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2016 DIGILAW 627 (KER)

K. C. T. Steel Pvt. Ltd. v. State of Kerala

2016-07-19

ANTONY DOMINIC, DAMA SESHADRI NAIDU

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JUDGMENT : Dama Seshadri Naidu, J. Facts: The appellant, a private limited company engaged in the production of steel, faced financial crises and has its manufacturing unit closed. In the process, the company ran into debts to the banks and other agencies; it has huge arrears of unpaid sales tax, too. 2. As one creditor bank took possession of the appellant's immovable property, the respondent department attached the company's movables-the machinery. In 2010, the third respondent, as a follow up, notified under the Revenue Recovery Act the sale of movables and machinery. Then, the third respondent valued the attached properties at Rs. 85,16,000/-. But the sale could not take place because of the appellant's objections on the valuation of the property. As a matter of further developments, the very assessment by the department fell for consideration before this Court, which directed the department to reassess the tax due. In the parallel debt recovery proceedings, the creditor bank seems to have valued the appellant's movable property including machinery at Rs. 1,09,12,500/-. 3. In view of the earlier aborted sale, the third respondent on 24.05.2016 freshly notified through Ext.P4 the sale of the attached movables and machinery. This time he fixed the value of the attached properties at Rs. 36,16,990/-, much less than the earlier valuation at Rs. 85,16,000/-. It is pertinent that the sales tax arrears to be realised stand at Rs. 1,65,41,651/-. 4. The appellant, once again, approached this Court complaining that the valuation shown by the authorities for the attached machinery is too low. It filed W.P.(C) No.20899 of 2016. This Court, per a learned single Judge, dismissed the Writ Petition through judgment dated 21.6.2016 holding that the petitioner is free to raise all objections before the authority concerned regarding what is said to be the under valuation. Further aggrieved, the appellant has taken this intra-court appeal before us. Contentions: 5. The learned Senior Counsel for the appellant has strenuously contended that a creditor bank in its parallel proceedings fixed the value of movables and machinery at more than one crore rupees According to him, the very third respondent earlier fixed the value of the property at about Rs. 85 lakh rupees, but has now brought it down drastically to Rs. 36 lakh rupees-in a matter of 5 years. In sum and substance, his singular contention is that the movable property has been grossly undervalued. 85 lakh rupees, but has now brought it down drastically to Rs. 36 lakh rupees-in a matter of 5 years. In sum and substance, his singular contention is that the movable property has been grossly undervalued. Therefore, the third respondent shall not go ahead with the auction unless the property is reappraised by a competent evaluator. 6. The learned Senior Counsel has also submitted that the appellant will have the property valued or appraised at its own expense by a Government panel-engineer. The learned Government Pleader, on the other hand, has submitted that the appellant is free to raise its every conceivable objection before the authority concerned. According to him the Writ Petition is not maintainable. 7. Heard the learned Senior Counsel for the appellant and the learned Government Pleader for the respondents, apart from perusing the record. Issue: 8. The issue is whether the writ remedy is the proper primary redressal mechanism available for the appellant. Discussion: 9. There is no denying the fact that the appellant might have a grievance that its movable properties sought to be sold by the third respondent under the Revenue Recovery Act were grossly undervalued. It seeks a just remedy. That said, we reckon a perusal of the record does not reveal that the appellant has complained to any of the authorities who have fixed the value of the property or those who have brought the property for sale. Yet it wants a certiorari or a mandamus, as the case may be. To be explicit, we may note that the appellant seeks these reliefs: i. A writ of certiorari calling for the records relating to Ext.P4 and quash the same. ii. A writ of mandamus or any other order or direction in the nature thereof directing respondent No.3 to obtain proper valuation of the movables and machineries attached from the petitioner company before conducting the sale. iii. Any other writ, order or direction which this Hon'ble Court deems fit and necessary to grant in the case. Certiorari: 10. Certiorari, a Latin expression, means 'to certify' or 'to inform'. iii. Any other writ, order or direction which this Hon'ble Court deems fit and necessary to grant in the case. Certiorari: 10. Certiorari, a Latin expression, means 'to certify' or 'to inform'. In Halsbury's Laws of England, Halsbury Laws of England, (4th Edn.), Vol.11, Pg.802) it is observed that the order of certiorari is an order issuing out of the High Court and directed to the judge or officer of an inferior tribunal to bring proceedings in a cause or matter pending before the tribunal into the High Court to be dealt with to ensure that the applicant for the order may have the more sure and speedier justice. It is a method of bringing the record of a subordinate court, or an inferior tribunal, or other quasi-judicial authority, as commented by V.G. Ramachandran (Law of Writs (6th Edn.), EBC.) before a superior court to correct errors of jurisdiction or of law apparent on record and to decide whether those authorities had exceeded their jurisdiction or the errors of law committed by them had resulted in miscarriage of justice. In Corpus Juris Secundum, (Vol.14, pp.121-122) certiorari is defined to be a writ from a superior court to an inferior court or tribunal commanding the latter to send up the record of a particular case. 11. Summarising the English and the Indian decisions holding the field till then, a Seven-Judge Bench Hari Vishnu Kamath v. Ahmad Ishaque ( AIR 1955 SC 233 ) has delineated the bounds of certiorari. Subsequently, the Courts have articulated the jurisdictional contours of this particular prerogative writ substantially on the same line. Thus, from a series of judicial pronouncements, we can deduce the juridical purposes for which certiorari can be invoked: where the subordinate tribunals or bodies or officers (a) act wholly without jurisdiction, or (b) in excess of it, or (c) in violation of the principles of natural justice, or (d) refuse to exercise a jurisdiction vested in them, or (e) issue orders containing an error apparent on the face of the record. 12. Indeed, a Constitutional Court, while exercising its extraordinary jurisdiction of certiorari, acts as a supervisory body but not as an appellate one. 12. Indeed, a Constitutional Court, while exercising its extraordinary jurisdiction of certiorari, acts as a supervisory body but not as an appellate one. Further, it is well established that an erroneous adjudication may also be amenable to the command of certiorari but the resulting error must be one apparent on the face of the record: to be illustrative, we may say when the decision is clearly in ignorance of or in-disregard for law. Pithily put, a patent error which results in perversity or miscarriage of justice too, is amenable to judicial review. Mandamus: 13. Black's Law Dictionary (9th Edn. Ver.2.1.2) describes mandamus as a writ issued by a court to compel performance of a particular act by a lower court or a governmental officer, or body, usually to correct a prior action or failure to act. The celebrated law lexicon further defines two species of mandamus: (a) Alternative mandamus; (b) Peremptory mandamus. The former is a writ issued upon the first application for relief, commanding the defendant either to perform the act demanded or to appear before the court at a specified time to show cause for not performing it. The latter is an absolute and unqualified command to the defendant to do the act in question. It is issued when the defendant/respondent defaults on, or fails to show sufficient cause in answer to, an alternative mandamus. 14. A mandamus is available, says V.G. Ramachandran, (Law of Writs, (6th Edn.), EBC.) against any public authority including administrative and local bodies. And it would lie against any person who is under a duty imposed by a statute or by common law to do a particular act. To obtain a writ or order like mandamus, the applicant must satisfy that he has a legal right to the performance of a legal duty by the party against whom mandamus is sought and such right must subsist on the date of the petition. 15. The writ cannot be granted unless it is established that there is an existing legal right of the applicant, or an existing duty of the Respondent. Thus, the writ does not lie to create or to establish a legal right, but to enforce one already established. To maintain the writ of mandamus, the first and foremost requirement is that the petition must not be frivolous, and must be filed in good faith. Thus, the writ does not lie to create or to establish a legal right, but to enforce one already established. To maintain the writ of mandamus, the first and foremost requirement is that the petition must not be frivolous, and must be filed in good faith. Additionally, the applicant must make a demand which is clear, plain, and unambiguous. It must be made to an officer having the requisite authority to perform the act demanded. Furthermore, the authority against whom mandamus is issued, should have rejected the demand earlier. Therefore, a demand and its subsequent refusal, either by words, or by conduct, are necessary to satisfy the court that the opposite party is determined to ignore the demand of the applicant regarding the enforcement of his legal right (See Rajasthan State Industrial Development & Investment Corporation v. Diamond & Gem Development Corporation Ltd. (2013) 5 SCC 470 . at page 476. 16. Indeed, Diamond & Gem Development Corporation, carves out an exception to the proposition that demand and refusal are sine qua non: A demand, however, may not be necessary when the same is manifest from the facts; that is, when it is an empty formality, or when it is obvious that the opposite party would not consider the demand. 17. In Halsbury's Laws of England ((3rd Edn.), Vol. 13, p. 106): it has been tellingly observed that as a general rule, the order will not be granted unless the party complained of has known what it was he was required to do, so that he had the means of considering whether or not he should comply; it must be shown by evidence that there was a distinct demand of that which the party seeking the mandamus desires to enforce, and that demand was met by a refusal. 18. In Mansukhlal Vithaldas Chauhan v. State of Gujarat (1997) 7 SCC 622 the Hon'ble Supreme Court has held that it is primarily the responsibility and duty of a statutory authority to take a decision and it should be enabled to exercise its discretion independently. If the authority does not exercise its mind independently, the decision taken by the statutory authority can be quashed and a direction given to take an independent decision. Can the Court Issue a Positive Mandamus? 19. If the authority does not exercise its mind independently, the decision taken by the statutory authority can be quashed and a direction given to take an independent decision. Can the Court Issue a Positive Mandamus? 19. Quoting Mansukhlal with approval, the Apex Court in D.N. Jeevaraj v. State of Karnataka (2016) 2 SCC 653 , at page 660, emphasised another facet of mandamus: To take over the decision making power. If a court is of the opinion that a statutory authority cannot take an independent or impartial decision because of some external or internal pressure, it must give its reasons for coming to that conclusion. The reasons given by the court for disabling the statutory authority from taking a decision can always be tested and if the reasons are found to be inadequate, the decision of the court to by-pass the statutory authority can always be set aside. 20. Jeevaraj holds that if the reasons are cogent, then in an exceptional case, the court may take a decision without leaving it to the statutory authority to do so. Their Lordships have, however, cautioned that if the court took over the decision taking power of the statutory authority, it must only be in exceptional circumstances and not as a routine. Jeevaraj, in fact, clarifies that the Court has to give reasons why it took over the authority's decision-making function. Absent reasons, the positive mandamus is susceptible to a further judicial review. Application of Law: 21. On facts, we may observe that Ext.P4 cannot be treated as a judicial or quasi-judicial order amenable to any certiorari jurisdiction. The second relief is that there should be a mandamus to the third respondent to obtain a proper valuation of movables and machinery attached. It is trite to observe that for a mandamus to be issued, the appellant ought to have made the necessary foundation: There should have been a proper demand by the appellant and an improper refusal by the authority concerned. Neither is available here. 22. In the facts and circumstances, we see no illegality in the judgment impugned requiring interference. As a result, we dismiss the Writ Appeal. No order on costs.