... 1 ... IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.89 OF 2002 Sancoale Alloy Steels Pvt. Ltd. (as successors to Bandekar Alloys Steels Pvt. Ltd.) a company set up under Companies' Act 1956 and having its registered office at Nitin Chambers, Vasco-da Gama, Goa. ... Petitioners v e r s u s 1. The Deputy Collector and DRO, Margao, Salcete, Goa. 2. E.D.C. Ltd., a company set up under Companies' Act 1956 with office at E.D.C. House, 1st floor, Dr. Atmaram Borkar road, Panaji, Goa. ... Respondents Shri A. F. Diniz, Advocate for the petitioners. Shri S. R. Rivonkar, Government Advocate for the respondent no.1. Shri N. Vaze, Advocate for the respondent no.2. ... 2 ... CORAM: S. A. BOBDE, J. R. C. CHAVAN, J. Date : 04.07.2008. ORAL JUDGMENT: (Per S. A. BOBDE , J.) The petitioners have challenged the amount of money recovered by the respondent no.1/Deputy Collector as cost for recovery under the Goa, Daman and Diu Public Moneys (Recovery of Dues) Act and Rules. The petitioners have also challenged the order dated 14.6.2002 issued by the Government under sub section 3 of section 3 of Goa, Daman and Diu Public Moneys (Recovery of Dues) Act, 1986 fixing the cost of collection as the percentage of the amount that is recovered. 2. The petitioners had borrowed an amount of money from the respondent no.2 i.e. the E.D.C. Ltd. Since the petitioners ... 3 ... did not repay the amount due, the respondent no.2, E.D.C. issued Recovery Certificate for recovery of the outstanding amount of loan to the respondent no.1/Deputy Collector under section 21 of the Goa, Daman and Diu Public Moneys (Recovery of Dues) Act, 1986. 3. The E.D.C. informed the respondent no.1 that they received payment from the petitioner as follows: A) Prior to the PMRA Case 8,33,306.50 B) Subsequent to the PMRA Case -M/s Bandekar Alloys and Steels Pvt. Ltd. 31,56,000.00 -M/s Nazareth Metals (Auction sale) 35,96,466.00 - Withdrawn from High Court 20,10,000.00 --------------- 95,95.772.50 --------------- 4. It may be mentioned that capital 'A' above refers to the amount repaid by the petitioners before the recovery case. Capital 'B' above contains three items out of these three, only one amount ... 4 ... i.e. Rs.35,96,466.00 represents the costs incurred by the Deputy Collector in pursuance of auction sale. 5. In pursuance of the aforesaid application the Deputy Collector collected the amount of costs in accordance with order dated 14.06.2002 which reads as follows: Upto Rs.50,000/- - 10% Rs.50,000/- to Rs.5,00,000/- - Rs.5000/- + 8% of the amount exceeding Rs.50,000/-. Rs.5,00,001 to Rs.10,00,000/- - Rs.41,000/- + 5% of the amount exceeding to Rs.5,00,000/-. Rs.10,00,001 to Rs.20,00,000/- - Rs.66,000/- + 4% of the amount exceeding Rs.10,00,000/-. Rs.20,00,001/- and above - Rs.1,06,000/- + 3% of the amount exceeding Rs.20,00,000/-. 6. According to the learned counsel Shri Diniz, the order dated 14.06.2002 issued by the Government is illegal because the order enables recovery of costs on a percentage basis, describes the percentage of costs rather than the actual costs. The ... 5 ... contention is based on the Form “cost of collection” used in sub section 3 of the Act. We are of the view that though the term 'cost of collection' is liable to be constructed as a term which is utilized as actual cost incurred for the purpose of collection. It is permissible for the Government to prescribe such cost of collection on a percentage basis by a general order applicable to all the cases of recovery. Sub Rule 3 does not place restriction on the Government on the method it should employ for collecting the cost of collection. On the other hand it provides that the Collector is entitled to collect such cost of collection which he deems to be reasonable. The Government in such a case would be free to prescribed the cost of collection on percentage basis and having regard to its experience of the cost of collection, which are normally incurred for recovery. We therefore, see no merit in this challenge. 7. It was further contended by the learned counsel for the petitioners that the order is vitiated because it does not prescribed a maximum ceiling. Having regard to the fact that these recoveries ... 6 ... are normally in cases of commercial or trading houses. We see no reason why such a ceiling should mandatorily be imposed. In any case section 3 does not contemplate such ceiling. We therefore, reject this submission. 8. Mr. Diniz learned counsel for the petitioners further contended that the respondent no.1 had no authority to recover any cost of collection on the amounts which are paid directly by the petitioners to the respondent no.2 without any intervention of the respondent no.1. For instance, from the amount reproduced earlier, the petitioners have paid to their creditors, the E.D.C. amounts of Rs.8,33,306/-, Rs. 31,56,000/-, Rs.35,96,466./- and Rs. 20,10,000/- directly. In fact, the last amount of Rs.20,10,000/- was withdrawn by the respondent no.2 from this Court when the petitioners were directed to deposit the said amount in the contempt petition in this Court. This contention of the petitioners is sound indeed. The incurring of cost is a sine quo non for charging the parties for cost of collection. If the Collector has not incurred any cost, he cannot charge any party ... 7 ... with any cost of collection. Accordingly, we direct that the amount of Rs.2,30,500/- less the sum of Rs.74,926/- (amount already withdrawn), amounting to Rs.1,55,574/- shall be refunded to the petitioners forthwith. Rule made absolute, accordingly. S. A. BOBDE, J. R. C. CHAVAN, J. lh/.