2010 (8) TMI 319 - HC - Central Excise

Recovery of dues recovery officer of Debt Recovery Tribunal iissuing notice for initiating contempt proceedings against Central Excise officer for objecting to tender notice not containing outstanding Govt. dues Held that - contempt proceedings per se are personal in nature - parties in their official capacity said to be aggrieved by initiation of the contempt proceedings vide the order - Officer against whom the contempt proceedings have been proposed to be taken is aggrieved - remedial action in accordance with law

Summary

Issues:
1. Jurisdiction of the Recovery Officer to initiate contempt proceedings.
2. Priority of revenue over dues of the Certificate-holder Bank.
3. Challenge to the initiation of contempt proceedings against the Officer who signed the objection.

Analysis:

1. Jurisdiction of the Recovery Officer to Initiate Contempt Proceedings:
The petition challenged the Recovery Officer's jurisdiction to initiate contempt proceedings under the Contempt of Courts Act, 1971. The argument presented was that the Recovery Officer of the Debt Recovery Tribunal is not a Court and lacks the authority to commence contempt proceedings. It was contended that the Recovery Officer, being a member of the staff of the Tribunal, does not possess the power to institute contempt actions under Section 10 of the Contempt of Courts Act or Article 215 of the Constitution of India. The petitioner's counsel relied on the provisions of Section 7 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, to support this contention. The petitioners sought relief from the Court on this ground.

2. Priority of Revenue Over Dues of the Certificate-holder Bank:
The judgment addressed the issue of the priority of revenue over the dues of the Certificate-holder Bank. The Recovery Officer's order, dated 15-5-2008, rejected the Central Excise Department's argument regarding the precedence of revenue claims over the bank's dues. The Court referenced the Supreme Court's decision in Union of India v. Sicom Limited, emphasizing that secured debts or those accorded first charge status by statute take precedence over unsecured crown debts. The judgment aligned with the principles established in the aforementioned Supreme Court case, affirming the priority of certain debts over others based on legal provisions and constitutional interpretations.

3. Challenge to the Initiation of Contempt Proceedings Against the Officer:
Regarding the challenge to the initiation of contempt proceedings against the Officer who signed the objection, the Court clarified that contempt proceedings are personal in nature. The judgment stated that the petitioners, acting in their official capacities, could not be considered aggrieved by the proposed contempt actions outlined in the impugned order. The Court indicated that if the concerned Officer faced grievances due to the proposed contempt proceedings, they were entitled to pursue appropriate legal remedies in accordance with the law.

In conclusion, the Court dismissed the petition, finding no merit in the arguments raised by the petitioners. The judgment rejected the petition with no costs imposed and discharged the notice. Additionally, any interim relief previously granted was vacated as per the Court's decision.