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2001 DIGILAW 797 (PAT)

Birendra Kumar Das v. State Of Bihar

2001-08-29

RADHA MOHAN PRASAD

body2001
Judgment Radha Mohan Prasad, J. 1. In this writ petition, petitioner is aggrieved with the order dated 2.6.1997/3.6.1997 passed by the Certificate Officer, Katihar (Respondent no. 2) in Certificate Case No. 595/94-95, contained in Annexure-3, whereby and whereunder the petitioner has been directed to repay 50% of the total amount, of loan with interest thereon at the rate of 12% from the date of filing of the certificate case. 2. The case of the petitioner, in brief, is that the petitioner and his co-villager Ratan Deo Mehta entered into a contract on 1.3.1993 for running a brick kiln in the name and. style of M/s Koshi Bricks. The aforesaid partnership firm was granted a loan of Rs. 4,62,000/- by Katihar District Central Co-operative Bank Ltd. (Respondent no. 4) showing Rs. 2,20,000/- as term loan and Rs. 2,42,000/- as working capital. Petitioners case is that at the relevant time i.e. in the year 1993 as he was a regular student of Intermediate, the account of the firm M/s Koshi Bricks was practically operated by Ratan Deo Mehta, who was, in fact, working partner of the petitioner. A requisition vide Annexure-1 was submitted before the Certificate Officer Katihar by the Respondent-Cooperative Bank for realisation of the amount of loan to the extent of Rs. 1,42.000/-, and on the basis of the said requisition Certificate Case No. 595/94-95 was started. It is stated that the order dated 20.3.1995 mentions that the requisition for realisation of Rs. 1,42,100/- was from Ratan Deo Mehta only and accordingly notice under Section 7 of the Public Demand Recovery Act, hereinafter referred as the Act was issued and served upon him, and on 25.4.1997 he submitted a petition under Section 9 of the Act, which was admitted for hearing. A copy of the said petition was sent to the petitioner a!so alOngwith the abstract of the order dated 25.4.1997 (Annexure-2). On 17.5.1997 petitioner submitted his reply to the petition submitted by Ratan Deo Mehta and thereafter on 2.6.1997/3.6.1997 the impugned order (Annexure-3) was passed. 3. A counter affidavit has been filed on behalf of Respondent nos. A copy of the said petition was sent to the petitioner a!so alOngwith the abstract of the order dated 25.4.1997 (Annexure-2). On 17.5.1997 petitioner submitted his reply to the petition submitted by Ratan Deo Mehta and thereafter on 2.6.1997/3.6.1997 the impugned order (Annexure-3) was passed. 3. A counter affidavit has been filed on behalf of Respondent nos. 3 & 4, in which it is stated that the account of the firm M/s Koshi Bricks has been operated by both the partners with joint signature through cheques and the account was opened on request of both and all the documents were executed by the petitioner and the account has also been operated with full signature of both the partners, and the only intention of the petitioner is to linger the matter. 4. A counter affidavit has also been filed on behalf of District Co-operative Officer-cum-Certificate Officer, Katihar (Respondent no. 2), in which it has been stated that certificate proceeding was initiated at the instance of Katihar District Central Co-operative Bank Limited against the proprietor of Koshi Bricks, Korha, namely, Ratandeo Mehta and Birendra Kumar Das; and that a requisition under Section 5 of the Act was filed by the creditor Bank and outstanding balance was confirmed by the M.D. of the said Bank in appropriate form no. 2 and after being satisfied from the said requisition Respondent no. 2 in the capacity of Certificate Officer accepted the said certificate proceeding under Section 60 of the Act on 20.3.1995 and allowed to enter the case in Register no. 10 bearing certificate case No. 595/94-95, and, as such, it is in continuity of the relevant provisions of the Act. It is stated that notice under Section 7 of the Act alongwith a copy of certificate in the prescribed form was issued in the name of Ratandeo Mehta and Birendra Kumar Das both and the said notice having been served on one of the partner Ratandeo Mehta, shall be deemed to have been served upon Birendra Kumar Das also. It is stated that under Section 11 of the Act Respondent no. 2 is competent to amend a certificate, and the creditor Bank as well as the certificate-debtor admitted that a sum of Rs. 4,62,000/- actually became overdue to the firm in which both the certificate debtors are partners having fifty per cent liability in profit and loss each as per registered partnership deed . 2 is competent to amend a certificate, and the creditor Bank as well as the certificate-debtor admitted that a sum of Rs. 4,62,000/- actually became overdue to the firm in which both the certificate debtors are partners having fifty per cent liability in profit and loss each as per registered partnership deed . and accordingly Respondent no. 2 in the capacity of Certificate Officer altered the claim of the creditor Bank from. Rs. 1,42,100/- to Rs. 4,62,00.0/- with the consent of both the parties. 5. It is submitted by the learned counsel appearing on behalf of the petitioner that as no notice under Section 7 of the Act was ever given to the petitioner and no amendment in the certificate was ever made in terms of the provisions of Section 11 of the Act, the petitioner cannot be held liable for fifty per cent of the total amount of loan. It is further submitted that as the documents of loan (Annexure-4 series) are completely blank, the. same could not have been acted upon. Moreover, according to the learned counsel as there was no requisition in Form 2 of Schedule II as required under Section 5 of the Act nor there has been any agreement between the petitioner and the Respondent-Bank that the loan amount shall be recoverable as public demand and thus, does not fall within the purview of Schedule I, the very initiation of the proceeding itself is wholly without jurisdiction and the impugned order is fit to be quashed. 6. It is contended by the learned counsel appearing on behalf of the petitioner that it is not a case covered by the public demand as defined under Section 3(6) of the Act in absence of a written instrument agreeing for being recoverable as public demand as per requirement in item 15 of Schedule I. Learned counsel for the petitioner referred to paragraph 23 of the writ petition which has only been answered by the Branch Manager and the Bank (Respondent nos. 3 & 4) in paragraph 16 of their counter affidavit. 7. In paragraph 23 of the writ petition, petitioner has specifically pleaded that there has not been any agreement by the petitioner by a written, instrument that the amount of loan shall be recoverable as public demand. While answering the said statement the Branch Manager and the Bank (Respondent nos. 3 & 4) in paragraph 16 of their counter affidavit. 7. In paragraph 23 of the writ petition, petitioner has specifically pleaded that there has not been any agreement by the petitioner by a written, instrument that the amount of loan shall be recoverable as public demand. While answering the said statement the Branch Manager and the Bank (Respondent nos. 3 & 4) in paragraph 16 of their counter affidavit have simply stated that they have taken right steps for recovery of loan. The statement made in paragraph 23 of the writ petition has not been denied. The District Co-operative Officer-cum-Certificate Officer (Respondent no. 2) also in his counter affidavit has not claimed that there was any written instrument for recovery of the amount as public demand. The definition of public demand as contained in Section 3(6) of the Act means any arrear or money mentioned or referred to in Schedule I, and includes any interest which may, by law, be chargeable thereon upto the date on which a certificate is signed under Part II. Item 15 of Schedule I deals with any money payable to the Bank specified in column (2) of the first schedule to the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (Act V of 1970); or a company or a corporation or a statutory body, including a registered society carrying on financial transactions, owned by or in which, Government has a majority of shares or which is managed by an authority appointed under any law for the time being in force, in respect of which the person liable to pay the same has agreed, by a written instrument that it shall be recoverable as public demand. It is not clear from the pleading as to whether the Bank is covered by item 15 of the first Schedule, however, in absence of the denial of the statement made in paragraph 23 of the writ petition, this Court finds it difficult to out-right reject the contention of the learned counsel for the petitioner. The question for consideration is as to whether the said proceeding can be initiated in respect of the loan by the Respondent-Bank in absence ot written- instrument in terms of item 15 of 1st Schedule, which, in my opinion, can appropriately be examined by the Certificate Officer. The question for consideration is as to whether the said proceeding can be initiated in respect of the loan by the Respondent-Bank in absence ot written- instrument in terms of item 15 of 1st Schedule, which, in my opinion, can appropriately be examined by the Certificate Officer. It is needless to point out that the aforementioned provisions have been declared intra-vires by a decision of this Court in the case of Sawar Mal Choudhary V/s. State Bank of India and ors., reported in 1986 PLJR 660 . 8. In this view of the matter, this Court finds it to be fit and proper if the said question is reconsidered by the Certificate Officer and. thus, does not feei inclined to go into any other question raised on behalf of the petitioner. It is made clear that before doing so the Certificate Officer shall give an opportunity of hearing to the petitioner as also the Respondent- Bank and further allow the parties to raise all questions including the question mentioned hereinbefore. 9. In the result, writ application is allowed and the order as contained in Annexure-3 is set aside. The matter is remitted back to the Certificate-Officer for fresh consideration in accordance with law.