No recovery charges / collection charges @10% for recovery as arrears of land revenue under UP Z A & L R Act 1950

It has been seen that the concern authority invokes the provisions of UP Z A & L R Act 1950 to recover a sum recoverable as an arrear of land- revenue and charging cost of recovery @ 10% of the amount stated in the recovery certificate.

No recovery charges / collection charges @10% for recovery as arrears of land revenue under UP Z A & L R Act 1952 required to be paid henceforth.

Three judges bench (comprising Hon'ble R.K. Agrawal, J.Hon'ble S.P. Mehrotra, J. Hon'ble S.U. Khan, J.) of Hon’ble Allahabad High Court unanimously ruled on  09.01.2013 “If the recovery as arrears of land revenue is being made by invoking the provisions of 1950 Act (i.e. U.P. Zamindari Abolition and Land Reforms Act, 1950) then in that event the fee prescribed under 1952 Rules for various process for realisation of arrears of land revenue while selling moveable and immovable properties and also where properties are not sold alone is payable” instead of collection charges at the rate of 10% of the amount stated in the certificate while deciding Writ C No. 56175 of 2011 titled as Mahrajwa and others vs. State of U.P. and others.

The aforesaid bench was constituted to decide following issue

“Whether decision in Mange Ram & Anr. Vs. State of U.P. & others, 2010 (2) CRC 216 in so far as it takes the view that there is no provision under any of the Acts for levying any  collection charges  for mere issuance of citation or sale proclamation is correct; or, the decision in Chinta Mani Vs. State of U.P. & Ors., 2011 (1) AWC 637 holding that provisions   of   sub-section   (2)   of   Section   279   do   not   contain   any provision for an absolute waiver of recovery charges where the citation has   been   issued   under   sub-section   (1)   and   the   charging   section empowers the Collector to raise such demand subject to the rules and provision of Revenue Recovery Act U.P. Act No.37 of 2001, is correct.”

While deciding aforesaid issue, the bench discussed extensively following laws on cost of recovery / recovery charges / collection charges 10% for recovery as arrears of land revenue:

1.    The Revenue Recovery Act, 1890

2.    U.P. Zamindari Abolition and Land Reforms Act, 1950,

3.    U.P. Zamindari Abolition and Land Reforms Rules, 1952

4.    The Uttar Pradesh Agricultural Credit Act, 1973.

5.    The Uttar Pradesh Agricultural Credit Rules, 1975.

At Page 20-21 of the attached judgment, the Hon’ble Court observed :

“From the scheme of 1890 Act, 1950 Act and 1973 Act as also 1952 Rules and 1975 Rules one thing is amply clear that while Sections 3 and 5 of 1890 Act and Rule 29 of 1975 Rules speak of  the cost of recovery to be realised along with the arrears it is necessarily to be understood and restricted to where the arrears have been recovered by the concerned authorities. If the authorities have not   been   able   to   recover   the   amount   of   arrears   through coercive process undertaken by them, then there is no question of realising the cost of recovery from the defaulter. The issuance of recovery certificate is a ministerial job. If no concrete further steps have been taken and the arrears have not been realised by them and instead the defaulter pays the amount of arrears directly to the creditor or to the person to whom it is due then it cannot be said by any stretch of imagination that the State authorities have recovered the amount of arrears. In that event, there is no question of realising the cost of recovery/recovery charges from the defaulter either under the 1890 Act or under the 1975 Act. The provisions of Section 3 of the 1890 Act and Rule 29 of 1975 Rules have to be read accordingly”

After referring number of earlier judicial pronouncements of cost of recovery/recovery charges / collection charges 10% for recovery as arrears of land revenue, finally ruled:

“………… it is absolutely clear that it has to be seen as to under what Act the recovery has been initiated.

1.     Whether it is under 1890 Act, 1950 Act or 1973 Act.

2.     If the recovery proceedings have been initiated under 1890 Act then in that event if the recovery is being made under Section 3 of the Act then cost of recovery would be 10% of the amount stated in the certificate. However, if recovery certificate has been issued but no recovery had   been   made   by   the   State   authorities,   who   had   issued the   recovery certificate as for example the defaulter directly deposits the amount or therecovery certificate is withdrawn or cancelled for any reason whatsoever thenin that event there is no question of charging any costs of recovery. At best thefee for the  process mentioned in 1952 Rules can be levied. However, if the recovery certificate has been issued under Section 5 of 1890 Act then there is no question of any cost of recovery being realised as the State Government has not yet issued any notification specifying any rate.

                                                                                                                                   

3.    If the recovery has been issued under 1973 Act then in that case realisation of recovery charges by the State authorities can be made from the defaulter only where the entire amount had been recovered by the authorities of the State.

4.    If the recovery as arrears of land revenue is being made by invoking the provisions of 1950 Act (i.e. U.P. Zamindari Abolition and Land Reforms Act, 1950) then in that event the fee prescribed under 1952 Rules for various process for realisation of arrears of land revenue while selling moveable and immovable properties and also where properties are not sold alone is payable.