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1990 DIGILAW 111 (PAT)

State Of Bihar v. Bera Colliery Company (P) Ltd

1990-03-17

S.B.SINHA

body1990
Judgment 1. This First Appeal arises out of a judgment and decree dated 31-1-1984 passed by Shri Eric Mechyari, First Additional Subordinate Judge, Dhanbad, in Money Suit No. 51/13/14 of 1976-79-82 decreeing the plaintiff respondents suit against the appellants. 2. The facts of the case lie in a very narrow compass. 3. The plaintiff was the owner of a colliery commonly known as Bera Colliery. 4. It is admitted that the said colliery was required to pay rent and royalty to the State of Bihar in terms of the provisions contained Mines and Minerals (Regulation and Development) Act 1957 and Mineral Concessions Rules 1960. 5. The President of India in exercise of its power conferred upon it under Art. 123(1) of the Constitution of India promulgated an Ordinance known as Coal Mines (Taking Over of Management) Ordinance 1973 which came into force with effect from 31-1-1973; whereby and whereunder the management of collieries mentioned in the schedule appended to the said ordinance including the aforementioned Bera Colliery vested in the Central Government. The said Ordinance was later on repealed and replaced by a Parliamentary Act known as Coal Mines (Taking Over of Management) Act 1973 which was given a retrospective effect and retroactive operation with effect from 31-1-1973. The Central Government in exercise of its power conferred upon the aforementioned Act/ Ordinance issued a notification in terms whereof the management of the aforementioned Bera Colliery vested in M/s. Bharat Cocking Cal Ltd. M/s. Bharat Cocking Coal Ltd. admittedly as the custodian of the aforementioned Mines took over charge of the said colliery and had been realising the dues of the said colliery from its customers and had also been carrying on coal mining business as on owner thereof. The Parliament, thereafter, enacted Coal Mines (Nationalisation) Act 1973 which came into force with effect from 1-5-1973. 6. Allegedly the defendant No. 3 issued a demand notice on the defendant No. 1 for a sum of Rs. 2,28,323.23 p. purported to be towards arrears of royalty and commission towards the despatches of coal of the aforementioned Bera Colliery. 7. Admittedly the defendant No. 3, the District Mining Officer, is authorised by the defendant No. 2 to realise royality and commission in respect of the said colliery. 8. 2,28,323.23 p. purported to be towards arrears of royalty and commission towards the despatches of coal of the aforementioned Bera Colliery. 7. Admittedly the defendant No. 3, the District Mining Officer, is authorised by the defendant No. 2 to realise royality and commission in respect of the said colliery. 8. According to the plaintiff, although the defendant No. 2 merely issued a demand notice upon the defendant No. 1 for payment of a sum of Rs. 2,28,323.23 p., the defendant No. 1 allegedly made payment of a sum of Rs. 3,26,738.06 p. 9. Having come to learn about the excess payment made by the defendant No. 1, the plaintiff made a request to the defendants through defendant No. 3 to refund the said amount. 10. In the aforementioned suit, the defendant No. 1 filed written statement wherein it took the stand that during the management period i.e. for the period 31-1-1973 to 30-4-1973 a sum of Rs. 1,03,328.00 became payable towards royalty and commission and the balance sum of Rs. 1,98,752.81 p. had been adjusted towards the arrear royalty and commission for the pretake over period of the said colliery for which plaintiff did not raise any protest. According to the defendant No. 1, no extra amount has been paid on account of the royalty during the management period. It was further alleged that if there was any mistake in the accounting for the pretake over period that is a matter which ought to have been settled between the plaintiff and the defendant 2. 11. In the said suit the defendant Nos. 2 and 3 filed a joint written statement wherein the said defendants admitted that a demand a sum of Rs. 2,28,323.23 p. was made. According to the said defendants, the defendant No. 1 Bharat Cocking Coal Ltd. tendered a challan for Rs. 27 lakhs in March 1973 towards royalty and interest etc. for the different collieries under its management. 12. In Paragraph-7 of the written statement, defendant Nos. 2 and 3 gave the details of demand in the following terms: - Royalty Interest Total Dues upto 31-12-1972 Rs. 1,00,337.98 2006.74 1,02,344.72 Dues upto 30-4-1973 Rs. 1,27,985.25 ---- 1,27,985.25 Rs. 2,28,323.23 2006.74 2,30,329.97 p. @@@ According to the said defendants, the plaintiff is not entitled to refund of any amount. 13. In Paragraph-7 of the written statement, defendant Nos. 2 and 3 gave the details of demand in the following terms: - Royalty Interest Total Dues upto 31-12-1972 Rs. 1,00,337.98 2006.74 1,02,344.72 Dues upto 30-4-1973 Rs. 1,27,985.25 ---- 1,27,985.25 Rs. 2,28,323.23 2006.74 2,30,329.97 p. @@@ According to the said defendants, the plaintiff is not entitled to refund of any amount. 13. Upon the aforementioned pleadings of the parties, the learned Court below framed the following issues: - I S S U E S "(1) Has the plaintiff any cause of action? (2) Is the suit maintanable? (3) Is the suit barred under the provisions of the Coal Mines (Nationalisation) Act? (4) Is the plaintiff entitled to the claim as prayed for? (5) Is the suit bad for want of valid, adequate and sufficient notice under Sec. 80 C.P.C.? (6) To what relief or reliefs if any, is the plaintiff entitled? 14. Before the learned court below, issue Nos. 1 and 5 were not pressed. 15. The learned Court below took up issue Nos. 1, 2, 4 and 6 together and came to the conclusion that the defendant Nos. 2 and 3 on their own showing, had realised an excess amount of Rs. 98,414.83 p. and it further held that as the defendant Nos. 2 and 3 were not entitled to any interest as claimed by it amounting Rs. 2006.75 and the plaintiff is thus entitled to a decree as against the defendant Nos. 2 and 3 to the extent a sum of Rs. 98,414.83 p. The learned Court below, however, held that as the defendant No. 1 M/s. Bharat Cocking Coal Ltd. did not pay the aforementioned excess sum to the defendant Nos. 2 and 3 mala fide, no liability can be fastened upon it. 16. The State of Bihar and District Mining Officer, Dhanbad, who were arrayed as the defendant Nos. 1 and 3 in the aforementioned suit, have preferred this appeal. 17. 2 and 3 mala fide, no liability can be fastened upon it. 16. The State of Bihar and District Mining Officer, Dhanbad, who were arrayed as the defendant Nos. 1 and 3 in the aforementioned suit, have preferred this appeal. 17. Before proceeding with this case further, it may be mentioned that on 9-2-1990 after the case was heard for sometime, an adjournment was granted in order to enable the parties to obtain instructions as to whether in relation to the self-same matter any claim was filed either by M/s. Bharat Cocking Coal Ltd. against the plaintiff-respondent or by the State of Bihar/District Mining Officer before the Commissioner of payment at Dhanbad in terms of S. 20 provision of Coal Mines (Nationalisation) Act 1973. 18. Mr. R. K. Chowdhury the learned Government Pleader No. 1 that the suit was not maintainable inasmuch as the notice served upon the defendant Nos. 2 and 3 purported to be under S. 80 of the Code of Civil Procedure was not valid. The learned counsel further submitted that as the said notice was addressed to the State of Bihar only and not to the Secretary of the concerned Ministry or the Collector of the District, as is required under S. 80 of the Code of Civil Procedure, the said notice cannot be said to be a valid one. The learned counsel further submitted that in any event as M/s. Bharat Cocking Coal Ltd. has made a lump sum payment towards the royalty and commission for a number of collieries, the appellants cannot be said to be responsible for the same and as such they are not liable to refund the alleged excess payment. Re-Contention: - 1 19. As noticed hereinbefore, the defendants No. 2 and 3 did not press issue No. 5 before the learned Court below. The learned Court below also found that a notice under S. 80 of the Code of Civil Procedure was sent to the defendants under registered cover with A/D. In this situation, in my opinion in a benevolent litigant, the State should not be permitted to raise the question about the alleged invalidity of the notice under S. 80 of the Code of Civil Procedure. 20. 20. It is now well known that the object of notice under S. 80 of the Code of Civil Procedure is to give to the Government or Public Officer concerned an opportunity to reconsider its position to decide for itself whether the claim of the plaintiff should be accepted or not. It is further well known that it is duty of the State to receive the notice under Sec. 80 of the Code of Civil Procedure and be responsive, thereto to avoid an unnecessary litigation. Reference in this connection may be made to Raghunath Das V/s. Union of India reported in AIR 1969 SC 674 : (1969 All LJ 570) and State of Punjab V/s. M/s. Geeta Iron and Brass Works Ltd. reported in AIR 1978 SC 1608 . 21. In P.P. Abunbacker V/s. The Union of India reported in AIR 1972 Kerala 103. V. R. Krishna Iyer, J. stated that role of the State as a litigant in the following terms: - at pages 107 and 108 of AIR 1972 Kerala. "The State, under our Constitution, undertakes economic activities in a vast and widening public sector and inevitable gets involved in disputes with private individuals. But it must be remembered that the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook; for the States interest is to meet honest claims, vindicate a substantial defence and never to score a technical point or overreach a weaker party to avoid a just liability or secure an unfair advantage, simply because legal devices provide such an opportunity. The State is a virtuous litigant and looks with in concern on immoral forensic successes so that if on the merits the case is weak, Government shows a willingness of prestige and other lesser motivations which move private parties to fight in Court. The lay-out on litigation costs and executive time by the State and its agencies is so staggering these days because of the large amount of litigation in which it is involved that a positive and wholesome policy of cutting back on the volume of law suits by the twin into forensic show-downs where a reasonable adjustment is feasible and ever offering to extinguish a pending proceeding on just terms, giving the legal mentors of government some initiative and authority in his behalf. I am not indulging in any judicial homily but only echoing the dynamic national policy on State litigation evolved at a Conference of Law Ministers of India way back in 1957. This second appeal strikes me as an instance of disregard of that policy". V.R. Krishna Iyer J. again reiterated the duties of the State as a litigant by reiterating the aforementioned observations of the Kerala High Court in Dilbagh Rai Jerry V/s. Union of India reported in AIR 1974 SC 130 . 22. In any event the Code of Civil Procedure (Amendment) Act 1976 has brought about a drastic change with regard to the dismissal of the suit for non-service of valid notice, by inserting Sub-sec. (3) Sec. 80 of the Code of Civil Procedure which reads as follows : - "No suit instituted against the government or against a public officer in respect of and act purporting to be done by such public officer in his official capacity shall be dismissed merely by reason of any error of defect in the notice referred to in Sub-sec. (1), if in such notice. (a) the name, description and the residence of the plaintiff had been given as to enable the appropriate authority or the public officer to identify the persons giving the notice and such notice had been delivered or left at the officer of the appropriate authority specified in sub-sections (1) and (b) the cause of action and the relief by the plaintiff had been substantially indicated. 23. Further it is not the case of the appellants that the defendant No. 3, District Mining Officer, Dhanbad, did not receive any notice. The written statement has been filed on behalf of the State of Bihar and the District Mining Officer, Dhanbad, and the said written statement has been signed and verified by the District Mining Officer, Dhanbad. The appellant, therefore, has not been able to show that they were prejudiced in any manner whatsoever as allegedly the notice was not addressed to a secretary to the Government or the Collector of the District. 24. It may be noticed that the notice under S. 80 of the Code of Civil Procedure is to be addressed to the State but the same may be delivered to or left at the address of the Secretary to the Government or the Collector of the District. 25. 24. It may be noticed that the notice under S. 80 of the Code of Civil Procedure is to be addressed to the State but the same may be delivered to or left at the address of the Secretary to the Government or the Collector of the District. 25. In the instant case, admittedly the District Mining Officer, Dhanbad, was the authorised agent of the State of Bihar to realise royalty etc. on its behalf in terms of the provisions of Mines and Minerals (Regulation and Development) Act 1957 and Mineral Concession Rules 1960. 26. The defendant No. 3 did not examine himself to say that he did not receive the said notice. 27. It is also not the case of the defendant Nos. 2 and 3 that the department of mines did not receive the notice addressed to the State of Bihar. Further it is also not the case of the appellant that even the defendant No. 3 did not inform the concerned ministry of the State of Bihar about the claim of the plaintiff after receiving a copy of the notice under S. 80 of the Code of Civil Procedure. The District Mining Officer himself was the delegated authority for dealing with the said matter and further as all the informations relating to the claim of the plaintiff were lying in the office of the defendant No. 3, in my opinion, it cannot be said that defendant Nos. 2 and 3 were prejudiced in any manner whatsoever by reasons of the fact that the notice was not addressed to the concerned Secretary of the State of Bihar. Re-Contention: - 2 28. In this case the basic facts are not disputed by any of the parties. 29. The plaintiff has examined Jawala Prasad Sinha who proved a letter dated 25-11-1974 (Ext. 1) from the District Mining Officer (East) to the defendant No. 1 Bharat Cocking Coal Ltd. showing adjustment of Rs. 27 lakhs paid by Bharat Cocking Coal Ltd. in respect of royalty against non-coking coal mines of Jharia Coal Field for the quarter ending December 1972. 30. 1) from the District Mining Officer (East) to the defendant No. 1 Bharat Cocking Coal Ltd. showing adjustment of Rs. 27 lakhs paid by Bharat Cocking Coal Ltd. in respect of royalty against non-coking coal mines of Jharia Coal Field for the quarter ending December 1972. 30. It is further the case of the plaintiff that royalty up to the quarter ending September 1971 was paid by the plaintiff company prior to take over of the management of the colliery by the Central Government or by M/s. Bharat Cocking Coal Ltd. This fact has been proved by P.W. 3, Brahmdeo Bhal, who was agent of Bera Colliery at the material time. The said P.W. 3 has also proved the demand notice in respect of the aforementioned colliery showing that a sum of Rs. 1,26,108.39 was demanded for the period from 1-1-1972. The said P.W. 3 has also proved statement of royalty (Ext. 5) on the basis of despatches of coal for the period from 7-7-1972 to 30-9-1972. 31. The said statement was forwarded under a letter (Ext. 6) showing that a sum of Rs. 1,12,684.00 was paid as royalty in respect of the said colliery for the aforementioned period. 32. It was further alleged that the defendant No. 2 M/s. Bharat Cocking Coal Ltd. submitted that return of despatches of coal by the said colliery for the period from 1-10-1972 to 30-4-1973. 33. The said witness has proved a statement received from the office of the District Mining Officer, Dhanbad showing that a sum of Rs. 2,28,323.23 p. were the dues towards royalty etc. for the period 1-10-1972 to 30-4-1973 and a sum of Rs. 2006.74 was charged by way of interest i.e. total sum of Rs. 2,30,323.97 was demanded as dues of the said colliery but M/s. Bharat Cocking Coal Ltd. paid a sum of Rs. 3,26,738.06 p. which was in excess of the sum demanded from it. 34. Even assuming that the said Ext. 7 was not admissible in evidence, as was contended by the defendants before the Court below, it may be mentioned the basic facts have not been denied in the written statement. The defendants No. 2 and 3 in their written statement admitted the aforementioned position that a sum of Rs. 98,414.84 has been realised in excess from the said colliery. 35. In the written statement the defendant Nos. The defendants No. 2 and 3 in their written statement admitted the aforementioned position that a sum of Rs. 98,414.84 has been realised in excess from the said colliery. 35. In the written statement the defendant Nos. 2 and 3 further admitted a sum of Rs. 1,00,337.98 p. was demanded as royalty and commission up to 30/12/1972 and the defendant No. 1 accepted in their written statement that a sum of Rupees 1,98,752.80 P was adjusted by the defendant No. 3 towards royalty and commission for the pretake over period. It is, therefore, clear that the defendants thus admitted that a sum of Rs. 98,414.83 P had been realised in excess. 36. Despite the aforementioned admission made in the written statement, it is unfortunate that the defendant neither examined any witness nor came out with the documents which were in their custody. M/s. Bharat Cocking Coal Ltd. is also a State within the meaning of Article 12 of the Constitution of India. 37. During the period of Management, M/s. Bharat Cocking Coal Ltd. was managing the affairs of the said colliery on behalf of its owner. Its position was, therefore that of a trustee and thus it was obligatory on its part to deal with the affairs of the said colliery as a prudent manager and it was expected that it would run the colliery as if it was itself the owner thereof and in a prudent manner. This case depicts a saddest state of affairs. As a State within the meaning of Article 12 of the Constitution it had a duty to act fairly and thus I do not find any justification of the stand taken by it in the suit. In my opinion the defendant No. 1 should have rendered all assistance to the plaintiff to recover the amount by producing all the relevant facts and documents before the Court. 38. Further after taking over the management of colliery by M/s. Bharat Cocking Coal Ltd. it must be presumed that all the books of accounts and the relevant documents in relation to the said colliery had also been handed over it by the plaintiff in terms of provisions Coal Mines (Taking over Management) Act 1973 and Coal Mines (Nationalisation) Act 1973. It was, therefore, obligatory on the part of the said defendant to produce the documents which were in its custody and/or under its control. 39. It was, therefore, obligatory on the part of the said defendant to produce the documents which were in its custody and/or under its control. 39. The Supreme Court recently in National Insurance Co. Ltd. V/s. Jugal Kishore reported in (1988) 1 SCC 626 : ( AIR 1988 SC 719 ) deprecated the practice of the State to withhold the documents which are in their possession / custody, in the following terms at page 723; AIR 1988 SC: - "This Court has consistently emphasised that it is the duty of the party which is in possession of a document which would be helpful in doing justice in the case to produce the said document and such party should not be permitted to take shelter behind the abstract doctrine of burden of proof. This duty is greater in the case of instrumentalities of the State such as the appellant who are under an obligation to act fairly." 40. As noticed hereinbefore Supreme Court even in Dilbag Rai Jerrys case (supra) has deprecated the practice of the State in raising technical pleas in order to evade the just claim of the citizens. 41. Taking into consideration all the facts and circumstances of the case, I am of the view that there is no merit in this appeal which is accordingly dismissed with costs. Appeal dismissed.