IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 5TH AUGUST 2011 / 14TH SRAVANA 1933 WP(C).No. 11390 of 2007(E) -------------------------- PETITIONER: --------------- M.K.ABDULLA, S/O N.K.ASSU, AGED 50, ABCO AGENCIES, PANAMARAM, WAYANAD DISTRICT. BY ADV. MR. K.JAYAKUMAR MR. P.B.KRISHNAN MR. R.SURAJ KUMAR MS. GEETHA P.MENON RESPONDENTS: --------------- 1. DISTRICT COLLECTOR, WAYANAD. 2. THE AGRICULTURAL INCOME TAX AND SALES TAX OFFICER, MANANTHAVADI, WAYANAD DISTRICT. 3. THE COMMERCIAL TAX OFFICER, MANANTHAVADI, WAYANAD DISTRICT. 4. THE TAHSILDAR, MANANTHAVADI, WAYANAD DISTRICT. BY GOVERNMENT PLEADER MR. V. K. SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 05/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) 11390 OF 2007 APPENDIX PETITIONER'S EXHIBITS : EXT. P1 : DATED 13.03.2007. TRUE COPY OF THE SHOW CAUSE NOTICE UNDER SECTION 65 OF THE KERALA REVENUE RECOVERY ACT ISSUED BY RESPONDENT NO. 1 EXT. P2 : DATED 23.03.2007 TRUE COPY OF THE WRITTEN OBJECTION FILED BY THE PETITIONER BEFORE RESPONDENT NO.1 AGAINST EXT. P1 NOTICE EXT. P3 : DATED 23.03.2007. TRUE COPY OF THE PROCEEDINGS OF RESPONDENT NO.1 BEARING NO. C5 7732/01 ORDERING ARREST AND IMPRISONMENT OF THE PETITIONER IN CIVIL PRISON. EXT. P4 : DATED 24.09.2004. TRUE COPY OF THE FINAL ORDER OF THE HON'BLE DEBTS RECOVERY TRIBUNAL, ERNAKULAM IN O.A. NO. 289 OF 2003. FIRST RESPONDENT'S EXHIBITS : EXT. R1 : TRUE COPY OF THE ORDER DATED 28.07.2006 OF THE DIVISIONAL BENCH OF THE HON'BLE HIGH COURT. /TRUE COPY/ P.A. TO JUDGE P.R. RAMACHANDRA MENON J. ~~~~~~~~~~~~~~~~~~~~~~~ W.P (C) No . 11390 of 2007 ~~~~~~~~~~~~~~~~~~~~~~~ Dated, this the 5th August , 2011 JUDGMENT The petitioner is challenging Ext. P3 order passed by the first respondent, invoking the power under Section 65 of the Kerala Revenue Recovery Act, ordering arrest and detention of the petitioner in a civil prison. 2. The case of the petitioner is that, he turned to be a defaulter with regard to the liability, mainly to be satisfied to the sales tax department. The default occurred mainly due to the sudden down fall in the business and the petitioner was mulcted with huge liability, allegedly without any basis (by way of assessment for different assessment years and imposing penalty), finally leading to Ext. P1 notice under Section 65 of the Kerala Revenue Recovery Act, calling for explanation from the petitioner, as to why he shall not be arrested and detained in a civil prison. On receipt of the said notice, the petitioner preferred Ext. P2 explanation dated 23.02.2007 and appeared before the first respondent. However, after hearing the petitioner, the first respondent passed Ext. P3 order on the same day, W.P. (C) No. 11390 of 2007 : 2 : without considering the specific plea of 'no means', as put forth in Ext. P2 and passed the order of arrest and detention under Section 65 of the Kerala Revenue Recovery Act, which in turn is under challenge in this Writ Petition. 3. The learned Government Pleader with reference to the counter affidavit filed from the part of the respondent submits that the concerned respondents conducted a detailed enquiry, which revealed that the petitioner is leading a 'luxurious life' and was having sufficient means to pay. Reference is also made to the subsequent turn of events, that when this Court granted interim stay with a direction to satisfy a portion of the liability to an extent of Rs. 1 lakh and to execute bond with two solvent sureties for the amount specified therein, the petitioner complied with the said direction within 24 hours and got released from the jail. The learned Government Pleader also submits that the plea of 'no means' raised by the petitioner is without any merit or bonafides and hence no interference is warranted. 4. Section 65 of the Kerala Revenue Recovery Act, which forms base of the impugned proceedings reads as follows : 65. Arrest in case of wilful and fraudulent non - payment of arrears : When arrears of public revenue W.P. (C) No. 11390 of 2007 : 3 : due on land, with interest thereon and cost of process are not paid after the service of the written demand under Section 34 and the District Collector is satisfied that the defaulter or his surety is wilfully withholding payment of the arrears, or has dishonestly transferred any part of his property, or has been guilty of fraudulent conduct in order to evade payment, or that defaulter has the means to pay the arrears or some substantial part thereof and refuses or neglects to pay the same, or the proceeds of the sale of the property of the defaulter and his surety are not sufficient to liquidate the arrears with interest thereon and cost of process, he may issue a warrant for the arrest of the defaulter calling upon him to appear before the District Collector at the time and place specified in the notice and to show cause why he should not be committed to the civil prison. The District Collector shall on the appearance of the defaulter, hear him and consider such other evidence as may be produced by him. Upon the conclusion of the enquiry, the District Collector may, if he is convinced that such course is necessary, make an order for the detention of the defaulter in the civil prison and shall, in that event, cause him to be arrested. With reference to the mandate of the Statute, the learned counsel for the petitioner submits that the movable and immovable properties of the petitioner have already been attached and put to sale by the different authorities. Apart from the steps taken by the revenue authorities, it is W.P. (C) No. 11390 of 2007 : 4 : stated that, the financing bank had also taken steps under the relevant provisions, by approaching the DRT, leading to Ext. P4 order to attach the immovable property. 5. After hearing both the sides and also taking note of the contents of Ext. P3 order passed by the first respondent, it is seen that, in spite of raising the specific plea of 'no means' vide Ext. P2, the first respondent has not taken any steps to ascertain the factual position before proceeding with the arrest and detention of the petitioner in a civil prison. What is stated in Ext. P3 is that, enquiry has already been made by the Tahasildar and as per the report of the Tahasildar, there was a chance to have the liability cleared by the petitioner once the procedure under Section 65 was initiated. More over, it is also discernible from Ext. P3, that the first respondent was acting simply as per the 'advice' given by the Tahasildar, without any meticulous analysis or proper application of mind, as to the facts and circumstances, before proceeding to arrest and detain the petitioner in a civil prison under Section 65 of the Act. In other words, it is only by way of an 'experimental measure', that notice was issued under Section 65 of the Kerala Revenue Recovery Act, as advised by the Tahasildar, without arriving at a proper finding as to the specific circumstances W.P. (C) No. 11390 of 2007 : 5 : contemplated under Section 65 of the Act so as to justify the arrest and detention in the civil prison. 6. The aforesaid provision which is to be exercised sparingly, on satisfaction of the conditions stipulated therein, ought to have been invoked by the first respondent with much care and caution. True, the liability of the petitioner as discernible from Ext. P1 is more than Rs. 1.4 Crore. It is also true that the petitioner has arranged funds from some or other corners to satisfy the condition imposed by this Court so as to avail the benefit of the interim order. But, it does not mean that the plea of the petitioner that he is having 'no means' to satisfy the liability and that he has no other property as well, since the other available properties have been subjected to sale or attachment, is devoid of any merit. In any view of the matter, whether the petitioner was pursued any unlawful or fraudulent exercise so as to evade the liability ought to have been analysed by the first respondent, with specific reference to the particulars of property or funds, after holding a proper enquiry and should not have been pursued the matter in a mechanical manner. 7. The law has been made clear by this Court in the decision rendered in Aboo Vs. District Collector [2000 (3) KLT S.N. 29 (case W.P. (C) No. 11390 of 2007 : 6 : No. 34)]; relevant portion of which is extracted as given below: “it appears that the District Collector was placing reliance on some reports by the Tahasildar about the living conditions of the petitioner. But that does not amount to a proper enquiry regarding the means of the petitioner. When the petitioner specifically contends that he has no means to pay the amount, the District Collector must collect evidence and satisfy himself that he has means to pay the amount. A luxurious life itself may not indicate that the person is capable of paying off the liability to the tune of Rs. 7.78 lakhs or a substantial part thereof. It is possible that he may have a rich wife or in-laws. The District Collector should have ascertained whether the petitioner himself had the means. The section permits if the defaulter is wilfully withholding payment of arrears. But the defaulter can said to be withholding payment of arrears willfully if he has the means to pay it and refuses to do so without reasonable cause. The section specifically provides that the District Collector must hear the defaulter and consider the evidence produced by him.” 8. In the above circumstances, this Court finds that the petitioner is entitled to succeed, to the extent that the matter requires to be reconsidered by the first respondent . Accordingly, Ext.P3 is set aside and the first respondent is directed to reconsider the matter with reference to the actual facts and figures, by conducting a proper enquiry. A 'speaking order' shall be passed in this regard, in accordance with law, after hearing the petitioner as to the plea of 'no W.P. (C) No. 11390 of 2007 : 7 : means' and such other contentions. The proceeding as above shall be finalized at any rate within two months from the date of receipt of copy this judgment. The Writ Petition is allowed to the said extent. No cost. Sd/- P. R. RAMACHANDRA MENON, JUDGE kmd