Timber and Plywood Corpn. Ltd. Vs. State of Kerela  INSC 210 (31 March 1994)
Jagdish Saran (J) Verma, Jagdish Saran (J) Kuldip Singh (J) Sahai, R.M. (J)
1994 AIR 2141 1994 SCC Supl. (2) 182 JT 1994 (3) 122 1994 SCALE (2)385
Judgment of the Court was delivered by VERMA, J--This appeal by special leave
is against the judgment of the Kerala High Court dated 21-3-1990 in AS No. 214 of 1980 arising out of judgment and
decree of the Subordinate
Court, Kozhikode in OS No. 153 of 1972. The trial
court had dismissed the original suit filed by the State of Kerala + From the Judgment and Order dated
March 21, 1990 of the Kerala High Court in Appeal
suit No. 214 of 1980.
but the High Court has allowed the appeal of the State of Kerala. Hence this further appeal by
special leave by the defendants in the suit.
subject-matter of the suit is 4200 acres of land in Jenmakaran Tharakan. In
short, the claim of the plaintiff- State of Kerala is that these lands had
escheated and belong to the State of Kerala and order Ex. A-17 dated 24-12-1968
to this effect made by the Collector of the district under the Kerala Escheats
and Forfeitures Act, 1964 had become final under the Act, there having been no
appeal under Section 7 or any suit in accordance with Section 11 of the Act by
defendants/appellants against the order Ex. A- 1 7 made by the Collector. On
this basis the suit for recovery of possession of these lands was filed against
the defendants/appellants who were in unlawful possession of the same. The suit
was resisted by the defendants/appellants claiming title in these lands and
denying the claim of escheat. The trial court rejected the claim of the
plaintiff-State and dismissed the suit. The High Court has reversed that decree
and decreed the suit. The appellants contend that reversal of the trial court's
decree by the High Court is without any justification.
would be appropriate to mention the findings of the High Court in the
background of the rival claims. It is beyond controversy that the disputed
lands were in the possession of some European planters in the middle of the
19th century when they occupied the high lands of Malabar wherein Wynad hills
were found to be congenial for coffee plantation. Apparently Such lands then
were available in abundance for such occupation. According to the plaintiff- State of Kerala, the suit lands came to be assigned by their
original owner to one Antoon Lopez while there was a transfer also to M/s Leckie
& Co. M/s Leckie & Co. in order to
avoid any possible dispute of title made a purchase also from Antoon Lopez.
Nothing was heard of Antoon Lopez after he sold his right to M/s Leckie &
Co. while that company seems to have gone out of existence during the early
years of the 20th century and had abandoned the lands near about 1910. Escheat
proceedings were initiated by issue of Ex. A-10 dated 26-4-1965 to which
erratum Ex. A- II was issued in view of the objection Ex. A-37 filed by the
defendant/appellant. It was thereafter that the decision of the Collector Ex.
A- 17 dated 24-12-1968 was made holding that the suit
lands had escheated to the State Government of Kerala. The
defendants/appellants being in unauthorised possession of these lands a suit
for recovery of possession was filed by the State of Kerala on I- I 1 969. The
defendants challenged the validity of the escheat proceedings and also
contended that identity of the suit lands did not match with those acquired by
the documents Ex. A-1, A-2 and A-3 on which plaintiff-State relies. To get over
the effect of failure to appeal under Section 7 or file a suit in accordance
with Section I I of Kerala Escheats and Forfeitures Act, 1964 the defendants
contended that the validity of the order of escheat was challenged in a writ
petition wherein all questions regarding the validity of escheat proceedings
and the order made therein were left open "to the extent permissible in
law" for being raised in the pending suit filed by the State of Kerala.
The defendants also claimed to have acquired title through one L.S. Krishnan
who had obtained a lease Ex. B-1 dated 18-3- 1921, and executed sale deed Ex.
B-2 dated 11-5-1921 in favour of United India Lumbering (Pvt.) Ltd. Co. which
went into liquidation and the properties thereof were then purchased by M. Cherian
Pothen who then transferred the same in the manner indicated to enable
defendants to acquire title to the suit lands.
first question relates to the identity of the suit lands. The High Court has
considered at length the rival contentions in the light of the entire evidence
led by the parties and rejected the defendants' plea disputing the identity of
lands. After discussing the entire evidence the High Court held in para 45 of
its judgment as under :
therefore hold on issues I to 3, differing from the findings of the trial
court, that the plaint schedule property was properly identified, that it
originally belonged to Jenmakaran Tharakan and that Mr Antoon Lopez and M/s Leckie
& Company had title and possession over the plaint schedule property.
also hold, in the alternative, on issues 2 and 3 that the rights of M/s Leckie
& Company under Ex. A-1 had priority over the later transfer by Anoth Tharwad
under Ex. B-1 in favour of Shri L.S. Krishnan, which rights alone could have
devolved on defendants 19 to 21."
do not find any misreading of evidence or any other infirmity in the discussion
of evidence made by the High Court before reaching the above conclusion
relating to identity of the suit lands. The submission of learned counsel for
the appellants to the contrary does not require any further discussion.
High Court has then considered the evidence relating to the justification for
commencing the escheat proceedings and making the order and the decision Ex.
A-17 by the Collector as a result of the enquiry held for that purpose. The
High Court on this aspect held as under :
only inference possible therefore was that M/s Leckie & Company was not
registered either in Bombay or in London or elsewhere in UK either as a company
or as a firm. The concern had gone completely out of existence.
seems to us to be a situation justifying escheat proceedings.
hold that the plaintiff has succeeded in proving that the concern, M/s Leckie
& Company, Bombay, which was the owner of the property according to Exs.
A-1 and A-2, had gone out of existence somewhere about 1910 and the
constituents of the concern, whether they be joint owners or partners or
shareholders, had left the property for good without any intention of asserting
title to the property at any time.
have held that M/s Leckie & Company was the owner of the property and that
the property became ownerless by about 1910. We have also held that Exs. A- I
0, A- I I and A- 17 were valid. We therefore set aside the findings of the
trial court on these issues and hold in favour of the appellant."
brief reference to the escheat proceedings and the impact of the order Ex. A-17
dated 24-12-1968 may be made at this stage. The Kerala Escheats and Forfeitures
Act, 1964 provides for administration, supervision, custody and disposal of
escheats and unclaimed property. Section 3 provides for escheat of the property
of a person who dies intestate and without leaving heirs. Section 4 prescribes
for a preliminary enquiry by the Collector whenever he receives information
about any such property within his jurisdiction. Section 5 requires publication
in the Gazette of a notice calling upon all persons who may have any claim to
the property to appear and prefer the claim within six months of the 185 date
of the publication of the notice if as a result of the enquiry under Section 4
the Collector is satisfied that the deceased has died intestate and without
leaving any heirs and that it is a prima facie case of escheat. Section 6 then
provides for investigation into any claim so made under Section 5 and for a
decision by the Collector. It also provides that "the decision of the
Collector shall be final, subject to the provisions of Sections 7 and I I".
Section 7 provides for an appeal to the Board from the decision of the
Collector under Section 6 within the prescribed period and it says that the
decision on such appeal shall be final subject to the further appeal prescribed
therein to the Government within the prescribed period and Section I I which
provides for a suit within the prescribed period by the aggrieved person.
Section I I provides for a civil suit within the prescribed period. The scheme,
therefore, is that the decision of the Collector made under Section 6 of the
Act is final subject to the decision in appeal under Section 7 or a suit under
Section I I filed within the prescribed period.
decision of the Collector Ex. A-17 dated 24-12- 1968 was made in the present
case after investigating into the claim of the defendants made under Section 5
of the Act and the defendants did not prefer any appeal under Section 7 or file
a civil suit under Section II of the Act to challenge the Collector's decision
against it. In an attempt to overcome the consequence of finality of the
Collector's decision against it by virtue of the provisions in the Act, learned
counsel for the appellants placed reliance on the writ petitions filed by the
defendants and the order made therein. He contended that the questions raised
in the writ petitions remain open to the defendants/appellants even now.
Learned counsel placed reliance particularly on a portion of the judgment dated
24- 12-1970 in OP Nos. 1107 and 1467 of 1969 filed by the appellants which were
dismissed by the Kerala High Court.
only challenge made by the appellants in the writ petitions was to the validity
of the escheat order on the ground that the proceedings having been started
under the Madras Endowments and Escheats Regulations, 1817 it could not be continued
under the Kerala Escheats and Forfeitures Act, 1964. There was no challenge by
the appellants in the writ petitions to the escheat order on the ground of
jurisdiction or violation of rules of natural justice. The High Court while
dismissing the writ petitions on the ground of pendency of the suit filed by
the State of Kerala, observed as under :
is not disputed that all questions regarding the validity of the escheat
proceedings and the legality of the orders can be raised, to the extent permissible
in law, in the suits which are pending." (emphasis supplied)
our opinion the above observation made by the High Court while dismissing the
appellants' writ petitions are of no avail to circumvent the effect of finality
attaching to the decision of the Collector made under Section 6 of the Act, on
account of the failure of the appellants to assail the same on merits in
accordance with Sections 7 and I I of the Act. The only challenge in the writ
petitions was to the continuance of the escheat proceedings under the 1964 Act
when the proceedings had been initiated under the 1817 Regulations, and not to
merits of the decision of the Collector. Moreover, the High Court in its
observation has merely said that the grounds, "to the extent permissible in
law" would remain open in the suit. Obviously in the suit filed by the
State of Kerala the correctness on merits of the Collector's decision could not
be gone into, 186 which is the challenge now made and not any challenge on the
ground on which the writ petitions were filed, assuming the liberty to the
defendant-appellant extended to raising the available grounds as a defendant in
the suit. It would thus appear that the finality of the Collector's decision
Ex. A- 17 made under Section 6 of the Kerala Escheats and Forfeitures Act, 1964
is by itself sufficient to negative the defence in the present suit. In other
words, the escheat order Ex. A-17 having attained finality, the suit filed by
the State of Kerala for recovery of possession on that basis had to succeed for
that reason alone. No further question does really arise for any serious
consideration in this appeal. This alone is sufficient to uphold the High
Court's decision decreeing the suit of the State of Kerala.
view of the above conclusion, it is unnecessary to deal with any other
submission of learned counsel for the appellants or even with the submission of
learned counsel for the respondents made in the alternative that the suit lands
are "private forest" as defined in Section 2(f) of the Kerala Private
Forests (Vesting & Assignment) Act, 1971 and therefore they have vested in
the State of Kerala by virtue of that Act free from all encumbrances. This
alternative submission of learned counsel for the respondents was to contend
that even if the claim of plaintiff-State could not be upheld on the ground of
escheat, it must succeed on the ground of vesting of private forest in the
State of Kerala.
view that we have taken it is unnecessary to examine this alternative
submission of learned counsel for the respondents as well as reply of learned
counsel for the appellants that the suit lands do not fall within the
definition of 'private forest'.
do not see any ground to interfere in the appeal.
the appeal is dismissed with costs.