The Kerala State Housing Board vs Kerala Lok Ayukta
2023 Latest Caselaw 4094 Ker

            IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
        THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
                                   &
        THE HONOURABLE MR.JUSTICE MURALI PURUSHOTHAMAN
  FRIDAY, THE 31ST DAY OF MARCH 2023 / 10TH CHAITHRA, 1945
                     WP(C) NO. 12339 OF 2016
PETITIONER:

            THE KERALA STATE HOUSING BOARD
            DIVISION NO.1, SANTHI NAGAR, REPRESENTED BY ITS
            SECRETARY, OFFICE OF THE KERALA STATE HOUSING
            BOARD, THIRUVANANTHAPURAM-695 001.

            BY ADVS.
                   SRI.GEORGE BOBAN, SC, K.S.H.B.
                   SRI.DENNY DEVASSY
                   SRI.MANOJ RAMASWAMY
                   SRI.T.K.SAJEEV(K/000957/1995)


RESPONDENTS:

    1       KERALA LOK AYUKTA
            REPRESENTED BY ITS SECRETARY, OFFICE OF THE LOK
            AYUKTA, THIRUVANANTHAPURAM-695 001.

    2       ABOOBEKKER KUNJU
            AGED 72 YEARS, S/O.LATE ADIMA KANNU, A.R.HOUSE,
            PULIMODU, KULAPPADA P.O., ARYANADU, NEDUMANGAD
            TALUK, THIRUVANANTHAPURAM DISTRICT-695 121.

    3       STATE OF KERALA
            REPRESENTED BY THE SECRETARY TO THE HOUSING
            DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695
            001.

            BY ADVS.
            SMT.RENU. D.P., SC, LOK AYUKTA
            TEK CHAND V- SR.G.P


     THIS     WRIT   PETITION    (CIVIL)   HAVING   BEEN   FINALLY
HEARD ON 31.03.2023, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
 WP(C) NO.12339/2016          ..2..




                        JUDGMENT

MURALI PURUSHOTHAMAN, J.

The Kerala State Housing Board (hereinafter referred

to as 'the Board', for short) has filed this writ petition

challenging Ext.P6 order passed by the Kerala Lok Ayukta

in Complaint No.841 of 2014 A.

2. The short facts leading to Ext.P6 order are as

follows:

2.1. The 2nd respondent/complainant applied for a loan

of Rs.58,000/- from the Board in the year 1989 and an

amount of Rs.43,500/- was sanctioned and disbursed to him

in three instalments, of which the first and last instalments

were disbursed on 14.05.1991 and 01.02.1992 respectively.

As per clause 7 of the mortgage deed, the due date of

payment of the first instalment of E.M.I was on 10.03.1992

and the second instalment was due on 10.04.1992 and the

loan has to be discharged in 168 monthly instalments.

WP(C) NO.12339/2016 ..3..

However, the complainant did not pay even a single equated

monthly instalment and the Board initiated revenue

recovery proceedings by submitting requisition before the

District Collector. Pursuant to the requisition, the Special

Deputy Collector (RR) issued notice dated 24.02.2014 to the

complainant intimating that the mortgaged property will be

brought to sale if the entire amount of Rs. 1,54,665/-

including interest is not paid within 30 days therefrom.

Contending that the amount sought to be recovered is time

barred and the action of the Board in initiating proceedings

under the Kerala Revenue Recovery Act, 1968 (hereinafter

referred to as the 'RR Act', for brevity) to recover the time

barred debt amounts to maladministration as defined under

Section 2 (k) of the Kerala Lok Ayukta Act, 1999

(hereinafter referred to as the 'Lok Ayukta Act'), the

complainant filed Ext. P4 complaint before the Lok Ayukta.

2.2. A written statement was filed on behalf of the

Board and it was contended that the amount sought to be WP(C) NO.12339/2016 ..4..

recovered from the complainant is not barred by limitation.

2.3. Before the Lok Ayukta, it was contended by the

Board that as regards the amount due to the Board notified

under Section 71 of the RR Act, Article 112 of the Limitation

Act shall apply and the period of limitation is 30 years. The

said contention was rejected by the Lok Ayukta relying on

the decision of the Hon'ble Supreme Court in State of

Kerala v. Kalliyanikutty [1999 (3) SCC 657: AIR 1999 SC

1305: 1999 (2) KLT 146: 1999 KHC 297]. The Lok Ayukta

found that Article 63 (b) of the Limitation Act, 1963 applies

to the issue where the period of limitation is 12 years and in

terms of the mortgage deed, the limitation runs from

11.04.1992, when the complainant made default in payment

of two consecutive instalments, the second instalment

having fallen due on 10.04.1992. The Lok Ayukta also found

that there has not been any acknowledgment of debt by the

complainant in terms of Section 25 (3) of the Indian

Contract Act, 1872. Accordingly, the Lok Ayukta held that WP(C) NO.12339/2016 ..5..

the Board is not entitled to proceed against the complainant

under the provisions of the RR Act for recovery of any

amount on the basis of the mortgage deed. The Lok Ayukta

also held that, if advised, the debt due from the complainant

which got barred by reason of the dereliction of duty and

maladministration on the part of the officials of the Board,

can be recovered from those responsible for the loss, fixing

their liability following the due process of law and

procedure.

3. Ext.P6 order is challenged in this writ petition on the

ground that Ext.P4 complaint is not maintainable before the

Lok Ayukta and that the action of the officials of the Board

with regard to recovery of debt will not come within the

purview of maladministration as defined under Section 2 (k)

of the Lok Ayukta Act and such action cannot be

investigated by Lok Ayukta in terms of Section 8 of the said

Act. It is further contended that the debt is not barred by

limitation and as per Article 63 of the Limitation Act, the WP(C) NO.12339/2016 ..6..

period of limitation prescribed for filing a suit for

foreclosure of the mortgage by the mortgagee is thirty years

from the date of mortgage.

4. Heard Sri.T.K.Sajeev, the learned counsel for the

petitioner and Sri.Tek Chand V., learned Senior

Government Pleader appearing for the 3rd respondent.

Though notice was issued to the 2 nd respondent, the

complainant before the Lok Ayukta, he has not chosen to

enter appearance.

5. According to Sri.Sajeev, the learned counsel for the

petitioner, the action of the Board in taking steps to recover

the loan amount by initiating proceedings under the

Revenue Recovery Act is not a matter subject to

investigation by the Lok Ayukta, as the same is in respect of

an action specified in clause (c) of the Second Schedule to

the Lok Ayukta Act. Section 8(1) read with Clause (c) of the

Second Schedule to the Lok Ayukta Act provides that the

Lok Ayukta shall not conduct any investigation under the WP(C) NO.12339/2016 ..7..

Act in the case of a complaint involving a grievance in

respect of any action relating to administrative action taken

in matters which arise out of the terms of a contract

governing purely commercial relations of the administration

with customers or suppliers except where the complainant

alleges harassment or gross delay in meeting contractual

obligation. According to Sri. Sajeev, the complaint relates to

and arises out of the terms of contract between the Board

and the complainant with respect to a housing loan availed

by the complainant from the Board. Sri. Sajeev contends

that the same pertains to the commercial relation of the

Board with the loanee and therefore, there cannot be any

interference by the Lok Ayukta with such contractual

obligations. The contractual obligation on the part of the

Board is the realisation of the loan amount. It is contended

that, steps to realise the loan amount, being an

administrative action arising out of the terms of contract

governing purely commercial relations of the Board with WP(C) NO.12339/2016 ..8..

the complainant, the Lok Ayukta has no jurisdiction to

investigate into such matters.

7. Section 8 and the 2nd schedule of the Lok Ayukta Act

read as under:-

"8.Matters not subject to investigation.- (1) Except as hereinafter provided, the Lok Ayukta or an Upa-Lok Ayukta shall not conduct any investigation under this Act, in the case of a complaint involving a grievance in respect of any action, if such action relates to any matter specified in the Second Schedule.

(2) The Lok Ayukta or an Upa-Lok Ayukta shall not investigate,-

(a) any action in respect of which a formal and public inquiry has been ordered with the prior concurrence of the Lok Ayukta or an Upa-Lok Ayukta, as the case may be;

(b) any action in respect of a matter which has been referred to inquiry under the Commissions of Inquiry Act, 1952 (Central Act 60 of 1952);

(c) any complaint involving an allegation made after the expiry of five years from the date on which the action complained against is alleged to have taken place: Provided that a complaint referred to in clause(c) may be entertained by the Lok Ayukta or an Upa-Lok Ayukta, as the case may be, after the expiry of the period referred to in the said clause, if the complainant satisfies that he had sufficient cause for not making the complaint within the period specified in that clause.

(3) In the case of any complaint involving a grievance, nothing in this Act shall be construed as empowering the Lok Ayukta or an Upa-Lok Ayukta to question any administrative action involving the exercise of a discretion, except where he is satisfied that the elements involved in the exercise of the discretion are absent to such an extent that the discretion can prima-facie be regarded as having been improperly exercised.

 WP(C) NO.12339/2016                ..9..



                              SECOND SCHEDULE
                              [See section 8 (i) (a)]

(a) Action taken for the purpose of investigating crime relating to the security of the State.

(b) Action taken in the exercise of powers in relation to determining whether a matter shall go to a court or not. (c) Administrative action taken in matters which arise out of the terms of a contract governing purely commercial relations of the administration with customers or suppliers except where the complainant alleges harassment or gross delay in meeting contractual obligation.

(d) Action taken in respect of appointment, removal, pay, discipline, superannuation or other mattes relating to conditions of service of public servants but, not including actions relating to claims for pension, gratuity, provident fund or to any claims which arises on retirement, removal or termination of service.

(e) Grant of honors and awards."

True, the transaction between the Board and the

complainant arises out of contract having commercial

relations and there is contractual obligation on the part of

the Board as well as the complainant. Section 8(1) read

with clause (c) to the 2nd schedule excludes from the

jurisdiction of the Lok Ayukta, cases of contracts having

commercial relations. However, an exception is carved out

in clause (c) whereby, even in cases of contracts having

commercial relations, the Lok Ayukta can have jurisdiction WP(C) NO.12339/2016 ..10..

if the complainant alleges harassment or gross delay in

meeting contractual obligation.

8. According to the complainant, the amount payable to

the Board was not recovered within the period of limitation.

If that be so, there is gross delay in meeting contractual

obligation on the part of the Board, ie., to effect recovery

within time. In this writ petition, we are not really

concerned with the correctness or otherwise of the findings

of the Lok Ayukta on the question of limitation in recovering

the amount by the Board, but the jurisdiction of the Lok

Ayukta to investigate into the complaint. However, to

consider the question as to whether the action comes within

the exception carved out in clause (c) of the 2nd schedule,

we have given our consideration to the question of

limitation also. From a perusal of the mortgage deed, we

find that limitation has to run from the date of last default,

default in the payment of two consecutive instalments. The

second instalment fell due on 10.04.1992 and the limitation WP(C) NO.12339/2016 ..11..

starts from 11.04.1992. As rightly found by the Lok Ayukta,

Article 63 (b) of the Limitation Act applies and the claim got

barred by law of limitation on 11.04.2004. Any coercive

action like initiation of revenue recovery proceedings to

recover a time barred debt amounts to harassment in

meeting contractual obligation. Therefore, the exception to

clause (c) of the 2nd Schedule to the Lok Ayukta Act will

come into play and the Lok Ayukta will get jurisdiction to

investigate into Ext.P4 complaint. There is no jurisdictional

infirmity or error in Ext.P6 order of the Lok Ayukta.

The writ petition fails and is, dismissed. No costs.

Sd/-

S. MANIKUMAR CHIEF JUSTICE

Sd/-

                                  MURALI PURUSHOTHAMAN
                                          JUDGE
spc/
 WP(C) NO.12339/2016            ..12..


                APPENDIX OF WP(C) 12339/2016

PETITIONER EXHIBITS

                      TRUE   COPY    OF   THE   MORTGAGE  DEED
EXT.P1                NO.1091/1991 DATED 23.04.1991 OF THE SUB
                      REGISTRAR OFFICE ARYANAD

                      TRUE COPY OF THE DEMAND NOTICE DATED
EXT.P2                31.10.2006 ISSUED TO THE 2ND RESPONDENT
                      BY THE PETITIONER - BOARD

                      TRUE COPY OF THE DEMAND NOTICE DATED

25.7.2009 UNDER SECTION 34 OF THE KERALA EXT.P3 REVENUE RECOVERY ACT ISSUED TO THE 2ND RESPONDENT

EXT.P4 COPY OF THE COMPLAINT NO.841/2014 BEFORE THE KERALA LOK AYUKTA SUBMITTED BY THE 2ND RESPONDENT

EXT.P5 TRUE COPY OF WRITTEN STATEMENT SUBMITTED BY THE PETITIONER BOARD

EXT.P6 TRUE COPY OF THE ORDER DATED 5.2.2016 IN C.NO.841/2014 BEFORE THE KERALA LOK AYUKTA