Ramachandra Rao, J.
1. This appeal is against the judgment of our learned brother Obul Reddi, J. dismissing the Writ Petition filed by the appellant herein for the issue of a Writ of mandamus restraining the respondents viz. The State of Andhra Pradesh, the Collector of Hyderabad District and the Special Deputy Tahsildar, Urban, Hyderabad, to forbear from taking proceedings under the Madras Revenue Recovery Act against the appellant (petitioner) in pusurance of Form No. II noticed dated 6-5-1967 issued by the 3rd respondent.
2. The appellant herein obtained a loan of Rs. 20,000/- by mortgaging certain immoveable properties in December, 1953 from the Industrial Trust Fund (hereinafter called the Fund) which was constituted under the Hyderabad Industrial Trust Fund Rules, 1347 Hizri. He obtained another loan of Rs. 30,000/- in August, 1953 from the same fund by hypothecating certain moveable property. In December, 1955 he obtained a further loan of Rs. 25,000/- from the fund hypothecating the Gaysers and Gayseretts manufactured by the appellants' concern and other moveable properties which were in the custody of the State Bank of Hyderabad and which were agreed to be handed over to the custody of the said Board. The appellant states that these articles were handed over to the Board on 24-1-1956. The monies borrowed under the agreement should be repaid with interest at 5% per annum compoundable at half-yearly intervals. Under the agreement it is provided that the board can after giving 30 days' notice, seize and sell the moveable properties if the loan is not paid on demand.
3. In the year 1965 the Government took proceedings under the Madras Revenue Recovery Act to recover the dues from the appellant. The appellant then approached this Court under Article 226 of the Constitution and filed Writ Petn. No. 934 of 1965 (AP), contending that no proceedings under the Madras Revenue Recovery Act could be taken for the recovery of the amount. The main contention of the appellant then was that the loans were granted to him under the Industrial Trust Fund Rules and that the said rules did not provide for invoking the provisions of the Revenue Recovery Act. The Writ Petition was disposed of by Gopala Krishnan Nair, J on 7-7-1965 (AP),holding that the action of the Government was authorised and valid under the provisions of Section 52 of the Madras Revenue Recovery Act.
4. The appellant now states that subsequent to the disposal of the aforesaid writ petition, he had made payment to a tune of Rs. 40,000/- to the Government and another sum of Rs. 5,000/- on 10-3-1966, that at the time of the payment of the aforesaid sum of Rs. 5000/- the appellant specifically made it a condition precedent for the encashment of the cheque, that the Gayseretts which were hypothecated by the appellant to the Government and which were in possession of the Government should be returned to the appellant. Thereafter the attachment proceedings were withdrawn by the Government. The appellant submits that he made repeated requests to the respondents to release the hypothecated goods worth according to him, more than Rs. 50,000/- in order to facilitate him to make the payment of the amounts due to the Government. He submits that so far, the respondents have not taken any steps to return the goods hypothecated and handed over to the Government, or to determine the actual amount due towards the principal and interest under the aforesaid loans. However the third respondent came to the concern of the appellant on 6-5-1967 and attached certain moveable properties belonging to the appellant and took an undertaking from him under duress that he would hand over these articles to the Government whenever required.
The appellant has thereupon filed this Writ Petition challenging the action of the respondents. The appellant states that apart from Rs. 45, 000/- already paid, he has paid in instalments some more amounts aggregating to Rs. 6517-15-1 on various dated either by cash or by cheque, that the total amount paid by him comes to Rs. 51, 518/- that without a proper enquiry and without determining the actual amounts due, the respondents are not justified in resorting to the recovery proceedings under the Revenue Recovery Act, and that the respondents without releasing the articles hypothecated or adjusting the value thereof, could not validly take out proceedings to straightway attach the properties. A further contention is also raised that the respondents cannot resort to Section 52, of the Revenue Recovery Act and that the only remedy of the respondents is to file a suit in a civil Court.
5. A counter-affidavit was filed on behalf of the respondents herein stating that the appellant had filed earlier a Writ Petn. No 934 of 1965 (AP),on identical grounds and the same was dismissed and that therefore the appellant was not entitled to claim relief on the same grounds in this Writ Petition. It is contended that the agreement dated 19-8-1953 particularly recited in express terms that the amount due may be recovered under Section 69 of the Transfer of property Act or under the law relating to the recovery of Government dues as may then be in force in Hyderabad. Section 52 of the Revenue Recovery Act gives wide powers to the Government to invoke the provisions of the Act for recovering all the sums due to the State Government.
The statement of the appellant that Gaysers and Gayseretts approximating to the value of Rs. 50,000/- were hypothecated in 1956 and are in the possession of the respondents, is denied by the respondents. The respondents stated that the appellant did not hand over the stock nor was it locked and sealed before any of the departmental officers. It is further averred that except the statement of the appellant, of having kept the stock underlock and key and sent the key to the Government, there was no evidence of the appellant having given physical possession of the said stock to the respondents and it is contended that the Gayseretts are within the factory premises which is also the residence of the appellant. it is the case of the respondents that in the earlier correspondence, the appellant did not deny the outstanding or mention that the Geyseretts were kept in charge of the Government.
On the representations of the appellant that the stocks kept under the charge of the Government were suffering damage and deteriorating as they were lying idle the Government directed the Director of Industries to inspect the condition of the stocks and pursuant to the aforesaid direction, the Inspector-General of Police was directed to investigate the stocks. The report of the Inspector-General of Police proves that physical possession of the Geyseretts was not taken by the Fund and that no acknowledgment was passed by it. For all the aforesaid reasons, the respondents state that they are entitled to take appropriate action under the Madras Revenue Recovery Act (hereinafter called the Act) for recovery of the amount due and outstanding under the loans borrowed by the appellant.
6. Our learned brother Obul Reddi, J,. held that Section 52 of the Act confers very wide powers in the Government, that the provisions of Section 52 of the Act are not discriminatory and violative of the provisions of Article 14 of the Constitution and that in the earlier Writ Petn. No. 934 of 1965 (AP) filed by the appellant, the contention of the appellant that the provisions of the Act could not be invoked, was rejected. On the aforesaid grounds, the learned Judge rejected the contentions of the appellant that Section 52 of the Act, could not be invoked for recovering the amounts due under the aforesaid loans. The learned Judge further held that the questions which require recording of evidence, could not be gone into in a Writ Petition, that the question whether possession of the hypothecated property was delivered to the respondents can only be gone into by a civil Court and that the appellant has an effective alternative remedy through a civil Court. For the aforesaid reasons, the learned Judge dismissed the Writ Petition.
7. In this appeal, Sri Umakant Naik, the learned Counsel for the appellant raised two submissions viz., (1) that the provisions of Section 52 of the Act, cannot be invoked for recovery of the amounts due to a statutory body like the Industrial Trust Fund, that the amounts were not lent by or due to the Government and (2) assuming that the provisions of Section 52 of the Act can be invoked, the respondents cannot straightway issue a demand notice and attach or distrain the appellants' properties without first determining the amounts actually due by the appellant, and that such a procedure is not warranted by the provisions of Section 52 of the Act and is opposed to the principles of natural justice. The learned Counsel, however, did not challenge the vires of Section 52 of the Act as violative of the provisions of Article 14 of the Constitution.
8. The first contention that the provisions of Section 52 of the Act cannot be invoked in the circumstances of the case, cannot be sustained because this question is concluded as between the parties by the decision of Gopala Krishnan Nair J., in W. P. No. 934 of 1965 (AP). The main point which was urged in the said writ petition was that Section 52 of the Act was inapplicable as loans were advanced under Industrial Trust Fund Rules, that the said rules did not provide for recovery of the loan amounts under Section 52 of the Act and that whenever the Legislature intended that the amounts due should be recovered as arrears of land revenue, special provision was made in that behalf in the Special Enactments. This contention was rejected by Gopala Krishnan Nair, J., by holding that even in n the absence of a provision in the Industrial Trust Fund Rules, the language of Section 52 of the Act is wide enough to cover all sums due to the State Government and that the action of the Government in invoking the provisions of Section 52 of the Act was authorised and valid. This decision of the learned Judge is binding on the parties and it is no longer open to the appellant to raise the contention that Section 52 of the Act cannot be invoked by the respondents for recovery of the amounts due under the aforesaid loans. The first contention of the learned counsel has therefore to be rejected.
9. Coming to the second point, the learned Counsel submits that subsequent to the dismissal of the earlier Writ Petn. No. 934 of 1965 (AP), the appellant had paid several amounts aggregating to Rs. 51, 518/- towards the loan, that even though the appellant made several representations for releasing the hypothecated goods, the respondents have not taken any action and that therefore they cannot straightway proceed to attach the properties of the appellant without considering the representations made by the appellant with regard to the delivery of the stock hypothecated or without adjusting the value thereof towards the loan amount. It is contended that the appellant was not liable to pay interest from the date when he expressed his willingness to repay the loan amount and called upon the respondents to return the hypothecated goods, namely the Geysers and Geyseretts.
Therefore, the learned counsel submits that when there are substantial questions in dispute between the appellant and the respondents, the respondents without any reference the representations made by the appellant and without giving (him an opportunity to substantiate his representations and without scrutinizing the relevant material available, cannot determine the amount due to the respondents by the appellant under the aforesaid loans. From the correspondence that has passed, between the appellant and the respondent, it is clear that there is a serious dispute between the parties as to the question whether the hypothecated goods were delivering` or not to the appellant. While the appellant states that the hypothecated goods were put in possession of the respondents delivering the key of the room where the hypothecated goods were stored, the Government denies the same. Secondly the appellant says that under the agreement, the interest is not chargeable beyond a particular date viz., the date on which the appellant expressed is willingness to repay the loans and called upon the respondents to return the hypothecated goods.
10. The question that arises for consideration is, whether the respondents could straightway attach the properties of the appellant without first determining and quantifying the amount alleged to be due by the appellant. Section 52 of the Act reads as follows:
'All arrears of revenue other than land revenue due to the State Government, all advances made by the State Government for cultivation or other purposes connected with the revenue and all fees or other dues payable by any person to or on behalf of the village servants employed in revenue or police duties, and cesses lawfully imposed upon the land and all sum due to the State Government including compensation for any loans or damage sustained by them in contract, may be recovered in the same manner as arrears of a land revenue under the recovery thereof shall have been or many hereafter be other wise specially provided for.'
In the present case, the amounts are claimed by the Government under the loans advanced by the Industrial Trust Fund. Therefore it cannot be disputed that the amounts sought to be recovered fall under the expression 'all sums due to the State Government'. But the section itself does not expressly provide for an enquiry or determination of the sums due to the Government. According to the Dictionary the word 'due' means that which is owned; What one has a right to: fee, toll charge or tribute. How much sum is owed by the appellant, or what amounts the respondents have a right to recover has first to be arrived at before the same could be recovered as a sum due to the Government. When there are disputed between the alleged debtor and the Government with regard to the liability itself or as to the quantum of said liability it is but proper that the alleged debtor should be furnished with the material or data on which the liability is sought to be fixed
Cases where the amount due is admitted or is determined by a competent authority under a special enactment providing for an enquiry in that behalf, are different and would not present much difficulty. In other cases where no enquiry is at all held and the Government seeks to recover the amount, the question arises whether such a liability could be fastened upon the alleged debtor without first determining the liability and the quantum of the said liability. it is an elementary principle that principles of natural justice require that the person who is sought to be fastened with a liability should first be apprised of the facts on which the liability is sought to be based and he should be given an opportunity to make his representations in that behalf. In our view the expression 'sums due' does imply an obligation on the part of the State Government when the liability is disputed, to hold a proper enquiry and furnish the person from whom the amount is sought to be recovered, the full particulars or facts, hold an enquiry, consider the representations and first determine the liability or otherwise for the sum said to be due.
Normally in all cases where the amounts are due under a loan or contract or by way of compensation for breach of a contract, the party aggrieved has to proceed by way of a suit in a civil Court and the party sought to be made liable will then have an ample opportunity of contesting, the claim. But Section 52 of the Act which is a special provision and which enables the Government to recover is a drastic provision and presumably expeditious collection of the amounts due to the Government. Even so, the provisions of Section 52 of Act have to be interpreted in such a manner so as to accord with the principles of natural justice and that the party sought to be proceeded against should at least have the minimum safeguard of having an opportunity to know the basis and the material on which the liability is sought to be imposed upon him and to rebut the same by placing the necessary material in the behalf before the appropriate authority of the Government.
Whether the proceedings taken under Section 52 of the Act the are quasi-judicial or administrative in character, it is incumbent upon the Government to observe the basic principle of natural justice viz., that the party affected should have a reasonable notice of the case he has to meet and a reasonable opportunity of making his representations against the same by producing the relative authority. In our opinion therefore before the Government could recover the sums due under Section 52 of the Act, the relevant material on which the amount is said to be due, and give an opportunity to the appellant to make his representations and produce the relevant material to substantiate his representations and thereafter determine the liability. Only on such determination of the liability and the amount due thereunder, the Government can take proceedings under Section 52 of the Act for recovering the amount. In other words the recovery proceedings under Section 52 of the Act should be preceded by an anterior determination of the liability and the amount due towards such liability.
11. In the instant case after the dismissal of the Writ Petn. No. 934 of 1965 on 7-7-1965 (AP) the appellant alleged that the had paid some more amounts aggregating to Rs. 51,518/-. He contends that interest was not payable from the date on which he expressed his willingness to repay the loan and take delivery of the hypothecated goods. He also contends that the value of the hypothecated goods which are alleged to be in the possession of the Government should at least be adjusted towards the loan amounts. The respondents on the other hand deny the aforesaid statements and contend that there was no delivery of the hypothecated goods. In view of the disputes with regard to the various questions mentioned above, it is but proper that there should be an enquiry by the Government or an appropriate authority constituted by the Government before the proceedings under Section 52 of the Act could be launched against the appellant. Admittedly no enquiry was held in this behalf and the liability of the appellant as well as the amount due and outstanding has to been determined.
After the dismissal of the Writ Petition, the Government issued the Memorandum No. 380/M1/65-28 dated 2-8-1968 stating that the several representations received from the appellant were under consideration of the Government and that therefore the attachment proceedings should be withdrawn. Thereafter the appellant states that he had paid certain amounts and he also asked for the return of the hypothecated goods or the adjustment of the value of the said goods towards the loan amounts. No proceedings of the Government have been brought to our notice to show that the representations of the appellant were considered and that any orders were passed on the aforesaid representations. For the aforesaid reasons and in the circumstances of the case, we are therefore of the opinion that the action of the respondents is not in conformity with Section 52 of the Act and is violative of the principles of natural justice.
12. The judgment under appeal is therefore set aside and both the writ petition and the writ appeal are allowed and a writ of mandamus will issue to the respondents to forbear from taking any proceedings in pursuance of Form II dated 6-5-1967 issued by the third respondent, the Special Deputy Tahsildar, Urban Hyderabad. This order will not however preclude the Government from holding an enquiry and determine the liability of the appellant and thereafter if the appellant is found to be liable, to take appropriate proceedings for recover of the amounts found due and payable by the appellant. In the circumstances of the case, there will no order as to costs. Advocates fee Rs. 100/-.
13. Appeal allowed.