Kerala High Court

Joy Joseph vs M.V.Paul on 27 July, 2021

        IN THE HIGH COURT OF KERALA AT ERNAKULAM
                             PRESENT
          THE HONOURABLE MRS. JUSTICE MARY JOSEPH
   TUESDAY, THE 27TH DAY OF JULY 2021 / 5TH SRAVANA, 1943
                       RFA NO. 335 OF 2007
AGAINST THE JUDGMENT AND DECREE IN OS 199/1998 OF PRINCIPAL
             SUB COURT,NORTH PARAVUR, ERNAKULAM


APPELLANT/PLAINTIFF:

         JOY JOSEPH,
         AGED 45, S/O.JOSEPH,
         THULUSSERIL, MUTTUCHIRA P.O., ERAVIMANGALAM KARA,
         MANJOOR VILLAGE,, KOTTAYAM DISTRICT.
         BY ADVS.
         SRI.K.V.JAYACHANDRAN
         SRI.RAJU V.MATHEW


RESPONDENTS/DEFENDANTS:

    1    M.V.PAUL, AGED 34,
         S/O.M.P.VINCENT, MUZHITHOTTIL HOUSE,
         KUTTIKKATTUKARA, ELOOR.
    2    K.J.JOSEPH AGED ABOUT 47, BUSINESS
         S/O.JOSEPH, KUNNESSERI HOUSE, THIRUVAMPADY P.O.,
         NEEZHOOR VILLAGE, KOTTAYAM DISTRICT.
    3    THE GENERAL MANAGER
         DISTRICT INDUSTRIES CENTRE, ERNAKULAM.
    4    K.R.PRADEEP, 'ANAND', CIVIL LANE ROAD
         KOCHI-24.
    5    STATE OF KERALA REP. BY DISTRICT
         COLLECTOR, ERNAKULAM.
    6    DR.K.A.SIVADASAN (DIED) S/O.AYYAPPANKUTTY
         KIZHAKKECHERIYIL HOUSE, MAMALA P.O., THIRUVANIYOOR
         VILLAGE, KUNNATHUNADU TALUK.
 ADDL R7 MRS.SUBHASHINI,
         WIFE OF DR.K.A.SIVADASAN, KIZHAKKE CHARUVIL HOUSE,
         MAMALA P.O., THIRUVANIYOOR, KUNNATHUNADU,
         ERNAKULAM,KOCHI-682 305,MOB.8086798533.
 R.F.A. No. 335 of 2007
                                       -:2:-

  ADDL R8 MR.K.B.SUNIL KUMAR,
          SON OF DR.K.A.SIVADASAN, KIZHAKKE CHARUVIL HOUSE,
          MAMALA P.O., THIRUVANIYOOR, KUNNATHUNADU,
          ERNAKULAM,KOCHI-682 305
  ADDL R9 DR.SOBHANA K.S.,
          DAUGHTER OF DR.K.A.SIVADASAN, RAMANAND, PAREKKATTU
          TEMPLE ROAD (276) CHEMBUMUKKU, THRIKKAKKARA P.O.,
          ERNAKULAM (DT), KOCHI-682 021.
 ADDL R10 DR.JIJI K.S.,
          DAUGHTER OF DR.K.A.SIVADASAN,W/O.MR.SAJEEV DEV,
          MANGALATH HOUSE, NEAR VYRELIL GAS AGENCY, HILL
          PALACE ROAD, (CHATHARI CURVE) NEAR RAILWAY STATION,
          KARINGACHIRA, THRIPPUNITHURA, ERNAKULAM, KERALA
          PIN-682 301.

              LRS OF THE DECEASED 6TH RESPONDENT ARE IMPLEADED AS
              ADDL.RESPONDENTS 7 TO 10 VIDE ORDER DATED
              09.10.2020 IN IA.4/2018.(IA.NO.1213/2018)
              R4 BY ADVS.
               SRI.NAGARAJ NARAYANAN
               SRI.SAIJO HASSAN
               SRI.BENOJ C AUGUSTIN
               SRI.U.M.HASSAN
               SMT.P.PARVATHY
               SMT.SURYA P SHAJI
               SMT.AATHIRA SUNNY
               SHRI.MANAS P HAMEED
               SHRI.GAUTHAM MOHAN H.

              R7 TO R10 BY ADV.SRI.RAFEEK. V.K.
              R3 & R5 BY GP.SRI. M.V. ANADAN


      THIS REGULAR FIRST APPEAL HAVING COME UP FOR ADMISSION
ON    17.02.2021,        THE   COURT    ON     27.07.2021   DELIVERED   THE
FOLLOWING:
 R.F.A. No. 335 of 2007
                                      -:3:-




                              MARY JOSEPH, J.
                    ------------------------
                           R.F.A. No. 335 of 2007
                    ------------------------
                     Dated this the 27th day of July, 2021


                                JUDGMENT

O.S No.199/98 was decreed in part with costs by Principal

Sub Court, North Paravur (for short 'the court below') whereby

the plaintiff was allowed to recover Rs.3,97,000/- from the 1st

defendant with future interest at the rate of 6% per annum

from the date of the suit till realisation. Declaration and

specific performance of contract were also sought as reliefs but

were declined by the court below and the aggrieved plaintiff

has assailed the judgment and decree in the appeal on hand.

Parties are referred to hereinafter as the plaintiff and

defendants in tune with their status in the Suit before the court

below.

2. As revealed from the averments of the plaintiff in

the plaint filed to institute the original suit, an agreement for

sale of plaint schedule property and machineries was executed

among the plaintiff and the 2 nd defendant on 29.09.2005 for a R.F.A. No. 335 of 2007

total sale consideration of Rs.8,00,000/- out of which

Rs.32,319/- was agreed to be paid to the 3 rd defendant towards

the value of the land and Rs.1,00,000/- to the 1st defendant for

clearing off the dues to the K.F.C. The plaintiff paid

Rs.32,319/- to the 3rd defendant on 15.12.1995 and also

cleared off the dues to the KFC. Thus he performed his part as

per the terms of the agreement for sale, but, the 1 st

defendant failed to perform his part as per the agreement. He

alongwith one Mr.Ajaya Kumaran removed the machineries

from the plaint schedule properties and therefore a complaint

was lodged by the plaintiff at the nearest Police Station. A

lawyer notice was also issued by the plaintiff demanding return

of Rs.3,97,000/- paid by him. Notice was not received by the

1st defendant. Third parties trespassed into the property on

13.05.1998 and the 1st defendant also tried to sell it to

strangers. Therefore, the plaintiff was constrained to file the

suit.

3. Defendants 1 and 2 failed to appear in the case and

were declared ex parte.

4. Defendants 3, 4 and 6 filed written statement.

Based on the contention raised by the 3rd defendant, State was R.F.A. No. 335 of 2007

impleaded as the 5th defendant. According to him the suit

property was allotted to the 1st defendant on hire purchase

basis for manufacturing and selling wooden materials and

furniture. The property was not utilised for the purpose and

therefore, the 1st defendant was issued with a show cause

notice. For the reasons, despite remittance of land value by the

1st defendant, the property was not assigned in his favour.

5. As per Rule 9 of the Kerala Allotment of Government

Land in Development Areas on Hire Purchase for Industrial

Purpose Rules, 1969 (for short 'Rules, 1969') for alienating or

encumbering the Government lands, prior permission of the 3 rd

defendant is mandatory. Permission was not granted by the 3 rd

defendant and therefore, Ext.A1 agreement is null and void.

6. In view of the restriction imposed by Rule 9, the

land allotted to an industrialist shall not be alienated or

encumbered by him in any manner without prior sanction in

writing obtained from the Director of Industries and

Commerce.

7. 1st defendant did not obtain sanction from the 3rd

defendant and therefore the latter is not bound by Ext.A1

agreement for sale executed by him in favour of the plaintiff. R.F.A. No. 335 of 2007

Land has been resumed by the 3 rd defendant from the 1st

defendant for non-utilisation of the same for the purpose for

which it was allotted in his favour and was assigned in favour

of the 4th and 6th defendants who has applied for it in their

capacity as the Managing Partner and partner of Ramand

Industries, Edayar. The 4th and 6th defendants have also

remitted the cost of the land with interest at the rate of 6.5%.

He has also remitted all further dues to the Government

without default. The 4th defendant was not aware of the sale

of the land proposed by the 1st defendant in favour of the

plaintiff. In the context the original suit is sought to be

dismissed.

8. The court below has framed issues based on the

contentions raised by the parties as follows:

"1. Whether the plaintiff is entitled to get declaration as prayed for?.

2. Whether the plaintiff is entitled to get specific performance as prayed for?.

3. Whether the plaintiff is entitled to recover the amount as prayed for?

4. Reliefs and cost."

9. Before the court below, plaintiff tendered his

version as PW1 and marked Exts.A1 to A21. 4th defendant R.F.A. No. 335 of 2007

deposed as DW1 and Exts.B1 and B2 were marked by him

and Ext.X1 series by the 3rd defendant.

10. The court below on a scrutiny of the evidence and

the legal provisions applicable to the context on hand, held

that plaintiff and the 1st and 2nd defendants are disentitled to

execute Ext.A1 agreement proposing to sell the Government

land allotted on hire purchase basis for industrial purpose,

under Rule 9 of Rules, 1969 and it having been violated,

Ext.A1 is void. The court below also found that a document

to establish that the 1st defendant has applied for Patta from

the 3rd defendant for the land obtained in allotment in his

favour. The court has observed that an application under Rule

5 of the Rules of Assignment of Government Land for

Industrial Purpose has to be made by the 1st defendant for

issuance of Patta in his favour and materials are not

forthcoming in evidence to show that application has been

preferred. In that context, the court below has found that the

plaintiff is not entitled to get decrees for declaration of title to

the property and specific performance of Ext.A1. Recovery of

Rs.3,97,000/- with future interest at the rate of 6% per R.F.A. No. 335 of 2007

annum from the date of the suit till realisation from the 1 st

defendant alone was granted. Therefore, the suit was allowed

in part and a decree was also drawn to that effect.

11. Seeking to obtain the declined reliefs, the plaintiff is

now before this Court with the specific allegation that the court

below is totally erred and unjustified in doing so.

12. Though the impugned judgment directs the return

of Rs.3,97,000/- with interest from the 1 st defendant, the

same has not been assailed by the latter. It is worthy to note

that the 1st defendant did not care to enter appearance in the

suit either personally or through a counsel engaged by him.

Therefore, the court below declared him ex parte. Accordingly,

the pleading of the plaintiff stands uncontroverted.

13. Admittedly of the 3rd defendant plaint schedule

property was allotted to the 1st defendant on hire purchase

basis for commencing an industrial concern for manufacture of

wooden building materials and furniture. But, the property

allotted was kept idle and non-utilised and therefore, it was

resumed by the 3rd defendant from the 1st defendant and

allotted to the 4th and 6th defendants on themselves making an

application seeking for that on payment of necessary costs. R.F.A. No. 335 of 2007

According to him, Rule 9 of Rules, 1969 contemplates a bar on

alienation or encumbrance of the allotted properties.

14. Therefore, allotment to the extent of 50 cents of

land in favour of the 1st defendant for setting up of an

industrial unit for manufacturing of wooden building materials

and furniture is not disputed by the 3rd defendant. The only

dispute was against the non-utilisation of the property for the

purpose for which it was sought by the 1 st defendant and

allotted by the 3rd defendant in his favour. That being the

scenario, it is incumbent upon this Court to see whether any

measures have been taken by the 1st defendant for utilisation

of property at any point of time and if so, whether the 3 rd

defendant was justified in invoking the power to resume it on

behalf of the Government.

15. The 3rd defendant has produced the office file

relating to allotment of the plaint schedule property in favour

of the 1st defendant on a direction being issued in an

application filed for the purpose on 01.03.1991 alongwith the

project report elaborating the potentials for development of

the industry proposed to be started in the property on it being

allotted. Ext.X1 incorporates an order of assignment of R.F.A. No. 335 of 2007

Government land registry for industrial purpose subject to

certain conditions and the 1st defendant is found to have

subscribed those and thereby made a declaration underneath

making himself bound by those.

16. Conditions 1 to 3 of the order of assignment of

Government land registry are relevant in the context of the case

and therefore are extracted hereunder:-

"conditions:-

1. (i) That the land assigned shall be heritable but shall not be-alienated or encumbered without prior permission of the Government.

(ii) That the land assigned shall be used only for the following purposes.

a) For construction of factory building and erection of plant and machinery for manufacture of Hard wood housing materials, Plywood dressed furniture and allied products.

2. That the work connected with the above purpose shall commence within a period of one year from the date of issue of patta.

3. That the registry shall be liable to be cancelled for contravention of conditions and I and II above and also for the conditions specified in the patta."

R.F.A. No. 335 of 2007

17. In view of the above conditions, the allottee is

restrained from alienating or encumbering the property

allotted in his favour without a sanction being obtained from

the Government.

18. According to the plaintiff, the 1 st defendant had

proposed to sell the Government land (plaint schedule

property) allotted in his favour for a sale consideration agreed

in consensus and incorporated in Ext.A1 executed for the

purpose. The 1st defendant was ex parte in the suit. Plaintiff

when confronted on the question of obtainment of sanction by

the 1st defendant from the 3rd defendant prior to execution of

Ext.A1, has taken a stand of ignorance. Ext.X1 does not

incorporate materials to show that sanction for alienation of

the allotted land was applied for by the 1 st defendant before

the 3rd defendant or else that the sanction was granted by the

latter.

19. Therefore, reliable materials having not been made

available in evidence by the plaintiff so as to enable the court

to take a view that execution of Ext.A1 was posterior to grant

of sanction by the 3rd defendant. In the said circumstances,

proposal to alienate the allotted property and execution of R.F.A. No. 335 of 2007

Ext.A1 agreement for sale of property for consideration by the

1st defendant to the plaintiff was without any authority and

therefore, against condition No.1 of the order of assignment of

Government land Registry.

20. The conditions above are found to have it's root in

Rules 3, 4, 9, 11 and 16 of Rules, 1969 and those are

apposite extraction hereunder :

"1. xxxx

2. xxxx

3. Government land in development areas will be allotted for industrial purpose only under these rules.

4. Land allotted under these rules shall be used only for the industrial purpose for which it is allotted.

5. xxxx

6. xxxx

7. xxxx

8. xxxx

9. The land allotted under these rules shall not be alienated or encumbered in any manner without the prior sanction in writing of the Director of Industries & Commerce.

10. xxxx

11. The Director of Industries & Commerce shall have the power to resume the land if the allottee R.F.A. No. 335 of 2007

contravenes any of the provisions of these rules or any of the provisions of the agreement executed by the allottee or in the event of the concern belonging to the industrialist being wound up or transferred to any other person, Company or group of persons, or in the opinion of the Director of Industries & Commerce there is misuse of the land.

12. xxxx

13. xxxx

14. xxxx

15. xxxx

16. A period of 16 months is fixed as the period within which the allottee should utilise the land for the purpose for which it is allotted. However in deserving cases the Director of Industries & Commerce may allow time up to one year for utilising the land and for further extension of time, if found absolutely necessary, the allottee should obtain orders of the Government.

["If the allottee does not start construction of building or make any improvement of appreciable nature on the land allotted within a period of 6 months and further extension of time has not been given by the competent authority in this regard the land shall be resumed possession, realising 6% interest on the full cost of the land from the date of handing over possession to the date of resumption. In case the amount remitted by the allottee towards initial payment and subsequent R.F.A. No. 335 of 2007

installments with interest if any, is in excess of the 6% interest on the cost of land, the balance amount shall be refunded to the allottee. On the other hand, if the amount already remitted by the allottee falls short of of 6% interest on the cost of land, the same shall be recoverable from the allottee under the provisions of the R.R.Act for the time being in force."

21. It is found from Ext.X1 that the property with all its

improvements was handed over to the 1 st defendant on

08.06.1988 on execution of agreement but even in the year

1996 it was kept idle by him and therefore a show cause notice

was issued by the 3rd defendant to him. On receipt of the notice,

a reply was found sent by the 1st defendant to the Industrial

Extension Officer on 26.08.1996 explaining the reason for

stoppage of functioning of the concern and seeking for

enlargement of time by ten weeks to restart production in the

industrial concern. Since the explanation was found not

satisfactory by the 3rd defendant, steps were directed to be

taken for resumption of the allotted property at the cost of the

1st defendant.

22. By letter dated 10.09.1997 the 1st defendant had

sought for further extension of time and accordingly a R.F.A. No. 335 of 2007

personal hearing opportunity was granted by the 3 rd

defendant to him. Thereafter in the month of April 1998 on

finding that the industrial concern has not been commenced,

proceedings were initiated and an order was issued by the 3 rd

defendant for resumption of the allotted property from the 1 st

defendant, which reads:

" In the circumstances stated above, and in exercise of the powers conferred on me I hereby order to resume the 50 cents of land comprised in Sy.No.131/15 part 16/part in Kadungalloor Village in Development Area, Edayar which was allotted to Sri.M.V.Paul, Moozhithottil House, Alupuram, Udyogamandal , M/s.Palis Group."

23. There is nothing on record to show that the order

above was assailed by the 1st defendant before the

Government. It was after issuance of the order as above that

the application filed by the 4 th and 6th defendants was

considered, found proper after verification and after receiving

the necessary consideration, allotment of the property was

made in favour of them.

24. It is convincingly clear that Ext.A1 was entered into

by the 1st defendant with the plaintiff without authority and

therefore is void.

R.F.A. No. 335 of 2007

25. A decree for declaration of title and specific