Research › Search › Judgment

Madhya Pradesh High Court · body

2008 DIGILAW 624 (MP)

Harcharan Rajpali v. Collector, Tikamgarh

2008-04-24

K.K.LAHOTI

body2008
ORDER 1. In all the aforesaid cases, recovery initiated by respondent Zila Sahkari Kendriya Bank, Tikamgarh through Revenue Recovery Certificates (hereinafter referred to as 'RRC' for short) issued by the Collector, Tikamgarh are under challenge. 2. As the common questions of law are involved in all the aforesaid cases based on similar facts, all these cases are being decided by this common order. 3. In WP No. 8707/2007, the petitioner has challenged RRC Annexure P-l, dated 18.4.2007 issued by the Collector, Tikamgarh on the ground that petitioner was an employee of Zila Sahkari Kendriya Bank, Tikamgarh (hereinafter referred to as 'Bank' for short) and was appointed as the Committee Manager in Prathmik Krishi Sakha Sahkari Samiti Maryadit, Shivpuri, Kundleshwar, District Tikamgarh. He was appointed in the year 1975 and continued in the service of the said society. He was promoted on the post of Supervisor on 2nd December, 1997 and served in the Samiti till his retirement on 31.8.2006. The petitioner received a notice from Tahsildar, Tikamgarh in respect of proceedings initiated against the petitioner on the basis of RRC issued by the Collector, Tikamgarh on 18.4.2007. The petitioner submitted his objections before the Tahsildar and thereafter filed this petition on following grounds : (1) That no show-cause notice was issued or opportunity of hearing was extended to the petitioner before issuing such an RRC. (2) That no such an amount was due against the petitioner. (3) No enquiry was conducted against the petitioner. On the aforesaid grounds the RRC for Rs.8,78,000/- has been assailed before this Court. 4. The respondent No.4 has filed reply in which it is stated that petitioner was issued a charge-sheet on 22.8.2005 as Annexure R-4-1. The departmental proceedings could not proceed as the petitioner attained age of superannuation and retired on 31.8.2006 from the post of Supervisor. In Para 6, it is stated that a detailed investigation was made by the Deputy Registrar, Cooperative Societies in respect of complaints of wide spread defalcation of financial assistance extended by respondents to various primary credit Cooperative Societies including the respondent Society in which number of employees including the petitioner were found responsible for indulging in misconduct of defalcation. In Para 6, it is stated that a detailed investigation was made by the Deputy Registrar, Cooperative Societies in respect of complaints of wide spread defalcation of financial assistance extended by respondents to various primary credit Cooperative Societies including the respondent Society in which number of employees including the petitioner were found responsible for indulging in misconduct of defalcation. In Para 7 of the reply it is stated that the purpose of obtaining a decree from the Registrar, Cooperative Societies is to enable the employee concerned to be afforded an opportunity of being heard before an order of recovery is passed against him. In the instant case, the reasonable opportunity in the shape of informing the petitioner of the alleged misconduct of defalcation and conduction of an inquiry were completed and therefore, the purpose of approaching Registrar, Cooperative Societies for obtaining a decree in this respect was achieved, though by another mode. On the aforesaid ground the respondent No.4 submitted that due procedure was followed and RRC was rightly issued at the instance of respondent No.4 by the Collector, Tikamgarh. The State has adopted the return filed by respondent No.4. 4-A. In WP No. 9324/2007, petitioner Raghuraj Singh has challenged the RRC Annexure P-l, dated 18.4.2007 issued by the Collector, Tikamgarh at the instance of respondent No.4 for Rs.4,56,779/- along with 18% interest, on the ground that petitioner has filed a case before the Deputy Registrar, Cooperative Societies under section 64 of the M.P. Cooperative Societies Act, 1960 (hereinafter referred to as 'Act of 1960' for short), which is registered as Case No. 187/2007. During the pendency of the case, RRC has been issued by the Collector. The petitioner on receiving notice from the Tahsildar submitted his objection to the Revenue Recovery Certificate, but without any result. As the petitioner was apprehending recovery under the RRC, so this petition has been filed on the same grounds which are raised in WP No. 8707/2007 by the petitioner Harcharan Rajpali and one additional ground that the dispute under section 64 of the Act of 1960 is pending before the Deputy Registrar, Cooperative Societies. 5. The respondent No.4 has filed reply stating that the petitioner was an employee of the society and was functioning as its salesman. 5. The respondent No.4 has filed reply stating that the petitioner was an employee of the society and was functioning as its salesman. He defalcated a sum of Rs.4,56,779/- for which he was proceeded with a Departmental Enquiry, which culminated into issuance of an order of removal from service of the society, after affording due and sufficient opportunity to the petitioner. Thereafter various notices were issued to the petitioner inviting his attention to refund the defalcated amount to the society, but when no response was made by the petitioner, respondent No.4 initiated proceedings for issuance of RRC. A copy of notice dated 27.3.2007 is filed on record as Annexure R-4/1. So far as the loss to the society is concerned, the Deputy Registrar conducted an enquiry as per Annexure R-4/2 in which irregularities were found of the petitioner to the tune of Rs.4,56,779/- and accordingly the RRC was issued against the petitioner. It is pertinent to mention here that respondent No.4 has not filed the report of Department Enquiry in the case, showing that any charge was leveled against the petitioner in respect of alleged defalcation. No particulars of such enquiry has been furnished by respondent No.4 in the return. The enquiry report (Annexure R-4/2), dated 2.2.2006 is on record, but alleged defalcation was not subject matter of the enquiry. 6. In WP No. 9448/2007 petitioner Kishore Singh has assailed RRC (Annexure P-1), dated 18.4.2007 issued by the Collector, Tikamgarh at the instance of respondent No.4 on the ground that Collector was having no jurisdiction to issue such an RRC. The RRC, which was stated to be issued under the provisions by the Revenue Recovery Act, 1890 (hereinafter referred to as 'Act of 1890' for short) but the provisions of this Act were not applicable. The provisions of the Act of1960 shall apply in the matter of petitioner, because the petitioner was an employee of a Cooperative Society. That no details in respect of recovery amount were furnished and the recovery was malafide. That no show-cause notice or opportunity of hearing was extended to the petitioner before issuance of such RRC. The provisions of the Act of1960 shall apply in the matter of petitioner, because the petitioner was an employee of a Cooperative Society. That no details in respect of recovery amount were furnished and the recovery was malafide. That no show-cause notice or opportunity of hearing was extended to the petitioner before issuance of such RRC. The respondent No.4 has filed reply in which it is stated that recovery of Rs.1,56,521/- was effected against the petitioner without obtaining any decree from Registrar on the ground that petitioner was involved in defalcation of public money, which was received by respondent No 3 Primary Credit Society from respondent No.4 Bank as financial assistance. The petitioner was subjected to a Departmental Enquiry in which he was removed from the service as a measure of penalty. Petitioner was duly extended an opportunity of hearing in the departmental proceedings conducted prior to his removal and so far as quantification of defalcation amount is concerned it was duly enquired into by the Deputy Registrar of the Cooperative Societies, Tikamgarh as per Annexure R-4/1 who certified that petitioner committed irregularity for an amow1t of Rs.1,56,521/-. It was submitted that after a due enquiry the Deputy Registrar recorded the aforesaid finding that the petitioner was involved in defalcation of aforesaid amount of the Bank and RRC was rightly issued against the petitioner. In the case the respondent No.4 has not filed any decision of the Departmental Enquiry in which the petitioner was removed from service. Apart from this no document has been filed by respondent No.4 showing that before issuing RRC Annexure P-l, any show-cause notice or opportunity of hearing was extended to the petitioner. 7. In WP No. 9592/2007 petitioner Balram has assailed RRC Annexure P-2, dated 18.4.2007 for Rs.6,56,719/- and interest on the grounds that respondent No.3 Primary Agricultural Creditors Cooperative Societies Ltd., Arora Tahsil Baldeogarh, Distt. Tikamgarh filed a dispute before the Deputy Registrar Cooperative Societies, Tikamgarh as Case No. 64/140-5 by which a recovery was sought against the petitioner for Rs.6,56,719.23p. The aforesaid dispute was allowed by Deputy Registrar by an order dated 28.2.2005 but against this order the petitioner preferred an appeal before the . Joint Registrar, Cooperative Societies, Sagar Division Sagar as Appeal No.78-32/2005. The aforesaid dispute was allowed by Deputy Registrar by an order dated 28.2.2005 but against this order the petitioner preferred an appeal before the . Joint Registrar, Cooperative Societies, Sagar Division Sagar as Appeal No.78-32/2005. By order Annexure P-l, dated 19.5.2005 the order of Deputy Registrar dated 28.2.2005 was set aside and the matter was remanded back to the Deputy Registrar, Cooperative Societies, Tikan1garh with the direction to serve a copy of complaint and documents to the petitioner, extend due opportunity of hearing to the petitioner, record evidence and thereafter to decide the matter afresh. It was submitted that the aforesaid dispute is still pending before the Deputy Registrar, Cooperative Society, Tikamgarh and without final adjudication of the dispute the recovery was effected which was not only il1egal but without jurisdiction. Before issuance of RRC no show cause notice or opportunity of hearing was extended to the petitioner and issuance of such RRC was without jurisdiction and may be quashed. The respondent No.4 has filed reply in which it is stated that petitioner was removed from service by order dated 4.11.2006 (Annexure R-4/l). The aforesaid order was passed after holding due departmental enquiry against the petitioner in which the charges were found proved and petitioner was removed from service. In the said order it was found that petitioner had not deposited the amount which was recovered by him from the members of the society and thereby committed defalcation of money of respondent No.4. In the said order, recovery of various amounts was directed. Learned counsel for petitioner submitted that before issuing the aforesaid RRC no show-cause notice or opportunity of hearing was extended to the petitioner. Respondents before issuing RRC ought to have extended an opportunity of hearing to the petitioner and without taking such recourse issuance of RRC was not only illegal but also without jurisdiction. 8. Shri Shed Nagu appearing for respondent No.4 submitted that it was not necessary for the respondents to take recourse under section 64 of the Act of 1960, but under section 58-B as amended by M.P. Cooperative Societies Amendment Act, 2004 (No.10/2005) published in the M.P. Rajpatra, dated 5.5.2005, the respondent No.4 was empowered to recover the loss caused to respondent No.4 by enforcing recovery through RRC and in this regard respondent No.4 had taken the recourse under section 58-B of the Act in which there is no illegality. To this Shri Sanjay Patel, appearing for petitioner submitted that under Proviso to section 58-B(1), it was mandatory requirement of law to extend petitioner a reasonable opportunity of hearing before effecting the aforesaid recovery and in this case before issuance of RRC no opportunity of hearing was extended to the petitioner. 9. Learned counsel appearing for respondents though opposed the contention, but were unable to place any material on record that before issuing RRC as referred hereinabove any opportunity of hearing was extended to the petitioner by issuing show-cause notice or extending personal opportunity of hearing to controvert the correctness of the amount stated in the RRC. 10. Section 58-B as amended by the Amendment Act 1012005 (supra) reads thus: "58-B. Procedure for making good losses caused to a society. -- (1) If in the course of an audit, inquiry, inspection or the winding up of a society or otherwise, it is found that any person, who is or was entrusted with organisation or management of such society or any deceased, past or present chairman, secretary, member of Board of Directors, officer or employees of the society has made any payment contrary to the provisions of this Act or the rules made there under or bye-laws of a society or has caused any deficiency or loss by gross negligence or misconduct or has misappropriated or fraudulently retained any money or other property belonging to such society, the Registrar may on his own motion or on the application of the Board of Directors, liquidator or any creditor may make an order requiring such person or in the case of a deceased person, his legal representative who inherits his estate, to repay or restore the money or property or any part thereof, with interest at such rate or to pay contribution and costs or compensation to such extent as the Registrar may consider just and equitable: Provided that no order under this sub-section shall be made unless the person concerned is given a reasonable opportunity of being heard in the matters : Provided further that the liability of a legal representative of the deceased, shall be to the extent of the property of the deceased, which has come to the hands of such legal representative. (2) Any person aggrieved by the order made under sub-section (1) may within thirty days from the date of communication of the order to him appeal to the Tribunal: Provided that in computing the period of limitation, the time requisite for obtaining a copy of the order appealed against shall be excluded. (3) Any order made under sub-section (1) or sub-section (2) shall be enforced in accordance with the provisions of section 85. (4) If the Registrar is satisfied on affidavit, enquiry or otherwise that any person with intent to delay or obstruct the enforcement of any order that may be made against him under this section: (a) is about to dispose of the whole or any part of his property; or (b) is about to remove the whole or any part of his property from the jurisdiction of the Registrar, he may, unless adequate security is furnished, direct the conditional attachment of the said property or such part thereof as he thinks necessary." Section 58-B (1) provides that if the society finds that an employee of the society has made any payment contrary to the provisions of the Act or Rules or has caused any defalcation or loss by gross negligence or misconduct or has mis-appropriated or fraudulently retained any money or other property belonging to such society, the Registrar may on his own motion or on the application of Board of Directors may make an order requiring such person to repay or restore the money or property or any part thereof with interest at such rates as Registrar may consider just and equitable. The first proviso provides that no order under section 58-B shall be made unless the person concerned is given a reasonable opportunity of hearing. 11. Admittedly in this case no opportunity of hearing was extended to the petitioners by issuance of a show-cause notice or extending personal opportunity of hearing, in absence of such issuance of RRC was without jurisdiction. Apart from this the requirement of section 58-B is that such order shall be passed by the Registrar and not by respondent No.4 or the Collector. In absence of any order passed by the Registrar or following the provision of 1st Proviso, the respondent No.4 was not entitled to make a request to the Collector for issuance of RRC. The RRC so issued by the Collector at the request of respondent No.4 was without jurisdiction. In absence of any order passed by the Registrar or following the provision of 1st Proviso, the respondent No.4 was not entitled to make a request to the Collector for issuance of RRC. The RRC so issued by the Collector at the request of respondent No.4 was without jurisdiction. 12. At this stage, Shri P.N. Dubey, Deputy A.G., submitted that Collector, Tikamgarh recovered the aforesaid amount under section 5 of Act of 1890 and he was within his jurisdiction to issue such RRC at the request of General Manager, Zila Sahkari Kendriya Bank Maryadit, Tikamgarh, which reflects from the perusal of RRC in which the General Manager had signed the certificate and put his seal on the aforesaid certificate. Only thereafter the Collector issued the RRC to the Tahsildar for recovery. It was submitted that under section 5 of Act of 1890 the action of Collector was within his jurisdiction and the RRC cannot be quashed. Section 5 of Act of 1890 reads thus: "5. Recovery by Collectors of sums recoverable as arrears of revenue by other public officers or by local authorities. -- Where any sum is recoverable as an arrear of land revenue by any public officer other than a Collector or by any local authority, the Collector of the district in which the office of that officer or authority is situate shall, on the request of the officer or authority, proceed to recover the sum as if it were an arrear of land revenue which had accrued in his own district, and may send a certificate of the amount to be recovered to the Collector of another district under the foregoing provisions of this Act, as if the sum were payable to himself." The aforesaid provision specifically provides that for issuance of RRC the sum sought to be recovered must be recoverable as an arrears of land revenue by an officer other than the Collector or by any local authority and on the request of such an officer or authority the Collector shall proceed to recover the sum as if it were an arrears of land revenue, which had accrued in his District. To invoke the provisions of section 5, the Collector was required to satisfy himself that a sum was recoverable as arrears of land revenue and the authority who approached to the Collector was empowered to make such a request to the Collector and after satisfying with the aforesaid requirement of law, only then the Collector was empowered to issue RRC and not otherwise. Section 5 of the Act of 1890 specifically provides that such recovery can be made in respect of amount, which was recoverable as an arrears of land revenue and the public officer should be empowered to do so, only then the Collector was having jurisdiction in this regard. 13. Now the question arises, whether such amount was recoverable as an arrears of land revenue. Merely such amount was recoverable by Bank will not be treated such an amount recoverable as arrears of land revenue. Under the Act of 1960 specific provision has been made in this regard. Section 84A and section 85 deal with such situation. For the ready reference section 84A and 85 are quoted as under: "84-A. Recovery of sums due to certain societies. -- (1) Notwithstanding anything contained in sections 64, 69 and 78 on an application made by a cooperative housing society or Madhya Pradesh State Cooperative Housing Federation or Primary Urban Cooperative Bank for recovery of arrears of its dues, the Registrar may, after making such enquiry as he deems fit, grant a certificate for the recovery of the amount stated therein to be due as an arrear. (2) The certificate granted by the Registrar shall be final and conclusive proof of the arrears stated therein, and the same shall be recoverable as arrears of land revenue. 85. Execution of orders, etc. (2) The certificate granted by the Registrar shall be final and conclusive proof of the arrears stated therein, and the same shall be recoverable as arrears of land revenue. 85. Execution of orders, etc. -- Every order or award passed or decision given by the Registrar under any provision of this Act, every order passed by the Appellate or Revisional Authorities and every order made, decision given by the Liquidator, if not carried out-- (a) on a certificate signed by the Registrar or any person authorised by him in this behalf be deemed to be decree of a civil Court and shall be executed in the same manner as a decree of such Court; or (b) be executed according to the law and under the rules for the time being in force for the recovery of arrears of land revenue; (c) be executed by the Registrar or any other person empowered by the Registrar in this behalf, by the attachment and transfer in the manner as may be prescribed or sale or sale without attachment of any property of the person or a society against whom the order, decision or award has been obtained or passed: Provided that any application for the recovery under clause (b) shall be made -- (i) to the Collector and shall be accompanied by a certificate signed by the Registrar or by any person authorised in this behalf; and (ii) within five years from the date fixed in the order, decision or award and if no such date is fixed, from the date of order, decision or award, as the case may be." Section 84-A empowers a Primary Urban Cooperative Bank to file an application for recovery of its dues to the Registrar and the Registrar after making such enquiry as he deems fit can grant certificate for recovery stated to be due as arrears. Meaning thereby the authority empowered was the Registrar and not the society who could directly make a request to the Collector for recovery of aforesaid amount. In this case as appears from the perusal of Annexure P-1, the request was made by General Manager of the Bank to the Collector and the Collector without looking into the provisions of section 84A issued RRC. In this case as appears from the perusal of Annexure P-1, the request was made by General Manager of the Bank to the Collector and the Collector without looking into the provisions of section 84A issued RRC. Section 85 of the Act of 1960 also empowers for enforcement of order or award passed after decision by the Registrar under any provision of the Act and under sub-section (b) the aforesaid amount can be recovered as an arrears of land revenue, but in this case no decision by the Registrar has been produced before this Court to show that the aforesaid arrears were certified by the Registrar as an arrears which could be recovered as an arrears of land revenue. The Proviso of section 85 also provides that the recovery under clause (b) shall be made on an application to the Collector and shall be accompanied by the certificate signed by the Registrar or any person authorised in this behalf. Admittedly in this case neither certificate was issued by the Registrar in this regard, nor Registrar had determined or ascertained the amount as recoverable as an arrears of land revenue. In these circumstances, the issuance of RRC by the Co11ector was without jurisdiction, even under the -provisions of Act of 1890. No other provision was shown before this Court to justify the act of respondents. In view of the contention raised and decided hereinabove it is found that action of respondent No.4 by issuing RRC was without jurisdiction. In the result, all the petitions are allowed. All the RRC's issued by the Collector, Tikamgarh at the request of respondent No.4 are hereby quashed. All the consequential action taken by the Tahsildar in enforcing the RRC shall also stand quashed. If any property was attached by the Tahsildar for enforcing RRC that shall be released forthwith. However, the respondent No.4 shall be free to take recourse of law for recovering the amount either under section 58-B and section 64 of Act of1960 as the case may be, or as may be advised, but after following due procedure of law. Considering facts of the case there shall be no order as to costs.