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2004 DIGILAW 334 (PAT)

Mritunjay Kumar Singh v. State Of Bihar

2004-03-23

RADHA MOHAN PRASAD

body2004
Judgment 1. In this writ petition, the petitioners have sought for quashing of the certificate proceeding being Certificate Case No. BICICO/10 of 2002 pending before the Certificate Officer of the Bihar State Credit & Investment Corporation Ltd. purporting to be under the provisions of the Bihar & Orissa Public Demands Recovery Act, 1914. The petitioners have 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 petitioners submitted that this question has been considered by this Court in the case of Nav Bharat Link Chain Manufacturers Pvt. Ltd. & Ors. vs. 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 realisation 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 I, 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 petitioners before this Court are the guarantors 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 I of the Public Demands 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. 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 guarantors also there is no such stipulation in the guarantee furnished by them. 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 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 borrowers/petitioners in an appropriate proceeding before the appropriate forum.