Allowed

Muhammed Musthafa v. District Collector, Palakkad

Kerala HC8 Sept 2023WP(C)/4617/2014

Case brief

AI extract

What is this about?

The Court quashed a revenue recovery notice issued by the Tahsildar demanding balance auction fees from a petitioner who won a tender to collect bus stand fees. The Court held that without an executed contract, the state could not recover dues via revenue recovery and should have forfeited the Earnest Money Deposit instead. The writ petition was allowed on this ground.

What did the court decide?

The demand dated 27.01.2014 (Ext. P8) issued for recovery of the balance amount was quashed, and the writ petition was allowed.

Muhammed Musthafa Vs District Collector… — Contract and Commercial Disputes | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE AMIT RAWAL

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FRIDAY, THE 8^TH DAY OF SEPTEMBER 2023 / 17TH BHADRA, 1945

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WP(C) NO. 4617 OF 2014

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PETITIONER/S:

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MUHAMMED MUSTHAFA S/O.LATE IBRAHIM, CHERUMKUZHI HOUSE, VILATHUR,THIRUVEGAPPURA, OTTAPALAM TALUK, PALAKKADDISTRICT.

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BY ADV SRI.P.JAYARAM

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RESPONDENT/S:

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1 DISTRICT COLLECTOR, PALAKKAD 678 001 2 DEPUTY TAHSILDAR RR OTTAPALAM - 679 101. 3 VILLAGE OFFICER THIRUVEGAPPURA VILLAGE, P.O.THIRUVEGAPPURA,PALAKKAD - 679 304. 4 SHORNUR MUNICIPALITY REPRESENTED BY ITS SECRETARY,P.O.SHORNUR - 679 121. 5 SECRETARY SHORNUR MUNICIPALITY, P.O.SHORNUR - 679 121. 6 STATE OF KERALA REPRESENTED BY SECRETARY,DEPARTMENT OF LOCAL SELF GOVERNMENT,GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM -695 001. BY ADVS. SMT.C.SEENA SRI.P.P.THAJUDEEN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 08.09.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C) NO. 4617 OF 2014

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JUDGMENT

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Revenue recovery proceeding of the Tahsildar on the requisition of the respondent Nos.4 and 5 Municipal Corporation is under challenge in the present writ petition.

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4^th respondent, Shornur Municipality caused a public notice holding a public auction for granting exclusive right to collect fees from bus operators at the Shornur – Kulappully bus stand for the year 201314. Petitioner in lieu thereof submitted a tender being a lone tenderer which was accepted in an auction held on 20.3.2013 and earnest money deposit of Rs.25,000/- was already paid. As per the terms and conditions of the bid, Municipality directed the petitioner to pay 1/3^rd of the auction amount and the petitioner paid Rs.2,48,333/- against the bid amount of Rs.7,21,500/-. In April, 2013 petitioner approached the Municipality for a formal permission to collect the fees at the bus stand which was not granted, without any reasons. The possession of the bus stand was not handed over to the petitioner for levying and collecting fees. Bus operators informed the petitioner that in the absence of any permission, they would not pay the fees. Later on, it came to the notice of the petitioner that Ottapalam Taluk Private Bus Operators Association had filed a writ petition, W.P.(C) No.10163/2013 against the Municipality wherein the petitioner was not the party. The bus operators refused to pay the petitioner citing the pending lis. Though the tender conditions

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WP(C) NO. 4617 OF 2014

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empowered the Municipality to re-auction, that was not also not done. Recovery action is wholly illegal and arbitrary.

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On the other hand, learned counsel appearing on behalf of the respondent Nos. 4 and 5 submitted that the petitioner has not come to the court with clean hands and suppressed certain materials, particularly the contents of R5(c) wherein the request was made to seal the receipt book. Otherwise as per the conditions of clause 8 of the tender conditions and clauses 5, 6 and 7 balance amount of the auction was to be paid in 5 equal installments from May 2013 onwards. The tender confirmation order was issued on 30.3.2013, Ext.R5(a) whereby permission was granted to collect the bus stand fee on the condition that he has to execute the agreement and produce solvency certificate or bank guarantee. Petitioner neither paid the balance amount nor executed the agreement despite issuing reminders rather submitted a letter dated 10.4.2013 for release of the earnest money, which was rejected on the premise that EMD can always be released after receipt of the entire payment of the tender amount. Despite repeated reminders and notices the tender was cancelled and recovery proceedings was initiated in view of the decision of the counsel dated 30.11.2013, Ext.R5(g). There is no connection with the present case viz-a-viz the Ottapalam Taluk Private Bus Operators Association.

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I have heard the learned counsel for the parties and appraised the paper book. Clauses of the allotment letter would reveal that the total bid amount for collecting the fees from the bus operators

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WP(C) NO. 4617 OF 2014

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in respect of the bus stand mentioned above, was Rs. 7,21,500/-. Only sum of Rs.2,48,333/- was paid and the balance was to be paid in five (5) equal installments and the requirement of law was to execute the agreement and the bank guarantee much less the solvency certificate. The request of the petitioner for sealing of the receipt book and issuance is also not in dispute as receipt book was in fact issued. Instead of paying the balance amount had sought the return of the EMD which could not have been done, for, the balance amount of the auction money was not paid. It is in that background, the respondent initiated the steps for recovery of the amount after giving numerous opportunities to enter into an agreement and pay the balance amount. The action of such person is not only reprehensible but absurd. But I am of the view that in the absence of contract, r espondents cannot recover balance amount and at the best could have forfei t EMD which has been done. Even otherwise if certain terms and conditions of auction empowers the respondent to realise the due, that can be done only through competent court of law having jurisdiction but not under the provisions of revenue recovery. Thus demand dated 27.01.2014 Ext.P8 is not sustainable and hereby quashed. Writ petition is allowed.

Sd/-

sab

AMIT RAWAL

JUDGE

WP(C) NO. 4617 OF 2014

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APPENDIX OF WP(C) 4617/2014

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PETITIONER EXHIBITS

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EXT.P-1: TRUE COPY OF THE NEWSPAPER ADVERTISEMENT DATED 12.3.2013 ISSUED BY 4TH RESPONDENT MUNICIPALITY

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EXT.P-2: TRUE COPY OF THE TENDER CONDITIONS FOR 2013-2014 ISSUED BY 4TH RESPONDENT MUNICIPALITY

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EXT.P-3: TRUE COPY OF THE NOTICE DATED 31.5.2013 ISSUED BY 4TH RESPONDENT MUNICIPALITY TO THE PETITIONER

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EXT.P-4: TRUE COPY OF THE REPLY DATED 20.6.2013 SENT BY THE PETITIONER TO 4TH RESPONDENT MUNICIPALITY

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EXT.P-5: TRUE COPY OF THE FINAL NOTICE DATED 2.9.2013 ISSUED BY 4TH RESPONDENT MUNICIPALITY TO THE PETITIONER

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EXT.P-6: TRUE COPY OF THE REPLY DATED 23.9.2013 SENT BY THE PETITIONER TO 4TH RESPONDENT MUNICIPALITY

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EXT.P-6(A): TRUE COPY OF THE POSTAL RECEIPT DATED 27.9.2013 RELATING TO EXHIBIT P7 NOTICE

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EXT.P-7: TRUE COPY OF THE ORDER PROCEEDINGS DATED 30.11.2013 ISSUED BY THE SECRETARY 4TH RESPONDENT MUNICIPALITY

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EXT.P-8: TRUE COPY OF THE RECOVERY NOTICE DATED 27.1.2014 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER.

Muhammed Musthafa v. District Collector, Palakkad

Case brief

What is this about?

What did the court decide?

Muhammed Musthafa v. District Collector, Palakkad

Case brief

What is this about?

What did the court decide?

What the court decided

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