IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 10TH FEBRUARY 2011 / 21ST MAGHA 1932 WP(C).No. 37150 of 2010(P) ----------------------------------- PETITIONER : - ----------------------- M/S. SURYA INDUSTRIES AND CULTURAL CENTRE, PARATHODE P.O., KOTTAYAM, REPRESENTED BY ITS CHAIRMAN, HASHIM M.K. BY ADVS. SRI.BECHU KURIAN THOMAS SMT.INDU SUSAN JACOB SMT.NISHA JOHN SRI.ENOCH DAVID SIMON JOEL RESPONDENTS : - -------------------------- 1. STATE OF KERALA, REPRESENTED BY SECRETARY, DEPARTMENT OF REVENUE, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2. KHADI AND VILLAGE INDUSTRIES BOARD, THIRUVANANTHAPURAM-695001, REPRESENTED BY ITS SECRETARY. R1 BY GOVT. PLEADER SRI. BIJOY CHANDRAN R2 BY ADV. SRI.K.P.HARISH, SC, KERALA KHADI BOARD THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10/02/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 37150 of 2010(P) APPENDIX PETITIONER'S EXHIBITS: EXT P1 : COPY OF THE JUDGMENT DATED 29.06.2004 IN W.P (c) 3698 / 2004 ON THE FILES OF THIS HON'BLE COURT. EXT P2 : COPY OF THE DEMAND NOTICE DATED 04.09.2004 AND NUMBERED AS K.B. 7132 / 00/ R.2 ISSUED BY THE 2nd RESPONDENT. EXT P3 : COPY OF THE REPLY DATED 29.09.2004 SENT BY THE PETITIONER TO THE 2nd RESPONDENT. EXT P4 : COPY OF THE LETTER DATED 18.12.2004 AND NUMBERED AS K.B. 7132/2000/R2 ISSUED BY THE 2nd RESPONDENT TO THE TAHSILDHAR, KANJIRAPALLY. EXT P5 : COPY OF THE LETTER DATED 26.03.2005 ISSUED BY THE PETITIONER TO THE 2nd RESPONDENT. EXT P6 : COPY OF THE LETTER DATED 09.11.2005 AND NUMBERED AS K.B. 7132/2000/R2. EXT P7 : COPY OF THE LETTER DATED 21.10.2010 AND NUMBERED AS K.B. 7132/2000/R2 ISSUED BY THE 2nd RESPONDENT TO THE PETITIONER. EXT P8 : COPY OF THE APPLICATION DATED 04.11.2010 SUBMITTED BY THE PETITIONER TO THE 2nd RESPONDENT UNDER THE RTI ACT. EXT P9 : COPY OF THE REPLY DATED 26.11.2010 AND NUMBERED AS K.B. 1/2010/ E8/RTI ISSUED BY THE 2nd RESPONDENT TO THE PETITIONER. RESPONDENTS' EXHIBITS: EXT R2 (a) : COPY OF THE CALCULATION STATEMENT. EXT R2 (b) : COPY OF THE LETTER FROM THE TAHSILDAR, KANJIRAPPALLY. TRUE COPY P.A. TO JUDGE DMR/- C.K.ABDUL REHIM,J. ------------------------------- WP(C).NO. 37150 of 2010 --------------------------------- Dated this the 10th day of February, 2011 JUDGMENT The petitioner is challenging Ext.P7 notice through which an amount of Rs.41366/- is demanded towards interest, stationary charges, and collection charges. The petitioner is a society who was a defaulter with respect to repayment of loan availed from the 2nd respondent. When revenue recovery steps were initiated the petitioner approached this court in WP(C). No.3698/2004. In Ext.P1 judgment this court permitted the petitioner to settle the loan account through 'one time settlement' making it clear that, if the petitioner is willing to clear the entire arrears before 30.9.2004 then the penal interest should be waived. According to the petitioner, pursuant to Ext.P1 judgment Ext.P2 notice was issued by the 2nd respondent to which the petitioner submitted Ext.P3 reply disputing correctness of the demand. Petitioner relies on Ext.P4 letter in which the 2nd respondent had addressed the Tahsildar admitting that the petitioner had remitted the entire amount except the WP(C).37150/2010 2 penal interest excluded by virtue of Ext.P1 judgment, and further intimating withdrawal of the revenue recovery requisition. According to the petitioner, the 2nd respondent had not returned the title deeds of the mortgaged property, even after closing of the loan account, inspite of specific requests made. In this regard Ext.P6 notice was issued during November 2005 demanding a sum of Rs.18,170/- towards collection charges and stationary charges. Subsequently another notice was issued as per Ext.P7 demanding penal interest, stationary charges and collection charges to the tune of Rs.41366/-. Aggrieved by Exts. P6 and P7 the petitioner sought information under the provisions of the Right to Information Act, and Ext.P9 is the reply obtained. It is stated in Ext.P9 that the amount of Rs.26,389/- demanded is towards balance of interest and the amount of Rs.13977/- demanded is towards collection charges claimed by the revenue authorities. In this writ petition the petitioner is challenging the demand raised on both the counts, as unsustainable. 2. In the counter affidavit of the 2nd respondent it is stated that, the collection charge is demanded on the basis of request made by the Tahsildar, Kanjirappally. It is also WP(C).37150/2010 3 mentioned that the amount claimed towards balance of interest is actually due from the petitioner, in view of Ext.R2(b) statement of accounts produced. 3. Learned counsel appearing for the petitioner raised serious dispute regarding liability for payment of collection charges. Attention of this court is drawn to a Division bench decision of this court in Malabar Organics vs. State of Kerala (2009(4) KLT 328). It is held that there will be no liability to pay collection charges or service charges in case the defaulter pays the arrears directly to the institution to which the amount is due, pursuant to any notice issued under section 7 or section 34 of the Revenue Recovery Act. On the basis of the dictum laid as above, learned counsel contended that the petitioner is not liable for payment of any amount towards collection charges. 4. Learned Government Pleader appearing on behalf of the 1st respondent pointed out that the above said decision of this court is under challenge before the Hon'ble Supreme Court and a special leave petition filed in this regard is pending disposal. It is further submitted that even going by the dictum laid in the decision cited supra, the petitioner is liable for payment of 1% WP(C).37150/2010 4 service charge. 5. Considering the factual situation as narrated above and also considering the rival contentions raised at the Bar, I am of the considered opinion that the dispute regarding the demand for the balance amount towards interest could not be adjudicated in a proceedings under Article 226. The contention of the petitioner is that charging of penal interest was restrained by virtue of directions contained in Ext.P1 judgment. But from the contention of the 2nd respondent it is evident that penal interest is not charged. But what is demanded is only the balance outstanding towards interest, after crediting payments already made. Therefore I am of the opinion that the petitioner can be given liberty to seek clarification or to approach the appropriate authority in the 2nd respondent to get the amount waived. However the petitioner will abide by the decision taken in this regard or else he will be at liberty to challenge such decision by resorting to common law. 6. With respect to the amount of collection charges demanded, I am inclined to hold that the petitioner is not liable for payment of the said amount, subject to final outcome of the WP(C).37150/2010 5 matter which is now pending before the Hon'ble Supreme Court. Hence Exts.P6 and P7 demands, to the extent of it requiring the petitioner to pay the collection charges, is hereby quashed. If the petitioner settle payment of other amounts due under the demand, the 2nd respondent shall close the loan account and return the title deeds and other records relating to the mortgaged property. 7. However it is made clear that the ultimate liability for payment of collection charges will depend on the outcome of the decision of the Hon'ble Supreme Court. If it is ultimately found that the petitioner is liable, the 2nd respondent or the revenue recovery authority as the case may be, can recover the collection charges. The writ petition is disposed of with the above observations and directions. C.K.ABDUL REHIM,JUDGE pmn/