Dismissed

P.K. Mohammed v. the District Collector

Kerala HC29 Nov 2018WA/2018/2018

Case brief

AI extract

What is this about?

An appellant challenged recovery proceedings initiated under the Kerala Revenue Recovery Act for a penalty under the Foreign Exchange Regulation Act. The High Court held that since the adjudication order preceded the property sale, Section 44 of the Revenue Recovery Act applied, and the 30-year limitation period under the Limitation Act was not barred.

What did the court decide?

The writ appeal was dismissed upholding the recovery proceedings under the Kerala Revenue Recovery Act.

P.K. Mohammed Vs the District Collector — Execution and Attachment | Kerala HC (2018)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.HRISHIKESH ROY

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THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR

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THURSDAY,THE 29TH DAY OF NOVEMBER 2018/8TH AGRAHAYANA, 1940

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WA.No. 2018 of 2018

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AGAINST THE JUDGMENT IN WP(C) 22684/2013 OF HIGH COURT OF KERALA DATED 1.8.2018

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APPELLANT/PETITIONER:

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P.K. MOHAMMED S/O MAMMIKUTTY, PERMKATTIL HOUSE, TANGAL ROAD, KOTTU P.O., TIRUR, PIN 676 101.

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BY ADVS.SRI.SUJITH MATHEW JOSE SRI.SEBASTIAN JOSEPH (KURISUMMOOTTIL)

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RESPONDENTS/RESPONDENTS:

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1 THE DISTRICT COLLECTOR MALAPPURAM- 676 505.

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2 DEPUTY TAHSILDAR (REVENUE RECOVERY) TALUK OFFICE, TIRUR-676101.

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3 ENFORCEMENT OFFICER DIRECTORATE OF ENFORCEMENT, GOVT.OF INDIA, SASTRI BHAVAN, CHENNAI-5.

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R1 & 2 BY SR.GOVERNMENT PLEADER

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SRI.ARAVINDAKUMAR BABU R3 BY SMT.C.G.PREETHA, CGC

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 29.11.2018, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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J U D G M E N T

A.K. Jayasankaran Nambiar, J

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The petitioner in Writ Petition No. 22684 of 2013 is the appellant before us, aggrieved by the judgment dated 1.8.2018 of the learned Single Judge, who dismissed the Writ Petition after finding no reason to interfere with Exts.P3 and P4 revenue recovery proceedings initiated against him for recovery of penalty amounts confirmed under the Foreign Exchange Regulation Act, 1973. The facts in the Writ Petition would indicate that the petitioner had been imposed the penalty of Rs.10 Lakhs through an adjudication order dated 4.5.1995 (Ext.R3(a)) of the Enforcement Officer (Directorate of Enforcement) under the Foreign Exchange Recovery Act. It is stated that, at the time of issuance of the adjudication order, the petitioner was undergoing incarceration and he was released only on 13.11.1995. It was his case that the demand notice for non-payment of penalty amount was issued to him only in 2001 as evidenced by Exts. R3(c) and R3(e) documents produced in the writ proceedings. Subsequently, a demand by certificate, in terms of Section 70 (1)(iii) of the Foreign Exchange Regulation Act, was issued on 28.1.2009 (Ext.R3(f)) and thereafter, the proceedings under the Kerala Revenue Recovery Act (RR Act) were initiated by the District Collector through a notice dated 6.5.2009 (Ext. R3(h)) issued to the Tahsildar, followed by the notices dated 7.6.2013 and 7.8.2013 (Exts.P3 and

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P4) under Section 44 (1) and (2) and Section 36 of the Kerala Revenue Recovery Act respectively. The challenge of the petitioner to Exts. P3 and P4 notices was primarily on the contention that the property transferred by him, against which proceedings were initiated under Section 44 of the Revenue Recovery Act, could not be so proceeded against since the said transfer took place in 1996, well before the certificate under Section 70(1)(iii) of the Foreign Exchange Regulation Act was issued in 2009, and the proceedings under the Kerala Revenue Recovery Act were initiated by the District Collector. It was his specific case that, inasmuch as there was no demand notice prior to the sale of the property in 1996, the proceedings under Section 44 of the Revenue Recovery Act was vitiated. The petitioner also raised a plea of limitation in that, the proceedings against him under the RR Act were initiated almost 13 years after the adjudication was completed in 1995. It was further contended by the writ petitioner that the provisions of the Revenue Recovery Act itself would apply to him only after steps were taken by the District Collector, pursuant to the certificate sent to him by the adjudicating authority under the Foreign Exchange Regulation Act, and till such time, the penalty amount due to the Central Government could not be treated as public revenue due on land for the purposes of the Kerala Revenue Recovery Act.

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The learned Single Judge who considered the issue found that,

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inasmuch as the adjudication order was passed in 1995, and in the period between the said order and the demand notice in 2001, the petitioner had

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alienated his property in 1996, the provisions of Section 44 (1)/ (2) of the Kerala Revenue Recovery Act stood attracted and therefore the proceedings by way of Ext.P3 and P4 notices could not be assailed.

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Before us, the learned counsel for the appellant/writ petitioner vehemently urges, relying on the decisions reported in Abraham Jacob @ Rajan and Others v. Thomas J. Nidhiri and Others [2008 (2) KHC 180 and Anandan K. and Anothehr v. State of Kerala and others [2009 (4) KHC 1002] , that the mere initiation of proceedings under the Kerala Revenue Recovery Act could not have the effect of attracting the charge under Section 3 of the said Act, by treating the outstanding liability to the Central Government as a public revenue due on land for the purposes of the Kerala Revenue Recovery Act. A distinction is sought to be made between the treatment accorded to a liability to the Central Government, as revenue due on land, and the liabilities that would attract the definition of “public revenue due on land” , for the purpose of Revenue Recovery Act. It is stated that, while in the latter cases the charge under Section 3 would come into operation, a similar charge on the property, pursuant to the mere treatment of the liability as a public revenue due on land, would not arise in the former cases, unless and until a determination has been done in terms of Section 69(2) of the Revenue Recovery Act. The plea with regard to limitation which, according to the learned counsel for the appellant, was not considered by the learned Single Judge, is also reiterated before us.

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We heard Sri.Sujith Mathew Jose the learned counsel for the

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appellant, the learned Government Pleader Sri.Aravinda Kumar Babu on behalf of respondents 1 and 2 and Smt. C.G. Preetha for respondent 3.

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On a consideration of the facts and circumstances of the case, and the submissions made across the Bar, we find that it is not in dispute that the adjudication order, whereby the penalty amount was confirmed on the appellant, was dated 4.5.1995. Although it is now contended before us by the learned counsel for the appellant that, the adjudication order was not served on him, since he was undergoing incarceration in prison during the relevant time, we have to presume, in the absence of any such plea taken before the learned Single Judge, that the adjudication order containing the demand of penalty amounts was served on the appellant immediately after the date of adjudication. At any rate, we find that the order of adjudication was passed and communicated to the appellant before the sale transaction in 1996. The provisions of Section 44 (1) of the Kerala Revenue Recovery Act have the effect of declaring any engagement entered into by a defaulter with any one, in respect of any immovable property, after the service of a written demand on him, as not binding upon the Government. In our view, once it is undisputed that, within the period of limitation for recovery of dues by the Central Government, the recovery proceedings for recovery of the said dues was set in motion against the appellant, and the provisions of the Kerala Revenue Recovery Act, 1968 were made applicable to such recovery, then, notwithstanding the initiation of the process on a subsequent date, the issue of whether the service of written demand in

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respect of the dues was made on the appellant had necessarily to be seen with reference to the demand made on him by the Central Government through the adjudication order dated 4.5.1995. We are given to understand that the said adjudication order required the appellant to effect payment of the penalty amount adjudicated within 45 days of the service of the adjudication order on him. In that view of the matter, we are of the view that the sale in 1996, having been effected only after the service of adjudication order on the appellant, the provisions of Section 44 of the Revenue Recovery Act, 1968, which was made applicable to the recovery proceedings initiated against the appellant, would squarely be attracted. In the light of the view we have taken, we feel we are not called upon to consider the judgments relied upon by the appellant to canvass for the proposition that a charge under Section 3 of the Revenue Recovery Act against the properties could not have arisen in the instant case till such time, as the certificate under Section 69(2) of the Act came to be issued. The date on which the charge against the property was created is not relevant for the purposes of determining the applicability of S. 44 (1) of the Kerala Revenue Recovery Act in the instant case.

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As regards the plea of limitation that was urged by the learned counsel for the appellant, we are of the view that, in terms of Article 112 of the Limitation Act, which gives a period of 30 years for the Central Government to proceed against the appellant for recovery of adjudicated dues, the Revenue Recovery action initiated against the appellant in 2009,

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through notices issued under the Kerala Revenue Recovery Act, have to be seen as in respect of amounts that were legally recoverable for the purposes of the Kerala Revenue Recovery Act. The proceedings initiated under the Revenue Recovery Act cannot, in our view, be seen as barred by limitation for the said reason.

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The upshot of the above discussion is that we find no reason to take a view different from what was taken by the learned Single Judge, and for the reasons stated in the judgment of the learned Single Judge, as supplemented by the observations in this judgment, the Writ Appeal is found devoid of merit and accordingly dismissed.

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Sd/Hrishikesh Roy, Chief Justice

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Sd/A.K. Jayasankaran Nambiar, Judge

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sou.

P.K. Mohammed v. the District Collector

Case brief

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P.K. Mohammed v. the District Collector

Case brief

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