IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No.876/2008 Reserved on: 3.11.2008 Decided on:10.11. 2008 Bimla Devi and another. …Petitioners. Versus State of Himachal Pradesh and another. …Respondents Coram The Hon’ble Mr. Justice Rajiv Sharma, J. Whether approved for reporting ?1. yes. For the petitioner : Mr., K.S. Thakur, Advocate. For the Respondents: Mr. Rajinder Kishore Sharma, Senior Additional Advocate General with Mr. Rajinder Dogra, Additional Advocate General and Mr. Vikas Rathore, Deputy Advocate General for respondent No.1. Mr. Ashwani K. Sharma, Advocate for respondent No.2. Rajiv Sharma, J. Brief facts necessary for the adjudication of this petition are that the respondent-corporation has sanctioned term loan of Rs. 3.52 lakhs on 26.9.2003 in favour of the petitioners. The hypothecation deed was executed on 9.10.2003. The respondent-corporation issued two notices to the petitioners to repay the outstanding loan on 26.4.2004 and 2.8.2004. The petitioners did not repay the loan. The respondent-corporation took 1 Whether the reporters of Local Papers may be allowed to see the judgment? No. 2 over the possession of the vehicle in question on 4th August, 2004. Petitioner No.1 was served with a notice on 25.8.2004 to pay the outstanding loan. The vehicle was sold for a sum of Rs. 75,000/-. The respondent-corporation initiated proceedings against the petitioners under section 32–G of the State Financial Corporations Act, 1951 for the issuance of recovery certificate for Rs. 3,58,666/- along with pendente lite and future interest with effect from 1.8.2007 with incidental charges before the specified authority on 6.8.2007. A notice was issued to the petitioners for 8.10.2007. They did not choose to appear before the specified authority. The notices were again issued to the petitioners for 12.11.2007. The petitioners did not appear despite service through registered post. They were proceeded exparte. The Specified Authority after perusing the statement of accounts filed by the respondent-corporation, came to the conclusion that a sum of Rs.3,47,422/- was due to the respondent- corporation and consequently the recovery certificate was issued for recovery as arrear of land revenue in favour of the respondent- corporation. The order was passed by the Specified Authority on 18.2.2008. The petition was listed for admission on 4.6.2008. The learned counsel for the petitioners has cited Rajeev Anand and others versus Union of India and others, AIR 1998 Delhi 259 for substantiating his plea that Managing Director could not become judge of his own cause. The operation of the impugned judgment was stayed by the Court subject to the petitioners depositing a sum of Rs. one lakh in the Registry of the Court. A sum of Rs. one lakh was not deposited by the petitioners in the Registry of the Court. The order dated 4.6.2008 was vacated on 22.10.2008. 3 Mr. K.S. Thakur has strenuously argued that the Managing Director of the respondent-corporation could not be appointed as a Specified Authority for adjudicating upon the matter under section 32-G of the State Financial Corporations Act, 1951. He had relied upon Rajeev Anand and others versus Union of India and others (supra). He also contended that the petitioners were not issued notices by the Specified Authority before passing the impugned order dated 18.2.2008. Mr. Ashwani Sharma has supported the order dated 18.2.2008. He also contended that the judgment citied by Mr. K.S. Thakur i.e. Rajeev Anand and others versus Union of India and others, AIR 1998 Delhi 259 has been over ruled by their Lordships of the Hon’ble Supreme Court in Delhi Financial Corporation and another versus Rajiv Anand and others, (2004) 11 SCC 625. He lastly contended that the petitioners were served with the notices for 8.10.2007 and 12.11.2007 but they did not appear before the Specified Authority and have rightly been proceeded exparte. I have heard the learned counsel for the parties and gone through the documents placed on record carefully. It is not disputed by the parties that the respondent-corporation had sanctioned a term loan of Rs. 3.52 lakhs in favour of the petitioners on 26.9.2003. The hypothecation deed was executed on 9.10.2003. Despite the notices issued to the petitioners on 26.4.2004, 2.8.2004 and 25.8.2004 the outstanding loan was not repaid by the petitioners. The proceedings under section 32-G of the State Financial Corporations Act, 1951 were initiated against the petitioners before the Specified Authority. Now, the Court will consider: whether the Managing Director of the corporation can be appointed as a Specified Authority under section 32-G 4 of the State Financial Corporations Act, 1951 or not? This question is no more res integra in view of the definitive law laid down by their Lordships in Delhi Financial Corporation and another versus Rajiv Anand and others, (2004) 11 SCC 625. The Hon’ble Supreme Court has over ruled the judgment rendered by Delhi High Court in Rajeev Anand and others versus Union of India and others, AIR 1998 Delhi 259. Their Lordships have held as under: “Thus, the authorities disclose that mere appointment of an officer of the corporation does not by itself bring into play the doctrine that "no man can be a judge in his own cause". For that doctrine to come into play it must be shown that the officer concerned has a personal bias or a personal interest or has personally acted in the matter concerned and/or has already taken a decision one way or the other which he may be interested in supporting. This being the law it will have to be held that the decision of the Delhi High Court is erroneous and cannot be sustained and the view taken by the Punjab and Haryana High Court is correct. It will, therefore, have to be held that Managing Director of a financial corporation can be appointed as an authority under Section 32-G of the Act.” Mr. K.S. Thakur has contended that the impugned orders are not in conformity with the principles of natural justice as no reasonable opportunity of hearing was afforded before the impugned order was passed by the Specified Authority on 18.2.2008. It is clear from the bare perusal of order dated 18.2.2008 that the petitioners were served for 8.10.2007 and 12.11.2007. They were served through registered notices. There is a presumption under section 27 of the General Clauses Act, 1897 that the petitioners had received the notices sent by post. If the petitioners had not chosen to appear before the Specified Authority despite the 5 receipt of the notices, they are precluded from taking the plea that there is violation of principles of natural justice. There is neither any jurisdictional error nor any procedural irregularity in the order passed by the Specified Authority Consequently, there is no merit in this writ petition and the same is dismissed. There will, however, be no order as to costs. 10.11. 2008 (Rajiv Sharma ), J. *awasthi*