Supreme Court emphasizes natural justice in Haryana dues recovery case

The Supreme Court set aside the High Court's judgment in a case involving the recovery of dues under the Haryana Public Moneys (Recovery of Dues) Act, 1979. The Court emphasized the importance of principles of natural justice and the need for notice before recovery proceedings. It held that the Managing Director must hear the alleged defaulter to ensure fairness. As such principles were not followed in this case, the Court allowed the appeal, directing the Managing Director to initiate recovery proceedings afresh in compliance with the law and principles of natural justice.

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Issues involved:
The judgment deals with the issue of whether the Collector was justified in proceeding against the appellant, a Director of a company, for defaulting in loan repayment without providing an opportunity of being heard u/s the Haryana Public Moneys (Recovery of Dues) Act, 1979.

Summary:
The appellant was a Director of a company that defaulted on loan repayments to the Haryana Financial Corporation. The Corporation sought recovery of the outstanding amount through proceedings u/s 3(3) of the Haryana Public Moneys (Recovery of Dues) Act, 1979. The appellant contended that as he had resigned as Director, no recovery could be made from him without notice. The High Court held in favor of the Corporation, but the Supreme Court found that principles of natural justice must be applied in such cases.

The Act provides for the recovery of dues as arrears of land revenue. The Managing Director of the Corporation must determine the sum due from the defaulter before issuing a recovery certificate to the Collector. The certificate is conclusive proof of the amount due, and the Collector proceeds with recovery. The Act bars civil courts from adjudicating on such matters, emphasizing the role of the Managing Director in determining the amount due.

The Supreme Court held that the determination by the Managing Director must involve hearing the alleged defaulter to ensure natural justice. The Court distinguished a previous case and emphasized the need for notice before recovery proceedings. As principles of natural justice were not followed in this case, the Court set aside the judgment of the High Court and the recovery certificate, allowing the Managing Director to initiate recovery proceedings afresh in compliance with the law.

In conclusion, the Supreme Court allowed the appeal, setting aside the previous judgment and directing the Managing Director to proceed with recovery in accordance with the law and principles of natural justice.

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