A.E. DAMODARAN v. SPECIAL GRADE EXECUTIVE OFFICER

V.K.MOHANAN, J.-------------------------------------CRL.R.P.1003/2000------------------------------------- Dated the 17th October, 2007. ORDERThe petitioners herein are the accused in S.T.Case No.371 of1991 on the file of the Judicial Magistrate of the First Class,Sulthanbathery for the offence punishable under section 74 of theKerala Panchayats Act, 1960 read with Rule 26 of the KeralaPanchayats (Taxation and Appeal) Rules, 1963. By the judgmentdated 30th May 1994, the trial court found that all thepetitioners/accused are guilty and accordingly, they wereconvicted and sentenced to pay a fine of Rs.45,000/-(Rs.15,000/-each) in default to undergo simple imprisonment for three months.It is also ordered that the fine amount shall be paid to thePanchayat. Aggrieved by the order of conviction and sentence, thepetitioners herein preferred Crl. Appeal No.37/1994 before theSessions Court, Wayanad. By judgment dated 31st August 2000,the Sessions Court dismissed the appeal confirming and sustainingthe conviction and sentence ordered by the trial court. Theabove judgment is challenged in this Crl. Revision Petition.2. The allegation against the accused is that they wilfully CRL.R.P.NO.1003/2000-:2:-omitted to pay the building tax due to the complainant viz., theSulthanbathery Grama Panchayat for the buildings bearingNos.3/714, 3/715, 3/716 and 3/714 A to 3/716 L from 1987-88 to1991-92 and thereby committed the offence punishable undersection 74 of the Kerala Panchayats Act, 1960 read with Rule 26of the Kerala Panchayats (Taxation and Appeal) Rules, 1963(hereinafter referred to for short as “Rules” only). On the saidallegation, PW1 preferred the complaint which was taken on file asS.T.No.371/91. During the course of trial, the accused appearedand they were given the prosecution records. The substances ofthe prosecution case had been read over and explained to theaccused, to which they pleaded not guilty which resulted infurther trial of the case during which PWs 1 to 3 were examined;Exts.P1 to P3(b) were marked on the side of the prosecution. Onthe side of the defence, except Ext.D1, there is no other evidenceeither documentary or oral. The trial court framed two issues forconsideration as to (1) whether the accused have wilfully omittedto pay building tax Rs.38834/- due to the Panchayat as alleged bythe prosecution; and (2) what should be the proper sentence onconviction.3. After an elaborate consideration of the evidence and CRL.R.P.NO.1003/2000-:3:-materials on record, the trial court came into the finding that theaccused have committed the offence charged against them andaccordingly they were convicted for the above offence andsentenced to pay a fine of Rs.45,000/-(Rs.15,000/- each), and indefault of payment of fine to undergo simple imprisonment for 3months. It is also ordered separately that the fine amount, ifrealised, shall be paid to the Panchayat. In appeal, the SessionsCourt, after evaluating the evidence on record, came into theconclusion that the petitioners/accused have committed theoffence charged against them. Thus the appellate court by itsjudgment, sustained the conviction and affirmed the sentence.Pressing the various legal and factual grounds, the petitionersassailed the concurrent findings of the courts below in thisCrl.Revision Petition.4. I have heard the counsel appearing for the revisionpetitioners as well as the counsel for the respondent. 5. The challenge against the conviction and sentence aremainly on two grounds. According to the revision petitioners andtheir counsel, in the light of the decision reported in PankajbhaiN.Patel v. State of Gujarat (2001 (1) KLT 517) (SC), the trialcourt has no jurisdiction to impose fine exceeding Rs.5000/- CRL.R.P.NO.1003/2000-:4:-and especially in the light of the pecuniary jurisdiction of theMagistrate as per section 29 of the Cr.P.C., the sentences orderedby the trial court and confirmed by the lower appellate court isnot sustainable. On behalf of the petitioners, the other contentionadvanced by the learned counsel is that that no proper noticewas served on all the accused and the distraint warrant was notexecuted by the person authorized as per warrant and therefore,the entire proceedings are vitiated and hence no offence will lieagainst them. On the other hand, counsel for the respondentpointed out that Ext.P1 notice has already been served on the Istaccused and in Ext.P1 itself, it is recited that notice was beingserved on the Ist accused and also for others. Since all theaccused were jointly assessed and Ext.P1 notice was served onthe Ist accused for himself and also for others, I am of the viewthat service of Ext.P1 is sufficient and therefore the contention ofthe counsel for the petitioners in this regard is not helpful toassail the procedure of the Panchayat.6. Another contention raised by the counsel for thepetitioners that Ext. P3 is the distraint warrant in which theofficer authorized to execute the warrant is one P.Vilasini who is aLower Division Clerk, as the name appears from Ext.P3, the said CRL.R.P.NO.1003/2000-:5:-officer is a lady. The above contention was raised even in thetrial court, which was correctly answered by the trial court whichcan be seen in page No.4 of the trial court judgment. As per theevidence and materials on records, it can be seen that thoughExt.P3 was entrusted with PW-3, PW-3 had filed a submissionbefore the Executive Officer on 1.3.1991 and as per the order ofthe Executive Officer, the same was entrusted with PW-2 forservice though it authorised PW-3. Going by Ext.P3 documentit can be seen that it is a printed form and the name of theperson authorized to execute the same has been incorporated inwriting in the printed form. There is no mandatory provisioncontained in the Rules namely Kerala Panchayats (Taxation andAppeal) Rules, 1963 which says that the distraint warrant shouldbe executed by the person to whom it is authorised for execution.The service of distraint warrant is only a procedure and nothingbrought out to show that due to the service of Ext.P3 distraintwarrant by a person other than the authorised person, anyprejudice is caused to the accused. In the absence of anyprejudice caused to the accused, I find that there is no force inthe contention raised by the counsel for the petitioner in thisregard. CRL.R.P.NO.1003/2000-:6:- 7. In the light of the above discussion, I find no reason tointerfere with the finding arrived at by the trial court as well as bythe lower appellate court and therefore, the conviction enteredinto by the courts below is confirmed. 8. Regarding the sentence, I find some force in thesubmission made by the counsel for the petitioner. In view ofsection 29(2) of Cr.P.C. the Magistrate court has no jurisdiction toimpose fine exceeding an amount of Rs.5000/-. The SupremeCourt in the decision reported in Pankajbhai. N.Patel's case(cited supra) it is held that the Judicial First Class Magistrateafter conviction cannot impose a fine exceeding Rs.5000/- . Inparagraph 8 of the above decision it is held:“Thus, the non-obstante limb provided inS.142 of the N.I.Act is not intended to expand thepowers of a Magistrate of first class beyond whatis fixed in Chapter III of the Code. S.29, whichfalls within Chapter III of the Code, contains alimit for a Magistrate of first class in the matter ofimposing a sentence as noticed above i.e., if thesentence is imprisonment it shall not exceed 3years and if the sentence is fine (even if it is partof the sentence) it shall not exceed Rs.5000/-”. CRL.R.P.NO.1003/2000-:7:- 9. In the present case, a similar provision as that of theNegotiable Instruments Act, 1881 is contained in Rule 26 of theKerala Panchayats (Taxation and Appeal) Rules, 1963. Rule 26says: “ Magistrate to recover tax, warrant feeetc.-(1) Every person who if prosecuted underthe second proviso to S.74 of the Act shall be liableon proof to the satisfaction of the Magistrate thathe wilfully omitted to pay the amount due by himor that he wilfully prevented distraint or a sufficientdistraint, to pay a fine not exceeding twice theamount which may be due by him on account of--(a)the tax and the warrant fee, if any, and (b)if distraint has taken place, thedistraint fee and the expenses incidental to thedetention and sale if any, of the propertydistrained”.(emphasize supplied) Though the Rule enables the Magistrate court to impose fine notexceeding twice the amount which may due from the accused onthe grounds mentioned therein, as per the limitation contained insection 29(2) of Cr.P.C., the Magistrate cannot impose a fine CRL.R.P.NO.1003/2000-:8:-exceeding Rs.5000/- on an accused. By no stretch of imaginationit can be held that by incorporating Rule 26(1) of the Rules,through subordinate legislation, rule making authority who hasabsolutely no jurisdiction, had intention to enlarge the pecuniaryjurisdiction of a Magistrate of First Class, from the limit fixed byold S.32 of Cr.P.C., 1898 which is corresponding to S.29(2) ofCr.P.C. 1973, a Central Act, enacted by the Parliament. 10. In the present case as revealed by the judgment , asum of Rs.15,000/- has been imposed as fine upon one accusedand the total amount thus comes to Rs.45,000/-. Probably, theabove amount was fixed with a view to compensate thecomplainant to whom a total sum of Rs.38,834/- is due from theaccused. In the light of section 29(2) of Cr.P.C. and the decisionreported in Pankajbhai N.Patel's case (cited supra), the orderof the trial court sentencing the accused to pay a fine ofRs.15,000/- which is an amount exceeding the pecuniaryjurisdiction fixed by section 29 (2) of Cr.P.C. is not sustainableand therefore, the sentence imposed by the trial court andconfirmed by the lower appellate court is liable to be set aside.11. In our democratic system, the Grama Panchayats arethe local unit of self Government and for its effective functioning, CRL.R.P.NO.1003/2000-:9:-the main revenue is by way of certain item of taxes which areauthorised to collect by the Grama Panchayats. Therefore, thedefault on the tax payers in paying the tax will ultimately affectthe very functioning of the local self Government and it was in thisbackground, Section 74 of the Kerala Panchayats Act, 1960 andRule 26 of the Kerala Panchyats (Taxation and Appeal) Rules, 1963enacted with a view to prosecute the defaulters in paying the taxand also to realise the tax and any other due connectedtherewith and to pay the same to the Panchayat concerned. Atthis juncture, it is relevant to note sub-rule 2 of Rule 26 whichsays:(2) whenever any person is convicted of anoffence under sub-rule (1), the Magistrate shall, inaddition to any fine which may be imposed,recover summarily and pay over to the Panchayatthe amounts, if any, due under the headsspecified in clauses (a) and (b) of sub-rule (1);and may, in his discretion also recover summarilyand pay to the Panchayat such amount, if any, ashe may fix as the costs of the prosecution”. On a combined reading of sub-rules 1 and 2 of Rule 26 it can beseen that the intention of the rule making authority is to enable CRL.R.P.NO.1003/2000-:10:-the Grama Panchayat to realise the tax due from the defaultedtax payers by invoking the penal provision and to compensate thePanchayat in this regard. But in view of Section 29 of Cr.P.C.and especially in the light of the decision referred above, thepecuniary jurisdiction of Magistrate is confined to onlyRs.5000/- and therefore, the trial court cannot be in a position tomaterialise the object behind the provisions of the above rules.In this context, it is relevant to note that the total tax arrearswas Rs.38,834/- as on 1992. Now we are in 2007. So far noamount was paid by the petitioners/accused. Of course, counselfor the petitioners raised a contention that an amount ofRs.4000/- has already been paid and that was not adjustedtowards the total amount demanded. But from Ext.P1, it is clearthat the amount demanded therein was after deducting thedeposit amount. Now, even if any amount is liable to be takeninto account and adjusted, the same can be done at the time offinal settlement of accounts as observed by the trial court in itsjudgment. 12. In the present case, it is relevant to note that asper the above rules, on finding of guilt of the accusedand on conviction, the Magistrate can sentence the accused CRL.R.P.NO.1003/2000-:11:-only by awarding a fine since the Magistrate is notauthorised to award sentence of imprisonment. But by virtueof the above limitation, even if the arrears are more thanRs.5000/-, the Magistrate can impose a fine only up toRs.5000/-. In short, even the permissible amount cannot befixed as fine. But, at the same time, the trial court hasmiserably failed to invoke sub rule 2 of Rule 26 of the aboveRules and to pass an order for realising the actual dueamount as well as the prosecution expense and otheramounts which are just and proper to compensate thecomplainant Panchayat. In the light of the above bar on thepecuniary jurisdiction of the trial court, the above order ofsentence imposing fine to the tune of Rs.15,000/- each onthe accused has to be held as illegal. But at the very sametime, after having found the accused guilty, they shall notgo unpunished but, of course, subject to the abovepecuniary limitation. But, still even in such event, thepanchayat will not be benefited or compensated and thetax arrears due to the panchayat cannot be realised unless CRL.R.P.NO.1003/2000-:12:-an order passed by the court below by invoking Rule 26(2) ofthe Rules. Thus, if the trial court, after evaluating the entirefactual situation involved in the matter, invokes Rule 26(2)and fixes an appropriate amount, the same will be sufficientto advance the intention behind the Rule and give effect forthe same. Besides invoking Rule 26(2) of the Rules, theMagistrate can also invoke Section 357 of Cr.P.C. as held inPankajbhai N. Patel's case (cited supra). But all thesecan be done only after giving opportunity of being heard tothe accused.13. In the light of the above discussion andobservation, this Crl.R.P. is allowed in part setting aside thesentence awarded but sustaining the conviction. The matteris remanded to the trial court for fresh consideration on thequestion of sentence , i.e., imposing fine under Rule 26(1)of the Rules and also awarding appropriate amount ascontemplated by Rule 26(2) of the Rules and awardingcompensation, if any, under section 357 of Cr.P.C. afterhearing the accused as well as the complainant on those CRL.R.P.NO.1003/2000-:13:-aspects. The petitioners/accused are directed to appearbefore the trial court on 26-11-2007 and it is needless to saythat if the accused are not appearing as directed, theMagistrate can take steps against the sureties to ensure thepresence of the accused.14. In the result, this Crl.R.P. is allowed in partsustaining the conviction and remanded the same forpassing fresh orders on the question of sentence andawarding compensation in the light of the above observationand direction.V.K.MOHANAN, JUDGE.kvm/- CRL.R.P.NO.1003/2000-:14:- V.K.MOHANAN, J. Crl.R.P.No.1003 of 2000 OrderDated:17-10-2007