Case Note & Summary
The case involved an appeal by S.K. Bhargava against the Collector, Chandigarh, concerning recovery proceedings initiated under the Haryana Public Moneys (Recovery of Dues) Act, 1979. The appellant, a former Director of M/s. Depro Foods Pvt. Ltd., contended that he had resigned before the company defaulted on loans taken from the Haryana Financial Corporation. The loans were taken in 1971 and 1973, and after default, the company was ordered to be wound up in 1980. The Haryana Financial Corporation sought recovery of the outstanding amount through the Collector, but the appellant argued that he was not given notice or an opportunity to be heard regarding the recovery. The Punjab & Haryana High Court upheld the recovery, stating that the amount was recoverable without further notice. The Supreme Court, however, found that the Managing Director of the Corporation must determine the sum due from the defaulter and that this determination required notice to the defaulter, as it could have significant civil consequences. The court emphasized that the principles of natural justice were not complied with in this case, leading to the invalidation of the recovery certificate and the determination made by the Managing Director. The appeal was allowed, and the court set aside the High Court's judgment, directing that fresh proceedings could be initiated in accordance with the law. No costs were awarded.
Headnote
A) Administrative Law - Principles of Natural Justice - Requirement of Notice - Haryana Public Moneys (Recovery of Dues) Act, 1979, Section 3 - The court held that the principles of natural justice must be read into the provisions of Section 3, requiring the Managing Director to provide an opportunity to the alleged defaulter before determining the sum due. The absence of notice rendered the determination and subsequent recovery proceedings invalid. (Paras 1-4).
Issue of Consideration
Whether the Collector was justified in proceeding against the appellant without affording an opportunity of being heard under the Haryana Public Moneys (Recovery of Dues) Act, 1979.
Final Decision
The Supreme Court allowed the appeal, set aside the judgment of the High Court, and invalidated the recovery certificate and the determination made by the Managing Director under Section 3(1)(b) of the Haryana Public Moneys (Recovery of Dues) Act, 1979. The Managing Director was permitted to initiate fresh proceedings in accordance with the law.
Law Points
- Natural justice
- Recovery of dues
- Determination of amount due
- Haryana Public Moneys (Recovery of Dues) Act
- 1979
- Section 3
