WP (C). No. 28558 of 2013 (T). Case: M.G. Raveendran Nair Vs The State of Kerala. Kerala High Court

Case Number:WP (C). No. 28558 of 2013 (T)
Party Name:M.G. Raveendran Nair Vs The State of Kerala
Counsel:For Appellant: N.J. Mathews, Adv. and For Respondents: Raju Joseph (Sr.) Adv., K.T. Paulose, SC, KSEB, S. Jamal, Government Pleader and Jaice Jacob, SC, Kerala State Electricity Board
Judges:Antony Dominic, K. Ramakrishnan and Anil K. Narendran, JJ.
Issue:Companies Act, 1956 - Section 186; Indian Income-tax Act, 1922 - Section 46(2); Kerala Motor Transport Workers' Welfare Fund Act, 1985 - Section 10; Kerala Revenue Recovery Act, 1968 - Sections 2, 2(j), 28, 3, 46, 5, 65, 68, 69(2), 70, 70(2), 71; Negotiable Instruments Act, 1881 - Section 138
Judgement Date:October 23, 2014
Court:Kerala High Court
 
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Judgment:

Antony Dominic, J.

  1. Contention of the consumers of the Kerala State Electricity Board that the proceedings initiated against them for recovery of the amounts are in respect of debts, the recovery of which is barred by the law of limitation, has given rise to the writ appeal and writ petitions.

  2. When WP(C) Nos. 17300/13 and 28558/13 came up before the learned single Judge, doubting the correctness of the judgment in Inspector, Toddy W.W.F. Board v. Vijayan (2009 (1) KLT 410), these cases were referred to a Division Bench. The writ petitions and WA No. 1848/12 were considered by a Division Bench, which, by its order dated 18th of July, 2014 agreed that the judgment in Vijayan's case (supra) required reconsideration. It is accordingly that these cases are coming up for consideration of the Full Bench.

  3. Vijayan's case (supra) arose under the Toddy Workers Welfare Fund Act, 1969. Considering Section 9 of the said Act and the provisions of the Kerala Revenue Recovery Act, a Division Bench of this Court held that the amounts due under the Toddy Workers Welfare Fund Act is public revenue due and that 30 years provided under Article 112 of the Limitation Act is applicable for its recovery. It is the correctness of these conclusions in the judgment which are to be reconsidered.

  4. In Vijayan's case (supra), the Division Bench of this Court followed the earlier Division Bench in Kerala Motor Transport Workers Welfare Fund Board v. William Raynold (2004 (3) KLT 1083) rendered in the context of Section 10 of the Kerala Motor Transport Workers Welfare Fund Act and held thus in para 7 and 8 of the judgment;

    "7. In Kerala Motor Transport Workers Welfare Fund Board v. William Raynold (2004 (3) KLT 1083), a Division Bench of this Court considered the impact of S. 10 of the Motor Transport Workers Welfare Fund Act. Division Bench held that S. 10 of the said Act provides that the arrears due from an employer under the Act could be recovered in the same manner as an arrear of public revenue due on land. It was specifically held that when S. 10 declares that the arrears due from an employer under the Act could be recovered in the same manner as arrears of public revenue due on land, it follows that all the provisions of the R.R. Act would become applicable. Division Bench therefore, went on to hold that the arrears due from the employer under the said Act is arrears of public revenue due on land and it could be recovered by resorting to the provisions of the R.R. Act. Division Bench indicated that this is the view that was taken in Baby v. State of Kerala & Ors. (1981 KLT 510).

  5. We are in respectful agreement with the view expressed by the Division Bench in Kerala Motor Transport Workers Welfare Fund Board v. William Raynold (2004 (3) KLT 1083). We take note of the fact that S. 9 of the Toddy Workers Welfare Fund Act is in pari material with S. 10 of the Motor Transport Workers Welfare Fund Act. We are of the view that S. 9 of the Act, by a fiction declares that the amounts due under the Act are liable to be treated as arrears of land revenue. Thus, by virtue of the declaration made under S. 9 of the Act, amounts which are otherwise not land revenue stricto sensu are deemed to be land revenue and recoverable as such. Thus, the period of limitation applicable in relation to the amounts due under the Act will be the period prescribed in relation to the amounts due to the Government. If that be so, the entry applicable in this behalf in relation to amounts due under the Act, would be Art. 112 of the Limitation Act, and not Art. 113 of the Act. Thus, the longer period of limitation prescribed under the former namely thirty years would be available in relation to the amounts due under the Act, by the virtue of S. 9 of the Toddy Workers Welfare Fund Act. In that view of the matter, it is clear that the proceedings initiated in the year 2005, evidenced by Exts. P1 and P3, would not be barred by limitation. We are unable to sustain the findings of the learned single Judge."

  6. Section 9 of the Toddy Workers Welfare Fund Act provides that any amount due from the employer in pursuance of the provisions of the Act or the scheme thereunder may, if the amount is in arrear, be recovered together with interest thereon at the rate of nine per cent per annum in the same manner as an arrear of land revenue. The Division Bench held that this section by a fiction declared that the amounts due under the Act are, though not arrears of land revenue stricto sensu, deemed to be arrears of land revenue and are recoverable as such. It is further held that therefore the period of limitation applicable for recovery of the amounts due under the Act is the longer period prescribed in relation to the amounts due to the Government under Article 112 of the Limitation Act and not Article 113 of the Act.

  7. While considering the correctness of this judgment, we have to examine two issues. One is whether by a mere declaration made by Government under Section 71, the amounts thus declared to be recoverable under the Revenue Recovery Act would get the character of "public revenue due on land" as defined in Section 2(j) of the Kerala Revenue Recovery Act. The second is whether in a case where such a declaration is made, the provisions of Article 112 of Limitation Act are attracted in order to get the benefit of longer period of limitation.

  8. While considering these questions, we should first make reference to the relevant provisions of the Kerala Revenue Recovery Act. Section 2(j) of the Act defines "public revenue due on land" as the land revenue charged on the land and includes all other taxes, fees and cesses on land, whether charged on land or not and all cesses or other dues payable to Government on account of water used for the purposes of irrigation. Section 3 provides that public revenue due on any land shall be the first charge on that land, the buildings upon it and on the produce thereof. Section 5 provides the manner in which the arrears of public revenue due on land are to be recovered. Section 71 of the Revenue Recovery Act provides that the Government may, by notification in the Gazette declare, if they are satisfied that it is necessary to do so in public interest, that the provisions of the Act shall be applicable to the recovery of amounts due from any person or class of persons to any specified institution or any class or classes of institutions, and thereupon all provisions of the Act shall be applicable to such recovery. It was in exercise of the powers under Section 71, the Government of Kerala have issued SRO No. 1297/1985 declaring that the provisions of the Revenue Recovery Act shall be applicable to the recovery of the amounts due to the Kerala Toddy Workers Welfare Fund Board, Thiruvananthapuram.

  9. A combined reading of the provisions of the Revenue Recovery Act and Section 10 of the Motor Transport Workers Welfare Fund Act show that Section 10 of the latter Act only provides the manner in which the amounts due under the Act are to be recovered. Likewise, Section 71 of the Revenue Recovery Act only enables the Government to issue a notification making the provisions of the Revenue Recovery Act applicable for the recovery of amounts due to institutions. These provisions show that even in spite of a declaration and a notification issued under Section 71, the nature of the debt that is due to be recovered under the machinery of the Revenue Recovery Act does not get altered to a public revenue due on land. Instead, the fiction created is only...

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