IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN FRIDAY, THE 18TH FEBRUARY 2011 / 29TH MAGHA 1932 SA.No. 852 of 2000(B) --------------------------- AS.129/2000 of DISTRICT COURT, THRISSUR OS.652/1998 of II ADDL.MUNSIFF COURT,THRISSUR .................... APPELLANT(S):APPELLANT/PLAINTIFF --------------------------------------------- C.L.JOSE, S/O. CHALISSERY LONAPPAN, PROPRIETOR OF SEENA SWEETS )BACKERY), JAIHIND MARKET, THRISSUR TOWN, THRISSUR TALUK. BY ADV. SRI.DINESH MATHEW J.MURICKEN RESPONDENT(S):RESPONDENTS.DEFENDANTS ------------------------------------------------------ 1. KERALA GOVERNMENT REPRESENTED BY THE DISTRICT COLLECTOR, AYYANTHOLE, THRISSUR. 2. DEPUTY TAHSILDAR (R.R.), TALUK OFFICE CHEMBOOKAVU, THRISSUR – 20. 3. VILLAGE OFFICER, THRISSUR, CHEMBOOKAVU, THRISSUR – 1. 4. THE MANAGER, PUNJAB NATIONAL BANK, THRISSUR BRANCH. 5. GURU SWAMY, THEKKUMKARAN HOUSE, NELLAMKARA DESOM, NETTISSERY VILLAGE, THRISSUR TALUK. R1 TO R3 BY GOVT. PLEADER SRI.P.R.JAYAKRISHNAN R4 BY ADV. SRI.K.PADMANABHAN R5 BY ADVS. SRI.P.VIJAYA BHANU SRI.M.V.HARIDAS MENON THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 18/02/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: svs P.BHAVADASAN, J. ---------------------------- S.A.No. 852 of 2000 --------------------------------- Dated this the 18th day of February, 2011 JUDGMENT The plaintiff in O.S.No.652/1998 before the Munsiff's Court,Thrissur is the appellant. 2. Revenue Recovery Proceedings were initiated against the plaintiff on a requisition made by the 4th defendant for a loan availed off by the 5th defendant for whom the plaintiff stood as a surety. The allegation was that without proceeding against the 5th defendant and attempting to realise the amount from him, proceedings could not be initiated against the plaintiff. On the basis of these allegations, the suit was laid. 3. The 5th defendant remained exparte. The defendants 1 to 3 contented that the suit is not maintainable and it is liable to be dismissed. They also pointed out that the Revenue Recovery Proceedings were initiated on the basis of the requisition made by the 4th defendant and the plaintiff has to resort the statutory remedy available to him under the Revenue Recovery Act. 4. The 4th defendant filed a written statement pointing out that the plaintiff is as much as liable to the 5th defendant in the suit. It was also contended by them, the plaintiff undertaken to pay the half of the S.A.No. 852 of 2000 2 loan amount on behalf of the 5th defendant and that was not done. They also pointed out that the suit was pending against the 5th defendant for the amount due from him. On the basis of these contentions, they prayed for a dismissal of the suit. 5. Based on the above pleadings, necessary issues were raised by the trial court. The evidence consists of the testimony of PW1 and documents marked as Exts. A1 and A2 from the side of the plaintiff. No oral or documentary evidence adduced by the defendants. The trial court on the basis of the principle that the liability of the surety is co- extensive with that of the principal debtor, dismissed the suit. 6. The plaintiff carried the matter in appeal A. S. 129/2000. The appeal was dismissed by admission stage itself. Hence the second appeal. 7. Notice has been issued on the following substantial questions of law: (i) Whether the trial court as well as the lower appellate court was right in upholding that the revenue recovery proceedings can be initiated, when a decision of the Supreme Court (1999 (1) KLT 155) specifically mentions that the provisions of Revenue Recovery Act can be invoked only when the loan has been advanced by the bank under various development schemes. (ii) Whether the trial court as well as the lower appellate court was right in coming to the S.A.No. 852 of 2000 3 conclusion that revenue recovery proceedings can be initiated against the appellant when the 5th respondent has not proved the burden of showing that his property worth Rs.10,00,000/- to the bank is not enough for securing the whole of the loan amount. 8. The learned counsel appearing for the appellant relying on the decision reported in (1999 (1) KLT 155) Califf India Chambers v. Syndicate Bank contended that unless the loan was extended under a development priority scheme the bank could not resort to revenue recovery proceedings to recover the amount from the plaintiff. This aspect of the matter has not been considered by the either of the courts below and that has resulted in miscarriage of justice. The learned counsel also pointed out that an opportunity ought to have been given to the appellant/plaintiff to place his entire case for consideration on merits by the lower appellate court. 9. There seems to be considerable force in the above submissions. The contention based on the decision reported in (1999 (1) KLT 155) Califf India Chambers v. Syndicate Bank needs to be considered. If the loan amount is not for a development scheme for which the Revenue Recovery Proceedings would be resorted to, the action taken by the bank may not be legal. S.A.No. 852 of 2000 4 10. Of course, there was no such contention raised before either of the courts below but this being a pure question of law, needs consideration at the hands of the lower appellate court. In the result, this Second Appeal is allowed. The judgment and decree of the lower appellate court is set aside and the matter is remanded to the lower appellate court for fresh consideration in accordance with law and in the light of what has been stated above. The parties shall appear before the lower court on 29.03.2011. This will not preclude the Bank from proceeding against the 5th defendant. There will be no order as to costs. P.BHAVADASAN, JUDGE. ln