Judges : PARIPOORNAN,G.VISWANATHA IYER
DAVID - Appellant
Versus
KERALA STATE FINANCIAL CORPORATION - Respondent
Case No : O.P. No. 4641, 6271 of 1986
Decided On : 03/28/1988
Advocates Appeared :
P. George William; S. Sivaraman; For Petitioners Mathews P. Mathew; Government Pleader; For Respondents
Revenue Recovery Act - Recovery of Loan Amount - S.71 of Kerala Revenue Recovery Act 1968 - S.R.O. No. 851/79 - The court dismissed the petitions challenging the recovery proceedings initiated by the Kerala Financial Corporation under the Act. The court held that the jural relationship between the petitioners and the Corporation is purely contractual, and any breach of contract should be remedied through ordinary civil action. The notification issued by the State Government under S.71 of the Act was found to be within legislative competence and not open to attack. The court concluded that the petitions were without merit.
Fact of the Case:
The petitioners obtained loans from the Kerala Financial Corporation and challenged the recovery proceedings initiated by the Corporation under the Kerala Revenue Recovery Act. They argued that the Corporation did not adhere to the terms of the loan agreements and committed breach of contract.
Finding of the Court:
The court found that the jural relationship between the petitioners and the Corporation is purely contractual, and any breach of contract should be remedied through ordinary civil action. The court also held that the notification issued by the State Government under S.71 of the Act was within legislative competence and not open to attack.
Issues: The main issue was the challenge against the recovery proceedings initiated by the Kerala Financial Corporation under the Kerala Revenue Recovery Act, particularly the notification issued by the State Government under S.71 of the Act.
Ratio Decidendi: The court held that the jural relationship between the petitioners and the Corporation is purely contractual, and any breach of contract should be remedied through ordinary civil action. The notification issued by the State Government under S.71 of the Act was found to be within legislative competence and not open to attack.
Final Decision: The court dismissed the petitions, concluding that they were without merit.
1. In these two O. Ps. common questions arise for consideration. They were heard together. O.P. 4641 of 1986: The petitioner obtained a loan from the Ist respondent, the Kerala Financial Corporation (in short, Corporation). An agreement was executed by the petitioner in favour of the Corporation. It is Ext. P1. According to the petitioner, the Corporation did not act according to the terms and conditions of the agreement. The performance of certain conditions by the petitioner became impossible. The petitioner was earnest in complying with the terms of the agreement and for completing the industrial concern, for which the loan was obtained. Though the Corporation did not adhere to the terms of the agreement, the petitioner was pursuing the matter with the Corporation. He requested for enhancement of the loan amount. He also requested for immediate disbursement of the loan amount as per Ext. P1. The full amount was not disbursed at any time While so, by Ext. P5 dated 2-4-1982, the 2nd respondent informed the petitioner that further disbursement of the amount will be made only after making firm arrangement for procurement of plant and machinery. The petitioner was compelled to spend further amounts on machinery from his resources. There were further correspondence between the petitioner and the Corporation regarding the disbursement of the amount and other matters. By Ext. P9 dated 21-12-1983, the loan was recalled. The petitioner sent Ext. P10 reply, dated 27-1-1984. It is stated that the Corporation violated the provisions of Ext. P1 agreement, and they committed breach of contract. The petitioner issued a lawyer's notice dated 11-9-1984, evidenced by Ext. P11. He received a reply, evidenced by Ext. P12, dated 10-12-1984. Subsequently, by Ext. P13 and P13 (A) the 3rd respondent (Deputy Tahsildar, Revenue Recovery) served notices on the petitioner under S.34 and S.7 of the Kerala Revenue Recovery Act (in short, the Act). The petitioner sea! Ext. P14 reply thereto and contended that no amount is realisable from the petitioner since the Corporation committed breach of contract. Without considering the above matters, the 3rd respondent issued a notice of attachment in Form 11 under S.36 of the Act. It is dated 10-2-1986, evidenced by Ext. P15. The provisions of the Act are made applicable to the recovery of amounts due to the Corporation, by the Government by Ext. P16 notification. Ext. P16 is illegal and unenforceable. The attack is against Exts. P13 and P13 (A) and P15 (notices and attachment under the Act) and Ext. P16 notification issued by the State Government in exercise of the powers under S.71 of the Act permitting recovery of amounts due to the Corporation under the provisions of the Act. The petitioner prays for the issue of a writ of certiorari to quash Ext. P13, P13 (A), P15 and P16. He also prays for the issue of a writ of prohibition restraining the respondents from resorting to the provisions of the Act against the petitioner, and prays for a declaration that the petitioner is not liable to be proceeded against under the Act.
O.P. No. 6271 of 1976:-In this O.P., the petitioner obtained a loan from the 1st respondent (Corporation) for starting an oil mill. Due to misfortune, he could not pay up the dues and became a defaulter. The 1st respondent took over the management and possession of the industry. He filed O.P.No.10892 of 1983. On paying an amount of Rs. 5,000/- the court ordered to hand over back the industry to the petitioner. The petitioner remitted the amount and got back possession from the 1st respondent. The court directed the petitioner to discharge the liability in instalments. During the time the Corporation possessed the industry, considerable damages took place. The petitioner was constrained to file OS. 170 of 1986 before the Sub Court, Trivandrum, for recovery of damages sustained by him against the 1st respondent. The suit is pending. The mill was not working. The petitioner was not able
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