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1972 DIGILAW 141 (ORI)

KAPILESWAR PRADHAN v. STATE OF ORISSA

1972-07-07

K.B.PANDA, R.N.MISRA

body1972
JUDGMENT : R.N. Misra, J. - This is a petition under Article 226 of the Constitution asking for a writ of certiorari to quash a certificate proceeding under the provisions of the Orissa Public Demands Recovery Act instituted at the instance of the opposite party No. 2 in the Court of opposite party No. 3. 2. The Petitioner entered into an agreement with the State of Orissa - opposite party No. 1 on the 7th of June, 1965 to act as agent under the provisions of the Orissa Kendu leaves (Control of Trade) Act, 1961 and the Rules made there under in respect of unit No. 14-A in the district of Sambalpur. This agreement remained valid from 7th of June, 1965 up to 31st of January, 1966. On the self same day he also entered into a similar agreement in respect of unit No. 14-B in the same district. Under Clause (4)(i) it was stipulated that the agent would purchase and/or collect and process kendu leaves and store them in well packed bags of a specified quantity. In respect of unit No. 14-A, 950 bags were specified while in respect of the other unit, 1,500 bags were so specified. Under Clause (5) of both the agreements, the agent's remuneration was provided for and under Sub-clause (c) thereof if the agent failed to purchase or collect and deliver the quantity of bags specified under Sub-clause (i) of Clause (4) of the agreement, he was a obliged to pay compensation to the State of Orissa. Under Clause (8) of the agreement it was stipulated: Any compensation payable by him under the agreement shall be recoverable as arrears of land revenue under the Public Demands Recovery Act for the time being in force in the unit. Clause (9) of the Agreement contained an arbitration clause with the Chief Secretary to Government of Orissa as the named arbitrator. The opposite party No. 2 (Divisional Forest Officer of Sambalpur) sent a requisition to the Special Certificate Officer (Opposite Party No. 3) under the provisions of the Orissa Public Demands Recovery Act (1 of 1963) and on the basis thereof, opposite party No. 3 drew up and filed a certificate in his Court on 16th of December, 1969 in Forest Certificate Case No. 11 of 1969. The Petitioner challenges the maintainability of the certificate proceeding in this writ petition and contends that it is liable to be quashed. At the time of admission of the writ petition on 15.1.1970, a direction was given that the writ petition is admitted on the limited point as to whether the certificate officer has jurisdiction to enforce the demand in question under provisions of the Orissa Public Demands Recovery Act. On 1-5-1970 time fixed for filing of counter affidavit was finally extended and a peremptory direction was given. As no counter was filed within the time so appointed, this application was directed to be heard ex parte. Long after the date so fixed a counter affidavit was filed, but this Court was not moved to take that into consideration. As such the counter affidavit has been excluded from consideration. 3. Mr. Misra for the Petitioner contends that the agreements in question are a nullity and as such cannot provide the basis for a certificate proceeding. In support of this contention of his, he places reliance on certain observations of their Lordships of the Supreme Court in the case of Commissioner of Sales Tax, Uttar Pradesh Vs. The Modi Sugar Mills Ltd.. In paragraph 33 of the judgment; their Lordships after an analysis of the agency agreement said: Clause 6 provides that subject to other terms and conditions, all charges and outgoings shall be paid by the agent and he shall not be entitled to any compensation whatsoever for any loss that may be sustained by reasons of fire, tempest, disease, pest, flood, draugh or other natural calamity, or by any wrongful act committed by any third party or for any loss sustained by him through any operation undertaken in the interest of fire conservancy. This clause clearly shows that the agent becomes personally liable to bear the loss which, under the normal rules of agency, the principal would have to bear. We have not thought it necessary to refer to all the clauses in detail because we are satisfied that even if the agreement is broadly considered, it leaves no room for doubt that the person appointed under the agreement to work the monopoly of the State is not an agent in the strict and narrow sense of the term contemplated by Article 19(6)(ii). The agent appointed under this agreement seems to carryon the trade substantially on his own account, subject, of course, to the payment of the amount specified in the contract. If he makes any profit after complying with the said terms, the profit is his; if he incurs any loss owing to circumstances specified in Clause 6 the loss is his. In terms, he is not made accountable to the State Government; and in terms, the State Government is not responsible for his actions. In such a case, it is impossible to hold that the agreement in question is consistent with the terms of Section 3 of the Act. No doubt, the learned Attorney General contended that in commercial transactions, the agreement in question may be treated as an agreement of agency, and in support of this argument he referred us to the decisions in Ex parte Bright: In re Smith, (1879) 10 Ch. D. 666 and Weiner v. Harris 1910. 1 K.B. 285. It is true that an agent is entitled to Commission in commercial transactions, and 80 the fact that a person earns commission in transactions carried on by him on behalf of another would not destroy his character as that other person's agent. Cases of delcredere agents are not unknown to commercial law. But we must not forget that we are dealing with agency which is permissible under Article 19(6)(ii), and as we have already observed, agency which can be legitimately allowed under Article 19(6)(ii) is agency in the strict and narrow sense of the term; it includes only agents who can be said to carry on the monopoly at every stage on behalf of the State for its benefit and not for their own benefit at all.... The two agreements in question are not in the same form as the agreement in the case before their Lordships of the Supreme Court was. Besides, their Lordships were dealing with that case from the angle of State monopoly and as to whether the agreement was to be sustained in the background of the provisions in Article 19(6)(ii) of the Constitution. The fundamental right of a citizen to carry on trade on one side and state monopoly on the other were in issue. Besides, their Lordships were dealing with that case from the angle of State monopoly and as to whether the agreement was to be sustained in the background of the provisions in Article 19(6)(ii) of the Constitution. The fundamental right of a citizen to carry on trade on one side and state monopoly on the other were in issue. The agreement entered into by Government of Orissa with Akadasi Padhan was accepted to be an agreement in the commercial sense though from the point of view of fundamental right subject to the restriction of State monopoly it was not found tenable. On the basis of the authority of that decision, we are not prepared to bold that the two agreements in this case can be taken to be a nullity. They are valid agreements in the commercial sense and are enforceable in law. This contention of Mr. Misra must, therefore, be rejected. 4. Mr. Misra next contended that under Clause (4)(xvii) compensation payable for damage to the forest is to be paid to the Forest Officer while the compensation envisaged under Clause (5)(c) of the Agreement is payable to the State of Orissa There is no provision in the agreement or under any rules of business of the State, which authorizes the Divisional Forest Officer to claim payment of the compensation raised under Clause (5)(c) of the agreement as if it is payable to him. Column 6 of the Certificate (Annexure-C) shows that the amount is due as compensation for careless destruction of leaves and shortfall in collection of Forestry deportment. There is no provision for compensation for careless destruction of leaves in terms of Clause (5)(c). Compensation under this head also is not available to be raised under Clause (4)(xvii). It is not understood as to what is meant by "shortfall is collection of Forestry department". If it is really compensation in terms of Clause (5)(c) of the agreement, specific mention of that fact should have been made. The Divisional Forest Officer, Sambalpur Division cannot really be the certificate holder. Money is payable to the State of Orissa in terms of agreement and as Such it is the State of Orissa which should have been shown as the certificate holder. 5. The Petitioner has alleged upon affidavit that no notice of any assessment of compensation had ever been served upon him nor was compensation determined in his presence. Money is payable to the State of Orissa in terms of agreement and as Such it is the State of Orissa which should have been shown as the certificate holder. 5. The Petitioner has alleged upon affidavit that no notice of any assessment of compensation had ever been served upon him nor was compensation determined in his presence. For the first time he had notice from the certificate case. In such circumstances the certificate should have been clear and details have been properly provided in column 6 of the certificate so as to give a clear picture of the particulars of the public demand for which the certificate was singed. It has been often said that the certificate proceedings are summary ones and have serious consequence. In this Court in the case of Saudamini Works through Manager T.P. Padhi v. State of Orissa and Anr. ILR 19511 Cutt. 361 a decision of the Judicial Committee where Lord Davey emphasised upon the need of the certificate to be in proper form and that all particulars required to be provided to be completely given, has been referred to with approval. There are two units. It is not known if compensation has been raised in respect of both the units and under what heads. If details had been given, even within the limited sphere of Section 8 of the Orissa Public Demands Recovery Act, the Petitioner could have disputed his liability. We are satisfied that the certificate as laid (Annexure-C) cannot be sustained. We would accordingly quash the same. We, however, make it clear that in case the opposite parties and 2 are satisfied that any dues are really payable from the Petitioner which are collectable as public demands from him, our quashing the present certificate shall not stand in the way of raising a fresh certificate in accordance with law. The writ application is allowed with costs. Hearing fee Rupees one hundred. K.B. Panda, J. 6. I agree.