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TMI Blog1982 (9) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 10th March, 1980, in which he has found the order of the certificate officer on all the points to be correct. However, he held that the appeal before the Collector was maintainable and 40 per cent of the certificate dues was not required to be deposited. Annexure 4 is the order passed by the Member, Board of Revenue (respondent No. 2), dated 16th July, 1981, by which the contentions of the petitioner have been rejected and the judgment of the authorities below have been affirmed. 2.. In order to appreciate the points raised in this writ application, it will be necessary to state the salient facts which are not in dispute. The property in the hands of the petitioner originally belonged to the Hindustan Bicycle Manufacturing and Industrial Corporation Limited ("H.B.C. " for short). It appears that sales tax for different periods were not paid by the said H.B.C., and accordingly, for realisation of the sales tax for the period 1947-48 to 1957-58, several certificate cases were initiated on requisitions filed by the Assistant Commissioner of Commercial Taxes. It has not been disputed before this Court that the notice under section 7 of the Bihar and Orissa Public Demands Recove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate cases, the property was sold on 27th November, 1971, by the Financial Corporation to the petitioner about which I have already stated above, an order was passed in the certificate cases to serve notices under section 7 of the P.D. Act upon the petitioner and also the Financial Corporation. It is said that the notices were served on them on 9th August, 1973. Two objections were filed; one by the petitioner and the other by the Financial Corporation. Both the objections have been rejected by the certificate officer by his order dated 27th January, 1975, as contained in annexure 1. It appears from the order (annexure 1) that the stand of the petitioner was fully supported by the Financial Corporation. The contention put forward on behalf of the Financial Corporation was that the property sold by them to the petitioner under section 29 of the Act was free from encumbrances, and therefore, the certificate dues are not realisable either from the Financial Corporation or from the petitioner. The certificate officer, however, held that the sale by the H.B.C. as also by the Financial Corporation are hit under the provisions of section 8 of the P.D. Act, and the mortgage dues of the Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argument put forward by Mr. Singh has to be accepted. If, however, it is held that the said transaction was a private transfer, then it will be hit by section 8 of the P.D. Act, in view of service of notice under section 7 of the P.D. Act already effected upon the certificate-debtor. It is, therefore, necessary here to read section 8 of the P.D. Act as well as section 29(1) of the Act. Section 8 of the P.D. Act reads thus: "8. Effect of service of notice of certificate.-From and after the service of notice of any certificate under section 7 upon a certificate-debtor- (a) any private transfer or delivery of any of his immovable property situated in the district, or in the case of a revenue-paying estate, borne on the revenue-roll of the district in which certificate is filed, or of any interest in any such property, shall be void against any claim enforceable in execution of the certificate; and (b) the amount due from time to time in respect of the certificate shall be a charge upon such property, to which every other charge created subsequently to the service of the said notice shall be postponed". Sub-section (1) of section 29 of the State Financial Corporations Act, 1951 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation, generally or specially authorised by the Board in this behalf, may apply to the District judge within the limits of whose jurisdiction the industrial concern carries on the whole or a substantial part of its business for one or more of the following reliefs, namely: (a) for an order for the sale of the property pledged, mortgaged, hypothecated or assigned to the Financial Corporation as security for the loan or advance; or (b) for transferring the management of the industrial concern to the Financial Corporation; or (c) for an ad interim injunction restraining the industrial concern from transferring or removing its machinery or plant or equipment from the premises of the industrial concern without the permission of the Board, where such removal is apprehended. (2) An application under sub-section (1) shall state the nature and extent of the liability of the industrial concern to the Financial Corporation, the ground on which it is made and such other particulars as may be prescribed." Under this provision a person may be generally or specially authorised by the Board to apply to the District judge within whose jurisdiction the industrial concern carries on busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporation under the mortgage deed. Since then the petitioner is coming in possession of the property. Under these circumstances, it cannot be held that the said sale was an involuntary one. Mr. Singh contended that it would be still an involuntary sale. In support of his submission he cited a few decisions. The first case cited was the case of Mohammed Afzal Khan v. Abdul Rahman AIR 1932 PC 235. That was a case where a decree for partition was made on the basis of an award where the matters in difference were referred to arbitration without the intervention of the court. It was argued that in such a case it would be considered to be a private sale, within the meaning of section 64 of the Code of Civil Procedure, and therefore, void as against the attaching creditor. This argument was not accepted by their Lordships. It was held that "if the party against whom a decree is passed, fails to transfer the property as required by the decree, the transfer may be enforced by proceedings in execution, and this is what actually happened in the present case". Nobody can dispute the dictum laid down in this case, nor this decision has been disputed by the other side. The next case cited was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, to be held that the transfer by the Financial Corporation to the petitioner was a private sale, and therefore, hit under the provisions of section 8 of the P.D. Act and shall be void against the claim enforceable in execution of the certificate dues which have been initiated for realisation of the dues of sales tax against the H.B.C. and the H.V.L., and the certificate dues would be a charge upon the property which is now in the hands of the petitioner. The contention of Mr. Singh, therefore, fails. 8.. The other submission made by Mr. Shreenath Singh is that in the facts and circumstances of the case, the sales tax authority as also the certificate officer should not proceed against the property in the hands of the petitioner for realisation of the certificate dues in view of the indemnity clause given in the sale deed of the petitioner. The indemnity clause has been quoted in paragraph 3(e)(vi) of the writ application. It reads thus: "(vi) The sale of the assets will be free from all charges, liabilities, encumbrances and claims and the corporation shall keep the purchaser indemnified against the same. Peaceful vacant possession will be given by the corporation at the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgment, the learned Judge of the Supreme Court pointed out that the questions involved in that case cannot be decided in the abstract. They can be determined only against the background of facts. The questions posed were: "What are the constitutional obligations on the State when it takes action in exercise of its statutory or executive power? Is the State entitled to deal with its property in any manner it likes or award a contract to any person it chooses without any constitutional limitations upon it? What are parameters of its statutory or executive power in the matter of awarding a contract or dealing with its property?" The next case cited was Kasturi Lal Lakshmi Reddy v. State of Jammu and Kashmir AIR 1980 SC 1992. In that case also in the opening part of the judgment the learned judge of the Supreme Court has pointed out that the questions raised are of "some importance in the field of constitutional law, but they are not abstract questions which can be divorced from the facts giving rise to them". The salient facts of that case was that the State passed an order sanctioning 11.85 lakhs blazes in the inaccessible areas to the second respondents fora period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property remained charged for those dues. The sales tax authority, which is the certificate-holder, was not a party to the transfer deed in favour of the petitioner. Under these circumstances, if the law gives the sales tax authority right to proceed against the property in the hands of the petitioner for realisation of the certificate dues filed against the H.B.C. and the H.V.L., can it be said to be an arbitrary act on the part of the sales tax authority? The answer undoubtedly is, no. The said authority gets right to proceed against the property under the law and in view of section 8 of the P.D. Act to realise the dues from the property in the hands of the petitioner. For these reasons, it is difficult to accept the aforesaid submissions of Mr. Singh, and accordingly, this submission is also rejected. 11.. During the course of arguments, Mr. Singh stated that the petitioner has to pay three lacs of rupees to the Financial Corporation as against the loan taken from the latter, and if the Financial Corporation agrees then the petitioner will have no objection in making payment of the said dues towards the dues under the certificate proceedings and the balance may be paid by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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