Rubber cess arrears can be recovered under Kerala Revenue Recovery Act, Kerala High Court rules

Rubber cess arrears relating to Sida Rubber Goods Training Centre were pursued under the Kerala Revenue Recovery Act, 1968 (KRR Act) against property belonging to its Managing Director, the fifth respondent.

At a revenue auction on 26 May 2010, the petitioner purchased 3.30 Ares for ₹3,83,500; the sale was confirmed on 12 January 2011, with no application to set it aside under Sections 52 or 53 of the KRR Act.

The second respondent, a decree-holder against the fifth respondent, had filed an application dated 29 November 2010 asserting that the cess could be recovered from the defaulter’s other assets and offering to pay if that recovery failed.

The State Government later set aside the sale, reasoning, among other things, that the application should have been treated as one under Section 48 and that the auction price suggested collusion.

The petitioner challenged that order and sought a declaration that a later sale deed covering the 3.30 Ares was not binding on him.

Whether rubber cess could be recovered under the KRR Act.

Whether the second respondent’s application dated 29 November 2010 should have been treated as an application under Section 48 of the KRR Act.

Whether the Government’s order setting aside the revenue sale was liable to be interfered with.

Whether the later sale deed covering the 3.30 Ares could be declared not binding on the petitioner.

Section 12(3) of the Rubber Act, 1947 permits unpaid rubber cess to be recovered as an arrear of land revenue; Section 68 of the KRR Act enables recovery under that Act of sums that another law makes recoverable as land revenue.

Although rubber cess is not itself “public revenue due on land,” and a debt does not acquire that character merely because revenue-recovery procedures are available, statutory authority to recover it through those procedures may arise independently under Section 68.

Section 48 of the KRR Act applies while property is under attachment and before sale; it requires the judgment-creditor to pay the arrears, interest and process costs, with payment evidenced by a receipt, for the revenue attachment to be withdrawn.

The Court also applied the principle that inadequacy of the price at a forced sale, without more, does not justify setting the sale aside unless the price is grossly inadequate; it referred to Sruthi v. District Collector, Thrissur [2024 (2) KLT 506].

It considered Raveendran Nair M.G. v. State of Kerala [2014 (4) KHC 518] on the character of a debt.

The Court held that Section 12(3) of the Rubber Act, read with Section 68 of the KRR Act, supplied authority to recover the cess through revenue-recovery proceedings, notwithstanding that the cess was not itself public revenue due on land and no Section 71 notification had been produced.

The second respondent’s application was filed after the auction and did not tender the amount due; its conditional offer to pay if recovery from other assets failed did not satisfy Section 48.

The Government’s inference of collusion rested on comparing the auction value with the value stated for a different court sale, although the properties differed in composition and the court-sale property included a building, plant and machinery.

The Court found no material supporting collusion or gross inadequacy of price.

Because the revenue sale remained valid, the fifth respondent had no title to convey the 3.30 Ares by the subsequent sale deed.

It declared the sale deed No. 2224/2012 not binding on the petitioner or on the 3.30 Ares in Survey No. 184/1, Block No. 8, Koovappally Village.