Case ID: 1070

Judgment:
Appeal No. 88 of 1957. Appeal from the judgment and order dated January 18	 1956	 of the Rajasthan High Court (Jaipur Bench) in D.B.C. Writ Petition No. 262 of 1954. section K. Kapur and Ganpat Rai	 for the appellants. N. section Bindra and D. Gupta	 for the respondents. December 7. The Judgment of the Court was delivered by SARKAR	 J. The appellants are traders of Jhalawar. Respondent No. 1	 the Collector of Jhalawar	 	served on the appellants a notice under section 6 of the 	Rajasthan Public Demands Recovery Act	 1952	 hereafter called the Act	 for the recovery from them as a public demand	 of Rs. 2	24	607/6/6 said to be due on account of loans taken by them from the Jhalawar State Bank. The appellants filed a petition under section 8 of the Act contending	 among other things	 that 964 the amount sought to be recovered from them was not a public demand. Respondent No. 1 appears to have called upon the appellants to prove that it was not a public demand. The appellants without proceeding further before respondent No. 1	 filed a petition in the High Court of Rajasthan for the issue of a writ quashing the proceedings under the Public Demands Recovery Act. The High Court dismissed the petition but granted a certificate that the case was fit for an appeal to this Court. Hence the present appeal. The only question raised in this appeal is whether any loan due to the Jhalawar State Bank could be recovered as a public demand. A "public demand" within the meaning of the Act is "any money payable to the Government or to a department or an officer of Government under or in pursuance of a written instrument or agreement". The Government here means the Government of Rajasthan for the Act was passed in 1952 by the Rajasthan State Legislature. The question then is whether money due to the Jhalawar State Bank	 is money payable to the Government of Rajasthan. Now	 the Jhalawar State Bank was started in 1932. At that time Jhalawar was a ruling State. Sometime in or about April	 1948	 the State of Jhalawar	 along with nine other ruling States of Rajputana	 integrated and formed the United State of Rajasthan under a covenant executed by the Rulers of these States. One of the articles of this covenant provided	 "All the assets and liabilities of the covenanting States shall be the assets and liabilities of the United State." Subsequently	 on March 30	 1949	 the States of Bikaner	 Jaipur	 Jaisalmer and Jodhpur joined the United State of Rajasthan. On the promulgation of the Constitution of India	 the United State of Rajasthan became a Part B State in the Indian Union. The assets of the previous ruling State of Jhalawar	 which had earlier vested in the United State of Rajasthan	 thereupon passed to and devolved upon the State of Rajasthan in the Indian Union. 965 The proceedings under the Act against the appellants were started by the filing of a requisition with respondent No. 1 by respondents Nos. 2 and 3	 being respectively the Treasury Officer	 Jhalawar	 and the Recovery Officer	 Jhalawar State Bank	 under section 3 of the Act stating that the amount earlier mentioned was due from the appellants to the Government of Rajasthan in respect of the claims of the Jhalawar State Bank against them. This was done presumably shortly prior to June 16	 1953	 on which date respondent No. 1 signed a certificate specifying the amount of the demand and certain other particulars and filed it in his own office under section 4 of the Act. A notice of the signing and filing of the certificate was served upon the appellants under section 6 of the Act. This notice and the subsequent proceedings have been referred to in the beginning of this judgment. The claim thus is in respect of moneys due to the Jhalawar State Bank. If that Bank was not the property of the Jhalawar State	 then its dues cannot of course be said to have merged in the present State of Rajasthan. The appellants first contended that the Jhalawar State Bank was not the property of the State of Jhalawar. The only material to which we have been referred by the appellants in support of this contention is certain rules framed by the Ruler of Jhalawar in respect of the Bank. It was pointed out that the rules showed that the Bank was like any other commercial enterprise. We are unable to agree that for this reason it could not be an institution belonging to the State. There was nothing to prevent the Jhalawar State carrying on a commercial undertaking. If it did so	 the assets of that undertaking would be those of the State and	 in the circumstances earlier mentioned	 must now be held to be vested in the State of Rajasthan. It was also said that the rules showed that the management of the Bank was in the hands of a board of which certain non officials were members. It was contended that this showed that the Bank was not the property of the State. It is clear	 however	 from the 122 966 rules that the Bank was not the property of the board. Again	 the board was constituted from time to time by the Ruler and the majority of its members were officers of the State. This would show that the Ruler was in full control of the management of the Bank as a State undertaking. It is true that the rules indicate that the Bank might sue or be sued in respect of transactions made by or with it. That	 however	 would not indicate that the Bank had a separate identity. The rules in this connection only indicate in what name suits could be brought by or against the State 's banking business. On the other hand	 it is perfectly clear that the capital of the Bank was derived solely from the funds of the Jhalawar State. No part of it was contributed by anyone else. One of the objects of the Bank was to invest the surplus funds of the State. The entire transaction of the business of the Bank was in the ultimate control of the Ruler. The Jhalawar State guaranteed the financial liabilities of the Bank. The name "Jhalawar State Bank" also indicates that the institution belonged to the State of Jhalawar. About the time of the formation of the United State of Rajasthan in 1948	 the Chief Executive Officer	 Jhalawar	 issued a public notification in which	 after referring to the article in the Covenant which provided that the assets and liabilities of the covenanting States would be the assets and liabilities of the United State	 he proceeded to state that by virtue of this article	 on the formation of the new State	 the responsibility and guarantee of the existing transactions with the different departments of Jhalawar State or the Jhalawar State Bank	 would be of the newly formed United State of Rajasthan. This would show that the assets of the Jhalawar State Bank were being treated by all concerned as assets of the former Jhalawar State	 which	 upon the formation of the United State of Rajasthan	 had vested in the latter State. Further	 no one else has at any time made any claim to the assets of the Jhalawar State Bank. It is	 therefore	 clear beyond all doubt	 that the Jhalawar State Bank was one of the assets of Jhalawar State and is now vested in the State of Rajasthan. 967 The second point argued for the appellants is that the dues of the Jhalawar State Bank have in any case been transferred by the Government of Rajasthan to the Bank of Rajasthan Ltd. under certain Notifications to which we shall presently refer. It is said that the Bank of Rajasthan Ltd. is	 as its name shows	 obviously a limited company having an inde pendent existence and is not a department of the Government of Rajasthan State. It is also contended that this vesting took place before the proceedings under the Act had started. Therefore	 it is said that at the commencement of those proceedings	 the amount claimed from the appellants as due to the Jhalawar State Bank	 was not a public demand within the meaning of the Act. This contention which is based on the Notifications	 earlier mentioned	 does not seem to us to be well founded. We will assume for the present purpose that the Bank of Rajasthan Ltd. is not a department of the Government of Rajasthan State. The question is whether the effect of these Notifications	 which were two in number	 was to vest the dues of the Jhalawar State Bank in the Bank of Rajasthan Ltd. The first Notification is dated February 15	 1951. It	 stated that the Government of the State of Rajasthan had decided to transfer	 among others	 the Jhalawar State Bank	 to the Bank of Rajasthan Ltd. It was contended that by this Notification the assets of the Jhalwar State Bank were transferred to the Bank of Rajasthan Ltd. We do not think that that was the effect of this Notification. It contained two very significant provisions which we set out below: "All debtors of the State Banks irrespective of the class	 category and nature of the debt are hereby informed that within one month from the date of publication of this notice they should clear accounts with the aforesaid State Banks which will continue to function only to clear the old accounts	 and thereafter their accounts with the securities pledged will automatically be transferred to the Bank of Rajasthan Ltd.	 who will be authorised on behalf of the State	 to effect necessary recoveries and settle accounts. 968 The transfer of these debts to the Bank of Rajasthan Ltd. will not	 on any account	 take away the inherent right which the Rajasthan Govt. possess in these various transactions made on the guarantee of the respective convenanting States to make recoveries and settle accounts in accordance with the existing rules or laws that may hereafter be made to effect recovery of State dues or State debts. " It is clear from these provisions that the Bank of Rajasthan Ltd. was being authorised "on behalf of the State"	 that is	 the Government of the State of Rajasthan	 to recover the amounts due to the Jhalawar State Bank. The transfer of the latter Bank to the Bank of Rajasthan Ltd. was to be subject to this qualification that its dues would remain the dues of the Government of the State of Rajasthan and would only be recovered by the Bank of Rajasthan Ltd. as the agent of that Government. The last paragraph set out above emphasises this Position. It preserves the right of the Government of the State of Rajasthan to recover the amounts due to the Jhalawar State Bank in accordance with any law that might be made after the date of the Notification. The position then is that under this Notification the debts due to the Jhalawar Bank were not transferred to the Bank of Rajasthan Ltd. and remained payable to the Government of Rajasthan. The other Notification is dated April 16	 1952	 and it repeats that the banks mentioned in the earlier Notification	 including the Jhalawar State Bank	 "will be merged in the Bank of Rajasthan Limited". It is said that the effect of this Notification was in any event to cancel the earlier Notification	 in so far as the latter preserved the power of the State to collect the debts of the Jhalawar State Bank. We are wholly unable to agree. This Notifi cation only reiterates the intention of the Government of the State of Rajasthan to merge the banks named	 in the Bank of Rajasthan Ltd. It says nothing specifically about the dues of these banks or as to their recoveries	 with regard to which	 therefore	 the provisions of the previous Notification must have effect. Furthermore	 there is nothing to show that the debts 969 due to the Jhalawar State Bank were by any document specifically transferred to or vested in the Bank of Rajasthan Ltd. and thereupon became its property. That being so	 there is no basis for the contention that the debts due from the appellants are now due to the Bank of Rajasthan Ltd. in its own right. It would follow that such debts remained debts due to the Government of the State of Rajasthan. The third point argued was that the moneys claimed from the appellants were not payable under a written instrument or agreement. This contention is wholly unfounded. It appears that the loans were granted by the Jhalawar State Bank to the appellants on their own applications. In each application the appellants stated that they wanted a loan from the Jhalawar State Bank and promised to repay it with interest at the rate mentioned in it. By these applications the appellants also proposed to hypothecate various properties belonging to them as security for the due repayment of the loans taken. They signed the applications and the receipts	 which latter also bore the signatures of the officers of the Bank in token of the sanction of the loan. In our view	 the money payable by the appellants was payable under these applications and receipts and was	 therefore	 payable under written instruments or agreements. A point was sought to be made that in each case there were two documents	 namely	 the application by the appellants and the receipt for the moneys advanced signed by them	 whereas a public demand as defined in the Act	 required one instrument. It is enough to say in regard to this contention that the Act does not say that the moneys shall be due under a single instrument. It is well known that in a statute a singular includes the plural. In any case	 the two documents constituted the written agreement between the parties and that is enough to satisfy the requirement of the Act	 even if read in the way suggested by the appellants. The fourth point advanced was that the certificate under the Act was defective and therefore the proceedings were a nullity. Section 4 of the Act requires that the certificate shall be in the prescribed form. 970 One of the particulars to be stated in the form	 requires that the period for which the demand was due should be specified. That period was not specified in the certificate in the present case. It seems to us however that this is no defect. In the case of loans due	 there is no question of any period for which the demand is due. Obviously	 the requirement as to	 the specification of the period was meant to apply where the demand consisted of a claim for revenue or rent or the like	 which could be due for a period. It is clear to us that the requirement as to stating the period for which the demand is due	 as appears from the prescribed form	 does not arise in the case of a loan due to the Government which is a public demand within the Act and in such a case no question of stating the period arises. The certificate was not	 therefore	 defective. The last point argued was that in so far as the Act enables moneys due to the Government in respect of its trading activities to be recovered by way of public demand	 it offends article 14 of the Constitution. It is said that the Act makes a distinction between other bankers and the Government as a banker	 in respect of the recovery of moneys due. It seems to us that the Government	 even as a banker	 can be legitimately put in a separate class. The dues of the Government of a State are the dues of the entire people of the State. This being the position	 a law giving special facility for the recovery of such dues cannot	 in any event	 be said to offend article 14 of the Constitution. We have now discussed all the points raised in this appeal and are unable	 for the reasons earlier mentioned	 to find merit in any of them. In the result we come to the conclusion that the amount claimed from the appellants was a public demand within the meaning of the Act and was legally recoverable by the impugned proceedings. This appeal therefore must be dismissed with costs and we order accordingly Appeal dismissed.

Summary:
The jhalawar State Bank was originally a Bank belonging to the ruling State of jhalawar and its assets	 including moneys 963 due to it	 became vested in the United State of Rajasthan under the covenant executed by the Ruler of Jhalawar along with other Rulers by which the United State of Rajasthan was formed. On the promulgation of the Constitution of India	 the United State of Rajasthan became the State of Rajasthan in the Indian Union and all its assets	 including the jhalawar State Bank and its dues	 vested in the State of Rajasthan. Moneys due from the appellants in respect of advances made to them by the jhalawar State Bank at a time when it belonged to the ruling State of jhalawar	 could be recovered by the State of Rajasthan after the Bank had become vested in it	 as a public demand under the Rajasthan Public Demands Recovery Act	 1952. The form prescribed in the Rajasthan Public Demands Recovery Act	 in which a certificate has to be drawn up and filed under section 4 of the Act for commencing proceedings for recovery of public demands under the Act in so far as it required a statement as to the period for which a public demand is due	 was not applicable to a public demand like a loan due to the Government in respect of which there is no question of any period for which it is due. The Rajasthan Public Demands Recovery Act did not off end article 14 of the Constitution as giving special facility to the Government as a banker for the recovery of the bank 's dues for	 the Government can legitimately be put in a separate class for this purpose.