Kerala High Court
The Kerala State Housing Board vs Kerala Lok Ayukta on 31 March, 2023
Author: Murali Purushothaman
Bench: S.Manikumar, Murali Purushothaman
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN
FRIDAY, THE 31ST DAY OF MARCH 2023 / 10TH CHAITHRA, 1945
WP(C) NO. 12339 OF 2016
PETITIONER:
THE KERALA STATE HOUSING BOARD
DIVISION NO.1, SANTHI NAGAR, REPRESENTED BY ITS
SECRETARY, OFFICE OF THE KERALA STATE HOUSING
BOARD, THIRUVANANTHAPURAM-695 001.
BY ADVS.
SRI.GEORGE BOBAN, SC, K.S.H.B.
SRI.DENNY DEVASSY
SRI.MANOJ RAMASWAMY
SRI.T.K.SAJEEV(K/000957/1995)
RESPONDENTS:
1 KERALA LOK AYUKTA
REPRESENTED BY ITS SECRETARY, OFFICE OF THE LOK
AYUKTA, THIRUVANANTHAPURAM-695 001.
2 ABOOBEKKER KUNJU
AGED 72 YEARS, S/O.LATE ADIMA KANNU, A.R.HOUSE,
PULIMODU, KULAPPADA P.O., ARYANADU, NEDUMANGAD
TALUK, THIRUVANANTHAPURAM DISTRICT-695 121.
3 STATE OF KERALA
REPRESENTED BY THE SECRETARY TO THE HOUSING
DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695
001.
BY ADVS.
SMT.RENU. D.P., SC, LOK AYUKTA
TEK CHAND V- SR.G.P
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 31.03.2023, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
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JUDGMENT
MURALI PURUSHOTHAMAN, J.
The Kerala State Housing Board (hereinafter referred to as 'the Board', for short) has filed this writ petition challenging Ext.P6 order passed by the Kerala Lok Ayukta in Complaint No.841 of 2014 A.
2. The short facts leading to Ext.P6 order are as follows:
2.1. The 2nd respondent/complainant applied for a loan of Rs.58,000/- from the Board in the year 1989 and an amount of Rs.43,500/- was sanctioned and disbursed to him in three instalments, of which the first and last instalments were disbursed on 14.05.1991 and 01.02.1992 respectively.
As per clause 7 of the mortgage deed, the due date of payment of the first instalment of E.M.I was on 10.03.1992 and the second instalment was due on 10.04.1992 and the loan has to be discharged in 168 monthly instalments.
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However, the complainant did not pay even a single equated monthly instalment and the Board initiated revenue recovery proceedings by submitting requisition before the District Collector. Pursuant to the requisition, the Special Deputy Collector (RR) issued notice dated 24.02.2014 to the complainant intimating that the mortgaged property will be brought to sale if the entire amount of Rs. 1,54,665/- including interest is not paid within 30 days therefrom. Contending that the amount sought to be recovered is time barred and the action of the Board in initiating proceedings under the Kerala Revenue Recovery Act, 1968 (hereinafter referred to as the 'RR Act', for brevity) to recover the time barred debt amounts to maladministration as defined under Section 2 (k) of the Kerala Lok Ayukta Act, 1999 (hereinafter referred to as the 'Lok Ayukta Act'), the complainant filed Ext. P4 complaint before the Lok Ayukta.
2.2. A written statement was filed on behalf of the Board and it was contended that the amount sought to be WP(C) NO.12339/2016 ..4..
recovered from the complainant is not barred by limitation.
2.3. Before the Lok Ayukta, it was contended by the Board that as regards the amount due to the Board notified under Section 71 of the RR Act, Article 112 of the Limitation Act shall apply and the period of limitation is 30 years. The said contention was rejected by the Lok Ayukta relying on the decision of the Hon'ble Supreme Court in State of Kerala v. Kalliyanikutty [1999 (3) SCC 657: AIR 1999 SC 1305: 1999 (2) KLT 146: 1999 KHC 297]. The Lok Ayukta found that Article 63 (b) of the Limitation Act, 1963 applies to the issue where the period of limitation is 12 years and in terms of the mortgage deed, the limitation runs from 11.04.1992, when the complainant made default in payment of two consecutive instalments, the second instalment having fallen due on 10.04.1992. The Lok Ayukta also found that there has not been any acknowledgment of debt by the complainant in terms of Section 25 (3) of the Indian Contract Act, 1872. Accordingly, the Lok Ayukta held that WP(C) NO.12339/2016 ..5..
the Board is not entitled to proceed against the complainant under the provisions of the RR Act for recovery of any amount on the basis of the mortgage deed. The Lok Ayukta also held that, if advised, the debt due from the complainant which got barred by reason of the dereliction of duty and maladministration on the part of the officials of the Board, can be recovered from those responsible for the loss, fixing their liability following the due process of law and procedure.
3. Ext.P6 order is challenged in this writ petition on the ground that Ext.P4 complaint is not maintainable before the Lok Ayukta and that the action of the officials of the Board with regard to recovery of debt will not come within the purview of maladministration as defined under Section 2 (k) of the Lok Ayukta Act and such action cannot be investigated by Lok Ayukta in terms of Section 8 of the said Act. It is further contended that the debt is not barred by limitation and as per Article 63 of the Limitation Act, the WP(C) NO.12339/2016 ..6..
period of limitation prescribed for filing a suit for foreclosure of the mortgage by the mortgagee is thirty years from the date of mortgage.
4. Heard Sri.T.K.Sajeev, the learned counsel for the petitioner and Sri.Tek Chand V., learned Senior Government Pleader appearing for the 3rd respondent. Though notice was issued to the 2 nd respondent, the complainant before the Lok Ayukta, he has not chosen to enter appearance.
5. According to Sri.Sajeev, the learned counsel for the petitioner, the action of the Board in taking steps to recover the loan amount by initiating proceedings under the Revenue Recovery Act is not a matter subject to investigation by the Lok Ayukta, as the same is in respect of an action specified in clause (c) of the Second Schedule to the Lok Ayukta Act. Section 8(1) read with Clause (c) of the Second Schedule to the Lok Ayukta Act provides that the Lok Ayukta shall not conduct any investigation under the WP(C) NO.12339/2016 ..7..
Act in the case of a complaint involving a grievance in respect of any action relating to administrative action taken in matters which arise out of the terms of a contract governing purely commercial relations of the administration with customers or suppliers except where the complainant alleges harassment or gross delay in meeting contractual obligation. According to Sri. Sajeev, the complaint relates to and arises out of the terms of contract between the Board and the complainant with respect to a housing loan availed by the complainant from the Board. Sri. Sajeev contends that the same pertains to the commercial relation of the Board with the loanee and therefore, there cannot be any interference by the Lok Ayukta with such contractual obligations. The contractual obligation on the part of the Board is the realisation of the loan amount. It is contended that, steps to realise the loan amount, being an administrative action arising out of the terms of contract governing purely commercial relations of the Board with WP(C) NO.12339/2016 ..8..
the complainant, the Lok Ayukta has no jurisdiction to investigate into such matters.
7. Section 8 and the 2nd schedule of the Lok Ayukta Act read as under:-
"8.Matters not subject to investigation.- (1) Except as hereinafter provided, the Lok Ayukta or an Upa-Lok Ayukta shall not conduct any investigation under this Act, in the case of a complaint involving a grievance in respect of any action, if such action relates to any matter specified in the Second Schedule.
(2) The Lok Ayukta or an Upa-Lok Ayukta shall not investigate,-
(a) any action in respect of which a formal and public inquiry has been ordered with the prior concurrence of the Lok Ayukta or an Upa-Lok Ayukta, as the case may be;
(b) any action in respect of a matter which has been referred to inquiry under the Commissions of Inquiry Act, 1952 (Central Act 60 of 1952);
(c) any complaint involving an allegation made after the expiry of five years from the date on which the action complained against is alleged to have taken place:
Provided that a complaint referred to in clause(c) may be entertained by the Lok Ayukta or an Upa-Lok Ayukta, as the case may be, after the expiry of the period referred to in the said clause, if the complainant satisfies that he had sufficient cause for not making the complaint within the period specified in that clause.
(3) In the case of any complaint involving a grievance, nothing in this Act shall be construed as empowering the Lok Ayukta or an Upa-Lok Ayukta to question any administrative action involving the exercise of a discretion, except where he is satisfied that the elements involved in the exercise of the discretion are absent to such an extent that the discretion can prima-facie be regarded as having been improperly exercised.
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SECOND SCHEDULE
[See section 8 (i) (a)]
(a) Action taken for the purpose of investigating crime relating to the security of the State.
(b) Action taken in the exercise of powers in relation to determining whether a matter shall go to a court or not. (c) Administrative action taken in matters which arise out of the terms of a contract governing purely commercial relations of the administration with customers or suppliers except where the complainant alleges harassment or gross delay in meeting contractual obligation.
(d) Action taken in respect of appointment, removal, pay, discipline, superannuation or other mattes relating to conditions of service of public servants but, not including actions relating to claims for pension, gratuity, provident fund or to any claims which arises on retirement, removal or termination of service.
(e) Grant of honors and awards."
True, the transaction between the Board and the complainant arises out of contract having commercial relations and there is contractual obligation on the part of the Board as well as the complainant. Section 8(1) read with clause (c) to the 2nd schedule excludes from the jurisdiction of the Lok Ayukta, cases of contracts having commercial relations. However, an exception is carved out in clause (c) whereby, even in cases of contracts having commercial relations, the Lok Ayukta can have jurisdiction WP(C) NO.12339/2016 ..10..
if the complainant alleges harassment or gross delay in meeting contractual obligation.
8. According to the complainant, the amount payable to the Board was not recovered within the period of limitation. If that be so, there is gross delay in meeting contractual obligation on the part of the Board, ie., to effect recovery within time. In this writ petition, we are not really concerned with the correctness or otherwise of the findings of the Lok Ayukta on the question of limitation in recovering the amount by the Board, but the jurisdiction of the Lok Ayukta to investigate into the complaint. However, to consider the question as to whether the action comes within the exception carved out in clause (c) of the 2nd schedule, we have given our consideration to the question of limitation also. From a perusal of the mortgage deed, we find that limitation has to run from the date of last default, default in the payment of two consecutive instalments. The second instalment fell due on 10.04.1992 and the limitation WP(C) NO.12339/2016 ..11..
starts from 11.04.1992. As rightly found by the Lok Ayukta, Article 63 (b) of the Limitation Act applies and the claim got barred by law of limitation on 11.04.2004. Any coercive action like initiation of revenue recovery proceedings to recover a time barred debt amounts to harassment in meeting contractual obligation. Therefore, the exception to clause (c) of the 2nd Schedule to the Lok Ayukta Act will come into play and the Lok Ayukta will get jurisdiction to investigate into Ext.P4 complaint. There is no jurisdictional infirmity or error in Ext.P6 order of the Lok Ayukta.
The writ petition fails and is, dismissed. No costs.
Sd/-
S. MANIKUMAR CHIEF JUSTICE Sd/-
MURALI PURUSHOTHAMAN
JUDGE
spc/
WP(C) NO.12339/2016 ..12..
APPENDIX OF WP(C) 12339/2016
PETITIONER EXHIBITS
TRUE COPY OF THE MORTGAGE DEED
EXT.P1 NO.1091/1991 DATED 23.04.1991 OF THE SUB
REGISTRAR OFFICE ARYANAD
TRUE COPY OF THE DEMAND NOTICE DATED
EXT.P2 31.10.2006 ISSUED TO THE 2ND RESPONDENT
BY THE PETITIONER - BOARD
TRUE COPY OF THE DEMAND NOTICE DATED
25.7.2009 UNDER SECTION 34 OF THE KERALA EXT.P3 REVENUE RECOVERY ACT ISSUED TO THE 2ND RESPONDENT EXT.P4 COPY OF THE COMPLAINT NO.841/2014 BEFORE THE KERALA LOK AYUKTA SUBMITTED BY THE 2ND RESPONDENT EXT.P5 TRUE COPY OF WRITTEN STATEMENT SUBMITTED BY THE PETITIONER BOARD EXT.P6 TRUE COPY OF THE ORDER DATED 5.2.2016 IN C.NO.841/2014 BEFORE THE KERALA LOK AYUKTA