IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.530 of 2008 RAJNEESH KUMAR SAH Versus THE STATE OF BIHAR &ORS ----------- 6 17.9.2008 Petitioner had taken a loan from the State Bank of India for setting up of a brick kiln .There was a default in repayment thereof. Petitioner asserts that the default was attributable to non co- operating attitude of the respondent- Bank whereby additional finance that was necessary to make the unit functional and for other reason was not made available because of which the unit could not economical function. Petitioner on coming to know of the Bank high handed attitude in moving Certificate Court for recovery of its dues approached the District Collector to set up an enquiry. The matter before the Certificate Court was postponed awaiting the enquiry report. Ultimately the enquiry report was submitted to the Collector and the Certificate Court recommended that the Bank would be justified in realizing the principal amount but , in the facts, as noted therein, should not insist upon the interest amount, which should be waived. The matter was then taken up by the Certificate Court , who, ultimately, by order dated 16.8.2007 rejected petitioner’s objection and directed petitioner to pay the certificate dues. Petitioner filed an appeal being Certificate Appeal No. 93 of 2007 to the District Certificate Officer- cum- Collector, Purnea, who remanded the matter to the Certificate Court directing it to quantify the amount payable - 2 - under the certificate. On remand, when the matter was taken up by the Certificate Court, it quantified the said amount by its order dated 5.11.2007 in the said certificate case no. 1697 of 1995-96. The amount, so quantified, was Rs. 3,75,538.77p. The petitioner was granted opportunity to pay the same in instalments and it is not in dispute that the petitioner has paid the said entire amount. On the certificate being satisfied ,the Certificate Officer required the Bank to oblige with an “No Due Certificate”. Bank has refused to do so on the ground that as per Reserve Bank of India circulars and instructions and other statutory provisions, it is entitled to interest and till such time interest is not paid, it is not obliged to issue “No Due Certificate”. It is now the correctness of this stand, which is to be considered. Bank has filed a counter affidavit and rejoinder has been filed. Heard the parties and with their consent the writ petition is being disposed of at the stage of admission itself. In a certificate proceeding, once objections are considered and rejected, there is an option to the certificate debtor to pay or appeal against it. Petitioner appealed and the matter was remanded. After remand by order dated 5.11.2007, the Certificate Court quantified the dues and granted instalments to the petitioner to make payment thereof. Once payment was made, nothing remains to be executed as the Certificate was fully satisfied. As to the question of liability to pay interest is - 3 - concerned, the Certificate Court is not bound by the instructions of the Reserve Bank of India or the Instructions of the Bank. It is governed by the provisions of the Bihar Public Demand Recovery Act, 1940. It is the jurisdiction of the Certificate Court to allow or not to allow interest, and, if so, it has to follow the provisions of the Act in this regard. Section 17 of the Act provides interest i.e. chargeable but it is clearly stated that the interest is chargeable in a proceeding for execution of the certificate. Thus, the question arises as to what is executing the proceeding. The answer lies in Section 14 of the Act. Here, it would be seen in the present case that the execution proceeding has not yet been initiated. The amount was quantified, petitioner sought for instalments and paid in instalments. Thus, no execution proceedings were at all enforced. That being the situation, application of Section 17 of the Act does not arise.The Certificate Officer was fully aware of this position and it is because of that he insisted upon the Bank to issue “No Due Certificate”. So far as directives of the Reserve Bank of India are concerned, they are for the Bank. The Certificate Court is not bound by those directives. Once the Bank chose to bring the matter to Certificate Court or for that matter before any Civil Court, then it is the certificate or the decree that would determine the liability to pay interest. Interest may or may not be awarded but merely because Reserve Bank of India makes it obligatory to charge interest, it does not mean that it became obligatory on the part of the Certificate Officer de hors the provision of the Act to charge or award interest. - 4 - Thus, the action of the Certificate Officer cannot be questioned. It may be noted that the Bank also did not choose to question the order dated 5.11.2007 before any competent Court or authority. That being the situation, in my view, the certificate stands fully satisfied and the petitioner does not require to pay any further amount. State Bank of India would be obliged to issue “No Due Certificate” in the matter and other consequences like return of papers and documents submitted by the petitioner immediately. The Writ petition stands allowed. singh (Navaniti Prasad Singh)