- (1.) THIS is a revision which challenges the judgment of the learned Revenue Appellate Authority Jaipur dated 10-7-63, u/s 23 (b) of the Rajasthan Public Demands Recovery Act, whereby the learned R. A. A. accepted the appeal filed by the legal representatives of the late Shri Manmal, against the order of the learned Addl Collector Jaipur dated 21-4-61. He has cancelled the certificate filed against Shri Guman chand Kailashchand, Prakashchand, Premchand sons of late Shri Manmal and Smt Surajbai widow of late Shri Manmal, and has further ordered that the execution proceedings against them may be dropped.
(2.) BRIEFLY, the facts of this case are summarised as follows: - The Chief Engineer, Electrical & Mechanical Department filed a requisition u/s 3 of the Rajasthan Public Demand Recovery Act (hereinafter referred to as the Act) for the recovery of Rs. 2,42,672/15/- due on account of embezzlement against Shri Manmal, Store-keepar of the said Department. The Collector filed a certificate u/s 4 of the Act and issued notices u/s 6 of the Act to the defaulters. Thereupon the defaulters submitted their objections. Shri Raj Kumar, the then Collector heard the parties and by his order dated 14th September, 1954 withdrew the certificate on 8-1-55. The main ground on which he passed this order was that the Chief Engineer, Electrical & Mechanical Department was not an authorised person to file the requisition. Subsequently, the State Government passed an order authorising the Executive Engineer (Generation) to file a consolidated requisition against the legal heirs of Shri Manmal for the recovery of Rs. 3,87,823/- on account of money said to have been embezzled by late Shri Manmal in collusion with his colleagues and assistants and other accomplices. The Executive Engineer (Generation) submitted a consolidated requisition to the Collector Jaipur for the recovery of the said amount from the present non-petitioners as legal heirs of late Shri Manmal and also from Kapurchand, Cashier, Champalal, Harikishan, Rajmal, Lalitkishan Amarchand Rampratap and Sushilkumar, all clerks in the Electrical and Mechanical Department. On the 23rd March 1955, Shri Z. S. Jhala, the then Collector filed certificate 44 of 1955 u/s 4 of the Act for the recovery of the said amount. Notices were issued to the defaulters and petitions denying liability were presented. Shri S. L. Kakkar who succeeded Shri Jhala as Collector referred these petitions to the Executive Engineer (Generation) as the officer charged with the recovery, for heaiing and disposal in terms of Section 8 of the Act. On the 17th October, 1960 Shri Bahadur Singh Executive Engineer (Distribution) submitted a report to the Collector, and at this stage the Addl. Collector dealt with the case. He rejected the objections submitted by the legal heirs of late Shri Manmal. However, in respect of the other defaulters, he accepted their objections and withdrew the certificate against them. In respect of the legal heirs of late Shri Manmal, petitioners in the instant case, the certificate was sent to the Tehsildar for execution. Aggrieved by this order of the Addl. Collector, the petitioners went up in an appeal and this was accepted by the learned R. A. A,, Jaipur. Hence this revision petition has been filed on behalf of the State Government. Six objections were raised in appeal before the learned Revenue appellate Authority as follows: - (1) The proceedings initiated las a result of the filing of the certificate No. 44 of 1955 by Shri Z. S. Jhala were barred due to the operation of the principle of res-judicata on account of the order of the Collector, Shri Raj Kumar dated 14th September, 1954 which was final. (2) The certificate filed was without jurisdiction on account of lack of personal satisfaction, by the Collector Shri Jhala that the demand was due and recoverable under the Act. (3) The Addl. Collector had no jurisdiction to direct execution, because the petitions denying liability had not been heard and determined by the officer charged with the realisation of the said amount was the Executive Engineer (Generation), whereas the petitions denying liability were heard and disposed of by Shri Bahadur Singh, Executive Engineer (Distribution) who had no jurisdiction to hear and determine the same. (4) When other defaulters were discharged of the joint liability, the heirs of late Shri Manmal could not be legally proceeded against. (5) The liability rested personally with Shri Manmal and on his death, it could not be enforced against his legal heirs. (6) Neither there was any money payable to the Govt. by the legal representatives of the late Shri Manmal nor was it recoverable under the Act. Objection No. 1 - The learned R. A. A. Jaipur upheld objection No. 1 on the ground that Shri Jhala had no jurisdiction to sit as a court of appeal against the order of Shri Raj Kumar dated 14th September 1954 which had become final. He maintained that a fresh certificate could not be legally signed and the certificate filed on 21-3-55 was invalid as the nature of recovery of the embezzlement amount was the same in respect of which Shri Raj Kumar had by his order dated 14-9-54 withdrawn the certificate. Objection No. 2 - The learned R. A. A. has held that Shri Jhala had signed certificate No. 44 of 1956 as an executive officer and had not functioned as a judicial officer. He has also held that the Collector based his personal satisfaction on the report of the officer charged with realisation i. e. Executive Engineer (Generation ). He has maintained that the original evidence, direct or circumstantial, should have formed the basis of the personal satisfaction, of the Collector and Shri Jhala signed the certificate not on the basis of his persona] satisfaction, but merely on the report of Shri Yad Ram Chaturvedi and under the impression that he was acting as a executive officer. Consequently, he has declared the certificate filed by Shri Jhala as nullity in law. Objection No. 3.- This objection was also upheld and it was maintained by the R. A. A. that the petitions denying liability was not heard by the competent officer namely the Executive Engineer (Generation) because it was heard and disposed of by the Executive Engineer (Distribution ). Consequently, it has been concluded that the Addl. Collector has no jurisdiction to finally determine the petitions. Objection No. 4.- This objection was rejected by the first appellate court and it has been maintained that the liability being joint and several, could be enforced against all or any of the defaulters. Objection No. 5 - Placing reliance on Section 1 para 2 of the Legal Representatives Suits Act 1856 and Sec. 306 of the Indian Succession Act, the R. A. A. has maintained that the liability can be enforced against the legal heirs and representatives of Shri Manmal to the extent of assets inherited by them, and further to the extent of wrong committed by him before his death. Having made these observations, the R. A. A. did not clinch the issue. He failed to give a finding on this objection on the ground that it was no use expending labour on this point as he had already reached the conclusion that the demand for which requisition was sent and certificate was filed, was not recoverable under the Act. Objection No. 6.- The lower court has arrived at the conclusion that the existence of the demand has not been established as there was no material on record, on the basis of which an order equivalent to a decree could be passed. The argument on which he has passed this conclusion is that the money payable on account of cheating, is not recoverable under the Act. He has based this finding on the report of Shri Yad Ram Chaturvedi who is said to have reported that Shri Man mal had innovated new tactics in collusion with the Cashier, invoice clerk and other clerks to do away with the Government money from time to time fraudulently and had cheated his officers by obtaining orders regarding the payment which the officers would not have done had they been not defrauded by him. I have heard the learned counsel appearing for the State that Conclusion of the lower court on the first objection i e. the operation of the principle of resjudicata was perverse. It was urged that Shri Raj Kumar had by his order dated 14-9-54 withdrawn the certificate issued u/s 4 of the Act on the technical ground that the requisition u/s 3 of the Act had not been filed by an authorised officer. It was argued that the Collector while passing this order had not considered the merits of this case. The subsequent requisition filed by Shri Bhargava, Executive Engineer (Generation) by a c6mpetent person duly authorised by the State Government. It was averred that for the principle of res-judicate to operate, the following conditions precedent must be fulfilled: - (i) The parties to the issue must be the same i. e. they must fill the same character. (ii) The authority hearing the second case must not be lower in rank to one who decided the first one. (iii) The subject matter of the dispute should be the same and must be heard and finally decided. The learned Advocate General vigorously maintained that two of the aforementioned conditions were not fulfilled. In the first place the requisition filed ear-Her was not filed by a duly authorised person and secondly the matter was never gone into and there was no question of its having been heard and finally decided It was submitted that the Collector did not go into the merits of the case at all, but threw out the requisition on a technical ground. The contention of the learned Advocate General was that the Government being a corporate body it could act through its officers and unless an officer was duly authorised, he could not undertake to represent the Government. In the instant case, the Chief Engineer had no locus-standi and the Collector, therefore, by his order dated 14 9-54 held that the requisition was not valid in law. Evidently there was no proceeding on behalf of the Government. It was further argued that the demand was not the same as the requisition filed on the second occasion was for a different amount and as it was a fresh requisition by a duly authorised person, Shri Jhala filed a certificate u/s 4 of the Act. Extending stout support to the order, he averred that Shri Jhala did not review the order passed by Shri Raj Kumar. Continuing his arguments, the learned counsel submitted that the conclusion drawn by the learned R. A. A. was perverse. He urged that if this argument is extended, the order passed by Shri Jhala would be equally operative as res-judicata against the respondents. The respondents could have challenged the order of the Addl. Collector Shri Raof but not the order of Shri Jhala dated 21-9-55. As regards the second objection the contention of the learned counsel was that the personal satisfaction of the Collector was based on a set of objective circumstances. Shri Yad Ram Chaturvedi and Shri lansi Lal, Senior Accounts Officers had made an exhaustive enquiry and had come to the conclusion that Shri Man Mal had in collusion with his colleagues embezzled a sum of Rs. 3,87,823/- and this detailed report was the basis on which Shri Jhala had relied. The summary of this report was given by the officer charged with realizing the said amount, namely the Executive Engineer (Generation ). It was contended that the proceedings were of a quasi-judicial nature and the Collector Shri Jhala had applied his judicial mind to the facts of the case and as a result had come to the conclusion that there was a strong prima facie case of embezzlement of a sum of Rs. 3,87,823/- by Shri Manmal and his accomplices. The finding of the R. A. A. was therefore based on perverse logic. In regard to the third objection the learned Advocate General contended that this was a ground for remanding the case for hearing of the petitions denying liability by a competent officer. In respect of the fourth objection, it was submitted that the learned R. A. A. had over-ruled this objection and on this point, no argument was necessary. The learned Advocate General drew my attention to sub-sec. 2 of sec. 2 of the Act and stated that the term 'defaulter' includes not only a person from whom the demand is due personally but also the legal representatives of such person. In dealing with the objections No. 6, the learned counsel contended that item 8 of the Schedule of the Act clearly provides that any money payable to the State Government or to a Department or a officer of the State Government, due to consequential loss caused by misappropriation, defalcation or breach of trust by a public servant was recoverable under the Act. He submitted that cheating was the means adopted to achieve defalcation and the result was embezzlement of the government money His argument was that the learned R A. A. had adopted perverse logic to come to this conclusion. On behalf of the respondents, their learned counsel contended that nature of the demand in the first requisition which was disposed of by the Collector by his order dated 14-9-54 and that in the second requisition filed by the Executive Engineer (Generation) dated 28-2 55 was the same. The only difference between the two requisitions was the extent of the liability. It was, therefore, affirmed that the initiation of the proceedings for the second time were barred by the principle of res-judicata. As regards objection No. 2, it was argued that the Collector has to satisfy himself that there is a demand in existence and in the instant case, there was no material before the Collector except the summary of Shri Yad Ram's report made by Shri Bhargava, Executive Engineer (Generation) in his requisition. The embezzlement, it was averred took place through the collusion of officers and employees, as the report showed, and there should have been positive proof of the liability against Shri Manmal before collective responsibility could be fixed. The argument was that the Collector had not applied his judicial mind for his personal satisfaction and had merely relied on the version of others. It was contended that the liability of a person for defalcation must be conclusively established before recovery under the Act could be made. The Collector had made only provisional satisfaction and there is no provision in law for issuing a certificate under sec. 4 of the Act on provisional basis. 1955 Patna 49 (Sasamusa Sugar Works vs. State of Bihar) and 1956 RRD 23 (Shri Brahma vs. State) were cited in support of their contention. It was asserted that Shri Yad Ram's report, which was the basis of the Executive Engineer (Generation) Shri Bhargava's report does not form part of the record. It was urged that the creation of demand and issuing of certificate is like passing decree against the debtor and the Collector must act in a judicial manner before doing so As regard the third objection, it was submitted that the Executive Engineer (Generation) alone was competent to hear petition denying liability, but it was heard by a person without jurisdiction and the R. A. A. had given a correct judgment. In regard to the objection No. 6, the learned counsel drew my pointed attention to the observations made by the learned R. A. A. at page 29 of his judgment and he supported his conclusion that money payable for cheating is not recoverable under the Act. I have given my careful consideration to the arguments of the parties and have examined the record of this case. Shri Jhala passed his order on 21-3-55 and signed the certificate No. 44 of 1955 for the recovery of the said amount. If the respondents felt aggrieved by this order, they should have filed an appeal against it. The period of limitation for filing an appeal under sec. 23 (A) of the Act is 30 days from the date of the order. The appeal in question was filed by the respondents on 22nd May 1961. This appeal was directed against the order of the Addl Collector dated 21-4 61. The Collector's order dated 21-3-58 had, therefore, become final. It cannot be challenged in an appeal which was preferred against the Addl. Collector's order in so far as the objection No. 1 is concerned.
(3.) I am inclined to uphold the contention of the learned Advocate General that the principle of res-judicata was inoperative in the instant case. The Collector's order dated 14-9-54 threw out the case merely on a technical ground that requisition had not been filed by an authorised person. This cannot therefore, be deemed to be an order on merits and it cannot be said that the dispute had been heard and finally decided. This cannot act as a bar for filing of a fresh requisition. The fresh requisition was subsequently filed by a duly authorised person namely the Executive Engineer (Generation) Shri Bhargava and the same was given due consideration by the Collector who filed a certificate u/s 4 of the Act by his order dated 21-2 65. As I have already observed this order became final because the respondents never challenged it by way of an appeal. The conclusion of the learned R. A. A. on the first objection is perverse and entirely unwarranted. I am afraid I cannot uphold the finding of the learned R. A. A. on the second objection too. Shri Jhala in his order dated 21-3-55 has elaborately dealt with the circumstances of the case before coming to the conclusion that he was personally satisfied that the demand was recoverable under the Act. The learned R. A. A. has applied perverse logic in coming to the conclusion that Shri Jhala had passed the order dated 21-3-55 in his capacity as an executive officer. An enquiry was made by two independent officers deputed by the Finance Department who, after an exhaustive probe, came to the conclusion that Shri Manmal, Store-keeper was responsible for the embezzlement of a sum of Rs. 3,87,823/ -. This formed the basis of requisition filed u/s 3 of the Act by the Executive Engineer (Generation), Shri Bhargava, and the Collector applied his mind to the facts of the case and came to the conclusion that the demand was recoverable under the Act. The proceedings under the Act are of a quasi judicial nature and the Collector has given full justification for his order dated 21-3-55. The contention of the learned R. A. A. that the Collector must have had access to the direct and circumstantial evidence, is entirely misconceived and ill founded. It has been contended that filing of a certificate u/s of the Act is like passing a decree by a civil court and the Collector must be fully satisfied before he signs the certificate that the liability of the defaulter is conclusively established and the amount is recoverable under the Act. This contention is not entirely correct. The decree becomes executable only after the petition denying liability has been heard and rejected. While signing the certificate, the Collector has merely to see that there is a strong prima facie case. In the instant case the Collector had ample material on record to form his opinion that there was a strong prima facie case. A defaulter has the opportunity of denying liability by way of a petition and prove his case. It may therefore be said that a certificate u/s 4 of the Act is like a decree of a civil court which remains under suspension till the petition denying liability has been heard and rejected. The Collector was well within rights when he signed and filed the certificate u/s 4 of the Act and the objective circumstances entirely justify the order passed by him. So far as objection No. 3 is concerned, the learned Advocate General conceded that the] petition denying liability was not heard and determined by a competent authority. This is a mere procedural lapse and I uphold his contention that this defect is curable and it can now be heard and disposed of by a competent person. The finding of the learned R. A. A. on objection No. 4 & 5 have not very much been contested because they go in favour of the petitioners. He flinched from giving a finding on objection No. 5. While he made observations which tended to incline in favour of the view that legal heirs were liable to pay the amount due, he did not clinch the issue and refrained from giving a finding on the point. Subsection 2 of section 2 of the Act read with sec. 19 & 19 (A) of the Act rule out any scope for controversy on this score. It is abundantly clear that by virtue of the provisions of these sections, the legal heirs and representatives of late Shri Manmal are liable for the recovery to the same extent. I have tried to comprehend lengthy and laboured logic resorted to by the learned R. A. A. in the decision of objection No. 6 and I must confess that I have failed to appreciate his conclusion that the amount is not recoverable under the Act as it was on account of cheating that he had acquired this amount. The cheating resorted to by late Shri Manmal may have been only one of the means adopted to embezzle the amount. The net result is that he along with his accomplices defrauded the State Government of a sum of Rs 3,87,823/ -. It is perverse logic to argue that on account of cheating the recovery of this amount fell outside the ambit and scope of the Act. I entirely uphold the contention of the learned Advocate General that this is recoverable under the Act, as even a bare reading of item 8 of the schedule annexed to the Act makes it abundantly clear. The result of the foregoing discussions is that the impugned order of the learned R. A. A. , is set aside and the case is remanded to the Collector for reference of the petition denying liability to a person charged with realisation for hearing of the same and its disposal in terms of sec. 8 of the Act. Pronounced in open court. . ;