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C.P. Joseph Vs. the State of Kerala and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtKerala High Court
Decided On
Case NumberO.P. No. 2635 of 1972
Judge
Reported inAIR1973Ker89
ActsKerala Revenue Recovery Act, 1968 - Sections 65; Constitution of India - Articles 19(1) and 22
AppellantC.P. Joseph
RespondentThe State of Kerala and ors.
Appellant Advocate O.V. Radhakrishnan and; K. Radhamoni Amma, Advs.
Respondent AdvocateGovt. Pleader
DispositionPetition dismissed
Cases ReferredState of M. P. v. Shobharam
Excerpt:
.....that time. this order of the district collector was followed by arrest and detention of the said mani mathew on failure to comply with the direction therein to pay the amount within a period of 30 days. ..if the district collector is satisfied that if any one of these conditions exists, he can order detention of the defaulter in civil prison. we must observe here that we are not concerned with the adequacy or sufficiency of materials on the basis of which the district collector was satisfied that there had been a wilful default in the matter of payment of the dues. p-2 is bad for that reason. p-2 must fail. p-2 is liable to be challenged also for the reason that one of the grounds mentioned in the order ext p-2 to support the conclusion is bad and if that be the case the order itself..........pursuant to proceedings taken under the kerala revenue recovery act and for release of the said mani mathew. the petitioner also prays that certain sections of the abkari act and the kerala revenue recovery act, 1968 should be declared as unconstitutional and void.2. the petitioner is the brother-in-law of sri mani mathew who was an abkari contractor in the kunnamangalam range for the periods 68-69, 69-70 and 70-71. he defaulted to pay the dues under the agreements entered into by him in regard to the conduct of toddy shops bid by him in auction. as a result, notice under section 34 of the revenue recovery act (hereinafter called the act) was issued to the said mani mathew on 7-5-1970. pursuant to such notice certain properties were attached as if they were the properties of the said.....
Judgment:

Subramonian Poti, J.

1. The prayer in this petition is for the issue of a writ of Habeas Corpus directing the respondents to produce one Mani Mathew who is under detention pursuant to proceedings taken under the Kerala Revenue Recovery Act and for release of the said Mani Mathew. The petitioner also prays that certain sections of the Abkari Act and the Kerala Revenue Recovery Act, 1968 should be declared as unconstitutional and void.

2. The petitioner is the brother-in-law of Sri Mani Mathew who was an Abkari contractor in the Kunnamangalam range for the periods 68-69, 69-70 and 70-71. He defaulted to pay the dues under the agreements entered into by him in regard to the conduct of toddy shops bid by him in auction. As a result, notice under Section 34 of the Revenue Recovery Act (hereinafter called the Act) was issued to the said Mani Mathew on 7-5-1970. Pursuant to such notice certain properties were attached as if they were the properties of the said Mani Mathew. But the attachment was raised since it was found that Mani Mathew has no proprietary rights over the properties attached. It appears that Mani Mathew was running a business in arecanuts at Kodencherry and it is the case of the petitioner that the said business was closed on 5-10-1970. When it was found that the amount due from the said Mani Mathew could not be recovered by sale of movable or immovable properties of the defaulter notice was issued under Section 65 of the Act to show cause why warrant of arrest should not be issued. Ext. P-1 is the copy of the notice. A copy of the tentative findings on the basis of which proceedings for recovery by way of arrest was proposed was also forwarded to the said Mani Mathew by the District Collector, Kozhikode, who issued Ext. P-1 notice. The copy of the tentative findings is produced and marked as Ext. P-1 (a). The said Mani Mathew is seen to have appeared pursuant to such notice and it is seen from the file that he gave a statement on 17-1-1972. We have perused the copy of the statement which was in the file. The defaulter mentions therein that he is not in a position to pay the amount as he has no means to pay the same and that he would make strenuous efforts to find out funds to pay off the amount due. The District Collector thereafter passed Ext. P-2 order finding that the defaulter Mani Mathew was liable to be committed to civil prison as he had wilfully evaded payment of Government dues. He further found that the defaulter was liable to detention in civil prison but it was only fair that he should be given a month's time to pay off the arrears. Accordingly a period of 30 days was given and it was provided in the order that action according to rules would be taken only on failure to comply with the direction to pay within that time. This order of the District Collector was followed by arrest and detention of the said Mani Mathew on failure to comply with the direction therein to pay the amount within a period of 30 days. It is said that the defaulter has been arrested on 17-4-1972 and is dow detained in the civil Jail at Cannanore. The petitioner, who is the brother-in-law of the said Mani Mathew, avers that the petition has been filed by him at the instance of the said Mani Mathew.

3. The order which resulted in the detention of Mani Mathew in the civil prison, namely Ext. P-2 is challenged on the ground that in passing Ext. P-2 considerations relevant under Section 65 of the Act have been lost sight of by the District Collector who passed that order and that the order is illegal also for the reason that the arrest and subsequent action pursuant thereto have not been taken as warranted by the provisions of Article 22 of the Constitution of India.

4. It Is seen from Ext. P-l (a), the tentative findings, copy of which was sent to Mani Mathew along with Ext. P-l notice, that proceedings under Section 65 of the Act were sought to be taken against him as he was avoiding payment of dues to the Government wilfully, having means to pay the same. In support of this, reference was made to the fact that the close relatives of the said Mani Mathew were financially sound and also that the said Mani Mathew was running arecanut business at Kodencherry in the name of other persons and therefore had means to pay the amount. Reference was also made to the earlier proceedings for attachment of properties which ended ultimately in the raising of such attachment on claim petitions filed by the petitioner and others. The considerations which are relevant under Section 65 of the Act for directing detention of a defaulter in civil prison are:

1. the defaulter or his surety wilfully withholding payment of the arrears, or

2. dishonestly transferring any part of his property, or

3. being guilty of fraudulent conduct in order to evade payment, or

4. the defaulter having the means to pay the arrears or some substantial part thereof and refusing or neglecting to pay the same... If the District Collector is satisfied that if any one of these conditions exists, he can order detention of the defaulter in civil prison. Of course, it can only be after the issue of notice calling upon the defaulter to appear before the District Collector at the time and place specified in the notice and to show cause why he should not be committed to the civil prison, and on such appearance the District Collector is to hear him and consider such other evidence as may be produced by him. The satisfaction of the District Collector is necessarily to be an objective satisfaction and if it is shown that the considerations which weighed with him in directing detention were irrelevant and extraneous in the context of Section 65 of the Act, the court would certainly interfere.

5. The petitioner contends that the order Ext. P-2 does not disclose grounds relevant in the matter of directing detention of the defaulter in the civil prison. It is true that merely because the close relatives of the defaulter are financially sound the defaulter is not liable to be detained pursuant to Section 65 of the Act. But if the defaulter himself has means to pay and he is wilfully withholding payment that would be sufficient to direct detention and that has been so found in Ext. P-2. But that finding is attacked as one reached without sufficient or adequate materials to support it. We must observe here that we are not concerned with the adequacy or sufficiency of materials on the basis of which the District Collector was satisfied that there had been a wilful default in the matter of payment of the dues. But if the plea is that there was no material before the District Collector to reach the decision he is seen to have come to in Ext. P-2, that necessarily requires examination. It is seen from Ext. P-1 (a) notice that the case of the revenue is that Mani Mathew was running a business in arecanuts in the name of other persons and this business was sufficient to enable him to pay off the amounts. It is true that this statement is not as specific as it could have been. If this statement had been specifically denied and there was no material to support the statement any order based upon this could not have been sustained. But in the case before us in the statement filed by Shri Mani Mathew before the District Collector pursuant to the notice issued he has not denied the statement in Ext. P-1 (a), that he was carrying on business in the name of other persons. He cannot now say that he was not in a position to deny as the statement was vague. If he was in doubt he could have asked for more particulars or at least could have mentioned that he was not in a position to refute the allegation against him for want of sufficient particulars. We find no reason to think, in the face of the statement given before the District Collector on 17-1-1972, that he was unable to answer the allegation against him properly because of want of material particulars. Therefore it cannot be said, in the circumstances of the case, that the order Ext. P-2 is bad for that reason. In the face of the report of the revenue authorities seen in the file on the basis of which the District Collector reached his tentative decision and in the face of the case of the defaulter reflected in the statement given on 17-1-72 it is not possible to say that the finding in Ext. P-2 is not supported by any material at all. If that be the case the attack to the order Ext. P-2 must fail.

6. Counsel urges that Ext. P-2 is liable to be challenged also for the reason that one of the grounds mentioned in the order Ext P-2 to support the conclusion is bad and if that be the case the order itself is liable to be vacated. In support of this, counsel relies on the decision in State of Bombay v. Atma Ram, AIR 1951 SC 157, Shibban Lal v. State of U. P., AIR 1954 SC 179 and P. Mukherjee v. State of West Bengal, AIR 1970 SC 852. It is not neecessary to refer to the facts of these cases as all these cases are easily distinguishable from the case before us. In cases where orders of detention under laws relating to Preventive Detention are passed based on grounds showing the subjective satisfaction of the detaining authorities, if one or other of the grounds is shown to be not available or shown to be vague, the order itself may be liable to be attacked. But that is not the case here. The authority which has to pass an order directing the detention of the defaulter in civil prison can do so only on being satisfied that any one of the four grounds mentioned in Section 65 does exist. Even if the case be that, of the several grounds mentioned in support of the order under Section 65 of the Act, only one exists and is available to support it, that would be sufficient to sustain the order. That is because the satisfaction of the District Collector is not to be a subjective satisfaction. The District Collector has to make an objective assessment as to the existence of one or more of the grounds enumerated in Section 65 on the basis of materials available. If that be the case, Ext. P-2 if shown to be supported on the ground that the defaulter has been withholding payment though he has means to pay, will have to be sustained even if it be that the other ground urged, namely, that the relatives of the defaulter are financially sound, may not be available.

7. Counsel for the petitioner attacks Ext. P-2 also on the ground that the said Mani Mathew who was arrested pursuant to Ext. P-2 order was not dealt with as a person who is arrested should be, keeping in view the safeguard under Article 22 of the Constitution of India. In other words counsel's plea is that in every case where a person is arrested, whether it be by District Collector or by any other executive authority and for any purpose such arrest would be one falling within the meaning of Article 22 of the Constitution which gives a person arrested three safeguards, namely,

1. being made aware of the grounds of arrest at the time of arrest,

2. being assured of the right to consult and to be defended by a legal practitioner of his choice and,

3. the right to be produced before the nearest Magistrate within a period of 24 hours of the arrest.

According to Counsel the arrest in this case has not satisfied these requirements, especially the production before the nearest Magistrate within 24 hours of the arrest. Counsel would urge that arresting a person who is unable to pay is in fact a punishment, and therefore in any view of the question as to the scope of the term 'arrest', there is contravention of Article 22 in the present case. We do not Think that an arrest of a defaulter who, having means to pay, withholds such payment and that wilfully, could be said to be a punishment. It is a mode of recovery of the amount due from him. We need not go into this question further in view of the decision in Collecter of Malabar v. E. Ebrahim, AIR 1957 SC 688. The situation there was more or less similar to that in the case before us. That case arose out of a petition for habeas corpus. The respondent in the appeal before the Supreme Court had been arrested in pursuance of a warrant issued by the Collector of Malabar under Section 48 of the Madras Revenue Recovery Act for recovery of income-tax remaining outstanding from the respondent. The Income-tax Officer had reason to believe that the respondent was wilfully withholding payment of arrears of tax. He issued a certificate to the Collector who proceeded under Section 48 of the Madras Revenue Recovery Act in consequence of which respondent was arrested and lodged in Central Jail, Cannanore. Dealing with the contention that the arrest was not a mode of recovery of the arrears of tax but it was a punishment for failure to pay, the Supreme Court said thus:

'We now proceed to consider the interpretation sought to be put by Mr. Pocker on Section 46 (2) of the Indian Income-tax Act and Section 48 of the Act. He contended that Section 46 (2) of the Indian Income-tax Act merely authorised the Collector to recover the amount of arrears of income-tax, but it did not give him any authority to arrest the respondent. He submitted that the act of arrest was not a mode of recovery of the arrears of tax, but it was a punishment for failure to pay.

We are unable to accept this interpretation. The authority given to the Collector by this section is to recover the arrears of tax as if it were an arrear of land revenue. The preamble of the Act clearly states that the laws relating to the collection of the public revenue should be consolidated and simplified and Section 5 provides for the manner in which the arrears of revenue may be recovered. It reads,

'whenever revenue may be in arrear. It shall be lawful for the Collector, or other officer empowered by the Collector in that behalf, to proceed to recover the arrears, together with interest and costs of process, by the sale of the defaulter's moveable and immovable property, or by execution against the person of the defaulter in manner hereinafter provided.' This section clearly sets out the mode of recovery of arrears of revenue, that is to say, either by the sale of the movable or immovable property of the defaulter, or by execution against his person in the manner provided by the Act. Section 48 provides that when arrears of revenue cannot be liquidated by the sale of the property of the defaulter then the Collector, if he has reason to believe that the defaulter is wilfully withholding payment of the arrears or has been guilty of fraudulent conduct in order to evade payment of tax, can lawfully cause the arrest and imprisonment of the defaulter.

This section read with Section 5, makes it abundantly clear that the arrest of the defaulter is one of the modes, by which the arrears of revenue can be recovered, to be resorted to if the said arrears cannot be liquidated by the sale of the defaulter's property. There is not a suggestion in the entire section that the arrest is by way of punishment for mere default. Before the Collector can proceed to arrest the defaulter, not merely must the condition be satisfied that the arrears cannot be liquidated by the sale of the property of the defaulter but the Collector shall have reason to believe that the defaulter is wilfully withholding payment, or has been guilty of fraudulent conduct in order to evade payment.

When dues in the shape of monty are to be realised by the process of law and not by voluntary payment, the element of coercion in varying degrees must necessarily be found at all stages in the mode of recovery of the money due. The coercive element, perhaps in its severest form, is the act of arrest in order to make the defaulter pay his dues. When the Collector has reason to believe that withholding of payment is wilful, or that the defaulter has been guilty of fraudulent conduct in order to evade payment, obviously, it is on the supposition that the defaulter can make the payment but is wilfully withholding it, or is fraudulently evading payment.

In the Act there are several sections (e.g., Sections 16, 18 and 21) which prescribe, in unambiguous language, punishment to be inflicted for certain acts done. It is clear, therefore, that where the Act intends to impose a punishment or to create an offence, it employs a language entirely different to that to be found in Section 48. We are of the opinion, therefore, that where an arrest is made under Section 48 after complying With its provisions, the arrest is not for any offence committed or a punishment for defaulting in any payment. The mode of arrest is no more than a mode for recovery of the amount due.'

8. We do not see anything in the decision in State of M. P. v. Shobharam, AIR 1966 SC 1910 which persuades us to think that the Supreme Court spoke differently on this question later, though this is the contention urged by counsel before ui. Earlier the Supreme Court in State of Punjab T. Ajaib Singh, AIR 1953 SC 10 spoke thus:

'The language of Article 22 (1) and (2) Indicates that the fundamental right conferred by it gives protection against such arrests as are effected otherwise than under a warrant issued by a Court on the allegation or accusation that the arrested person has, or is suspected to have, committed, or is about or likely to commit an act of a criminal or quasi-criminal nature or some activity prejudicial to the public or the State interest. In other words, there is indication in the language of Article 22 (1) and (2) that it was designed to give protection against the act of the executive or other non-judicial authority.'

It was this that was followed by the Supreme Court in AIR 1957 SC 688. It is true that one of the learned Judges in AIR 1966 SC 1910, in the dissenting judgment observed that there is nothing in Article 22(1) to limit the requirements of the Article to arrests of any particular kind. The learned Judge said in paragraph 21 of the judgment as follows:

'I consider that there is room for further deliberation on the point. I do not see how we can differentiate between arrests of different kinds. Arrest is arrest, whatever the reason. In so far as the first part of Article 22(1) is concerned it enacts a very simple safeguard for the persons arrested. It merely says that an arrested person must be told the grounds of his arrest. In other words, a person's personal liberty cannot be curtailed by arrest without informing him, as soon is possible, why he is arrested. Where the arrest is by warrant, the warrant itself must tell him, where it is by an order, the order must tell him and where there is no warrant or order the person making the arrest must give him that information. However, the arrest is made, this must be done and that is all that the first part of Article 22(1) lays down. I find nothing in Article 22(1) to Jimit this requirement to arrests of any particular kind. A warrant of a court and an order of any authority must show on their face the reason for arrest. Where there is no such warrant or order, the person making the arrest must inform the person the reason for his arrest. In other words, Article 22(1) means what it says in its first part.'

We may, in this context, quote another passage from the same judgment of the learned Judge:

'As I have stated already a person who is arrested gets three rights which are guaranteed. The first is that he must be told why he is arrested. This requirement cannot be dispensed with by taking bail from him. The need to tell him why he is arrested, remains still. The next is that the person arrested must not be detained in custody more than 24 hours without being produced before a Magistrate. This requirement is dispensed with when the person arrested is admitted to bail. Otherwise it remains. The third is that he gets a right to consult and to be defended by a legal practitioner of his choice. This is, of course, so while the arrest continues but there are no words to show that the right is lost no sooner than he is released on bail. The word 'defended' clearly includes the exercise of the right so long as the effect of the arrest continues. Before his release on bail the person defends himself against his arrest and the charge for which he is arrested and after Ms release on bail, against the charge he is to answer and for answering which, the bail requires him to remain present. The narrow meaning of the word 'defended' cannot be accepted.'

We do not see anything even in the dissenting judgment of the learned Judge extending Article 22 to cases such as the one before us, cases where persons have been arrested for default of payment of arrears due to Government. We may also observe here that the majority Judges have not indicated that cases such as the one before us fall within the scope of Article 22. Therefore, we see no reason not to follow the decision in AIR 1957 SC 688.

9. Lastly counsel for the petitioner urged that Section 65 of the Revenue Recovery Act, 1968 is liable to be challenged as infringing the fundamental right guaranteed under Article 19(1)(d) of the Constitution of India. We find no substance in the challenge on the merits. If a person can cankerously refuses to pay what he is bound to pay to the State and action is taken against him for recovery and it is found that there has been a deliberate and wilful withholding of payment by the defaulter who is in a position to pay, the provision as to detention in prison and default would only be a restriction in the public interest. Counsel would contend that if Section 65 of the Act permits arrest and detention of a person who is unable to pay not for any fault of his, then the section is liable to be successfully challenged and that in this case Mani Mathew is unable to pay. If that be the case, the challenge muit be to the order and not to the section and we have already found that the challenge to the order cannot succeed on the merits as it has not been shown that the order has been passed without finding the existence of grounds relevant for arrest.

10. Before we part with this case we want to observe by way of abundant caution that the result that has been reached in this case need not be taken as indicating approval of the procedure adopted. It is necessary that in all the cases where proceedings are taken under Section 65 of the Kerala Revenue Recovery Act 1968, notice as to show cause should be specific and the materials on the basis of which action is taken must be made available to the defaulter so that he gets a proper opportunity to meet the case against him. We would point out that had the defaulter denied the statement in Ext. P-1 (a) in this case, the result possibly would have been different. It is only because the defaulter neither wanted further particulars nor had he a complaint that for want of particulars he was not able to furnish the proper answer that we find that no interference is called for. Since the consequence of any detention pursuant to proceedings under Section 65 of the Act would be to deprive the liberty of a person, anxious consideration should be given by persons vested with the power under Section 65 of the Act, to the matters which they are to consider and equally important is the fact that ample and sufficient opportunity should be given to the defaulter to meet the case against him, an opportunity which must be real and substantial and not merely one of form.

In the result we dismiss the original Petition. But in the circumstances of the case, we make no order as to costs.


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