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Union Of India v. Jatindra Narayan Majumdar And Others
Structured Summary of the Opinion (Sinha, C.J.)
Factual and Procedural Background
The Rehabilitation Finance Administration (established by Act 12 of 1948) advanced a loan of Rs. 35,000 to respondent No. 1, Shri Jatindra Narayan Majumdar, in connection with a cloth business in Calcutta. Respondents Nos. 2 and 3 were sureties for repayment. On 29 August 1952 the shop's stock was allegedly entirely destroyed by fire. The stock had been insured; the insurer (Central Insurance Company Limited) failed to pay, and respondent No. 1 sued the insurance company in Suit No. 3284 of 1954 claiming Rs. 66,050/13/6. Amounts due to the Rehabilitation Finance Administration were treated as public demands recoverable under the Revenue Recovery Act, 1890 (the "said Act").
On or about 24 February 1958 a certificate of recovery under Section 3(1) of the Revenue Recovery Act, 1890 was issued by the Collector, Delhi (signed by an authorised officer) and forwarded to the Collector, 24 Parganas, Alipore. That certificate became case No. 894 (OPR)/1958-1959 before the Certificate Officer. On 24 January 1961 the suit by respondent No. 1 against the insurance company was decreed for Rs. 60,000. The Rehabilitation Finance Administration applied for attachment of that decree under the certificate; attachment orders were made in May and June 1961.
In the course of proceedings the Collector, 24 Parganas transferred the certificate to the Certificate Officer and the Certificate Officer issued a fresh certificate and proceeded under the Public Demands Recovery Act. A decision of this Court in Sm. Bulu Rani Seal v. Member, Board of Revenue, West Bengal, AIR 1962 Cal 499 (referred to in the opinion) indicated that where the Revenue Recovery Act applied the collector to whom a certificate was transmitted must realise the amount and could not transfer it to the Certificate Officer. After that decision, respondent No. 1 applied to quash the certificate proceedings. The Collector, 24 Parganas then withdrew the case to his file, renumbered it as Case No. 1.OPR/1962-1963, issued notices and proclamations under the Public Demands Recovery Act, and proceeded to execute the original certificate issued by the Collector, Delhi.
Before the Court below (Banerjee, J.), the respondent's application was allowed and the certificate proceedings were quashed. The present appeal challenges that order.
Legal Issues Presented
- Whether a certificate of recovery issued by a Collector outside the district and transmitted to the Collector within the district (under the Revenue Recovery Act, 1890) is rendered spent or invalid when, at an initial stage, the local Collector transfers the matter to a Certificate Officer who follows procedure not in accordance with the said Act.
- Whether, after such an incorrect transfer and initial procedure, the local Collector (24 Parganas) may withdraw the case, renumber it and proceed to execute the original certificate in accordance with law without issuing a fresh certificate from the issuing Collector (Collector, Delhi).
- Whether the Court below was correct in quashing the certificate proceedings in view of the earlier decision in Sm. Bulu Rani Seal v. Member, Board of Revenue (AIR 1962 Cal 499).
Arguments of the Parties
Appellant's Arguments
- The certificate was validly issued by the Collector, Delhi (signed by an authorised officer) and subsists until realised, withdrawn or cancelled; a wrong procedure adopted in execution does not affect the validity of the certificate itself.
- The transfer of the certificate by the Collector, 24 Parganas to the Certificate Officer and the consequent procedure followed by that officer were not in accordance with the Revenue Recovery Act (only a "collector" as defined could realise the amount), and that wrong procedure is void and cannot extinguish the certificate.
- When the error was realised, the Collector, 24 Parganas correctly withdrew the case to his file, renumbered it and proceeded to execute the original certificate under the provisions of the Revenue Recovery Act and, where the Act was silent, under the Public Demands Recovery Act; this remedial action was lawful and sufficient — issuing a fresh certificate by the Collector, Delhi was unnecessary.
Respondent's Arguments
- When the certificate was initially put into execution through an incorrect procedure (transfer to the Certificate Officer and execution under the Public Demands Recovery Act), the certificate thereby "spent its force" and could not be further realised in the same form.
- It was suggested that the proper way to proceed, if the appellant wished to realise the amount after the defect, was to have the Collector, Delhi issue a fresh certificate.
- Before the Court below the respondents relied on the Court's earlier decision in Sm. Bulu Rani's case (AIR 1962 Cal 499) and obtained an order quashing the certificate proceedings.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Sm. Bulu Rani Seal v. Member, Board of Revenue, West Bengal, AIR 1962 Cal 499 (Certificate Case No. 894 (OPR) of 1958-1959) | Establishes that where the Revenue Recovery Act applies the certificate to be realised is the certificate issued by the collector outside jurisdiction and transmitted to the collector within jurisdiction; it is for the collector to whom it is transmitted to realise the amount and he cannot transfer it to the Certificate Officer. | The court held that this decision applied to the present facts. It identified the prior incorrect transfer to the Certificate Officer as a procedure not according to law and used the principle to require that the Collector, 24 Parganas himself proceed to realise the certificate (which he did by withdrawing and renumbering the case and following the correct procedure). |
Court's Reasoning and Analysis
The court's analysis proceeded in these steps, following the facts and the precedent cited:
- Authentication of the issuing authority: The certificate of recovery was issued by the Collector, Delhi, and had been signed by an authorised officer (Shri S.C. Vajpaye) pursuant to delegation under Section 3(2) of the Revenue Recovery Act. The court accepted the affidavit proving the Collector of Delhi had authorised Shri Vajpaye to sign such certificates.
- Identification of initial procedural defect: The Collector, 24 Parganas had transferred the received certificate to the Certificate Officer who then issued a fresh certificate and proceeded under the Public Demands Recovery Act — a procedure inconsistent with the Revenue Recovery Act's requirement that a "collector" realise the certificate.
- Application of precedent: The court recognised the earlier decision in Bulu Rani's case (AIR 1962 Cal 499) as applicable, which establishes that the local collector is the proper authority to realise a certificate transmitted to him and cannot transfer the matter to the Certificate Officer.
- Remedial action taken locally: Once the error was realised (respondent had applied to quash), the Collector, 24 Parganas withdrew the case to his file, renumbered it, issued notices and proclamations required by the Revenue Recovery Act and proceeded to execute the original certificate under the correct statutory procedures (and where the said Act was silent, under the Public Demands Recovery Act).
- Legal effect of the wrongful procedure: The court rejected the contention that the incorrect initial procedure (transfer to the Certificate Officer and execution steps not according to the said Act) exhausted or destroyed the certificate. The court reasoned that such a wrong procedure is void and cannot affect the subsistence of the certificate; the certificate remains subsisting until it is realised, withdrawn, or cancelled.
- Consequent conclusion: Because the Collector, 24 Parganas had taken correct steps to execute the original certificate in accordance with law, there was no legal basis to hold that the only remedy would be to obtain a fresh certificate from the Collector, Delhi. The court therefore found the lower court's quashing of the proceedings to be erroneous.
Holding and Implications
Holding: The appeal is allowed; the order of the Court below quashing the certificate proceedings is set aside and the Rule is discharged. All interim orders are vacated. The operation of this order is stayed for six weeks, and the amount deposited in court shall remain on deposit until that time. There will be no order as to costs.
Implications:
- Direct effect on the parties: The certificate proceedings that had been quashed by the Court below are revived for execution by the appropriate Collector (24 Parganas) who had withdrawn and renumbered the case and was following the procedure required by law. The appellant is entitled to proceed with realisation of the original certificate under the statutory procedure. The amounts deposited in court are to remain on deposit for six weeks pending the operation of this order.
- Broader precedent: The opinion applies the previously decided principle in Sm. Bulu Rani Seal (AIR 1962 Cal 499) but the judgement does not purport to lay down a new general principle beyond applying that precedent to the facts. The opinion does not discuss broader implications beyond the immediate effect on the proceedings between the parties.
Result stated in the opinion: Appeal allowed. The order of the Court below is set aside, the Rule is discharged, all interim orders are vacated, there will be no order as to costs, and the operation of the order is stayed for six weeks with the deposited amount retained in court.
Sinha, C.J:— The facts in this case are shortly as follows.
2. In 1948, by Act 12 of 1948 was established the Rehabilitation Finance Administration, the main purpose of which was the giving of financial assistance to displaced persons, to enable them to settle in business or industry. The respondent No. 1, Shri Jatindra Narayan Majumdar claims to be a refugee from East Pakistan. Prior to 1952, he took a loan from the said Administration of a sum of Rs. 35,000 in connection with his cloth business carried on in Calcutta. Respondents Nos. 2 and 3 stood as sureties for the re-payment of the said loan on the 29th of August, 1952 a fire broke out in the said shop and it is claimed that the entire stock was burnt out and destroyed. The stock was insured with the Central Insurance Company Limited and as the aid Insurance Company failed to pay the claim, the respondent No. 1 filed a suit being suit No. 3284 of 1954 in the Original Side of this Court, claiming the value of the stock amounting to Rs. 66,050/13/6 pies, for damages and other reliefs. The amounts due to the said Administration are under the said Act 12 of 1948, recoverable as a public demand. On or about the 24th of February, 1958 a certificate of recovery under Section 3(1) of the Revenue Recovery Act, 1890 (Act 1 of 1890) (hereinafter referred to as the “said Act”) was issued by the Collector, Delhi District and forwarded to the Collector, 24 Parganas, Alipore. A copy of this certificate is Annexure A to the petition at page 14 of the Paper Book. Section 3(1) of the said Act is in the following terms:
“Where an arrear of Iand-revenue, or a sum recoverable as an arrear of land-revenue, is payable to a collector by a defaulter being or having property in a district other than that in which the arrear accrued or the sum is payable, the collector may send to the collector of that other district a certificate in the form as nearly as may be of the schedule, stating—
(a) the name of the defaulter and such other particulars as may be necessarv for his identification and
(b) the amount payable by him and the account on which it is due.”
3. Under sub-section (2) of Section 2 of the said Act, “collector” means the chief officer in charge of the Land-Revenue Administration of a District. Sub-section (2) of S. 3 provides that the certificate shall be signed by the collector making it or by any officer to whom such collector, may by order in writing, delegate this duty, and, save as otherwise provided by the said Act, shall be conclusive proof of the matters therein stated. Before us there was some dispute on the point as to whether this certificate had been signed by the Collector Delhi or by a person authorised under S. 3(2) as stated above. We, therefore, directed an affidavit to be filed on the point and it has now been proved to our satisfaction that the Collector of Delhi had authorised Shri S.C Vajpaye, District Collection Officer to sign certificates of recovery on his behalf in terms of Section 3(2) of the said Act. The certificate in question has been signed by Shri Vajpaye. This certificate having been received by the Collector. 24 Parganas he transferred the said certificate to Shri N.C Dutta. Certificate Officer. Alipore for disposal and a certificate was issued by the Certificate Officer under the Public Demands Recovery Act and a case being case No. 894 (OPR)/1958-1959 was started on the 5th of December, 1958. On the 23rd of April, 1958 the Rehabilitation Finance Administration was added as a partv in the original suit No. 3284 of 1954 mentioned above and on the 24th of January 1961 the said suit filed by the respondent No. 1 against the insurance Company was decreed for a sum of Rs. 60,000. On the 19th of May, 1961 the Rehabilitation Finance Administration filed an application before the certificate officer for attachment of the said decree in execution of the certificate issued as aforesaid. On the 23rd of May, 1961 the application was allowed and an attachment order made. On the 29th June, 1961 a further order was made for attachment of a sum of Rupees 3,863.07 P. On the 18th of February, 1962 an order was made by this Court directing the Accountant General to set apart a sum of Rupees 43,988.20 P. against the attachment made under certificate case No. 894 (OPR) 1958-1959 and to pay the balance of the amount deposited by the Insurance Company to the Solicitor of the respondent No. 1. On the 23rd of February, 1952 the name of Union of India was substituted as the certificate holder. In the meanwhile, what had happened was that a similar matter had come up for decision in this Court and it was decided by me in Civil Revision No. 2310 of 1959, Sm. Bulu Rani Seal v. Member, Board of Revenue, West Bengal, AIR 1962 Cal 499 that where the said Act was applicable the certificate that was to be realised was the certificate issued by the collector outside jurisdiction and transmitted to the collector within jurisdiction under the provisons of the said Act, and it was for the collector to whom it was transmitted to realise the amount and that he could not transfer it to the certificate officer on the 11th July, 1962 respondent No. 1 made an application to the Certificate Officer, Alipore praying that the certificate proceedings be Quashed, in view of the decision of this Court. On the 2nd March, 1963 the Collector. 24 Parganas made the following order:
“The case is withdrawn to my file in view of the latest judgment of the Hon'ble High Court. Enter in Register X, and issue notice under Section 7 of the Public Demands Recovery Act. A proclamation under Section 6(1) of the R.R Act should also be issued. A fresh attachment order should be issued in terms of the observation of the Certificate Officer in the order sheet on 5-6-62.”
4. On the 4th of March, 1963 notice was issued under Section 7 of the Public Demands Recovery Act in as much as, the procedure under that Act has to be followed where the procedure is not indicated by the said Act. On the 6th of March, 1963 a proclamation under Section 6(1) of the said Act was issued. Thereupon, the respondent No. 1 objected to the proceedings by applying under Article 226 of the Constitution before this Court and on the 17th June, 1963, a Rule was issued by Banerjee J., inter alia, asking the respondents to that application to show cause why the proceedings should not be quashed and why other reliefs should not be granted. I might mention here that after the withdrawal order as set out above, dated the 2nd March, 1963 was made, the case was renumbered as case No. 1.OPR/1962-1963. The matter came up before Banerjee, J. in the Court below and in a very short order, the learned Judge allowed the application and made the Rule absolute. The relevant part of the judgment is set out below:
“It is conceded by the learned Advocates for the Respondents that in view of the decision of this Court in AIR 1962 Cal 499 Certificate Case No. 894 (OPR) of 1958-1959, subsequently re-numbered as Case No. 1.OPR/1962-1963 cannot continue.
That being the position, the Certificate in the above case is quashed. This is however, without prejudice to the rights of the Respondent Collector to start fresh Certificate proceedings according to law.
The Rule is made absolute as indicated above. There will be no order for costs.”
5. It is against this order that this appeal is directed. In our opinion, the learned Judge was in error in allowing the application although he was right in holding that the decision of this Court in Bulu Rani's case, AIR 1962 Cal 499 was applicable. What happened in this case appears to be quite clear. The Collector, Delhi through his authorised agent issued a certificate under the said Act and transmitted it to the Collector, 24 Parganas. Under the said Act, it was only a “collector” as defined under the said Act that could realise the amount of the certificate and the order of the Collector, 24 Parganas transferring the case to the Certificate Officer, who issued a fresh certificate and proceeded under the Public Demands Recovery Act to execute it, was a procedure not according to law. When the respondent No. 1 made the application on 11th July, 1962, this error was realised and so the correct procedure was taken by the Collector, 24 Parganas. He withdrew the case to his own file, re-numbered it as a new case and proceeded to execute the certificate which had been issued by the Collector of Delhi. A proclamation was issued as required by the said Act, and further proceedings took place in accordance with the provisions of the Public Demands Recovery Act, as there is no procedure fixed under the said Act for the subsequent proceedings. The objection which is taken before us is as follows. It is said that when the certificate was put into execution here, and a wrong procedure followed, the certificate spent its force and the Collector, 24 Parganas could not continue realisation of the said certificate by re-numbering the case before him.
6. It is suggested that what should be done now, if the appellant wishes to realise the amount is to issue a fresh certificate by the Collector, Delhi. In our opinion, this argument has no substance. The certificate had been issued by the Collector of Delhi and is subsisting until it is realised, and/or withdrawn or cancelled. All that had happened was that a wrong procedure was adopted which is not in accordance with law. Such a procedure is void in the eye of law and cannot affect the certificate. Now the Collector, 24 Parganas is proceeding correctly under the provisions of law. The case number is, therefore, not a mere re numbering of the case that has been commenced ??? by the certificate officer but is an original proceeding, had in accordance with law. We see no defect in it. We are unable to agree that the only way of realising the amount of the certificate would be now to issue a fresh certificate. That being so, the order made by the Court below was not correct and must be set aside.
7. The result, therefore, is that this appeal is allowed. The order of the Court below is set aside and the Rule is discharged. All interim orders are vacated.
8. There will be no order for costs throughout.
9. Let the operation of this order remain stayed for six weeks from today and let the amount deposited in court remain in deposit until that time.
Arun K. Mukherjea, J.:— I agree.
CK/VSD/G.G.M
10. Appeal allowed.
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