Jojo George vs The State Of Kerala & Ors.

Bechu Kurian Thomas, J.

A revenue recovery sale held on 26.05.2010 for recovering rubber cess, is the subject matter of dispute in this writ petition. The said sale was set aside by the Government as per the impugned order, which is assailed by the auction purchaser in this writ petition.

For rubber cess due from an establishment called Sida Rubber Goods Training Centre, a property having an extent of 3.30 Ares in Survey No.184/1 of Block No.8 of Koovappally Village belonging to its Managing Director - the fifth respondent, was attached on 15.12.2009, as per the provisions of the Kerala Revenue Recovery Act, 1968 (for short, ‘the KRR Act’). The property was later put up for sale on 23.02.2010, and since none turned up to purchase the property, it was again put up for sale on 26.05.2010 and the petitioner being the highest bidder at Rs.3,83,500/-, his bid was accepted. Thereafter, as none had filed any objection or even any application to set aside the sale under sections 52 and 53 of the KRR Act , the Revenue Divisional Officer confirmed the sale on 12.01.2011, after holding that the sale was conducted regularly and in accordance with law.

While so, the second respondent, a decree holder in an Arbitration Award against the fifth respondent, filed an application before the Land Revenue Commissioner on 02.02.2011, alleging that the order confirming the sale ought to be set aside, especially since the said applicant was denied the benefit of section 48 of the KRR Act, and further that the upset price fixed was too meagre and therefore collusion between the parties ought to be suspected. By an order dated 13.09.2011, the Land Revenue Commissioner, after noticing the history of the case, dismissed the said petition. It was found that the property included in the revenue auction was excluded by the District Court in the execution proceedings under the arbitration Award and also that the revenue recovery sale was held on 26.05.2010, while the first order of the Civil Court to sell the property was only on 20.12.2010, apart from there being no application filed for setting aside the sale. It was also found that none had filed any application alleging any irregularity, mistake or fraud in publishing or conducting the sale was ever filed.

The second respondent filed a revision petition under section 83(2) of the KRR Act before the Government against the order of the Land Revenue Commissioner, and by the impugned order dated 03.05.2012, the Government allowed the revision petition and set aside the said order as well as the order confirming the sale. The writ petition thus challenges the order setting aside the revenue auction. While so, after the writ petition was filed, when it was realised that pursuant to the aforesaid impugned order, the fifth respondent sold the property to the eighth respondent as per a sale deed No.2224/2012 of Erumeli Sub Registry Office, the writ petition was amended and the relief of declaration that the said sale deed is not binding upon the petitioner or will not affect the revenue recovery sale was incorporated.

A counter affidavit has been filed by the fifth respondent stating that due to default in repayment of the loan availed from the second respondent, arbitration proceedings were initiated and pursuant to an Award dated 27.12.2005, the second respondent filed an execution petition before the District Court, Kottayam as E.P. No.28/2007. It is also pleaded that, sales tax and rubber cess were also in arrears for which a revenue auction was held on 02.06.2008. Since subsequently, the sales tax liabilities were reduced and paid, the said sale was later set aside. Despite the above, since arrears of rubber cess remained, an extent of 3.30 Ares of property, which formed part of 41.60 Ares in Re-survey No.184/1 in Block No.8 of Koovappally Village belonging to the fifth respondent was sold in public auction by the revenue authorities. According to the fifth respondent, since the second respondent had filed a petition on 20.11.2010 before the Tahsildar to set aside the sale on getting information of fraud, and also filed a petition not to confirm the sale, the fifth respondent had not filed any petition.

According to the fifth respondent, ignoring the petition filed by the second respondent, the sale was confirmed on 12.01.2011, and thereafter, a petition was filed by the writ petitioner before the District Court as E.A. No.09/2011 in E.P. No.28/2007 to demarcate the property stating that the property sold by the Government was not well demarcated or separated. The District Court however dismissed the said application. It is also stated that the fifth respondent had, in the meantime, transferred the property as agreed, to respondents 7 to 10, and cleared the entire balance of the decree debt due to the second respondent, who, in turn, filed an affidavit in E.P. No. 28/2007 admitting full satisfaction. After the impugned order, the property was sold to the additional eighth respondent, as per sale deed No.2224/2012, for a consideration of Rs.10,20,000/-.

In the counter affidavit filed by additional respondents 7 to 10, they reiterated the contentions of the fifth respondent and stated that they purchased the property after getting permission from court and further that the Tahsildar could not have sold the property which was attached by the District Court.

A reply affidavit has been filed by the petitioner, stating that the Civil Court itself had excluded 3.30 Ares from the court sale, which itself justifies the auction conducted by the revenue authorities, and further that the property purchased by the petitioner was excluded from the court sale. It is also stated that the remaining property brought for sale by the Execution Court consists of a huge building, including plant and machinery and therefore, the upset price fixed in the proclamation of the court sale, had to be different from the vacant land of an extent of 3.30 Ares put up for revenue sale. Petitioner also alleged that the agreement to purchase the property was done behind the back of the petitioner, and the reasoning in the impugned order is baseless and is not sufficient to set aside the sale. The petitioner has also pleaded that he is a bona fide purchaser in a revenue auction and the execution petition filed before the District Court was not sufficient to get over the charge over the property by the Government.

Sri. S. Sreekumar, the learned Senior Counsel, instructed by Sri. K. N. Chandrababu, the learned counsel for the petitioner, contended that the impugned order is perverse and failed to consider the relevant aspects. It was argued that neither was there any petition under section 48 of the KRR Act nor was there any application to set aside the sale filed by any person. It was also submitted that there was no material before the Government to come to the conclusion that the value obtained in auction was inadequate as the property put up in revenue auction was a vacant land while that put up in the court auction had a huge building with plant and machinery. It was also submitted that the conclusion of the Government that there was a possible collusion between the officials and the auction purchaser was based on surmises and assumptions. The learned Senior Counsel submitted that the sale deeds created after the revenue auction are liable to be declared as having no effect.

Sri. George Abraham, the learned counsel for respondents 2 and 7 to 10, and Sri. Shaji Thomas, the learned counsel for the fifth respondent, submitted that the impugned order does not warrant any interference. It was further submitted that, when Ext.P6 petition was filed under section 48 of the KRR Act, the sale ought not to have been confirmed without taking a decision on that petition. Relying upon the decision in Raveendran Nair M.G. v. State of Kerala and Others [2014 (4) KHC 518], Adv.George Abraham, contended that the revenue recovery proceeding itself was without any authority as rubber cess was not a public revenue due on land. He further submitted that the Rubber Board is not an institution notified under section 71 of the KRR Act and hence, the recovery proceedings are illegal.

Having regard to the contentions advanced, the following issues require determination:

(i). Whether rubber cess can be recovered under the provisions of KRR Act?

(ii). Whether the petition dated 29.11.2010 (Ext.P6) should have been considered as a petition under section 48 of KRR Act?

(iii). Whether the order setting aside the revenue sale held on 26.05.2010 is liable to be interfered with?

(iv). Whether the sale deed No.2224 of 2012 executed on 13.07.2012 of Erumeli Sub Registry Office can be declared as not binding on the petitioner?

Before dealing with the above mentioned issues, it is necessary to refer briefly to the facts, as revealed from the pleadings. The revenue recovery auction held on 26.05.2010 relating to 3.30 Ares of property belonging to the fifth respondent is the subject matter of dispute. Being the highest bidder, the auction fell in favour of the writ petitioner for Rs.3,83,500/-. After the sale, none filed any application to set aside the sale as per the provisions of section 52 or section 53 of the KRR Act.

While so, the second respondent, who had claimed to have obtained an arbitration Award against the fifth respondent, filed an execution petition and attached an extent of 41.60 Ares, belonging to the fifth respondent on 13.11.2007. The property sold in revenue auction, having an extent of 3.30 Ares in Survey No.184/01, was part of the said 41.60 Ares, over which the second respondent had obtained an attachment. Hence, an application was filed as E.A. No.12/2011 by the State Government as well as the writ petitioner to exclude the extent of 3.30 Ares - the property already sold in revenue auction, as by then, the notice of Court sale was published, proposing sale of the entire 41.60 Ares on 17.01.2011. By an order dated 03.02.2011, the District Court, Kottayam, allowed the claim petition and excluded the property of 3.30 Ares and directed only the remaining property to be sold for recovery of amounts due under the arbitration Award and also permitted incorporation of a rectified valuation as shown by the judgment debtors, on account of the exclusion of the claim property. The decree holder was permitted to participate and bid in the auction sale of 38.30 Ares for the amount due under the arbitration Award. The said order of the District Court was never challenged. On the other hand, a sale proclamation was published pursuant to the order of the District Court, excluding the extent of 3.30 Ares purchased by the petitioner in the revenue sale. Thereafter, the court sale in the execution proceedings was held on 07.06.2011, and the property having an extent of 38.30 Ares was purchased by the decree holder.

In the meantime, the second respondent, had on 29.11.2010 filed Ext.P6 application stating that the amount due as rubber cess can be recovered from the personal property of the defaulter - the fifth respondent and if not done so, the second respondent is willing to pay the amount. The auction sale was confirmed on 12.01.2011. Subsequent to the confirmation of sale, a petition was filed before the Land Revenue Commissioner challenging the sale confirmation, which was dismissed, against which, the second respondent approached the State Government under section 82 of the KRR Act. By the impugned order, the State Government set aside the sale stating that a petition under section 48 of the KRR Act was before the RDO and therefore, the sale could not have been confirmed.

It is also relevant to mention that subsequent to the court auction, the decree holder itself filed E.A. No.113/2011 stating that respondents 6, 7 and 8, who were third parties, had agreed to purchase the property for consideration, and hence, they agreed to have the court sale held on 07.06.2011, set aside and permit the first judgment debtor to transfer the property to third parties. The District Court by order dated 01.10.2011, set aside the court sale and relying upon the settlement, the judgment debtor was permitted to transfer the property to respondents 6, 7 and 8 or to any other person. Thus after the Government set aside the revenue sale, a sale deed was executed between the fifth respondent and the eighth respondent and the property included in the revenue sale was sold by sale deed No.2224 of 2012 of Erumeli Sub Registry Office.

In the background of the above facts, the issues raised earlier, are dealt with in seriatim.

Though there is no pleading in any of the counter affidavits or even in the petition filed before the Government on the above issue, still, since a contention was raised during arguments, relying upon the Full Bench decision in Raveendran Nair M.G. v. State of Kerala and Others [2014 (4) KHC 518], the issue is considered. The main thrust of the argument on behalf of the respondents regarding this issue was that rubber cess is not a public revenue due on land and since Rubber Board was not an institution notified under section 71 of the KRR Act, the amount due to such an institution cannot be recovered invoking the provisions of the said statute.

Rubber cess is a duty of excise imposed under section 12 of the Rubber Act, 1947 on all rubber produced in India at a rate, fixed by the Central Government. The said cess is collected by the Board, either from the owner of the estate on which the rubber is produced or from the manufacturer by whom such rubber is used or from the exporter by whom such rubber is exported. True, rubber cess is not a cess on land. Since rubber cess is neither a land revenue nor a cess on land, it cannot be regarded as a ‘public revenue due on land’ as defined in section 2(j) of the KRR Act, since. In Raveendran Nair (supra) it has been held that merely because revenue recovery proceedings can be invoked, pursuant to a notification under section 71 of the KRR Act, to recover a debt, the character of the debt would not change into a public revenue due on land. Thus, even if revenue recovery proceedings were initiated to recover rubber cess, the debt could not have been regarded as public revenue due on land.

Further, no notification under section 71 of the KRR Act has been produced to indicate that the Rubber Board has been notified as an institution under the KRR Act. Hence, the Rubber Board is not even an institution notified under section 71 of the KRR Act. Notwithstanding the liability not being a public revenue due on land and the Rubber Board having not been notified under the KRR Act, can the provision of the KRR Act, be invoked, to recover the cess due to the Rubber Board? The answer has to be in the affirmative for the reasons mentioned in the ensuing paragraphs

As per section 12(3) of the Rubber Act, 1947, if the person liable to pay the duty of excise to the Board fails to do so, the duty can be recovered as an arrear of land revenue. Further under section 68 of the KRR Act, all sums due to the Government which has been declared by any other law to be recoverable as an arrear of public revenue due on land or as land revenue; and all fees and other dues payable by any person to the Government, can be recovered under the provisions of the Act. Thus, it is not only amount of public revenue due on land or amount due to institutions notified under section 71 of the KRR Act that can be recovered through the process of revenue recovery, but even sums declared by any other law to be recoverable as land revenue can be recovered through the said process.

In this context, reference to an unreported decision in Jyothi Chaly v. State of Kerala and Others [W.P.(C).No. 6569 of 2010] wherein amounts due to the Airport Authority of India was sought to be recovered through the KRR Act, is relevant. It was held that amounts due to other States or other institutions under the Revenue Recovery Act, 1890 (Central) can also be recovered through the provisions of the KRR Act. Further, in Charuvilkulangara Khadi and Village Industries Co-operative Society v. State of Kerala and Others [2018 (3) KHC 512], while dealing with recovery initiated by the Khadi Board, it was observed that though the Khadi Board is not a notified institution under S.71, it was empowered under S.29A of Khadi and Village Industries Board Act, 1957 to recover arrears due to it by resorting to the provisions of Kerala Revenue Recovery Act as an arrear of land revenue.

Similarly, in a recent decision in Kunjumohammed M.M. v. State of Kerala [2026 (1) KLT 48], a learned Single Judge of this Court had, while dealing with amounts due to a cooperative society under the Kerala Cooperative Societies Act, 1969, held that awards to which S.76(b) of the said Act apply, a notification as contemplated by the provisions of S.71 of the KRR Act is not necessary as the provisions of S.76(b) of the Kerala Cooperative Societies Act, 1969 itself makes amounts so due, to be recoverable as arrears of public revenue due on land.

Thus, by virtue of the provisions contained in section 68 of the KRR Act, the arrears of rubber cess can be recovered through the provisions of the KRR Act.

Section 48 of KRR Act enables a decree holder who has obtained an attachment through the civil court to remove an attachment effected under the KRR Act, over the same property on which he has obtained an attachment. The second respondent had alleged that his petition filed on 29.11.2010 (Ext.P6), is an application under section 48 of KRR Act and hence the sale could not have been confirmed. To appreciate the above contention, it is necessary to extract section 48 of the KRR Act as follows;

A reading of the above provision indicates that the following are the salient features of section 48 of the KRR Act:

(i). Land, under attachment in execution of a decree of a civil court, is attached under the Act for arrears of public revenue due on such land.

(ii). The Judgment-creditor at whose instance the civil court attached the property, can pay the arrears of public revenue due on the land, with interest and cost of process, to the Collector or the authorised officer.

(iii). A receipt issued by the Officer receiving the amount shall be conclusive evidence of such payment.

(iv). On such payment, the attachment shall be withdrawn and the decree holder can recover the amount paid by him from the judgment debtor.

Section 48 of the KRR Act makes it explicit that it has application only at the stage when the property is under attachment and not after the sale has taken place. The terminology used in section 48 of KRR Act is unambiguous, that it is a pre-auction procedure and not after the auction. In other words, once an auction or sale of the property attached in revenue recovery proceedings has taken place, section 48 of KRR Act will not apply. Further, the decree holder/judgment creditor must deposit the amount, for which the revenue recovery proceedings have been initiated, and obtain a receipt, and thereafter get a certificate enabling him to include that amount also in his execution proceedings. Section 48 of the KRR Act has no application unless the amount due under the revenue recovery for which the attachment has been effected, is deposited.

In the instant case, as noted earlier, the sale was on 26.05.2010. Ext.P6 petition, even if it is assumed to be a petition under section 48 of the KRR Act, was filed only on 29.11.2010 - after the sale. Moreover, the amount due under the revenue recovery was not deposited and instead what is stated in the said petition is that the Government can recover the dues from the personal assets of the fifth respondent, and if there is default in such recovery, the second respondent is ready to pay. Such a conditional offer is not countenanced and is not a substitute for actual payment, as contemplated under section 48 of the KRR Act. Hence, Ext.P6 petition filed on 29.11.2010, on behalf of the second respondent, does not satisfy the requirements of section 48 of the KRR Act. Thus, the revenue sale conducted by the Government could not have been set aside on that score.

In the impugned order, the Government suspected collusion on the ground that the price fixed in the proclamation for court sale was Rs.1.25 lakh per cent, while the Tahsildar had put up the property for sale at Rs.47,055/- per cent. Even if it is assumed that the auction was bid by the petitioner for a value less than that it should have actually fetched, it is a settled principle of law that an auction sale is a forced sale, in which the best price will not often be forthcoming. Hence, mere inadequacy of the price fetched at a revenue sale would not by itself, be a sufficient ground to set aside the sale in favour of an auction purchaser, unless it was grossly inadequate. In this context, reference to the Full Bench decision in Sruthi v. District Collector, Thrissur [2024 (2) KLT 506], is relevant. Further, if the revenue sale is interfered with for the mere asking, sanctity of auction sales will be affected and none will participate in such auctions, thereby prejudicially affecting the recovery of dues.

It is also relevant to mention in this context that, petitioner had contended that the property put up for sale in the court auction had a building, apart from plant and machinery, while the property sold under the revenue recovery sale was a vacant land. Thus it cannot be concluded that the property was sold at the revenue auction for a lower value. Hence, the conclusion arrived at in the impugned order, to the contrary, is based on surmises and without any reference to the facts.

Even the finding regarding collusion between the parties due to the alleged lower value fetched, is without any basis or material. No reason is forthcoming as to how the Government assumed that there was any collusion. In the absence of any material and also in view of the clear findings of the Land Revenue Commissioner that there was no collusion or even any sale of property for a lesser value, this Court is of the view that the impugned order is unsustainable. Conclusions arrived at in Ext.P9 are not based on any material and the relevant factors have not been considered while irrelevant factors have been taken into reckoning and hence, the same is not sustainable. In the light of the above discussion, this Court is of the view that the impugned order is liable to be set aside.

Issue No. (iv). Whether the sale deed No.2224 of 2012 executed on 13.07.2012 of Erumeli Sub Registry Office can be declared as not binding on the petitioner?

The second respondent had sold the property including the 3.30 Ares sold in revenue auction to the eighth respondent, immediately after Ext.P9 Government Order. Since the discussion in the preceding paragraphs persuade this Court to set aside the Government Order, consequently, the private sale of 3.30 Ares, situated in Survey No.184/1 of Block No.8 of Koovappally Village could not have taken place. The said sale deed cannot have any effect or binding force as the fifth respondent did not have title to execute a sale deed to that extent.

In view of the above conclusions, Ext.P9 order dated 03.05.2012 bearing No.G.O.(M.S) No.185/12/RD issued by the Government of Kerala, is hereby set aside. Consequently, it is declared that the sale deed No.2224/2012 in favour of the eighth respondent to the extent it includes 3.30 Ares situated in Survey No.184/1 of Block No.8 of Koovappally Village, is not binding on the petitioner or on the said property.

The writ petition is allowed as above.