IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.13882 of 2007 SATYA NARAYAN SINGH Versus THE STATE OF BIHAR & ORS with CWJC No.12345 of 2007 SYED MAHMOOD ASHRAF Versus THE STATE OF BIHAR & ORS with CWJC No.237 of 2007 MATIUR RAHMAN Versus THE STATE OF BIHAR & ORS with CWJC No.4669 of 2007 YOGENDRA PD.SAH Versus THE STATE OF BIHAR & ORS ----------- For the Petitioner : Mr. Rajendra Narayan & S.K.Srivastava (CWJC No.13882/07) Advocates For the Petitioner : Mr. Md. Helal Ahmad, Advocate (CWJC No.12345/07) For the Petitioner: Mr. A.K.Ambastha, Advocate (CWJC No.237/07) For the Petitioner: Mr. P.K. Mallick, Advocate (CWJC No.4669/07) For the Respondents: Mr. S.N.Pathak, Advocate ----------- 3 20.4.2010 In all these writ applications a common question of law has been raised by all the petitioners. Therefore they are heard together and are being disposed of by this common judgment. Some facts are not in dispute that these petitioners were borrowers from what is known as Purnea Central Co- operative Bank Ltd., branch may be different. They have executed certain agreements which included loan agreement, a promissory note, along with the deed of hypothecation and guarantee. They went in default. The respondent decided to initiate a proceeding under the Public Demand Recovery Act. Some of the petitioners were even arrested for non-payment or non- appearance before the certificate officer who happened to be Managing Director of the - 2 - Bank itself. Factual aspects have been pleaded and stated but the same are not being emphasized either by the counsels or this Court looking at the very pointed question of law which has been raised at the bar. Their submission is that there is no agreement subsisting between these petitioners and the respondent Bank which empowers them to recover the loans as public demand under the Bihar & Orissa Public Demand Recovery Act. In absence of any agreement the recovery cannot be effected under the special law. There may be other forums or mechanism but what has been embarked upon by them as a method of recovery cannot be allowed to be maintained. The Court directed learned counsel representing the Bank to produce the original copy of the agreement (a Xerox copy of the original agreement has been retained on record for ready reference). This was specially called for with the object of ensuring that there was a subsisting agreement entered between the parties which would authorize the respondent to maintain a certificate proceeding. Original records in this regards has been produced which has been perused by the Court and the counsel of the parties but nowhere the same establishes this fact that there is agreement for recovery of the loan amount at public demand. Hypothecation, execution of pro note and guarantee is not an agreement for recovery under the special law. In absence of any subsisting agreement between the parties the Bank cannot be - 3 - allowed to maintain certificate proceedings in question for recovery. Learned counsel for respondents relies on a Division Bench judgment rendered in a case of M/s Kavita Pigments & Chemical (P) Ltd. & ors. Vrs. Allahabad Bank & Ors reported in 2000(3) PLJR 241 especially on the observation that public money has to be recovered and this cannot be evaded on one ground or the other. The case and the observation of the Division Bench were in relation to recovery of money under Debts Due to Banks and Financial Institution Act 1993. The decision is not an authority on the proposition of law which has been urged at the Bar. In absence of any agreement subsisting between the petitioners and the Bank to get loan amount recovered under Public Demand Recovery Act, the proceedings are quashed. The respondents have freedom to explore other forum/avenues for recovery of loan amount to their satisfaction as the law is well settled by a series of decisions of this court that in absence of any agreement subsisting between the parties no recovery can be made under Public Demand Recovery Act in the given set of facts. In view of above, the certificate proceedings initiated against the respective petitioners stand quashed. All the writ applications are allowed. RPS (Ajay Kumar Tripathi, J.)