dated 9-2-1996 which is after the date of coming into force of the New Act. The New Act came into force with effect from 23-11-1995. The complaint before the court below was thereafter filed on 30-4-1996. Admittedly, the complaint was filed under Section 74 of the Old Act Rule with Rule 26 of the Kerala Panchayaths (Taxation and Appeal) Rule, 1963. By virtue of Section 284(2)(i) of the New Act the liability, if any, incurred under the Old Act is deemed to be a liability under the New Act and hence the prosecution under the New Act alone would lie. Therefore, the complaint ought to have been filed under Section 210 of the New Act Rule with Rules 27 of the Kerala Panchayat Raj (Taxation, Levy and Appeal) Rules, 1996. But in respect of amounts due under a contract no prosecution will lie either under Section 74 of the Old Act or under Section 210 of the New Act. Admittedly the amount due from the accused is the balance bid amount under Ext.Pl agreement which will not fall under arrears of cess, rate, surcharge or tax imposed or fees levied within the meaning of Section 210 of the New Act. The said amount is also not covered under Section 74 of the Old Act. If so, the decisions in Peravoor Grama Panchayat and Thalavoor Grama Panchayath (supra) squarely apply to the facts of the present case and those decisions do not call for any Re-consideration.
Judicial Evaluation
9. We are afraid that we find ourselves unable to agree with the above submissions. Admittedly, the appellant/Panchayat was parcelling out and leasing the area within the limits of the said Panchayat for the purpose of enabling the lessee to conduct a fish market and recover the fees for the use of the same. This power of leasing of the market by the Panchayat was in exercise of the statutory authority under Section 85 (2) of the Old Act. Section 85 of the said Act which deals with public markets Rules as follows:-
" 85. Public markets:
(1) The Panchayat may, with the sanction of the Director, provide places for use as public markets and, with like sanction, may close any such market or part thereof. All public markets within a Panchayat area shall be under the control and management of the Panchayat.
(2) Subject to such Rules as may be prescribed, the Panchayat may parcel out any portion of a public market and lease such parcel or parcels by auction or otherwise or levy any one or more of the following fees in any public market at rates, not exceeding the maximum prescribed -
a) fees for the use of, or for the right to expose goods for sale in such market;
b) fees for the use of shops, stalls, pens or stands in such market;
c) fees on vehicles or pack-animals bringing or on persons carrying, any goods for sale in such market;
d) fees on animals brought for sale into or sold in such market; and
e) licence fees on brokers, commission agents, weighmen and measures practising their calling in such market".
Sub-section 2 of Section 85 thus gives the power to the Panchayat to lease the parcels of land subject to Rules as may be prescribed. In exercise of the power under Section 129 of the Old Act, the Government had framed the Kerala Panchayats (Public and Private Markets) Rules, 1964 (hereinafter referred to as "the Old Market Rules") which were published in the Kerala Gazette dated 5-5-1964. Rule 5 of the said Rules Rules as follows:-
"5. Leasing out of portions of a public market--Subject to the subsisting Kuthagapattom or other rights, a Panchayat may parcel out any portion of a public market and lease such parcel or parcels and stalls, if any, under Sub-section (2) of Section 85 of the Act subject to the following conditions, namely:-
1) Ordinarily the lease of parcels of space and stall, if any, shall be made by auction to the highest bidder.
2) Such leases shall ordinarily be for a period not exceeding one year at a time.
3) A permit in Form I appended signed by the Executive Authority or such other officer authorised in this behalf shall be given to the occupier of each stall or space specifying the conditions of the lease.
4) No articles other than those specified in the permit issued under Sub-rule(3) shall be sold or exposed for sale in any stall or space nor a stall-holder or occupier of space, use the land adjoining his stall or space for sale or exposure for sale of his goods.
5) No stall-holder or occupier of space shall assign or sublet or otherwise part with the possession of any stall or space except with the previous permission in writing of the executive authority.
6) Every tenant or occupier of a stall or space shall keep the same in a clean condition and shall not allow any refuse or garbage to remain on or about it, so as to cause inconvenience or annoyance to the other dealers or to the public who resort to the market.
7) The Executive Authority or such other officer as may be authorised in this behalf may by an order in writing, prohibit any person other than a tenant or his agent to trade in any stall leased or let out to such tenant.
8) The Executive Authority may with the approval of the Panchayat cancel a permit granted under Sub-rule(3) for breach of any of these Rules or the bye-laws of the Panchayat or the conditions of the permit".
Rule 22 of the said Rules reads as follows:
"Payment of lease amount: The rents or fees due shall be payable in advance in full, or in such instalments as may be allowed by the Panchayat in each case. In addition to the advance, the lessee shall also deposit an amount equal to one instalment as security deposit before the commencement of the contract. In case of default of payments the amount due shall be recovered from the lessee as arrears of panchayat tax and the lessee shall in addition be liable to summary eviction for default. The lessee shall also be liable for any loss caused to the panchayat by such eviction and subsequent re-auction".
10. The further question would be whether the arrears of bid amount due from the accused/the highest bidder is recoverable under Section 74 of the Old Act. Section 74 Rules as follows:-
74. recovery of arrears of tax, cess, rate, surcharge or tax imposed or fees levied under this Act shall be recoverable as an arrear of public revenue under the law relating to the recovery of arrears of public revenue for the time being in force:
Provided that the executive authority may directly recover by distraint, under his warrant, and sale of movable properties of the defaulter subject to such Rules as may be prescribed:
Provided further that, if for any reason the distraint or a sufficient distraint of the defaulter's property is impracticable, the executive authority may prosecute the defaulters before a Magistrate".
It is true that arrears of bid amount is not expressly covered by Section 74 of the Old Act. But if there is any provision either in the Old Act or the Rules framed thereunder treating the arrears of bid amount as tax recoverable under the Act or the Rules, then a prosecution under Section 74 for realisation of the arrears of bid amount would be perfectly justified. There is no dispute that the bid amount due under Rule 5 is rent and the accused was the successful bidder in respect of the transaction in question. Therefore, the balance amount due from the accused would also be rent due from him to the Panchayat and payable in accordance with Rule 5 of the Old Market Rules. Rule 22 itself provides that in case of default of payment the amount due shall be recovered from the lessee as arrears of Panchayat tax. A combined reading of Rules 5 and 22 of the Old Market Rules will show that the status of the successful bidder to whom the above right to collect the market fees has been farmed out is that of a lessee and amounts due from him answer the description of rent. (See also in this connection the decision in In Re. Punya Shyamalo - AIR 1924 Madras 669). By virtue of Rule 22, in the event of any default made by the lessee the amount can be recovered from him as arrears of Panchayat tax. Arrears of Panchayat tax is recoverable under Rule 26 of the Kerala Panchayats (Taxation and Appeal) Rules, 1963, (hereinafter referred to as "the Old Taxation Rules")- Thus, by virtue of the statutory fiction rent or arrears of rentpayable by a lessee who is the successful bidder in respect of a market would become converted to arrears of tax recoverable under Section 74 of the Kerala Panchayats Act, 1960.
11. As mentioned earlier, Rule 22 of the Old Market Rules enables the Panchayat to realise the arrears of bid amount in the form of rent by resort to Rule 26 of the Old Taxation Rules. But there are other Rules such as Contract Rules, 1962, Acquisition and Transfer of Immovable Properties Rule, 1963 etc., all issued in exercise of the power under Section 129 of the Old Act but which do not contain a provision similar to Rule 22 of the Old Market Rules enabling the Panchayat to recover the dues from the defaulter by resort to the Old Taxation Rules. It was presumably realising this omission that the Government of Kerala in exercise of the residuary power under Section 129 of the Old Act framed Rules regarding Demanding of Amounts Due To Panchayath Where There Is No Special Provision. 1962 which were published in the Kerala Gazette No. 45 dated 13-11-1962. The said notification by which the said Rules were issued Rules as follows:
"GOVERNMENT OF KERALA Development (Panchayat Special) Department NOTIFICATION NO. G.O.MS.820/62/DD. Dated, Trivandrum, 7-11-62.
S.R.O. No. 319/62 - In exercise of the powers conferred by Section 129 of the Kerala Panchayaths Act, 1960 (Act 32 of 1960) and in supersession of the existing Rule on the subject the Government of Kerala hereby make the following Rule the same having been previously published as required by Sub-section (2) of Section 130 of the said Act.
RULES All costs, damages, compensation, penalties, charge, fees (other than school fees), expenses, rents, contributions and other sums which under the Kerala Panchayats Act, 1960 (Act 32 of 1960) or any other law or Rules or bye-laws made thereunder are due by any person to the Panchayat, may, if there is no special provision in the Act or in the other law or in the Rules or bye-laws made thereunder for their recovery be demanded by bill which shall be served on the person concerned and recovered in the manner provided in the Rules for the collection of taxes under the said Act".
After the publication of the said Rules defaulters in respect of amounts due under the various Rules issued under Section 129 of the Old Act can be proceeded against under Rule 26 of the Taxation and Appeal Rules and such defaulters can, therefore, be prosecuted under Section 74 of the Old Act. The said Rules will hereinafter be referred to as "the Residuary Rules" for brevity.
11. What now falls for consideration is the question as to whether the prosecution in this case under the Old Act and Rule 26 of the Old Taxation and Appeal Rules is bad on account of the coming into force of the New Act in the meanwhile. As adverted to earlier, auction in this case was held prior to 20-3-1995 and the first instalment was remitted by the accused on 20-3-1995. The New Act came into force only on 23-11-1995, that is, after the liability was incurred by the accused and the cause of action for the prosecution had arisen. It is true that Ext.P4 demand notice was issued and the subsequent complaint was filed after the coming into force of the New Act. But that by itself will not take away the liability of the accused to be prosecuted under the provisions of the Old Act and the Rules framed thereunder. For the purpose of this case we are concerned only with Clauses (b), (d), (f) and (i) of Sub-section (2) of Section 284 of the New Act. Sub-section (2) and the aforementioned clauses Rule as follows:
"(2) With effect on, and from the appointed day the Kerala Panchayats Act, 1960 (32 of 1960), the Kerala District Administration Act 1979 (7 of 1980) and also the provision relating to Panchay ats contained in the Kerala Local Authorities (Constitution and Preparation of Electoral Rolls) Act, 1994 (4 of 1994) shall stand repealed and the following consequences shall ensue, that is to say, -
xxx xxx xxx "(b) all rights, liabilities and obligations of an existing Panchayat or, as the case may be, a district council, shall be deemed to be the rights, liabilities and obligations of the successor Panchayat or, as the case may be, of the Government.
xxx xxx xxx
(d) all sums due to an existing panchayat, whether on account of any tax, cess, fee, surcharge or otherwise, shall be recoverable by the successor Panchayat, and for the purposes of such recovery the successor Panchayat shall be competent to take any measure or institute any proceedings which it would have been open to an existing panchayat, or any authority thereof to take or institute before the appointed day;
xxx xxx xxx
(f) all the contracts made with, and all instruments executed by or on behalf of an existing panchayat or on behalf of a district council shall be deemed to have been made with, or executed by or on behalf of the successor Panchayat or, as the case may be, on behalf of the Government, and shall have effect accordingly:
xxx xxx xxx
(i) any appointment, notification, notice, tax, fee, order, scheme, licence, permission, Rule, bye-law, Regulation or form made, issued, imposed or granted in respect of the Panchayat area of existing Panchayat under the Kerala Panchayats Act, 1960 and in force immediately before the appointed day shall, insofar as it is not inconsistent with the provisions of this Act continue to be in force as if made, issued, imposed or granted in respect of the corresponding Panchayat area of a successor panchayat under this Act until superseded or modified by any appointment, notification, notice, tax, fee, order, scheme, licence, permission, Rule, bye-law, Regulation or form made, issued, imposed, or granted under this Act".
xxx xxx xxx
12. Thus, the provisions of the Old Act and Rules thereunder are unaffected by the New Act and the Rules framed thereunder in respect of a cause of action for a prosecution which arose prior to the coming into force of the New Act and the Rules, notification etc. issued under the Old Act, as long as they are not inconsistent with the provisions of the New Act, will continue to be in force until superceded or modified by new Rules, notifications etc. issued under the New Act. In the place of the Old Market Rules, the Government have issued the Kerala Panchayat Raj (Issuance of Licence and Control of Public and Private Markets) Rules, 1996 (hereinafter referred to as "the New Market Rules" for short). But the New Market Rules came into force only on 27-8-2001 and until then the Old Market Rules which are not inconsistent to the provision of the New Act, would continue to operate.
13. We will now briefly discuss the case law relied on in this Case. In In Re. Punya Shyamalo, AIR 1924 Madras 669 (Supra) it was held that the amount due under a contract of lease of the tolls due to a Local Board will not fall under "other sums" within the meaning of Section 221 of the Madras Local Boards Act, XIV of 1920 which provided for recovery under the warrant of a Magistrate, "any fee, toll, costs, compensation, damages, penalties, charges, expenses or other sums due to a Local Board", The main reasoning was that such amounts were amounts due under a contract and not amounts due under the provisions of the Act by way of fee, toll, costs and tax etc. To the same effect is the decision reported in Mahabab Alii Khan v. Taluk Board, Kurnool - AIR 1924 Madras 898 wherein the analogous Section 221 of the Madras District Municipalities Act (XIV of 1920), was considered.
14. In P.A. Yousuf v. Kumaranelloor Panchayat -- 1973 KLT 145 the question arose before a learned Single Judge of this Court as to whether the amount due under a contract for farming out the property of a Panchayat to conduct certain cultural programmes could be recovered by resort to Section 74 of the Old Act in the light of the residuary Rules referred to above. relying on the decisions in In Re Punnya and Mahabab Alii Khan (supra) of the Madras High Court and other decisions taking the same view it was held that such amounts could not be recovered by resort to Section 74 of the Old Act. In K.S. Rajan v. State of Kerala and Anr. -1983 KLT 677 the question arose before another learned Single Judge of this Court as to whether the arrears of rent in respect of a building belonging to a Panchayat and given on lease to the accused was recoverable under Section 74 of the Old Act. The rent was due to the Panchayat by virtue of the undertaking given in terms of the Kerala Panchayaths (Acquisition and Transfer of Immovable Properties) Rules, 1963. Relying on the special provisions in the residuary Rules the learned Judge was of the view that even though there was no specific provision enabling the Panchayat to recover the amount under the Kerala Panchayats (Acquisition and Transfer of Immovable Properties) Rules, 1963, the Residuary Rules enabled the recovery of the said amount as if it were a tax recoverable under the provisions of the Old Taxation Rules and accordingly held that a prosecution under Section 74 would lie. Since there was an apparent conflict in the views taken in Yousuff's case and Rajan's Case (supra) the question was considered at length by a Division Bench of this Court in Executive Officer v. Suresh Babu, 1992(1) KLT 291. There, the question was as to whether the arrears of rent due to the Panchayat could be recovered by resort to Section 74 of the Old Act Rule with Rule 13 of the Kerala Panchayats (Acquisition and Transfer of Immovable Property) Rules, 1963 and the Residuary Rules. After adverting to the earlier conflicting views and after adverting to the Residuary Rules etc. the Division Bench observed as follows:
"Rent due to the panchayats under the lease transactions entered into on the basis of the provisions of the Acquisition and Transfer of Immovable Properties Rules, 1963 and the form prescribed thereunder will undoubtedly come under the said Rules. For these matters, there is no other special provision. It can, therefore, be demanded and recovered in the manner provided in the Rules for collection of tax under the Act. Therefore, Section 74 and the Rules regarding recovery of tax under the Act are evidently applicable to recovery of those amounts also. The Taxation and Appeal Rules regarding recovery made under Section 129 Rule with Section 74, particularly Rules 13,14 and 26 are, therefore, applicable to recovery of rent even though it will not come directly under the provisions of Section 74. That includes the right for prosecution also and the matter is, therefore, clear from the residuary Rules mentioned above. It was not necessary to quote Rules 13 to 26 of the Taxation and Appeal Rules in the residuary Rules or the Rules relating to acquisition and transfer of immovable properties".
15. The Division Bench accordingly approved Rajan 's case (supra) and overruled Yousuff's case (supra).
16. In Suresh v. Executive Officer, 1995 (2) KLT 75 another Division Bench of this Court was concerned with the question as to whether the amounts due from the successful bidder in an auction for removal of sand from Kallada river during the period 1992-1993 was recoverable under Section 74 of the Old Act. Without noticing the ratio of the Division Bench in Suresh Babu's case, (supra) the Division Bench held that even though the amount due to the Panchayat would not come within the categories of amounts mentioned under Section 74 of the Old Act, they could still be collected in the manner provided in the said provision in view of the residuary Rules which were extracted in the judgment.
17. In Concrete Aggregate Industries v. Kummancode Poura Samithi, 1995 (2) KLT 720 the question before a Division Bench of this Court was whether the orders, licences and Rules under the Old Act would survive after the coming into force of the New Act. Noticing Clause (i) of Sub-section 2 of Section 284 of the New Act it was held that all the order, licence, permission, Rule, bye-laws etc. issued or granted in respect of the Panchayat area under the Old Act and in force immediately before the appointed day, will continue to be in force as if they had been made, issued or granted in respect of the corresponding Panchayat area under the New Act until superseded or modified. It is pertinent to note that the above provision in the New Act has been enacted, by and large in terms of Section 23 of The Kerala Interpretation and General Clauses Act, 1125 which provision is equivalent to Section 24 of the General Clauses Act, 1897. Thus the provisions of the Old Act are unaffected by the provisions of the New Act in respect of all actions taken or commenced under the repealed Act.
18. In Peravoor Grama Panchayat v. Rafi a learned single Judge of this Court was confronted with the question as to whether the rent payable in terms of the agreement executed between the defaulter and the Panchayat could be levied by recourse to Section 210 of the New Act which corresponds to Section 74 of the Old Act. On the view that there was no provision in the New Act enabling the Government to make Rules corresponding to Clauses (xxii) and (xvi) of Sub-section 2 of Section I29 of the Old Act, the learned Judge was of the view that such amounts were not recoverable by resort to Section 210 of the New Act. The decision of the Division Bench reported in Suresh Babu 's case was distinguished on the ground that, that decision was rendered for recovery of the amounts due under the Kerala Panchayaths (Acquisition and Transfer of Immovable Property) Rules, 1963 enabling the leasing out of the property of the Panchayat and recovery of arrears of rent whereas there was no corresponding Rule or provision enabling the recovery of the amounts in question under the New Act. With due respect, we find that as a matter of fact there is a corresponding provision in Clause (xxxvii) of Sub- section 2 of Section 254 of the New Act which is in part materia with clause (xvi) of Sub-section2 of Section 129 of the Old Act. This enabling provision was not brought to the notice of the learned Single Judge who decided Peravoor Grama Panchayat's case. It is true that in exercise of the enabling provision referred to above and corresponding to the Kerala Panchayats (Acquisition and Transfer of Immovable Property) Rules, 1963 Rules have not yet been framed under the New Act. But by virtue of the saving provisions under Section 284 of the New Act the aforesaid Rules of 1963 framed under the Old Act will continue to hold the field until the New Rules are framed by the State Government. In Thalavoor Grama Panchayat v. Salim (supra), the question arose before the very same learned Judge who decided Peravoor Panchayat's case as to whether the bid amount in respect of a meat stall " due to the Panchayat could be recovered by resort to Section 210 of the New Act. The substantive provision in the New Act pertaining to the meat stall is Section 229. Clause (xvi) of Sub-section2 of Section 254 of the New Act is the enabling provision which gives power to the State Government to frame Rules in respect of slaughter houses and meat stalls. In exercise of the said power the Kerala Panchayat Raj (Slaughter Houses and Meat Stalls) Rules, 1996 have been issued and which have come into force with effect from 16-7-2002. Until 16-7-2002 it was the corresponding Rule namely, The Kerala Panchayats (Slaughter Houses and Meat Stalls) Rules, 1964 issued in exercise of the power under Clause (xxvii) of Sub- section 2 of Section 129 of the Old Act that was in force. The substantive provision in the Old Act pertaining to slaughter houses and meat stalls is to be located under Sections 93 to 95 of the Old Act. Thus, it was without noticing these aspects of the matter that the learned Single Judge decided Thalavoor Grama Panchayath 's case holding inter-alia that the amounts due to the Panchayat was not a statutory due leviable under the New Act but was one arising under a contract and not recoverable by resort to Section 210 of the New Act. In fact, the said view taken by the learned Single Judge is in consonance with the decision of the Madras High Court in In re Punya's case and Mohabab Alli's case which were specifically dissented from by the Division Bench in Suresh Babu's case. What has been disapproved has been resurrected. With due respect, we find ourselves unable to agree with the ratio in Peravoor Grama Panchayat's case and Thalavoor Grama Panchayat's case rendered without noticing the existence of the Rules framed under the Old Act as well as the enabling provision in the New Act coupled with the subsequent framing of Rules also under the New Act.
19. It was with the avowed object of endowing the Panchayati Raj Institutions with such powers and authority as may be necessary to enable them to function as units of self-government that the State Legislature enacted the New Act giving . meaningful expression to the Constitution (Seventy Third Amendment) Act, 1992. The functional decentralisation brought about by this legislation was to strengthen and not weaken such institutions. Courts while grappling with the rights and duties of these local self government institutions cannot afford to be oblivious of the Constitutional ethos and intendment. Persons who undertake various works under the Panchayats which award the contract for such works in exercise of the powers conferred on them by the statute, cannot be permitted to disown their liabilities towards the Panchayats raising such contentions as have been raised in the present case.
20. In the light of the discussions above, we respectfully overrule the decisions of the learned Single Judge in Peravoor Grama Panchayat's case and Thalavoor Grama Panchayat's case (supra) and we approve and follow the ratio in Suresh Babu's case (supra) and Suresh's case - 1995 (2) KLT 75) referred to above.
21. The result of the foregoing discussion is that the prosecution of the first respondent under Section 74 of the Old Act Rule with Rule 26 of the Old Taxation Rules issued under the Old Act was fully justified and the finding recorded by the learned Magistrate that the complaint filed by the appellant is not maintainable cannot be sustained and we dislodge the same.
22. In the result, the judgment under appeal is set aside and the matter is remitted to the court below for disposal afresh, according to law, without any de novo trial. We make it clear that this judgment shall not be a bar to the first respondent taking recourse to the provisions pertaining to the compounding of offence, if the same course is permissible in law.
The parties shall appear before the trial court without any further notice on 24-10-2005.