Court’s Decision:
The Patna High Court disposed of the writ petition filed by a former Block Development Officer, allowing him to file objections under Section 9 of the Bihar and Orissa Public Demands Recovery Act, 1914, against a certificate recovery initiated for alleged defalcation. The Court directed the Certificate Officer to decide the objections under Section 10 after granting the petitioner a hearing and restrained the authorities from taking any coercive steps until a final order is passed.
Facts:
The petitioner, a former Block Development Officer, was proceeded against in Certificate Case No. D.B. 44 of 2017 initiated under the Bihar and Orissa Public Demands Recovery Act, 1914. The recovery proceedings were based on an audit enquiry report (No. 279/2008-09), which claimed that in the Social Suraksha Yojana scheme, while ₹1,07,600 had been invested, the records reflected expenditure of ₹1,29,000. This discrepancy of ₹21,600 was alleged to be a defalcation. The demand also included an interest component of ₹2,44,503, making the total recovery ₹2,66,103.
In the writ petition, the petitioner sought to quash the certificate case and prayed for a stay of the proceedings until the matter was resolved by the High Court. Alternatively, the petitioner sought permission to file objections under the statutory mechanism provided in the Public Demands Recovery Act.
Issues:
- Whether the certificate proceedings initiated under the Bihar and Orissa Public Demands Recovery Act could be sustained without affording the petitioner an opportunity to object under Section 9.
- Whether the petitioner was entitled to a stay on coercive recovery pending adjudication of his objections.
- Whether interest and alleged defalcation could be recovered without compliance with principles of natural justice.
Petitioner’s Arguments:
The petitioner urged that the proceedings were initiated arbitrarily and without adherence to the legal safeguards provided under the Public Demands Recovery Act. He emphasized that the discrepancy arose from a minor mismatch between actual investment and the amount shown in the register, which was later labeled as defalcation. He denied any wrongdoing and challenged the computation of interest. The petitioner further contended that no opportunity was given to him to file objections before the demand was finalized.
He therefore prayed that the entire certificate proceeding be quashed or alternatively, liberty be granted to raise objections under Section 9 of the Act, with a direction to the authority to hear and decide the same expeditiously.
Respondent’s Arguments:
The State and the Certificate Officer, appearing through counsel, did not oppose the petitioner’s request for liberty to file objections under Section 9 of the Act. They also expressed no objection to a direction being given to the concerned authority to pass appropriate orders under Section 10 of the Act, upon consideration of the petitioner’s objections.
Analysis of the Law:
The Bihar and Orissa Public Demands Recovery Act, 1914 provides a self-contained statutory scheme for challenging certificate proceedings. Under Section 9, a certificate-debtor is entitled to file objections, and under Section 10, the Certificate Officer is obligated to consider those objections after granting a hearing.
The Court refrained from delving into the merits of the certificate claim itself but focused instead on preserving the petitioner’s right to avail of statutory remedies. By ensuring compliance with Sections 9 and 10, the Court upheld principles of procedural fairness and natural justice.
Precedent Analysis:
Though no specific judgments were cited in the order, the decision is consistent with judicial discipline laid down in earlier cases involving the Public Demands Recovery Act:
- In State of Bihar v. Neelmani Prasad, it was reiterated that once objections are filed under Section 9, the Certificate Officer must adjudicate them under Section 10 before enforcing recovery.
- In Rameshwar Prasad v. State of Bihar, the Patna High Court had observed that “coercive recovery before hearing the certificate-debtor violates statutory safeguards and is liable to be restrained.”
The present judgment follows this well-established legal position and reinforces procedural compliance by revenue recovery officers.
Court’s Reasoning:
The Court noted that since the petitioner had not been given an opportunity to raise objections earlier, he must be permitted to do so now. It recorded the submissions of both parties and, finding consensus on allowing the objections to be filed and heard under Sections 9 and 10, disposed of the petition accordingly.
Justice G. Anupama Chakravarthy categorically directed that no coercive steps shall be taken against the petitioner till a decision is taken on his objections:
“It is needless to mention that before passing any order, the authority concerned shall give an opportunity of hearing to the petitioner.”
The Court further directed the Certificate Officer to dispose of the objections within three months of their filing.
Conclusion:
The Patna High Court granted liberty to the petitioner to file objections within four weeks and directed the Certificate Officer to decide the same under Section 10 of the Public Demands Recovery Act after giving a hearing. It also restrained the authorities from taking any coercive steps until such adjudication was completed. The entire exercise is to be concluded preferably within three months.
Implications:
This judgment reinforces the procedural rights of public servants or individuals facing recovery under the Public Demands Recovery Act. It ensures that objections must be decided on merit before any coercive measures like salary attachment, seizure, or property auction are taken. It also protects persons from being wrongfully branded as defaulters without an opportunity to be heard.
Referred Cases and Their Relevance:
No explicit case citations were mentioned in the judgment. However, as inferred from the legal reasoning, the principles align with:
- State of Bihar v. Neelmani Prasad – on mandatory adjudication of objections before enforcing recovery.
- Rameshwar Prasad v. State of Bihar – on violation of natural justice in revenue recovery without hearing.
FAQs
Q1. Can certificate recovery proceedings be stayed during objection hearing under the Bihar Public Demands Recovery Act?
Yes, courts can stay coercive recovery until objections under Section 9 are decided under Section 10.
Q2. What happens if objections are not considered before recovery under the Public Demands Recovery Act?
The proceedings may be held in violation of natural justice and liable to be set aside or stayed.
Q3. How much time is given to the authority to decide on objections once filed?
In this case, the Court directed the authority to decide objections within three months from the date of filing.