V. P. Kunhammed v. State of Kerala — 1999 DIGILAW 405 (KER)

JUDGMENT S. Sankarasubban, J. 1. In this Original Petition, Petitioner challenges Ext.P5 notice issued under the Revenue Recovery Act and also prays for a declaration that no amount is due by him by way of compensation. 2. The petitioner was awarded with a contract for providing water supply scheme to tribunal colonies at Puzhappathoor and Illiyambam in Wynad District as per work orders dated 18.8.1991 and 22.2.1981 by the third respondent, viz., the Executive Engineer, Kerala Water Authority, Sulthan Batherry, Wynad District. On completion of 90% of the said work, the petitioner had to leave India on getting an employment in Soudi Arabia in the year 1983. The work was thereupon entrusted with one Moosa as his agent with the concurrence of the third respondent. According to the petitioner, he returned to India in 1991 when he received Ext. P1 notice, it is stated that the aforesaid Moosa had not completed the work and the work was executed through some other contractor and the petitioner was liable to compensate the loss occurred to the Department. The third respondent demanded a sum of Rs.64,667/- by way of damages. The petitioner sent Ext.P2 reply. The petitioner disputed his liability to pay any amount by way of compensation. The third respondent again issued Ext.P3 demanding the amount and the petitioner sent Ext.P4 reply. Thereafter, the petitioner received Ext. P5 revenue recovery notice. It is challenging the above notice that this Original Petition is filed. 3. According to the petitioner, no amount can be recovered from him by way of damages, unless an independent authority founds that loss was occasioned to the Department. Counsel for the petitioner relied on the decision of the Supreme Court in State of Karnataka v. Rameshwara Rice Mills - A.I.R. 1987 S.C. 1359 - and contended that the third respondent cannot unilaterly assess the damages. He also raised the contention that Ext.P5 notice itself was belated. 4. Counter affidavits have been filed on behalf of respondents 1 and 3. It is stated in the counter affidavits that the Executive Engineer gave extension of time upto 15.2.1984 at the request of Moosa. He has also been informed that no further extension would be given. However, he had not come forward to start or to complete the work. It is further stated that as per the agreement, the Department is entitled to recover the loss sustained by it from the contractor. He has also been informed that no further extension would be given. However, he had not come forward to start or to complete the work. It is further stated that as per the agreement, the Department is entitled to recover the loss sustained by it from the contractor. 5. I heard counsel for the petitioner, counsel for the Water Authority and the Government Pleader. It seems that the agreement between the petitioner and the third respondent was executed on 11.3.1981. The show cause notice was issued regarding the termination of the contract on 1.7.1985 and the contract was terminated on 12.9.1985. In Ext. P3, it is stated that the authority has suffered a loss of Rs. 29,964/-. It is further stated that a total amount of Rs. 70,819/-which includes an amount of Rs.31,427/- towards the value of certain movables has to be remitted by the petitioner. Under Ext.P5, the amount claimed is Rs. 1,35,485/-. 6. From the above, it is clear that the petitioner has denied that the breach of contract was committed by him or Moosa. He is also disputed the value of the materials and also contended that no claim is sustainable against him for the value of materials. It is now clear from the decision of the Supreme Court in State of Karnataka v. Rameshwara Rice Hills - A.I.R. 1987 S.C. 1359 - that the powers of the State Government under an agreement entered into by it with a private person providing for assessment of damage for breach of conditions of the agreement and recovery of the damages is confined only to those cases where the breach of conditions is admitted or it is not disputed. Here, the breach is not admitted. Unless the claim is established through a court of law, no amount can be recovered. In this case, admittedly, there has been no finding by any court that the petitioner committed breach of contract. The contention regarding limitation under the Revenue Recovery Act is also tenable. The Supreme Court in the decision reported in State of Kerala v. V.R. Kalliyanikutty - 1999 (2) K.L.T. 146 - held as follows: "Therefore, all claims which are legally recoverable and are not time barred on that date can be recovered under the Kerala Revenue Recovery Act". Here, admittedly, the contract was revoked by the third respondent on 12.8.1985 and Ext. Here, admittedly, the contract was revoked by the third respondent on 12.8.1985 and Ext. P5 notice is dated 8.8.1996, nearly 11 years afterwords. Thus, going by two grounds that the compensation has not been fixed by law and on the ground of limitation, the respondents cannot recover the amount. 7. In the above view of the matter, I quash Ext.P5 and hold that the State cannot recover the amount mentioned in Ext.P5 against the petitioner. Counsel for the petitioner then submitted that as per the interim order in C.M.P.No.11050/ 96, an order was passed stating that the proceedings under Ext. P5 will stand stayed on deposit of Rs.25,000/-. Counsel for the petitioner submits that in pursuance of the order, the amount was deposited. Since I have held that the entire recovery proceedings are irregular and against the provisions of the Revenue Recovery Act, I direct the respondents to return the amount of Rs. 25,000/-received by them as per the order in C.M.P.No. 11050/96. Original Petition is allowed.