Ajay Bhagat v. State of Jharkhand through the Secretary/Principal Secretary
2018-07-10
ANUBHA RAWAT CHOUDHARY
body2018
DigiLaw.ai
JUDGMENT : 1. Heard Mr. Manoj Tandon, counsel appearing on behalf of the petitioner assisted by Mr. Shiv Shankar Kumar, Advocate. 2. Heard Mrs. Chandra Prabha, counsel appearing on behalf of the respondent State. 3. This writ petition has been filed for the following reliefs:- (i) To quash/set aside the entire certificate proceeding, being Certificate Case No. 06(Misc)/2013-14 pending before the Certificate Officer, Ranchi (respondent no. 3), whereby and whereunder, a certificate of Rs. 84,35,677.00 has been issused. (ii) During the pendency of this writ petition, further proceeding of Certificate Case No. 06(Misc)/2013-14 pending before the Certificate Officer, Ranchi (respondent no. 3) may kindly be stayed. 4. Counsel for the petitioner submits that the impugned certificate proceeding is wholly without jurisdiction as there is no agreement between the petitioner and the respondent nos. 1 and 2 to the effect that the petitioner agreed to realisation of the amount impugned as public demand so as to bring the same within the scope of Bihar and Orissa Public Demand Recovery, Act, 1914. Accordingly, he submits that the respondents have no power or jurisdiction to recover the amount through impugned certificate proceeding. 5. Counsel for the petitioner submits that the agreement involved in this case was terminated vide letter no. 1031 dated 29.04.2014 which is impugned letter in W.P. (C) No. 2548 of 2014. 6. During the pendency of the said case being W.P. (C) No. 2548 of 2014, the petitioner was served with letter dated 28.06.2014 wherein the petitioner was asked to pay the amount of Rs. 84,35,652/-. Pursuant to this demand, the petitioner responded to the authority that the petitioner has filed the writ petition being W.P. (C) No. 2548 of 2014 before the High court which is pending. The petitioner had also raised certain grievances in connection with the measurement vide letter dated 19.07.2014. Thereafter objection of the petitioner was rejected vide letter no. 1837 dated 02.08.2014 and ultimately impugned certificate proceeding was initiated against the petitioner for realisation of the amount. 7. Counsel for the petitioner submits that there are few clauses of the schedule to Bihar and Orissa Public Demand Recovery Act, 1914 which may call for interpretation in this writ petition. They are clauses 8-A, 9 and 15.
1837 dated 02.08.2014 and ultimately impugned certificate proceeding was initiated against the petitioner for realisation of the amount. 7. Counsel for the petitioner submits that there are few clauses of the schedule to Bihar and Orissa Public Demand Recovery Act, 1914 which may call for interpretation in this writ petition. They are clauses 8-A, 9 and 15. He submits that the impugned certificate proceeding is not covered by any provision of Bihar and Orissa Public Demand Recovery Act, 1914 including the aforesaid clauses of the schedule and therefore the entire certificate proceeding is wholly without jurisdiction. 8. Counsel for the respondent on the other hand submits that the respondents have filed counter affidavit and have referred to clause 60.1 of the agreement which reads as follows:- 60.1- “If the Contract is terminated because of a fundamental breach of Contract by the Contractor, the Engineer shall issue a certificate for the value of the work done less advance payments received up to the date of the issue of the certificate, less other recoveries due in terms of the contract, less taxes due to be deducted at source as per applicable law and less the percentage to apply to the work not completed as indicated in the Contract Data. Additional Liquidated Damages shall not apply. If the total amount due to the Employer exceeds any payment due to the Contractor shall be a debt payable to the Employer.” 9. She submits that in view of clause 60.1 read with clause 8A of schedule to Bihar and Orissa Public Demand Recovery Act, 1914, the amount involved in this case is recoverable from the petitioner as a public demand. She also refers to the judgment passed by this court reported in (2014) 4 JLJR 88 (Jhr) and submits that Hon’ble Division Bench of this court has laid down that it is not open to the parties to challenge certificate proceeding without availing the statutory remedy which are available under the Bihar and Orissa Public Demands Recovery Act, 1914. She also submits that the petitioner instead of filing the objection under Section 9 of the Bihar and Orissa Public Demand Recovery Act, 1914 has rushed to this court challenging the certificate proceeding on the ground that the entire certificate proceeding is wholly without jurisdiction.
She also submits that the petitioner instead of filing the objection under Section 9 of the Bihar and Orissa Public Demand Recovery Act, 1914 has rushed to this court challenging the certificate proceeding on the ground that the entire certificate proceeding is wholly without jurisdiction. She submits that admittedly the petitioner has received advances from the respondent in order to execute the work and there has been termination of contract on account of fundamental breach of contract, therefore the amount for which certificate proceeding has been initiated is certainly covered under clause 8A of Bihar and Orissa Public Demands Recovery Act 1914. She submits that on conjoint reading to the aforesaid clauses of the agreement, read with clause 8-A and 9 of Schedule to Bihar and Orissa Public Demand Recovery Act, 1914, the amount involved in this case is recoverable as a public demand under Bihar and Orissa Public Demand Recovery Act, 1914 Counsel for the respondent refers to paragraph no. 5, 6, 7, 15, 19, 20 and 21 of the counter affidavit. 10. Before entering into the merits of the arguments of the parties it would be useful to quote the relevant provision of Bihar and Orissa Public Demand Recovery Act, 1914 which are relevant for the purposes of this case. They are section 3(1); 3(2) 3(6) and items 8A , 9 and 15 of schedule I to Bihar and Orissa Public Demand Recovery Act, 1914. There is no dispute on the legal position that if the demand is covered by any of the item of the schedule I of Bihar and Orissa Public Demand Recovery Act, 1914, the same is recoverable as public demand under Bihar and Orissa Public Demand Recovery Act, 1914. Section 3(1); 3(2) 3(6) and items 8A , 9 and 15 of schedule I to Bihar and Orissa Public Demand Recovery Act, 1914 read as under:- 3. Definitions- In this Act, unless there is anything repugnant in the subject or context:- (1) “certificate debtor” means the person named as debtor in a certificate filed under this Act and includes any person whose name is substituted or added as debtor by the Certificate Officer; (2) “certificate holder” means the Government or person in whose favour a certificate has been filed under this Act, and includes any person whose name is substituted or added as creditor by the Certificate Officer; (3) …. …. …. …. (4) ….
…. …. …. (4) …. …. …. …. (5) …. …. …. …. (6) “Public demand” means any arrear of money mentioned or referred to in Schedule I, and includes any interest which may, by law, be chargeable thereon up to the date on which a certificate is signed under Part II Schedule 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. 9. Any money payable to a servant of the Government or any local authority, in respect of which the person liable to pay the same has agreed, by a written instrument (xxxx) that it shall be recoverable as a public demand, 15. Any money payable to- (i) State Bank of India constituted under the State Bank of India Act, 1955 ( No. 23 of 1955); or (ii) a Bank specified in column (2) of the first schedule to the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (Act V of 1970); or (iii) a company or a statutory body, including a registered society carrying on financial transactions, owned by or in which, Government has a majority of shares or which is managed by an authority appointed under any law for the time being in force; or (iv) the Bihar State Electricity Board. In respect of which the person liable to pay the same has agreed, by a written instrument that it shall be recoverable as public demand. 4. After hearing counsel for the parties and after going through the materials available on record and the provisions of Bihar and Orissa Public Demand Recovery Act, 1914, this court finds that item 9 and 15 of Schedule I to Bihar and Orissa Public Demand Recovery Act,1914 has no applicability to the facts and circumstances of this case as there is no instrument on record to demonstrate an agreement that the amount involved in this case shall be recoverable as a public demand.
Clause-15 of the aforesaid schedule deals with specific bodies covered under its various sub-entries and has no applicability to the facts of this case as the agreement involved in this case is between the petitioner and the state government relating to execution of certain works and the parties to the agreement are not covered by any of the sub- entries to entry 15 of the aforesaid schedule I to Bihar and Orissa Public Demand Recovery Act,1914 . Entry 9 also does not apply as there is no written instrument that the amount will be recoverable as a public demand. 5. This court further finds that Clause-8A of the Bihar and Orissa Public Demand Recovery Act, 1914 clearly indicates that any outstanding loans and advances payable to the government or to the department is recoverable as public demand under the aforesaid Act. This clause fell for consideration by Hon’ble Patna High Court in a judgment reported in 2007(1) PLJR 192 (Rabindra Nath Singh versus The State of Bihar) and vide para 6 of the said judgment while interpreting item 8A of schedule I of Bihar and Orissa Public Demand Recovery Act,1914 ,it has been held as follows:- “6. In my view, this entry is wholly inapplicable to a case of defalcation of the present nature. The entry clearly speaks of loan and advances. These expression clearly denotes that some amount is given to a person who has to return the same. It is not that he has to merely account for. Therefore, it appears that a money can be public demand under entry 8A of List I, it must be shown that the person was required by law to refund or return or repay. In the present case the money which was given for distribution as scholarship cannot be termed as loan and advance bringing it within the meaning of entry 8A of schedule I of Public Demand Recovery Act.” 6.
In the present case the money which was given for distribution as scholarship cannot be termed as loan and advance bringing it within the meaning of entry 8A of schedule I of Public Demand Recovery Act.” 6. Applying the ratio of the aforesaid judgment, this court is also of the considered view that in order to come within the item no 8 A of Bihar and Orissa Public Demand Recovery Act, 1914, it must be shown that the person was required by law to refund or return or repay to the government .This item does not require any specific agreement between the parties regarding the amount being recoverable as a public demand under Bihar and Orissa Public Demand Recovery Act, 1914. Meaning thereby , if the amount falls under this item , the amount is automatically recoverable as a public demand and no further agreement for its recovery as a public demand is required for initiating a certificate proceedings for its recovery as public demand under Bihar and Orissa Public Demand Recovery Act,1914 . 7. Admittedly the parties are governed by clause 60.1 of the agreement which has been quoted and relied upon by the respondents. 8. Clause 60.1. of the agreement clearly provides the consequences of termination of contract because of fundamental breach. According to this clause, upon fundamental breach of Contract by the Contractor, the Engineer shall issue a certificate for the value of the work done and followings deductions will be made less advance payments received up to the date of the issue of the certificate, less other recoveries due in terms of the contract, less taxes due to be deducted at source as per applicable law and less the percentage to apply to the work not completed as indicated in the Contract Data. The clause clearly provides that Additional Liquidated Damages shall not apply. It further provides that if the total amount due to the Employer exceeds any payment due to the Contractor shall be a debt payable to the Employer. 9. Thus this court finds that the amount calculated in terms of clause 60.1. of the aforesaid agreement , if exceeds any amount due to the contractor, is to be treated to a debt payable to the state government(employer).
9. Thus this court finds that the amount calculated in terms of clause 60.1. of the aforesaid agreement , if exceeds any amount due to the contractor, is to be treated to a debt payable to the state government(employer). This court fully agrees with the interpretation of item 8A of schedule to Bihar and Orissa Public Demand Recovery Act, 1914, as interpreted in the judgment passed by Patna High Court reported in 2007(1) PLJR 192 , that for a money to be recoverable as public demand under entry 8A of Schedule I of Bihar and Orissa Public Demand Recovery Act, 1914, it must be shown that the person was required by law to refund or return or repay. This court finds that as per clause 60.1 of the agreement, if the total amount due to the Employer exceeds any payment due to the Contractor the same shall be a debt payable to the Employer(state government here) and accordingly this court holds that the petitioner is under a legal obligation to refund or return or repay the amount calculated under clause 60.1. of the agreement as the same is to the treated as a debt payable to the employer as per the said clause 60.1 itself. This clause clearly provides that Additional Liquidated Damages are not to be included in the calculation. 10. From bare perusal of the letter dated 28.06.2014 (Annexure-18), which is the basis of initiation of certificate proceedings, this court finds that admittedly the petitioner had received certain advances and the demand includes recovery of such advances which is certain covered under item 8A of schedule I of Bihar and Orissa Public Demand Recovery Act,1914 . As held above the amount payable under clause 60.1 of the agreement will also be recoverable as public demand under item 8A of schedule I of Bihar and Orissa Public Demand Recovery Act, 1914. Accordingly, this court finds that certificate proceeding as has been initiated against the petitioner cannot be said to be without jurisdiction. This letter includes further calculations and this court is not inclined to enter into the various components/calculations mentioned in the said letter so as to come to a finding whether the same would be covered within the calculation under clause 60.1. of the agreement.
This letter includes further calculations and this court is not inclined to enter into the various components/calculations mentioned in the said letter so as to come to a finding whether the same would be covered within the calculation under clause 60.1. of the agreement. This has to be considered and adjudicated upon by the certificate officer if any objection is filed by the petitioner under section 9 of Bihar and Orissa Public Demand Recovery Act, 1914. This will require interpretation of the agreement/calculation under the agreement and the petitioner has not yet filed his objection under Section 9 of the Bihar and Orissa Public Demand Recovery Act, 1914. 11. Having held that the proceedings before the certificate proceedings is valid and within the jurisdiction of the certificate officer , this writ petition is disposed of with a liberty to the writ petitioner to file his objection, if any , under Section 9 of Bihar and Orissa Public Demand Recovery Act, 1914 before the Certificate Officer within a period of three months and the certificate officer shall decide the objection of the petitioner by speaking order within a period of two months thereafter. 8. This writ petition is disposed of with aforesaid liberty to the petitioner.