TMI Blog1986 (5) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent bank sent a requisition under the Bihar and Orissa Public Demands Recovery Act (hereinafter referred to as " the Act "), on April 20, 1984, on the basis of which a Certificate Case No. 5 of 1984 was registered. The service of notice under section 7 was duly made on the petitioner and he filed objections challenging the authority of the bank to realise the loan in question. All the objections were rejected by the Certificate Officer and an order for issuance of warrant for arrest against the petitioner was passed on November 10, 1984. Allegations are made that the bank had failed to pay the requisite court fees in accordance with the provisions of section 6 of the Act and that the requisition, contained in annexure " 3 " was not duly filled up as prescribed. The somewhat hypertechnical sketchy averment made in the original writ petition stands stoutly controverted in the counter-affidavit of the respondent, State Bank of India. Therein it has been averred that the requisite court fee amount of Rs. 4,929,80 has been duly paid and that the requisition in Form No. 2 was duly sent to the Certificate Officer by the Branch Manager, duly filled in and signed. The allegations in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It would thus appear that the provisions of article 15 have also so far held the ground for the last 14 years without any meaningful constitutional challenge. However, learned counsel for the petitioners have, with vigour and vehemence, assailed the relevant part of the impugned article 15. To appreciate the rival contentions, it becomes necessary to quote the constitutional and the statutory provisions in extenso at the very outset: "The Constitution of India. SEVENTH SCHEDULE (Article 246) List I-Union List. 45. Banking List III-Concurrent List 43. Recovery in a State of claims in respect of taxes and other public demands, including arrears of land revenue and sums recoverable as such arrears, arising outside that State." Section 3(6) of the Act reads as under: " Definition.-In this Act, unless there is anything repugnant in the subject or context : . ...... (6) 'Public demand' means any arrear or money mentioned or referred to in Schedule I, and includes any interest which may by law be chargeable thereon up to the date on which a certificate is signed under Part II." Article 15 of Schedule I to the Act runs as follows: "15. Any money payable to (i) State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly central subject. Learned counsel relied on section 5(b) of the Banking Regulation Act, 1949, which attempts some definition of this wide ranging term as under: " 5. Interpretation.-In this Act, unless there is anything repugnant in the subject or context,-... (b) 'banking' means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise. " On the aforesaid premises, it was sought to be argued that the State Bank of India and the other nationalised banks were primarily doing the business of banking by borrowing and lending money and, therefore, every legislation appertaining thereto could be covered by entry 45 of the Union List I and was thus within the domain of Parliament alone. It was his case that any intrusion in this arena is beyond the pale of State Legislatures. To appreciate the aforesaid argument in proper perspective, the relevant part of the scheme of the statute deserves notice in passing. This again has to be viewed in the context of the fact that the phrase " public demand " is not defined either in the Constitution or in the Seventh S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus it may well be that something which may otherwise appear to be a public demand would be excluded from the sweep of the Act if it is not included or does not find reference in Schedule I. In the converse, whatever arrears or moneys which the Legislature chooses to incorporate in Schedule I become by virtue of the definition under section 3(6), a public demand for which recovery can be made under the Act. The scheme of the definition under section 3(6) of the Act and the frame of the Schedule complementary thereto thus become the key to the interpretation of these provisions. Once the aforesaid view is taken, the somewhat diffused arguments raised in this context fall into their proper place. Therefore, merely legislating on what the Legislature thinks a public demand and providing for its recovery is not an exercise in banking. If the framers of the law are of the view that arrears or moneys due to the State Bank of India (which admittedly has been for a long time an entirely State enterprise), and equally to the banks nationalised later, is a public demand worthy of expeditious recovery, then it cannot be easily said that this exercise is one of banking simpliciter. That the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes and records of rights, and alienation of revenues." The contention raised was that the State Legislature could under the Act recover only that which was due either as a public debt or land revenue of the State. According to counsel, under the Act, public demand has to be confined to what is due to the State of Bihar and not to any other person unless expressly warranted and specified by another Central statute. Reliance was sought to be placed on passing observations in Kanhaiyalal Dabriwala v. State of Bihar [1982] PLJR 257, which pertained wholly to the issue of court-fees payable by a bank in certificate proceedings. The argument aforesaid seems to stem from some misapprehension or fallacy with regard to what is a public debt as against a public demand. The two phrases are certainly not synonymous. It is somewhat simplistic to equate the wide-ranging varied public demands with the public debt of the State and there is no warrant for such a proposition. Neither principle nor precedent could be cited for any such contention. As noticed already, under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mands due to persons other than the Government." An identical view has then been recently taken in Harish Tara Refractories (P.) Ltd. v. Certificate Officer, AIR 1985 Cal 56, 59. " In the First Schedule, along with the arrears of revenue and other moneys due to the State, a number of items have been included which are not moneys payable to the State at all. Rule 8 relates to rent payable in respect of property belonging to a private individual which is under the charge of or is managed by any Court of Wards or the Revenue Authorities on behalf of that private individual. Rule 9 is in respect of moneys payable to a servant of the Government or of any local authority. Rule 12 is in respect of any money awarded as compensation under section 2 of the Bengal Land Revenue Sales Act, 1868, and rule 14 relates to any money ordered by a liquidator appointed under section 42 of the Co-operative Societies Act, 1912, to be recovered as a contribution to the assets of society or as the costs of liquidation. Therefore, it is clear that 'public demands' under the Bihar and Orissa Public Demands Recovery Act, 1914, include not only moneys payable to the State but also moneys which cannot ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y pertaining to bank dues. In sum, the submission is that in respect of a Central subject, the Central statute itself must provide for its recovery under the State statutes pertaining to public demand recoveries. Reference was made to clauses (2) and (3) of article 246 of the Constitution which pertain to the exclusive powers of legislation of Parliament and State Legislatures and to article 254 with regard to the inconsistency between laws made by either of them. Reliance was attempted to be placed on Purshottam Govindji Halai v. Additional Collector of Bombay [1955] 28 ITR 891 (SC). The aforesaid contention, though it might bring credit to the ingenuity of learned counsel, is nevertheless untenable on a close analysis. Merely because a Central statute may expressly authorise recoveries under the respective State statutes for public demands, it cannot possibly be said that it would bar the State Legislatures themselves from doing so by their own mandate. This is not, indeed, a one-way street, but a broader highway. It is plain that with regard to money recoveries under the Central statutes, the Centre may not have the machinery or the authorities for such recoveries in all the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tedly, in all the three Lists in the Seventh Schedule, this is the only entry pertaining to recoveries of public demands. However, he ingeniously contended that this entry pertains only to recovery of public demands outside the State and had no application within it. Reliance was placed on the passing observations in the Full Bench judgment in P. R. Krishna Rao v. Municipal Sales Tax Officer, AIR 1954 Trav.-Cochin 518; [1954] 5 STC 453 and N. C. Mukherjee and Co. v. Union of India [1964] 51 ITR 366 (Cal). The contention that entry 43 of the Concurrent List pertains only to recoveries of taxes and public demands outside the State's jurisdiction appears to me wholly untenable on principle and the language of entry 43 of List III itself. It is the admitted position that in the whole gamut of the Seventh Schedule, there is no other entry for the recovery of public demands. On principle, therefore, it looks inconceivable that the framers of the Constitution, when contemplating the recovery of public demands, would make provision for such recoveries outside the State but none at all for similar recoveries within the State itself. Plainly enough, the major burden of recoveries of State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State would be entitled to recover public demands arising outside the State. Consequently, it was undisputed that this entry in fact squarely covers the field of recoveries of public demands. The sole question that would remain on the language of entry 43 would, therefore, be, whether the words " arising outside that State ", at the end of the said entry, were intended to abridge the power of recovery of public demands or to enlarge or extend it even to demands arising outside the State. Mr. Varma rightly posed a question that if entry 43 authorises recoveries of public demands even outside the State, what possible bar there could be for the self-same recoveries within the territories of such States themselves. He rightly pointed out that such recoveries within the State territories were implicit and inherent in the situation and thus, outside that State was only by way of enlargement and extension. Learned counsel also pinpointed that the entry did not employ the words " only " to qualify such demands arising outside the State. According to Mr. Varma, and in our view rightly, this was clearly a clause enlarging the basic provision of the entry within the State to include within it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh begs the very question that is at issue. One fails to see how it is plain or axiomatic that entry 43 of the Concurrent List pertains exclusively to recoveries outside the State and not within. Indeed, it can be said that on a plain grammatical construction, entry 43 may extensively cover both demands within and without the State. There is again no reasoning or principle or authority cited for an observation which was considered merely axiomatic, and, as has been shown above, was not at all warranted. With the deepest deference on this aspect, would respectfully differ from the observations in N. C. Mukherjee and Co.'s case [1964] 51 ITR 366 (Cal). To conclude on this aspect, I am inclined to hold that entry 43 of the Concurrent List envisages within its wide sweep recoveries in respect of taxes and public demands both within and without the State. Mr. G. C. Bharuka, learned counsel for the petitioners in Civil Writ jurisdiction Case No. 1807 of 1983, however, tried to assail the impugned provisions of article 15 of the Schedule from a somewhat different angle. By reference to Stroud's judicial Dictionary and Black's Law Dictionary, he reiterated the stand that money-lending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd again. It must, therefore, be held that recoveries of monies due to the State Bank of India or the State-owned banks would come well within the ambit of public demand and are not exclusively and entirely banking stricto sensu. In repelling the aforesaid contention of Mr. Bharuka, the firm stand of Mr. K. P. Varma, learned counsel appearing for the respondent-State Bank of India, was that the recoveries of monies due to the State-owned banks was primarily and purely a matter of procedure and inevitably these matters could, therefore, be left to the State Governments and their civil or revenue courts. It was highlighted that it remains undisputed that the Certificate Officer who authorises the recoveries of public demands is a court, and, in any case, would undoubtedly come within the ambit of revenue courts. Consequently, the State Government would have undoubtedly the legislative power to govern the procedure and matters before the Certificate Officer. Both entry 11A and entry 13 of List III may, therefore, also come into play because they govern civil procedure as well. Further, because the court of the Certificate Officer is a court created by the State Government under its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y now settled beyond cavil that if the impugned legislation is in pith and substance within the sweep of a legislative entry, the same would not be invalidated merely because of the fact that it incidentally transgresses into the subjects in a rival list. This has been so held way back in 1940 by the Federal Court, in Subramanyam Chettiar v. Muthuswamy Goundan, AIR 1941 FC 47, which was expressly approved and applied by the judicial Committee in Prafulla Kumar Mukherjee v. Bank of Commerce Ltd., AIR 1947 PC 60. The Final Court has reiterated this in the undermentioned terms in State of Rajasthan v. C. Chawla, AIR 1959 SC 544-45: " After the dictum of Lord Selborne in Queen-Empress v. Burah [1878] 3 AC 889, oft-quoted and applied, it must be held as settled that the Legislatures in our country possess plenary powers of legislation. This is so even, after the division of legislative powers, subject to this that the supremacy of the Legislatures is confined to the topics mentioned as entries in the list conferring respective powers on them. These entries, it has been ruled on many an occasion, though meant to be mutually exclusive, are sometimes not really so. They occasionally over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Collector himself, it would lie to the Commissioner. The five sub-sections of section 60 provide for the forum, procedure, limitation, transfer, stay, etc., in the appellate jurisdiction. In particular, it may be noticed that interim relief has also been taken care of by sub-section (5) which, in terms, lays down that pending decision of any appeal, the execution may be stayed if the appellate authority so directs. What next meets the eye is the fact that though a bar is created against second appeals by section 61, the same is softened by expressly providing in section 62 for statutory revision against the appeal or original order as well. Therein power has been conferred on the Collector to revise any order passed by a Certificate Officer, Assistant Collector or a Deputy Collector and further on the Commissioner to revise an order passed by the Collector and, lastly, on the Board of Revenue itself to revise any order passed by the Commissioner under the Act. Yet again, a power of review has then been provided by the succeeding section 63 itself for correcting any mistakes or error either in the making of the certificate or even in the course of any proceeding under the Act. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d is not entitled to file an appeal. We fail to understand as to why the Legislature while granting the right of appeal cannot impose conditions for the exercise of such right. In the absence of any special reasons, there appears to be no legal or constitutional impediment to the imposition of such conditions ............ Likewise, it is permissible to enact a law that no appeal shall lie against an order relating to an assessment to tax unless the tax had been paid. Such a provision was on the statute book in section 30 of the Indian Income-tax Act, 1922. The proviso to that section provided that . ......... no appeal shall lie against an order under sub-section (1) of section 46 unless the tax had been paid. Such conditions merely regulate the exercise of the right of appeal so that the same is not abused by a recalcitrant party and there is no difficulty in the enforcement of the order appealed against in case the appeal is ultimately dismissed. It is open to the Legislature to impose an accompanying liability upon a party upon whom a legal right is conferred or to prescribe conditions for the exercise of the right." This identical point was also the subject-matter of consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin this jurisdiction the matter has now been concluded by the recent Full Bench judgment in Dinesh Prasad v. State of Bihar, AIR 1986 Pat 112 ; [1985] BBCJ 79 [FB]. In view of this, it seems not only unnecessary but indeed wasteful to refer to passing observations in the earlier single Bench or Division Bench authorities on the point. It is well-settled that once a point of law has been pronounced upon by a Full Bench, any observations contrary thereto by smaller Benches cannot hold the field and must be presumed to be wrongly decided. In Dinesh Prasad's case, the identical issue whether the alternative remedies provided under the statute have to be exhausted before seeking relief in the writ jurisdiction under article 226 of the Constitution was directly the subject-matter of adjudication. Therein after an exhaustive discussion and relying on Union of India v. T. R. Varma, AIR 1957 SC 882, A. V. Venkateswaran v. Ram Chand Sobhraj Wadhwani, AIR 1961 SC 1506, Premier Automobiles Ltd. v. Kamalakar Santaram Wadke, AIR 1975 SC 2238, Basant Kumar Sarkar v. Eagle Rolling Mills Ltd., AIR 1964 SC 1260 and Basant Kumar Sarkar v. Eagle Rolling Mills Ltd., ILR [1961] 40 Pat 193, it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n throwing out the petition on the untenable ground that the appellant had an effective alternative remedy. The High Court did not pose to itself the question, who would grant relief when the impugned order is passed at the instance of the Chief Minister of the State. To whom did the High Court want the appeal to be filed over the decision of the Chief Minister? There was no answer and that by itself without anything more would be sufficient to set aside the judgment of the High Court. " From the above, it is plain that the aforesaid case is clearly distinguishable. No such situation arises herein and we have already held that the statutory remedies provided are both effective and adequate. Counsel's reliance on this judgment is thus not well based. In any case, the observations of the larger Bench in Assistant Collector of Central Excise v. Dunlop India Ltd. [1985] 58 Comp Cas 145; AIR 1985 SC 330, appear to us as now rendering the issue beyond the pale of controversy. Whilst reiterating the stringent observations in Titaghur Paper Mills Co. Ltd. v. State of Orissa, AIR 1983 SC 603, it was held as under (p. 332) (at p. 149 of 58 Comp Cas): " Article 226 is not meant to short-c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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