IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR MONDAY, THE 25TH JULY 2011 / 3RD SRAVANA 1933 RSA.No. 437 of 2004(B) ---------------------- AS.259/2000 of DISTRICT COURT,KOZHIKODE OS.268/1998 of III ADDL ..SUB COURT, KOZHIKODE .................... APPELLANT/APPELLANT/DEFENDANT NO.4. IN O.S.268/98 --------------------------------------------------------------------------------------- KERALA SMALL INDUSTRIES DEVELOPMENT CORPORATION LTD., REP. BY ITS MANAGING DIRECTOR, TRIVANDRUM. . . BY ADV. SRI.R.T.PRADEEP RESPONDENT(S):RESPONDENTS/ PLAINTIFF & DEFENDANTS 1 TO 3. IN O.S.268/98 ---------------------------------------------------------------------------------------------------------------------- 1. MANAYADATH PRAKASAN, S/O.APPU, RESIDING AT EDAKKATTU MANA, PUTHIYANGADI DESOM, KOZHIKODE TALUK, P.O.PUTHIYANGADI, KOZHIKODE. 2. THE STATE OF KERALA, REP. BY THE DISTRICT COLLECTOR, CIVIL STATION, KOZHIKODE. 3. SPECIAL DEPUTY TAHSILDAR, CIVIL STATION, KOZHIKODE. 4. VILLAGE OFFICER, ELATHOOR VILLAGE, ELATHOOR P.O. KOZHIKODE TALUK. ADV. SRI.V.V.SURENDRAN FOR R1 SRI.P.A.HARISH FOR R1 BY GOVERNMENT PLEADER SMT. ANIE PAUL FOR R2 & R3 THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 25 /7 /2011 , THE COURT ON 25/07/2011 PASSED THE FOLLOWING: M.SASIDHARAN NAMBIAR,J. =========================== R.S.A. No. 437 OF 2004 =========================== Dated this the 25th day of July,2011 JUDGMENT Fourth defendant in O.S.268/1998 on the file of III Additional Sub Court, Kozhikode is the appellant. First respondent was the plaintiff and other respondents other defendants in the suit. First respondent admittedly obtained the right to run the canteen from the appellant agreeing to pay a monthly rent of Rs.1555/- on 25.9.1987. An advance of three months rent was paid. The period of the rental arrangement was one year. Subsequently it was admittedly extended for two years. When first respondent did not surrender the building on the expiry of the period, appellant demanded rent at the rate of Rs.2500/- and initiated steps to evict him by recourse to the provisions of Kerala Public R.S.A.437/2004 2 Buildings(Eviction of Unauthorised Occupants) Act, 1968. Though first respondent instituted O.S.453/1990 seeking a decree for injunction from eviction and an ex parte order of injunction was granted, it was vacated on 5.2.1992 when the suit was dismissed. Though first respondent filed A.S.35/1992 he could not succeed in getting an interim order. Appellant with the help of police obtained possession of the property on 29.9.1992 after preparing the list of materials and taking custody of plaint B schedule movables belonging to him. According to the first respondent, plaint B schedule materials valued at Rs.78,280/- was taken by the appellant at the time of taking possession of the canteen. Later appellant issued a notice demanding Rs.90,243.25 being the damages for unlawful occupation without even adjusting the value of the articles taken from the canteen. First respondent instituted the suit seeking a decree for declaration that he is not liable to pay Rs.90,243.25 as demanded and the notice is invalid R.S.A.437/2004 3 and a decree for injunction restraining the appellant from realising the amount. Appellant resisted the suit contending that the suit is not maintainable under section 72 of the Kerala Revenue Recovery Act and the lease granted in favour of the first respondent to run the canteen expired on 24.4.1990 and he was therefore in unlawful occupation of the building subsequent to 24.4.1990 and therefore he is liable to pay damages with interest at 16.5% per annum. Before the termination of the lease period appellant invited quotations for running canteen at the industrial estate for a period of two years from 25.9.1990 to 24.9.1992. Mr.Moideen quoted Rs.3285/- per month, which was the highest and it was accepted. By obtaining an order of temporary injunction from the court first respondent continued his unlawful occupation and therefore appellant was prevented from getting Rs.3,285/- per month. Hence the first respondent is liable to pay the damages demanded in the notice. It was also contended that the R.S.A.437/2004 4 value of the goods taken possession from the canteen would be below Rs.10,000/- and they were sold in public auction and received Rs.14,086.60 and it is adjusted towards the arrears of rent and interest and for the balance revenue recovery proceedings is initiated. It is in accordance with law and therefore the suit is to be dismissed. 2. Learned Sub Judge on the evidence found that suit is not barred under section 72 of the Kerala Revenue Recovery Act. Though appellant contended that the suit is barred under section 15 of Kerala Public Buildings(Eviction of Unauthorised Occupants) Act, (hereinafter referred to as the Act), it was found that the suit is not barred under section 15. Learned Sub Judge also found that though Section 8 enables the appellant to claim damages for unlawful occupation, as provided under sub section (3) of Section 8, it can only be after issuing notice in writing and as there was no such notice, appellant is not entitled to demand the amount claimed in Ext.A4 and therefore Ext.A4 R.S.A.437/2004 5 notice is illegal. The defendants were restrained from proceeding with revenue recovery proceedings, for realisation of the amount claimed under Ext.A4 without proper order as provided under section 8 of the Act. Appellant challenged the judgment before District Court, Kozhikode in A.S.259/2000. Learned District Judge on reappreciation of the evidence confirmed the findings of the learned Sub Judge and dismissed the appeal. It is challenged in the second appeal. Second appeal was admitted formulating the following substantial questions of law. A. On the facts and circumstances of the above case were the Courts below right in holding that the suit challenging Ext.A4 notice issued under the Revenue Recovery Act is maintainable when the suit is barred under section 72 of the Kerala Revenue Recovery Act? B. On the facts and circumstances of R.S.A.437/2004 6 the case were the Courts below right in holding that the absence of determination of arrears of rent and damages for use and occupation by an unauthorised occupant by the Estate Officer under section 8 of the Kerala Public Buildings(Eviction of Unauthorised Occupants) Act, 1968 the bar of jurisdiction under section 15 of the Act will not apply even when the arrears of rent and damages have been fixed on the basis of the rate of rent per mensem quoted for leasing the building to run the canteen by the highest bidder? 3. Learned counsel appearing for the appellant and first respondent were heard. 4. Admittedly first respondent and the appellant entered into an agreement whereunder first respondent was permitted to run the canteen on payment of Rs.1555/- per month as rent, on R.S.A.437/2004 7 25.9.1987 for a period of one year. An advance of rent for three months was also paid at that time. The period of lease was subsequently extended till 24.9.1990. First respondent did not surrender the building on the expiry of the extended period of the lease. When the appellant invited quotations for granting lease, for the subsequent period O.S.453/1990 was instituted by the first respondent seeking a decree for permanent prohibitory injunction restraining the appellant from forcibly evicting him. An order of temporary injunction was granted in his favour. The suit was later dismissed on 5.2.1992. Quotations were received by the appellant. The quotations agreeing a monthly rent by Moideen, being the highest viz Rs.3,285/- per month, was accepted. Though first respondent filed A.S.35/1992 challenging the dismissal of the suit, he did not succeed in getting an order. Appellant forcibly obtained possession of the building with the aid of police on 29.9.1992. At that time, the plaint B schedule R.S.A.437/2004 8 movables in the canteen, which were refused to be removed by the first respondent were taken possession. Later admittedly they were sold in public auction for Rs.14,086.60. When appellant demanded damages for the period 24.9.1990 to 29.9.1992 at the rate of Rs.3,285/- per month and interest, a total of Rs.78,280/- first respondent refused to pay the same. Therefore revenue recovery proceedings were initiated. It is at this stage the suit was filed. 5. Though learned counsel appearing for the appellant vehemently argued that the suit is barred under section 72 of the Revenue Recovery Act, as rightly found by the courts below, Section 72 of Revenue Recovery Act has no application. Section 72 provides that except as otherwise expressly provided in the Act, every question arising between the Collector or the authorised officer and the defaulter or his representative or any other person claiming any right through the defaulter, relating to the execution, discharge or R.S.A.437/2004 9 satisfaction of a written demand issued under the Act or relating to the confirmation or setting aside by an order under the Act of a sale held in execution of such demand, shall be determined not by suit, but by order of (i) the Board of Revenue where the Collector is a party to the question or (ii) the Collector in other cases. It is also provided that even in such case a suit will lie before a civil court in respect of any such question on the ground of fraud. The suit is not relating to the execution, discharge or satisfaction of a written demand issued under the Act. The suit is questioning the maintainability of demand for arrears of rent or damages as provided under the Act, in violation of the provisions of the Act. Therefore when the suit is challenging the right of the appellant, the fourth defendant, to demand or realise any amount which is not in accordance with the provisions of the Act, the suit is not barred under section 72 of the Kerala Revenue Recovery Act as claimed by the R.S.A.437/2004 10 appellant. 6. Then the question is whether the suit is barred under section 15 of the Act. Section 15 of the Act reads:- 15. Finality of orders--Save as otherwise expressly provided in this Act, every order made by an estate officer or appellate officer under this Act shall be final and shall not be called in question in any suit, application or execution proceeding, and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.” What is provided under section 15 is that every order made by an estate officer or appellate R.S.A.437/2004 11 officer under the Act shall be final and shall not be called in question in any suit, application or execution proceedings. Therefore the order must be an order as provided under the Act, following the procedure provided under the Act. If the order demanding the amount, as arrears of rent, is not an order passed in accordance with the provisions of Section 8, it cannot be contended that the suit is barred under section 15 of the Act. When the Act provides for an order to be passed after following a particular procedure and the impugned order is not passed following the procedure,the order cannot be an order as provided under the Act and if that be so, finality provided under section 15 cannot be attached to such orders. Therefore a suit challenging that order is not barred by Section 15 of the Act. That exactly is the case herein. According to the first respondent, no order was passed as provided under section 8 and therefore under Ext.A4 notice the amount cannot be realised from him. R.S.A.437/2004 12 7.Section 7 of the Act provides the liability of an unauthorised occupant to pay damages. Section 7 reads:- 7. Any person who is, or has at any time been, in unauthorised occupation of any public building shall be liable to pay for the whole period of such occupation, such damages on account of the use and occupation of such building as may be assessed by the estate officer having regard to such principles of assessment of damages as may be prescribed.” Clause (f) of Section 2 defines “unauthorised occupation” namely in relation to any public building means the occupation by any person of the building without authority for such occupation and includes the continuance in occupation by any R.S.A.437/2004 13 person of the public building after the authority (whether by way of lease or any other mode of transfer) under which he was allowed to occupy the building has expired or has been determined for any reason whatsoever. 8. When it is admitted case that the period provided under the agreement which was subsequently extended expired on 24.9.1990, first respondent is definitely an unauthorised occupant of the building from 24.9.1990 onwards. Therefore though till 24.9.1990 first respondent is liable to pay only Rs.1555/- per month as agreed, subsequent to 24.9.1990, the liability is not to pay rent but damages, which is to be fixed by the Estate Officer, the authorised officer under the Act. Section 8 provides the power to recover rent and damages in respect of public buildings. Section 8 reads:- 8. (1) Where any person is in arrears of rent payable in respect of any public building, R.S.A.437/2004 14 the estate officer may, by order, require that person to pay the same within such time and in such instalments as may be specified in the order. (2) where any person is liable to pay damages under section 7, the estate officer may by order require that person to pay such damages within such time and in such instalments as may be specified by the order. (3) No order under sub-section(1) or sub-section (2) shall be made against any person until after the issue of a notice in writing to the person calling upon him to show cause within such time as may be specified in the notice why such order should not be made, and until his objections, R.S.A.437/2004 15 if any, and any evidence produced by him in support of the same, have been considered by the estate officer.” Though under sub section(2) of Section 8, where any person is liable to pay damages under section 7, the estate officer may by order require that person to pay such damages within such time and in such instalments as may be specified by the order, sub section (3) makes it absolutely clear that no order under sub section (2) shall be made against any person until after issue of a notice in writing to the person calling upon him to show cause within such time as may be specified in the notice why such order should not be made and until his objections, if any and any evidence produced in support of the same have been considered by the estate officer. 9.Though appellant may be justified in claiming damages at the rate quoted by Moideen, appellant is bound to issue a notice in writing to R.S.A.437/2004 16 the first respondent calling upon him to show cause within a specified time, why such order should not be made as provided under sub section 3 of Section 8. The estate officer though competent to fix damages under sub section (2) of Section 8, shall consider the objections and also the evidence produced by the first respondent, before passing the order as provided under sub section (2), demanding the damages. It is not disputed that no notice was issued to the first respondent as provided under sub section (3) of section 8 and first respondent was not granted any opportunity to raise objection to the demand in excess of the agreed rent, much less the amount quoted by Moideen. Therefore the order passed by the Estate Officer based on which requisition was sent to the District Collector for realising the amount under the provisions of Revenue Recovery Act, is not an order passed under sub section (2) of Section 8 of the Act following the procedure provided under sub section (3). Therefore the finality provided under R.S.A.437/2004 17 section 15 is not attached to that order. Hence as rightly found by the courts below first respondent is entitled to contend that defendants are not entitled to realise the amount as demanded in Ext.A4 notice. 10.Learned counsel appearing for the appellant pointed out that first respondent has already deposited Rs.34,210/-, deducting Rs.4665/- being the three months advance rent paid at the time of the agreement, out of Rs.38,275/- being the rent calculated at the rate of Rs.1555/- from September 1990 to September 1992 as directed by the trial court as a condition to grant the order of injunction. It is clear that first respondent cannot dispute his liability to pay the damages at the rate of Rs.1555/- per month. Therefore appellant is entitled to receive that amount. Learned counsel appearing for the first respondent rightly pointed out that first respondent is entitled to Rs.14,086/-, being the amount realised by sale of the B schedule movables taken by the R.S.A.437/2004 18 appellant at the time of taking possession of the canteen with police aid and the appellant could claim only the balance amount. Therefore appellant is permitted to withdraw Rs.34,210/- less Rs.14,086/- out of the amount in deposit before the III Additional Sub Court,Kozhikode. It is also made clear that appellant is entitled to realise the balance amount of damages after passing an appropriate order under sub section (2) of Section 8, following the procedure provided under sub section(3) of Section 8. As the liability of the first respondent is not exhausted, the balance amount in the court deposit shall be retained. The plaintiff shall not withdraw the balance amount for three months. Appeal is dismissed. M.SASIDHARAN NAMBIAR JUDGE tpl/- M.SASIDHARAN NAMBIAR, J. --------------------- W.P.(C).NO. /06 --------------------- JUDGMENT SEPTEMBER,2006