TMI Blog1998 (4) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... 1979. Briefly stated the facts are that the appellant was appointed as one of the Directors of M/s. Depro Foods Pvt. Ltd., which was subsequently converted into a public limited company. In 1971 and in 1973 the said company took loans on two occasions from the Financial Corporation. According t the appellant, he resiged as a Director of the company on 35th February, 1974 and the factum of his resignation was communicated to the Registrar of Companies on 11th March, 1974. It is further the case of the appellant that after he ceased to be a Director of the company, anther loan of a sum of ₹ 3 lakhs on the basis of a registered mortgage was taken by the company on 12th November, 1974. It appears that default was committed by the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the appellant did not get any redress from the Collector's office, he filled a writ petition in the Punjab Haryana High Court, inter alia, contending that as he had resigned as a Director, no recovery could be effected from him. It was also stated therein that he had never been informed or made party to any of the proceedings before any authority whatsoever and no liability could be fixed on him merely by issuing a recovery notice. By a short judgment dated 26th July, 1985, a Division Bench of the High Court came to the conclusion that as the amount of ₹ 18,22,178,05 had been found to be recoverable in judicial proceedings, it did not think that the guarantor was entitled to any other notice before the amount which was sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount stated therein as arrear of land revenue. (4) No civil court shall have jurisdiction - (a) to entertain or adjudicate upon any case; or (b) to adjudicate upon or proceed with any pending case, Relating to the recovery of any sum due as aforesaid from the defaulter. The proceedings relating to the Recovery of the sums due from the defaulters, pending at the commencement of this Act in any civil court, shall abate. It is not in dispute that before a certificate was sent by the Managing Director to the Collector for recovering the amount of ₹ 18,22,178,05, on notice was given to the appellant. Section 3(1) provides a procedure where any sum is recoverable from a defaulter. Section 3(1)(b) requires the Managing Direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The determination being final and conclusive, would have the result of the passing of a final decree, inasmuch as t he defaulters from whom any amount is fund to be due, would become liable to pay the amount so determined and the Collector will have the right to recover the same as arrears of land revenue. In our opinion, even though Section 3 does not expressly provide for an opportunity being given to the alleged defaulter to explain as to whether any amount is due or not but in view of the nature of the said provision, the principles of natural justice must be read into it. The requirement of determination of the sum due by the Managing Director must be regarded as providing for the Managing Director hearing the alleged defaulter be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not contain a provision similar to Section 3 (1)(b) of the Haryana Act which requires determination by the Managing Director of the sum due from the defaulter. We, however, do not express any opinion that where a provision like Section 3(1)(b) of the Haryana Act is not incorporated in a statute, whether the principles of natural justice would require a notice being given before any amount is sought to be recovered as arrears of land revenue. For the reasons hereinabove as, admittedly, principles of natural justice were not complied with, it must be held that determination of the Managing Director under Section 3(1)(b) and the consequent certificate issued under Section 3(2) of the Haryana Act, both were vitiated. We, accordingly, a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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