Case: STATE OF KERALA AND OTHERS Vs. KALLIYANIKUTTY AND ANOTHER

in any of the sections of the said Act that the entire amount due whether time barred or not, can be recovered by resorting to the procedure under the Kerala Revenue Recovery Act. 13.- In our view if such a wide interpretation is put on the words amount due under the Kerala Revenue Recovery Act, there is every likelihood of the provisions of the Article 14 being attracted. this Court in the case Director of Industries, U.P. and Others Vs. Deep Chand Agarwal, justified the special procedure for recovery of certain debts under the U.P. Public Moneys (Recovery of Dues)Act, 1965 on the ground that the amount which were advanced by the State or by the financial institutions were for the economic betterment of the people of that State. Speedy recovery of these amounts was necessary so that these amounts was necessary so that these amounts could be re-utilised for the same public purpose. It is doubtful if this public purpose would extend to granting exemption to these claims from the statutes of limitation. The law of limitation itself rests on the foundations of public interest. The courts have expressed at least three reasons for supporting the existence of statutes of limitation; (1)that long dormant claims have more of cruelty than justice in them; (2)that a Defendant might have lost the evidence to disprove a stale claim; and (3)that persons with good causes of action should pursue them with reasonable diligence. (See Halsbury 4th Edn. Vol.28 para.605), In Nav Rattanmal and Others Vs. The State of Rajasthan, , the Statutes of Limitation have been considered as Statutes of Repose and statutes of Peace. The generally accepted basis for such statutes is that they are designed to effectuate a beneficent public purpose. Whether public purpose of speedy recovery would outweigh public purpose behind a statute of limitation is a moot point. But we need not examine this aspect any further in view of our interpretation of the words amounts due in Section 71. 14. It has been submitted before us that the statute of limitation merely bars the remedy without touching the right. Therefore, the right to recover the loan would remain even though the remedy by way of a suit would be time barred. Reliance was placed on Khadi Gram Udyog Trust Vs. Ram Chandraji Virajman Mandir, Sarasiya Ghat, Kanpur, )in this connection. The court there observed that though a debt may be time barred, it would still be a debt due. The right remains untouched and if a creditor has any means of enforcing his right other than by action or set off, he is not prevented from doing so. In Punjab National Bank and others Vs. Surendra Prasad Sinha, at page 503 this Court held that the rule of limitation are not meant to destroy the rights of the parties. Section 3 of the Limitation Act only bars the remedy but does not destroy the right which the remedy relates to. Excepting cases which are specifically provided for, as for example, u/s 27 of the Limitation Act, the right to which the remedy relates subsists. Though the right to enforce the debt by judicial process is barred, that right can be exercised in any manner other than by means of a suit. For example, a creditors right to make adjustment against time barred debts exists. 15. There is no question, however, in the present case of any payment voluntarily made by a debtor being adjusted by his creditor against a time barred debt. The provisions in the present case are statutory provisions for coercive recovery of amounts due, Although the necessity of filing a suit by a creditor is avoided, the extent of the claim which is legally recoverable is not thereby enlarged. u/s 70(2) of the Kerala Revenue Recovery Act the right of a debtor to file a suit for refund is expressly preserved. Instead of the bank or the financial institution filing a suit which is defended by the debtor, the creditor first recovers and then defends his recovery in a suit filed by the debtor. The rights of the parties are not thereby enlarged. The process of recovery is different. An Act must expressly provide for such enlargement of claims which are legally recoverable, before it can be interpreted as extending to the recovery of those amounts which have ceased to be legally recoverable on the date when recovery proceedings are undertaken. Under the Kerala Revenue Recovery Act such process of recovery would start with a written requisition issued in the prescribed form by the creditor to the collector of the District as prescribed u/s 69(2) of the said Act. Therefore, all claims which are legally recoverable and are not time barred on that date can be recovered under the Kerala Revenue Recovery Act. 16. In view of the interpretation which we have put on Section 71 of the Kerala Revenue Recovery Act it is not necessary for us to consider whether by making a requisition u/s 69(2) a creditor sets in motion a process of recovery which is a judicial process which would attract the Law of Limitation. There is a clear provision for adjudication u/s 70(3) of the said Act. This right u/s 70(3) of the said Act. This right u/s 70(3)is not affected by Section 72 of the said Act as was contended before us by the Respondents. Section 72 merely provides that every question arising between the Collector or the authorised officer and the defaulter relating to execution, discharge or satisfaction of a written demand issued under this Act will be determined not by a suit but under the provisions of the said Act. Section 72 does not cover the right of a person making a payment under protest to institute a suit which is expressly provided for u/s 70,Sub-section (3).Looking to the scheme of recovery and refund under Sections 70 and 71, amounts due u/s 71 are those amounts which the creditor could have recovered had he filed a suit.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]The word due always imports a fixed and settled obligation or liability; but with reference to the time for its payment there is considerable ambiguity in the use of the term, the precise signification being determined in each case from the context. It may mean that the debt or claim in question is now (presently or immediately)matured and enforceable, or that it matured at sometime in the past and yet remains unsatisfied, or that it is fixed and certain but the day appointed for its payment has not yet arrived. But commonly and in the absence of any qualifying expressions, the word due is restricted to the first of these meanings, the second being expressed by the term overdue and the third by the word payable. There is no reference in these definitions to a time-barred debt. In every case the exact meaning of the word due will depend upon the context in which that word appears.8. In the case of Abdullah Ashgar Ali v. Ganesh Das, AIR (20) 1933 PC 63  the Privy Council was required to interpret the words money due u/s 186 of the Companies Act, 1913. Section 186 dealt with the recovery of any money due to the Company from a contributory. Interpreting the words money due, the Privy Council said that the phrase would only refer to those claims which were not time barred. It noted that the section is concerned only with moneys due from a contributory. A debtor who is not a contributory is not affected by it. Moneys due from him can be recovered only by a suit in the companys name. Secondly, the section creates a special procedure for obtaining payment of money. It is not a section which purports to create a foundation upon which to base a claim for payment. It creates no new rights. Thirdly, the power of the court to order payment under that Section is discretionary. It may refuse to act under that section, leaving the liquidator to sue in the name of the company. Therefore, the Respondent under the procedure of Section 186 cannot be deprived of some defence or answer open to him in a suit for the same moneys.9. The same reasoning would apply in the present case also. The Kerala Revenue Recovery Act does not create any new right. It merely provides a process for speedy recovery of moneys due. Therefore, instead of filing a suit, (or an application or petition under any special Act), obtaining a decree and executing it, the bank or the financial institution can now recover the claim under the Kerala Revenue Recovery Act. Since this Act does not create any new right, the person claiming recovery cannot claim recovery of amounts which are not legally recoverable nor can a defence of limitation available to a debtor in a suit or other legal proceeding be taken away under the provisions of the Kerala Revenue Recovery Act. In fact, u/s 70 of the Kerala Revenue Recovery Act, it is provided that when proceedings are taken under this Act Act against any person for the recovery of any sum of money due from him, such person may, at any time before the commencement of the sale of any property attached in such proceedings, pay the amount claimed and at the same time deliver a protest signed by himself to the officer issuing the demand or conducting the sale as the case may be. Sub-section (2)of Section 70 provides that when the amount is paid under protest, the officer issuing the demand or the officer at whose instance the proceedings have been initiated, shall enquire into the protest and pass appropriate orders. If the protest is accepted, the officer disposing of the protest shall immediately ordense refund of whole or part of the money paid under protest. Under Sub-section (3)of Section 70, the person making a payment under protest shall have the right. to institute a suit for the refund of the whole or part of the sum paid by him under protest.10. Therefore, u/s 70(3) a person who has paid under protest can file a suit for refund of the amount wrongly recovered. In law he would be entitled to submit in the suit that the claim against which the recovery has been made is time barred. Hence no amount should have recovered from him. When the right to file a suit u/s 70(3) is expressly preserved, there is a necessary implication that the shield of limitation available to a debtor in a suit is also preserved. He cannot, therefore, be deprived of this right simply by making a recovery under the said Act unless there is anything in the Act which expressly brings about such a result. Provisions of the said Act, however, indicate to the contrary. Moreover, such a wide interpretation of amount due which destroys an important defence available to a debtor in a suit against him by the creditor, may attract Article 14 against the Act. It would be ironic if an Act for speedy recovery is held as enabling a creditor who has delayed recovery beyond the period of limitation to recover such delayed claims.This case turned on the interpretation of Section 20 of the U.P. Buildings (Regulation of Letting, Rent and Eviction)Act, 1972. u/s 20(2)(a) a suit for eviction against a tenant may be instituted on the ground that the tenant is in arrears of rent for not less than four months and has failed to pay the same to the landlord within one month from the date of service upon him of a notice of demand. A further opportunity of payment of rent is provided to the tenant u/s 20(4) which provides that if, at the first hearing of the suit, the tenant unconditionally pays r tenders the entire amount of rent and damages due from him together with interest the court may pass an order relieving the tenant against his liability for eviction. The court said that Section 20(4) is meant to give a last opportunity to the tenant to retrieve his position. It confers a benefit on the tenant to avoid a decree of eviction. Hence the entire amount of arrears due would have to be tendered including time barred rent also. This reasoning however, does not have any application to the Kerala Revenue Recovery Act. There is no indication in any of the sections of the said Act that the entire amount due whether time barred or not, can be recovered by resorting to the procedure under the Kerala Revenue Recovery Act.13.- In our view if such a wide interpretation is put on the words amount due under the Kerala Revenue Recovery Act, there is every likelihood of the provisions of the Article 14 being attracted. this Court in the case Director of Industries, U.P. and Others Vs. Deep Chand Agarwal, justified the special procedure for recovery of certain debts under the U.P. Public Moneys (Recovery of Dues)Act, 1965 on the ground that the amount which were advanced by the State or by the financial institutions were for the economic betterment of the people of that State. Speedy recovery of these amounts was necessary so that these amounts was necessary so that these amounts could be re-utilised for the same public purpose. It is doubtful if this public purpose would extend to granting exemption to these claims from the statutes of limitation. The law of limitation itself rests on the foundations of public interest. The courts have expressed at least three reasons for supporting the existence of statutes of limitation; (1)that long dormant claims have more of cruelty than justice in them; (2)that a Defendant might have lost the evidence to disprove a stale claim; and (3)that persons with good causes of action should pursue them with reasonable diligence. (See Halsbury 4th Edn. Vol.28 para.605), In Nav Rattanmal and Others Vs. The State of Rajasthan, , the Statutes of Limitation have been considered as Statutes of Repose and statutes of Peace. The generally accepted basis for such statutes is that they are designed to effectuate a beneficent public purpose. Whether public purpose of speedy recovery would outweigh public purpose behind a statute of limitation is a moot point. But we need not examine this aspect any further in view of our interpretation of the words amounts due in Section 71.15. There is no question, however, in the present case of any payment voluntarily made by a debtor being adjusted by his creditor against a time barred debt. The provisions in the present case are statutory provisions for coercive recovery of amounts due, Although the necessity of filing a suit by a creditor is avoided, the extent of the claim which is legally recoverable is not thereby enlarged. u/s 70(2) of the Kerala Revenue Recovery Act the right of a debtor to file a suit for refund is expressly preserved. Instead of the bank or the financial institution filing a suit which is defended by the debtor, the creditor first recovers and then defends his recovery in a suit filed by the debtor. The rights of the parties are not thereby enlarged. The process of recovery is different. An Act must expressly provide for such enlargement of claims which are legally recoverable, before it can be interpreted as extending to the recovery of those amounts which have ceased to be legally recoverable on the date when recovery proceedings are undertaken. Under the Kerala Revenue Recovery Act such process of recovery would start with a written requisition issued in the prescribed form by the creditor to the collector of the District as prescribed u/s 69(2) of the said Act. Therefore, all claims which are legally recoverable and are not time barred on that date can be recovered under the Kerala Revenue Recovery Act.16. In view of the interpretation which we have put on Section 71 of the Kerala Revenue Recovery Act it is not necessary for us to consider whether by making a requisition u/s 69(2) a creditor sets in motion a process of recovery which is a judicial process which would attract the Law of Limitation. There is a clear provision for adjudication u/s 70(3) of the said Act. This right u/s 70(3) of the said Act. This right u/s 70(3)is not affected by Section 72 of the said Act as was contended before us by the Respondents. Section 72 merely provides that every question arising between the Collector or the authorised officer and the defaulter relating to execution, discharge or satisfaction of a written demand issued under this Act will be determined not by a suit but under the provisions of the said Act. Section 72 does not cover the right of a person making a payment under protest to institute a suit which is expressly provided for u/s 70,Sub-section (3).Looking to the scheme of recovery and refund under Sections 70 and 71, amounts due u/s 71 are those amounts which the creditor could have recovered had he filed a suit.