The court ruled that no pre-adjudication is necessary for revenue recovery, affirming separate legal frameworks of the RR Act and the Chit Funds Act.

Dated this the 18^th day of December, 2025 Syam Kumar V.M., J.

This appeal is filed challenging the judgment dated 18.11.2024 of the learned Single Judge in W.P.(C) No.31573 of 2024.

Appellants were the petitioners in the W.P.(C).

2. Appellants in the W.P.(C) challenged the revenue recovery notices issued against them. They had entered into a Scheme with the 4^th respondent Kerala State Financial Enterprises Ltd. (KSFE) in a chitty for a duration of 50 months commencing from 17.01.2020. During Covid 19 period, they were not able to effect repayment of chitty instalments. Pursuant to their default, a notice was served upon them under Section 34 of the Kerala Revenue Recovery Act , 1968 (hereinafter referred to as 'the RR Act'). They would contend that the same had been issued without determining the amounts due under Section 64 of the Chit Funds Act , 1982. They filed the W.P.(C) seeking to quash the notices issued under Sections 34 and 36 of the RR Act produced as Exhibits P2, P2 (a)

and P4 in the W.P.(C).

3. The learned Single Judge dismissed the W.P.(C) inter alia holding that in view of the law laid down by this Court inBenzy Martin v. State of Kerala and others [2024 (5) KHC 602] and the fact that they had been served with notices under Section 7 and Section 34 of the RR Act as per Exhibit P2 and Exhibit P2(a) on 22.05.2024 and since they had submitted Exhibit P3 and Exhibit P3(a) replies to the respondents long after the stipulated time given in the notices, the prayers sought in the W.P.(C) cannot be sustained. Aggrieved by the dismissal, the appellants are before us with this appeal.

4. Heard Sri.Lal K.Joseph, Advocate for the appellants, Sri.K.P.Harish, learned Senior Government Pleader for respondents 1 to 3 and Sri.P.C.Anil Kumar, Advocate for respondent No.4.

5. It is contended by the learned counsel for the appellants that a determination as envisaged in law had to be carried out before initiating revenue recovery action and since the enquiry mandated under Section 34 (2) of the RR Act had not been carried out before issuance of Exhibit P4 notice, the same is bad in law. The learned Single Judge, it is submitted, had erred in properly appreciating the legal scope and ambit of the provision in the light of settled precedents and had also overlooked crucial factual aspects which had a bearing on the law to be applied.

6. It is submitted that the learned Judge had failed to consider the fact that in the absence of proof of service of notice to the 2^nd and 3^rd appellants on 11.07.2024. Exhibit P3 ought to have been considered and an enquiry ought to have been carried out/conducted. Since no date of proof of service is provided by the 3^rd respondent no delay could have been attributed for issuance of Exhibit P3 and Exhibit P3(a). It is contended that the learned Single Judge had emphasized on procedural technicalities at the expense of substantive justice, and had failed to consider that even if the 3^rd respondent Special Deputy Tahsildar (RR) had denied Exhibit P3 series reply in toto, the same ought to have been conveyed to the appellants by an order, which course was not complied with. The legal framework of natural justice, it is submitted, requires that a party shall be afforded a reasonable opportunity to resolve disputes substantively. The said aspect was overlooked.

7. It is further submitted that the implications of the non obstante clause in Section 64 , which supersedes other laws, when a dispute arises in relation to chitty agreements, was not properly appreciated by the learned Single Judge. The non obstante clause in specifically provides that any dispute touching the management or liabilities arising from a chitty agreement must be resolved by the R