Sakthidharan and Others vs Small Industries Dev. and Employment Corpn. Ltd.

K.A. Abdul Gafoor, J.—Admittedly by the petitioners they got Margine Money Advance for the purpose of their Small Scale Industries. Money was advanced based on the agreement in the performa as per Ext.P1. It shows that money advanced was liable to be re-paid. There is no dispute that the petitioners are committing default in repayment of the advance amount. Thus the petitioners are defaulters. When the petitioners defaulted in repayment of the advance given by the first respondent, respondents initiated proceedings under the Revenue Recovery Act. Hence, the petitioners approached this Court by filling O.P. No. 1858/83, which resulted in Ext.P2 judgment. It was disclosed during hearing that statutory notification was not in existence when the Revenue Recovery Proceedings were initiating against the petitioners which was subject matter of Ext.P2. Therefore, Original Petition was allowed on that technical reason with liberty that the judgment shall not stand in the way of first respondent seeking appropriate relief on the basis of the notification which was subsequently issued. Subsequent to the judgment self same proceedings were repeated. Steps were taken against the petitioners to recovery the money. It is in the above circumstances, petitioners have again filed this Original Petition to resist the recovery. The contention advanced by the petitioners is that the first respondent cannot recovery the money by resorting to the Revenue Recovery Proceedings, under the Revenue Recovery Act because when agreement was entered into between the petitioners and first respondent, there was no notification u/s 71 of the Kerala Revenue Recovery Act enabling the first respondent to recover the amount in terms of the said Act. The enabling provision for the first respondent to resort Revenue Recovery Proceedings in Clause 12 of the agreement which reads as follows:

The Borrower and the surety further agree that without prejudice to and in addition to the other methods of recovery, all amounts found due to the Mortgagee under or by virtue of this agreement shall be recoverable from the Borrower and the Sureties and its/their assets movable and immovable, either under the provisions of the Revenue Recovery Act for the time being in force as though they are arrears of land revenue or in such manner as the Mortgagee may deem fit.

It is the admitted case that when the agreement was entered into between the petitioners and first respondent, in the aforesaid clause, non-notification has been issued u/s 71. That notification came only later. Therefore, the petitioners submit that Clause 12 is unenforceable and void; for contemplating the mode of recovery, which was impossible for the parties to resort to and was opposed the policy of law. Because at the time of agreement between the parties, they had no power to enforce the mode of recovery as envisaged under Clause 12. So, it being a void clause, the first respondent cannot recovery the amount due from the petitioner by resorting to Revenue Recovery Proceedings.

I fail to understand this contention. Section 71 of the Kerala Revenue Recovery Act reads as follows: The Government may, by notification in the Gazette, declare, if they are satisfied that is necessary to do so in public interest, that the provisions of this Act shall be applicable to the recovery of amounts due from any person or class or class of persons to any specified institution or any class or classes of institutions, and thereupon all the provisions of this Act shall be applicable to such recovery.

The said provision enabled the Government to make applicable the provisions in the Act to recover amounts due from any person or class of persons to any specified institution or any class or classes of institution and thereupon all the provisions of the Revenue Recovery Act shall be applicable to such recovery. The petitioners have no case that when they entered into an agreement, with the clause as aforesaid there was no provision like Section 71. In other words, at the time of the contract the parties to the contract were well aware of the provision contained in Section 71 of the Kerala Revenue Recovery Act, which shall enable the lending party, in case of notification by the Government, to recover the amount covered by the agreement by resorting to the Revenue Recovery Act. Certainly, a notification issued by the Government is a necessary pre-condition to enforce Clause 12. Merely on the reason that there was no notification at the time of agreement, the lending party will not be disabled to enforce Clause 12 as and when notification is issued.

Therefore, the petitioners contention that Clause 12 is void cannot be accepted. Petitioners have referred to a decision reported in Kurian v. Government of Kerala (1963 KLT 183) Concerning Section 23 of the Contract Act. This decision cannot have any application in such circumstances. Accordingly, Original Petition fails, Dismissed. No cost.