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2018 DIGILAW 2219 (JHR)

Shailesh Kumar v. State of Jharkhand

2018-10-05

RAJESH SHANKAR

body2018
ORDER : The present writ petition has been filed for quashing the order dated 07.06.2017 (which has wrongly been typed as 07.16.2013 in the order sheet) passed by the Certificate Officer, Palamau (the respondent No.2) in Certificate Case No. 188 of 2017-18 whereby the application filed by the petitioner under Section 9 of the Bihar and Orissa Public Demand and Recovery Act, 1914 [hereinafter referred to as ‘the Act, 1914’] has been rejected. 2. The factual background of the case, as stated in the writ petition, is that the petitioner was posted in the District Nazarat at Palamau for a period of 8-9 years. It was alleged against the petitioner that during his posting at District Nazarat at Palamau, he defalcated public money. An FIR being Daltonganj P.S. Case No. 44 dated 01.03.2017 was lodged under Sections 409,150,467,468,471,120B & 34 of the IPC against the petitioner, who was arrested and is said to be in judicial custody since 01.03.2017. A certificate case was also instituted against the petitioner for recovery of the defalcated amount and a notice dated 04.05.2017 under Section 7 of the Act, 1914 was issued to him for recovery of Rs.9,41,07,208/-. The petitioner filed an objection under Section 9 of the Act, 1914 before the Certificate Officer, Palamau and apart from other grounds, he raised jurisdictional issue before the Certificate Officer in terms with Section 3(6) of the Act, 1914. However, the same was rejected vide order dated 07.06.2017 which gives rise to filing of the present writ petition. 3. The learned Sr. counsel for the petitioner submits that the respondents themselves have not ascertained as to what amount is due and payable by the petitioner which is apparent from the fact that the notice was served with regard to recovery of Rs.98 Lacs whereas, the certificate case was initiated for recovery of Rs.9,41,07,208/-. Section 3(6) of the Act, 1914 provides the definition of “Public Demand” as any money or arrear which is due under Schedule-I of the Act, 1914. Schedule-I of the Act, 1914 provides the dues which can be recovered by resorting to the provisions of the Act, 1914 and in the said list, it has nowhere been mentioned that any amount due owing to alleged defalcation will be recovered under the said Act. Schedule-I of the Act, 1914 provides the dues which can be recovered by resorting to the provisions of the Act, 1914 and in the said list, it has nowhere been mentioned that any amount due owing to alleged defalcation will be recovered under the said Act. The objection of the petitioner was not entertained by the Certificate Officer and the same was rejected vide order dated 07.06.2017 by way of a non-speaking order without dealing with any issue involved in the present case. The objection so filed under Section 9 of the Act, 1914 is required to be decided in terms with Section 10 of the Act, 1914 which provides for recording evidence, but in the present case, without any application of mind, the objection so filed by the petitioner with regard to maintainability of the certificate case has been dismissed by passing a non-speaking order dated 07.06.2017. The Certificate Officer had no jurisdiction to entertain the case, as the alleged defalcated amount does not come within the purview of the definition of “Public Demand” as provided under Section 3(6) of the Act, 1914. The criminal case on the basis of which the present certificate proceeding was initiated against the petitioner, is still pending and as such the issue as to whether the petitioner had defalcated the alleged amount or not, is yet to be decided. The concerned criminal Court has yet to examine the allegation of defalcation levelled against the petitioner and till the same is pending, the petitioner is not liable to pay any amount. 4. The learned Sr. counsel for the petitioner puts reliance on a judgment of the Hon’ble Supreme Court rendered in the case of Oryx Fisheries Private Limited Vs. Union of India & Ors. reported in (2010) 13 SCC 427 and submits that even in the cases of administrative orders, the reasons are required to be spelt out while disagreeing with the show cause reply. Learned counsel puts further reliance on a judgment of the Hon’ble Supreme Court rendered in the case of Kranti Associates Pvt. Ltd. & Anr. Vs. Sh. Masood Ahmed Khan & Ors. reported in (2010) 9 SCC 496 and submits that even the quasi-judicial authorities are bound to pass reasoned order. 5. Learned counsel puts further reliance on a judgment of the Hon’ble Supreme Court rendered in the case of Kranti Associates Pvt. Ltd. & Anr. Vs. Sh. Masood Ahmed Khan & Ors. reported in (2010) 9 SCC 496 and submits that even the quasi-judicial authorities are bound to pass reasoned order. 5. Per-contra, the learned counsel for the respondents submits that the Deputy Commissioner, Palamau, in course of enquiry, detected huge financial bungling committed by the petitioner who was posted as the District Nazir at Palamau. Hence, the said authority constituted a committee of six officers of the district, who conducted joint inspection of the office on 28.02.2017 and submitted the first enquiry report showing excess withdrawal of Rs.98 Lakh. The committee carried on the enquiry and submitted the second enquiry report showing excess withdrawal of Rs.9,41,07,208/- vide letter No. 432 dated 17.03.2017. The final report was submitted vide letter No. 989 dated 17.07.2017 showing illegal withdrawal of Rs.87154337.75. The Deputy Commissioner, Palamau also wrote to the Additional Chief Secretary, Planning and Finance Department, Government of Jharkhand informing about the alleged fraud and requested him to get an enquiry done through the Income Tax Department and Enforcement Directorate so that the properties of the petitioner and his nearest family members may be confiscated. Bank account of the petitioner was obtained and the statement was taken from which it transpired that huge transactions have been made through his personal Bank account. The Deputy Commissioner Palamau issued letter No. 257 dated 29.7.2017 to the Deputy Commissioner, Hazaribagh for obtaining the details of movable and immovable properties of the petitioner. The petitioner was put under suspension and a departmental proceeding was initiated against him. The enquiry report in the said departmental proceeding was submitted by the enquiry officer on 19.07.2017. Since the petitioner was in judicial custody, the enquiry was conducted in the jail premises for the convenience of the petitioner. The second show cause notice was issued by the Deputy Commissioner, Palamau vide memo no. 641 dated 16.08.2017 to the petitioner and the same was served to the petitioner though the Jail Superintendent, Medninagar, Palamau. An FIR was also lodged against the petitioner on 08.02.2017. A notice was issued to the petitioner vide letter No. 157 dated 13.04.2017, for recovery of a sum of Rs.9,41,07,208/- along with the details of recoverable amount. However, he did not deposit the said amount. An FIR was also lodged against the petitioner on 08.02.2017. A notice was issued to the petitioner vide letter No. 157 dated 13.04.2017, for recovery of a sum of Rs.9,41,07,208/- along with the details of recoverable amount. However, he did not deposit the said amount. Hence, the certificate proceeding was initiated. The petitioner has embezzled public money and hence the amount is recoverable and accordingly the proceeding has been initiated under the Act, 1914. The petitioner neither opted to be heard in person by sending any such petition from the jail nor his lawyer asked for his personal hearing by calling him from the jail. The certificate proceeding was not initiated on the basis of the criminal case, rather the same was initiated after detail scrutiny, enquiry and examination of all relevant records. The Certificate Officer, Palamau has passed the impugned order after considering the objection of the petitioner and if the petitioner is aggrieved by the said order on any pretext, the statutory remedy of appeal under the Act, 1914 is available to him. However, having not availed the statutory remedy of appeal, the petitioner has directly filed the present writ petition. During the pendency of the present writ petition, the departmental proceeding against the petitioner ended with punishment of dismissal from service and recovery of Rs.9,41,07,208/- and until the recovery is made, the other benefits admissible to the petitioner have been ordered to be stopped. 6. Heard the learned counsel for the parties and perused the materials available on record. A certificate proceeding was initiated against the petitioner for recovery of Rs.9,41,07,208/- as defalcated public money while he was posted as the District Nazir, Palamau. The petitioner appeared in the said proceeding through an Advocate and filed a petition under Section 9 of the Act, 1914 challenging the maintainability of the said proceeding and also denying his liability. However, the said application was rejected by the Certificate Officer, Palamau vide order dated 07.06.2017 which is under challenge in the present writ petition. 7. The thrust of the argument of the learned Sr. counsel for the petitioner is that the dues sought to be recovered from the petitioner is not a public demand as contemplated under the provisions of the Act, 1914. 8. The Act, 1914 is meant for recovery of public demand as defined under Sub-section (6) of Section 3, which refers to Schedule-I to the Act, 1914. counsel for the petitioner is that the dues sought to be recovered from the petitioner is not a public demand as contemplated under the provisions of the Act, 1914. 8. The Act, 1914 is meant for recovery of public demand as defined under Sub-section (6) of Section 3, which refers to Schedule-I to the Act, 1914. Schedule-I enumerates various demands under 15 heads to be the public demand, entry 3 of which reads as follows:- "3. Any money which is declared by any law for the time being in force to be recoverable or realizable as an arrear of revenue or land-revenue, or by the process authorized for the recovery of arrears of revenue or of the public revenue or of Government revenue." 9. Refuting to the argument of the learned Sr. counsel for the petitioner, the learned counsel for the respondents refers to Sections 3 & 4 of the Public Accountants Default Act, 1850 [hereinafter referred to as ‘the Act, 1850’] and submits that any arrear of land revenue figures at the first entry in Schedule-I to the Act, 1914 and thus a certificate proceeding is directly attracted for recovery of any amount defalcated by a public accountant. 10. Sections 3 of the Act, 1850 provides the definition of "Public accountant" which reads as follows:- "3. Public Accountant - For the purposes of sections 1 and 2 of the Act, the expression "public accountant" means any person who as Official Assignee or Trustee, or as sarbarahkar, is entrusted with the receipt, custody or control of any moneys or securities for moneys or the management of any lands belonging to any other person or persons, and for the purposes of Sections 4 and 5 of this Act the expression shall also include any person who, by reason of any office held by him in the service of the Central Government or the Government or the Government of a State, is entrusted with the receipt, custody or control of any moneys or securities for money, or the management of any lands belonging to such Government. 11. Section 4 of the Act, 1850 provides as follows:- “4. Prosecution of accountants and sureties. 11. Section 4 of the Act, 1850 provides as follows:- “4. Prosecution of accountants and sureties. The person or persons at the head of the office to which any public accountant belongs may proceed against any such public accountant and his sureties for any loss or defalcation in his accounts, as if the amount thereof were an arrear of land-revenue due to Government.” 12. The learned Sr. counsel for the petitioner has raised the question regarding applicability of the Act, 1850 and has referred to the Laws Local Extent Act, 1874 (in short ‘the Act, 1874’). It is submitted that Section 3 of the Act, 1874 specifically provides that the Acts mentioned in First Schedule will not extend to the Scheduled Districts. The learned Sr. counsel has further invited the attention of this Court to First Schedule of the Act, 1874 and has submitted that the Default of Public Accountants Act, 1850 is also included in the said Schedule and thus the applicability of the same is ceased so far as the Scheduled Area is concerned. Learned Sr. counsel has further referred to Part III of the Sixth Schedule of the Act, 1874 wherein Chutia Nagpur Division (now known as Chotanagpur Division) is included in the Scheduled Districts of Bengal. 13. The present matter relates to the District Nazarat, Palamau (Daltonganj) in the State of Jharkhand. In the year 1874, the Scheduled District Act, 1874 was enacted during the colonial period whereby Chutia Nagpur Division (now known as Chhotanagpur Division) comprising of five British districts i.e. Hazaribagh, Ranchi, Palamau, Manbhum and Singhbhum was declared as Scheduled Area. After independence, the President of India came out with an order known as the Scheduled Area (Part A States) Order, 1950 in exercise of the powers conferred by Clause 6(ii) of the Fifth Schedule to the Constitution of India whereby, apart from other districts of Chotanagpur, Latehar sub-division of Palamau district was declared as Scheduled. Thereafter, the Order 1950 was rescinded and replaced by the Scheduled Areas (State of Bihar, Gujarat, Madhya Pradesh and Orissa) Order, 1977 and Latehar sub-division and Bhandaria block of Garhwa sub-division in Palamau district was included in the Scheduled Area. Again in the year 2003, the Scheduled Areas (State of Jharkhand and Chhatishgarh, Jharkhand and Madhya Pradesh) Order 2003 was issued which replaced the Order 1977 wherein no part of Palamau district was declared as Scheduled Area. Again in the year 2003, the Scheduled Areas (State of Jharkhand and Chhatishgarh, Jharkhand and Madhya Pradesh) Order 2003 was issued which replaced the Order 1977 wherein no part of Palamau district was declared as Scheduled Area. In the year 2007, the Scheduled Area (State of Jharkhand) Order, 2007 was issued whereby Rabda and Bakoriya Panchayats of Satbarwa block in Palamau district were included as Scheduled Area. From the aforesaid facts, it would appear that on the date of occurrence, Daltonganj which is the district headquarters of Palamau district, was not pertaining to the Scheduled Area. 14. On bare perusal of the Act, 1850, it would transpire that the short title of the said Act was given by the Indian Short Titles Act, 1897 wherein it was provided that the Act, 1850 had been partially extended to Berar by the Berar Laws Act, 1941 and was declared to be in force in all the provinces of India (now the Part A States), except the Scheduled District, by the Laws of Local Extent Act, 1874. However, subsequently the said Act was enforced within the Scheduled District by a notification published under Section 3(a) of the Scheduled District Act, 1874. By Gazette of India, 1981 Pt. I, P. 504, the Act, 1850 was enforced in the Scheduled District namely “The District of Hazaribagh, Lohardaga (now Ranchi District, see Calcutta Gazette, 1899, Pt. 1, P. 44), Manbhum and Pargana Dhalbhum as well as Kolhan in the District of Singhbhum (Bihar)”. 15. Section 3 of the Scheduled District Act, 1874 provides that the Local Government, with the previous sanction of the Governor-General in Council, may from time to time, by notification in the Gazette of India, and also in the local Gazette (if any) declare as to what enactments are actually in force in any of the Scheduled Districts, or in any part of any such District. 16. Since at the time of publication of the Gazette of India, 1981, Palamau District was not included in the Scheduled District, there was no need to include it in the said notification. Thus, I find no substance in the argument of the learned Sr. counsel for the petitioner that the Act, 1950 has no application in the present case. 17. The next argument of the learned Sr. Thus, I find no substance in the argument of the learned Sr. counsel for the petitioner that the Act, 1950 has no application in the present case. 17. The next argument of the learned Sr. counsel for the petitioner is that the amount sought to be recovered from the petitioner is not a predetermined liability. However, on perusal of the record, it appears that on the allegation of defalcation of money by the petitioner, an enquiry was conducted and in the enquiry report, it was found that the petitioner had defalcated Rs.9,41,07,208/-. The departmental proceeding also ended during the pendency of the present writ petition and the charges against the petitioner were found proved and accordingly he was dismissed from service. The petitioner was also directed to deposit Rs.9,41,07,208.00 in the District Nazarat. Thus, by now it cannot be said that the certificate amount is yet to be determined. Even if it is assumed that there are some factual errors in the quantum of the demand sought to be recovered through the certificate proceeding, the same does not vitiate the entire proceeding. The Act, 1914 duly takes care of such eventualities. 18. Learned Sr. counsel for the petitioner has further contended that the impugned order has been passed by the Certificate Officer without providing sufficient opportunity to the petitioner to lead evidence in support of his case and the same is not a reasoned one. I have gone through the judgments cited by the learned Sr. counsel for the petitioner. 19. The Hon’ble Supreme Court in the case of M/s. Kranti Associates Pvt. Ltd. & Anr. Vs. Sh. Masood Ahmed Khan & Ors. reported in (2010) 9 SCC 496, has held as under:- “24. In Siemens Engineering and Manufacturing Co. of India Ltd. vs. The Union of India and another, this Court held that it is far too well settled that an authority in making an order in exercise of its quasi-judicial function, must record reasons in support of the order it makes. The learned Judges emphatically said that every quasi- judicial order must be supported by reasons. The rule requiring reasons in support of a quasi- judicial order is, this Court held, as basic as following the principles of natural justice. And the rule must be observed in its proper spirit. A mere pretence of compliance would not satisfy the requirement of law.” 20. The rule requiring reasons in support of a quasi- judicial order is, this Court held, as basic as following the principles of natural justice. And the rule must be observed in its proper spirit. A mere pretence of compliance would not satisfy the requirement of law.” 20. The Hon’ble Supreme Court in the case of Oryx Fisheries Private Limited Vs. Union of India & Ors. reported in (2010) 13 SCC 427 , has held as under:- “24. … It is well settled that a quasi-judicial authority, while acting in exercise of its statutory power must act fairly and must act with an open mind while initiating a show cause proceeding. A show cause proceeding is meant to give the person proceeded against a reasonable opportunity of making his objection against the proposed charges indicated in the notice.” 21. The said contention of the learned Sr. Counsel for the petitioner cannot be entertained by this Court in view of the fact that an alternative/efficacious/statutory remedy of appeal is available with the petitioner under Section 60 of the Act, 1914 under which the appellate authority has ample power and jurisdiction to adjudicate such issues. 22. In view of the discussions made hereinabove, the present writ petition is dismissed with a liberty to the petitioner to take appropriate recourse before the appellate authority under the Act, 1914, if so advised. Petition dismissed.