SIDCO Vs. GAB INDUSTRIES

JUDGEMENT

(1.) COULD a suit for injunction against recovery of amount under provisions of the revenue Recovery Act, 1968 (for short, "the Act") be maintained in the civil court notwithstanding the bar under Section 72 of that Act on the ground that recovery of the amount is barred by the law of limitation? That is one of the substantial questions of law framed for a decision in this Second Appeal.

(2.) APPELLANT, the Kerala State Small Industries Development and Employment corporation Ltd. supplied raw materials to respondent Nos. 1 and 2 for a sum of rs. 93,259. 72 ps. on credit. Respondent Nos. 1 and 2-paid Rs. 48,887. 69 ps. keeping a balance of Rs. 44,372. 03 ps. with interest as on 4-5-1978. Based on requisition from the appellant, respondent Nos. 3 to 5 initiated steps for recovery of the said amount under the Act. On 28-7-1987 a notice under Section 7 of the Act was issued to respondent Nos. 1 and 2 demanding payment of Rs. 84,867. Respondent nos. 1 and 2 approached the court of learned Principal Munsiff, Ernakulam with a suit for prohibitory injunction against recovery of the amount contending that recovery of the amount is barred by the law of limitation and hence appellant cannot resort to the provisions of the Act. Respondent Nos. 1 and 2 further contended that to make provisions of the Act applicable to the debt in question, no notification under section 71 of the Act has been issued. Appellant contended that the suit is not maintainable under Section 72 of the Act in so far as the suit is not brought on the ground of fraud. Appellant denied that recovery of amount payable by respondent nos. 1 and 2 is barred by limitation. Further contention is that as per notification dated 13-10-1987 the Act has been made applicable to recovery of amounts due to the appellant. Respondent Nos. 3 and 4 also raised similar contentions. Learned munsiff held that the bar under Section 72 of the Act applied and dismissed the suit as not maintainable. Respondent Nos. 1 and 2 took up the matter in appeal. First appellate court held that recovery of the amount payable by respondent Nos. 1 and 2 is barred by limitation, there is no legally payable or recoverable 'debt', provisions of the Act therefore are not applicable, attempt to recover the amount is not legal and hence civil court has jurisdiction to grant injunction. Holding so, judgment and decree of the trial court were reversed and respondent Nos. 1 and 2 were granted a decree as prayed for. Appellant has come up in Second Appeal.

(3.) IT is contended by learned counsel for appellant that finding of the first appellate court regarding maintainability of the suit is not correct. According to the learned counsel every question relating to the execution, discharge or satisfaction of a written demand arising between the Collector or the authorized officer and the defaulter, his representative or person claiming right through him is to be determined by the authorities mentioned in Section 72 of the Act and not by a suit. Learned counsel argued that the said provision excluded jurisdiction of the civil court in express terms and the proviso to the Section saved only suits brought on the ground of fraud. In this case, there is no allegation of fraud on the part of the appellant or respondent Nos. 3 to 5 in initiating proceedings under the Act. Learned counsel has placed reliance on the decision of the Division Bench of this Court in Special tahsildar v. Vasu, 2006 (4) K. L. T. 557. In response learned counsel for respondent Nos. 1 and 2 contend that it is only questions regarding execution, discharge or satisfaction of the written demand which are required to be determined by the Collector or other authority mentioned in the Act that are exempted from the purview of the civil court. Contention of respondent Nos. 1 and 2 is that there is no 'debt' legally payable to the appellant in that recovery of the amount has become barred by limitation. An amount the recovery of which is barred by limitation cannot be legally recovered by resort to the provisions of the Act and hence application of the Act did not arise. The question whether recovery of the amount is barred by limitation, according to learned counsel is not a matter required to be decided by the Collector or other authority mentioned in Section 72. Hence it is contended that the suit is maintainable even in the absence of allegation of fraud. Learned counsel has placed reliance on the decisions in John v. District Collector, 1989 (2) K. L. T. 831, ayisha Teacher v. District Collector, 2009 (4) K. L. T. 53 and chinnaswamy v. State of Kerala, 2009 (2) K. L. T. 525.