IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 30TH JULY 2009 / 8TH SRAVANA 1931 OP.No. 11105 of 2003(V) ----------------------- PETITIONER(S): --------------- THE TRAVANORE RUBBER & TEA CO. LTD., PATTOM PALACE P.O., TRIVANDRUM-695004. REPRESENTED BY ITS MANAGER, MR.SURESH DAMODARAN. BY ADV. SRI.JOSEPH MARKOSE, SENIOR ADVOCATE SRI.THOMAS VELLAPPALLY RESPONDENT(S): --------------- 1. SECRETARY, PERUVANTHANAM GRAMA PANCHAYAT, PERUVANTHANAM P.O.-685532, IDUKKI DISTRICT. 2. STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, GOVERNMENT OF KERALA, SECRETARIAT,TRIVANDRUM. ADV. SRI.K.JAJU BABU FOR R1 G.P. SRI.MATHEW VADAKKEL FOR R2 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 30/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON CMP NO.19105/2003 IN O.P. NO.11105/2003 DISMISSED: 30.7.2009 SD/-(C.N.RAMACHANDRAN NAIR, JUDGE.) APPENDIX PETITIONER'S EXHIBITS: P1: TRUE COPY OF LETTER DT.16.7.2002 FROM R1. P2: TRUE COPY OF LETTER DT.16.9.2002 FROM PETITIONER. P3: TRUE COPY OF NOTICE DT.30.9.2002 ISSUED BY RESPONDENT PANCHAYAT. P4: TRUE COPY OF APPLICATION FOR LICENCE DT.10.,12.2002 FILED BY PETITIONER. P5: TRUE OCPY OF DEMAND NOTICE DT.17.2.2003 FROM RESPONDENT. P6: TRUE COPY OF LETTER DT.27.3.2003 FROM THE PETITIONER. RESPONDENT'S EXHIBITS: R1(a): TRUE COPY OF NOTICE DT.17.12.2002 ISSUED BY R1. R1(b): TRUE COPY OF LETTER DT.29.1.2003 SENT BY PETITIONER BEFORE R1. R1(c): TRUE COPY OF LETTER DT.6.1.2003 SENT BY THE ASST. DIRECTOR OF PANCHAYAT, IDUKKI TO R1. R1(d): TRUE COPY OF NOTICE DURING THE YEAR 2002-03 ON 25.4.2002 ISSUED BY R1. R1(e): TRUE COPY OF LETTER DT.28.3.2003 SENT BY THE PANCHAYAT TOT HE PETITIONER. TRUE COPY PA TO JUDGE C.R. C.N.RAMACHANDRAN NAIR, J. .................................................................... O.P. No.11105 of 2003 .................................................................... Dated this the 30th day of July, 2009. JUDGMENT The petitioner is challenging arrears of licence fee claimed by the Panchayat for running a Crumb Rubber factory within the Panchayat area without licence in terms of Sections 232 and 233 of the Kerala Panchayat Raj Act. I heard counsel for the petitioner and counsel appearing for the Panchayat. 2. The first contention raised by the petitioner is that licence fee cannot be demanded for want of quid pro quo. However, this court has in the decision in OEN CONNECTORS LTD. V. CHOTTANIKKARA GRAMA PANCHAYAT (2007(4) KLT 342) held that no quid pro quo is required for demanding licence fee by the Panchayat. Therefore, this contention is rejected. The next contention raised by the petitioner is that under Section 243 of the Act, arrears could not be recovered beyond three years. I am of the view that licence fee cannot be demanded until petitioner is given a licence. Admittedly prior to or after coming into force of the Panchayat Raj Act, 1994, petitioner has not taken a licence for the factory. So much so, arrears of licence fee cannot be demanded from the petitioner 2 and therefore, there is no need to look into the provision on limitation. Licence cannot be retrospectively granted and so much so, Panchayat cannot grant retrospective licene and demand arrears. On the other hand, conducting a factory without licence is an offence that too, a continuing offence, for which Panchayat can prosecute the petitioner. However, Section 246 of the Panchayat Raj Act provides for composition of offence on collection of compounding fee. The Kerala Panchayat Raj (Compounding of Offences) Rules, 1996 provides for Rules for compounding. In the Schedule to the said Rule, an offence for running factory or workship without licence under Section 233 is compoundable on payment of fine which is Rs.3,000/-. Since the offence is a continuing offence under proviso to Section 245, the Secretary of the Panchayat is entitled to treat each year of violation as a separate offence and demand compounding fee for all the years during which the factory was run without a licence. However, counsel for the petitioner rightly pointed out that penalty could not be levied eversince commencement of the factory because running of the factory was within the knowledge of the Panchayat. Even though counsel for the Panchayat dispute this fact, I feel penalty should be limited to the period after the commencement of the new Act. In the circumstances, O.P. is disposed of vacating the arrear demand against the 3 petitioner, but directing the Secretary of the Panchayat to grant compounding from 1994 onwards until date of grant of licence in terms of the provision stated above, by collecting compounding fee for each year petitioner has carried on business without licence. If excess is paid, the balance should be refunded to the petitioner without any delay or adjust against any other demand due to the Panchayat. C.N.RAMACHANDRAN NAIR Judge pms