Kartik Kumar v. Bihar State Credit & Investment Respondents Corporation Ltd.
2004-03-04
RADHA MOHAN PRASAD
body2004
DigiLaw.ai
Judgment 1. In this writ petition, the petitioner has sought for quashing of the certificate proceeding being case No.BlClCO/87 pending before the Certificate Officer of the Bihar State Credit & Investment Corporation Ltd. purporting to be under the provisions of Bihar & Orissa Public Demands Recovery Act, 1914. The petitioner has assailed the validity of the certificate proceeding on the ground of inherent lack of jurisdiction besides that it is illegal and arbitrary. 2. Learned counsel for the petitioner submitted that this question has been considered by this Court in the case of Nav Bharat Link Chain Manufacturers Pvt. Ltd. & Ors. v. The State of Bihar & Ors., reported in 2004(1) PLJR 487 and this Court relying upon the earlier judgment of this Court in the case of Sunil Kumar Mehrotra vs. State of Bihar & Ors. (C.W.J.C. No. 12155/2002) and Janardan Prasad Singh vs. The Bihar State Credit & Investment Corporation Ltd. & Ors. reported in 2003(3) PLJR 757 , held that certificate case for realization of the due or dues in regard to the term loan under the agreement cannot be instituted against the borrower Company without meeting the requirement of public demand as provided in Clause 15 of Schedule l, which provides that such money is recoverable as public demand only if the person liable to pay the same has agreed by a written instrument. 3. However, learned counsel for the respondent-BICICO submitted that the petitioner before this Court is the guarantor and not the Company and as such, the principle decided in that case may not apply in the present case. However, he fairly submitted that in the case of Sunil Kumar Mehrotra (supra) it has been held that in the absence of an agreement by the guarantors as provided in Section 3(6), Entry 15 of Schedule l of the Public Demand Recovery Act the money recoverable cannot be treated as public demand and consequently a proceeding under the said Act would not be maintainable against him. Learned counsel submitted that the matter is pending before the Division Bench in L.P.A. against the judgment in the case of Sunil Kumar Mehrotra. However, he has not been able to produce any order staying the operation of the said judgment. In the present case filed on behalf of the guarantor, also there is no such stipulation in the guarantee furnished by him. 4.
However, he has not been able to produce any order staying the operation of the said judgment. In the present case filed on behalf of the guarantor, also there is no such stipulation in the guarantee furnished by him. 4. This Court thus finds that this case is also covered by the decision in the case of Sunil Kumar Mehrotra and accordingly, this writ petition is allowed. The certificate proceeding in question in so far as it relates to the petitioner is quashed. 5. However, this order shall not come in the way of the respondents from proceeding against the borrower/ petitioner in an appropriate proceeding before the appropriate forum.