Narmadeshwar Jha vs The State of Bihar and Others

J.N. Dubey, J.—Petitioner has approached this Court for issuing a writ of certiorari quashing the certificate case No. 845/91-92 pending before the Respondent No. 3, the District Manager-cum-Certificate Officer, Land Development Barik, Bettiah, West Champaran.

The case of the Petitioner is that he borrowed a sum of Rs. 25,000/- from the Land Development Bank, Bettiah (for short ''the Bank'') as agriculture loan in 1969. Out of which he paid a sum of Rs. 16,000/- but could not pay the balance amount. In 1974, the Bank initiated certificate proceeding against the Petitioner under the Bihar and Orissa Public Demands Recovery Act (for short ''the Act''). The Petitioner filed objection challenging the correctness of the account and requested the bank to produce the relevant ledger before the Certificate Officer. The Bank instead of producing the ledger, withdrew the certificate case. The Bank filed another certificate case No. 39/77-78 but that was also withdrawn on the objection of the Petitioner. The Bank filed yet another certificate case No. 328/77-78 in which also the petitoner filed objection but it was not entertained and, therefore, he filed Title Suit No. 23 of 1979 in the Court of Sub-Judge, Bettiah u/s 43 of the Act which was decreed by the 4th Additional Sub-Judge, Bettiah on 18.4.1983. The relevant portion of the judgment is quoted below:

This suit has been filed for declaration that the certificate case ho. 328/77-78 is illegal without jurisdiction and void and the Defendants have no right to recover the dues through the public demand.

It is contended by the Plaintiff that he took agricultural loan of Rs. 25,000/-from the Land Development Bank, Bettiah, after executing a simple mortgage bond. He had paid some of the instalment and some amount was still due to be paid, for which Defendant No. 2 has got started certificate case No. 328/1977-78. The Plaintiff was served with the notice of the same after which he appeared before the District Cooperative officer, who happens to be the certificate officer. The Plaintiff filed an objection which was not entertained by the certificate officer on the ground that there was no record before him. The Plaintiff then requested the Manager, Land Development Bank, Bettiah. Defendant No. 2 to submit the record before the certificate officer, but instead of producing the record as requested the Defendant No. 2 became angry. Since the Plaintiff found that his bonafide objections were not looked into that certificate case, he had no alternative but to file the suit. According to the Plaintiff loan from a Bank could not be realised from loanee by a certificate case unless there was written agreement to that effect, as required under Rule 15 of the Public Demand Recovery Act, 1914. And as there was no such agreement between the Plaintiff and bank in respect of that loan, the certificate case was illegal and without jurisdiction.

In this suit none of the Defendants appeared inspite the service of processes. Letter No. 226 dt. 14.4.79 has been received from the certificate officer, Bettiah, in this suit in response to the summons served on him in which it has been mentioned that certificate case No. 39 of 1977-78 against Narmdeshwar Jha had been withdrawn by the Land Development Bank. That case appears to be one of the earlier cases, as stated by the Plaintiff, in respect of the same loan.

It is surprising that neither the bank authorities have cared to appear in this suit nor the certificate case authorities, have forwarded the record of that case nor given any information about the assailed case No. 328/ 77-78 to show that the certificate case in question was. maintainable.

According to Rule 15 of schedule 1 of the Public Demand Recovery Act any money payable to a bank can be realized as a public demand only if the person liable to pay has agreed by written statement that it shall be recoverable as a public demand. The Plaintiff in the plaint, verified on oath has stated that there was no such agreement between him and Bank that the loan in question would be recovered as a public demand.

In the circumstance I have no alternative but to hold that the certificate case No. 328/77-78 challenged in the suit is without jurisdiction and the Defendant have no right to recover the dues in question from the Plaintiff as the public demand.

In the result the suit is decreed ex-parte in light of the observation made above. However there will be no order as to costs.

The judgment of the civil court not having been challenged by the Bank became final. After about nine years, the Bank filed certificate case No. 845/ 91-92 for recovery of the same amount. On coming to know of the certificate case, the'' Petitioner filed an objection claiming that no certificate proceedings were (sic)gally maintainable in view of the decision of the civil court in Title suit No. 23 of 1979 which was rejected on 28.6.1992. Feeling aggrieved, the Petitioner has filed this writ petition.

Heard the learned Counsel for the parties and perused the record.

Learned Counsel for the Petitioner contended that the present certificate proceeding is not legally maintainable in view of the decree of the civil court in Title suit No. 23 of 1979. On the other hand, learned Counsel for the Respondents contended that the decree of the civil court is ex-parte and nullity and is of no help to the Petitioner.

Having considered the argument of the learned Counsel, I am of the view that the present certificate proceeding is not legally maintainable in view of the decree of the civil court in Title Suit No. 23 of 1979. Once the civil court held that the amount in question was not recoverable as public demand, no proceeding for recovery of it could legally be initiated under the Act. It is true that the decree of the civil court was ex-parte and according to the learned Counsel for the Respondents, it was obtained by suppressing certain facts to bring the case u/s 43 of the Act but that does not make it a nullity.

In the result, the writ petition succeeds and is allowed. The certificate case No. 845/91-92 is quashed.

No order as to costs.