2002 (12) TMI 654 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the plaintiff's title and possession of the property.
2. Applicability of Section 44 of the Revenue Recovery Act.
3. Interpretation of Sub-sections (2) and (3) of Section 44 of the Revenue Recovery Act.
4. Binding nature of the Supreme Court's judgment on lower courts.

Issue-wise Detailed Analysis:

1. Validity of the plaintiff's title and possession of the property:

The plaintiff filed a suit for injunction to restrain the State and its officials from proceeding against the plaint schedule property under the Revenue Recovery Act. The plaintiff claimed ownership through a series of transactions involving an agreement for sale by Mohankumar to Asok Kumar, a decree for specific performance, and a subsequent assignment deed in favor of the plaintiff. The defendants contested the validity of the agreement and the plaintiff's title, alleging that the transactions were collusive and intended to defeat revenue recovery proceedings.

2. Applicability of Section 44 of the Revenue Recovery Act:

Section 3 of the Revenue Recovery Act establishes that public revenue due on any land shall be the first charge on the land. The defendants argued that the property was attached for abkari arrears due from Mohankumar before the plaintiff acquired it, making the attachment valid under the Revenue Recovery Act. The trial court initially ruled in favor of the plaintiff, but the lower appellate court reversed this decision, leading to the Second Appeal.

3. Interpretation of Sub-sections (2) and (3) of Section 44 of the Revenue Recovery Act:

Sub-section (2) of Section 44 stipulates that any transfer of immovable property made by a defaulter after public revenue has fallen in arrears, with intent to defeat or delay recovery, shall not be binding upon the Government. Sub-section (3) presumes such intent if the transfer is to a near relative or for grossly inadequate consideration, unless the contrary is proved. The Supreme Court in State of Kerala v. Radhamany (1996 (6) SCC 287) held that these sub-sections are independent and that prior notice of demand or attachment is not required to invalidate such transfers.

The plaintiff's counsel argued that the Supreme Court's interpretation conflicted with the proviso to Sub-section (3), which mandates giving the defaulter an opportunity to be heard and recording reasons before attachment. However, the judgment clarified that Sub-section (2) applies if arrears fell due before the transfer, making the sale not binding on the Government.

4. Binding nature of the Supreme Court's judgment on lower courts:

The appellant's counsel contended that the Supreme Court's judgment in State of Kerala v. Radhamany should not be followed as it allegedly overlooked the proviso to Sub-section (3). However, the court reiterated that under Article 141 of the Constitution, the law declared by the Supreme Court is binding on all courts within India. The court emphasized that a decision of the Supreme Court cannot be assailed on the grounds that certain aspects were not considered or certain provisions were not brought to its notice.

The court cited several judgments, including Director of Settlements, A.P. v. M.R. Apparao and Chandra Prakash v. State of U.P., to reinforce that the ratio decidendi of a Supreme Court judgment is binding and must be followed by lower courts. The court concluded that the observations made by single Judges in earlier decisions, which required the Government to establish fraudulent intent through independent civil proceedings, do not reflect the correct law in light of the Supreme Court's ruling.

Conclusion:

The reference was answered by affirming the applicability of the Supreme Court's judgment in State of Kerala v. Radhamany. The appeal was directed to be disposed of by the single Judge on merits in accordance with the law, recognizing that the transfer of property after arrears fell due is not binding on the Government, and prior notice of demand is not a pre-condition for invalidating such transfers under Sub-section (3) of Section 44 of the Revenue Recovery Act.