IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.BHAVADASAN THURSDAY, THE 8TH DECEMBER 2011 / 17TH AGRAHAYANA 1933 SA.No. 188 of 1999(E) ------------------------------ AS.4/1988 of ADDL.DISTRICT COURT,KOTTAYAM OS.230/1979 of ADDL.SUB COURT,KOTTAYAM .................... APPELLANT(S): APPELLANT IN THE IST APPEAL/3RD DEFENDANT IN THE SUIT. ------------------------------------------------------------------------------------------------------------------ KERALA STATE ELECTRICITY BOARD REPRESENTED BY ITS SECRETARY, KERALA STATE ELECTRICITY BOARD,TRIVANDRUM BY ADV. SRI.P.SANTHALINGAM (SENIOR ADVOCATE) BY ADV. SRI.S.RAMESH BABU RESPONDENT(S): RESPONDENTS IN THE IST APPEAL/PLAINTIFF AND THE ------------------------- REMAINING DEFENDANTS IN THE SUIT. 1. V.S.UMA DEVI, W/O. T.M.VASUDEVAN VAYASKARA ILLOM, KODIMATHA KARA,KOTTAYAM VILLAGE. 2. V.S. ARYA DEVI, W/O. C.N.NARAYANA MOOSS, CHITATTAMON ILLOM, OLASSA KARA, AYMANAM VILLAGE. 3. V.S.PARVATHI DEVI, W/O. NARAYANAN NAMBOODIRI, THEMATTU ILLOM, KODANGOOR KARA VILLAGE. 4. THE DISTRICT COLLECTOR, KOTTAYAM. 5. SPECIAL DEPUTY TAHSILDAR, (REVENUE RECOVERY) KOTTAYAM TALUK OFFICE, KOTTAYAM. 6. KERALA STATE REPRESENTED BY CHIEF SECRETARY TO THE GOVERNMENT,SECRETARIAT. TRIVANDRUM. R1 TO R3 BY SRI.T.KRISHNANUNNI (SENIOR ADVOCATE) BY ADV. SRI.G.P.SHINOD R4 TO R6 BY GOVT. PLEADER SRI.PADMALAYAN P.P. THIS SECOND APPEAL HAVING BEEN FINALLY HEARD ON 08/12/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: tss P.BHAVADASAN, J. ------------------------------------- SA No.188 of 1999-E ------------------------------------- Dated this the 8th day of December 2011 Judgment The twin questions that arise for consideration are : 1. Whether the courts below were justified in holding that the original plaintiff was only a Managing Trustee of the Kottayam Electric Supply Agency and that he was not personally liable for the amount due from the said agency and (2) Whether the finding of the court below that the Kottayam Electric Supply Agency (Undertakng) Acquisition Act, 1980 (hereinafter referred to as 'Act 3 of 1980') does not provide for recovery of liabilities in excess of what is due to the licencee, is correct. 2. The facts absolutely necessary for the disposal of the appeal are as follows : The father of the first plaintiff was appointed by the Government of Travancore as a licensee for supply of electricity in Kottayam town in the year 1930. After the SA 188/99 2 commissioning of the Hydro Electric Project at Pallivasal, the generating station belonging to the father of the plaintiff was taken over by the Government of Travancore and an agreement was entered into between the Government of Travancore and the plaintiff's father by which the Government agreed to supply electricity to Kottayam town from Pallivasal. Thereafter, the undertaking was named as Kottayam Electric Supply Agency. In the year 1120 ME, the plaintiff's father as per Ext.A1 assignment deed, assigned the agency in favour of the plaintiff. As per Ext.A1, the plaintiff was made the trustee of the undertaking so as to run the concern smoothly. Elaborate provisions were made in Ext.A1 regarding the manner in which the supply was to be carried on and for utilising the income. Later, upon the establishment of the Electricity Board, the Board became liable to honour the agreement entered into between the plaintiff's father and the Government of Travancore. But, the Board unilaterally revised the grid tariff rates and that resulted in issuance of SA 188/99 3 notice to the plaintiff demanding an amount of Rs.10,27,763.07 towards arrears of electricity charges from February 1970 to July 1973. Thereafter, revenue recovery proceedings were also initiated against the plaintiff. By order dated 3.10.1976, the Government of Kerala took over the management of the agency and an administrator was appointed. That necessitated the filing of two suits namely OS Nos.230/79 and 247/79 for declaration, injunction and for other reliefs. The main allegation in the plaint was that the father of the original plaintiff died during the pendency of the suit before the trial court and his legal heirs who were impleaded as additional plaintiffs 2 to 4 were not personally liable for any amount due from the agency and also that there is no provision under Act 3 of 1980 to recover any amount in excess of what is due to the licensee. 3. Defendants contested the suits. Defendants 1, 2 and 4 filed a joint written statement and the 3rd defendant filed a separate written statement. According to them, on a SA 188/99 4 reading of the provisions of Ext.A1, it is clear that the original plaintiff is liable for the amount and the suits are filed without any bona fides. On the above contentions, they prayed for dismissal of the suits. 4. On the above pleadings, the trial court raised necessary issues for consideration. Evidence consists of the testimony of PWs 1 and 2 and documents marked as Exts.A1 to A15 from the side of the plaintiffs. The defendants had DW1 examined and Ext.B1 marked. 5. On an evaluation of the evidence in the case, the trial court came to the conclusion that the original plaintiff was only the Managing Trustee of the Kottayam Electric Supply Agency and he could not be made liable for any amount due from the agency. It was also found that there was no provision under Act 3 of 1980 enabling the authority concerned to recover amounts in excess of what is due to the licensee in case the liability exceeds that amount. The trial court accordingly decreed the suit. SA 188/99 5 6. The defendants carried the matter in appeal as AS No.4/1988 before the District Court, Kottayam. The lower appellate court, on a re-evaluation of the materials before it and on an analysis of the relevant provisions of Act 3 of 1980, found that there was no ground made out to interfere with the judgment and decree of the trial court and accordingly dismissed the appeal. That brings the defendants before this court. 7. Notice is seen issued on the following questions of law raised in the second appeal : 1. Whether the right of the Board and the Government to recover amounts due to it under the Revenue Recovery Act or any other general law is affected by the provisions of the Kottayam Electric Supply Agency (Undertaking) Acquisition Act, 1980 ? 2. Was the trial court justified in construing Section 9 and 10 of the Kottayam Electric Supply Agency (Undertaking) Acquisition Act, 1980 as disentitling the Board to recover amounts admittedly due to it ? SA 188/99 6 3. Is the first plaintiff entitled to claim that he was not personally liable for the dues to the Kottayam Electric Supply Agency and were the courts below justified in construing the agency as a Trust ? 4. Were the unilateral agreement between the 1st plaintiff and his father and subsequent assignment deed between them to which the Board was not a party sufficient to cloth the undertaking as a trust when admittedly the licence was issued to the father of the first plaintiff in his personal capacity ? 8. Mr.P.Santhalingam, learned counsel for the appellants very vehemently contended that both the courts below have erred on facts and in law in decreeing the suit. The Board is a separate entity and is not bound by the private arrangements between the members of a family and it is wrong to say that there is no provision in Act 3 of 1980 for recovery of any amount in excess of what is due to the licencee if it is found that the liability of the licensee exceeds the amount due to the licensee. The learned SA 188/99 7 counsel referred to the provisions in the Act and pointed out that it does not stand to reason that the Board is not empowered to recover the amount due from the licensee towards electricity charges for electricity supplied to the agency. Merely because the plaintiff happens to be the Managing Trustee of the agency, that is not a ground to deny his personal liability. 9. Though the argument may look very attractive at the first blush, on a closer scrutiny, it can be found to be without any merits whatsoever. It is not in dispute that it is the father of the plaintiff who was initially the licensee for supply of electrical energy in Kottayam town. He had set up a generating station. After the commissioning of the Hydro Electric Project, an agreement was entered into between the licensee and the Government of Travancore to supply energy at the tariff rate. Thereafter, it is seen from the relevant records that Ext.A1 was executed by the father of the plaintiff in favour of the plaintiff after obtaining consent from the Government of Travancore. By virtue of SA 188/99 8 Ext.A1, it is very clear that the plaintiff was functioning as the Managing Trustee for the smooth functioning of the agency. Elaborate provisions are seen made regarding how the undertaking is to be carried on and also regarding the appropriation of the amounts received by the Agency. It is significant to notice that there were provisions to meet liabilities also. The Board, being the successor-in-interest, cannot now turn round and say that they are not bound by Ext.A1. It was executed after obtaining due consent and approval from the Government of Travancore. Both the courts below considered Ext.A1 in considerable detail and have come to the conclusion that the original plaintiff was only a Managing Trustee and therefore, could not be made personally liable for the amount due from the agency. 10. After having heard the learned counsel on both sides and having gone through Ext.A1, this court finds no reason to take a different view. Equally unassailable is the finding of the courts below that since there is no provision under Act 3 of 1980 for recovery of excess SA 188/99 9 amounts towards liabilities, is correct. A perusal of the preamble of Act 3 of 1980 shows the reasons for acquisition. There can be no doubt that it is a self contained Act. It provides the various measures to be taken by the acquisitioning authority and also matters relating to the assets and liabilities of the concern. Section 7 deals with the gross amount payable to the licensee for acquisition. What is significant is that Section 7 says that the amount paid is subject to Section 9 of the Act. Section 9(c) provides that the amount due, if any, for the energy supplied to the Board, including interest, shall be deducted from the gross amount payable under this Act to the licensee. It is also seen from the provisions of the Act that if the amount payable to the licensee is equal or less than the liabilities, then no amount shall be payable to the licensee. There is no provision in the Act which provides for recovery of the balance amount if liability exceeds the amount due to the licensee. Both the courts below have referred to the Principles of Interpretation and also to the SA 188/99 10 fact that Act 3 of 1980 is a self contained code. 11. On going through the judgments of the courts below, this court finds no grounds warranting interference with the same. Both the courts below have analysed the materials on record and have construed the provisions of the Act properly. There is nothing to show that the findings of the courts below are either perverse on unwarranted by the evidence on record. The result is that no substantial questions of law arise for consideration in this appeal. The second appeal is without any merits and it is accordingly dismissed. No order as to costs. P.Bhavadasan, Judge sta SA 188/99 11