Important Point
Under Section 71 of the Kerala Revenue Recovery Act claims which are time-barred on the date when a requisition is issued under Section 69(2) of the said Act are not “amounts due” under Section 71 and cannot be recovered under the said Act.

Headnote:Kerala Revenue Recovery Act, 1968-Section 71-Amount due-Does not encompass time barred claims-Claims time-barred on date when requisition is issued under Section 69(2) are not ‘amount due u/s 71 and cannot be recovered.
       Held : Looking to the object of Section 71 we have to examine whether time-barred claims of the State Financial Corporation and the banks can be recovered under it. Is the object only speed of recovery or is it also enlargement of the right to recover? The respondent-institutions rely on the words “amount due” in Section 71 of the Kerala Revenue Recovery Act as also in the notifications issued under Section 71? Do these words refer to the amounts repayable under the terms of the loan agreements executed between the debtor and the creditor irrespective of whether the claim of the creditor has become time-barred or not? Or do these words refer only to those claims of the creditor which are legally recoverable? An amount “due” normally refers to an amount which the creditor has a right to recover. Wharton in Law Lexicon defines “due” as anything owing; that which one contracts to pay to another. In Black’s Law dictionary, 6th End. at page 439 of the following comment appears against the word “due”. “The word “due” always imports a fixed and settled obligation or liability; but with reference to the time for its payment there is considerable ambiguity in the use of the term, the precise signification being determined in each case from the context. It may mean that the debt or claim in question is now (presently or immediately) matured and enforceable, or that it matured at sometime in the past and yet remains unsatisfied, or that it is fixed and certain but the day appointed for its payment has not yet arrived. But commonly and in the absence of any qualifying expressions, the word “due” is restricted to the first of these meanings, the second being expressed by the term “overdue” and the third by the word “payable”. “ There is no reference in these definitions to a time-barred debt. In every case the exact meaning of the word “due” will depend upon the context in which that word appears. (Para 8)
       The Kerala Revenue Recovery Act does not create any new right. It merely provides a process for speedy recovery of moneys due. Therefore, instead of filing a suit, (or an application or petition under any special Act), obtaining a decree and executing it, the bank or the financial institution can now recover the claim under the Kerala Revenue Recovery Act. Since this Act does not create any new right, the person claiming recovery cannot claim recovery of amounts which are not legally recoverable nor can a defence of limitation available to a debtor in a suit or other legal proceeding be taken away under the provisions of the Kerala Revenue Recovery Act. In fact, under Section 70 of the Kerala Revenue Recovery Act, it is provided that when proceedings are taken under this Act against any person for the recovery of any sum of money due from him, such person may, at any time before the commencement of the sale of any property attached in such proceedings, pay the amount claimed and at the same time deliver a protest signed by himself to the officer issuing the demand or conducting the sale as the case may be. Sub-section (2) of Section 70 provides that when the amount is paid under protest, the officer issuing the demand or the officer at whose instance the proceedings have been initiated, shall enquire into the protest and pass appropriate orders. If the protest is accepted, the officer disposing of the protest shall immediately order the refund of whole or part of the money paid under protest. Under sub-section (3) of Section 70, the person making a payment under protest shall have the right to institute a suit for the refund of the whole or part of the sum paid by him under protest. (Para 10)
       Therefore, under Section 70(3) a person who has paid under protest can file a suit for refund of the amount wrongly recovered. In law he would be entitled to submit in the suit that the claim against which the recovery has been made in time-barred. Hence no amount should have been recovered from him. When the right to file a suit under Section 70(3) is expressly preserved, there is a necessary implication that the shield of limitation available to a debtor in a suit is also preserved. He cannot, therefore, be deprived of this right simply by making a recovery under the said Act unless there is anything in the Act which expressly brings about such a result. Provisions of the said Act, however, indicate to the contrary. Moreover, such a wide interpretation of “amount due” which destroys an important defence available to a debtor in a suit against him by the creditor, may attract Article 14 against the Act. It would be ironic if an Act for speedy recovery is held as enabling a creditor who has delayed recovered beyond the period of limitation to recover such delayed claims. (Para 11)
       The provisions in the present case are statutory provisions for coercive recovery of “amounts due”. Although the necessity of filing a suit by a creditor is avoided, the extent of the claim which is legally recoverable is not thereby enlarged. Under Section 70(2) of the Kerala Revenue Recovery Act the right of a debtor to file a suit for refund is expressly preserved. Instead of the bank or the financial institution filing a suit which is defended by the debtor, the creditor first recovers and then defends his recovery in a suit filed by the debtor. The rights of the parties are not thereby enlarged. The process of recovery is different. An Act must expressly provide for such enlargement of claims which are legally recoverable, before it can be interpreted as extending to the recovery of those amounts which have ceased to be legally recoverable on the date when recovery proceedings are undertaken. Under the Kerala Revenue Recovery Act such process of recovery would start with a written requisition issued in the prescribed form by the creditor to the collector of the District as prescribed under Section 69(2) of the said Act. Therefore, all claims which are legally recoverable and are not time-barred on that date can be recovered under the Kerala Revenue Recovery Act. (Para 17)
       In view of the interpretation on which we have put on Section 71 of the Kerala Revenue Recovery Act it is not necessary for us to consider whether by making a requisition under Section 69(2) a creditor sets in motion a process of recovery which is a judicial process which would attract the Law of Limitation. There is a clear provision for adjudication under Section 70(3) of the said Act. This right under Section 70(3) is not affected by Section 72 of the said Act as was contended before us by the respondents. Section 72 merely provides that every question arising between the Collector or the authorised officer and the defaulter relating to execution, discharge or satisfaction of a writtend emand issued under this Act will be determined not by a suit but under the provisions of the said Act. Section 72 does not cover the right of a person making a payment under protest to institute a suit which is expressly provided for under Section 70 Sub-section (3). Looking to the scheme of recovery and refund under Sections 70 and 71, “amounts due” under Section 71 are those amounts which the creditor could have recovered had he filed a suit. (Para 18)
       In the premises under Section 71 of the Kerala Revenue Recovery Act claims which are time-barred on the date when a requisition is issued under Section 69(2) of the said Act are not “amounts due” under Section 71 and cannot be recovered under the said Act. Our conclusion is based on the interpretation of Section 71 in the light of the provisions of the Kerala Revenue Recovery Act. (Para 19)

Judgment

Mrs. Sujata V. Manohar, J.-Leave granted in S.L.P. (C) No. 12051 of 1988.

2. All these apepals raise a common question of law whether a debt which is barred by the law of limitation can be recovered by resorting to recovery proceedings under the Kerala Revenue Recovery Act of 1968. A Division Bench of the Kerala High Court in the impugned common judgment dated 2.11.1987 in C.A. No. 4211 of 1988, CA No. 4393 of 1988 and C.A. No. 4175 of 1988 held that in the absence of any provision in the Kerala Revenue Recovery Act creating a substantive right to recover time-barred debts, the said Act which provides for summary recovery cannot be availed of once the period prescribed for recovery under the Limitation Act has expired. This judgment of the Division Bench of the Kerala High Court was followed by a subsequent Division Bench in its judgment dated 29.1.1988 which is the subject matter of appeal arising from S.L.P. (C) No. 12051 of 1988. The above decisions of the Division Bench, however, have been overruled by a Full Bench of the Kerala High Court by its judgment dated 10.4.1996 which is the judgment under appeal in C.A. Nos. 12393 and 12394 of 1996. All these appeals, have, therefore, been heard together.

3. The Kerala Revenue Recovery Act, 1968 is an Act to consolidate and amend the laws relating to recovery of arrears of public revenue in the State of Kerala. Under Section 5 of the Kerala Revenue Recovery Act of 1968, “whenever public revenue due on land is in arrear,” such arrear, together with interest, if any, and cost of the process may be recovered by one or more of the modes set out in that section. One of the modes so prescribed is attachment and sale of the defaulters’ movable or immovable property. Under Section 68 of the said Act, “all sums due” to the Government on account of quit rent or revenue other than public revenue dues on land, as also all sums declared by any other law for the time being in force to be recoverable as arrear of public revenue “due” on land or land revenue can be recovered under the provisions of the said Act. Under Section 2(a) of the said Act “arrears of public revenue due on land” is defined to mean the whole or any portion of any kist or instalment of such revenue not paid on the day on which it falls due according to the kistbandy or any engagement or usage. Under Sub-section (j) of Section 2 “public revenue due land” means the land revenue charged on the land and includes all other taxes, fees and cesses on land, whether charged on land or not, and all cesses or other dues payable to the Government on account ofwater used for purposes of irrigation. The Act, therefore, provides a method for speedy recovery of arrears of public revenue. Under Section 71, however, there is a provision for extending the Act to recovery of certain other dues if the Government is satisfied that it is necessary to do so in public interest. Under Section 71 it is provided as follows:-

“Power of Government to declare the Act applicable to any institution:- The Government may, by notification in the Gazette, declare, if they are satisfied that it is necessary to do so in public interest, that the provisions of this Act shall be applicable to the recovery of amounts due from any person or class of persons to any specified institution or any class or classes of institutions, and thereupon all the provisions of this Act shall be applicable to such recovery.”

4. In exercise of its powers under Section 71, the State Government has issued a notification bearing S.R.O. No. 797 of 79 by which the provisions of the said Act have been made applicable to the recovery of the amounts due from any person to any bank on account of any loan advanced to such person by that bank for agricultural or agricultural purposes. Under another notification S.R.O. No. 851 of 79 issued under Section 71 by the State Government the provisions of the said Act are also made applicable to the recovery of amounts due from any person or clas

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1999 Supreme(SC) 418

Important PointUnder Section 71 of the Kerala Revenue Recovery Act claims which are time-barred on the date when a requisition is issued under Section 69(2) of the said Act are not “amounts due” under Section 71 and cannot be recovered under the said Act.

Cases Referred (6)

Important Point
Under Section 71 of the Kerala Revenue Recovery Act claims which are time-barred on the date when a requisition is issued under Section 69(2) of the said Act are not “amounts due” under Section 71 and cannot be recovered under the said Act.