IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR THURSDAY, THE 27TH MARCH 2008 / 7TH CHAITHRA 1930 SA.No. 208 of 1994(G) --------------------- AS.57/1991 of SUB COURT, KASARAGOD OS.98/1987 of ADDL.MUNSIFF, KASARAGOD .................... APPELLANT/APPELLANT/DEFENDANT: ---------------------------------------- THE KERALA AGRO INDUSTRIES CORPN.LTD., A COMPANY INCORPORATED IN THE INDIAN COMPANIES ACT HAVING ITS REGISTERED OFFICE AT 'KISSAN JYOTHI', FORT, THIRUVANANTHAPURAM – 23, REPRESENTED BY ITS MANAGING DIRECTOR. BY ADV. SRI.A.M.SHAFEEQ RESPONDENT/RESPONDENT/PLAINTIFF: -------------------------------------------- P.RAMAKRISHNA BHAT, AGED 48 YEARS, S/O NARAYANA BHAT, RESIDING AT PETHADKA, BAYAR VILLAGE, P.O.BAYAR, (VIA) UPPALA KASARGOD TALUK. BY ADV. SRI.KODOTH SREEDHARAN THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 27/03/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: M.SASIDHARAN NAMBIAR, J. ---------------------------------- S.A.NO.208 OF 1994 ----------------------------------------------------- DATED THIS THE 27TH DAY OF MARCH, 2008 J U D G M E N T Appellant is Kerala Agro Industries Corporation Ltd. Respondent purchased two pump sets under two separate hire purchase agreements C.234 dated 10.3.1970 and C.443 dated 10.12.1970. Exhibit B4 is the agreement C.234. Respondent purchased the said pump set agreeing to pay the value with interest in ten half yearly instalments. The total value of the machineries was Rs.4,224.71. Similarly, in respect of the other pump set, another hire purchase agreement was executed whereunder he has to pay 10 equal monthly instalments @ 391.33. Respondent did not pay the instalments as agreed. Consequently, appellant initiated steps to realise the amount by recourse to Kerala Revenue Recovery Act. Exhibit B2 requisition as provided under Section 69(2) of Kerala Revenue Recovery Act in Form No.24 was sent by the appellant to the District Collector along with Exhibit B3 covering letter on 26.9.1994. Revenue recovery steps was initiated in respect of other hire purchase SA.208/94 -2- agreement also. When revenue recovery steps were initiated, respondent paid the amount due under hire purchase agreement C.443. When the amount was received by the appellant-Corporation, they sent Exhibit A3 communication to the respondent stating that in view of the realisation of the amount, hire purchase agreement C.234 was closed on 31.1.1984. When recovery steps were proceeded with in respect of agreement C.443, respondent instituted O.S.No.121/1984 before Munsiff Court, Kasargod contending that even though he had paid the entire amount due under the hire purchase agreement C.443, revenue recovery steps is being initiated. A decree for declaration that he has paid the entire amount and the appellant-Corporation is not entitled to recover further amount by recourse to revenue recovery proceedings was sought. Under Exhibit B5 judgment, that suit was decreed finding that though appellant-Corporation has closed the hire purchase agreement C.234, in fact the amount realised was in respect of hire purchase agreement C.443 and therefore, appellant-Corporation is not entitled to proceed further against respondent for realisation of the amount in hire purchase agreement C.443. Finding out the mistake committed for realisation of the amount due under hire SA.208/94 -3- purchase agreement C.234 Exhibit B1 closure quotation was issued by the appellant demanding the balance amount due under hire purchase agreement C.234. Respondent on receipt of Exhibit A4 notice of attachment instituted O.S.No.98/1997 before Additional Munsiff Court, Kasargod for a declaration that no amount is due under hire purchase agreement C.234. It was contended that in view of the closure quotation, appellant-Corporation is not entitled to claim further amount and in any case claim for realisation of the amount under hire purchase agreement C.234 is barred by limitation. Appellant resisted the suit contending that closure quotation was issued by mistake and when the amount realised was due in hire purchase agreement C.443 and when it was received by appellant-Corporation, without showing that it is in respect of hire purchase agreement C.443, under the impression that the amount realised was in respect of hire purchase agreement C.234, Exhibit A3 closure quotation happened to be issued and in view of the decree granted in O.S.No.121/1984, steps were initiated to realise the balance amount due and the claim is not barred by limitation and the plea of limitation is not applicable for realisation of the amount under revenue recovery proceedings and therefore SA.208/94 -4- respondent is not entitled to the decree sought for. 2. Learned Munsiff on the evidence of Exhibits A1 to A4 and B1 to B5 found that Exhibit A3 closure quotation was issued by the appellant intimating that no further amount is due from the respondent and thereafter appellant is not entitled to initiate further steps to realise the amount. It was found that the claim is barred by limitation and therefore respondent is entitled to the decree sought for. The suit was decreed. Appellant challenged the judgment and decree before Sub Court, Kasargod in A.S.No.57/1997. Learned Sub Judge, on reappreciation of evidence confirmed the finding of learned Munsiff and dismissed the appeal. It is challenged in the second appeal. 3. The appeal was admitted formulating the following substantial question of law. Whether revenue recovery proceedings which is the subject matter of the case, was a continuation of the revenue recovery proceedings initiated on 26.9.1974 and if so whether the claim is barred by time? SA.208/94 -5- 4. Learned counsel appearing for appellant and respondent were heard. Relying on the decision of Apex Court in State of Kerala v. Kalliyanikutty (1999 (2) KLT 146 (SC)) and that of a learned Single Judge of this Court in Halimathu Beevi v. State of Kerala (1999 (3) KLT 279), the learned senior counsel appearing for appellant argued that though provisions of Limitation Act are applicable even in respect of claim for realisation of the amount under Revenue Recovery Act, the question whether the claim is barred by time or not is to be resolved as on the date of requisition made under sub-section (2) of Section 69 of Kerala Revenue Recovery Act and when appellant sent Exhibit B2 requisition in Form No.24, as provided under Section 69(2) of the Act, on 26.9.1974 along with Exhibit B3 covering letter, question whether the suit is barred by time is to be decided as on that date and not any subsequent date. It was argued that once a requisition is made to the District Collector as provided under sub- section (2) of Section 69 of the Act and the requisition was not sent back to the appellant-Corporation, the claim will not be barred and the fact that Exhibit A3 closure quotation, which was sent by mistake will not deprive appellant-Corporation their right to realise the amount due SA.208/94 -6- and therefore claim is not barred by time. It was also argued that even though respondent paid the amount due under hire purchase agreement C.443 and by mistake hire purchase agreement C.234 was closed, respondent himself instituted O.S.No.121/1984 and got a decree restraining appellant from realising the amount due and having taken advantage of the said payment, respondent cannot be allowed to contend that he is not liable to pay the amount due under hire purchase agreement C.234 and finding of courts below is not legal. 5. Learned counsel appearing for respondent argued that when appellant themselves issued Exhibit A3 closure quotation, it is to be taken that the original requisition made under Exhibit B2 was closed as on the date of Exhibit A3 and without a further requisition as provided under Section 69(2) of the Act, further proceedings cannot be initiated and the demand under the revenue recovery proceedings initiated later is definitely barred by time. Relying on paragraph 10 of the judgment in Kalliyanikutty's case (supra), it was argued that when respondent is entitled to deposit the amount under protest as provided under Section 70, in which event, the authorities are bound to consider the question whether the claim is barred by limitation or not, Exhibit SA.208/94 -7- B1 demand made subsequently is barred under the Limitation Act and courts below rightly found that the claim is barred and appellant is not entitled to realise the amount. It was pointed out that as against the value of Rs.4,224.71, appellant is claiming huge amount as amount due inclusive of interest and therefore respondent is not liable to pay the amount and the appeal is only to be dismissed. 6. The question whether a plea based on Limitation Act is available in respect of the demand made under Kerala Revenue Recovery Act is no more res integra in view of the declaration of law by Apex Court in Kalliyanikutty's case(supra). It was held: “15. It has been submitted before us that the statute of limitation merely bars the remedy without touching the right. Therefore, the right to recover the loan would remain even though the remedy by way of a suit would be time-barred. Reliance was placed in Khaki Gram Udyog Trust v. Ram Chandraji Virajman Mandir, Sarasiya Ghat, Kanpur (supra) in this connection. The Court there observed that though a debt may be time- barred, it will still be a debt due. The right SA.208/94 -8- remains untouched and if a creditor has any means of enforcing his right other than by action or set off, he is not prevented from doing so. In Punjab National Bank and Ors. v.Surendra Prasad Sinha, JT 1992 (3) SC 46, this Court held that the rules of limitation are not meant to destroy the rights of parties. S.3 of the Limitation Act only bars the remedy but does not destroy the rights of parties. S.3 of the Limitation Act only bars the remedy but does not destroy the right which the remedy relates to. Excepting cases which are specifically provided for, as for example, under S.27 of the Limitation Act, the right to which the remedy relates subsists. Though the right to enforce the debt by judicial process is barred, that right can be exercised in any manner other than by means of a suit. For example, a creditor's right to make adjustment against time-barred debts exists.” SA.208/94 -9- As Revenue Recovery Act does not create any new right, the person claiming recovery cannot claim recovery of amounts which are not legally recoverable nor can the defence of bar of Limitation Act available to a debtor in a suit or other proceedings can be taken away under the provisions of Kerala Revenue Recovery Act. 7. The question, therefore, is whether the claim for balance amount due under hire purchase agreement C.234 is barred by limitation or not. What was claimed by respondent is that as the agreement was on 10.3.1970 and Exhibit A3 closure quotation was sent on 31.1.1984, demand made under Exhibit A4 in 1987 is barred by time. 8. Section 69 of Kerala Revenue Recovery Act provides procedure for recovery of public revenue due on land, when defaulter or surety resides outside the district and also for recovery of dues other than public revenue due on land. Under Section 71 of the Act, the Government may by notification in the gazette declare 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 the provisions of SA.208/94 -10- Revenue Recovery Act shall be applicable to such recovery. It is not disputed that a notification was issued by the Government authorising appellant-Corporation to realise the amount due by recourse to Kerala Revenue Recovery Act. Under sub-section (2) of Section 69, when any amount other than public revenue due on land which is recoverable under the Act is due, the Officer charged with its realisation may send to the Collector of the District in which the demand arose, a written requisition in the prescribed form duly verified and certified by him. The requisition, as provided under sub-section (2) is to be sent in Form No.24. Exhibit B2 is the said requisition in Form No.24 sent by the appellant-Corporation as provided under Section 69(2). The procedure to be followed by the District Collector on receipt of the requisition is provided under sub-sections (3) and (5). It is not disputed that Exhibit B2 requisition sent by appellant-Corporation was not returned back to the Corporation. Respondent also has no case that the amount demanded under the requisition was paid by him at any point of time. True, along with the said requisition, another requisition was also forwarded for realisation of the amount due under hire purchase agreement C.443. It is also admitted case that the amount due SA.208/94 -11- thereunder was realised and by mistake Exhibit A3 closure quotation was sent by appellant closing the demand in respect of hire purchase agreement C.234, instead of hire purchase agreement C.443. It is for that reason, respondent successfully challenged the demand for the balance in respect of agreement C.443 and got Exhibit B5 decision from the court holding that appellant is not entitled to realise the amount in respect of hire purchase agreement C.443. There is no case for respondent that apart from the amount due under hire purchase agreement C.443, he has discharged liability due under Exhibit B4 hire purchase agreement C.234. The question then is whether because of Exhibit A3 closure quotation, respondent could contend that he is not liable to pay the amount due under Exhibit B4. When it is admitted case that the amount realised, based on which Exhibit A3 closure quotation was issued by the appellant, is in respect of hire purchase agreement C.443 and not Exhibit B4 hire purchase agreement C.234 and respondent has no case that he has discharged the liability due under Exhibit B4 hire purchase agreement, the fact that appellant- Corporation by mistake issued Exhibit A3 closure quotation will not establish that the liability of the respondent to discharge the SA.208/94 -12- contractual liability created under Exhibit B4 agreement was discharged. Therefore, fact that Exhibit A3 closure quotation was sent by mistake will not enable respondent to contend that he is not liable to pay the amount due under Exhibit B4 hire purchase agreement C.234, when admittedly the balance amount due was not paid. 9. The question then is whether the claim made by the appellant is barred by limitation. The question then is on which date the bar of limitation of the claim is to be considered. It is settled by the Apex Court in Kalliyanikutty's case(supra)as follows: “18. In the premises under S.71 of the Kerala Revenue Recovery Act claims which are time-barred on the date when a requisition is issued under S.69(2) of the said Act are not amounts due under S.71 and cannot be recovered under the said Act. Our conclusion is based on the interpretation of S.71 in the light of the provisions of the Kerala Revenue Recovery Act.” SA.208/94 -13- Following that decision, a learned Single Judge of this Court in Halimathu Beevi's case (supra) held that requisition to the Collector under Section 69(2) of the Revenue Recovery Act in Form No.24 should be taken as the date of initiation of the recovery proceedings and that being so, if the claim is not barred on that date, the amount is recoverable under Revenue Recovery Act. 10. The question whether the claim is barred by time or not, is to be decided on the date of requisition made under Section 69(2) of the Revenue Recovery Act. Exhibits B2 and B3 establish that the requisition was made on 26.9.1974. Though by mistake Exhibit A3 closure quotation was issued by the appellant, instead of closing hire purchase agreement C.443, the requisition made under Exhibits B2 and B3 dated 26.9.1974 remains unsatisfied. Therefore the demand made by the appellant under Exhibit B1 could only be taken as a demand pursuant to the requisition made under Exhibit B2 on 26.9.1974. If that be so, findings of courts below that claim made by the appellant is barred by limitation is not sustainable. Therefore respondent is not entitled to the decree for declaration and injunction granted by the courts below. SA.208/94 -14- 11. But facts and circumstances of the case establish that only Rs.4,224.71 was advanced by the appellant-Corporation to enable respondent to purchase the pump set covered under Exhibit B4 agreement. Exhibit B1 establish that the demand is for Rs.4721.50 inclusive of interest @ 8% from 22.1.1983 for the principal amount of Rs.2,254.38. It is clear from Exhibit B1 that out of the amount of Rs.4,224.71, a portion of the principal amount was already paid. What remains to be paid is the principal amount of Rs.2,254/- with interest. True, the amount was due from 1974 onwards and respondent is liable to pay interest from that date. But considering the fact that partly the whole confusion arose because of the actions of the appellant- Corporation in issuing Exhibit A3, though by mistake, and all the surrounding circumstances, it is made clear that if the respondent/plaintiff pays the amount demanded under Exhibit B1 notice within two months from this date, appellant shall not demand any further amount towards interest and if the respondent fails to pay the amount, appellant is entitled to realise the amount demanded under Exhibit B1 inclusive of interest. SA.208/94 -15- Appeal is allowed. The judgment of Sub Court, Kasargod in A.S.No.57 of 1991 confirming the judgment of Additional Munsiff Court, Kasargod in O.S.No.98 of 1987 is set aside. Suit Stands dismissed. But it is made clear that if plaintiff pays to defendant or deposit in Court Rs.4,224.71 with interest at 8% on 2,254.38 from 22.1.1983 till the date of institution of O.S.No.98 of 1997, within two months from today, defendant shall not realise any further amount and if not plaintiff is liable to pay subsequent interest also. M.SASIDHARAN NAMBIAR, JUDGE. dsn