UNION OF INDIA Vs. METHERUKUNJU MOOSAKUTTY

JUDGEMENT

(1.) This appeal is by the Union of India against the decree of the court below granting injunction to the plaintiffs in the suit restraining the defendants, the State of Kerala as well as the Union of India from taking steps under the Kerala Revenue Recovery Act against the plaint schedule items for recovery of amounts claimed as due to the second defendant, Union of India. There are two plaintiffs in the suit, the second plaintiff being the wife of the first plaintiff. They claim to be the owners of the plaint schedule items, item No. 2 being the building situated on item No. 1 which is land of an extent of 22 cents. The plaint items were purchased by the plaintiffs under a sale deed, Ext. A1, dated 10-41967, executed by one Janaki Amma and her 5 children. That the suit property originally belonged to one Velayudhan Pillai is not in dispute. It was inherited by his widow Janaki Amma and the 5 children, who jointly executed Ext. Al sale deed. At the time the sale was taken by the plaintiffs the property comprised therein appears to have been encumbered. Out of the consideration of Rs. 40,000 a sum of Rs. 30,200 was reserved with the plaintiffs for discharging a prior debt charged on the plaint items under a registered mortgage deed of 1959 in favour of the State Bank of Travancore. The Bank had obtained a decree against the vendors based on the mortgage in the suit O. Section 2 of 1964 of the Sub Court of Quilon. A sum of Rs. 2,500 was reserved with the plaintiffs for discharging another prior debt charged on the plaint item under a registered panayan of the year 1960 in favour of one Pareed Kunju. Pareed Kunju had obtained a decree for sale in O. Section 37 of 1966 of the Subordinate Judge's Court, Quilon. According to the plaintiffs they discharged the decree amounts due to these creditors and paid the balance of the consideration to the vendors. That they made such payments is not in controversy. Under the terms of the sale deed the vendors had undertaken to discharge another decree debt, that in O. S. No. 106 of 1964. The decree- holder in that suit had brought to sale l/6th share of one of the vendors, Lakshmana Kumar and he himself purchased such share in auction. He filed a suit for partition against the plaintiffs and others for such l/6th share as O.S. 704 of 1968 of the Subordinate Judge's Court, Quilon. He obtained a preliminary decree. Subsequently plaintiffs purchased the l/6th rights of the decree-holder auction-purchaser in O. Section 106 of 1964 by payment of Rs. 1.000 on 31-31969. Besides these debts which had been diclosed by the vendors at the time of the sale, there were other liabilities undisclosed at the time of the sale. Those had also to be discharged by the plaintiffs to save the property purchased by them. In a suit O. S. No. 388 of 1964 of the Sub Court of Quilon the plaint items had been attached before judgment in a suit against the vendors. After the decree the items were sold in execution and were purchased by the decree-holder himself. This right was purchased by the plaintiffs by paying a consideration of Rs. 4,200 to the decree-holder auction-purchaser under a sale deed dated 19-6-1969. Ext. A6 is the sale certificate and Ext. A7 is the sale deed taken by the plaintiffs from the decree-holder auction-purchaser in O. S. No. 388 of 1964 of the Munsiff's Court of Quilon. The plaint items had been similarly attached before judgment and later sold in auction in O. S. No. 643 of 1963, at which court sale they had been bid by the decree-holder himself. The plaintiffs paid the amount due to the decree-holder and obtained an order setting aside the sale. It is thus claimed by the plaintiffs that they had invested Rs. 48,736.50 for perfecting title to the plaint items.

(2.) Pursuant to the purchase by the plaintiffs in court auction mutation of revenue records was effected in the name of the plaintiffs in the village office.

(3.) While so, proceedings were taken under the Revenue Recovery Act for recovery of a sum of Rs. 58,708. 26 alleged to be due from Janaki Amma, one of the vendors of the plaintiffs. This amount was claimed as due by way of duty and penalty to the Central Excise Department, and such claim arose out of the business in tobacco conducted by Janaki Amma as licensee. Though the licence was in the name of Janaki Amma, proceedings were taken against the plaint items as if Janaki Amma and her children were really conducting the business and the licence in favour of Janaki Amma was really to run a business on behalf of herself and her children. The plaintiffs disputed the right of the Central Excise Department to proceed against the properties of the plaintiff for recovery of the amount due to the Central Government from Janaki Amma. In view of the purchase by the plaintiffs from the vendors under Ext. Al, it was contended that no further proceedings for sale of the plaint items could be taken under the Revenue Recovery Act. Even assuming that Janaki Amma was liable to pay dues as claimed it would only be her l/6th share that would be answerable. It was said that for other reasons Janaki Amma's share also would not be answerable. Besides the sale deed Ext. Al the plaintiff had also obtained the sale under Ext. A7 pursuant to the sale in execution of the decree in O. S. No. 388 of 1964 and that being the case the rights, if any, of the Excise Department to claim the amount due from Janaki Amma by proceeding against her rights over the plaint property were said to have been extinguished. There was a further plea that at any rate the plaintiffs having discharged the amounts due under mortgages and otherwise charged on the property they should be subrogated to the position of such mortgagees and holders of charge in respect of plaint items and any recovery proceedings could only be subject to the rights of the plaintiffs. It was also contended that the business in tobacco was conducted by Janaki Amma as licensee on her own account and not on account of her children, and further that the steps taken against Janaki Amma under the Revenue Recovery Act would not be in accordance with law, there being no issue of proper demand notice as required.