Skip to content


Dalichand Vs. the State of Rajasthan and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtRajasthan High Court
Decided On
Case NumberCivil 2nd Appeal No. 245 of 1967
Judge
Reported inAIR1976Raj112; 1975()WLN454
ActsContract Act, 1872 - Sections 128, 133, 137 and 139; Rajasthan Public Demands Recovery Act, 1952 - Sections 3, 4 and 8(3); Code of Civil Procedure (CPC) , 1908 - Sections 100 and 101 - Order 6, Rule 2
AppellantDalichand
RespondentThe State of Rajasthan and ors.
Appellant Advocate N.M. Lodha and; I.J. Lodha, Advs.
Respondent Advocate M.R. Bhansali, Asst. Govt. Adv.
DispositionAppeal dismissed
Cases ReferredMannalal v. The Collector
Excerpt:
.....recovery act, 1952, hereinafter called as the act, and issued a certificate of requisition to the collector, banswara for realisation of the amount of rs. 10,006 from the plaintiff as well as from the licencees raghavji and bhimji. 1/a the state had the right to cancel the licence and re-auction it on the failure of the licencees to deposit monthly instalments within the prescribed time, that is, at the end of the month. the question that arises for consideration is whether the surety stood discharged on account of the failure of the state to cancel the licence and re-auction the same on the defaults committed by the licencees in not making payment of monthly instalments as per terms and conditions of the licence or the advertisement. this plea was rightly rejected as the agreement in..........recovery act, 1952, hereinafter called as the act, and issued a certificate of requisition to the collector, banswara for realisation of the amount of rs. 10,006 from the plaintiff as well as from the licencees raghavji and bhimji. the collector, banswara, in his turn, issued notice ex. 4 on 9-12-53 informing the plaintiff that the certificate for rupees 10,006 had been filed against him in his office and he should therefore either file an objection petition denying his liability within 30 days from the receipt of the notice or deposit the amount in the treasury failing which the certificate shall be executed and the amount recovered under the provisions of the act. along with the notice, the collector, banswara, also sent a copy of the certificate which is ex. 5 on the record. the.....
Judgment:

S.N. Modi, J.

1. This is a plaintiff's appeal against the judgment and decree of the District Judge, Partapganh, dated 30-3-67 whereby he reversed the decree passed by the Civil Judge, Banswara, in civil suit No. 4 of 1963.

2. The relevants facts giving rise to this appeal are these:

In pursuance of an advertisement dated 1-3-52 (Ex. 1/A) issued by the Excise and Customs Department. Rajasthan, licence for the sale of the liquor shop at village Bajar, tehsil Bagidiora, district Banswara for the year 1952-53 was auctioned on 17-3-52 in the office of the Deputy Commissioner, Excise and Customs, Udaipur Division, Udaipur. Raghavji son of Chokhaji and Bhimji son of Kacharu jointly gave the highest bid of Rs. 20,000 for the said liquor shop which was accepted. The bidders deposited one-sixth amount of the bid, namely, Rs. 3,330 according to the term No. 8 of the advertisement (Ex. 1/A) and obtained a receipt thereof on 25-3-52. The licence Ex. Z was issued in favour of the bidders, namely, Raghavji and Bhimji on 24-5-52. It being necessary under the terms and conditions of the licence to furnish security for the due performance of the contract, the plaintiff stood surety for the payment at all dues payable to the State under the terms and conditions of the licence Ex. 2 and the advertisement Ex. 1/A. The surety-bond executed by the plaintiff-appellant is Ex. 1, Under the terms and conditions of the licence, the licencees, namely, Raghavji and Bhimji were required to deposit the balance of the licence amount in ten monthly instalments. The licencees paid monthly instalments upto a certain period but thereafter committed defaults with the result that a sum of Rs. 10,006 remained outstanding against the licencees Raghavji and Bhimil The licence period expired on 31-3-53. On 19-4-53 the Assistant Commissioner, Excise, and Customs, Banswara. sent a notice to the plaintiff calling upon him to deposit the amount due from the licencees. On failure of the plaintiff to deposit the amount, the Assistant Commissioner initiated action under the provisions of the Rajasthan Public Demands Recovery Act, 1952, hereinafter called as the Act, and issued a certificate of requisition to the Collector, Banswara for realisation of the amount of Rs. 10,006 from the plaintiff as well as from the licencees Raghavji and Bhimji. The Collector, Banswara, in his turn, issued notice Ex. 4 on 9-12-53 informing the plaintiff that the certificate for Rupees 10,006 had been filed against him in his office and he should therefore either file an objection petition denying his liability within 30 days from the receipt of the notice or deposit the amount in the treasury failing which the certificate shall be executed and the amount recovered under the provisions of the Act. Along with the notice, the Collector, Banswara, also sent a copy of the certificate which is Ex. 5 on the record. The plaintiff in response to the notice Ex. 4 submitted an objection petition Ex. A/6 denying his liability on 5-1-54. It appears that this objection petition was sent to the Sub-Divisional Officer, Banswara, for disposal. It further appears that on 18-2-54 the plaintiff moved another similar objection petition to the Collector with a request that his objection petition should be first decided by the Requisition Officer, namely, the Assistant Commissioner, Excise and Customs, Banswara. It further appears that the application dated 18-2-54 was sent by the Collector to the Assistant Commissioner, Excise and Customs, Banswara, who rejected the same vide his order dated 16-7-54 (Ex. A/11). The Assistant Commissioner thereafter realised a sum of Rs. 1,048 from the property of Raghavji and Bhimji. The objection petition dated 5-1-54 was then decided by the Sub-Divisional Officer who, it appears, rejected the same on 19-8-59 and ordered the Tehsildar to recover the amount of Rs. 8,958 from the plaintiff. The plaintiff then preferred an appeal to the Revenue Appellate Authority, Udaipur, challenging the legality of the order of the Sub-Divisional Officer dated: 19-8-59. The R.A.A. dismissed the appeal vide his order dated 22-6-60 (Ex 6). Ultimately, the plaintiff gave a notice under Section 80, C.P.C. and instituted a suit out of which this appeal has arisen, claiming the following reliefs against the State of Rajasthan and the Assistant Commissioner, Excise and Taxation, Banswara, formerly known as Assistant Commissioner, Excise and Customs, Banswara:---

1. That certificate No. 1 dated 9-12-53 issued against the plaintiff for the realisation of Rs. 10,006 be declared null and void and ineffective against the plaintiff and it be cancelled.

2. That the requisition certificate sent by the defendant No. 2 to the Collector, Banswara, being illegal, be declared as void and ineffective.

3. That since the defendants have not acted in accordance with the provisions of the Act, the proceedings initiated for the realisation of the amount be declared illegal.

4. That since the defendant No. 2 has violated the terms and conditions of the licence No. 83 and advertisement dated 1-3-52. the plaintiff be discharged from the entire liability.

5. That the disputed recovery be declared as not falling within the purview of the Act

3. The suit was resisted by the defendants. The defendants asserted that the certificate for the recovery of the amount was legally issued against the plaintiff and he is liable to pay the amount mentioned therein under the terms and conditions of the surety-bond executed by him. The various pleas raised by the plaintiff in his plaint and the defendants in their written statement would be clear from the following issues framed by the trial court: --

'1. Was it incumbent on the Government to re-auction the shop (theka) on the non-payment of the monthly instalments by the licencees in time and also to stop the issue of liquor?

2. Was the security deed dated 19-5-52 Ex. A/1 executed by the plaintiff?

3. Was the licencee Baghayji allowed to bid at the auction of the liquor shop at Lankayi in spite of the breach of the terms of the licence by him?

4. In case issue No. 3 goes for the plaintiff, were the defendants free to act as they did?

5. Was it not necessary to inform, the surety of the violations of the terms of the licence, if at all, within reasonable time?

6. Is it necessary under the Public Demands Recovery Act that the requisition certificate be signed by the Head of the Department and if not signed, is certificate invalid?

7. Is it illegal to issue A joint requisition certificate under the P.D.R. Act?

8. Had not all the means of realising State dues from Raghavji Bhimji been exhausted and is therefore the certificate invalid?

9. Is the requisition certificate not signed by the competent authority and therefore invalid?

10. Does the notice issued by the Collector, Banswara and the certificate No. 1 dated 9-12-53 not contain full particulars?

11. Was it mandatory to consider the objection petition of the plaintiff under Section 8(3) if the Public Demands Recovery Act and was it not heard accordingly?

12. Is the licence No. 83 signed by Shri R.S. Kothari unauthoritatively signed and cannot any realisation thereunder therefore be made from the plaintiff?

13. Cannot the defendants realise the amount in question under the P.D.R. Act?

14. Is the plaintiff not liable to pay the amount in question in view of the defendants not informing him of the nonpayment of the instalments in time?

15. Is the notice under Section 80, C.P.C. given by the plaintiff valid? 16. Is the suit time-barred?

17. Is the court-fee paid not sufficient?

18. To what relief is the plaintiff entitled?'

The trial court on consideration of the evidence led by the parties decided issues Nos. 1, 3, 5, 8, 11, 14, 15. 16 and 17 in favour of the plaintiff and the remaining issues, namely, Nos. 2, 4, 6, 7, 9. 10. 12 and 13 against the plaintiff. In the result, the trial court decreed the suit. On appeal by the defendants, the learned District Judge set aside the decree passed by the trial court and dismissed the suit. Hence this second appeal by the plaintiff.

4. Mr. Lodha, the learned advocate for the plaintiff, has urged the following points before me:--

1. That the liability of the plaintiff as surety was discharged when the State acted in violation of the terms of the licence and the advertisement by not cancelling the licence of the licencees and re-auctioning the same on non-payment of the monthly instalments within the prescribed time by the licencees.

2. That the certificate Ex. 5 issued by the Collector, Banswara, against the plaintiff is vague inasmuch as it does not disclose the period for which the demand is due.

3. That the requisition for recovery sent to the Collector was invalid as it was signed and sent by the Assistant Commissioner. Excise and Customs, Banswara, who was not the Head of the Department and therefore had no authority under Section 3 of the Act to send requisition for recovery of the amount from the plaintiff.

4. That the requisition for recovery was also invalid on the ground of its being a joint requisition against the licencees and the surety.

5. That the Sub-Divisional Officer, Banswara, had no jurisdiction to decide the objection petition filed by the plaintiff under Section 8 (3) of the Act.

5. So far as the first point is concerned, it is a fact that under the terms and conditions of the licence Ex. 2 and the advertisement Ex. 1/A the State had the right to cancel the licence and re-auction it on the failure of the licencees to deposit monthly instalments within the prescribed time, that is, at the end of the month. It is further not in dispute that in spite of the defaults in the payment of the monthly instalments by the licencees, the State did not cancel the licence or re-auction the sale or inform the surety about the defaults committed by the licencees. The question that arises for consideration is whether the surety stood discharged on account of the failure of the State to cancel the licence and re-auction the same on the defaults committed by the licencees in not making payment of monthly instalments as per terms and conditions of the licence or the advertisement. In this connection, it would be desirable to quote in extenso the surety or guarantee-bond executed by the plaintiff. It is Ex. 1 on the record and reads as under:--

^^tekur ukek**

;g tekur&ukek; vkt rkjh[k 16&5&52dks eSa nyhpUn oYn dk:ath tkfr dyky lkfdu oklokMk rglhy oklokMk ftyk oklokMkfMohtu mn;iqj jktLFkku Jheku dfe'uj lk- dLVEl vkcdkjh dh lsok esa is'k djrk gwaA

dLVEl vkcdkjh fpHkkx ls [knkZQjks'kh 'kjkc] cktkj nqdku dk ykblsUl uEcj 83 fMohtu mn;iqj ftyk oklokMk rglhyokxhnkSjk ds ekStk cktkj ds && eqgYys esa ykblasl esa ntZ 'kqnk 'krksZij :- 20]000 :i;ksa esa rkjha[k 1&4&52 ls rkjk[k 31&3&53 rd dsfy, Jh jk?koth oYn pks[kk Hkheth oYn dp: tkfr dyky lkfdu vkSlu lk- lkfy;k rglhyokxhnkSjk ftyk oklokMk fMohtu mn;iqj dks fn;k x;k gS A tks fd vc ykblsUlnkjfy[kk tkosxk vkSj gLc 'kjk;r ykblsUlnkj jk?koth o Hkheth us ij fyf[kr ykblsUlQhl dk :- 3330 :i;s rkjh[k 25&3&52 dks tek djk fn;k gS o ftldh jlhn ua-964 mlus ,flLVUV dfe'uj ftyk esa gkfly dj yh gS A

vc bl ykblsUlnkj dh ykblsUlQhl dh cdk;k 10 fdLr gLc 'kjk;r eqUnts ykblsUl ps fyf[kr bfryk dLVEl ovkcdkjha egdEg ls nh tkus ij QkSju bfryk feyus dh rkjh[k ls 1 ekg ds vUnj 2 ,flLVsUVdfe'uj dLVEl o vkcdkjh cklokMk ds [ktkus esa ;k nhxj txg tgka ds fy, eq>sstek djkus dh fgnk;r dha tkosxh] tek djk nqaxk A vxj bl vok/k esa tek ugha djkldwa ;k tek dh jlhn uEcj e; rkjh[k ls tek djkusds gqDe nsus okys vQlj dks fyf[krbfryk is'k ugha dj ldwa rks jkT; dks iw.kZ vf/kdkj gS fd eq>s fcuk uksfVl fn,bl ykblsUlnkj eSa cdk;k jde e; O;kt dh esjs ls o esjh py o vapy lEifr ls olwyhckcr dkuwuh dk;Zokgh mlh izdkj dh tk ldsxh ftl izdkj dh jktLFkku jkT; dh cdk;kjde olwy djus ckcr jkLFkku ;k mlesa lEefyr gksus okyh fj;klrks esa izpfyr dkuwuo rjhdk gks] o ,slh jde esjs okfjlku ls Hkh olwy gks ldsxh] vkSj esjs dks dksbZmtz djus dk gd ugha gksxk A

eSaykblsUlnkj dks tkurk gwa A bl tekur ds etewu dks i< dj le> fy;k gS o 'kjk;rykblsUl ls dSfQ;r gkfly dj yh gS o eSaus viuh ftEesnkjh iw.kZ :ils le> yh gSA

Qdr

nk% jk?koth pkS[kk] nyhpUn

gLrk{kj ykblsUlnkj] gLrk{kj tkfeu

16&5&52 rkjh[k 16&5&52

Again, the relevant clauses of the licence Ex. 2 and the advertisement Ex. 1/A on which reliance has been placed run as under:--

Clause 1 of the licence:

1ykblsUlnkj us mij ntZ 'kqnk Bsds dh jde dk vk/kk fgLlk A NBk fgLlk is'kxh 31ekpZ lu 1952 ds igys tek djk fn;k gS A cdk;k jde 2A10 fgLlksa esa gj eghus dh 5rkjh[k rd vkxk vius gYds ds os;j gkl ok ,flLVsUV dfe'uj dLVEl vkcdkjh dks [ktkusesa fcyk ukxk tik djkuh gksxh ojuk C;kt 1 :- izfr lsdMk ekgokj rk- 5 ds cknpMahanthsingh v. U. Ba Yi, AIR 1939 PC 110. I find nothing in the present case which impairs the plaintiff's remedy against the licencees.

8. I am not unmindful of the fact that a contract of guarantee under the Contract Act specially Sections 133 to 139 postulates the existence of the surety, the principal debtor and the creditor. This requirement is not satisfied in the case of the surety-bond executed in favour of the State or a Department of the State. Such surety-bond is given to the Department of the State and not to the creditor. Therefore, there cannot be any doubt that in terms the provisions of Sections 133 to 139 of the Contract Act cannot apply to a surety-bond like Ex. 1; but it is also clear from the various authorities that equitable principles underlying these sections apply to a surety-bond executed in favour of the State or a Department of the State. I am supported in my view by the decision of their Lordships of the Supreme Court in Raja Bahadtur Dhanraj Girji v. Raja P. Parthasarthy Rayanimvaru, (1963) 3 SCR 921 and the decision of the Lahore High Court in Prithi Singh v. Ramcharan Aggarwal, AIR 19-44 Lah 428. The case in hand therefore does not fall within the ambit of Section 139 of the Contract Act. The first point urged on behalf of the plaintiff-appellant thus fails.

9. Coming to the next point, it is urged that the certificate filed in the office of the Collector, Banswara, under Section 4 of the Act is vague, inasmuch as no period in column No. 4 for which demand was due has been mentioned. Reliance is placed on the decisions of Rajhumal v. State of Rajasthan, 1957 Raj LW 370 = (AIR 1958 Raj 17) and Baijnath Sated v. Ramgutsingh (AIR 1954 Cal 355) (sic?), (1896) 23 Ind App 45 (PC) (Abanindra Kumar Maity v. A.K. Biswas).

10. Mr. Bhansali, the Assistant Government Advocate, appearing on behalf of the State, has urged that this point which is now being pressed by the learned counsel, has not been raised in the memorandum of appeal filed in this Court He has further urged that a certificate even if deemed to be vague and defective, it is not a serious disregard of the provisions of law rendering the certificate invalid in the particular circumstances of the case, specially when the plaintiff was well aware of all the facts about his liability and also moved an objection petition denying his liability under Section 8 (3) of the Act.

11. It may be noted here that the plaintiff-appellant has not taken up this point in the memorandum of appeal. I, however, permitted the learned counsel appearing on his behalf to raise this point since it is, more or less a point of law. In the present case, failure on the part of the Collector, Banswara, to mention the period in column No. 4 of the certificate, is, in my opinion a mere irregularity. No prejudice appears to have been caused to the plaintiff on account of non-mentioning of the period for which the demand was made. Baijnath's case (sic?) (Abanindra Kumar's) (supra) on which reliance has been placed by the learned counsel for the appellant was discussed and distinguished by a Division Bench of this Court in Mannalal v. The Collector, Jhalawar, 1956 Raj LW 538. In that case, it was observed:

'It may be pointed out that in the Calcutta case the certificate was defective on a number of grounds and this was one of them that the period was not specified as required by the Form of Certificate. The learned Judges only observed that failure to specify the period as required by the Form was a non-compliance with the requirements of the Form. The court, however, did not go to the length of saying that the certificate was rendered invalid merely for this reason.'

The Division Bench then examined the Form of Certificate in that cases which is similar to the Form in the present case and repelled the argument of the learned counsel for the petitioners that failure to mention period for which such demand was made would invalidate the certificate. The relevant observations of the Division Bench in this connection run as under:--

'It would be apparent that under Col. 4 of the Form the period for which such demand is due has got to be specified. The Collector is expected to draw up this certificate on the basis of the particulars furnished by the officer sending the requisition for recovery under Section 3 in Form No. 1 of the Rules. We find that in the form of requisition the particular regarding the period does not appear. It may be that the Form under the Rules expects the Collector to make an independent inquiry himself in this behalf in order to fill in this particular item in the certificate. We may point out that failure to comply with every minute minor detail of the certificate cannot be regarded to have the effect of invalidating it. We should not be understood when we say so to mean that the authority signing the certificate is absolved from faithfully carrying out the provisions of law. It is very desirable that the officer who is to discharge the heavy responsibility of filling such a certificate should try strictly to comply with the requirements of the Form, specially because the certificate is prepared and signed ex parte and it has the effect of the passing of a decree against the person against whom it is signed. However, as pointed out above in the present case failure on the part of the Collector of Jhalawar to mention the period in col. 4 of the Certificate cannot be regarded to be irregularity which may be considered to go to the root of the case. No prejudice appears to have been caused to the petitioners for this reason.'

The Rajasthan case (Raghumal's case) reported in 1957 Raj LW 370 = (AIR 1958 Raj 17) is a case similar to the Calcutta case reported in AIR 1954 Cal 355 (sic?) (1896) 23 Ind App 45 (PC). In Raghumal's case, there were several defects in the certificate. While dealing with the defect about non-mentioning of the period for which the demand was due, the Division Bench observed that the defect is of a serious nature but it did not go to the length of saying that this defect alone invalidated the certificate. The Division Bench found one more defect in the certificate and as a cumulative effect of both the defects, held the certificate to be invalid and observed as follows:--

'To sum up, there are grave defects in the certificate in this case. It does not show clearly who the authority signing the requisition is, for the initials 'D.S.O.' Churu, may or may not convey the name of the authority clearly. In Baijnath Sahai's case referred to above, their Lordships of the Privy Council said that it was essential that any person who sees the certificate should be able to know who the judgment creditor is, and what is the sum for which the judgment is given, for the certificate amounts to a decree. The other defect is that the period for which this sum became due is not mentioned. Both these, in our opinion, are substantial defects which invalidate the certificate, and thus the foundation is not laid for proceeding under the Act.'

The Raghumal's case, (AIR 1958 Raj 17) is thus distinguishable and not applicable to the facts of the present case. The second point also fails.

12. I now take up the third point. It is argued on behalf of the appellant that the requisition for the recovery Ex. A/7 sent to the Collector, Banswara, is invalid as it is not signed by the Head of Department but by the Assistant Commissioner, Excise and Customs, Banswara Shri R.S. Kothari, The relevant provision in the Act in this connection is Section 3 which runs as under:--

'Section 3. Requisition for recovery:--

1. When any public demand is due, the officer, or authority charged with its realisation may send to the Collector having jurisdiction in the place where the defaulter resides or owns property a written requisition in the prescribed form.

2. Every such requisition shall be signed and verified in the prescribed manner.'

A requisition for recovery is required to be sent to the Collector under the aforesaid section not by the Head of Department but by the officer or authority charged with the realisation of the demand. It is nobody's case that the Assistant Commissioner, Excise and Taxation, District Banswara, was not the officer charged with the duty to realise the demand from the plaintiff. This point has also no force and it is rejected.

13. The fourth point urged by the learned counsel for the appellant is equally untenable. It is true that the requisition for recovery Ex. A/7 was sent to the Collector mentioning therein the names of the defaulters as Bheemji, Raghavji and Dalichand (plaintiff). It is certainly a requisition for recovery against several persons but no such provision of law or rule has been shown to me which prohibits sending of requisition for recovery against more than one person. This point also fails and it is rejected.

14. Coming to the last point, it is urged that the Sub-Divisional Officer, Banswara, had no jurisdiction to decide the objection petition filed by the plaintiff under Section 8 (3) of the Act. According to the learned counsel, the only competent authority was the Collector, Banswara, Who should have decided the objection petition filed by the plaintiff denying this liability in response to the notice of the certificate issued by the Collector.

15. On the other hand, it is argued by Mr. Bhansali that no such point was raised by the plaintiff in his plaint. This point was raised for the first time at the time of the arguments in the trial court. Had this objection been raised in the plaint, the defendants would have produced the authority empowering the Sub-Divisional Officer to deal with objection petitions made by the defaulters under Section 8 (3) of the Act. I have given my earnest thought to the point raised by the learned counsel for the plaintiff-appellant. There is no denying the fact that no plea was taken in the plaint that the Sub-Divisional Officer, Banswara, had no authority to deal with objection petition filed by the plaintiff under Section 8 (3) of the Act. In such matters, it must be remembered that if a technical plea of the nature sought to be raised had been raised in the plaint, the defendants would have had the opportunity to produce before the court the authority which empowered the Sub-Divisional Officer to deal with such objection petition. That apart, the point sought to be raised is not purely legal which may be allowed to be urged without any amendment of the plaint. It is a mixed question of law and fact. It is further significant to note that the plaintiff filed an appeal .against the judgment of the Sub-Divisional Officer before the Revenue Appellate Authority, Udaipur, and that appeal was dismissed. The judgment of the Revenue Appellate Authority does not show that the plaintiff therein took the plea that the Sub-Divisional Officer had no jurisdiction to decide the objection petition under Section 8 (3) of the Act. In my judgment, the course which the litigation between the parties had taken upto the date the suit was instituted and the abandonment of any contention about the authority of the Sub-Divisional Officer before the Revenue Appellate Authority are sufficient to reject this point.

16. The learned counsel for the appellant during the course of the dictation of the judgment, drew my attention to para No. 16 of the plaint and urged one more point to the effect that the requisition authority in the present case did not decide objection petition under Section 8 (3) of the Act in accordance with law. Suffice it to say in this connection that it is not the case of the plaintiff that the person authorised under Section 8 (3) of the Act to decide the objection petition was the requisition authority. In absence of that, it is immaterial whether the requisition authority decided the objection petition in accordance with law or not.

17. There is no force in this appeal and it is dismissed with costs.

18. The prayer for leave to appeal is refused.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //