STATE OF KERALA Vs. BANK OF INDIA

JUDGEMENT

(1.) AN important question of law arises for decision in this revision petition is as to whether the abkari arrears due from a person who had suffered a mortgage decree in another suit is public revenue due on land as defined in Sections 2 (a)and 2 (j) of the Kerala Revenue Recovery Act. If so, whether such arrears shall be the first change on the mortgage property under Section 3 of the Act. In other words, can the State's right to realise abkari arrears could, take precedence over the Bank's right to enforce its security, the bank being a secured creditor. What is the impact of Section 2 (a) read with Section 3 of the said Act and whether the said provisions gives a statutory recognition to the doctrine of the State's priority for recovery of abkari arrears is the crux of the dispute.

(2.) THE State of Kerala represented by the District Collector, Ernakulam and the Tahsildar Muvattupuzha are the revision petitioners. The order passed by the Sub Court, Muvattupuzha dated 23-3-2005 in E. A. 578/1996 in e. P. 122/1993 in O. S. 469/1985 is under challenge. The said E. A. was filed by the revision petitioners for a declaration that the property put to sale in execution belongs to the State of Kerala and therefore not liable to be sold in the execution proceedings. The prayer was declined by the court below and hence this revision.

(3.) THE decree-holder/plaintiff namely Bank of India, Pandappilly Branch filed O. S. No. 469/1985 before the Sub Court, Muvattupuzha for realisation of money against the defendants. A decree was passed in favour of the decree holder-Bank. The decree-holder-Bank filed E. P. 122/1993 in O. S. 469/1985 for realisation of the decree amount by sale of the property which is mortgaged in their favour. According to the State of Kerala which is not a party to the suit, the mortgaged property put to sale in execution of the decree in O. S. 469/1985 is under the State's custody and possession pursuant to a revenue recovery proceedings initiated against the 1st judgment-debtor/1st defendant who is a defaulter of Abkari arrears and therefore the State is entitled to the declaration prayed for in E. A. 578/1996.