Patna High Court
Murari Singh And Anr. vs The State Of Bihar And Ors. on 22 February, 1978
Equivalent citations: AIR1978PAT289, 1978(26)BLJR626, AIR 1978 PATNA 289
ORDER
1. Both these writ applications have been heard together and are being disposed of by this judgment which shall govern both of them. They arise out of certificate proceedings, and having travelled through the Courts of the Revenue authorities right from the certificate officer to the Board of Revenue, have come to this Court in its writ jurisdiction. The facts of the two cases may be separately stated.
C. W. J. C. No. 1993 of 1975.
2. Petitioner Murari Singh had taken lease in the year 1'967 from the Forest Department for working and plucking Kendu leaves from Charkapathar Kendu leaves bearing plot No. 172 for three years (20th April 1968 to 30th June 1970). The aforesaid lot was settled for a total sum of Rs. 25,650/- payable in three instalments of Rs. 8,550/- annually. The petitioner deposited Rs. 2,130/- as security deposit and Rs. 8,550/- as the instalment for the first year, i. e. 1967-68. Thereafter he felt some difficulty in peaceful working of the coupe on account of grant of permits to third persons describing them as raiyats by the Forest Department. He brought the matter to the notice of the officers of the Forest Department by several petitions, but no step was taken to safeguard his interest and ultimately by a letter dated 25-11-1968, he surrendered the coupe indicating his inability to work out the lease for the remaining period and also applied for the refund of the security money. The claim of the petitioner was refuted by the Government and he was informed by a written notice dated 21-1-1969 to deposit the balance of the instalments. The petitioner having failed to abide by the demand, his agreement was determined by the authority concerned in accordance with the terms and conditions of the agreement and the security deposit was forfeited. The lot in question was put to re-auction, but it could fetch a price of Rs. 4,475/- only for the remaining years. After setting off this amount, there was a deficit of Rs. 10,495/-. The petitioner was required to pay the difference of the amount realised on re-auction, namely, Rs. 10,495/-, to which the Government was put to loss, and as he failed to make good the loss, the Divisional Forest Officer, Monghyr Division, Mongihyr (respondent No. 6) instituted certificate proceeding, bearing Certificate Case No. 9 of 1971-72 against the petitioner for the realisation of the said amount.
C. W. J. C. No. 1995 of 19753. Petitioner Naresh Singh had taken settlement of Matis Kendu leaves Lot No. 155 for three years for a total sum of Rs. 30,000/- payable in three annual instalments of Rs. 10,000/-. He had deposited security deposit of Rs. 2,500/- and the first instalment of Rs. 10,000/- for the first year. He had also taken settlement of three other lots, namely, Gopalpur Lot No. 164 for Rs. 11,925/ at an annual price of Rs. 3,675/- and had deposited the security deposit of Rs. 920/- and the first instalment of Rs. 3,675/-; Abhaya Nath Lot No. 153 for a total sum of Rs. 15,375/- and had deposited the security of Rs. 1,285/- and the first instalment of Rs. 5,125/- and Barahat Lot No. 154 for a total price of Rs. 18,375/- and had deposited the security deposit of Rs. 1,531/- and the first instalment of Rs. 6,125/-. Necessary agreements were executed for the above settlements. After making deposit of the first instalments in respect of each of the lots, the petitioner defaulted in making deposit of the subsequent instalments and surrendered the respective coupes for the same and similar reason as in the case of petitioner Murari Singh. In this case also, the security deposits were forfeited and the lots in question were re-settled and the difference in the price of the re-settlement and those at which the lots were originally settled with the petitioner was calculated and the petitioner was asked to make good the loss which the Government had suffered. On the failure of the petitioner, respondent No. 6 instituted certificate proceedings, bearing Certificate Case Nos. 2 to 5 of 1971-72, in the Court of the Certificate Officer, Monghyr (respondent No. 5) against the petitioner for different amounts in respect of each of the lots.
4. It is not necessary to mention the details of the objections taken by the petitioners before the Certificate Officer, except the one that the notice under Section 7 of the Bihar and Orissa Public Demands Recovery Act was not validly served upon them. The plea of invalidity is based upon the fact that copy of the certificates was not served along with the notice on the petitioners. The plea was rejected by the Certificate Officer. Appeals and revisions preferred by the petitioners against the orders of the Certificate Officer before the Collector, Monghyr (respondent No. 4) and the Commissioner, Bhagalpur Division, Bhagalpur (respondent No. 3) were also dismissed. The petitioners then moved the Board of Revenue, and the Member, Board of Revenue (respondent No. 2), who heard the revisions together, also rejected this plea and held that the notices were validly served on the petitioners. Respondent No. 2 rejected this plea on the ground that the petitioners should have moved immediately before the Certificate Officer to furnish them with copies of the certificates so that they might be able to file proper show cause, if so advised. The service of the notices could not be held to be invalid on this account. It could, at best, be said to be only irregular, according to Mm.
5. Mr. Jagdish Prasad appearing for the petitioners in this Court has argued with great force the aforesaid plea of the petitioners that the notice under Section 7 of the Act was not legally and validly served upon them. Section 7 of the Act prescribes that when a certificate has been filed in the office of a Certificate Officer under Section 4 or Section 6, he shall cause to be served upon the certificate-debtor, in the prescribed manner, a notice in the prescribed form and a copy of the certificate. It is not disputed that copies of the certificates were not served on the petitioners along with the notice in the prescribed form. In our opinion, both these applications must succeed on this point alone. We are, therefore, not discussing any other question that was raised before the Revenue authorities on behalf of the petitioners.
This question fell for consideration before a learned single Judge of this Court long before in the case of Lachmi Kant Deo Prasad Singh v. Rameshwar Chaudhury (AIR 1948 Pat 104), where it was held that where there is simply service of notice in the prescribed form but no copy of the certificate is served as required by Section 7, it will be a case of non-compliance with the imperative and the certificate-debtor will be entitled to recover possession of his property or to set aside the sale under Section 45 of the Act even if the certificate proceeding had culminated to its end.
In reply to this argument of the learned counsel for the petitioners, learned Government Pleader No. 111 contended, as in the reported case, that the petitioners must be deemed to have knowledge of the certificates. This argument was repelled by the learned single Judge and it was observed that mere knowledge of the certificate on the part of the certificate-debtor cannot take the place of service on him. Reliance was placed in that case on a decision of the Judicial Committee in the case of Baijnath Sahai v. Ramgut Singh ((1896) 23 Ind App 45) (PC) where it was held by their Lordships of the Judicial Committee that for this extraordinary procedure of investing a revenue officer with the power of selling a subject's property, certain forms have been laid down to be followed and conformed and that in such proceedings those forms are also matters of substance. A certificate is an ex parte decree as it is filed behind the back of the certificate-debtor, and the certificate-debtor's right to impugn the validity and correctness of the demand is reserved to a stage to come after service of notice under Section 7. Unless, therefore, the certificate-debtor is given a notice with the copy of the decree, he is in fact invited to take exception to the validity or correctness of the demand. Therefore, even though it has the appearance of a mere technicality or a form, it has the value of substance.
We, therefore, have no hesitation to hold that in these cases, copies of the certificates being not served upon the petitioners, namely, the certificate-debtors, their mere assumed knowledge of the certificates would not amount to a valid compliance of the provisions of Section 7 of the Act. On this ground alone, we would allow these applications and quash the orders of Respondents Nos. 2 to 5 and remand the matter back to the Certificate Officer, Monghyr, to dispose of the certificate proceedings in accordance with law.
6. Before, however, parting with the cases, we would like to answer a further question that was urged on behalf of the petitioners. It was contended that in the agreements that were executed between the parties, there was an arbitration clause, and by virtue of that, all disputes between the parties should have been referred to the named arbitrator, namely, the Chief Conservator of Forests, Bihar. It is, no doubt, true that the agreements do contain in the end a clause containing arbitration agreement stipulating as follows:
"......in the event of any dispute arising with regard to the terms of these presents or the construction or meaning thereof or of any part thereof or as to the performance of any act or as to any other matter or thing in connection therewith, the decision of the Chief Conservator of Forest, Bihar, upon the matter of such disputes shall be final and binding on the parties hereto."
No such objection regarding the maintainability of the certificate proceedings was taken by either of the petitioners in their show cause filed under Section 9 of the Act denying their liability. The objections taken were on their merits, but not on jurisdictional fact.
7. Section 34 of the Arbitration Act, 1'940, itself provides and enjoins upon the parties to an arbitration agreement who want to take such objection regarding the maintainability of the legal proceeding on account of the existence of an arbitration agreement, to take such objection "before filing a written statement or taking any other steps in the proceedings. ........". It is well settled from a long line of decisions that once any other step is taken in the proceeding, this plea will be deemed to have been waived. Suffice it may to cite a Bench decision of this Court in Belsand Sugar Co. Ltd. v. Girja Nandan Singh (AIR 1969 Pat 8), where it was clearly laid down that the plea that the Court had no jurisdiction in the matter should be taken before the written statement is filed and that such a plea even if taken in the written statement itself will be of no effect. It is not disputed that this plea was not taken until a revision was filed before the Commissioner of Bhagalpur Division, on behalf of the petitioners. The petitioners are, therefore, estopped in law from taking this plea regarding the maintainability of the certificate proceedings on the ground of existence of an arbitration clause in the agreements in question. Learned Counsel, however, wanted in vain to take shelter under Section 32 of the Arbitration Act to contend that the certificate proceedings were not maintainable. This section, however, has no application as the scope of that section is entirely different and the provision of that section simply prevents a suit to challenge the existence or validity of an arbitration agreement and further prevents setting aside of an arbitration agreement otherwise than as provided by the Act. The scheme of the Arbitration Act itself precludes the parties to the arbitration proceeding to institute a suit in violation of the stipulation of the arbitration clause in any agreement. This plea, therefore, will not be available to the petitioners to be raised in the certificate proceedings when they go back on remand.
8. The result of all these discussions is that both these writ applications are allowed. The orders passed by the respondents Nos. 2 to 5 in the certificate proceedings and in appeals and revisions arising out of the same are hereby quashed and the matters are sent back to the Certificate Officer for disposal in accordance with law in the light of the observations made above. In the circumstances of the case, however, we shall leave the parties to bear their own costs.