IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM MONDAY, THE 20TH SEPTEMBER 2010 / 29TH BHADRA 1932 WP(C).No. 13230 of 2010(C) --------------------------------------- PETITIONER(S): ------------------------- AXIS BANK LTD., VIGNESWAR CRESTA, 1095, AVINASHI ROAD, PAPANAICKENPALAYAM, COIMBATORE-37 REPRESENTED BY POWER OF ATTORNEY HOLDER AND ASST. VICE PRESIDENT ABRAHAM THOMAS, KOCHI BRANCH. BY ADV. SRI.G.BALAMURALEEDHARAN (PARAVUR) SRI.MATHEWS V.JACOB (PARAVUR) SRI.N.T.NANDAKUMAR (PARAVUR) SRI.BINNY THOMAS RESPONDENT(S): ------------------------- 1. STATE OF KERALA REPRESENTED BY ITS CHIEF SECRETARY, GOVT.SECRETARIAT, THIRUVANANTHAPURAM. 2. THE DISTRICT COLLECTOR, PALAKKAD. 3. THE TAHSILDAR, (REVENUE RECOVERY) CHITTUR. 4. THE VILLAGE OFFICER, NALLEPPILLY VILLAGE, PALAKKAD. 5. KCT STEELS PVT. LTD., NATTUKAL, CHITTUR, PALAKKAD. 6. MADHAVAMANIS STEELS PRIVATE LTD. NO. SF 246/12, DHARANI NAGAR WEST, GANAPATHY PUDUR, 8TH STREET, COIMBATORE-641006. R1 TO R4 BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 20/09/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C) NO.13230/2010 APPENDIX PETITIONER'S EXHIBITS P1:- NOTICE DTD. 4.11.2008 ISSUED UNDER SARFAESI ACT. P2:- PAPER PUBLICATION OF NOTICE DTD. 12.8.2009. P3:- PAPER PUBLICATION OF AUCTION SALE OF PROPERTY. P4:- NOTICE DTD. 6.2.2010 ISSUED BY 3RD RESPONDENT. P5:- REPLY DTD. 12.2.2010 BY PETITIONER TO P4 NOTICE. P6:- NOTICE DTD. 11.3.2010 ISSUED BY 3RD RESPONDENT. P7:- NOTICE STATED 15.3.2010 ISSUED BY 2ND RESPONDENT. TRUE COPY P.S. TO JUDGE tss C. K. ABDUL REHIM, J. =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= W.P.(C) No. 13230 of 2010 =~=~=~=~=~=~=~=~=~=~=~=~=~=~=~=~= Dated this the 20th day of September, 2010 JUDGMENT Petitioner bank is challenging Exts.P4, P6 and P7 notices issued by the 3rd respondent, on the ground that they are illegal and issued without jurisdiction. The petitioner inter alia contends that the charge created on the properties by virtue of mortgage executed by the 5th respondent, which are now proceeded against under the provisions of the the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short the SARFAESI Act), is not liable to be interfered with by respondents 2 and 4 under the provisions of the Revenue Recovery Act. The property being the secured asset, the Bank is having prior charge, is the contention. 2. The petitioner bank had sanctioned credit facilities to respondents 5 and 6 to the extent of Rs.596.50 lakhs during the year 2004. Properties belonging to the 5th respondent situated in Palakkad district having an extent of 77.60 Ares W.P.(C) No. 13230/2010 2 along with properties of the 6th respondent were mortgaged in ordered to secure the loan. Consequent to default committed in repayment, proceeding under the SARFAESI Act was initiated. After issuing notices under sub-sections (2) and (4) of section 13, the bank proceeded with steps for sale of the property by publishing Ext.P3 notice. In the meanwhile, the 3rd respondent had issued Ext.P4 notice to the petitioner bank, intimating that the property in question is under attachment for realizing sales tax arrears due from the 6th respondent and it is claimed that such arrears is a first charge on the property. Under Ext.P5 the petitioner bank requested the 3rd respondent to stop further proceedings claiming that the property is in possession of the authorized officer of the bank and that the bank has got prior charge than the arrears of sales-tax which is sought to be recovered. But the 3rd respondent issued Ext.P6 notice through which the property was taken over possession and the management of the property was assumed by the 3rd respondent. 3. The legal position as to the arrears due to the W.P.(C) No. 13230/2010 3 Government as public revenue due on land has got prior charge over the property even in a case where the property is mortgaged in favour of any financial institutions, now stands settled by verdict of Honourable Supreme Court reported in Central Bank of India V. State of Kerala and others (2009) 4 SCC 94. Therefore, it is clear that the legal contentions raised by the petitioner bank is not tenable and respondents 1 to 4 are entitled to proceed with actions against the property under the Kerala Revenue Recovery Act. 4. Learned counsel for the petitioner contended that the 3rd respondent had never informed about details of the arrears due from respondents 5 and 6. But in a counter affidavit filed by the 2nd respondent it is repeatedly mentioned that the arrears of sales tax pertains to the years 2004-'05 and 2005-'06, and that the defaulter had filed a writ petition before this Court challenging the liability and the recovery steps and it was disposed of granting time to prefer appeal on payment of admitted tax. But it is stated that the petitioner had failed to comply with the conditions stipulated in the said judgment. W.P.(C) No. 13230/2010 4 5. Under the above circumstances, I do not find any merit in the contentions raised by the petitioner. Going by the dictum laid down by the the decision in Central Bank of India's case (Supra), I am of the opinion that there is no illegality warranting interfere with the proceedings initiated by respondents 1 to 4 under the provisions of the Kerala Revenue Recovery Act. 6. However, it is made clear that if any amount is recovered in excess of what is due under the Revenue Recovery requisition, the petitioner will be always at liberty to approach respondents 1 to 4 seeking payment of such amounts. If any such approach is made, respondents 1 to 4 shall not disburse such excess amount to the defaulter unless the claim of the petitioner is adjudicated. 7. The writ petition is disposed of with the above observations. C. K. ABDUL REHIM, JUDGE. mn.