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2017 DIGILAW 1231 (ALL)

D. S. M. SUGAR MANSOORPUR v. STATE OF U. P.

2017-05-09

KRISHNA MURARI, SIDDHARTHA VARMA

body2017
JUDGMENT By the Court.—Heard Sri Shakti Swarup Nigam, learned counsel for the petitioner and learned Standing Counsel for the State respondents. 2. Petitioner is a company duly registered under the Indian Companies Act, 1956 and is engaged in manufacture of crystal sugar through vacuum pan process. For the crushing season 2002-03, the company was served with a recovery certificate dated 1.10.2003 alleging that a sum of Rs. 1163.08 lac was due and payable by it towards arrears of cane price. The said coercive action was challenged by the petitioner by filing writ petition No. 47402 of 2003. The said writ petition came to be disposed of by a Division Bench of this Court vide judgement and order dated 10.12.2003 by making following observations : “Taking into consideration the facts and circumstances as brought on record as well as what has been noticed herein above, this writ petition is disposed of finally providing that the impugned demand shall not include any amount towards the State advised price as well as the unenforceable revised statutory minimum price. The demand already raised shall be scrutinized again expeditiously by the Cane Commissioner concerned after affording an opportunity of hearing to the petitioner and shall be rectified/modified accordingly within a period not later than a month from today. It is provided that during the interregnum no coercive measures shall be adopted by the respondents for recovering the amount in question.” 3. The Cane Commissioner rejected the claim for rectification or modification of the recovery certificate only on the ground that the petitioner failed to make a representation and thereafter, the bank account of the petitioner’s company was attached. Petitioner’s company thereafter, made payment of Rs. 1163.08 Lac of the outstanding cane price through Cane Co-operative Society. 4. The factum of petitioner’s having made the payment is borne out from the letter of the Additional District Magistrate (Finance & Revenue), Muzaffarnagar dated 5.6.2004 addressed to the Cane Commissioner, U.P., Lucknow, filed as annexure-6 to the writ petition. Subsequently, petitioner’s company received a letter dated 7.7.2004 issued by the respondent No. 1 calling upon the respondent No. 2 to recover 10% collection charges on the amount of recovery certificate dated 1.10.2003 and in pursuance thereof, the impugned recovery certificate dated 19.9.2016 for recovery of a sum of Rs. 1163.08 Lac was issued, which is under challenge in the present petition. 5. 1163.08 Lac was issued, which is under challenge in the present petition. 5. Learned counsel for the petitioner contends that since the entire due amount of cane price has already been made by the petitioner without any coercive process, the impugned certificate for recovering 10% recovery charges is patently illegal and not sustainable inasmuch as no coercive process was adopted for recovery of the due cane price from the petitioner and the petitioner deposited outstanding dues of its own. Reliance in support of the contention has been placed on a Full Bench judgement of this Court in the case of Mahrajwa and others v. State of U.P. and others, 2013(1) ADJ 426 (FB), wherein this Court, in paras 38 and 39, has said as under: “38. From the aforesaid decisions, it is absolutely clear that it has to be seen as to under what Act the recovery has been initiated. Whether it is under 1890 Act, 1950 Act or 1973 Act. If the recovery proceedings have been initiated under 1890 Act then in that event if the recovery is being made under Section 3 of the Act then cost of recovery would be 10% of the amount stated in the certificate. However, if recovery certificate has been issued but no recovery had been made by the State authorities, who had issued the recovery certificate as for example the defaulter directly deposits the amount or the recovery certificate is withdrawn or cancelled for any reason whatsoever then in that event there is no question of charging any costs of recovery. At best the fee for the process mentioned in 1952 Rules can be levied. However, if the recovery certificate has been issued under Section 5 of 1890 Act then there is no question of any cost of recovery being realised as the State Government has not yet issued any notification specifying any rate. If the recovery has been issued under 1973 Act then in that case realisation of recovery charges by the State authorities can be made from the defaulter only where the entire amount had been recovered by the authorities of the State. If the recovery has been issued under 1973 Act then in that case realisation of recovery charges by the State authorities can be made from the defaulter only where the entire amount had been recovered by the authorities of the State. If the recovery as arrears of land revenue is being made by invoking the provisions of 1950 Act then in that event the fee prescribed under 1952 Rules for various process for realisation of arrears of land revenue while selling moveable and immovable properties and also where properties are not sold alone is payable. It appears that this aspect of the matter was not brought to the notice of the Hon’ble Judges who decided the case of Chinta Mani (supra). We are, therefore, in respectful agreement with the view taken by this Court in the case of Mange Ram and another (supra) and hold that the decision in the case of Chinta Mani (supra) does not lay down the correct law. 39. Before parting with the case, we may mention here that we have not gone into the question as to whether recovery charges of 10% fixed under Section 3 of 1890 Act or the fee of 10% to be deposited by the bank while making an application under Rule 12 and 23 of 1975 Rules or the costs of recover @ 10% specified in 1975 Rules bears any correlation with the expenditure incurred by the State Government in recovering the dues as arrears of land revenue as there is no pleadings on this issue in the writ petition” 6. It is stated that in view of aforesaid judgement, demand of 10% recovery charges by the Collector is not permissible, since the amount was directly paid, there was no further steps except order of citation. 7. Learned Standing Counsel for the State respondents could not dispute aforesaid proposition of law. 8. The law settled by the Full Bench judgment of this Court in the case Mahrajwa (Supra), proceedings initiated against the petitioner to recover only 10% recovery charges despite clearing all the outstanding arrears of cane dues and without any steps being taken by the respondent Nos. 3 and 4 and only recovery certificate having been issued, there arises no question of charging the cost of recovery and the recovery certificate issued for recovering 10% recovery charges is rendered illegal and cannot be sustained. 9. 3 and 4 and only recovery certificate having been issued, there arises no question of charging the cost of recovery and the recovery certificate issued for recovering 10% recovery charges is rendered illegal and cannot be sustained. 9. As a result, writ petition succeeds and is allowed. 10. A writ of certiorari is issued quashing the recovery certificate dated 19.9.2016 (annexure-14 to the writ petition). 11. The amount deposited by the petitioner under the interim order dated 4.10.2016 shall be refunded by the State alongwith interest @ 8% per annum within five months from the date of production of a certified copy of this order before the authority concerned. 12. However, in the facts and circumstances, we do not make any order as to costs.