Sharfuddin Ahamed, J.
1. The two appeals arise out of the judgment and order of our learned brother Chinnappa Reddy J., made in Writ petitions 2991 and 3316 of 1967 holding Section 19 (1) of the Andhra Pradesh Khadi and Village Industries Board Act (IV of 1959) ultra vires as offending Article 14 of the Constitution.
2. The facts necessary to appreciate the arguments on either side may briefly be stated. The petitioner in Writ Petition No.2991 of 1967 is the Rayalaseema Village Service Association, Chagalamarri. This association was granted a loan of Rs.5,300/- for the purchase and working of ghanies by the Andhra Pradesh Khadi and Village Industries Board (hereinafter called the Board). In the affidavit filed by the Secretary of the Association it was stated that the Association inpursuant to the securing of the loan started the working of ghanies and also pushed its products into the market for sale which earned a rebate of Rupees 362-27P, thus having a balance of Rupees 4,937-733 P. being the loan amount. the Board also failed to pay rebate for the period from 1-3-1963 to 31-12-1964 which worked out to Rs. 5619/-. Further the Board had to pay the management grants from 1-4-1963 to 31-3-1964, the amount under this heading being Rs. 2,625.-. Thus the Association was entitled to recover Rs.8,24/- from the Board and after giving a set off to the balance of the loan, the Board had to pay to the petitioner Association a sum of Rs. 3,306-27 P. The Board, however, without taking into consideration its liability to pay the petitioner issued a demand notice on 12-3-1964 directing payment of the loan amount and finally on 16-7-1965 the Board threatened to take action against the petitioner under Section 19 of the Act to which the petitioner Association replied claiming a sum of Rs. 8,344/- after adjusting the loan amount. In spite of this protest the Tahsildar, Allagadda (3rd respondent) served a notice under the Provisions of the Revenue Recovery Act demanding the payment of the loan amounts failing which any immovable properties of the Association were liable to attachment and sold in auction. There-upon the petitioner-Association filed the petition for the issuance of a writ to declare Section 19 of the Act ultra vires of the powers of the State Legislature and to restrain the Board from taking action by invoking the provisions of Section 19 of the Act.
3. Writ Petition No.3316/67 was filed by Gandhi Gram Seva Samathi. Chagalamarri. This Samithi was granted a loan of Rs.5,000/- for the purchase and working of emery stones (Chakkies) for pounding rice. The case of the petitioner-Samithi was that after receiving the necessary implements for pounding rice. it started working the industry and was selling the products. But the Board failed to give the necessary rebate and also failed to sanction the management grant and subsidy which worked out to more than Rs.7,200.-. While so, in the early part of 1967 the Board started pressing for the payment of the loan and was successful in its attempt to recover Rs.1000/- For the balance of the amount the Board sent a certificate to the Revenue Recovery Act. It was contended that the Board cannot recover the amount under the provisions of the Revenue Recovery Act and if they had any vaild and legal claim they could approach the competent the Act is ultra vires of the powers of the State Legislature as it is violative of Article 14 of the Constitution.
4. The question involved in both the petitions was whether Section 19 of the Andhra Pradesh Khadi and Village Industries Board Act was ultra vires the powers of the State Legislature. The learned Judge on a consideration of the arguments advanced before his relying on the pronouncement of their Lordship of the Supreme Court in N.I. Caterers (Private) Ltd. v. State of Punjab, : 3SCR399 , held that Section 19 (1) of the Act offends Art. 14 of the Constitution and is, therefore, ultra vires and hence allowed the Writ Petitions. The appeals are directed against the judgment and order.
5. Before dealing with the arguments advanced on either side it may be noted that the Andhra Pradesh Khadi and Village Industries Board (IV of 1959) was enacted to provide for the establishment of a Borad for the development of Khadi and Village Industries in the State of Andhra Pradesh and for matters connected therewith. Section 11 of the Act describes the functions of the Board. while Section 3 provides for the constitution of the Board. The Board is to consist of a Chairman. offical and non-official memebers. It shall have its headquarters in the city of Hyderabad which shall be a body corporate having perpetual succession and a common seal, with powers to acquire, hold and dispose of property, to do all things incidental to and necessary for the purposes of the Act and to contract and may sue by the said name and be sued. The functions of the Board are set out in Section 11 of the Act and one of these is to grant loans and other assistance to institutions carrying on the Khadi or other village industry from bulk allotment which may be made to it by the Government subject to such conditions as laid down by the Government.
Admittedly the loans to the petitioners were granted under this provision. The funds and finance of the Board are to be made of the grants, subventions, donations and gifts and borrowing from the State or the Central Government or the Central Board or a local authority or a co-operative bank registered under any law governing the co-operative societies in the State subject to certain safeguards. Sec. 19 provides for the recovery of arrears. It reads as under.
'19(1) Where any loan or advance granted by the Board to any institution or person is not repaid before the date specified therefor, the Board may without prejudice to any other mode of recovery, issue a certificate for the amount due to the Collector of the district concerned, and the Collector shall proceed to recover the amount in the same manner as an arrear of land revenue.'
It is to be noted that this Section empowers the Board to issue a certificate for the amount due, to the Collector of the district concerned for the recovery of arrears of land revenue without prejudice to its power to adopt any other mode of recovery. The words are 'without prejudice to any other mode or recovery.' The Act, however, does not specifically prescribe any other mode of recovery. No rules framed by the Government under Section 28 bearing on this aspect have been placed before us. Therefore, the other mode of recovery can only be presumed to as is available to any other creditor under general law i.e., by a suit, arbitration, appointment of a receiver etc.
6. The question is whether by providing more than on mode of recovery one of which is a more drastic than the other an element of discrimination has been introduced violative of Article 14 of the Constitution.
7. No doubt under the provisions of this Section the Board has been vested with the discretion either to proceed against its debts by way of suit etc., or by issuing a certificate for the amount due, to the Collector. It may be possible to conceive of cases where the Board may decide to institute a suit in one case while resorting to the other procedure of issuance of a certificate to the Collector in the other. The possibility of 'pick and Choose' that is of discrimination is there. But the question is whether on this possibility alone the provision can be held to be violative of Article 14 of the Constitution.
8. A persual of the judgment of the learned Judge would show that relying upon the decision of the Supreme court in : 3SCR399 (supra), he has held that the remedy provided by Section 19 is very drastic and greatly to the prejudice of the debtor. His conclusions are as under:
'If Section 19 (1) of the Andhra Pradesh Khadi and Village Industries Board Act is examined in the light of the decision of the Supreme Court it is clear that the remedy provided by Section 19 is very drastic and greatly to the prejudice of the debtor. In fact it is even more drastic than Section 5 of the Punjab Public Premises and Land (Eviction and Rent Recovery) Act. While the Punjab Act provides for the issuance of a notice to the tenant to show cause against the eviction and enjoins a duty on the Collector to consider the cause and further to give him a reasonable opportunity of being heard. Section 19 of the Khadi and Village Industries Board Act does not contemplate any notice to show cause or any opportunity of being heard being given to the debtor before the issue of a certificate.'
The learned Judge has further observed:
'It is not difficult to contemplate cases where the claim of the Board may be exaggerated either because of a mistake or miscalculation or misinterpretation of some provision of law or some other reason. There may even be cases where the debtor may altogether question his liability.'
9. In the judgment referred to above the vires of Section 5 of the Punjab Public Premises and Land (Eviction and Rent Recovery) Act was under consideration. Section 4 of the Act provided that if the Collector was of opinion that any person was in unauthorised occupation of public premises and that he should be evicted, he should issue a notice in writing calling upon such person to show cause why an order of eviction should not be passed. Section 5 provided that after considering the cause and the evidence produced by such person and after giving him reasonable opportunity of being heard, if the Collector was satisfied that the public premises were in unauthorised occupation he may make an order of eviction. It was held that the remedy provided by Section 5 of the Act was in addition to the remedy available under ordinary law. Even so it was held that Section 5 conferred an unguied and absolute discretion on the Collector to discriminate between different occupants of public premises by pursuing the remedy available under the ordinary law in the case of one occupant and by pursuing the more drastic remedy under the Act in the case of another occupant.
It was observed that Section 5 has left it to the discretion of the Collector to make such an order in the case of some of the tenants and not to make such an order against others. Section 5 thus enables the Collector to discriminate against some by exercising his power under Section 5 and take proceedings by way of a suit against others, both the remedies being simultaneously available to the Government. There can be no doubt that if the Collector were to proceed under Section 4 and 5 the remedy is drastic for a mere opinion by him that a person is in unaithorised occupation authorises him to issue a show cause notice and then to recover under Section 7 rent in arears and damages which he may assess in respect of such premises as arrears of land revenue. Consequently Section 5 by confering such an unguided and absolute discretion manifestly violates the right of equality guaranteed by Article 14.
10. On a careful persual of the above decision we are of opinion that the principle enunciated therein may not have application to the present case. Under the Punjab Public Recovery) Act Land (Eviction and Rent Recovery) Act it is the Collector who has been empowered with two remedies one more drastic than the other and the matter has been left to his unguided discretion i.e., it is he who institutes the proceedings, determines the nature of possession and executes the order, whereas under Section 19 of the Act the Board has no power to execute its order. The Course open to the Board is either to institute a suit and obtain a decree and thereafter proceed to execute the decree or send a certificate to the Collector for the recovery of the amount as arrears of land under the Revenue Recovery Act. In other words it had the choice of either seeking the assistance of the Court or the more expeditious remedy of applying to the Collector. In either case it is open to a debtor to resist the claim if he is not debtor to resist the claim if he is not satisfied with the demand of the Board.
In one case he has the benefit of trial by an ordinary Court dealing with the ordinary law of the land., the right of appeal etc., while in the other case he has to file a suit under the provisions of the Revenue Recovery Act and resist the demand. If the Board itself had the powers as vested in the Collector under Section 5 of the Punjab Public Premises and Land (Eviction and Rent Recovery)Act, perhaps it could be rightly held following the ratio decadent of the case that Section 19 of the Act was violative of Article 14 of the Constitution. But from the mere fact that two remedies are open to the Board one more drastic than the other, it is difficult to hold that the equality of law is denied to the debtors of the Board. In fact in that very decision it has been observed that Revenue Recovery Acts do not deny equal protection of the laws because the Government has the free choice of recovering its revenue either by a proceedings under those Act. In Para 20 it has been observed as under:
'It has settled by our previous decisions that the Revenue Recovery Act and other Acts creating special tribunals and procedure for the expeditious recovery of revenue and State dues are in the public interest and do not violate Article 14.'
It would be desirable to examine some of the decisions referred to in this para to understand and appreciate the principle enunicated thereunder. In Purshottam Govindji Hala v.B.M. Desai, Additional Collector of Bombay. : 1956CriLJ129 , the validity of Section 46 (2) of the Income Tax Act was under consideration. The Additional Collector had issued a notice of demand on the assess for the payment of the assessed amount of tax No non-payment he attached the goodwill and tenancy rights in the said premises by a warrant of attachment. As the sale proceeds were not sufficient the Additional Collector issued a notice under Section 13 of the Bombay City Land Revenue Act. 1876 requiring the assess to appear before him in person and show cause why he should not be apprehended and confined to civil jail in satisfaction of the said demand. The asessee challenged the validity of the order. The main contention was that Section 46 (2) of the Income-tax Act under which the Income tax Officer issued the recovery certificate to the Additional Collector of Bombay is void under Article 13(1) of the Constitution in that the same offends Arts. 22 (1) and (2), 21 and 14 of the Constitution It was held that the proviso to S.46(2) of the Income Tax Act does not indicate a different and alternative mode of recovery of the certified amount of tax, but only confers additional powers on the Collector for the better and more effective application of the only mode of recovery authorised by the body of sub-section (2) of Section 46, Viewed in this light there is no question of the possibility of any discrimiantion violating Article 14 of the Constitution.
11. It is to be noted that the argument advanced in the said case was more or less similar to the contention put forth in the present case. It was urged that the powers as conferred on the Collector by Section 46(2) are unfettered and unguided and enable the Collector at his will to discriminate between the two defaulters who are similarly situated and thereby violate the behest of the equal protection clause of the Constitution. It was observed that the argument appears to be founded on a misapprehension about the true meaning of Section 46. On a proper reading, the section does not provide two different modes of procedure at all. The sub-section does not prescribe two separate procedures, but only confers additional powers on the Collector for the better and more effective authorized by the body of sub-section (2) of S.46. The decision has no direct bearing on the present case as the authority of the Collector, to proceed under the Revenue Recovery Act is not challenged. The ground on which Section 19 (1) is sought to be impugned is that it gives the Board the power to discriminate between debtors similarly placed by adopting different modes of recovery, while in the above case the powers of the Collector vis-a-vis Section 46 (2) of the Income-tax were urged to be in denial of the equality clause, However, before further dilating on this aspect it may be useful to examine the other decisions cited across the Bar bearing on this aspect. Nav Rattanmal v. State of Rajasthan, : 2SCR324 was a case where the validity of Article 149 of the Limitation Act was under consideration. The plea of the claim against the petitioner herein was barred by limitation under Art. 88 of the Limitation Act on the plea that Art. 149 of the Limitation Act which fixes a period of sixty years for the suits by the Government is unconstitutional as violative of Art. 14 of the Constitution. It was held that there was a distinction between the claim of the Government and the claims of the individual and there was rational basis for trading the Government differently as regards the period of limitation and therefore Art. 149 did not offend Art. 14 of the Constitution.
This case also has no direct bearing on the question involved in the present case apart from bringing out the fact the claim of the Government as distinct from the claim of the individual. The claim of the Board in the instant case having regard to the sources from which its funds are derived can be equated with that of the claim of the Government and therefore a differential treatment in regard to two modes or recoveries was certainly warranted. The case of Collector of Malabar v. E.Ebrahim, : 1957CriLJ1030 was in regard to the recovery of Income-tax under Section 48 of the Madras Revenue Recovery Act. The individual therein had been arrested in pursuance of a warrant issued by the Collector of Malabar under Section 48 of the Madras Revenue Recovery Act for being defaulter in payment of the Income-tax. Thereupon the said person filed a petitioner under Section 491 of the Criminal P.C. before the High Court which allowed the petition and ordered that the petitioner be set at liberty as his arrest was illegal.
The Government went in appeal to the Supreme Court. It was held with reference to Section 5 of the Revenue Recovery Act that the arrest of the defaulter is one of the modes by which the arrears of revenue can be recovered, to be restored to if the said arrears cannot be liquidated by the sale of the defaulter's property. There is not a suggestion in the entire section that the arrest is by way of punishment for mere default. Thus the existence of more than one mode of recovery was not held to be violative of Art. 14 of the Constitution. This is in consonance with the observation of their Lordships in the case of : 3SCR399 it reads as under:-
'It is settled by our previous decision that the Revenue Recovery Act and other Act creating special Tribunals and of revenue and State dues are in the public interest and therefore do not violate Art.14.'
In the majority judgment in the said case the cases cited above have not been overruled and therefore it can be rightly urged that the provisions of two or more modes of recoveries are not unconstitutional.
12. The learned Advocate General strongly relied on the decision of the supreme Court in Lachhman Dass v. State of Punjab, : 2SCR353 to support the proposition that the special procedure for recovery of dues for the Patiala State Bank was not violative of Art. 14 of the Constitution, In that case the Patiala State Bank was held to be a class by itself and it was down that it was within the powers of the State to enact a law under which dies to the Bank were expressly included in the definition of State dues with respect to it. The differential between the Patiala State Bankand the other Banks has a rational bearing on the object of the Legislation. If the funds of the Patiala State Bank are State Funds, a law which assimilates the procedure for the determination and recovery of the determination and recovery of amounts due to the bank from its customers to that prescribed for the determination and recovery of arrears of revenue must be held to have a just and reasonable relation to the purpose of the Legislation.
The argument is that the loans advanced by the Board were more or less from the funds of the State and therefore if a particular mode of recovery was prescribed there was no denial of the equality of law under the Constitution. In the preceding paras we have noted that how the funds of the Board are dervied and in view of that provision the argument of the Advocate-General is certainly entitled to weight that the amounts due to the Board could be equated with the State dues. The contention of the other side, however, is that if only one mode of recovery viz., through the Collector was provided under the Act, it would not have been objectionably. But by providing more than one mode of recovery one more drastic than the other against the debtors of the Board a scope for discrimination has been made available. There is no question of distinction inter se between the debtors of the Board and it is on this ground that the provisions have been found to be infringing the constitutional guarantee. No doubt the decisions cited above has no bearing on his aspect of the case.
13. The next case on which reliance has been placed in Tangail Textitles Ltd., v. Union of India. : AIR1965Cal220 . The vires of Section 15 (a) of the Rehabilitation Finance Administration Act which provided for the recovery of loans advanced by the administration as arrears of land revenue without prejudice to any other remedy provided by law was in question in that case. It was held that a summary procedure to recover the loan as arrears of land revenue in the context of the Rehabilitation Finance Administration Act is not discriminatory at all. Section 15 of the said Act provided that without prejudice to any other remedy provided by law the dues could be recovered as arrears of land revenue through the collector. It was held that the discretion was certainly and rightly left with the Administration as creditor. It may in certain cases be equate justified in exercising its discretion to proceed against a borrower by way of a suit or by other remedies provided by law. That does not make Section 15 of the Act itself unconstitutional or violate Art, 14 of this constitution.
The learned Judge who disposed of the Writ Petition has not chose to rely borrowing of money with open eyes and with full knowledge of the statutory provisions can have no bearing on the question of views of a provisions which is attacked on the ground that it invests an authority with arbitrary powers to pursue a liberal or a drastic remedy as it pleases. With respect to the learned Judge we are inclined to hold that the said decision is not based merely on the ground that the debtor had obtained the loan with open eyes and with full knowledge of the statutory provisions. It is only one of the reasons given by the learned Judge of meeting the plea of arbitrariness. What has ultimately been held is that the existence of two remedies did not amount to discrimination and hairsplitting distanced between the relative advantages and disadvantages of methods of recovery under Revenue Recovery Act. Public Demands Recovery Act and the ordinary mortgage suit or other proceedings in this connection do not seem to be proper appropriate for expounding the great constitutional doctrine of equality of law or equal protection of laws.
In our opinion the facts of the said case are on fall fours with the present case and the reasoning given therein for arriving at a conclusion that Section 15 (a) of the Rehabilitation Finance Administration Act is not violative of Art. 14 of the Constitution is applicable to the pradesh Khadi and Village Industries Board Act.
14. The learned counsel for the respondent the mainly relied on : 3SCR399 on which the decision of the learned Judge based. It may be necessary to examine the said decisions in more detail to ascertain how far the principles enunciated therein are applicable to the present case. The facts disclose that the State of Punjab has leased a hotel at Chandigarh to the appellants therein for a period of six years. On the expiry of the period of the Government called upon the appellants on a particular days. On January, 1st 1950 the State Officer and Collector served the appellants with a notice alleging that their occupation of the said Hotel had become unauithorised and required them under Section 4 of the Act to show cause on or before January 11, 1960 as to why an order of eviction should not be passed against them. Thereupon the appellants filed the writ petition in the High Court and obtained and interim stay against the order of eviction Their contention in the High Court inter alia was that the Act discriminated between the occupants of public premises and those of private property and also discriminated between the former inter se and, therefore, infringed their right of equality before law and equal protection under Art. 14 of the Constitution. On this point their Lordships observed as under:
'Under Section 4, if the Collector is of opinion that any person is in unauthorised occupation of any public premises and that he should be evicted, he has to issue a notice calling upon such person to show cause why an order of eviction should not be made. Under Section 5, if the Collector is satisfied that the public premises are in unauthorised occupation he has the power to make an order of eviction giving reasons therefor. The contention is that the Government thus had two remedies open to it, one under the ordinary law and the other a drastic and more prejudicial remedy under the present Act. The words 'the Collector may make an order of eviction' in Section 5 show that the section confers discretion to adopt the procedure under Section 4 or 5 or not. Section 5 has left it to the discretion of the Collector to make such an order in the case of some of the tenants and not to make such an order against others. Section 5 thus enables the Collector to discriminate against some by exercising his power under Section 5 and take proceedings by way of a suit against others, both the remedies being simultaneously available to the Government. There can be no doubt that if the Collector were to proceed under Section 4 and 5 the remedy is drastic for a mere opinion by him that a person is in unauthorised occupation authorities him to issue a show cause notice and his satisfaction under Section 5 is sufficient for him to pass an order of eviction and then to recover under Section 7 rent in arrears and damages which he may assess in respect of such premises as arrears of land revenue. Section 5 does not lay down any guiding principle or policy under which the Collector has to decide in which case he should follow one or the other procedure and, therefore, the choice is entitrely left to his arbitrary will. Consequently, Section 5 by conferring such an unguided and absolute discretion manifestly violates the right of equality guaranteed by Art. 14.'
15. In the present case the Board has no power in itself to effect recovery of the dues from its debtors. The impugned section authorises the Board without prejudice to any other mode of recovery to issue a certificate for the amount due, to the Collector of the District concerned to enable the Collector to recover the amount in the same manner as arrears of land revenue. As we have said earlier it does not specifically provide for any other mode of recovery. But it is obvious that the other mode of recovery will be the same as open to any other creditor under the general law. Unlike the Collector under the Punjab Public Premises and Land (Eviction and Rent Recovery) Act the Board had no power to effect the recovery to pass an order of eviction on being satisfied as under Section 5 of the said Act; in other words the Board has two remedies: one either going to a Civil Court or of applying to the collector Court or of applying to the Collector by issuing a certificate for the amount. In our opinion what has been struck down by the decisions cited above was that the power of the Collector to pass an order of eviction summarily in some cases and of resorting to other remedies in some other cases.
In the absence of any guiding principles this gave a handle to the Collector to discriminate between tenants if he chose to do so. But the Board in the instant case has no such power. It has only two remedies open to it, either going to civil court or to the Collector for the realisation of its dues. It is not the Board which passes a decree or makes an order under the Revenue Recovery Act. But the question is whether the existence of these two remedies is obnoxious to the equality clause. It may be noted here that even under the Civil P.C. more than one remedy is open to a decree-holder. A decree-holder having money decrees against more than one judgment -debtor can either execute the decree by attachment of the property of the judgment-debtors by attaching his property and against another by seeking for his arrest, it cannot be held that there is discrimination as contemplated under Art. 14 of the Constitution.
The mere existence of two remedies one more drastic than the other, therefore, in itself cannot amount to infringement of the constitutional guarantee of equality. No case has been cited before us where the existence of more than one remedy has been held to be violative of Art. 14. In fact it is observed in the minority judgment in : 3SCR399 that the Revenue Recovery Act and other Acts creating special tribunals and procedure for the expeditious recovery of revenue and State dues are in the public interest and therefore do not violate Art 14 . It has been urged by the learned counsel for the respondent that under Section 19 of the Act if the Board had chosen to lay a suit against his debtors it would have been open to the debtors to put forward their claim that they did not owe the amount or the claim of the Board was untenable on account of improper accounting etc. But by the issuance of certificate this mode has been denied to the debtors, and this in itself was sufficient to strike down the provision as unconstitutional. We do not think this argument is entitled to any weight. Though no doubt in the case of a civil suit the debtors would be in the position of defendants and would have had the benefit of the trial by an ordinary court dealing with the ordinary law of the land with the right of appeal etc., as observed by the learned Judge, but even under the Revenue Recovery Act this opportunity is not denied to them. Under Section 59 of the Revenue Recovery Act it has been laid down that 'Nothing contained in this Act shall be held to prevent parties deeming themselves aggrieved by any proceedings under Act, except as herein before provided, from applying to the Civil Courts for redress, provided that Civil Courts shall not take cognizance of any suit instituted by such parties for any such cause of action, unless such suit shall be instituted within six months from the time at which the cause of action arose.' In Section 58 what is denied to the Civil Court is the right to question the rate of land revenue as under:-
'No Court of Civil Judicature shall have authority to take into consideration or decide any question as to rate of land revenue payable to the State Government or as to the amount of assessment fixed, or to be hereafter fixed on the portions of a divided estate.'
The respect of other claims it is open to the Civil Court to entertain objections in regard to the quantum of the amount claimed. The only difference is that in the former case the position of the debtors would be that of defendants while in the latter case it is they who would have to institute the suit i.e. assuming the role of plaintiffs. We do not think this amounts to denial of an opportunity to the debtors to contest the claim put forth against them. Therefore it is difficult to accept the contention of the learned counsel for the respondent that quality clause is infringed because of the different procedures which would devolve on the debtors.
16. In the result we are unable to sustain the conclusion of the learned Judge. Accordingly we hold that Section 19 of the A.P. Khadi and Village Industries Board Act does not offend Art. 14 of the Constitution and the appeals are allowed. There will be no order as to costs. Advocates' fee Rupees 150/- in each.
17. Appeals allowed.