Sankar Lal Agarwalla v. Union of India — 1976 DIGILAW 19 (CAL)

JUDGMENT The judgment of the Court was as follows: Mitra, C. J: This Rule has been referred to a larger Bench by Mr. justice P.K. Banerjee by a judgment delivered on 17 July, 1974 on the ground that there was a difference of opinion between Mr. Justice Janah in Civil Rule No. -2059 (W) of 1971 and Mr. Justice Amiya Kumar Mookerji in Matter No. 333 of 1966 as to whether a certificate-debtor is liable to pay interest on certificate-debts arising out of the Revenue Recovery Act, 1890 read with Bengal Public Demands Recovery Act, 1913. 2. The broad facts of the case are that on the 26 June 1967 the Collector of Kottayam in Kerala forwarded an alleged requisition under the Revenue Recovery Act for the sum of Rs.2,23,242.64 to the Collector of 24-Parganas on account of cess on rubber payable by M/s. Olympia Rubber Works. The Collector of Kottayam stated: "Subject to the provisions of the Revenue Recovery Act, 1890, the said sum is recoverable by you as if it were an arrear of land revenue... ...," The Collector of 24-Parganas in complying with the requisition demanded of the certificate-debtor not only the said sum of Rs.2,23.242.64 but also interest thereon after payment of the principal amount. The petitioners before us objected to the payment of interest. But the Collector rejected the objection on 15 May, 1970 on the basis of a decision of the Additional Member, Board of Revenue, West Bengal, dated 15 March, 1970. 3. The petitioners before us challenged this order of rejection in an application under Article 226 of the Constitution. The application, as we have said, came up for hearing before Mr. Justice P. K. Banerjee and the learned Judge thought it fit to refer the matter to a larger Bench. 4. Mr. Arun Kumar Dutt (Senior) appearing on behalf of the petitioners has drawn our attention to several statutory provisions, Section 12 of the Rubber Act, 1947 provides for imp05ition of rubber cesses. Under sub-section (2) of section 12 the duty of excise levied under sub-section (1) Shill be collected by the Rubber Board constituted under the Act in accordance with rules made in this behalf. Under sub• section (3) of section 12 the duty may be recovered from the owner or the manufacturer, as the case may be, as an arrear of land-revenue. Under sub• section (3) of section 12 the duty may be recovered from the owner or the manufacturer, as the case may be, as an arrear of land-revenue. Section 1 of the Interest Act, 1839 gives power to the Court adjudicating a claim to allow interest. In other words, the Court which decides a claim can make an order for payment of interest. In (1) Vithal Dass v. Rup Chand and others, AIR 1967 SC 188 at page 190 in paragraph 4 it has been observed that interest may be awarded for the period prior to the date of institution of the suit if there is art agreement for payment of interest at the fixed rate or if interest is payable by the usuage of trade having the force of law, or under the provisions of any substantive law as for instance section 80 of the Negotiable Instruments Act or section 23of the Trusts Act. 5. Mr. Dutt then invited us to consider a few provisions of the Revenue Recovery Act, 1890. Section 3 of this Act makes provisions for recovery of public demands by enforcement of process in other districts than those in which they become payable. Under clause (b) of subsection (1) of section 3 the amount payable by the defaulter and the account on which it is due has to be stated in the Collector's certificate. Under sub-section (3) of section 3 the Collector of the other district shall on receiving the certificate, proceed to recover the amount stated therein as if it were an arrear of lewd revenue which has accrued in his own district. In other words, according to Mr. Dutt, the Collector of the other district has no jurisdiction to realise any amount other than the amount mentioned. And the amount mentioned is to be treated as if it were an arrear of land-revenue. By the Revenue Recovery (Amendment) Act, 1966 a new section, namely, section 3A was introduced enabling any certificate officer in the district to exercise all the powers and perform all the duties and functions of the collector under the Act. 6. Learned Counsel has then referred to the Bengal Public Demands Recovery Act, 1913 which makes provisions for recovery of public demands within the area of its operation. 6. Learned Counsel has then referred to the Bengal Public Demands Recovery Act, 1913 which makes provisions for recovery of public demands within the area of its operation. Section 4 of this Act provides that when the certificate officer (which under section 3 also means a Collector) is satisfied that any public demand payable to the Collector is due, he may sign a certificate in the prescribed form, stating that the demand is due, and shall cause the certificate to be filed in his office Section 5 prescribes, inter-alia, that when any public demand payable to any person other than the Collector is due, such person may send to the certificate officer a written requisition in the prescribed form. Section 6 lays down, inter alia, that on receipt of any such requisition the certificate officer, if he is satisfied that the demand is recoverable and that recovery by suit is not barred by law, may sign a certificate, in the prescribed form, stating that the demand is due; and shall cause the certificate to be filed in his office. Section 16 provides, inter alia, that there shall be recoverable, in the proceedings in execution of every certificate filed under this Act, that is, the Bengal Public Demands Recovery Act, interest calculated in such manner as may be prescribed upon the public demand to which the certificate relates at the rate of six and a quarter per Centum per annum from the date of the signing of the certificate up to the date of realization. 7. On the basis of the above statutory provisions and the said decision of the Supreme Court learned counsel for the petitioners has made the following points. (1) To view of the specific provisions of section 3 of the Revenue Recovery Act, 1890 particularly sub-section (3) thereof the Collector of the other district has no jurisdiction to recover any amount other than the one stated or mentioned in the certificate sent to the Collector of the other district. If the certificate is for amount X the Collector cannot recover X+I. (2) Section 16 of the Bengal Public Demands Recovery Act, 1913 can be invoked for the purpose of realisation of interests or costs by the Collector or the Certificate Officer provided that the certificate has been filed before him under the provisions of sections 4, 5 or 6 of the Bengal Public Demands Recovery Act. (3) To the present case since no certificate under the Bengal Public Demands Recovery Act has been filed, the Certificate Officer has no jurisdiction to recover any interest and he has to confine himself only to the amount mentioned in the certificate, (4) The Rubber Act under which the cess is imposed does not provide for levy or imposition or collection of interest and when the certificate-holder has not claimed such interest the Certificate Officer has no jurisdiction to claim any interest. (5) A certificate under the Revenue Recovery Act is not a certificate under the Bengal Public Demands Recovery Act. (6) Interest could be claimed and granted or allowed under the Interest Act only by a Court adjudicating a claim and not by any executive machinery or any executive authority. 8. We are unable to accede to these contentions of Mr. Dutt. We have seen that under section 5 of the Bengal Public Demands Recovery Act, 1913 when any public demand payable to any person other than the Collector is due, such person any send to the Certificate Officer a written requisition in the prescribed form. Under sub-section (2) of section 5 every such requisition shall, inter alia, be signed and verified in the prescribed manner. When a requisition of this nature is forwarded to the Certificate Officer under the Bengal Act section 6 comes into play. The Certificate Officer, if he is satisfied that the demand is recoverable and that the recovery by suit is not barred by law, may sign a certificate in the prescribed form stating that the demand is due; and shall inter alia, cause the certificate to be filed in his office. There are also provisions for service of notice and copy of certificate on the certificate-debtor. These provisions are on section 7 of the Bengal Act. Section 7 provides that when a certificate has been filed in the office of a Certificate Officer under inter alia, section 6, he shall cause to be served upon the certificate-debtor, in the prescribed manner, a notice in the prescribed form and a copy of the certificate. These provisions are on section 7 of the Bengal Act. Section 7 provides that when a certificate has been filed in the office of a Certificate Officer under inter alia, section 6, he shall cause to be served upon the certificate-debtor, in the prescribed manner, a notice in the prescribed form and a copy of the certificate. These provisions, in our view, make it clear that when any public demand is payable to any person other than a Collector under the Bengal Act the person to whom it is payable has to send a requisition either to the Collector or to the Certificate Officer under the Bengal Act. The Certificate Officer under the Bengal Act on receipt of the requisition upon being satisfied as to the recoverability of the amount due signs a certificate and files the certificate in his office and a copy of the certificate which is filed in his office is served on the certificate-debtor along with a notice. There can be no doubt that a certificate of this nature which is filed in the office of the Certificate Officer under the Bengal Act is a certificate filed under the Act and as such the provision of section 16 shall be attracted. In this view of the matter the claim for interest appears to be justified but our difficulty in this case has been created by certain observations of the Additional Member, Board of Revenue, West Bengal, in his order dated 15 March, 1970. We have said that it is this order of the Additional Member passed in another matter which has been followed by the Certificate Officer in the instant case to reject the objection to payment of interest. The Additional Member, Board of Revenue, In his order dated the 15 March, 1970 observed, inter alia, as follows: "It may, no doubt, be contended that the certificate in the present Case was notified under the PDR Act and that, therefore, section 16 providing for realisation of interest, is not attracted. but that would be offering too narrow an interpretation of the spirit of the enactment. but that would be offering too narrow an interpretation of the spirit of the enactment. Since section 3(3) of the RR Act, quoted earlier, enjoining the Collector on receiving the certificate to proceed to recover the amount as if it were an arrear of land revenue which had accrued in his own district, the certificate though received from elsewhere, should be treated as if it were one filed under the PDR Act itself. For the purposes of the case like the present one, the provisions of the PDR Act are virtually part and parcel of the RR Act and it can legitimately be concluded that the relevant Act does provide for the realisation of interest........." 9. Mr. Dutt strongly relied on these observation of the Additional Member, Board of Revenue, West Bengal. His contention is that in the instant case no requisition in the prescribed form was received by the Certificate Officer under the Bengal Act. Secondly, the Certificate office under the Bengal Act did not sign any certificate or file any certificate in his office. Thirdly, the Certificate Officer under the Bengal Act did not serve a copy of the certificate filed in his office on the certificate-debtor. These are all questions of fact which we do not propose to go into in this application under Article 226. We, therefore, make an order of remand to the Respondent No.5, namely, the Collector of 24-Parganas, Alipore, to inquire into these matters and upon hearing the certificate debtor give his findings on the following facts. (i) Whether a requisition as required by section 5 of the Bengal Public Demands Recovery Act, 1913 was forwarded to the Certificate Officer under the said Act. (ii) Whether the Certificate Officer under the Bengal Act had signed any certificate as required by section 6 and had filed the said certificate in his office, (iii) Whether the copy of the certificate filed in the office of the Certificate Officer was served on the certificate-debtor. 10. If the Respondent No.5 finds that the provisions of the above sections of the Bengal Public Demands Recovery Act have been complied with he would dispose of the petitioners objection to payment of interest in accordance with law. In otherwords, if he finds that the provisions of the above sections have been complied with in the instant case he may reject the objection to the payment of interest. 11. In otherwords, if he finds that the provisions of the above sections have been complied with in the instant case he may reject the objection to the payment of interest. 11. The Rule is made absolute as above. Let appropriate writs issue in accordance with this judgment. There will be no order for costs. Datta J. : I agree.