IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 26TH JUNE 2008 / 5TH ASHADHA 1930 WP(C).No. 35472 of 2005(W) -------------------------- PETITIONER: ------------ K.T. JOSEPH, KALARICKAL HOUSE, PERUMPUNNA (P.O). PERAVOOR, KANNUR DISTRICT. BY ADV. SRI.V.P.SUKUMAR SRI.KURYAN THOMAS RESPONDENTS: ------------- 1. THE DEPUTY TAHSILDAR (RR), THALASSERY. 2. THE DISTRICT COLLECTOR, KANNUR. 3. THE REVENUE DIVISIONAL OFFICER, THALASSERY. 4. THE ADDL. SALES TAX OFFICER-II, KUTHUPARAMBA. 5. T.V. MANOJ, S/O. T.V. BALAN NAMBIAR, THEKKANMAR VEETTIL, PARUMPUNNA P.O.,KANNUR DIST. 6. THE DIRECTOR, VIGILANCE AND ANTI-CORRUPTION BUREAU, THIRUVANANTHAPURAM. BY ADV. SRI.N.N.SUGUNAPALAN (SR.) FOR R5 SRI.S.SUJIN FOR R5 R1 TO R4&R6 BY G.P. SRI.TEK CHAND THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 26/06/2008, ALONG WITH WPC NO.28075/2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX(WPC 35472/2005) PETITIONER'S EXHIBITS: P1: TRUE COPY OF REPRESENTATION DT.22.3.2005 FILED BY PETITIONER BEFORE R2. P2: TRUE COPY OF ORDER DT.26.10.2005 PASSED BY R2. P3: TRUE COPY OF NTOCE DT.11.5.2005 ISSUED TO THE PETITIONER U/S.65 OF THE RR ACT. P4: TRUE COPY OF ORDER OF CONFIRMATION DT.26.11.2005 PASSED BY R3. TRUE COPY PA TO JUDGE C.N.RAMACHANDRAN NAIR, J. .................................................................... W.P.(C) Nos.35472 of 2005 & 28075 of 2007 .................................................................... Dated this the 26th day of June, 2008. JUDGMENT These W.Ps. are filed one by the husband who is a defaulter for sales tax arrears and the other, by his wife who is the apparent owner of the property claiming property on the basis of a sale deed executed by the defaulter to her. The petitioner in W.P. 35472/2005 is in arrears of sales tax of above Rs.10 lakhs for the year 1991-92, besides penalty also payable for the same year. When recovery proceedings were initiated, defaulter's wife, petitioner in the other W.P., claimed title over the property based on a sale deed executed by the defaulter on 18.1.1992. In one set of proceeding the objection of the wife of the defaulter was overruled and the property was put up for sale by the Deputy Tahsildar (RR) on 14.3.2005. The 5th respondent in W.P. 35472/2005 being the highest bidder, deposited the sale consideration of Rs.7,51,000/- on 27.3.2005. The sale was thereafter confirmed by the RDO. Challenge against confirmation of sale was turned down by all the authorities including the Land Revenue Commissioner and the Government. Consequently, these separate writ petitions are filed by the original owner and the transferree who is none other than the wife of the 2 defaulter. I heard counsel appearing for both the petitioners, Government Pleader and counsel appearing for the auction purchaser. 2. The main allegation of counsel for the petitioners is that the sale is a collusive deal by the several participants with the support of the Revenue officials. Besides this, it is argued that there is violation of Section 50 on various counts in as much as the RDO did not defer the sale inspite of the sale price offered being less than the debt amount. Apart from this, counsel also pointed out irregularities such as want of valuation before auctioning the property. Government Pleader and counsel for the auction purchaser submitted that large number of people participated in the auction and sale is made at competitive price which reflects the market price of the property. The property sold is 5.5 acres of garden land in Kannur and the sale price obtained is only Rs.7,51,000/-. 3. During hearing, counsel for the petitioner in W.P. 35472/2005 submitted that he is willing to approach the Government to settle sales tax liability under amnesty scheme. The application is stated to be already filed under the scheme introduced by the Government by the Finance Bill 2008. If the defaulter settles liability under amnesty scheme, then even the Government will have to support cancellation of Revenue sale as it serves full recovery of arrears of tax as against part recovery in revenue sale. If 3 the offer made by the defaulter is accepted and property restored to him on conditions, then there is no need for the defaulter's wife to press the other W.P. filed by her. Even though counsel for the auction purchaser (5th respondent in W.P. 35472/2005) opposed the contentions raised by the petitioners, I feel an interference is called for, for various reasons. In the first place, there is procedural illegality and impropriety in the confirmation of sale made in favour of the 5th respondent, even though petitioners have not brought the same to the notice of the lower authorities in the contest made before them. Besides this, sale price is at below the market price because 5.5 acres of garden land in Kannur has on sale fetched only Rs.7.51 lakhs. If the market price is anywhere near the amount stated by petitioners, it will fetch much higher price so that entire arrears of Revenue could be recovered besides compensating the auction purchaser. In any case since the defaulter has agreed to settle liability under amnesty scheme and in view of the irregularity in the conduct of sale in violation of Section 50 of the Act, I feel this court should in the interest of all concerned including the State interfere with the sale, but on terms. The auction purchaser who has deposited the money three years back, is certainly entitled to be compensated. In the circumstances, the W.Ps. are disposed of cancelling the sale of defaulter's property to 5th respondent (in W.P. 4 35472/2005) on the following terms and conditions: 1. The petitioner in W.P. 35472/2005 will give a Demand Draft to the 5th respondent therein for Rs.10.5 lakhs on or before 31.8.2008. 2. As and when payment is made, the 5th respondent will issue receipt of the same for production before the first respondent (in W.P. 35472/2005) and sale will stand cancelled on payment made by the petitioner and acknowledged by the 5th respondent. 3. The sale proceeds remitted by the 5th respondent without adjustment of collection charges will be credited in the defaulted account of the petitioner by the 4th respondent (in W.P. 35472/2005) with reference to the date on which the same was remitted by the 5th respondent to the Government i.e. 27.3.2005 and he will rework balance interest and liability for the petitioner to settle liability under the amnesty scheme. 4. The petitioner (in W.P. 35472/2005) is free to settle liability under the amnesty scheme and if liability is not settled within the time available under the Act, then respondents 1 to 4 can re-auction the very same property again for recovery of balance arrears of tax, interest or penalty, if any payable. The petitioners in the W.Ps. shall not on recovery of property after cancellation of sale as above, transfer, assign, encumber or do anything in the property to reduce it's value unless arrears of sales tax, interest and 5 penalty are settled under the amnesty scheme or by direct payment. I make it clear that if payment is not made to the auction purchaser by 31.8.2008 as stated above, then the W.Ps. will stand dismissed and possession will be handed over to the auction purchaser. C.N.RAMACHANDRAN NAIR Judge pms