The Kerala government has introduced significant amendments to the Kerala Revenue Recovery Act of 1968, aiming to provide substantial relief to debt-ridden borrowers, ensuring that the attached property is not lost forever. The amendments, passed by the Kerala Legislative Assembly, are designed to offer a more compassionate approach to revenue recovery, especially in light of the financial hardships exacerbated by recurring floods and the COVID-19 pandemic.
One of the most significant changes is the introduction of provisions allowing the government to stay recovery proceedings. This means that in cases where debtors are unable to repay their loans due to unforeseen circumstances, the government can temporarily halt the recovery process. Additionally, the amendments permit debtors to repay their outstanding amounts in instalments, providing much-needed flexibility. Previously, the rigid structure demanded immediate full repayment, causing undue stress for many borrowers.
New Sections were inserted such as Section 83A giving special power to the government to issue stay and instalments, Section 83B giving power to issue moratorium and Section 83C for bringing Settlement Schemes for the recovery of the arrear amounts.
Another notable change is the amendment of Section 6, which brings a reduction in the maximum interest rate on outstanding amounts from 12% to 9%. This reduction is expected to ease the financial burden on debtors, making it more feasible for them to clear their dues without falling into a deeper debt trap. By lowering the interest rate, the government aims to create a more equitable and supportive environment for struggling borrowers.
The amendment to Section 2 introduces the concept of ‘bought-in land’, referring to properties that remain unsold during auctions and are subsequently taken over by the government. It also inserted a new Section 50A to the Act stressing the Reconveyance of Bought-in-land. The new legislation stipulates that such land will be kept unsold for a lock-in period of five years, during which the original owner can reclaim the property by paying the outstanding amount along with interest. This provision prevents the immediate loss of property and offers debtors a fair chance to recover their assets.
To further protect debtors, the amendment to Section 36 ensures that the attachment of property will be proportional to the outstanding amount. This change prevents the excessive attachment of property, which has been a significant issue in the past.
Additionally, as per the amendment to Section 44, debtors will now be allowed to sell wholly or in part, their attached land with the District Collector’s permission. The purchaser shall remit the revenue recovery dues with interest and other dues out of the sale consideration. It also enables the debtor to generate funds for repayment without losing their entire property.
The amendment to Sections 12 and 49 paves the way for the introduction of e-auctions for auction proceedings. This move towards digitalisation aims to enhance transparency and efficiency in the auction process, reducing the chances of manipulation and ensuring fairer outcomes for all parties involved. By embracing technology, the government seeks to modernise revenue recovery procedures and instil greater confidence among debtors and financial institutions alike.
The Kerala Revenue Recovery (Amendment) Bill, 2024 has received widespread support across the political spectrum. The Leader of the Opposition, V.D. Satheesan, endorsed the amendments and suggested additional measures to protect the interests of a debtor’s immediate family in the event of their death. This bipartisan support highlights the collective recognition of the need for a more compassionate approach to revenue recovery.
After being introduced in the Assembly, the bill was referred to a subject committee for further review and recommendations. The subject committee’s report, tabled by Revenue Minister K. Rajan, included key amendments such as the government’s power to declare a moratorium on revenue recovery proceedings under specific conditions and guidelines. This provision ensures a structured approach to granting relief, ensuring decisions are made transparently and fairly.
The amendments to the Kerala Revenue Recovery Act & Rules, 1968 mark a significant shift towards a more compassionate and balanced approach to revenue recovery. By introducing provisions for staying recovery proceedings, allowing instalment repayments, reducing interest rates and modernising auction processes, the Kerala government has demonstrated its commitment to addressing the hardships faced by debtors. With widespread political support and a clear legal framework, these amendments are set to bring much-needed relief to those struggling with financial distress, ensuring a more equitable and supportive system for all.
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