Allowed

Manoj Kumar Mathur v. the Bihar State Credit and Inves

Patna HC21 Nov 2013CWJC/6711/2006

Case brief

AI extract

What is this about?

This order quashed arrest warrants issued by a State Credit Corporation against petitioners who were Directors. The Court held that proceedings initiated by an incompetent internal officer cannot be revived by a new officer and ruled that a subsequent letter renewed the invalid proceeding rather than constituting a fresh requisition under the Agreement.

What did the court decide?

Writ applications allowed; the requisition letter in Annexure-F and arrest warrants quashed in all three cases.

Manoj Kumar Mathur Vs the Bihar State Credit… — Pension and Retirement Benefits | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.6711 of 2006

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Manoj Kumar Mathur, son of Shree Jagdish Ram, resident of Isri Bazar, P.S. Nimia Ghat, District- Giridih, Jharkhand

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.... .... Petitioner/s

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Versus

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The Bihar State Credit & Investment Corporation Limited, Patna Indira Bhawan, 4^th Floor, Boring Canal Road, Patna through its Managing Director

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The Certificate Officer, Bihar State Credit & Investment Corporation Limited, Indira Bhawan, 4^th Floor, Boring Canal Road, Patna

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.6712 of 2006

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====================================================== Giridhari Lal Mathur, son of Shri Jagdish Ram, resident of Isri Bazar, P.S. Nimia Ghat, District- Giridih, Jharkhand.

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.... .... Petitioner/s

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Versus

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The Bihar State Credit & Investment Corporation Limited, Patna Indira Bhawan, 4^th Floor, Boring Canal Road, Patna through its Managing Director

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The Certificate Officer, Bihar State Credit & Investment Corporation Limited, Indira Bhawan, 4^th Floor, Boring Canal Road, Patna

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.... .... Respondent/s

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======================================================

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with

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Civil Writ Jurisdiction Case No.6719 of 2006

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====================================================== Sunil Kumar Mathur, son of Late Baldeo Ram, resident of Isri Bazar, P.S. Nimia Ghat, District- Giridih, Jharkhand.

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.... .... Petitioner/s

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Versus

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The Bihar State Credit & Investment Corporation Limited, Patna Indira Bhawan, 4^th Floor, Boring Canal Road, Patna through its Managing Director

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The Certificate Officer, Bihar State Credit & Investment Corporation Limited, Indira Bhawan, 4^th Floor, Boring Canal Road, Patna

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.... .... Respondent/s

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======================================================

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Appearance :

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(In all the cases) For the Petitioner/s : Mr. Suraj Samdarshi For the Respondent/s : Mr. Nirmal Kumar

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Mr. Vishwamnhar Prasad

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====================================================== CORAM: HONOURABLE MR. JUSTICE JAYANANDAN SINGH ORAL ORDER

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Patna High Court CWJC No.6711 of 2006 (12) dt.21-11-2013

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Admitted facts are that the Corporation had appointed one of its own officer as Certificate Officer. Thereafter, requisition was sent to him for realization of the dues from the petitioners of aforesaid three writ applications, who were Directors of the Company. Proceeding continued and warrants of arrest were issued against the petitioners. Hence, they moved this Court.

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12 21-11-2013

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Placing reliance on a judgment of a learned single Judge dated 14.1.2003 rendered in the case of Rajani Ranjan Sahau Vs. Bihar State Credit & Investment Corporation Ltd. and other analogous cases, which were filed by the writ petitioners challenging the authorization of the said officer of the Corporation as Certificate Officer, submission is that under the Bihar and Orissa Public Demand Recovery Act definition of Certificate Officer did not include authorization to any financial institution to appoint its own officer as Certificate Officer. Further submission of learned counsel is that the agreement contained two clauses numbered as 10.5. In the two clauses, alternative mode of recovery of dues of the Corporation was prescribed. In the first clause recovery was prescribed through invocation of provisions of Bihar and Orissa Public Demand Recovery Act and in the second clause recovery was prescribed by invoking provisions of section 29 of the State Financial Corporation Act, 1951. It was submitted that in

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Patna High Court CWJC No.6711 of 2006 (12) dt.21-11-2013

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the agreement entered into with the petitioners, first clauses 10.5 was marked as not applicable, thereby, leaving only one remedy to the Corporation to recover its dues against the petitioners in the event of default by invoking provisions of section 29 of the State Financial Corporation Act, 1951.

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When the matter was taken up on 8.8.2006, it was submitted by learned counsel for the petitioners that instead of initiating fresh proceeding before the competent Certificate Officer, same proceeding was being continued by the respondent Corporation. In the circumstances, interim orders were passed and learned counsel for the Corporation was asked to file counter affidavit.

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Learned counsel for the petitioners submits that the said judgment of the learned single Judge has also been affirmed by a Division Bench of this Court, as reported in 2006(1) PLJR 212 [Bihar State Credit & Investment Corporation Ltd. Vs. Rajani Ranjan Sahau]. Hence, it is settled that the notification of an officer of the Corporation as Certificate Officer was bad. He further submits that in a subsequent judgment in the case of M/s Shobha Coir Foam Pvt. Ltd. Vs. State of Bihar [2006(2) PLJR 571], learned single Judge of this Court has held that de facto doctrine did not apply and therefore any proceeding in which

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Patna High Court CWJC No.6711 of 2006 (12) dt.21-11-2013

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certificate had been issued by an incompetent Certificate Officer of the Corporation could not survive and could not be continued by any subsequently appointed competent Certificate Officer.

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Learned counsel for the Corporation does not dispute that the earlier Certificate Officer was an Officer of the Corporation, who, on the requisitions, had issued Certificate and had initiated the proceedings. He also does not dispute that in terms of judgment of learned single Judge in the case of Rajani Ranjan Sahau (Supra) and affirmed by a Division Bench of this Court, he was not competent to function as Certificate Officer. However, submission is that a new Certificate Officer was appointed by the Corporation to whom fresh requisitions were made, vide Annexure-F with the supplementary counter affidavit filed on 28.8.2013. In respect of the first clause 10.5 of the agreement, learned counsel submits that though the same has been bracketed and a note has been put that the same is not applicable but it does not contain initial of any party.

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Since it is admitted now that the earlier Certificate Officer had no authority to issue Certificate, question remains for consideration by this Court as to whether earlier certificate proceeding could be continued by the subsequently notified Certificate Officer and whether Annexure-F in each case is a fresh

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Patna High Court CWJC No.6711 of 2006 (12) dt.21-11-2013

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requisition before him or not. In this context, it will suffice to notice the observations of learned single Judge in the case of M/s Shobha Coir Foam Pvt. Ltd. (Supra) in paragraph 7 of the order :-

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7. ………. In the case of Bihar State Credit & Investment Corporation Limited vs. Rajani Ranjan Sahau & Ors. and other analogous cases, 2006(1) PLJR 212 it was held that the appointment of the Assistant Law Officer of the BICICO as Certificate Officer was completely illegal and any certificate issued by him, therefore, was not only illegal and without jurisdiction but void ab-initio and no valid proceeding can be held on the basis of a certificate that was void at its inception. Any argument upholding the validity of the proceedings by introducing a competent Certificate Officer in the middle of the proceedings would amount to trying to revive a dead child by giving it in the hands of a different nurse. I am, therefore, satisfied that the Certificate case that was illegal and invalid at its inception cannot be allowed to proceed simply by the introduction of a new Certificate Officer.”

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This observation of the learned single Judge fully answers the first issue and it is held that any proceeding in which Certificate had been issued by the earlier Certificate Officer of the Corporation did not survive by application of de facto doctrine.

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So far as second question is concerned, this Court has perused Annexure-F of each case and its enclosures. This Court finds that Annexure-F is a letter of the Assistant Secretary of the Corporation dated 17.12.2005 to the Certificate Officer with reference to earlier certificate proceeding of 2002 itself in which a

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Patna High Court CWJC No.6711 of 2006 (12) dt.21-11-2013

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prayer had been made to renew the earlier arrest warrant issued for its execution. With this letter earlier requisition dated 1.4.2002 has been enclosed. Thus, it is apparent that this letter of the Assistant Secretary of the Corporation to the Certificate Officer is only in context of the old certificate proceeding with a prayer to renew arrest warrant issued earlier. This shows that the Corporation itself was treating the earlier certificate proceeding as continuing and alive and was not making a fresh requisition before the new Certificate Officer.

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Now, it may also be noticed that complete copy of the agreement has been placed on record by the respondents themselves as Annexure-D with their supplementary counter affidavit. The page containing the two clauses numbered as 10.5 bears the signature of both the parties. First clause 10.5 has been bracketed and a note ‘not applicable’ has been written against it. Therefore, this Court has no reason to believe that the note ‘not applicable’ against first clause 10.5 was not genuine and was not put at the time agreement was entered into between the parties. In the circumstances, this Court is of the view that in the agreement only second clause 10.5 survived leaving the only remedy to the Corporation to proceed under section 29 of the State Financial Corporation Act, 1951 against the defaulting parties or under the

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Companies Act or by filing a suit as provided in the said clause.

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At this stage, learned counsel for the Corporation submits that this Court has already held more than once that if in a certificate proceeding a notice is issued, the certificate debtor or the party whom notices have been issued has only a remedy to file their objection under section 9 of the Act and at that stage no writ application is maintainable in this Court.

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This submission of learned counsel for the Corporation is totally misconceived. As noticed above, in the light of judgment of learned single Judge in the case of M/s Shobha Coir Foam Pvt. Ltd. (Supra), earlier certificate proceeding had died its natural death upon finding that the appointment of the Officer of the Corporation as Certificate Officer was itself bad in law. This Court has also found that the said Annexure-F of each case is not a fresh requisition at all, giving rise to any fresh certificate proceeding. Therefore, there is no question of any valid certificate proceeding pending against petitioners in which they are required to file objection in terms of section 9 of the Act.

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In the circumstances, all the three writ applications are allowed. The said so called requisition, as contained in Annexure-F with the supplementary counter affidavits, which is a letter of the Assistant Secretary of the Corporation dated

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Patna High Court CWJC No.6711 of 2006 (12) dt.21-11-2013

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17.12.2005 to the Certificate Officer, is quashed in all the three cases. Corporation shall be at liberty to proceed in the matter in accordance with law and only in terms of the agreement.

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(Jayanandan Singh, J)

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Pradeep/-

Manoj Kumar Mathur v. the Bihar State Credit and Inves

Case brief

What is this about?

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Manoj Kumar Mathur v. the Bihar State Credit and Inves

Case brief

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What did the court decide?

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