HIGH COURT OF KERALA
K VINOD CHANDRAN, C. JAYACHANDRAN, JJ
C SACHIDANANDAN (DIED) – Appellant
Versus
T D MANI – Respondent
WA 342 2023
Liability - Partnership - Revenue Recovery Act 1968 - Sections 49(2), 83 - The court upheld joint and several liabilities of partners in a partnership, confirming a sale under revenue recovery while clarifying apportionment of dues without disturbing third-party auction rights.
Fact of the Case:
A partnership firm's abkari dues from 1993-1994 were disputed post-property sales in 2007 due to inter-partner litigation. Legal heirs of a partner contested orders regarding unpaid dues against properties sold under revenue recovery for satisfied claims from other partners’ properties.
Finding of the Court:
The court affirmed the sales of properties under revenue recovery, confirming the joint and several liabilities of partners. It rejected claims for property restoration based on proportionality, emphasizing established third-party auction rights.
Issues: Whether the property sold at auction for debt recovery can be deemed improperly sold if other properties satisfied the dues; and the validity of the legal heirs' claims against the auction purchase rights.
Ratio Decidendi: The decision rested on the interpretation of joint and several liabilities in partnerships and the rights of third-party auction purchasers, dictating that partners cannot evade liability based on recoveries from others' properties.
Final Decision: Both appeals were dismissed, reaffirming the lower court's judgments.
JUDGMENT
K.Vinod Chandran, J.
The abkari dues of a partnership firm of 1993-1994 was satisfied only in the year 2007 because of the bickering between the partners and litigation filed by them separately. The dues of 1993-1994 totalled an amount of Rs17,14,417/- which along with interest came to Rs.25,34,412/-, at the time of sale of certain properties, after adjusting the amounts remitted by the various partners as is seen from Ext.P4 judgment.
2. O.P No.464 of 2010 was filed by the legal heirs of one of the partners, C.Sachidanandan, against Ext.P6 order of the Commissioner of Land Revenue dismissing the revision filed by that partner, who later expired. Ext.P6 revisional order refused to interfere with the sale of the properties of the three partners conducted pursuant to revenue recovery steps taken against their properties on the basis of an interim order of this Court, in a batch of writ petitions filed by the three partners whose properties were proceeded against.
3. W.P.(C) No. 11618 of 2010 was filed by the auction purchaser, who successfully bid the properties of Sachidanandan in the revenue recovery auction; asserting his right to the sale certificate and possession of the property of the deceased partner, put to auction on
13.08.2007.
4. The learned Single Judge found based on Janakaraj V. Gurdial Singh & Another [ AIR 1967 SC 608 ] that the third party rights created on the auction purchaser cannot be easily interfered with. The surviving claim of the petitioners, legal heirs of one of the partners, whose property was sold along with the property of two other partners can only be for apportionment of the dues as per the shares held by each of them in the partnership firm. The said action is exclusively between them; without the junction of the State, whose dues were a joint and several liability on the partners. This has to be agitated before the appropriate forum and not under Article 226. The writ petition challenging Ext.P6 order was rejected and the writ petition seeking issuance of sale certificate and delivery of the property sold in auction was allowed. The legal heirs of Sachidanandan, whose property was sold in auction along with two other properties have appealed against the common judgment passed.
5. We have heard Sri.Leejoy Mathew V., learned Counsel for the appellants, Sri.Karthikeyan, learned Counsel for respondents 1 & 2 and the petitioner in the writ petition from which W.A 342/2023 arise and Sri.T.K.Vipin Das, the learned Senior Government Pleader for the official respondents. Though not relevant to the lis we have to notice that one of the legal heirs of a deceased partner is the auction purchaser and is a respondent in one writ petition in the status of the legal heir and the petitioner, in the other writ petition in his capacity of the auction purchaser.
6. Since the issue started from 1993-1994 we have to briefly notice the chronology of facts as pointed out by the learned Counsel for the appellants. Six partners together took the licence for the year 1993-1994 for the conduct of arrack shops Nos.58 to 72 of Cherthala Excise Range. The partners were; C.Sachidanandan, T.D Thampi, Shivaji, Meena Ashokan, Ajitha Mohan and P.T Prasad. The licencees had offered different properties in lieu of solvency, but proceedings were taken specifically against the properties of Sachidanandan, Thampi, and Meena Asokan; the former two having died and are now represented by their legal representatives, respectively, appellants 2 to 4 and respondents 1 & 2 in Writ Appeal No.111 of 2023. The properties of all the three persons were proceeded against and sold on a single day, ie., 13.08.2007. The claim of the appellants, the legal heirs of Sachidanandan is that the entire abkari dues would be satisfied by the sale of the two properties belonging to Thampi and Meena Asokan and his property can be absolved from the liability especially in view of Ext.P3 order passed by the Commissioner of Land Revenue.
7. Coming back to the
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