V M BABY Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner-Panchayat is challenging revenue recovery, proceedings for recovery of arrears of loan and interest due to the second respondent-Corporation. The loan was availed in the year 1994-95 and appears to have been for a period of 15 years. According to the second respondent, which is a Government Corporation, the arrears due as on 16/04/2005 after setting off Rs.22,80,000/- already paid by the Panchayat was Rs.47,10,699/-. Obviously, there is overdue interest on this amount payable for another 1 years which will certainly take balance liability to above Rs.52 lakhs. Therefore, when the entire liability is paid up by the Panchayat, the total commitment of the Panchayat for the construction of the building is above Rs. 75 lakhs.

(2.) When the matter came up for hearing before this court in February 2005, this court felt that Panchayat took a destructive decision in taking up the construction of the building and therefore this court directed the District collector to conduct enquiry into the while affair. Report dated 26.05.2005 from the District collector is produced by the Government Pleader and the Collector has stated that his enquiry revealed that monthly rent that the Panchayat is getting from the whole building is Rs.2,132/-. In other words, on Rs.70 lakhs commitment, the annual return of the Panchayat is less than Rs.25,000/-. The building was obviously not for any public purpose, but was intended as a commercial venture on borrowed capital. Even though in this case, beneficiary is a Government corporation, the net result is that funds reaching the Panchayat for application for public welfare is absorbed to serve a debt, incurred on account of the folly of the Panchayat. Having regard to the meager returns, the District Collector rightly recommended sale of the property so that the Panchayat is saved from further loss. The Collector got the land and building of the Panchayat valued by the Assistant Executive Engineer, PWD (Buildings) at Rs.26,46,222/- which was in May 2005. Obviously, the market value would have gone up in the course of time. It is not proved whether the Panchayat has settled the liability in terms of OTS benefit stated to be granted to it by the second respondent. If liability is not settled in terms of OTS scheme, then of course the Panchayat will forfeit the OTS benefit granted. If liability is not settled, I think the sale of the building is the only solution to save the Panchayat and to protect the interest of the financial institution, which is a Government agency.

(3.) In the circumstances, writ petition is disposed of with direction to the Revenue Recovery Authorities to proceed for sale of the property in public auction after due publicity, if liability is not so far settled, at the earliest.