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  Judgement - 11KLC-3898
 
   
   
 

P.S.Gopinathan
tuesday the 14th December2010/23rd Agrahayana

Party Array / Case No.


IN THE HIGH COURT OF KERALA AT ERNAKULAM

 

SA.No. 400 of 1998(E)

 

 

 

1. THE EXCISE ASST.COMMISSIONER

                      ...  Petitioner

 

                        Vs

 

1. KANIYANKANDI PADMANABHAN

                       ...       Respondent

 

Judgement



    IN THE HIGH COURT OF KERALA AT ERNAKULAM

     

    SA.No. 400 of 1998(E)

     

     

     

    1. THE EXCISE ASST.COMMISSIONER

                          ...  Petitioner

     

                            Vs

     

    1. KANIYANKANDI PADMANABHAN

                           ...       Respondent

     

                    For Petitioner  :GOVERNMENT PLEADER

     

                    For Respondent  :SRI.R.PARTHASARATHY

     

    The Hon'ble MR. Justice P.S.GOPINATHAN

     

     Dated :14/12/2010

     

     O R D E R

                                P.S. GOPINATHAN, J.

                               = = = = = = = = = = =

                                S.A. NO. 400 OF 1998

                              = = = = = = = = = = = = =

     

            DATED THIS, THE 14TH DAY OF DECEMBER, 2010

     

                                   J U D G M E N T

     

     

     

           The second appeal was preferred by the defendants 1 to 3in O.S. 223

     

    of 1990 on the file of the Munsiff's Court, Koyilandy. The first respondent

     

    herein instituted the suit against the appellant and another (4th defendant)

     

    seeking a decree of declaration that the revenue recovery proceedings

     

    initiated against the first respondent is barred by limitation and to restrain

     

    the appellants by a decree of        permanent prohibitory injunction from

     

    realising any amount from the first respondent by revenue recovery in

     

    pursuance of Ext.A1 notice dated 2.5.1990.

     

           2. The appellants, the State and their officials, contended that the

     

    revenue recovery proceedings initiated were not at all barred by limitation

     

    and that the suit is not maintainable because of the bar under Section 72 of

     

    the Revenue Recovery Act and prayed for dismissal of the suit.

     

           3. After raising the issues, the parties were sent for trial. During the

     

    course of trial, the first respondent was examined as PW.1. The Excise

     

    Inspector, Koyilandy, was examined as DW.1. On the side of the first


     

    S.A. 400/1998                           2

     

    respondent, Exts. A1 to A4 were marked. On the side of the appellants,

     

    Exts.B1 to B4 were marked. The learned Munsiff, on appraisal of the

     

    evidence on record, arrived at a finding that since the recovery proceedings

     

    were initiated within thirty years, it is not at all barred by limitation and that

     

    the suit is hit by Section 72 of the Revenue Recovery Act. Consequently,

     

    the suit was dismissed.

     

          4.   The first respondent took up the matter in appeal as A.S. 33 of

     

    1993 before the Subordinate Judge, Koyilandy. The Subordinate Judge, by

     

    the impugned judgment dated 7.2.1996, allowed the appeal on entering into

     

    a finding that the period of limitation is only three years and hence revenue

     

    recovery proceedings are barred by limitation and that since appellants 1 to

     

    3 failed to initiate any action against the 4th respondent also, who is jointly

     

    liable for the amount covered by Ext.A1, there is fraud and since there is

     

    fraud on the side of the appellants, the suit is not hit by Section 72 of the

     

    Revenue Recovery Act, as then it was.           Consequently, the appeal was

     

    allowed. Now the second appeal.

     

          5.     The following are the questions of             law that arise for

     

    consideration:

     

          i.     Whether the liability due from the first respondent is barred by

                 limitation?


     

    S.A. 400/1998                          3

     

           ii.    Whether the failure of the appellants to initiate action against

                 the second respondent who is jointly liable with the first

                 respondent would amount to fraud?

     

     

           6. The brief facts leading to the suit is as follows:   Respondents 1

     

    and 2 jointly bid the right to run two toddy shops bearing Nos. 19 and 22 of

     

    Koyilandy Range for the year 1968-69 and 1969-70. After executing Exts.

     

    B1 and B2 agreements, inter alia agreeing to remit the bid amount jointly

     

    and severally, they run the above toddy shops for the relevant years. Since

     

    the respondents failed to discharge the liability as per Exts. B1 and B2,

     

    Ext.A1 demand notice was caused to the first respondent on 2.5.1990. The

     

    first respondent in the plaint would contend that he was liable to pay only

     

    half of the kist amount. According to him, he had paid the same and for the

     

    balance half, the second respondent alone is liable and no revenue recovery

     

    proceedings are sustainable against him.

     

                 7. Heard Sri. P.R. Jayakrishnan, learned Government Pleader

     

    and the learned counsel for the respondents.

     

    Point No. 1.

     

           8. Article 112 of the Schedule of the Limitation Act would show

     

    that the period of limitation for a suit on behalf of the State would be 30

     

    years and not three years. Schedule 112 of the Limitation Act reads thus:


     

    S.A. 400/1998                          4

     

     

     

     

    Description of suit        Period of limitation    Time from which period

                                                              begins to run

    "Any suit (except a        suit

    before the Supreme Court

     in the exercise of its

    original jurisdiction) by        Thirty years      When the period of

    or on behalf of the Central                        limitation would begin to

    Government or any State                            run under this Act against

    Government, including the                          a like suit by a private

     Government of the State                           person."

    of Jammu and Kashmir.

     

    Learned counsel for the first respondent fairly conceded that the period of

     

    limitation as against the State is 30 years as stipulated under Article 112.

     

    He had also been fair enough to concede that the appellate court went wrong

     

    in    finding that the period of limitation is three years. In the above

     

    circumstances, I find that the period of limitation for instituting a suit by or

     

    on behalf of the Central Government or State Government is 30 years.

     

    Since Ext.A1 notice is within that period the revenue recovery proceedings

     

    are not at all barred by limitation.

     

    Point No.2.

     

           9. Exts. B1 and B2 would show that the liability of the respondents

     

    for the kist amount is joint and several. Ext.A1 would show that action was

     

    initiated only against the first respondent.   DW.1 had deposed that action

     

    was initiated against the second respondent also for realisation of the


     

    S.A. 400/1998                           5

     

    amount due as per Ext.A1. But the learned Subordinate Judge rejected the

     

    evidence of DW.1 in the light of the plea of the second respondent that no

     

    action was initiated against him for realisation of the amount.

     

    Consequently, it was found that since there is failure on the side of the

     

    appellants to initiate action against the second respondent, there is collusion

     

    in between the appellants and the second respondent.             The learned

     

    Subordinate Judge further observed that the appellants should not have

     

    shown any discrimination between respondents 1 and 2. According to the

     

    learned Subordinate Judge, the appellants did not act reasonably and fairly.

     

    Hence it concluded that there is fraud and that when there is fraud, a suit

     

    against the appellants is not at all barred under Section 72 of the Revenue

     

    Recovery Act as then it was. For a correct appraisal of the law and facts, it

     

    would be relevant to read Section 72 of the Revenue Recovery Act, which is

     

    as follows: (Before the amendment by act 31 of 2007)

     

                         Section 72:- General bar to jurisdiction of

                 Civil Courts save where fraud alleged.--

     

                         Except as otherwise expressly provided in

                 this Act, every question arising between the

                 Collector or the authorized officer and the

                 defaulter or his representative or any other person

                 claiming any right through the defaulter, relating

                 to the execution, discharge or satisfaction of a

                 written demand issued under this Act or relating to

                 the confirmation or setting aside by an order under


     

    S.A. 400/1998                           6

     

                  this Act of a sale held in execution of such

                  demand, shall be determined not by suit, but by

                  order of --

     

                        (i)    the Board of Revenue, where the

                  Collector is a party to the question;

     

                        (ii)   the Collector, in other cases:

     

                  Provided that a suit may be brought in a Civil Court in respect

                  of any such question on the ground of fraud."

     

     

    A reading of the above provision would show that there is a general bar to

     

    jurisdiction of the civil courts relating to execution, discharge or satisfaction

     

    of a written demand issued under the Revenue Recovery Act except on the

     

    ground of fraud.    In view of the amendment made by Act 31/07 with effect

     

    from 12.12.2005 there is absolute bar to the jurisdiction of the civil court.

     

          10. It is not in dispute that by virtue of Exts.B1 and B2 executed by

     

    the respondents, the liability of the respondents are joint and several. Since

     

    the liability of the respondents are joint and several, it is for the State to

     

    decide as to against whom action shall be initiated so as to have the arrears

     

    levied at the earliest. The mere fact that there is failure on the side of the

     

    appellants to initiate action against one of the defaulter would not in any

     

    way amount to fraud mentioned under the proviso to Section 72. The

     

    evidence of DW-1 would show that separate demand notice was served


     

    S.A. 400/1998                         7

     

    upon the second respondent for realisation of the dues.     The evidence of

     

    DW.1 on that aspect remains unimpeached.            But the appellate court

     

    disbelieved DW.1 for the        reason that the second respondent in his

     

    pleadings contended that no action was taken against him. The appellate

     

    judge failed to note that the pleadings of the second respondent on that

     

    aspect was disputed by the appellants and that no legal sanctity can be given

     

    to the disputed pleadings to discredit a witness who withstood the cross

     

    examination. The appellate court thus fundamentally erred in appreciating

     

    the evidence of DW.1. The appellate court ought to have believed the

     

    evidence of DW.1 that action was also initiated against the second

     

    respondent. In this view of the matter, the reason stated by the appellate

     

    court that no action was initiated against the second respondent, to find that

     

    there was fraud, lacks evidentiary support and not sustainable. Adding to

     

    the above, as mentioned earlier, the inaction on the side of the authorities

     

    against one of the defaulter also would not amount to fraud so as to enable

     

    the co-defaulter to challenge the revenue recovery proceedings in a civil

     

    court alleging fraud. Fraud is not defined in the Kerala Revenue Recovery

     

    Act. Since the revenue recovery action was initiated basing upon Exts. B1

     

    and B2 agreements, it would be appropriate to read Section 17 of the

     

    Contract Act which defines fraud as follows:


     

    S.A. 400/1998                          8

     

                              " 17.     'Fraud' defined.    -- 'Fraud'

                 means and includes any of the following acts

                 committed by a party to a contract, or with his

                 connivance, or by his agent, with intent to deceive

                 another party thereto or his agent, or to induce him

                 to enter into the contract:--

     

                       (1) the suggestion, as a fact, of that which is

                 not true, by one who does not believe it to be true;

     

                       (2) the active concealment of a fact by one

                 having knowledge or belief of the fact;

     

                       (3)     a promise made without any intention

                 of performing it;

     

                       (4) any other act fitted to deceive;

     

                       (5)    any such act or omission as the law

                 specially declares to be fraudulent.

     

                 Explanation.-- Mere silence as to facts likely to

                 affect the willingness of a person to enter into a

                 contract is not fraud, unless the circumstances of

                 the case are such that, regard being had to them, it

                 is the duty of the person keeping silence to speak

                 or unless his silence, is, in itself, equivalent to

                 speech."

     

    If the above definition is given regard, at no stretch of imagination, the

     

    failure of the appellants to take action against the second respondent , if it

     

    is so, would amount to fraud. In the Collins PaperBack English Dictionary

     

    the meaning of the word 'fraud' is given as follows:

     

                 "1. deliberate deception, trickery or cheating

                       intended to gain an advantage.


     

    S.A. 400/1998                          9

     

                  2. an act or instance of such deception.

     

                 3. Inf.   a person who acts in a false or deceitful

                 way."

     

    Even by applying dictionary meaning, I find that the inaction of the

     

    appellant would in no way amount to fraud.           There is no deception,

     

    trickery or cheating intended to gain an advantage. Probably, such inaction

     

    can be termed as discrimination.         In fact, there is no discrimination.

     

    Whatever it be, revenue recovery proceedings are not liable to be assailed

     

    in a suit on the ground of discrimination. There is no fraud established

     

    against the appellants so as to invoke the jurisdiction of the civil court to

     

    assail the revenue recovery initiated in pursuance of Ext.A1. The finding

     

    of the appellate court is contrary to law and facts. The suit is misconceived

     

    and hit by Section 72 of the Revenue Recovery act and not maintainable.

     

           In the result, the appeal succeeds. While setting aside the judgment

     

    and decree of the appellate court, the decree and judgment of the trial court

     

    dismissing the suit is restored. The appellants are entitled to get their costs

     

    throughout.

     

     

                                                                               sd/-

                                                            P.S. GOPINATHAN,

                                                                         (JUDGE)

     

    knc/-


     

    S.A. 400/1998    10

     

     

     

     

                                P.S. GOPINATHAN, J.

                               = = = = = = = = = = =

     

     

     

     

                                S.A. NO. 400 OF 1998

                                = = = = = = = = = = =

     

     

     

     

                       DATED: 14TH DECEMBER, 2010

     

     

     

     

                                     J U D G M E N T


     



     
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