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1989 DIGILAW 436 (KER)

John v. District Collector

1989-10-12

RADHAKRISHNA MENON

body1989
Judgment :- 1. The agreement dated 29-9-1969 executed between the first petitioner and the third respondent, The Kerala Fisheries Corporation Ltd., hereinafter referred to as the Corporation, provides that the first petitioner shall purchase fish from the fishermen who are the clientele of the Corporation and pay the price to the Corporation at the rates fixed in the agreement. During the period from 20-10-1969 to 15-3-1971 certain purchases were made by the first petitioner and several payments in regard to the said purchases were made. This was the state of affairs when on 27-2-1971, the Corporation intimated the first petitioner that it has decided to terminate the contract with effect from 15-3-1971 oh account of default in payments. As per the said notice an amount of Rs.26029.42 was in arrears. The first petitioner on receipt of the notice assured the Corporation that he would pay off the dues without delay. On 25-10-1972 the Corporation through its counsel informed the first petitioner (Ext.Pl) that a sum of Rs.32507.97 p. was due under the agreement after giving credit to the various payments already made and coming to Rs.23579.02. The notice further stated that the said amount with interest thereon at 12% shall be paid within 14 days of the notice failing which legal proceedings for recovery of the amount will be initiated against the first petitioner and he will be held liable for all costs and consequences. 2. The Corporation, it is stated in the counter affidavit, subsequently has obtained a decree against the petitioners for the recovery of a sum of Rs.41,823.70 on 29-3-1974 in enforcement of the agreement. This amount is sought to be recovered by invoking the provisions of the Kerala Revenue Recovery Act, for short the R.R. Act. The recovery, however was resisted by the petitioners on the ground of bar of limitation. 3. The question thus arising for consideration is, Are the proceedings for recovery of the decree amount (by invoking the provisions of the R.R.Act) barred by limitation? 4. The learned counsel for the respondents argues that since the R.R. Act does not prescribe any bar of limitation for the recovery of the dues the proceedings cannot be said to be barred by limitation. There cannot be any dispute about this. 4. The learned counsel for the respondents argues that since the R.R. Act does not prescribe any bar of limitation for the recovery of the dues the proceedings cannot be said to be barred by limitation. There cannot be any dispute about this. That does not mean that the institution has the right to recover amounts due from a person if the same is barred by limitation under The Law of Limitation, the counsel for the petitioners submits. We shall now consider this aspect of the case. It should in this connection be remembered that The R.R.Act only creates a special procedure for obtaining payment of monies; the relevant provisions however, do not give the basis upon which a claim can be agitated. In other words these provisions do not create any new rights. The words 'recovery of amounts due' in S.71 in the context in which they have been used, means 'legally recoverable'. Whether an amount is legally recoverable depends upon the question whether the said amount can be recovered well within the time, the same could be recovered under the general Law of Limitation. If it is found that recovery of any amount is barred by the law of limitation, it is difficult to sustain the plea that the recovery officers can still insist that the said amount was payable/recoverable. I am fortified in this view by a decision of the Privy Council in Hansrajgupta v. Official Liquidators of the Dehradun-Mussorie Electric Tramway Company Ltd. (ALR.1933 P.C. 63) noted with approval by the Supreme Court in New Delhi Municipality v. Kaluram (A.I.R. 1976 S.C.1637). 5. It is in this background we have to consider the question as to whether the proceedings to recover the amounts are barred by limitation. I shall in this connection refer to certain dates which are relevant. The decree was obtained on 29-3-1974. The decree can be executed within 12 years of the date of the decree. (See Art.136 Limitation Act), that is at any time before 29-3-1986. The requisition for initiating revenue recovery proceedings made by the Corporation is dated 13-1-1986. The notice of demand, dated 20-3-1986, both under S.7 and S.34 of The R.R. Act, was served on the petitioners on 5-4-1986. 6. (See Art.136 Limitation Act), that is at any time before 29-3-1986. The requisition for initiating revenue recovery proceedings made by the Corporation is dated 13-1-1986. The notice of demand, dated 20-3-1986, both under S.7 and S.34 of The R.R. Act, was served on the petitioners on 5-4-1986. 6. The learned counsel for the petitioner submits that for the purpose of calculating the period of limitation the date that should be taken into account, is the date of the notice whether it be under S.7 or S.34 of The Revenue Recovery Act. On the other hand the learned Government Pleader argues that the relevant date is 13-1-1986 the date on which the Corporation requested the Collector to initiate proceedings for recovery under The R.R. Act. The Collector accordingly issued the certificate under S.69 of The R.R. Act authorising the second respondent to recover the decretal amount, adopting any one of the modes prescribed under S.S. The learned counsel for the petitioner however contends that until the demand notice contemplated under S.7 or S.34 as the case may be, is served on the defaulter, ie. the first petitioner it cannot be said that proceedings for recovery of the decretal amount have validly been initiated. These competing contentions would bring forth the question, when exactly did the authority concerned initiate the proceedings for recovery of the amounts due from the petitioners. The answer to the question depends upon the construction of the relevant provisions of The R.R. Act. In this connection we have to consider the scope of Ss.S, 7 and 34. S.5 provides four modes of recovery. They are: (a) by attachment and sale of the defaulter's movable property; (b) by attachment and sale of the defaulter's immovable property; (c) by appointing an agent for the management of the defaulter's immovable property; (d) by arrest of the defaulter and his detention in prison. Here the modes of recovery adopted by the second respondent are those provided for under (a) and (b) and accordingly he has served on the petitioners the demand notice envisaged under S.7 and S.34. These sections read: 7. Demand notice: When any movable property is to be attached for arrears of public revenue due on land, the Collector or the authorised officer shall furnish the person employed to make the attachment a demand in writing signed by him. These sections read: 7. Demand notice: When any movable property is to be attached for arrears of public revenue due on land, the Collector or the authorised officer shall furnish the person employed to make the attachment a demand in writing signed by him. The demand shall contain the name of the defaulter, the amount of the arrear of public revenue due on land for which the attachment is to be made, the date on which such arrear fell due and such other particulars as may be prescribed. The person employed to make the attachment shall serve the demand in writing on the defaulter and if he fails to remit the amount in arrear together with the interest thereon and the cost of process immediately, the demand in writing shall be the authority for making the attachment. 34. Demand to be served prior to attachment of land:- (1) Before the Collector or the authorised officer proceeds to attach the immovable property of the defaulter, he shall cause a written demand to be served upon the defaulter specifying the name of the defaulter, the amount of the arrear of public revenue due on land for which the attachment is being made, the date on which such arrear fell due, the interest on the arrear and the amount of the batta due to the persons who serve the demand and such other particulars as may be prescribed, and the time allowed for the payment which shall not be less than seven days from the date of service of the demand. (2) If within the time prescribed under sub-section (1), the defaulter objects to the claim of arrears wholly or in par, the Collector or the authorised officer, as the case may be, shall inquire into the objection and record a decision before proceeding to attach the immovable property of the defaulter". On a dissection of these sections it is clear that, whether the proceedings for recovery of the decree amount are initiated under S.7 or S.34, the authority concerned shall first serve the notice of demand on the defaulter. Failure on the part of the defaulter to respond to the notice and pay off the dues, would result in the passing of the order attaching the property which would later be sold in public auction. Failure on the part of the defaulter to respond to the notice and pay off the dues, would result in the passing of the order attaching the property which would later be sold in public auction. It is relevant in this context to note the well established principle that a sale conducted without service of demand notice or effecting attachment etc. would be void. (Vide Kochappu Asari v. Narayana Pillai,1958 K.L.J.176(DB) and Eravi Pillai v. Malik Mohammed Sahib Hameed (1953 K.L.T. 802 (FB). It therefore follows that the recovery proceedings envisaged under S.5(a) and (b) can be said to be validly initiated only on the actual service of the demand notice on the defaulter. Such recovery proceedings, however, shall be initiated before the expiry of the period prescribed under The Limitation Act. (See A.K. Nanu and others v. State of Kerala and others, 1987(2) K.L.T.921 and the judgment in A.K. Krishnan Kutty Nair v. M. Murugesan and others O.P. 9508/1984-G.) It is all the more so here because, as already noted, the R.R.Act does not contain any provision creating a substantive right making it possible to recover time-barred debt; but it creates only a special procedure for obtaining payment of monies. 7. Here the notice under S.7 and 34 seeking to recover the amounts due under the decree passed on 29-3-1974 was served on the petitioners, according to the petitioners on 5-4-1986 and according to the respondents on 31-3-1986. Proceedings for recovery of the decree amount ought to have been initiated on or before 29-3-1986. However proceedings for recovery were initiated after the expiry of the period of limitation. That means the R.R.proceedings have rightly been challenged as barred by limitation. Exts.P2 and P3 proceedings therefore are quashed. The O.P. is allowed. No costs. Issue photostat copy on usual terms.