Kerala High Court
Vadavucode - Puthencruz Grama ... vs Deputy Tahsildar, Revenue Recovery on 15 February, 2024
Author: P Gopinath
Bench: P Gopinath
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE GOPINATH P.
THURSDAY, THE 15TH DAY OF FEBRUARY 2024 / 26TH MAGHA, 1945
WP(C) NO. 3702 OF 2015
PETITIONER/S:
VADAVUCODE - PUTHENCRUZ GRAMA PANCHAYAT
PUTHENCRUZ P.O., ERNAKULAM DISTRICT, REP. BY ITS
SECRETARY.
BY ADV K.S.ARUN KUMAR
RESPONDENT/S:
1 DEPUTY TAHSILDAR, REVENUE RECOVERY
TALUK OFFICE, KUNNATHUNADU, AT PERUMBAVOOR, PIN-683
542.
2 GREATER COCHIN DEVELOPMENT AUTHORITY
KADAVANTHRA, COCHIN-682020, REP. BY ITS SECRETARY.
BY ADVS.
SRI.M.K.THANKAPPAN, SC, GCDA
SRI. VENUGOPAL V., GOVT. PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON
15.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
W.P (C) No.3702/2015 -2-
JUDGMENT
This writ petition has been filed challenging revenue recovery
proceedings initiated against the petitioner for recovery of an amount of
Rs.1,94,939/- together with interest @ 12.5% from 04-04-2012 upon a
requisition initiated by the 2nd respondent namely the Greater Cochin
Development Authority (GCDA).
2. The brief facts are that the petitioner, a Grama Panchayat had
entered into Ext.P2 agreement with the 2 nd respondent for construction of a
Mini Civil Station. Allegedly owing to delay in payment of amounts due, the
2nd respondent was required to make payments out of its own fund to
contractors etc. According to the 2 nd respondent any loss caused to the 2 nd
respondent owing to default by the petitioner is recoverable from the
petitioner. The amount demanded is stated to be interest calculated on
amounts paid belatedly.
3. The learned counsel appearing for the petitioner would submit
that there is no clause in Ext.P2 agreement for the levy of interest. It is
submitted that in the absence of any such clause in Ext.P2 agreement and
since parties were in a contractual relationship, the 2 nd respondent cannot
unilaterally determine for itself that certain amounts are payable by the
petitioner towards interest and to seek to recover the same by resorting to
revenue recovery proceedings. Reliance is placed in this regard on a Division
Bench decision of this court in Sriram Engineering Construction Co.
Ltd. v. Kerala State Industrial Development Corporation; (2007
(2) KLT 388).
4. The learned counsel for the 2nd respondent would vehementally
contend that the petitioner cannot dispute the liability to pay the amount
demanded as there was a clear breach of obligations of the petitioner. It is
submitted that Ext.P2 agreement clearly stipulates that all loss suffered by the
2nd respondent owing to any breach by the petitioner can be recovered from
the petitioner. It is submitted that since the amounts now demanded cannot
be disputed, the ratio of the decision in Sriram Engineering
Construction Co. Ltd. (supra) may not apply to the facts and
circumstances of the case.
5. The learned Government Pleader points out that even while there
is a challenge in the writ petition to the revenue recovery proceedings, there is
no challenge in the writ petition to Ext.P5 which is the demand raised by the
2nd respondent for payment of the amount. Learned Government Pleader also
points out that the judgment of Sriram Engineering Construction Co.
Ltd. (supra) has been declared per incuriam in the judgment of this court in
Premanandan K. v. State of Kerala and others; [2020 (3) KHC 719].
6. Having heard the learned counsel for the petitioner, learned
Government Pleader and the learned standing counsel appearing for the 2 nd
respondent, I am of view that the petitioner is entitled to succeed. The issue
appears to be covered in favour of the petitioner by virtue of the Division
Bench judgment of this court in Sriram Engineering Construction Co.
Ltd. (supra). The petitioner and the 2nd respondent were in a contractual
relationship. While it is the case of the petitioner that no amount of interest
was payable by the petitioner, the 2nd respondent asserts that since the
petitioner is liable to make good any loss suffered by the 2 nd respondent, the
petitioner is liable to pay interest on belated payments. An identical issue
appears to have gained the attention of Division Bench of this court in
Sriram Engineering Construction Co. Ltd. (supra), it was held;
"Disputed amounts not settled or adjudicated cannot be recovered by
the proceedings under Revenue Recovery Act. Ext.P2 is not a
statutory contract. Respondents can realise disputed amount only by
adjudication and in the absence of clause for arbitration the only
remedy available is to file a suit or file a counter claim in the
pending suit. In this case, the Managing Director did not decide the
question of damages payable from KSIDC as mentioned under
Clause 34 after notice and adjudication. Ext.P12 is a decision from
Chief Engineer. Clause 34 cannot be treated as an arbitration clause.
When petitioner's claim for damages to the tune of Rs.43 lakhs was
rejected under Clause 34, petitioner, treating it as arbitration
award, filed petition to set aside the award and KSIDC itself
contended that Clause 34 cannot be equated to arbitration and
Ext.P11 decision of Managing Director is not amounting to
arbitration award. Here, breach of contract is not admitted and
petitioner contended that termination of contract by KSIDC is illegal
and suit for recovering damages is pending."
In the light of the law laid down by a Division Bench of this court, this writ
petition is liable to be allowed. Contention taken by the learned Government
Pleader that Ext.P5 order has not been challenged need not detain this court
as Ext.P5 is only a demand following which revenue recovery proceedings
were initiated against the petitioner. The petitioner is only challenging the
initiation of revenue recovery proceedings and therefore even if the demand is
not challenged, in the light of law laid down by this court in Sriram
Engineering Construction Co. Ltd. (supra)., the revenue recovery
proceedings can be quashed. This court in Premanandan (supra) has held
that the decision in Sriram Engineering Construction Co. Ltd. is not
applicable as the facts are completely different. Though there is also an
observation that the said judgment is per incuriam, there is no finding
contrary to the law laid down in Sriram Engineering Construction Co.
Ltd. Accordingly this writ petition is allowed. Ext.P1 will stand quashed. If
the 2nd respondent wishes to claim the amount by filing a suit, the period
during which this writ petition was pending before this court along with the
stay against recovery proceedings [i.e., from 04-02-2015 till 15-02-2024] will
stand excluded, for the purposes of determining any period of limitation for
filing such suit.
Sd/-
GOPINATH P.
JUDGE
AMG
APPENDIX OF WP(C) 3702/2015
PETITIONER EXHIBITS
P1 : TRUE COPY OF THE REVENUE RECOVERY NOTICE BEARING NO.B6-
2012/91039/7 DATED 01-12-2014 ISSUED BY THE 1ST RESPONDENT.
P2 : TRUE COPY OF THE AGREEMENT DATED 31-12-2007 EXECUTED BY
G.C.D.A.
P3 : TRUE COPY OF THE REPORT OF THE ASST. ENGINEER OF THE
PANCHAYAT.
P4 : TRUE COPY OF THE LETTER DATED 06-02-2012 BY THE PETITIONER'S
SECRETARY TO 2ND RESPONDENT'S SECRETARY.
P5 : TRUE COPY OF THE LETTER DATED 19-04-2012 BY THE 2ND
RESPONDENT'S SECRETARY TO THE PETITONER'S SECRETARY.
P6 : TRUE COPY OF THE DECISION NO.III/(25) DATED 23-04-2012 OF THE
PETITIONER PANCHAYAT.
P7 : TRUE COPY OF THE OBJECTION SUBMITTED BY THE PETITIONER'S
SECRETARY AGAINST THE DEMAND NOTICE DATED 14-01-2015.
RESPONDENT EXHIBITS
Exhibit R 2(a) TRUE COPY OF THE LETTER NO. 6164/I.A3/13/LSGD
DATED 26-05-2015
Exhibit R2(b) TRUE COPY OF THE LETTER NO. 5814/E2/2006/GCDA
DATED 3-06-2015 TO THE DISTRICT COLLECTOR,
ERNAKULAM
