TaxTMI 
TaxTMI 
2004 (3) TMI 749
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....ging Director and accordingly struck down the Certificate of Recovery. On the other hand, the Punjab and Haryana High Court has in the Judgment, impugned in Civil Appeal No. 7818 of 2002, disagreed with the view of the Delhi. High Court and has upheld the appointment of the Managing Director. However, on facts of that case, it was held that the opportunity of being heard had not been granted and the matter was referred back for giving a hearing to the party and passing a fresh order. The Financial Corporations being aggrieved by the Judgment of the Delhi High Court have come in Appeal against that Judgment. The party being aggrieved by the Judgment of the Punjab & Haryana High Court has come in Appeal against that Judgment. 4. At this stage it must be mentioned that even though the Delhi High Court allowed the Writ Petitions on the above mentioned ground, all other points raised in the Writ Petitions were answered against the party. Mr. Mehta relied upon the authorities of this Court in the cases of Management of Northern Railways Co-operative Society Ltd. v. Industrial Tribunal, Rajasthan, Jaipur and Anr. and Employees in Relation to the Management of India Cable Co. v. Their w....
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....tment would not inspire confidence as the question was not of the bias but of the reasonable likelihood of bias. The Delhi High Court has held that it is against all canons of justice to make a man a judge in his own cause. It is held that justice should not only be done but should be seen to be done as well. 7. The Punjab and Haryana High Court has disagreed with this view. It has held that the decision of the Delhi High Court appears to be based on the assumption that the function of the authority was akin to the determination of a lis/dispute between the parties. The Punjab and Haryana High Court has held that the procedure laid down for issuance of Recovery Certificates does not involve adjudication of a lis in a strict sense. It has held that the only thing which the State Government or the specified authority is to do before issuing a Certificate is to go through the contents of the application filed on behalf of the Corporation and the objection, if any, raised by the persons to whom notice is issued. The Punjab & Haryana High Court has held that ordinarily, the loanee, would know his liability which is to be repaid to the Corporation along with interest at the specified ....
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....d that persons who are entrusted with the duty of hearing a case judicially should be one who have no personal bias in the matter. On these facts, the majority of the Judges applied the principle that 'no man can be a judge on his own cause' and struck down the scheme. However Justice Wanchoo and Justice B.P. Singh held that the action of the Government was purely administrative and that in such cases it does not follow that the Secretary was an improper person, to hear the objections. 9. This question again came up for consideration before a Constitution Bench of this Court in the case of Lachhman Das on behalf of Firm Tilak Ram Bux v. State of Punjab and Ors. . The facts of this case are almost identical to the facts of the present case. In Lachhman Das's case (supra) the statute provided a special procedure of recovery. Under the provisions of the statute the head of the department, was authorised to determine the exact amount due and recoverable from defaulters. Under the statute the head of the department was the Managing Director of the Patiala State Bank. The Constitutional validity of that procedure was challenged. The question was whether in such cases the d....
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...." and decide the dispute, and that there is thus no real opportunity afforded to the parties to present their case. This argument proceeds on a misconception of the true scope of Rule 6. It does not bar the parties from examining witnesses or producing other documentary evidence. The Managing Director, has, under this Rule, to examine the statement and the records of the Bank, in so far as they bear on the points in dispute and that normally, would be all that is relevant. But he is not precluded by the Rule from examining witnesses or taking into account other documentary evidence, if he consider that that is necessary for a proper determination of the dispute. And whether he should do so or not is a matter left to his discretion. Discussing a somewhat similar question arising on the language of Section 68-D(2) of the Motor Vehicles Act, 1939, this Court observed in Malik Ram v. State of Rajasthan: "It will therefore be for the State Government, or as in this case the officer concerned, to decide in case any party desires to lead evidence whether firstly the evidence is necessary and relevant to the inquiry before it. If it considers that evidence is necessary, it will give a r....
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....tion of presuming that there was any conflict of duty or that the Managing Director would not act fairly. 12. Reliance was also placed upon the decision of another Constitution Bench of this Court in the case of A.K. Kraipak and Ors. v. Union of India and Ors. . In this case the Acting Inspector General of Forest of Jammu & Kashmir State was himself a candidate for selection to the Indian Forest Service. Even though he was a candidate he became a Member of the Selection Board constituted under Regulation 5 for preparing a list of officers of State Forest Service. In the list which was prepared his name was shown as No. 1. It was pointed out that the Acting Inspector General of Forest did not sit in the Selection Board at the time when his name was considered by the Selection Board. This Court held even though he may not have sat in the Selection Board at the time his name was considered but he did participate when the names of his rivals were being considered. It was held that he was bound to have influenced the other members whilst the names of his rivals were being considered. Here also, the facts were completely different. It was shown that the Acting Inspector General had a ....
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....an be thought of for implementing the provisions of the Act. This Court held that personal bias cannot be attributed to such officers either in favour of the bank or against any occupant who is being proceeded against, merely because he happens to be an officer. Thus, the authorities disclose that mere appointment of an officer of the Corporation does not by itself bring into play the doctrine that 'no man can be a judge in his own cause'. For that doctrine to come into play it must be shown that the concerned officer has a personal bias or a personal interest or has personally acted in the concerned matter and/or has already taken a decision one way or the other which may be interested in supporting. This being the law it will have to be held that the decision of the Delhi High Court is erroneous and cannot be sustained and the view taken by the Punjab and Haryana High Court is correct. It will therefore have to be held that Managing Director of a Financial Corporation can be appointed as an Authority under Section 32G of the Act. 15. It is next urged that Section 32G of the Act can only apply to a principal debtor and not against a surety. In support of this submission....
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....ime the Legislature intended that Section 32G was not to apply to a surety then the Legislature would have specifically so provided. It is therefore clear that the remedy under Section 32G is available even against a surety. 17. In support of the submission that the Legislature did not intend to apply Section 32G to a surety, reliance was placed upon the case of P.K. Unni v. Nirmala Industries and Ors. wherein it has been held that the Court must proceed on the assumption that the Legislature did not make a mistake and that it intended to say what it said. It was held that assuming there is a defect or an omission in the words used by the Legislature, the Court cannot correct or make up the deficiency. It was held that the Court cannot add words to a Statute or read words into it which are not there, especially when a literal reading thereof produces an intelligible result. It is held that the Court is not authorised to alter a word or provide a casus omissus. Reliance was also placed on the case of Union of India v. Elphinstone Spinning and Weaving Co. Limited and Ors. reported in (2001) 4 SCC 139 which is to the similar effect. There can be no dispute with these propositions. ....
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....omputed, then the question may, subject to any rules that may be made under this Act, be decided by such Labour Curt as may be specified in this behalf by the appropriate Government [within a period not exceeding three months]." 20. It was submitted that the wordings of Section 33C(1) and 32G are identical. Reliance was then placed upon the authority of this Court in the case of Fabril Gasosa v. Labour Commissioner and Ors. wherein Section 33C was considered. It was held that Section 33C is in the nature of an execution proceeding designed to recover the dues of the workmen. The distinction between Sub-sections (1) and (2) was noticed and it was held that this distinction is mainly in the procedural aspect and not with any substantive rights of workmen. It was held that after the determination is made by the labour court under Sub-section (2), the amount so determined can be recovered through the summary and speedy procedure provided by Sub-section (1). It was held that Sub-section (1) does not control or affect the ambit and operation of Sub-section (2) which was wider in scope than Sub-section (1). It was held that the rights conferred under Sub-section (2) were in additional ....
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....nterest is. Thus a mere calculation has to be made to ascertain the amount due. If on such calculations it is found that an amount due is due to the Financial Corporation then a Certificate of Recovery can be issued. Undoubtedly, the provision is the nature of an execution proceeding but it is not a recovery proceeding pursuant to a decree of a Court. It is a recovery proceeding on the amount being found to be due by a simple verification by the State Government or the authority appointed by it. Further to accept the interpretation suggested by counsel would be to go against the very purpose and object of the Act which is to ensure speedy recovery. With that object in that Sections 29, 31 and 32 have been enacted. These have been found to be inadequate. Thus by Section 32G one more remedy of recovery is given to a Financial Corporation. Merely for execution of a decree of a Court no such provision is required. Once a decree is passed it can be executed in the normal manner. That Section 32G is not for execution of a decree of a Court is also clear from the fact that it does not use the word decree. All that Section 32G contemplates is that where an amount is due an officer will mak....
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....ry. 23. It was next submitted that under Sections 31 and 32 an elaborate procedure has been established. It was submitted that unlike that Section 32G does not lay down any procedure. It was submitted that this Court must thus strike down Section 32G as being arbitrary. It was submitted that such a draconian provision can be exercised without giving any reasons in writing and in the absence of any procedure. It was submitted that absence of procedure means that the principles of natural justice need not be followed. It was submitted that no right of Appeal has been provided against the issuance of a Certificate of Recovery issued under Section 32G. In support of the submission that such a provision must be struck down, reliance was placed upon the case of Excel Wear etc. v. Union of India and Ors. wherein Sections 25(O) and Section 25(R) of the Industrial Disputes Act, 1947, as they then stood were, struck down as being constitutionally invalid amongst others on the ground that the provisions did not require any reasons to be given and that there was no provision for an appeal. However, it must be noted that the abovementioned Sections were struck down not only on these two grou....
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....igh Court under Article 226 or Article 227 of the Constitution of India. Section 32G provides that the State Government or the authority will issue a certificate after following the procedure. The words 'after following the procedure' necessarily indicates that principles of natural justice have to be complied with. Thus, notice would have to be issued, the party concerned would have to be heard and then only the order would be passed. We see no substance in the submission that the order must always be a speaking order or a reasoned order. Considering the fact that the provisions only contemplate arithmetical calculations or simple verification, the question of any reasoned or speaking order does not arise. All that is to be stated is that the amount is found due. On that basis the Certificate of Recovery is to be issued. We, therefore, see no substance in the submission that the provision is arbitrary or discriminatory. 26. We are told that now a procedure has been prescribed. Even though no procedure was prescribed earlier, it could not be denied that principles of natural justice were followed. Notices were issued to the concerned parties. They were given a hearing. T....