IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON SATURDAY, THE 23RD MAY 2009 / 2ND JYAISHTA 1931 WP(C).No. 31200 of 2008(L) -------------------------- PETITIONER(S): --------------- MUHAMMED C.M., AGED 56 YEARS, S/O.C.S.MOIDEEN, FAIZ MANZIL, ALLAPARA P.O., PERUMBAVOOR, ERNAKULAM DISTRICT. BY ADV. SRI.C.A.NAVAS RESPONDENT(S): --------------- 1. THE MANAGER, KERALA FINANCIAL CORPORATION, PERUMBAVOOR, ERNAKULAM DISTRICT. 2. THE MANAGING DIRECTOR, KERALA FINANCIAL CORPORATION, VELLAYAMBALAM, THIRUVANANTHAPURAM. 3. THE DEPUTY TAHSILDAR (REVENUE RECOVERY), FOR KERALA FINANCIAL CORPORATION, ERNAKULAM DISTRICT. 4. THE DISTRICT COLLECTOR, COLLECTORATE, KAKKANAD, ERNAKULAM. 5. M/S.K.M.J.RICE MILLS (P) LTD, KADAVOOR P.O., POTHANIKKAD, MUVATTUPUZHA REPRESENTED BY ITS MANAGING DIRECTOR, SRI.JOSHY MATHEW. 6. JOSHY MATHEW, KIZHAKKEBHAGATH HOUSE, KADAVOOR, P.O.POTHANIKKAD, MUVATTUPUZHA, ERNAKULAM DISTRICT. 7. SHIJU K.MATHEW, KIZHAKKEBHAGATH HOUSE KADAVOOR P.O. POTHANIKKAD, MUVATTUPUZHA, ERNAKULAM DISTRICT. 8. K.C.MATHEW, KIZHAKKEBHAGATH HOUSE, KADAVOOR P.O. POTHANIKKAD, MUVATTUPUZHA, ERNAKULAM DISTRICT. 9. CHINNAMMA MATHEW, KIZHAKKEBHAGATH HOUSE, KADAVOOR P.O. POTHANIKKAD, MUVATTUPUZHA, ERNAKULAM DISTRICT. 10. MARY GEORGE, KIZHAKKEKURUVITHADAM HOUSE, KADAVOOR P.O. POTHANIKKAD, MUVATTUPUZHA, ERNAKULAM DISTRICT. 11. DENNY JOHN, KALAMBATTUPARAMBIL HOUSE, KADAVOOR P.O. POTHANIKKAD, MUVATTUPUZHA, ERNAKULAM DISTRICT. 12. SECRETARY TO GOVERNMENT, FINANCE DEPARTMENT GOVERNMENT OF KERALA, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM. BY GOVERNMENT PLEADER Mr. BIJOY CHANDRAN ADV. SRI.K.JAJU BABU,SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23/05/2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMACHANDRA MENON, J. ----------------------------------------------- WP(C) NO. 31200 OF 2008 ----------------------------------- Dated this the 23rd day of May 2009 JUDGMENT Whether non-payment of the balance bid amount will attract automatic forfeiture of the entire amount deposited under Section 49(3) of the Kerala Revenue Recovery Act in every case, is the issue involved herein. 2. The petitioner participated in the auction conducted by respondents 1 to 4, whereby 3 acres and 8 cents of land comprised in survey Nos. 823/2/4/5, 823/2/2, 823/2/3/4 and 824/1A/1/4 of Pothanikad village belonging to the 5th and 11th respondents was caused to be sold. 3. The sale was effected when the borrower who had availed a loan from the KFC turned to be a defaulter. The sale was reportedly conducted on 27th November, 2007, in favour of the petitioner who was the highest bidder. In conformity with the terms of auction, the petitioner remitted 15% of the bid amount (Rs.4,00,000/-) on the very same day and the balance amount was to be paid by him within 30 days from the date of auction. 2 WP(C) NO. 31200/2008 4. It is the case of the petitioner that he was very much ready and willing to remit the balance amount to complete the sale within 30 days' time. But in the meanwhile, the defaulter approached this Court by filing WP(C)No.37113/2007 on 13.12.2007, wherein an interim order was passed by this Court on 18.12.2007 observing that the sale was not to be confirmed in favour of the bidder. It is also relevant to note that the petitioner was never a party to the above proceedings before this Court and the interim order obviously was passed within 30 days from the date of the auction, i.e., before the expiry of the period within which, the petitioner was to effect the balance deposit persuant to the auction. 5. Learned Counsel for the petitioner submits that the petitioner had approached the KFC on many an occasion seeking to take the auction to its logical conclusion so as to enable him to enjoy the benefit of auction. It is stated that the petitioner was given to understand that he would be given necessary intimation as and when the matter was got finalised before this Court. It is also revealed that the petitioner had issued Ext.P9 lawyer notice asking the respondent KFC to discharge the duty cast upon them in finalizing the auction sale, which in turn was relied vide Ext.P10 dated 27.09.2008. It is revealed that the KFC have considered the application of the defaulters for OTS benefit pursuant to Ext.P11 verdict and accordingly, 3 WP(C) NO. 31200/2008 the same was sanctioned agreeing to settle for a sum of Rs.39,90,000/-. Even then, the fate of the petitioner was left in the dark and finally the amount deposited by him has been ordered to be forfeited vide Ext.12 alleging failure on his part in remitting the balance bid amount, which made him to approach this court by filing this writ petition. 6. No counter affidavit is filed by the departmental authorities or the State. KFC has filed a statement, wherein they have rather conceded to the sequence of events pointed out by the petitioner. 7. The KFC has stated in their statement that the 15% bid amount originally deposited with them was later transferred to the Government and that the same is lying with the Government. It is also stated in paragraph 8 of the statement that, though the OTS benefit was extended to the defaulter, settling the claim a total sum of Rs.39,90,000/-, the defaulter remitted only 9.5 lakhs (apart from remitting Revenue Recovery collection charges Rs.45,000/- on 03.11.2008) and had only 'agreed' to remit the balance amount; despite which 'NOC' was given by the 3rd respondent to release the documents/title deeds. 8. Learned Government Pleader submits that Section 49(3) of the 4 WP(C) NO. 31200/2008 Revenue Recovery Act clearly stipulates that the amount deposited by the bidders as part of the sale consideration is liable to be forfeited if the balance amount is not deposited within the prescribed time. But to attract the said provision, it is really necessary to have failure on the part of the concerned person. But for the observation in Ext.P12, there is absolutely no material before this Court to arrive at such a conclusion that there was failure on the part of the petitioner in remitting the balance 85% towards the bid amount. 9. The auction was admittedly conducted on 27.11.2007 and as per terms of auction, the petitioner was having 30 clear days' time to remit the balance amount. It is also evident from the materials on record that, before the expiry of the said 30 days, the defaulter had approached this Court by filing WP(C)37113/2007 on 13.12.2007 and further that this Court had passed an interim order on 18.12.2007. By virtue of the interim order, the petitioner was not in a position to have had the sale confirmed in his name and as such there was no point in remitting the balance amount before lifting the van. In other words, the KFC was actually prevented from conveying the property to the successful bidder, making him to enjoy the same with absolute ownership, exclusive possession and with clear and marketable title by virtue of the interim order passed by this Court. In the 5 WP(C) NO. 31200/2008 said circumstances, it is declared that there was no 'failure' on the part of the petitioner in remitting the balance amount with regard to the auction conducted on 27.11.2007, to have attracted the adverse consequences as provided under Section 49(3) of the Kerala Revenue Recovery Act. 10. In the above facts and circumstances, Ext.P12 passed by the 3rd respondent is held as unsustainable to the extent it adversely affects the petitioner, which part is hence set aside. Accordingly the respondents 1 to 4 and 12 are hereby directed to take necessary steps to refund the sum of Rs.4,00,000/- deposited by the petitioner as borne by Ext.P1 to P8 receipts in connection with the auction as aforesaid, as expeditiously as possible and at any rate, within a period of one month from the date of receipt of a copy of this judgment. The Writ Petition is allowed to the above extent. No costs. (P.R.RAMACHANDRA MENON, JUDGE) dnc