State accepts payment of arrears post-purchase must ensure fairness in re-conveyance rights, adhering to principles of equity.

1. This writ appeal is filed by the State.

2. The writ petitioner was a defaulter of public revenue arrears and also had dues under the Workmen's Compensation Act. Revenue recovery proceedings were initiated under the Kerala Revenue Recovery Act . Ultimately, the properties belonged to the writ petitioner were auctioned and the Government purchased the properties in auction as bought - in - land for Rs.1/- on 04.07.2003. Thereafter, revenue recovery was initiated again. In that process, the writ petitioner discharged the entire liability as recoverable from him. The payment was effected on 13.08.2008. The writ petitioner, thereafter, approached the authorities for re - conveyance of the land purchased by the State Government as bought - in - land, which was unsuccessful. Accordingly, the writ petitioner approached this Court with the writ petition. In the writ petition, the learned Single Judge ordered re - conveyance and restitution of the property. This is challenged in appeal by the State.

3. The learned Special Government Pleader, placing reliance on the decisions of the Division Bench of this Court in State of Kerala v. George Jacob [2010 (3) KLT 483] and District Collector & Others v. N.C.Thomas [2015 / KER / 10260], submitted that as a matter of right, a defaulter cannot seek re - conveyance. It is further submitted that the property having vested with the Government, it cannot be divested without there being any right recognized under law for re - conveyance.

4. In George Jacob (supra), the Division Bench opined that subsequent payment after the Government purchasing the property as bought - in - land, will not invalidate recovery proceedings already culminated in sale and confirmation of sale. However, having opined as above, the Division Bench ordered re - conveyance of the property by directing the defaulter therein to pay some more amount to the State. In N.C.Thomas (supra), the Division Bench of this Court considered the similar issue and opined that in the absence of policy of the Government, as a matter of right, the defaulter cannot seek re - conveyance.

5. It is true, the Division Bench of this Court, held that in the absence of policy or any other statutory law in this regard, the defaulter cannot, as a matter of right, claim re - conveyance of bought - in - land. It is to be noted that in Savithammal R. v. Tahsildar, Udumbanchola and Others [2016 (3) KHC 335] , one among us [AMM(J)] considered the legality of acceptance of revenue arrears after the purchase of the land by the Government as bought - in - land on principles of proprietary estoppel. It is appropriate to refer to paragraphs 4 to 15 in Savithammal R. (supra) as follows;
"4. The Government Order would apply if the petitioner seeks the re - conveyance of the land, which was purchased by the State in terms of S.50 of the Revenue Recovery Act based on the conditions enumerated therein. The Government Order does not indicate the issue for re - conveyance of the land when the debtor has been allowed to discharge his debt, otherwise than in the mode as prescribed in the Government Order. Therefore, the only point, which has to be considered by this Court is the legal effect is of the payment effected by the debtor.
5. The restitutional claim would arise against the public authorities or State in numerous circumstances. One of such circumstances is on equitable ground. To allow any claim based on equitable ground, the Court has to look around the conduct of the parties in relation to the transaction. Therefore, the foremost point to consider is the reason for the Government to allow the debtor to discharge his liability.
6. When a sale would extinguish the liability of the debtor, any payment thereafter made towar