STATE OF KERALA V R Vs. S MANI

JUDGEMENT

(1.) This appeal by the plaintiff is against the judgment dated 21-1-1985 in O.S.No.136 of 1983 on the file at the Addl. Sub Judge, Cochin. State of Kerala is the plaintiff. The following prayers were made by the plaintiff in the suit (a) to direct the second defendant to deliver the plaint schedule properties with damages for use and occupation at the rate of Rs.750/- per month from the date of suit till the date of realisation and (b) for a declaration that the sale effect by the Official receiver in Insolvency Proceedings No.2 of 1973 before the Sub Court, Ernakulam is null and void and it is not binding en the plaintiff. The suit was dismissed with costs.

(2.) The undisputed facts are as follows: The first defendant is the owner in possession of the plaint schedule properties. He was an assessee under the Kerala Sales Tax Act. He defaulted in the payment of sales tax due under various assessments made by the Sales Tax Officer, Ist Circle, Mattancherry, Cochin. The Sales Tax Officer (31st respondent herein) initiated a proceeding under S.69(2) of the Revenue Recovery Act on 25-6-1972 for realisation of a sum of Rs.9,328.10. On the issue of a certificate by the District Collector, Cochin on 3-7-1972, the Tahsildar Cochin attached those properties on 20-11-1972 under S.36 of the Revenue Recovery Act. The first defendant had created an equitable mortgage by giving the plaint schedule property as security by deposit of title deeds and obtained a loan by way of overdraft from the second defendant-Bank. The mortgage was created on 2-9-1963. The first defendant was . indebted to several persons. When it came to a crisis, he filed insolvency proceedings No.2 of 1973 before the Sub Court, Ernakulam on 13-4-1973 for being adjudged as an insolvent. Defendant No.2 was the first respondent and defendant No.31 was the 30th defendant in that petition. The other defendants herein were also parties in the petition. Notice was served on the 31st defendant, viz. the Sales Tax Officer on 5-6-1973 and he entered appearance in the insolvency case on 19-6-1973. In spite of the fact that the 31st defendant had been served with the notice of the insolvency proceeding, the Tahsildar held the sale of the property on 28-6-1973. The 34th defendant as the highest bidder, purchased the property for Rs.33,000/- He had deposited 15% of the bid amount on the date of sale and the balance on 28-7-1973. The second defendant informed the Tahsildar on 1-8-1973 that the properties are involved in the said Insolvency Proceeding No.2 of 1973 filed by the first defendant. The Sub Collector confirmed the revenue sale on 17-2-1973 though later by an order dated 25-5-1975, he cancelled the revenue sale. But the Board of Revenue suo motu by its order dated 7-8-1976 cancelled the order of the Sub Collector. The second defendant filed O.P.No.4986 of 1976 before the High Court challenging the order of the Board of Revenue dated 7-8-1976. The said O.P. was dismissed on the ground that an alternative remedy by way of revision to Government was available with an observation that the dismissal of the original petition will not in any manner affect the disposal of the case pending before the Insolvency Court or before the civil court or before the R.D.O. and they will have to dispose of the case untrammelled by the fact that the writ petition has been dismissed. In the insolvency proceeding, the Official Receiver was directed to take possession of the plaint schedule property. In compliance with the said order, he took possession of the property on 11-1-1974. In his report, the official receiver sought for a direction from the court to sell the property and intimated the court about the revenue sale that had taken place. Defendant No.2 the Tahsildar and the 34th defendant were heard in the matter and the insolvency court passed orders directing the official receiver to sell the property in public auction according to law by ignoring the revenue sale alleged to have been conducted at the instance of the Sales Tax Officer (31st defendant). The Official receiver sold the property in public auction subject to the mortgage in favour of the 2nd defendant-Bank. On 12-8-1975, this defendant purchased the property for Rs.5,000/-reserving the mortgage liability of Rs. 85,000/- The sum of Rs.5,000/- was deposited with the official receiver and thereafter a registered sale deed was executed in its favour. Defendant No.2 took over possession of the property. When these proceedings were pending before the insolvency court, the Tahsildar filed I.A.No.2784 of 1975 representing that the properties have been sold by Government and that it is pending confirmation. The second defendant however contested the petition and contended that the revenue sale was void. The court accepted the contention of the second defendant-Bank and held that the sale effected by the Government is void. Against the said order, the Tahsildar filed an appeal which was registered as A.S.No. 111 of 1977 before the District Court, Ernakulam and the 31st respondent, the Sales Tax Officer filed an appeal which was registered as A.S.No.7 of 1979 before the District Court, Ernakulam. By a common judgment dated 18-7-1980, the District Court dismissed the appeals holding that the sale effected by the Revenue Department is vitiated by lis pendens.

(3.) The 5th defendant filed a suit against the 1st defendant for realisation of Rs. 20,000/- On 24-1-1974, the District Court received a notice attaching Rs.23,671.90 in revenue deposit out of the amounts deposited by the 34th defendant. Out of the amounts deposited by him, the Tahsildar Cochin sent a sum of Rs.23,688.40 to Sub Court, Ernakulam in O.S.No.88 of 1972 as per orders of that court. The decree holder has withdrawn the amount thus deposited.