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2008 DIGILAW 1614 (PAT)

Associated Cement Companies ltd. , Through Its Manager Marketing, patna Branch, J. v. B. sastry, 2nd Floor "samridhi" s. P. Verma Road, P. S. -kotwali, District-patna VS State Of Bihar Through Its Secretary Revenue, Old Secretariat, Patna

2008-11-12

AJAY KUMAR TRIPATHI

body2008
Judgment Ajay Kr.Tripathi, J. 1. Petitioner is a Public Limited Company and is seeking quashing of certificate proceeding being Misc. Case No. 100 of 1997-98 which is pending before the Certificate Officer, Munger, respondent no. 3. The notice issued to the petitioner is contained in Annexure-1 and the demand as per the notice is for Rs. 3,69,600/-. 2. The background to the present dispute is that the Deputy Development Commissioner, Munger placed an order for supply of 2315 Metric tons of non-levy cement in terms of the letter no. 2692 dated 2.11.1989 as contained in Annexure-2 to the writ application. The cement in question was to be supplied through various local dealers of the Company and in lieu of the said supply order a sum of Rs.28,68,285/- by way of demand draft at the rate of Rs. 2315 Metric tons was made over to the company. Based on the communication contained in Annexure-2 steps were taken by the Company to supply cement and 1470 Metric tons of cement came to be supplied by 5.4.1999. Balance of the cement amount could not be supplied for certain reasons indicated in the writ application which included the fact that there was revision in the price of the cement due to the Union Budget which pushed up the cost of cement. Petitioner thereafter communicated with the respondents requesting price escalation for supply of balance 845 metric tons of cement and the same was accepted by the respondents as would be evident from Annexure-5. The balance 845 metric tons of cement could not be supplied in toto, therefore a sum of Rs. 8,80,000/- was refunded by the Company to the respondents in the year, 1992. The matter came to rest thereafter till the petitioner suddenly received a notice dated 19.8.1997 contained in Annexure-1 from the Certificate Officer for a sum of Rs. 3,69,600/-. This amount was supposed to be interest on the delayed refund of the money which the respondents were claiming from the petitioner. Petitioner was, therefore advised to challenge this notice since it is dubbed as patently illegal and beyond the ambit of Public Demand Act. 3. 3,69,600/-. This amount was supposed to be interest on the delayed refund of the money which the respondents were claiming from the petitioner. Petitioner was, therefore advised to challenge this notice since it is dubbed as patently illegal and beyond the ambit of Public Demand Act. 3. Learned counsel for the petitioner submits that the notice or the proceeding in question is not maintainable for claim of interest for the reason that not every demand can be called a Public Demand and its recovery can be made under the Bihar and Orissa Public Demands Recovery Act. A perusal of Annexure-2 (the subject matter of dispute) would show that it is an order to supply and no agreement of the kind was entered between the parties stating that non-supply of cement would be treated as a public demand in case of default. It was a clear case of offer and acceptance and if there was any breach for whatever reason the remedy lay in the common law and not under the special law of Public Demand. The second contention is that even according to the notice the claim is not of any principal amount because the Company had already refunded the balance money due to non-supply of the rest of the cement. The claim is with regard to interest which the respondents have calculated in their own way without any details as to how a sum of Rs. 3,69,600/- has been reached. The third contention is that the order placed on the petitioner relates to November, 1989 but the certificate proceeding has been brought against the petitioner in the year, 1997 and therefore, a kind limitation had come into play. 4. A counter affidavit has been filed on behalf of the respondent-State where the basic facts are not disputed but their stand is that since the petitioner had failed to supply the quantity of cement within the stipulated time and the balance amount which was refunded was after a passages of time of more than two years, the development work suffered and the interest of the Government therefore got jeopardized. In was in this background that a decision was taken to file the certificate case against the petitioner for the loss of interest due to delay in refunding the money due to non-supply of cement of the balance amount. In was in this background that a decision was taken to file the certificate case against the petitioner for the loss of interest due to delay in refunding the money due to non-supply of cement of the balance amount. On the question of legality of the proceeding it has been urged that the claim of interest against the pititioner would be a public demand after an amendment has been brought about and incorporated in Schedule-1 of the Public Demands Act in the year, 1993. Reliance has been placed on the new amendment which is Clause 8-A as under: "8-A. Any outstanding loans and advances payable to State Government or to a Department or official of the State Government by any body whatsoever." 5. Another objection which has been taken is that the petitioner has not exhausted the statutory remedy first by filing the objection before the Certificate Officer but has rushed to the Court against the notice itself. 6. Learned counsel for the petitioner submits that even a plain reading of the newly incorporated Clause 8-A would show that there was neither a loan nor advance of the kind payable to State Government which can bring the present dispute within the ambit of Public Demands Act. At the best even if for the sake of argument it is accepted that there was a failure on the part of the petitioner to meet the obligation of making supply of all 2315 metric tons of cement and the petitioner had to refund money in this regard due to inability of the petitioner to meet its obligation under the supply order contained in Annexure-2, the remedy for the respondents was to move before the civil court for damages or may be raise an arbitration in this regard but they decided to take easy way out by instituting a proceeding under a special Act within whose domain the dispute does not fall squarely. 7. It is further contended that since the supply order relates to the year 1989 and the refund made in 1992 an amendment brought about in the Schedule-1 in the year, 1993 can only be prospective and not retrospective. 8. 7. It is further contended that since the supply order relates to the year 1989 and the refund made in 1992 an amendment brought about in the Schedule-1 in the year, 1993 can only be prospective and not retrospective. 8. In so far as the contention of the respondents with regard to maintainability of the writ application against the notice is concerned, it is submitted that since the forum and the remedy invoked by the respondents is misplaced and beyond the ambit of special law the petitioner has only one remedy of approaching the High Court. 9. The Court is in agreement with the petitioner on this count that since the respondent has not been able to satisfactorily make out a case that claim of interest on the refunded money for non-supply of cement comes squarely within the ambit of Public Demand Act specially Schedule-1 then the petitioner could move this Court at the stage of notice itself. If the proceedings initiated against the petitioner are beyond the competence of the certificate officer, the claim prima facie not being a Public Demand, merely because in the opinion of the certain officials of the State they were entitled to an amount of interest for delayed refund for non-supply of contracted goods, it does not become Public Demand within the definition of the Act. 10. The Court is also of the opinion that dispute of the kind raised through the forum of certificate officer is misplaced forum and the respondent authority had common law remedy available to them which has not been invoked and a kind of via-media has been adopted by them in relation to the supply order contained in Annexure-2. That being the factual and legal position, the Court comes to an opinion that the notice contained in Annexure-1 issued against the petitioner claiming certain interest with regard to the dispute is misplaced and the same deserve interference. 11. This writ application is allowed. Annexure-1 is quashed. There will be however no order as to cost.