P.C. Aggarwal vs Govt. Of Nct Of Delhi
2011 Latest Caselaw 1470 Del

            *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Date of decision: 14th March, 2011

+                W.P.(C) No.1598/2011 & CM No.3375/2011 (for stay)

%        P.C. AGGARWAL                                           ..... Petitioner
                     Through:             Mr. R.K. Saini, Adv.

                                     Versus

         GOVT. OF NCT OF DELHI                   ..... Respondent
                      Through: Ms. Rachna Saxena, Adv. for Mr.
                               Rajiv Nanda, ASC.

CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may              Yes.
         be allowed to see the judgment?

2.       To be referred to the reporter or not?             Yes.

3.       Whether the judgment should be reported            Yes.
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The writ petition impugns the warrant of arrest dated 8th October,

2010 issued by the Assistant Collector of the Govt. of NCT of Delhi

against the petitioner and also seeks quashing of the proceedings leading to

the issuance of the warrant of arrest. The counsel for the respondent

appears on advance notice. Considering the nature of the controversy,

need is not felt to issue formal notice or to call for the reply. The counsels

have been heard finally.

2. It is the case of the petitioner:-

(i) That he is 65 years of age and suffering from various ailments

and leading a retired live.

(ii) That he was/is one of the Directors of M/s Pankaj Cement Ltd.

(PCL) which had taken financial assistance of `65.41 lacs in the year

1993-94 from Rajasthan Financial Corporation (RFC), Jaipur (not

impleaded as a party to this writ petition) and for repayment of

which dues, the petitioner had guaranteed.

(iii) PCL defaulted in repayment of the loan amount and

possession of the land building and machinery of the factory of the

said company in District-Jaipur was handed over to the RFC on 6 th

August, 1997.

(iv) RFC auctioned the said unit in the year 2003 for a total

consideration of `47.36 lacs.

(v) That a total sum of `28,49,310/- was repaid by PCL to RFC.

(vi) That RFC inspite of so receiving a total sum of `75,85,310/-

against loan of `65.41 lacs was still showing a sum of `72,15,243/-

as outstanding as on 3 rd November, 2003.

(vii) Had RFC not waited for over five years to auction the unit of

PCL, a better price would have been received and then the entire

outstanding would have been liquidated.

(viii) That some police official from P.S.-Neb Sarai visited the

residence of the petitioner to arrest him in compliance of warrant of

arrest issued by the respondent. The petitioner then applied for

inspection of the file of the respondent on 21 st February, 2011 and

realized that RFC had moved an application dated 22 nd September,

2009 before the District Collector, Jaipur for recovery of

`2,02,80,353/- then due from the petitioner and Smt. Shashi Bala in

accordance with Sections 256/257 of the Rajasthan Land Revenue

Act, 1956; that the District Collector, Jaipur forwarded the request to

the respondent; that the Assistant Collector of respondent passed an

order dated 13th April, 2010 issuing notice to the petitioner; that

though the record showed issuance of a notice dated 20 th April, 2010

under Section 136 of the Delhi Land Reforms Act, 1954/under

Section 67 of the Punjab Land Revenue Act, 1887 calling upon the

petitioner to deposit the amount aforesaid by 30 th April, 2010, failing

which action for realization of amount will be taken, but no such

notice was received by the petitioner; that the Assistant Collector of

respondent on 7th May, 2010 issued another notice to the petitioner

to show cause as to why he should not be arrested and committed to

civil prison for failure to deposit the money; that the said notice was

also not received by the petitioner; that on 4th October, 2010 the

respondent ordered issuance of arrest warrant since no reply had

been received.

(ix) That the petitioner on 21st February, 2011 applied to the

respondent for withdrawal of warrant of arrest but the warrant has

not been withdrawn.

3. The petitioner in his representation dated 21 st February, 2011 (supra)

sought withdrawal of warrant of arrest impugning illegalities to RFC. The

counsel for the petitioner before this Court also has attempted to find fault

with the actions of RFC. However, the counsel fairly agrees that having

not impleaded RFC as a party to this writ petition, no challenge with

respect to any of its action can be made in the present writ petition.

4. The counsel for the petitioner has however contended that the action

of the respondent of issuance of warrant of arrest is bad.

5. In this regard, it may be noticed that Section 32G of the State

Financial Corporations Act, 1951 empowers the State Financial

Corporations, as RFC is, to recover its dues as arrears of land revenue.

6. The counsel for the petitioner calls the issuance of warrants bad, by

inviting attention to Section 136 of the Delhi Land Reforms Act, 1954

under which the warrant of arrest has been issued. The same provides for

recovery of arrears of land revenue by one or more processes mentioned

therein and one of which is by arrest and detention of his person.

7. The counsel for the petitioner next invites attention to Section 190 of

the Reforms Act which is as under:-

"190. Application of certain Acts to the proceedings of this Act--(1) Unless otherwise expressly provided by or under columns 4 and 6 of Schedule I of this Act, the provisions of the Court Fees Act, 1870, the Code of Civil Procedure, 1908, and the Indian Limitation Act, 1908, shall apply to the proceedings under this Act.

(2) The provisions of the General Clauses Act, 1897, shall mutatis mutandis apply, as far as may be, to this Act in the same manner as they apply to a Central Act."

8. The argument is that to the action of arrest under Section 136, the

provisions of Civil Procedure Code (CPC) would apply.

9. Attention is next invited to Section 51 and Order XXI Rule 37 of the

CPC to contend that where the decree is for payment of money, execution

by detention in prison shall not be ordered unless, after giving the

judgment-debtor an opportunity to show cause why he should not be

committed to prison, reasons are recorded in writing of satisfaction that the

judgment-debtor, with object or effect of obstructing or delaying the

execution of the decree--is likely to abscond or leave the local limits of the

jurisdiction of the Court or has, after the institution of the suit leading to

the decree, dishonestly transferred, concealed or removed any part of his

property or committed any other act of bad faith in relation to his property

or that the judgment-debtor inspite of having means to having paid the

decretal amount has refused or neglected to pay the same or that the

judgment-debtor is bound to decretal amount in a fiduciary capacity.

10. Reference is also made in the writ petition to Order XXI Rule 40 of

the CPC to contend that RFC has not placed any material to show that the

conduct of the petitioner is mala fide or dishonest or that there is willful

failure to pay inspite of sufficient means.

11. Though in the writ petition reference is made to certain other

judgments also but the counsel for the petitioner has based his case on:-

(a) Jolly George Verghese Vs. The Bank of Cochin AIR 1980

SC 470 on the proposition that a decree for recovery of money

cannot be executed by arrest unless there is some proof of willful

failure to pay inspite of sufficient means and simple default to

discharge the decree is not enough.

(b) P. Azeez Ahmed vs. State Bank of India, Vaniyambadi AIR

1995 Madras 194 where a Single Judge held that the mere affidavit

of the decree holder without any other documentary or oral evidence

to show that the judgment-debtor has means to pay the decretal

amount is not sufficient to direct execution of a money decree by

arrest in civil prison.

(c) Suresh Jindal Vs. Delhi Financial Corporation 166 (2010)

DLT 462 where a Single Judge of this Court held that extreme

coercive process of arrest and detention of a defaulter will be

resorted to not on account of mere non-payment or inability to pay

but only where a person is liable to pay and dishonestly makes

default in payment. It was further held that the Delhi Financial

Corporation in that case having failed to place any material in this

regard, was not entitled to proceed under Section 32G of the State

Financial Corporations Act. Accordingly, the proceedings under

Section 32G and for arrest were set aside.

12. At first blush it would appear that the matter is fully covered by the

judgment of this Court in Suresh Jindal (supra) and this writ petition is

entitled to succeed inasmuch as there does not appear to have been any

satisfaction recorded by the Assistant Collector of the respondent in the

present case, of the petitioner being able to pay and having dishonestly

defaulted in payment. The counsel for the petitioner has also sought only

an opportunity for the petitioner to satisfy the Assistant Collector in this

regard.

13. I may however notice that the petitioner in his representation dated

21st February, 2011 supra to the respondent has not pleaded so. The

petitioner claims to be an advocate by profession and to be residing in the

posh Sainik Farms Colony, of Delhi. Even the writ petition is bereft of any

particulars whatsoever of the financial status of the petitioner. The writ

petition appears to be an attempt to, after having the matter remanded to

the Collector, further delay the payment of public dues.

14. I have therefore examined the matter further. This Court in Suresh

Jindal held that the judgment of the Apex Court in Jolly George Verghese

(supra) is not applicable to the payment of statutory dues of Financial

Corporations (thus the reliance by the petitioner herein on the same is of no

avail); for doing so, reference was made to Ram Narayan Agarwal Vs.

State of Uttar Pradesh (1983) 4 SCC 276. On the basis of Ram Narayan

Agarwal it was further concluded that Section 51 of the CPC is applicable

to recoveries of land revenue also.

15. I am afraid, I am unable to cull out from Ram Narayan Agarwal

(supra) that the provisions of Section 51 of the CPC apply to recovery of

land revenue by arrest. On the contrary, Ram Narayan Agarwal (dealing

with the Uttar Pradesh Zamindari Abolition & Land Reforms Act, 1950

and Rules, 1952 framed thereunder) held:-

(a) That Section 279(1)(b) of the U.P. Act authorized recovery of

land revenue by arrest and detention of the person who has

committed the default.

(b) Rules 247 to 253 contained the procedure to be followed

while recovering the arrears of land revenue by arrest and detention

of the defaulter.

(c) Under Rule 247, the Collector/Assistant Collector was

required to issue the process against a defaulter.

(d) Under Rule 247(b) if the defaulter at the time of arrest paid

the entire amount of arrears specified in the warrant of arrest etc., he

is not to be arrested and if arrested to be released on receipt of the

said amount.

(e) Under Rule 251 (2), the defaulter after arrest is not to be

detained in custody, "unless there is a reason to believe that the

process of detention will compel the payment of the whole or a

substantial portion of the arrear".

(f) That Jolly George Verghese was a case governed by Section

51 of the CPC. Where pubic dues are to be collected, some amount

of coercion is necessary to make recalcitrant defaulter who has

means to pay or who has fraudulently secreted his assets to screen

them from being proceeded against to pay up the dues.

(g) Section 281 of the U.P. Act prescribed the maximum period

for which the defaulter could be detained for non-payment of land

revenue as fifteen days unless the arrears are sooner paid; the

women, minor could not be arrested or detained for recovery of

arrears.

(h) That the Rules aforesaid also provided sufficient safeguards.

(i) The argument that Rule 251 (2)(supra) which contemplates an

enquiry after the defaulter is arrested and produced and not before

his arrest as provided under Section 51 of the CPC and was thus

unconstitutional, was negatived. It was held that each State is well

within its right to devise its own machinery for the recovery of its

own public demand and no person can complain that the law of his

State is more rigorous than that of the neighbouring State or the

procedure prescribed by the CPC for execution of decrees.

(j) That the only question was whether the procedure prescribed

in Rule 251 (2) (supra) was fair, reasonable and not arbitrary and

satisfied the minimum constitutional requirement having regard to

the nature of arrear, the prevailing conditions in our society and

other relevant matters.

(k) It was held that the procedure prescribed under the U.P. rules

provides adequate opportunity to the defaulter to satisfy the officer

concerned that there is no justification to order his "detention" as

distinct from "arrest".

(l) That the procedure aforesaid of arrest did not amount to

imposition of any unreasonable restrictions on the liberty of the

defaulters.

(m) That the procedure under the U.P. Act and Rules is a

complete code on the process of arrest and detention of a defaulter

and was not to be modified by any of the provisions of CPC.

(n) That wherever the U.P. Act or Rules required the procedure of

CPC to be followed, express provision was made therefor but there

is no such provision in the Rules governing the process of arrest and

detention.

(o) That section 51 of the CPC could thus not be relied upon.

(p) That the defaulter however to be ordinarily served with a writ

of demand before any other process is adopted for recovery of

arrears of land revenue.

(q) The decision of the Allahabad High Court in Seth Banarasi

Das Gupta Vs. State of U.P. 1975 Revenue Decision 246 laying

down that the procedure under Section 51 of the CPC would apply,

does not lay down the law correctly.

16. It could thus be seen that Ram Narayan Agarwal which in Suresh

Jindal has been held to hold that the procedure as prescribed in Section 51

of the CPC is applicable to arrest for recovery of arrears of land revenue

does not so hold and rather holds to the contrary. With respect I state that

judgment in Suresh Jindal noticed the judgment in Ram Narayan

Agarwal only till paragraph 10 and did not notice the subsequent

paragraphs particularly para 16 expressly laying down that Section 51 of

CPC does not apply for recovery.

17. At this stage, I may state that the provisions of the Reforms Act and

the Rules framed thereunder are in pari materia to the U.P. Act and Rules

considered by the Supreme Court in Ram Narayan Agarwal (supra).

Section 138 provides for detention for maximum fifteen days and Rule 119

provides that after arrest, the defaulter shall not be detained in custody

unless there is reason to believe that the process of detention will compel

the payment of whole or substantial portion of the arrear. It may also be

noticed that though Rule 118 in the matter of entering a dwelling house for

the purposes of making arrest provides that the provisions of Section 55 of

the CPC shall be applicable thereto but Rule 119 does not provide for

application of Section 51. On the parity of reasoning in Ram Narayan

Agarwal, the Delhi Land Reforms Act and the Rules framed thereunder are

also a complete Code and reference to Section 51 is misconceived.

18. It would thus be seen that the only requirement preceding arrest is to

notify the defaulter of the demand and upon failure to pay, the procedure to

be followed is to arrest the defaulter and it is only after arrest that the

decision is to be taken as to whether he is to be detained further or not

depending upon whether detention will compel payment or not.

19. Upon the same being put to the counsel for the petitioner, he has

contended that Suresh Jindal in para 18 thereof, inspite of Ram Narayan

Agarwal has held that in recovery of land revenue also arrest will not be

effected without recording satisfaction that default in payment is dishonest.

20. I am unable to agree. Suresh Jindal has proceeded only on the

premise that Ram Narayan Agarwal has held Section 51 CPC to be

applicable, and which as aforesaid is not correct. In the face of the

judgment of Apex Court, even otherwise, this Court could not have held to

the contrary.

21. The only aspect which remains to be considered is whether Section

190 (supra) of the Reforms Act and of equivalent whereof under the U.P.

Act there is no mention in the judgment in Ram Narayan Agarwal, makes

the position in Delhi different. A perusal of the U.P. Act shows that

Section 340 thereof is pari materia to Section 190 of the Delhi Land

Reforms Act. Thus, the position in Delhi is no different from that

considered in Ram Narayan Agarwal. I have already observed that the

Rules regarding the arrest do not mention CPC. Section 190 even

otherwise makes the provisions of CPC applicable to "proceedings under

the Reforms Act" unless otherwise expressly provided by or under

Columns 4 & 6 of Schedule I of the Act. Since Section 190 refers to the

Schedule I to the Act, I have perused the said Schedule to see whether it

provides for any proceedings for recovery of land revenue. I do not find

so. Thus proceedings for recovery of land revenue cannot be said to be one

to which Section 190 is applicable.

22. Before parting reference may also be made to the judgment of the

Division Bench of this Court in Harmeet Singh Ghai Vs. Anand S.

Khullar (59) 1995 DLT 152 and to Raghuvir Singh Verma Vs. Delhi

Financial Corporation MANU/DE/1417/2003 in neither of which also it

was held that the provisions of Section 51 of the CPC are to be complied

with in making the arrest in default of payment of land revenue and held

that it is only Rules 118 & 119 of the Reforms Rules which have to be

complied with.

23. That brings me back to the facts of the present case. The petitioner

even if was not served with the notice (though I find it hard to believe) has

had sufficient notice by now to pay the amount due. The petitioner has not

paid the same. The next step in accordance with the Reforms Rules is of

the "arrest" of the petitioner and it is only post "arrest" and before

"detention" that the petitioner will be required to satisfy that his detention

will not compel payment.

24. No opportunity before arrest is required to be granted to the

petitioner, as under CPC.

25. I am even otherwise of the view that the petitioner who instead of

contesting the claim of RFC by filing proper proceedings in Jaipur, if

aggrieved from the proceedings under Section 32G of the State Financial

Corporation Act, has chosen to file this writ petition merely with a view to

delay payment of public dues, is not entitled to any indulgence from this

Court in equity jurisdiction. The Supreme Court in Andhra Pradesh State

Financial Corporation Vs. M/s GAR Re-Rolling Mills 1994 (2) SCC 647

has held that time has come for the Court to stop granting any such

indulgence to such persons. It was held that the aim of equity is to

promote honesty and not to frustrate the legitimate rights of Financial

Corporations which after advancing the loans take steps to recover their

dues from the defaulting party. The Full Bench of this Court as far back as

in Digambar Prasad v. S.L. Dhani MANU/DE/0243/1969 held that the

grant of a writ is in the discretion of the court and court will decline to

exercise discretion where conduct of the petitioner is such that it would be

inequitable and unjust to grant him the relief. This Court would be loath to

exercise discretion in favour of petitioner who inspite of opportunity has

failed to repay the public dues. Mention may also be made of S.P.

Chengalvaraya Naidu v. Jagannath MANU/SC/0192/1994 : AIR 1994

SC 853 where also the Apex Court noted that the process of the court is

being abused - bank loan dodgers and other unscrupulous persons from all

walks of life find the court process a convenient lever to retain the illegal

gains indefinitely.

26. The writ petition is accordingly dismissed. I refrain from imposing

any costs.

CM No.3376/2011 (for exemption)

Allowed, subject to just exceptions.

RAJIV SAHAI ENDLAW (JUDGE) MARCH 14, 2011 bs