IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 6TH JUNE 2011 / 16TH JYAISHTA 1933 WP(C).No. 11539 of 2011(N) -------------------------- PETITIONERS: -------------------- 1. JOMI JOHN,S/O.JOHN.P.J, PATHIKULANAGARA HOUSE,PAZHAGANAD,KIZHAKKAMBALAM PO, ERNAKULAM DISTRICT. 2. BENCY JOMI, PATHIKULANAGARA HOUSE, PAZHAGANAD,KIZHAKKAMBALAM PO, ERNAKULAM DISTRICT. BY ADV. SMT.P.M.SWAYAM PRABHA SRI.ANIL KUMAR M.SIVARAMAN RESPONDENTS:- --------------------- 1. KERALA STATE FINANCIAL ENTERPRISES, REP.BY ITS MANAGER,OFFICE OF THE SPECIAL DEPUTY TAHSILDAR,ERNAKULAM. 2. THE SPECIAL DEPUTY TAHASILDAR(REVENUE RECOVERY) KERALA STATE FINANCIAL ENTERPRISES, ERNAKULAM. ADV. SRI.M.SASINDRAN, SC, K.S.F.E., LTD. FOR R1 GOVT.PLEADER SRI.BIJOY CHANDRAN FOR R2. THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06/06/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.K.ABDUL REHIM, J. = = = = = = = = = = = = = WP(C).No.11539 of 2011-N. = = = = = = = = = = = = = Dated this the 6th June, 2011. J U D G M E N T Challenge in this writ petition is against the demand made by the respondents for payment of collection charges, with respect to steps taken for realisation of amounts due under loan accounts and chitty transactions which were subscribed by the petitioners. Contention of the petitioners is that, they were making payments of the amounts due directly to the 1st respondent and there was no occasion to recover any amounts through any coercive steps initiated by the 2nd respondent under the Kerala Revenue Recovery Act. 2. The issue pertaining to liability for payment of collection charges with respect to proceedings initiated under the Kerala Revenue Recovery Act now stands settled through a Division Bench decision of this Court in Deputy Tahsildar (R.R.), K.F.C. and others Vs. Vijaya Builders WP(C).No.11539 of 2011-N. 2 and others, (2009(4) ILR (Ker.) 320). In the said decision it was held that, as far as institutions like KFC and KSFE, they have got theirown machinery of recovery, by utilising service of officers on deputation from the Government, and that the entire expenses including salary and maintenance of the establishment are met by the respective Corporation and the Enterprises. Under such circumstance, it is held that realisation of service charges under Rule 5(3) of the Kerala Revenue Recovery Rules is unsustainable. 3. In view of the settled legal position as above, the demand for collection charges at 5% and other charges of recovery are not sustainable. However, learned Government Pleader points out that the above cited decision has been taken up before the Hon'ble Supreme Court of India and a stay was already granted against operation of the judgment cited above. Under such circumstances the petitioners could not be exonerated from the liability for payment of collection charges, is the WP(C).No.11539 of 2011-N. 3 contention. 4. If no amount was recovered from petitioners by recourse of any coercive steps under the Kerala Revenue Recovery Act, then there is no justification in demanding payment of collection charges, in view of the legal position stand settled as on today. Of course, final decision regarding the liability will depend upon the ultimate decision which will be taken by the Hon'ble Supreme Court. But merely because the legal issue is now pending final decision, the petitioners could not be compelled to make payment of the collection charges, nor it is justifiable on the part of the 1st respondent to keep in abeyance the demand without closing the accounts, even after on payment of the entire dues other than the collection charges. 5. Therefore, I am of the view that the writ petition can be disposed of on issuing the following directions: (i) If the petitioners remit the entire amounts due under the loan account as well as chitty transactions, the 1st respondent shall treat the WP(C).No.11539 of 2011-N. 4 respective accounts as closed, without insisting for payment of collection charges as demanded under Ext.P3. (ii) However, release of the mortgage/security if any furnished, shall be made subject to the petitioners executing a bond undertaking to make payment of collection charges and other amounts if any, ultimately found liable by virtue of decision of the Hon'ble Supreme Court. (iii) It is made clear that petitioners in such case will be liable for payment of the amounts of collection charges and other amounts, despite closing of the accounts and releasing of mortgage/security. C.K.ABDUL REHIM, (Judge) Kvs/-