- (1.) This appeal, by special leave, raises mainly the question whether the Insolvency Court can, at the hearing of a petition by a creditor for declaring a debtor insolvent, determine the liability of the alleged debtor for the payment of the debt for the recovery of which the creditor had obtained an order under the Patiala Recovery of State Dues Act, 2002 BK (Act IV of 2002 BK), hereinafter called the Act. To appreciate how the question arises on the facts of the case, reference to the provisions of the Act is necessary and we set them out first.
(2.) The Act was enacted to consolidate and amend the law relating to the recovery of State dues. According to cl. (1) of S. 3 'State dues' included debts due to the Patiala State Bank. The expression 'department' includes the Patiala State Bank, and the expression 'defaulter' means a person from whom State dues are due and includes a person who is responsible as surety for the payment of any such dues. 'Head of Department' means, among other things, the Managing Director in the case of the Patiala State Bank. Chapter II purported to deal with determination of State dues and modes of recovery thereof. Section 4 which falls in the Chapter provides that the head of Department shall determine in the prescribed manner the exact amount of State dues recoverable by his department from the defaulter. Section 5 lays down the modes for the recovery of State dues. Section 6 provides for the transmission of a certificate as to the amount of State dues recoverable from the defaulter to the Nazim and to the Accountant General and its sub-section (2) is: "A certificate transmitted under the preceding sub-section shall be conclusive proof of the matters stated therein and the Nazim or the Accountant General shall not question the validity of the certificate or hear any objections of the defaulter as to the amount of State dues mentioned in the certificate or as to the liability of the defaulter to pay such dues."
(3.) Section 10 provides that no action shall be taken by the Nazim or the Accountant General on a certificate coming from the Managing Director, unless it is sent to him within the period of limitation specified in that Section. Section 11 reads: "No Civil Court shall have jurisdiction in any matter which the head of department, or any authority or officer authorised by the head of department is empowered by this Act or the rules made thereunder to dispose of, or take cognizance of the manner in which any such head of department, or authority, or officer, exercises any powers vested in him or it by or under this Act or the rules made thereunder." Section 12 empowers the Government of the State to make rules for the purpose of carrying out the provisions of the Act. Sub-section (2) thereof states that the rules may provide the manner in which the amount of State dues shall be determined by a head of department.;