Kerala High Court
Mohanachandran Nair Balakrishna ... vs State Of Kerala on 10 August, 2022
W.P.(C)No.10055/2022
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
WEDNESDAY, THE 10TH DAY OF AUGUST 2022 / 19TH SRAVANA, 1944
WP(C) NO. 10055 OF 2022
PETITIONER:
MOHANACHANDRAN NAIR BALAKRISHNA PILLAI
AGED 65 YEARS
S/O. PADMANABHA PILLAI, AYYAPPAN PILLAI, RESIDING
AT HARISREE, MWRA -14, KOCHUPILAMOODU, KOLLAM P.O,
KOLLAM DISTRICT, PIN - 691001.
BY ADVS. SRI K.B.PRADEEP
SRI HARISANKAR R
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY ITS SECRETARY TO THE GOVERNMENT,
REVENUE DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM - PIN - 695001.
2 THE ADDL. SUB REGISTRAR,
KOTTAYAM, OFFICE OF THE ADDL. SUB-REGISTRAR,
KOTTAYAM, SREE GOKULAM SPRING TOWER, KANJIKUZHY-
KALATHILPADY ROAD, KANJIKUZHY, KOTTAYAM, PIN
-686004.
ADDL.R3 IMPLEADED
ADDL R3 THE STATE BANK OF INDIA,
REPRESENTED BY ITS CHIEF MANAGER, SARB, ERNAKULAM,
7TH FLOOR, VANKARATH TOWERS, PALARIVATTOM, BYPASS
JUNCTION, ERNAKULAM.
ADDL R3 IS IMPLEADED AS PER ORDER DATED 23-05-2022
IN IA NO.6/2022
ADDL.R4 SUO MOTU IMPLEADED
ADDL.R4 THE DEPUTY COMMISSIONER OF STATE TAX,
STATE GST DEPARTMENT, SPECIAL CIRCLE, GST COMPLEX
BUILDING, NAGANPADAM, KOTTAYAM-686 001.
IS SUO MOTU IMPLEADED AS ADDL. R4 AS PER ORDER
DATED 13.06.2022.
BY ADVS. SRI MUHAMMED RAFEEQUE, SPL.GOVT.PLEADER (TAXES)
SRI GEORGE THOMAS (MEVADA)(SR.),
SRI AMAL GEORGE
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
17.06.2022, THE COURT ON 10.08.2022 DELIVERED THE FOLLOWING:
W.P.(C)No.10055/2022
2
T.R. RAVI, J.
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W.P.(C)No.10055 of 2022
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Dated this the 10th day of August, 2022
JUDGMENT
For the realisation of amounts due from M/s.St.Antony's Motors
India Ltd. and St.Antony's Bi-wheelers Pvt. Ltd., the additional 3 rd
respondent invoked the provisions of the Security Interest
(Enforcement) Rules, 2002 and brought to sale two properties in
Vijayapuram Village situated in several survey numbers. The petitioner
purchased the properties that were brought to sale and the sale
certificates dated 4.1.2022 regarding 28.98 Ares of land and 44.606
Ares of land respectively are produced and marked as Exts.P1 and P2.
The encumbrance certificates with respect to the properties noted an
attachment over the property by the Additional District Judge, effected
on 30.1.2017 on an application made by M/s Sundaram Finance Ltd. as
entry No.13, and a revenue recovery request by the Tahsildar, Kottayam
on 25.8.2017. Ext.P3 is the encumbrance certificate dated 20.1.2022.
The sale deeds pertaining to Exts.P1 and P2 sale certificates were
executed and true copies of the same are produced as Exts.P4 and P5.
When presented for registration, the 2 nd respondent issued a notice on
16.3.2022 declining registration on the ground that there are
encumbrances that need to be set right prior to registration of the sale
deeds. Ext.P6 is the letter refusing registration.
W.P.(C)No.10055/2022
2. According to the petitioner, the properties covered by
Ext.P4 sale deed were mortgaged to the additional 3 rd respondent
on 11.9.2010 and the properties covered by Ext.P5 sale deed were
mortgaged to the Bank on 22.7.2004. The above facts are
evidenced by Ext.P8 certificate dated 5.4.2022 issued by the
additional 3rd respondent. The counsel for the petitioner submits
that the adverse entries in Ext.P3 are made much after the
mortgage was created in favour of the additional 3rd respondent
and the assessment order based on which the revenue recovery
proceedings were initiated was dated 23.1.2012, much after the
mortgage. It is contended that the revenue recovery proceedings
which were initiated in 2017 cannot in any way affect the
mortgage rights held by the additional 3 rd respondent, which has
been sold in an auction conducted as per the provisions of the
Statute.
3. The Special Government Pleader (Taxes) appearing for
respondents 1, 2, and 4 submits that the date of the assessment
orders is immaterial and that going by Section 6 of the Kerala
Value Added Tax Act, the charge to tax comes to the fore when the
sale takes place. It is submitted that once the return is filed, the
amount has become due. Reliance is placed on the decision in
Hamsa v. Assistant Commissioner [2008 (3) KLT 180] and
W.P.(C)No.10055/2022
Cochin Condiments Pvt. Ltd. v. District Collector & Ors
[2008 SCC Online Kerala 219]. It is further submitted that
under Section 21, what is required is the self-assessment and
hence no contention of a better charge can be raised, merely
because an assessment order was issued much after the period for
which the tax is charged. The judgment in Medineutrina
Pvt.Ltd. (Company) v. District Industries Centre (DIC) &
Ors. [AIR 2021 Bombay 135] is relied on to state the effect of
Section 26E of the Securitisation Act. In reply, the counsel for the
petitioner submits that the contention of the State that there were
amounts in arrears towards tax cannot in any way affect the
registration of the property, particularly when the demand for such
arrears by the State is like a covenant which runs with the land
and the registration will not in any way affect the rights of the
State. It is submitted that as far as Ext.P5 sale deed is concerned,
the properties involved therein were mortgaged on 22.7.2004, and
hence arrears of tax for the period 2005-2006 based on the
assessment order dated 23.1.2012 cannot in any way affect the
said document or create a charge better than the mortgage.
Regarding Ext.P4 document, the petitioner submits that since the
mortgage was created on 11.9.2010, after the tax became due, he
may be permitted to move the Government for payment of the
arrears of tax and thereafter move for registration of the
W.P.(C)No.10055/2022
document.
4. Having heard the counsel on either side, I find that the
submission made by the counsel for the petitioner is justified. As
far as Ext.P5 document is concerned, the State cannot have a
claim that the sale should be subject to their rights since the
mortgage was prior to the date on which the tax became due. As
such, the petitioner is entitled to the reliefs claimed insofar as the
said document is concerned. Regarding the sale deed Ext.P4 in
which the mortgage was on 11.9.2010, the respondents cannot
have any objection to the petitioner approaching the Government
for payment of the dues and claiming registration thereafter.
5. In the above circumstances, the writ petition is allowed
in part. Ext.P6 is set aside. There will be a direction to the 2 nd
respondent to accept Ext.P5 sale deed as and when presented and
to register the same without any entries in the sale deeds
regarding the attachments and encumbrances mentioned in Ext.P6
or otherwise. As far as Ext.P4 sale deed is concerned, the
petitioner is directed to approach the 1 st respondent for settling
the claims of the additional 4 th respondent against the erstwhile
owners of the property and to approach the 2 nd respondent
thereafter for registration of the document. The petitioner shall
approach the 1st respondent within one week from the date of
W.P.(C)No.10055/2022
receipt of a copy of this judgment and the 1 st respondent shall
pass necessary orders within one month of the receipt of the
request from the petitioner. Once Ext.P4 document is presented
before the 2nd respondent after settling the dues, the same shall
also be registered by the 2nd respondent without any entries in the
sale deed regarding the attachments and encumbrances
mentioned in Ext.P6.
Sd/-
T.R. RAVI
JUDGE
dsn
W.P.(C)No.10055/2022
APPENDIX OF WP(C) 10055/2022
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF THE SALE CERTIFICATE ISSUED
UNDER THE RULE 9(6) OF THE SECURITY INTEREST
(ENFORCEMENT) RULES, 2002 DATED 04.01.2022.
Exhibit P2 TRUE COPY OF THE SALE CERTIFICATE ISSUED
UNDER THE RULE 9(6) OF THE SECURITY
(ENFORCEMENT) RULES, 2002 DATED 04.01.2022.
Exhibit P3 TRUE COPY OF THE ENCUMBRANCE CERTIFICATE
DATED 20.01.2022 PERTAINING TO THE ABOVE
PROPERTIES PURCHASED BY THE PETITIONER
Exhibit P4 TRUE COPY OF THE SALE DEED DATED 16.03.2022
IN RESPECT OF EXT.P1.
Exhibit P5 TRUE COPY OF THE SALE DEED DATED 16.03.2022
IN RESPECT OF EXT.P2.
Exhibit P6 TRUE COPY OF THE NOTICE ISSUED BY THE 2ND
RESPONDENT DATED 16.03.2022 DECLINING
REGISTRATION.
Exhibit P7 TRUE COPY OF THE JUDGMENT DATED 17.06.2021 IN
WPC NO. 9864 OF 2021.
Exhibit P8 TRUE COPY OF THE CERTIFICATE DTD. 5/4/2022
ISSUED BY THE SBI
Exhibit P9 TRUE COPY OF REPLY TO A QUERY UNDER THE RTI
ACT DT.18.4.2022 IN REPLY TO THE APPLICATION
DT.16.4.2022
EXHIBIT P10 TRUE COPY OF APPLICATION DT.16.4.2022 UNDER
THE RTI ACT SUBMITTED TO THE STATE GST
DEPARTMENT, SPECIAL CIRCLE, KOTTAYAM.
RESPONDENT EXHIBITS
EXHIBIT R4 (A) TRUE COPY OF TERMS AND CONDITIONS OF SALE
PURSUANT TO WHICH THE E-AUCTION WAS CONDUCTED
AND EXTS P1 SALE CERTIFICATES WAS ISSUED
EXHIBITSR4(B) TRUE COPY OF TERMS AND CONDITIONS OF SALE
PURSUANT TO WHICH THE E-AUCTION WAS CONDUCTED
AND EXTS P2 SALE CERTIFICATES WAS ISSUED
EXHIBIT R4(C) TRUE COPY OF THE REQUIDITION FOR RECOVERY IN
FORM 24 ISSUED TO THE DISTRICT COLLECTOR
KOTTYAM DATED 05/07/2017 AS PRESCRIBED UNDER
SECTION 69(2) OF THE KERALA REVENUE RECOVERY
ACT 1968
W.P.(C)No.10055/2022
EXHIBIT R4(D) TRUE COPY OF THE REQUIDITION FOR RECOVERY IN
FORM 24 ISSUED TO THE DISTRICT COLLECTOR
KOTTYAM DATED 05/07/2017 AS PRESCRIBED UNDER
SECTION 69(2) OF THE KERALA REVENUE RECOVERY
ACT 1968
