[Cites 12, Cited by 0]
Kerala High Court
Kerala State Civil Supplies Corpn vs M/S.T.O.Varghese on 6 February, 2026
WA NO.839/2013 & conn.cases 1
2026:KER:10572
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR.JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 6TH DAY OF FEBRUARY 2026 / 17TH MAGHA, 1947
WA NO.839 OF 2013
ARISING OUT OF THE JUDGMENT DATED 28.02.2013 IN WPC
NO.31143/2007 OF HIGH COURT OF KERALA
APPELLANT/1ST RESPONDENT:
THE MANAGING DIRECTOR
KERALA STATE CIVIL SUPPLIES CORPORATION LTD.,
MAVELI BHAVAN, GANDHI NAGAR, KOCHI-20.
BY ADV. SRI N.D.PREMACHANDRAN,SC,SUPPLYCO
RESPONDENTS/PETITIONERS & ADDL. PETITIONERS 3 TO 7/
3RD RESPONDENT/ADDL.RESPONDENTS 3 & 4:
1 M/S.T.O.VARGHESE
RICE & PADDY DEALERS
KANJOOR WEST, PIN:683 575,
ERNAKULAM DISTRICT-REPRSENTED BY ITS PROPRIETOR,
SRI.T.O.VARGHESE (DIED LRS IMPLEADED).
2 M/S.KALLOORKKADAN MODERN RICE MILL
RICE & PADDY MERCHANTS, OKKAL P.O.,
KALADY, ERNAKULAM DISTRICT, PIN:683 550,
(WITHDRAWN AS PER ORDER DATED 9.12.2010).
3 ELSY VARGHESE
W/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM DISTRICT.
4 SIMY VARGHESE
D/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM DISTRICT.
WA NO.839/2013 & conn.cases 2
2026:KER:10572
5 JOHNSON VARGHESE
S/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM DISTRICT.
6 JUSTIN VARGHESE
S/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM DISTRICT.
7 JOHN VARGHESE
S/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM DISTRICT.
8 STATE OF KERALA
REPRESENTED BY ITS CHIEF SECRETARY,
GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM.
9 BIJU KARNAN
S/O.K.KARNAN, XII/674, KURAVAMPADATH HOUSE,
OKKAL P.O., ERNAKULAM DISTRICT.
10 AMMINI KARNAN
W/O.K.KARNAN,
KURAVAMPADATH HOUSE, XII/674,
KUNNATHUNADU TALUK, OKKAL P.O.,
ERNAKULAM DISTRICT.
BY ADVS.
SRI.B.K.GOPALAKRISHNAN, R10
SRI.M.R.ANISON
SMT.K.P.GEETHA MANI
SMT.S.KARTHIKA
SRI.N.N.SUGUNAPALAN (SR.)
SRI.S.SUJIN, R1 TO R7
SMT.NIKITHA P.
SRI.K.P.HARISH, SR.GOVERNMENT PLEADER, R8
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
06.02.2026, ALONG WITH WA NO.898/2013 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WA NO.839/2013 & conn.cases 3
2026:KER:10572
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR.JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 6TH DAY OF FEBRUARY 2026/17TH MAGHA, 1947
WA NO.898 OF 2013
ARISING OUT OF THE JUDGMENT DATED 28.02.2013 IN WPC
NO.36841/2009 OF HIGH COURT OF KERALA
APPELLANT/1ST RESPONDENT:
THE MANAGING DIRECTOR
KERALA STATE CIVIL SUPPLIES CORPORATION LTD
MAVELI BHAVAN,GANDHI NAGAR,KOCHI-20.
BY ADV SRI.N.D.PREMACHANDRAN,SC,SUPPLYCO
RESPONDENTS/PETITIONERS & RESPONDENTS 2 TO
7/ADDL.RESPONDENTS 8 TO 12:
1 BIJU KARNAN
S/O.K.KARNAN,
XII/674,KURUVAMPADATH HOUSE,
OKKAL.P.O,ERNAKULAM DISTRICT.
2 AMMINI KARNAN
W/O.K.KARNAN,KURUVAMPADATH HOUSE,
XII/674,KUNNATHUNADU TALUK,
OKKAL.P.O,ERNAKULAM DISTRICT.
3 THE DISTRICT COLLECTOR
COLLECTORATE,ERNAKULAM,PIN-682031.
4 THE SPECIAL TAHSILDAR (RR)
ALUVA TALUK OFFICE,ALUVA-683575.
5 T.O.VARGHESE
THALLIYAN VEEDU, KANJOOR,
VADAKKUMBHAGOM VILLAGE, ALUVA-683575. (DECEASED)
WA NO.839/2013 & conn.cases 4
2026:KER:10572
RESPONDENT NOS.5 & 6 ARE DELETED FROM THE PARTY
ARRAY AT THE RISK OF THE APPELLANT AS PER ORDER
DATED 20.12.2016 IN I.A.NO.1494/2016.
6 T.O.DEVASSY
THALLIYAN VEEDU,KANJOOR,
VADAKKUMBHAGOM VILLAGE,ALUVA-683575.
7 JOHNSON VARGHESE
THALLIYAN VEEDU,KANJOOR,
VADAKKUMBHAGOM VILLAGE, ALUVA-683575.
RESPONDENT NOS.6 & 7 ARE DELETED FROM THE PARTY
ARRAY IN THE PLACE OF 5 & 6 AS PER ORDER DATED
31.1.2017 IN I.A.NO.122/2017
8 DR.ABRAHAM
KULANGARA HOUSE, MEKKOZHOOR,
MAILAPARA.P.O,PATHANAMTHITTA,REPRESENTED BY HIS
POWER OF ATTORNEY HOLDER,SRI.SUNNY MATHEW,
GRACEHILL,KIDANGOORKKARA,ANGAMALY.P.O,
ALUVA TALUK,ERNAKULAM DISTRICT-683575.
9 ELSY VARGHESE
W/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR.P.O,KALADY,ERNAKULAM DISTRICT.
10 SIMY VARGHESE
D/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR.P.O,KALADY,ERNAKULAM DISTRICT.
11 JOHNSON VARGHESE
S/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR.P.O,KALADY,ERNAKULAM DISTRICT.
12 JUSTIN VARGHESE
S/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR.P.O,KALADY,ERNAKULAM DISTRICT.
13 JOGINN VARGHESE
S/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR.P.O,KALADY,ERNAKULAM DISTRICT.
BY ADVS.
SRI.M.R.ANISON
SRI.B.K.GOPALAKRISHNAN, R2
WA NO.839/2013 & conn.cases 5
2026:KER:10572
SMT.K.P.GEETHA MANI
DR.GEORGE ABRAHAM
SMT.S.KARTHIKA
SRI.N.N.SUGUNAPALAN (SR.)
SRI.S.SUJIN, R9 TO R13
SRI.K.P.HARISH, SR.GOVERNMENT PLEADER, R3 & R4
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
06.02.2026, ALONG WITH WA.839/2013 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WA NO.839/2013 & conn.cases 6
2026:KER:10572
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 6TH DAY OF FEBRUARY 2026 / 17TH MAGHA, 1947
WA NO.933 OF 2013
ARISING OUT OF THE JUDGMENT DATED 28.02.2013 IN WPC
NO.36841/2009 OF HIGH COURT OF KERALA
APPELLANTS/PETITIONERS:
1 BIJU KARNAN
S/O.K.KARNAN, XII/674, KURUVAMPADATH HOUSE,
OKKAL P.O., ERNAKULAM DISTRICT-683550.
2 AMMINI KARNAN
W/O.K.KARNAN, XII/674, KURUVAMPADATH HOUSE,
OKKAL P.O., ERNAKULAM DISTRICT-683550.
BY ADVS.
SRI.M.R.ANISON
SRI.B.K.GOPALAKRISHNAN
RESPONDENTS/RESPONDENTS:
1 THE KERALA STATE CIVIL SUPPLIES CORPORATION LTD.
REP.BY ITS MANAGING DIRECTOR, MAVELI BHAVAN,
GANDHI NAGAR, COCHIN-682020.
2 THE DISTRICT COLLECTOR
COLLECTORATE, ERNAKULAM-682031.
3 THE SPECIAL TAHSILDAR (RR)
ALUVA TALUK OFFICE, ALUVA-683575.
WA NO.839/2013 & conn.cases 7
2026:KER:10572
4 T.O.VARGHESE
THALIYAN VEEDU, KANJOOR,
VADAKKUMBHAGOM VILLAGE, ALUVA-683575. [DIED]
5 T.O.DEVASSY
THALIYAN VEEDU, KANJOOR,
VADAKKUMBHAGOM VILLAGE, ALUVA-683575.[DELETED]
6 JOHNSON VARGHESE
THALIYAN VEEDU, KANJOOR,
VADAKKUMBHAGOM VILLAGE, ALUVA-683575. [DELETED]
[R5 AND R6 ARE DELETED FROM THE PARTY ARRAY AS
PER ORDER DATED 20/12/2016 IN IA NO.1456/16 IN
WA.933/13].
7 DR.ABRAHAM
KULANGARA HOUSE, MEKKOZHOOR, MAILAPARA P.O.,
PATHANAMTHITTA, REP.BY HIS POWER OF ATTORNEY
HOLDER SRI.SUNNY MATHEW, GRACEHILL,
KIDANGOORKARA, ANGAMALY P.O., ALUVA TALUK,
ERNAKULAM DISTRICT-683575.
8 ELSY VARGHESE
W/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM-683574.
9 SIMY VARGHESE
D/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM-683574.
10 JOHNSON VARHESE
S/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM-683574.
11 JUSTIN VARGHESE
S/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM-683574.
12 JOGIN VARGHESE
D/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O., KALADY,ERNAKULAM-683574.
BY ADVS. SRI.N.D.PREMACHANDRAN,SC,SUPPLYCO, R1
DR.GEORGE ABRAHAM, R7
SRI.N.N.SUGUNAPALAN (SR.)
WA NO.839/2013 & conn.cases 8
2026:KER:10572
SRI.S.SUJIN, R8 TO R12
SRI.K.P.HARISH, SR.GOVERNMENT PLEADER, R2 & R3
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 06.02.2026,
ALONG WITH WA.839/2013 AND CONNECTED CASES, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
WA NO.839/2013 & conn.cases 9
2026:KER:10572
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI
&
THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.
FRIDAY, THE 6TH DAY OF FEBRUARY 2026/17TH MAGHA, 1947
WA NO.938 OF 2013
ARISING OUT OF THE JUDGMENT DATED 28.02.2013 IN
WP(C) NO.31143/2007 OF HIGH COURT OF KERALA
APPELLANTS/ADDL.3RD & 4TH RESPONDENTS:
1 BIJU KARNAN
S/O.K.KARNAN, XII/674, KURUVAMPADATH HOUSE,
OKKAL P.O., ERNAKULAM DISTRICT-683550.
2 AMMINI KARNAN
W/O.K.KARNAN, XII/674,
KURUVAMPADATH HOUSE, OKKAL P.O.,
ERNAKULAM DISTRICT-683550.
BY ADVS.
SRI.M.R.ANISON
SMT.K.P.GEETHA MANI
SRI.B.K.GOPALAKRISHNAN
RESPONDENTS/PETITIONERS & RESPONDENTS 1 & 2 & ADDL.
PETITIONERS 3 TO 7:
1 M/S.T.O.VARGHESE
RICE AND PADDY DEALERS, KANJOOR WEST-683575,
ERNAKULAM DISTRICT, REPRESENTED BY ITS
PROPRIETOR SRI.T.O.VARGHESE
2 M/S.KALLOOKKADAN MODERN RICE MILL
RICE AND PADDY MERCHANTS, OKKAL P.O.,KALADY,
ERNAKULAM DISTRICT-683550, REPRESENTED BY ITS
PROPRIETOR K.D.THOMAS
(R2 IS DELETED FROM THE PARTY ARRAY AT THE RISK
OF THE APPELLANT AS PER ORDER DATED 31/01/2017 IN
I.A.NO.78/2017 IN W.A.NO.938/2013)
WA NO.839/2013 & conn.cases 10
2026:KER:10572
3 THE MANAGING DIRECTOR
KERALA STATE CIVIL SUPPLIES CORPORATION LIMITED,
MAVELI BHAVAN, GANDHI NAGAR,COCHIN-682020.
4 STATE OF KERALA
REPRESENTED BY ITS CHIEF SECRETARY,GOVERNMENT
SECRETARIAT,THIRUVANANTHAPURAM-695001.
5 ELSY VARGHESE
W/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR P.O,KALADY, ERNAKULAM-683574.
6 SIMY VARGHESE
D/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM-683574.
7 JOHNSON VARGHESE
S/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR P.O.,KALADY, ERNAKULAM-683574.
8 JUSTIN VARGHESE
S/O.LATE T.O.VARGHESE, THALIYAN HOUSE,
KANJOOR P.O,KALADY, ERNAKULAM-683574.
9 JOHN VARGHESE
D/O.LATE T.O.VARGHESE,THALIYAN HOUSE,
KANJOOR P.O., KALADY, ERNAKULAM-683574.
BY ADVS.
SRI.N.N.SUGUNAPALAN (SR.)
SRI.S.SUJIN, R5 TO R9
SRI.N.D.PREMACHANDRAN, SC, R3
SRI.K.P.HARISH, SR.GOVERNMENT PLEADER, R4
THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON
06.02.2026, ALONG WITH WA.839/2013 AND CONNECTED CASES,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WA NO.839/2013 & conn.cases 11
2026:KER:10572
JUDGMENT
[WA Nos.839/2013, 898/2013, 933/2013, 938/2013]
Dated this the 06th day of February, 2026
Syam Kumar V.M., J.
These Writ Appeals raise common questions for consideration
and are filed challenging the common judgment of the learned
Single Judge dated 28.02.2013 in three connected Writ Petitions.
They were heard and disposed of together vide this common
judgment. W.A.No.898 of 2013 is treated as the lead case for the
sake of easy reference to the parties and exhibits.
2. The subject matter of these litigations are disputes arising
from contracts awarded by the Kerala State Civil Supplies
Corporation (hereinafter referred to as the 'Corporation') to rice mills
for procurement of paddy from farmers and societies, for milling and
supply to ration dealers.
3. W.P.(C) No.31143 of 2007 was filed by two rice mill owners
contending that there had been illegal rejection of certain
consignments of paddy and rice supplied by them. They had in the
W.P.(C) inter alia sought to quash the proposed action/demand
notice initiated/issued to them by the Corporation and sought
issuance of a writ of mandamus directing the Corporation to pay
2026:KER:10572
them the amounts due under the relevant contract. A prayer for
issuance of a writ of mandamus directing the Corporation to decide
the quantity rejected on the ground that the same was not in
conformity with the PFA standard and to relieve the petitioners from
all liabilities up to a specified date and to pay them the amount due
as hulling charges, was also made in the said Writ Petition.
4. W.P.(C) No.36841 of 2009 was filed by a mother and son
duo contending that they had purchased two mills involved in
W.P(C) No.31143 of 2007 which have outstanding dues to the
Corporation and that the revenue recovery proceedings initiated
against the relevant mill properties will put them to irreparable loss
and prejudice. They thus sought to quash the revenue recovery
proceedings and a direction not to proceed against the properties
now owned by them, pending disposal of W.P.(C)No.31143 of 2007.
5. Another W.P.(C) numbered as W.P.(C) No.33822 of 2010
had also been filed by K.C.Abraham claiming to be the bonafide
purchaser for value challenging the orders passed by the Revenue
Authorities and seeking a direction that the relevant property cannot
be attached and proceeded for non-payment of dues payable to the
Corporation by the petitioners in W.P.(C) No.31143 of 2007.
2026:KER:10572
6. After admitting the W.Ps., certain interim orders were
passed based on which certain amounts were remitted by the 1st
petitioner in W.P.(C) No.31143 of 2007 towards the amounts
claimed by the Corporation. The revenue recovery proceedings
were stayed on the basis of the amounts thus remitted. The relevant
property changed hands in the meanwhile and an agreement was
entered into between the Corporation and the subsequent
purchasers which envisaged making deduction of certain amounts
from the amounts due to them from the Corporation. The legal heirs
of the deceased 1st petitioner in W.P.(C) No.31143 of 2007 were
impleaded as additional respondents and the subsequent
purchasers too got impleaded. The separate Writ Petition filed by
them were also tagged along with the main litigation viz., W.P.(C)
No.31143 of 2007. Finally, the learned Single Judge vide common
judgment dated 28.02.2013 disposed of the W.P.(C)s inter alia
holding as follows:
"(i) In WP (C) No.31143/2007, it is declared that the
Corporation is not entitled to recover from the legal heirs of the
first petitioner, the delay cut of ₹10/- per day per M/T rice
amounting to ₹59,86,649/- and no further amount is payable by
them to the Corporation.
(ii) WP (C) No.36841/2009 is allowed quashing the
revenue recovery proceedings against the property purchased
by the petitioners as per Exhibits P2 to P4.
(iii) WP (C) No.33822/2010 is allowed quashing Exhibits
P6, P8 and P10.
(iv) If there is any settlement of liability between the
2026:KER:10572
petitioners in WP (C) No.36841/2009 and respondents 5 to 12
in regard to payment of ₹27,59,002/-, they are at liberty to take
any proceedings as envisaged under law."
7. Aggrieved by the judgment of the learned Single Judge in
W.P.(C) Nos.31143 of 2007 and 36841 of 2009, the Corporation has
filed W.A.Nos.839 of 2013 and 898 of 2013 respectively. The
subsequent purchasers have also challenged the very same
judgment by filing W.A.Nos.938 and 933 of 2013. No appeal is seen
filed with respect to W.P.(C) No.33822 of 2010.
8. Heard Sri.N.D.Premachandran, Advocate for the appellant
- Kerala State Civil Supplies Corporation, Sri.B.K.Gopalakrishnan
Advocate for R2, Sri.K.P.Harish, Senior Government Pleader for R3
and R4 and Sri.S.Sujin, Advocate for respondents 9 to 13.
9. The learned counsel for the appellant submitted that the
judgment of the learned Single Judge is unsustainable in law. It is
submitted that the reliefs granted by the learned Single Judge had
not been prayed for in the Writ Petition and were beyond the
pleadings. The learned Single Judge erred in issuing positive
directions based on a contractual arrangement, overlooking the
settled legal position that writ jurisdiction under Article 226 of the
Constitution is generally not maintainable for disputes arising from
pure contractual obligations. Material facts regarding quality
2026:KER:10572
specifications and the obligations under the tender conditions and
the agreements had been suppressed by the petitioners in the W.P.,
and that no reliefs ought to have been granted to the Mills/its
owners/their representatives, for the reason of such suppression of
material facts. There had been specific admissions and
undertakings made by the Mills/its owners to pay interest for the
delay if default was committed by them, and the said aspect had
been overlooked by the learned Single Judge. The learned Judge
ought to have refrained from exercising extraordinary jurisdiction
under Article 226 to enforce contracts, calculate damages, or to
resolve disputed questions of fact. The parties ought to have been
relegated to seek their remedies by filing a civil suit.
10. Basing on the facts of the case, the learned counsel
contended that the learned Single Judge had failed to take into
consideration the admissions made by the Mills/its owners in the
addendum agreement produced by which they had undertaken to
deliver 10535 quintals of rice due to the Corporation, confirming to
the quality specifications mentioned in the agreement on or before
31.01.2007, and to pay interest at 10% per annum for the defaults.
It is submitted by the learned counsel that the learned Single Judge
2026:KER:10572
erred in overlooking the same and in declaring that the petitioners in
W.P.(C) No.31143 of 2007 are not liable to pay any amount to the
Corporation. It is further submitted that the learned Single Judge
ought to have found that the Mills/its owners are bound by Exhibit
P1 agreement and also by the terms and conditions of the tender
and its annexures, specifying the quality standards, and they ought
to have processed the paddy and delivered the rice in terms of the
agreement in time. Since they had failed to deliver the rice in
accordance with the time schedule stipulated, they were liable to
pay a penalty as per the relevant clause in the agreement. The said
aspect was overlooked by the learned Single Judge.
11. The learned counsel submitted that the alleged 'double
penalty' as had been found by the learned Single Judge to be
imposed is baseless, illegal and unsustainable and has not been
supported by any pleadings or factual material. The finding of the
learned Single Judge that the actual realisation of the price of rice
at ₹12.32/- per kilogram itself is a penalty imposed on the defaulter
for not providing rice after taking delivery of paddy is also
unsustainable and devoid of any actual basis. It is submitted that
no element of penalty is included in ₹12.32/- per kilogram of rice
2026:KER:10572
and that the petitioner had no case that the realisation of actual cost
of rice was a penalty. It is submitted by the learned counsel that
other than the amount remitted as per the interim order rendered by
this Court, no amounts had been realised from the petitioners in the
W.P. towards the cost of the rice except submitting a statement
showing the actual amount due.
12. It is further submitted by the learned counsel that the
learned Single Judge had not only failed to take into consideration
the entire facts of the case, including the terms and conditions of the
tender documents, the contractual documents, the communications
between the parties etc., but also had misstated the facts regarding
the quantum of amount payable to the Corporation. The learned
Single Judge had erred in entertaining the Writ Petition challenging
Exhibit P18 and Exhibit P19 notices issued by the Corporation,
which concerned an issue that falls squarely within the realm of a
contract involving disputed facts which require evidence. The
learned Single Judge had, according to the learned counsel,
decided the matter arbitrarily and in a one-sided manner, without
taking evidence or without even considering the evidence on record,
such as the binding provisions of the contract and the calculation
WA NO.839/2013 & conn.cases 18
2026:KER:10572
statements submitted in accordance with the terms and conditions
of the contract.
13. As regards the contentions put forth by the subsequent
purchasers, the learned counsel for the Corporation submits that the
contention that they were never informed about the liability to the
appellant Corporation is not true insofar as they had themselves
entered into an agreement with the appellant Corporation already
agreeing to deduct certain amounts from the payments towards
milling and transportation charges due to them from the appellant
Corporation. The said respondents had purchased the property after
initiation of revenue recovery proceedings against the same, and
the sale was effected fraudulently and with the intent to defeat the
recovery steps. It is submitted by the learned counsel that the
learned Judge erred in failing to take note that the relevant sale of
the Mill property had been effected after initiation of the revenue
recovery proceedings and had erroneously proceeded to make
observations that are starkly contradictory to the pleadings in the
matter. The learned Single Judge, it is submitted, had committed a
grave error in treating the payment of Rs.27,59,002/- as paid by the
petitioners in W.P.(C)No.31143 of 2007 to comply with the
2026:KER:10572
conditional interim order passed by the court and had failed to take
into consideration the agreement entered into between the appellant
Corporation and the subsequent purchasers. It is thus prayed by the
learned counsel for the Corporation that the judgment of the learned
Single Judge may be set aside and the W.As filed by the
Corporation may be allowed.
14. Sri.B.K.Gopalakrishnan, the learned counsel appearing for
the subsequent purchasers ie., the appellants in W.A.Nos.933 and
938 of 2013, on the other hand, submit that the said appellants are
bona fide purchasers of 3 rice mills along with 2.85 acres of land
owned by respondents Nos.4 to 6 in the said Writ Petition. In the
relevant sale deed, it had been mentioned that no liabilities existed
over the properties and it is only when the appellants approached
for effecting mutation of the properties that they were informed that
a liability of more than Rs.1.2 Crores is due to the respondent
Corporation from respondents 4 to 6. The contentions of the learned
counsel are premised on Section 44 of the Revenue Recovery Act,
1968, with respect to the effect of engagement and transfers by the
defaulters, as well as under Section 5 and Section 8 of the Kerala
Revenue Recovery Act, 1968. It is submitted that in the light of the
2026:KER:10572
said legal provisions, there is no mode of recovery from a third-party
account and the third party may have a separate and distinct
contract with the other party. It is submitted that in such cases, the
contractual obligations and responsibilities lie only within the
parameters of the relevant contract. It is contended that insofar as it
is admitted by the Corporation that while the revenue recovery
proceedings were pending, the party respondents had sold the
properties without revealing the revenue recovery proceedings and
two items on the properties had been purchased by the appellants,
in the light of Section 44 of the Revenue Recovery Act, no notice
could have been issued to the said appellants unless and until a
notice had been addressed to the defaulter.
15. The next contention vociferously put forth by the learned
counsel concerns the amount of ₹27,59,002/- and to the agreement
dated 08.02.2010. It is submitted that the findings arrived at by the
learned Single Judge with respect to the amount of ₹27,59,002/-
withheld by the Corporation from the amounts payable are incorrect
and are opposed to the documentary evidence put forth in the case.
The principal grievance of the learned counsel is regarding the
conclusion arrived at by the learned Single Judge that if there is any
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settlement of liability between the petitioners in W.P.(C) No.36841 of
2009 and respondents 5 to 12 regarding payment of ₹27,59,002/-,
they are at liberty to take proceedings as envisaged under law. The
said finding, it is submitted, was arrived at by the learned Single
Judge blindly believing the false and incorrect version given by the
1st petitioner in W.P.(C) No.31143 of 2007 to the effect that it was
he who had paid the amount of ₹27,59,002/- to the Corporation
towards the amount of ₹62,00,000/- payable by him as per the
interim order rendered by this Court in the said W.P.(C). It is
submitted that the agreement dated 08.02.2010 is only a unilateral
agreement and the same had been executed on the insistence of
the Corporation, failing which the appellants would have been
denied the continuance of the job working contracts. It is thus
contended that there is no contract between the Corporation and the
appellants in the subject matter.
16. It is further submitted by the learned counsel for the
appellants in W.A.Nos.933 and 938 of 2013 that the finding of the
learned Single Judge that the said amount of ₹27,59,002/- had been
paid by the deceased 1st petitioner in W.P.(C) No.31143 of 2007 is
per se incorrect, as could be seen from a mere perusal of Exhibit P2
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sale deed, Exhibit P12 agreement and Exhibit P14 notice. It is
contended that a combined reading of Exhibit P1 and Exhibit P2
would show that the entire consideration of ₹3.65/- lakhs stipulated
in the sale agreement had been paid by the subsequent purchasers
before executing the sale deed. It is thus submitted that a combined
reading of Exhibits P1, P2, P12 and P14 would establish the factual
mistake committed by the learned Single Judge regarding the
withheld amount of ₹27,59,002/-, which was payable by the
Corporation to the subsequent purchasers. The said conclusion
arrived at by the learned Single Judge, it is submitted, is opposed to
all the documentary evidence available in the case. The learned
counsel prays that the judgment of the learned Single Judge in
W.P.(C) No.36841 of 2009, to the extent it does not direct the
Corporation to release the withheld amount of ₹27,59,002/- to the
appellants, is incorrect and is fit to be interfered with. It is contended
that the learned Single Judge ought to have found that the
Corporation does not have any right to withhold the amounts which
are due to the appellants and that the dispute between the
Corporation and the petitioners in W.P.(C) No.31143 of 2009 does
not have any impact whatsoever on the amounts that are due from
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the Corporation to the appellants. The learned counsel also
challenges the finding to the effect that the appellants are not bona
fide purchaser of the relevant property and contends that an amount
of ₹27,59,002/- is payable to the appellant by the Corporation. The
learned Single Judge ought to have granted liberty to initiate
proceedings against the Corporation for realisation of the said
amount, as it is an admitted fact that the same is outstanding from
the Corporation to the appellants. Reliance is placed on the dictum
laid down in Kumari Shrilekha Vidyarthi and others v. State of
UP and others [(1991) 1 SCC 212] and M.P.Power Management
Company Ltd. Jabalpur v. Sky Power South East Solar India
Pvt. Ltd. and others [(2023) 2 SCC 703] to substantiate the
contentions that when instrumentalities of the State like the
Corporation act completely contrary to the parameters of Article 14,
such action is arbitrary and discriminatory, entitling the writ courts to
interfere.
17. Sri.Sujin, the learned counsel for the respondents, submit
that the judgment of the learned Single Judge does not merit any
interference. The same has been rendered in accordance with law
after due consideration of the contentions and also taking note of
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the subsequent developments. The learned counsel invites our
attention to that portion of the impugned judgment wherein the
learned Single Judge had specified that the endeavour was to
ascertain whether any modification can be made to the statement
submitted by the Corporation before the court, so as to avoid further
controversies in the matter and to give a finality to the issue involved
in the claims and the counterclaims. The learned Single Judge had
taken note of the fact that during the pendency of the Writ Petition,
substantial payments had been made by the defaulter or on his
behalf by the subsequent purchaser. The reliance by the learned
Single Judge on the dictum in ABL International Ltd. v. Export
Credit Guarantee Corporation of India Ltd. [(2004) 3 SCC 553] is
termed as apposite, and the exercise of jurisdiction is sought to be
justified based on the same.
18. We have heard all parties and have considered the
contentions put forth. The precedents relied on have been duly
perused. Before we proceed to consider the respective contentions,
we deem it relevant to remind ourselves of the law relating to
exercise of writ jurisdiction in contractual matters involving a state
entity.
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19. It is trite and settled that a Writ Petition is not a proper
proceeding for the adjudication of disputes related to contractual
obligations. Ascertainment of facts based on the contents of an
affidavit is impermissible in dealing with contractual disputes. Such
issues need to be decided after considering evidence in a civil suit,
but not before the writ courts. If appreciation of the subject dispute
required taking of oral evidence; then the High Court may refuse to
exercise its power. Mere involvement of a question of fact in the lis
though is not a bar for entertaining a Writ Petition, exercise of
discretionary power has to be based on sound judicial principles
[See State of Kerala v. M.K.Jose (2015) 9 SCC 433]. It has been
held in Gunwant Kaur v. Municipal Committee, Bhatinda [(1969)
3 SCC 769] that when the petition raises questions of fact of a
complex nature, which may, for their determination require oral
evidence to be taken, and on that account, the High Court is of the
view that the dispute may not appropriately be tried in a Writ
Petition, the High Court may decline to try a petition. Having thus
reminded ourselves of the law governing the exercise of this
jurisdiction in contractual matters, we proceed to consider the
contentions put forth by the respective sides.
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20. We note that the learned Single Judge was not totally
oblivious of the nature of the contentions put forth by the parties,
and its predominantly contractual overtone, which seriously limited
the jurisdiction under Article 226. The learned Judge had noted that
the questions that arose for consideration were regarding the actual
amount payable by the petitioners in W.P.(C) No.31143 of 2009 and
had also concluded that as regards the settlement of accounts, the
same is not a matter which the court, exercising jurisdiction under
Article 226 could decide upon. It had also been noted by the learned
Single Judge that the matter relates to a contract which, under
normal circumstances, the court would not have adjudicated, as it
involves disputed questions. However, the learned Single Judge
thereafter proceeded to make a verification of the statements
produced and thereafter concluded that no substantial difference
could be noted between the contentions of the parties, other than
three specific aspects. The said three aspects noted by the learned
Single Judge were (1) the claim of the Corporation relating to the
value of rice, (2) the penalty by way of delay cut of ₹10/- per day per
metric ton and (3) regarding the claim for the value of the shortage
in quantity of rice. After thus identifying the issues in dispute
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between the parties, the learned Single Judge reasoned that the
same though are matters to be considered on the basis of the terms
and conditions of the contract, so as to enable a quietus to the
dispute, the said outstanding issues are to be settled in the very
same writ proceedings. There is some merit in the contention of
Sri.N.D.Premachandran learned counsel for the Corporation that at
this point, the learned Single Judge committed a jurisdictional error.
21. However, it is apparent that the learned Single Judge was
persuaded to take such a course of reasoning, taking note of the
subsequent developments, especially the fact that a substantial
amount had been paid to the Corporation either by the original
petitioners or the impleaded subsequent purchasers of the property,
during the interregnum. However, insofar as the Corporation itself
was relying on the terms and conditions of the contract as well as
disputing the scope and ambit of the terms of the contract and the
obligations arising therefrom, it was not strictly proper on the part of
the learned Single Judge to have proceeded to draw up the aspects
of the dispute and to resolve the same by appreciating the factual
elements and interpreting the terms and conditions of the contract.
The reliance placed in this respect on the dictum of the Hon'ble
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Supreme Court in ABL International Ltd. and another v. Export
Credit Guarantee Corporation of India Ltd. and others [(2004) 3
SCC 553] does not suit the facts and circumstances of the dispute
at hand. It is the specific case of the Corporation that the addendum
to the agreement Exhibit R1(c) was overlooked by the learned
Single Judge. The specific allegations regarding violation of the
terms and conditions of Exhibit P1 agreement by the other party, the
alleged suppression of material facts regarding quality specifications
and obligations under the tender conditions and the contention that
no 'double penalty' is attracted on an interpretation of the relevant
terms and conditions of the contract, as seen raised by the
Corporation, points to the fact that the ratio in ABL International
Ltd. (supra), which laid down that a writ court has the jurisdiction to
entertain a Writ Petition involving disputed questions of fact and that
there is no absolute bar even if the dispute arises out of a
contractual obligation, could not have been extended to or applied
to the facts of the dispute at hand. The learned Single Judge had
clearly erred in the said respect.
22. It is noted that the learned Single Judge had, after having
decided to appreciate the facts in issue and the contractual
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documents based on an appreciation of the facts, the rate per
kilogram of the rice as well as the processing time, the delivery
schedule of rice and the penalty that is envisaged as per the
arrangement, concluded that a double penalty had been imposed on
the miller. It was found that the imposition of a penalty of
₹59,86,649/- amounts to a double penalty, which was not
contemplated under the provisions of the agreement. Referring to
clause 40 of Exhibit P1 agreement, it was held that the same could
be applicable only in a situation where the contractor commits
delay in processing of rice. It was further concluded that the penalty
imposed for the delay in processing 6806.47 quintals, which was
never processed and given, was not in line with the contract and is
arbitrary. The learned Single Judge thus reasoned that the amount
is liable to be deducted from the claim made by the Corporation.
The learned Judge thereafter came to the finding that, going by the
formula applied in the arrangement entered into by the parties, one
could see that on payment of ₹62,00,000/- towards the liability, no
further amount will be payable by the petitioners in W.P.(C)
No.31143 of 2007 to the Corporation. The learned Single Judge
therefrom opined that, going by the statement, no further amount
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will be payable by the defaulter and proceeded to allow the Writ
Petition, declaring that the penalty shall not be recovered from the
petitioners in W.P.(C) No.31143 of 2007 and no further amount is
payable by them to the Corporation.
23. We find merit in the contention put forth by the learned
counsel for the Corporation that the learned Single Judge erred in
issuing positive directions based on a contractual arrangement,
overlooking the settled legal position with respect to limitations on
the exercise of writ jurisdiction under Article 226 of the Constitution
in matters involving contractual interpretation. It follows that the
declaration in the impugned judgment of the learned Single Judge
that the Corporation is not entitled to recover from the legal heirs of
the 1st petitioner, the delay cut of ₹10/- per day per M/T rice
amounting to ₹59,86,649/- and no further amount is payable by
them to the Corporation is not sustainable in law. As regards the
findings arrived at by the learned Single Judge while quashing the
revenue recovery proceedings, we note that the same too are not
legally grounded. As has been laid down by the Hon'ble Supreme
Court in State of Kerala and another v. Radhamany [(1996)6 SCC
287] in the context of Section 44(3) of the Kerala Revenue Recovery
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Act, 1968, as regards the transfer of immovable property made by a
defaulter after public revenue due on any land from him has fallen in
arrears, sale if made with intent to defeat or delay the recovery of
such arrears, such sale shall not be binding upon the Government.
24. It follows that the rights and obligations inter se the parties
to these litigations are subject to the contractual agreements to
which they are parties and shall be governed by the terms and
conditions of the same. The learned Single Judge erred in engaging
in an appreciation of questions of fact based on the settlement, and
in embarking on an inquiry which necessitated interpretation of the
terms of the contract. The Corporation shall be free to initiate
appropriate proceedings as envisaged in law for recovering the
amounts that are outstanding to it, of course, only after giving due
credit to the amounts already realised.
In view of the above, W.As are allowed. The judgment of the
learned Single Judge is set aside. The parties shall be entitled to
pursue any and all appropriate legal remedies to enforce their
respective rights under the inter se contracts or arrangements to
which they are party. All contentions of the parties are left open to
facilitate the above.
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None of the observations of the learned Single Judge in the
impugned judgment touching on the merits of the matter shall be
treated as binding or conclusive in the litigation, if any, initiated by
either of the parties.
Sd/-
SUSHRUT ARVIND DHARMADHIKARI
JUDGE
Sd/-
SYAM KUMAR V.M.
JUDGE
csl
