IN THE HIGH COURT OF JUDICATURE AT PATNA LPA No.608 of 2004 THE BIHAR STATE CREDIT & INVESMENT CORPORATION LIMITED Versus ARUN KUMAR SINHA & ORS With LPA No.628 of 2004 THE BIHAR STATE CREDIT & INVESTMENT CORPORATION LIMITED Versus DINESH B.PARIKH & ORS ----------- For the appellants:- Mr. Nirmal Kumar Roy, Advocate 3 28.8.2008 In both the appeals common questions of law arise and, as such, they have been heard together and are being disposed off by this common order. Bereft of all unnecessary detail facts giving rise to the present appeals are that writ-petitioners-respondent no.1 are guarantors of loan. There is an agreement between the loanee and the Bihar State Credit and Investment Company Limited, hereinafter referred to as the BICICO, for recovery of the amount under the provisions of Bihar & Orissa Public Demand Recovery Act. There 2 is no similar clause in the deed of guarantee and the guarantor had not otherwise agreed by a written instrument that the loan granted to the loanee could be recoverable as Public demand. The learned Single Judge relying on the decision of this Court in the case of Sunil Kumar Mehrotra Vs. State of Bihar (2003(3) PLJR 757) came to the conclusion that the guarantor cannot be proceeded under the provisions of Public Demand Recovery Act and accordingly quashed the certificate proceeding. One of the clauses of the loan agreement between the loanee M/s Jamshedji Company Ltd. is as follows:- “10.5. B & O. Public Demand Recovery Act. The Company agrees and covenants that BICICO if so like may recover its due or dues from the company either by way of filing the certificate case under the Bihar & Orissa Public Demand Recovery Act or by way of filing suit or suits in competent Court of law having jurisdiction over the matter, as 3 the case may arise.” Mr. Nirmal Kumar Roy, appearing on behalf of the appellants submits that in view of the stipulation in the loan agreement the guarantors are also bound by that and therefore recourse can be taken for recovery of loan amount under the provisions of Bihar & Orissa Public Demand Recovery Act. We do not find any substance in the submission of Mr. Roy. In our opinion, the existence of liability in the sense of pecuniary obligation is one thing and the mode, means and mechanism by which the person under the liability may be compelled to make the payment is entirely different. In our opinion, in the absence of an agreement by the guarantors, the amount recoverable from them cannot be treated as Public demand and consequently a proceeding under the 4 Public Demand Recovery Act could not be maintainable. It is relevant here to state that the learned Single Judge while passing the impugned order had relied on the judgment of this Court in the case of Sunil Kumar Mehrotra(supra). We are entirely in agreement with the reasoning assigned in the said case and consequently the impugned order passed following the aforesaid judgment is legal and valid. We do not find any merit in these appeals and are dismissed accordingly. (Chandramauli Kr.Prasad,J.) (Dr.Ravi Ranjan,J.) A.Kumar