IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 27TH JANUARY 2011 / 7TH MAGHA 1932 WP(C).No. 36554 of 2010(T) ---------------------------------------- PETITIONER(S): ------------------------ JACOB MATHEW, KAVUMKAL HOUSE, VELLOOR P.O PAMPADY, KOTTAYAM DISTRICT. BY ADV. SRI.V.G.ARUN, SRI.T.R.HARIKUMAR. RESPONDENT(S): -------------------------- 1. KERALA FINANCIAL CORPORATION, REPRESENTED BY ITS MANAGING DIRECTOR, THIRUVANANTHAPURAM – 695 001. 2. THE BRANCH MANAGER, KERALA FINANCIAL CORPORATION, BRANCH OFFICE, M.C.ROAD, KOTTAYAM- 686 001. 3. THE DEPUTY TAHSILDAR (REVENUE RECOVERY) KERALA FINANCIAL CORPORATION, KOTTAYAM – 686 001. R1 & R2 BY ADV. SRI.A.A.ABUL HASSAN, SC, KFC. R3 BY GOVT. PLEADER MR.BIJOY CHANDRAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27/01/2011,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs WP(C) NO. 36554/2010-T APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE NOTICE DATED 05/12/2009 ISSUED BY THE 3RD RESPONDENT. EXT.P2: COPY OF THE COMMUNICATION DATED 01/12/2010. EXT.P3: COPY OF THE RECEIPT SHOWING THE PAYMENT OF Rs.30,00,000/- DATED 03/12/2010. EXT.P4: COPY OF THE LETTER DATED 03/12/2010 ISSUED BY THE 3RD RESPONDENT. RESPONDENT'S EXHIBITS: NIL //TRUE COPY// P.A. TO JUDGE rs C.K.ABDUL REHIM, J. ------------------------------------------- W.P.(C).No.36554 of 2010 ------------------------------------------- Dated this the 27th day of January, 2011 J U D G M E N T ---------------------- Grievance of the petitioner is that inspite of settlement of amounts due to the respondents 1 and 2, which pertains to arrears in the loan account availed by him, the 3rd respondent is not issuing clearance certificate and is not taking steps for withdrawal of the revenue recovery requisition. On the other hand, the 3rd respondent is threatening recovery steps demanding 'collection charges' due from the petitioner. 2. It is contended that the petitioner is not liable for payment of 'collection charges' since the amount was directly remitted to respondents 1 and 2. Learned counsel for petitioner points out that in a Division Bench decision of this court in Malabar Organics Ltd. Vs. State of Kerala (2009 (4) KLT 328) the issue was decided to the effect that with respect to the organization fully owned by Government like that of respondents 1 and 2, the defaulters are not liable for payment of any amount towards collection charges, if the amount is paid directly to the Corporation, and when no coercive steps of recovery was initiated apart from issuing the demand notice. However, learned counsel for petitioner submits that he is ready to make payment of the amount at the rate of 1% of the recoveries W.P.(C).36554/10 -2- effected, towards service charge, as contemplated under Rule 5(3) of the Kerala Revenue Recovery Rules. 3. Learned Government Pleader appearing on behalf of 3rd respondent submitted that the decision cited above is now pending challenge before the Hon'ble Supreme Court and the apex court had already stayed the operation of the judgment. However, going by the settled proposition, I am bound by the dictum laid by a Division Bench of this court unless it is reversed. 4. Under the above circumstances, I am of the view that 'collection charges' demanded under Ext.P4 is unsustainable. Therefore the 3rd respondent is directed to issue clearance certificate for facilitating withdrawal of the revenue recovery requisition, provided the petitioner remits the balance amount if any due under the loan transaction as well as 1% of the amount recovered towards service charge. It is made clear that liability for payment of 'collection charges' will ultimately depend upon the decision of the matter which is now pending before the Hon'ble Supreme Court. 5. In case clearance certificate is issued by the 3rd respondent, respondents 1 and 2 shall take necessary steps for withdrawal of the revenue recovery requisition. C.K.ABDUL REHIM, JUDGE. okb