1980 Supreme(Ker) 21
Kerala High Court
P.SUBRAMONIAN POTI,KUMARI P.JANAKI AMMA
Union of India - Appellant
Versus
Metherukunju Moosakutty - Respondent
Decided On : 01/16/1980
T. R. G. Warrier, for Appellant, C. K. S. Panicker, P. G. P. Panicker, V. Bhaskara Menon, K. S. Radhakrishnan, K. S. Balakrishnan and Govt. Pleader, for Respondents.
Headnote:
Crown Debts - Revenue Recovery - Central Excises and Salt Act, 1944, Kerala Revenue Recovery Act 15 of 1968 - The court found that the State had not attempted to prove its case that the business said to be run by Janaki Amma as licensee was really a business run on behalf of her children also. The court held that the State and the Union Government were not entitled to claim priority for State dues over dues to other creditors. The court also found that the doctrine of Crown priority was not recognised or applied in the territory of the erstwhile Travancore State on 26-1-1950. The appeal was dismissed.
Fact of the Case:
The appeal was filed by the Union of India against the decree of the court below granting injunction to the plaintiffs in the suit restraining the defendants, the State of Kerala as well as the Union of India from taking steps under the Kerala Revenue Recovery Act against the plaint schedule items for recovery of amounts claimed as due to the second defendant, Union of India. The plaintiffs claimed to be the owners of the plaint schedule items, item No. 2 being the building situated an item No. 1 which is land of an extent of 22 cents. The plaintiffs discharged the amounts due to the creditors and paid the balance of the consideration to the vendors. The State of Kerala and the Union of India filed separate written statements, practically raising the same contentions.
Finding of the Court:
The court found that the State had not attempted to prove its case that the business said to be run by Janaki Amma as licensee was really a business run on behalf of her children also. The court held that the State and the Union Government were not entitled to claim priority for State dues over dues to other creditors. The court also found that the doctrine of Crown priority was not recognised or applied in the territory of the erstwhile Travancore State on 26-1-1950. The appeal was dismissed.
Issues: The main issue was whether the plaintiffs were entitled to the injunction restraining the proceedings for revenue recovery for the amount due to the second defendant, Union of India.
Ratio Decidendi: The court held that the State and the Union Government were not entitled to claim priority for State dues over dues to other creditors. The court also found that the doctrine of Crown priority was not recognised or applied in the territory of the erstwhile Travancore State on 26-1-1950.
Final Decision: The appeal was dismissed with costs.
SUBRAMONIAN POTI, J. :- This appeal is by the Union of India against the decree of the court below granting injunction to the plaintiffs in the suit restraining the defendants, the State of Kerala as well as the Union of India from taking steps under the Kerala Revenue Recovery Act against the plaint schedule items for recovery of amounts claimed as due to the second defendant, Union of India. There are two plaintiffs in the suit, the second plaintiff being the wife of the first plaintiff. They claim to be the owners of the plaint schedule items, item No. 2 being the building situated an item No. 1 which is land of an extent of 22 cents. The plaint items were purchased by the plaintiffs under a sale deed, Ext. A1, dated 10-4-1967, executed by one Janaki Amma and 5 children. That the suit property originally belonged to one Velayudhan Pillai is not in dispute. It was inherited by his widow Janaki Amma and the 5 children, who jointly executed Ext. A1 sale deed. At the time the sale was taken by the plaintiffs the property comprised therein appears to have been. Out of the consideration of Rs. 40,000 a sum of Rs. 30,200 was reserved with the plaintiffs for discharging a prior debt charged on the plaint items under a registered mortgage deed of 1959 in favour of the State Bank of Travancore. The Bank had obtained a decree against the vendors based on the mortgage in the suit O.S. 2 of 1964 of the Sub Court of Quilon. A sum of Rs. 2,500 was reserved with the plaintiffs for discharging another prior debt charged on the plaint item under a registered panayan of the year 1960 in favour of one Pareed Kunju. Pareed Kunju had obtained a decree for sale in O.S. 37 of 1966 of the Subordinate Judge's Court, Quilon. According to the plaintiffs they discharged the amounts due to these creditors and paid the balance of the consideration to the vendors. That they made such payments is not in controversy. Under the terms of the sale deed the vendors had undertaken to discharge another decree debt, that in O.S. No. 106 of 1964. The decree-holder in that suit had brought to sale 1/6th share of one of the vendors, Lakshmana Kumar and he himself purchased such share in suction. He filed a suit for partition against the plaintiffs and others for such 1/6th share as O.S. 704 of 1968 of the Subordinate Judge's Court, Qulion. He obtained a preliminary decree. Subsequently plaintiffs purchased the 1/6th rights of the decree-holder auction-purchaser in O.S. 106 of 1964 by payment of Rs. 1,000 on 31-3-1969. Besides these debts which had been disclosed by the vendors at the time of the sale, there were other liabilities undisclosed at the time of the sale. Those had also to be discharged by the plaintiffs to save the property purchased by them. In a suit O.S. No. 388 of 1964 of the Sub Court of Quilon the plaint items had been attached before judgement in a suit against the vendors. After the decree the items were sold in execution and were purchased by the decree-holder himself. This right was purchased by the plaintiffs by paying a consideration of Rs. 4,200 to the decree-holder auction-purchaser under a sale deed dated 19-6-1969. Ext. A6 is the sale certificate and Ext. A7 is the sale deed taken by the plaintiffs from the decree-holder auction-purchaser in O.S. No. 388 of 1964 of the Munsiff's Court of Quilon. The plaint items had bean similarly attached before judgement and later sold in auction in O.S. No. 643 of 1963, at which court sale they had been bid by the decree-holder himself. The plaintiffs paid the amount due to the decree-holder and obtained an order setting aside the sale. It is thus claimed by the plaintiffs that they had invested Rs. 48,736.50 for perfecting title to the plaint items.
2. Pursuant to the purchase by the plaintiffs in court auction mutation of revenue records was effected in the name of the plaintiffs in the village office.
3. While so, proceedings were taken under the Revenue Recovery Act for recovery of a sum of R