P. v. Hussain VS Commissioner of Land Revenue Commissionerate of Land Revenue
2018-11-01
DAMA SESHADRI NAIDU
body2018
DigiLaw.ai
JUDGMENT : Petition P. V. Hussain was or is a partner in an industry – PVS Castings Ltd. that ran up a huge debt of electricity dues. The industry’s repeated forays into the judicial arena for redressal bore no fruit. Then, in June 2005, the Board disconnected the power supply. Later, in November 2006, it dismantled the service connection, too. In August 2014 the Board demanded Hussain and others, the partners, to pay over 38 crores; in July 2015, it revised the amount as over 40 crores. 2. Unable to realise the dues, the Board invoked the Kerala State Revenue Recovery Act (“RR Act”). Then, the State’s revenue machinery swung into action. In March 2017, the revenue authorities issued the Ext.P1 show cause notice to Hussain and other partners. The notice was under Section 65 of the RR Act. In fact, the revenue authorities first proceeded against the partners with assets: the assets were attached, to begin with. But against those partners with no assets, the authorities proceeded for their arrest and detention. Both Hussain and Ashraf, another partner, fall under the latter category. 3. In response to the Ext.P1 show cause notice, Hussain submitted his Ext.P2 explanation. Then, the District Collector heard him and Ashraf, in May 2017. Eventually, he passed an order on 1st February 2018, deciding “to proceed under Section 65 of the KRR Act as the petitioner had failed to prove his case”. Later, Ashraf filed a revision before the Land Revenue Commissioner, but could not succeed. The revision was dismissed in May 2018. In Ashraf’s revision Hussain was a respondent, but he himself filed no revision against the order, dt.01.02.2018. 4. Eventually, in July 2018 the District Collector issued the Ext.P5 warrant of arrest against Hussain. Indeed, the Revenue Department maintains that as Hussain evaded to receive that notice, the Department served the notice of arrest on Hussain’s counsel in this writ petition. 5. In August 2018, Hussain filed the Ext.P3 revision before the Commissioner of Land Revenue. It was not against the order, dt.01.02.2018, but against the Ext.P5, the order of arrest. In fact, Hussain, in this writ petition, maintains that he received no other order than the Ext.P5. So he asserts that the Ext.P5 order of arrest suffers from incurable laches.
5. In August 2018, Hussain filed the Ext.P3 revision before the Commissioner of Land Revenue. It was not against the order, dt.01.02.2018, but against the Ext.P5, the order of arrest. In fact, Hussain, in this writ petition, maintains that he received no other order than the Ext.P5. So he asserts that the Ext.P5 order of arrest suffers from incurable laches. According Hussain’s counsel, the Ext.P5 is only a consequential order; the principal order, dt.01.02.2018—the one under Section 65 of the RR Act—having never been served on Hussain, if ever passed. 6. The Government has filed its counter affidavit through the District Collector. It has faithfully set out the stages of litigation. In paragraph nine of the counter affidavit filed on 19th September 2018, the District Collector did set out elaborately about the hearing under Section 65 of the KRR Act. The hearing was on 19th April 2017, 30th April 2017, and 20th May 2017. The District Collector has concluded that Hussain and Ashraf “failed to proof their case”. 7. In the above backdrop, Smt. Reshmi, the learned Government Pleader, strenuously contends that the District Revenue Administration has followed the procedure to perfection. According to her, the petitioner has no substantial grievance, except his harping on the issue that he had not been served with the order, dt.01.02.2018. Smt. Reshmi also contends that Hussain has had every opportunity, and in the revision Ashraf filed, he was the respondent. So he has fully known about the order the District Collector passed under Section 65 of the RR Act. She stresses that Hussain has never bothered to assail the order until he faced the threat of arrest and confinement in the civil prison. According to her, Hussain did all he could to evade the notice of arrest; so the authorities were constrained to serve the notice on him through his counsel in this writ petition. 8. To conclude, Smt. Reshmi has submitted that Hussain’s approach lacks bona fides; he should not be allowed to exploit the system in the name of procedural propriety. 9. Heard Sri N.Anand, the learned counsel for the petitioner and Smt. Reshmi, the learned Government Pleader for the respondents. Discussion: 10. Indeed, Hussain and other partners of an establishment; that establishment ran up a huge bill of electricity. The sum is staggering; it runs into crores. If we confine ourselves to discussing Hussain’s case, he apparently has no assets.
9. Heard Sri N.Anand, the learned counsel for the petitioner and Smt. Reshmi, the learned Government Pleader for the respondents. Discussion: 10. Indeed, Hussain and other partners of an establishment; that establishment ran up a huge bill of electricity. The sum is staggering; it runs into crores. If we confine ourselves to discussing Hussain’s case, he apparently has no assets. So under the RR Act, he faced the prospects of detention in a civil prison. Thus, the case appears to have a cut-and-dried answer or outcome, but that is not to be. 11. All along, the Constitutional Courts have endeavoured to ensure that no person loses his or her fundamental rights without due process. Arrest and confinement, even in a civil prison, is a drastic measure and needs at most care and scrutiny on the official's part before they take such a coercive step. Granted, the firm is the debtor, and all its partners must answer the claim. It is a debt to the State's Exchequer. As the amount is over 40 crore rupees, the Court does appreciate the State's efforts, including the revenue administration’s, to recover those dues— by adopting all possible legal means. 12. At the same time, this Court cannot be oblivious to the fact that the ends cannot justify the means. The Government's zeal to recover a huge debt cannot put paid to the procedural safeguards a citizen—say, the debtor—enjoys. 13. Here, the issue concerns whether Hussain had been served with an order under Section 65 of the RR Act, after the Collector heard him and Ashraf in April, May 2017. The record does reveal, and none denies, that Ashraf was served with a copy of the order, dt.01.02.2018. And he unsuccessfully challenged that in a revision. In the Ext.P5 notice of arrest served on Hussain, there is a specific mention about the Collector's order, dt.01.02.2018. In fact, the Ext.P5 notice reads as if the order, dt.01.02.2018, had been passed against Hussain, too. On that count, there arose some confusion. 14. After the Court's pointing out about the confusion—whether the Section 65 order has been served on Hussain—the Government Pleader placed on record that very notice. But, as it turned out, that was addressed to only Ashraf. In fact, the order confines itself to Ashraf’s defence and, of course, rejects that defence. It has no reference to Hussain.
14. After the Court's pointing out about the confusion—whether the Section 65 order has been served on Hussain—the Government Pleader placed on record that very notice. But, as it turned out, that was addressed to only Ashraf. In fact, the order confines itself to Ashraf’s defence and, of course, rejects that defence. It has no reference to Hussain. In this writ petition, the District Collector has filed affidavits twice. In the latter affidavit, he has pleaded there is only one order under Section 65 of the Act and that was passed against Ashraf. 15. Under these circumstances, I cannot but conclude that after a statutory hearing under Section 65, the District Collector has passed no order against Hussain. Had there been an order passed—and served, too—Hussain would have had an opportunity of filing a revision. It may have met with a failure as it did in Ashraf’s case, but that is beside the point. 16. If a person's personal liberty is threatened, that person's antecedents, even his tainted past, is no justifying factor for an authority to give a short shrift to the procedural safeguards. Indeed, an act infringing a citizen’s fundamental right demands utmost adherence to the procedural safeguards. It brooks no laxity. Here, technically speaking, Hussain may have been, I reckon, insisting on an empty formality—the formality of hearing and a speaking order. 17. The Courts, no doubt, have an armoury of exceptions to the principles of natural justice; useless formality or absence of prejudice is one recent arrow added to that armoury. That said, I must also stress that an act depriving an individual’s liberty or freedom is a drastic measure deserving no procedural dilution. Even an apparent lack of prejudice cannot excuse an authority’s failure to follow the due procedure. 18. In other words, if a procedural safeguard aims to protect a person's fundamental rights or to serve the public interest, that safeguard cannot be dispensed with, even if its infraction has caused no prejudice. Indeed, Section 65 under which Hussain was heard lays down an elaborate mechanism and it reads: 65.
18. In other words, if a procedural safeguard aims to protect a person's fundamental rights or to serve the public interest, that safeguard cannot be dispensed with, even if its infraction has caused no prejudice. Indeed, Section 65 under which Hussain was heard lays down an elaborate mechanism and it reads: 65. Arrest in case of wilful and fraudulent non-payment of arrears-(1)When arrears of public revenue due on land, with interest thereon and cost of process, are not paid after the service of the written demand under Section 34 and the District Collector is satisfied that the defaulter or his surety is wilfully withholding payment of the arrears, or has dishonestly transferred any part of his property, or has been guilty of fraudulent conduct in order to evade payment, or that defaulter has the means to pay the arrears or some substantial part thereof and refuses or neglects to pay the same, or the proceeds of the sale of the property of the defaulter and his surety are not sufficient to liquidate the arrears with interest thereon and cost of process, he may issue a warrant for the arrest of the defaulter. No such warrant shall be issued before serving a notice upon the defaulter calling upon him to appear before the District Collector at the time and place specified in the notice and to show cause why he should not be committed to the civil prison. The District Collector shall on the appearance of the defaulter, hear him and consider such other evidence as may be produced by him. Upon the conclusion of the enquiry, the District Collector may, if he is convinced that such course is necessary, make an order for the detention of the defaulter in the civil prison and shall, in that event, cause him to be arrested: Provided that, in order to give the defaulter an opportunity to clear the arrears, the District Collector may, before making the order of detention, grant him time not exceeding thirty days on his furnishing security to the satisfaction of the District Collector for his appearance at the expiration of the specified period.
If the arrears are not paid by that date, the District Collector shall pass orders for the arrest and detention of the defaulter in the civil prison of his district or, if there is no suitable accommodation in that civil prison, in the civil prison of any neighbouring district. (2) Every person detained in the civil prison under sub-section (1) may be so detained- (a) when the amount of arrears due from the defaulter does not exceed five hundred rupees, for a period not exceeding three months; (b) in all other cases, for a period not exceeding two years. Such imprisonment shall not extinguish the liability to pay the amount due to the Government by the defaulter or his surety. (3) The defaulter shall be released from detention- (i) on the amount mentioned in the warrant for his detention being paid to the officer in charge of the civil prison or to the District Collector or any other officer specially authorised by the District Collector in this behalf; (ii) on the ground of the defaulter's serious illness or on the ground of his suffering from any infectious or contagious disease or for any other reason recorded by the District Collector in writing. A defaulter released under clause (ii) may be re-arrested but the period of his detention in the civil prison shall not in the aggregate exceed the period allowed by sub-section (2). (4) The District Collector shall not order the arrest and detention in the civil prison of- (a) a woman; or (b) any person who, in his opinion, is a minor or of unsound mind. (5) (i) When a defaulter is arrested or detained in the civil prison, the sum payable for the subsistence of the defaulter from the time of arrest until he is released shall in the first instance be borne by the Government. (ii) Such sum shall be calculated on the scale fixed by the Government for the subsistence of a judgment-debtor arrested in execution of a decree of a Civil Court. (iii) Sums payable under this sub-section shall be deemed to be cost of proceedings: Provided that the defaulter shall not be detained in the civil prison or arrested on account of any sum so payable. 19. A person may have owed a debt to the public revenue.
(iii) Sums payable under this sub-section shall be deemed to be cost of proceedings: Provided that the defaulter shall not be detained in the civil prison or arrested on account of any sum so payable. 19. A person may have owed a debt to the public revenue. Once the RR Act invoked, the District Collector demands under Section 34 of the Act for repayment. If that demand yields no result, he can act further. First, he must satisfy himself that the defaulter or his surety (a) is wilfully withholding payment of the arrears, or (b) has dishonestly transferred any part of his property, or (c) has fraudulently evaded payment, or (d) refuses or neglects to pay despite means, or (e) does not pay sufficiently to to liquidate the arrears, then the District Collector may issue a warrant for the defaulter’s arrest. 20. Section 83 of the Act confers powers of revision on the Board of Revenue and the Government. The revision extends against any proceeding the Collector has taken under this Act. 21. Indeed, the District Collector will not issue such warrant without serving a notice upon the defaulter requiring him to appear before him. That notice requires the defaulter to show cause why he should not be committed to the civil prison. 22. Once the defaulter responds to the show-cause notice, the District Collector will consider the evidence the defaulter produces and, then, may order for the defaulter’s detention in the civil prison. After concluding thus, the District Collector will ensure the defaulter’s arrest. Thus, the Collector must, first, pass an order concluding that the defaulter needs to be detained in the civil prison. Then, to execute that order, he passes an order of arrest. Here, the Ext.P5 is the second order. The first order, as passed against Ashraf, is found missing against Hussain—not passed at all. That is the vital link in the chain of procedural safeguards gone missing. 23. The proviso to Section 65 provides a window of an extended opportunity to the defaulter. To allow the defaulter to clear the arrears, the District Collector may grant him thirty days, on his furnishing security for his appearance, to clear the debt. Even if this extended period yields no result, the District Collector will pass orders for the defaulter’s arrest and detention in the civil prison.
To allow the defaulter to clear the arrears, the District Collector may grant him thirty days, on his furnishing security for his appearance, to clear the debt. Even if this extended period yields no result, the District Collector will pass orders for the defaulter’s arrest and detention in the civil prison. The proviso plainly reveals, though couched in permissive language, the legislature’s efforts to provide every possible opportunity to a defaulter to save himself from incarceration—not to lose his liberty. 24. Admittedly, the District Collector heard both Hussain and Ashraf. But, perhaps by oversight, he passed an order only against Ashraf. I may, at the cost of repetition, observe that Hussain being a respondent in Ashraf's revision does not improve the situation. True, this Court will not appreciate the devious or dubious methods Hussain adopted in evading the notice and compelling the authorities to have it served on him through his counsel in this writ petition. But that questionable conduct on Hussain’s part cannot be a cardinal sin depriving him of the procedural safeguards: fair hearing and opportunity to vindicate oneself at higher echelons, if necessary. 25. I, therefore, set aside the Ext.P5 order and other consequential steps the authorities have taken so far, if any, and remand the matter to the District Collector. Thus the matter remanded, the District Collector will once again hear Hussain and pass orders, as in Ashraf's case. 26. Given Hussain’s elusive attitude, I reckon it will serve the interest of justice, if the Court fixes the date and asks him to appear before the District Collector. This arraignment obviates the Collector's issuing a notice and ensuring its service on Hussain. 27. Both the Government Pleader and Hussain’s counsel agree that the Collector will hear Hussain on 12th November 2018. For whatever reason, if the Collector could not hear the matter on that day, he will then inform about the next date of hearing to the petitioner, on his personally appearing. If Hussain defaults in this process, he will not have the advantage of this judgment; then the authorities can proceed from the stage where the case stood before this judgment. So I dispose of the writ petition.