Defaulters rejoice. Revenue Recovery Act, 1968, to be amended for their benefit

From now on having one's property attached by the government or banks does not mean that it is lost forever.
The Kerala Assembly on Monday tabled an amendment to the Kerala Revenue Recovery Act, 1968, that will allow the defaulter to either take back the attached property or sell the attached property to mobilise enough money to pay back the government or banks with interest.

The original Act, The Kerala Revenue Recovery Act, 1968, was intended to recover the arrears due to the government, and other institutions like local bodies, PSUs and banks, from the movable and immovable properties of the defaulter.

The amendment moved by revenue minister K Rajan, the Kerala Revenue Recovery (Amendment) Bill, 2024, is meant to strike a balance between the troubles of the defaulter and the compulsions of institutions like banks that initiate revenue recovery proceedings.

Three major changes will be introduced through the Bill that has the full support of the opposition UDF and has been sent to the Assembly Subject Committee for its consideration.

The first is an amendment to section 44 of the original Act that will allow the defaulter to sell the land that has been attached. The defaulter will be permitted to make an agreement for sale of the immovable property attached wholly or in part after getting permission from the Collector. For this, the defaulter and purchaser should submit a joint application.

The second is the insertion of a new section, 50A. This allows the reconveyance, or return, of the attached property to the original title holder. The defaulter can apply to get back the title of the land if she pays back the entire revenue dues with processing charge and interest till the date of application. This too requires the consent of the district collector. However, she has to do this within five years, and till then the government will not transfer the land or set it apart for other public purposes.

Thirdly, the insertion of sections 83A, 83B and 83C. The section 83A will allow the government to issue a stay on revenue proceedings, and also allows the defaulter to pay in installments. The section 83B would grant the government power to declare a moratorium on revenue proceedings. And 83C would empower the government to introduce settlement schemes for the recovery of arrears.

In fact, even without the backing of law, the government had allowed defaulters to pay in installments. But in a case filed by HDFC bank, the High Court had said that the Act did not authorise the government to restructure the pay back of arrears in installments. The High Court stuck to this stand even in the appeal filed by the government.

The revenue minister said the amendment was being introduced to overcome such a legal hurdle. Rajan reasoned that the amendment viewed defaults not as a misdeed but as the consequence of human suffering. "Through the amendment the 1968 Act would also be sensitive to the needs of the defaulter," he said.