Judgment:
M.Y. Eqbal, J.
1. This writ application has been
filed making a prayer for quashing the order dated
15-12-1987 passed by respondent No. 2
(Additional District Judge, VIIth, Dhanbad) in
Misc. Appeal No. 100 of 1978 arising out of an
order dated 11-7-1978 passed by the Assistant
Commissioner of Payments, Respondent No. 3.
in Claim Case No. DHB 1126 of 1976. By the
aforesaid order dated 15-12-1987 (Annexure 5)
the learned Additional District Judge, Vllth,
Dhanbad, allowed the appeal of respondent
No. 1 - Union of India and set aside the order
dated 11-7-1978 passed by the Assistant
Commissioner of Payments.
2. The claim case before the Commissioner arose out of claim raised by the claimant - Union of India for a sum of Rs. 3,18,618,45 paise which has subsequently amended on the basis of the audit report as Rs. 3,92,696,00 against the petitioners.
3. The case of the claimant-Respondent, in brief, is that under Section 3 of the Coal Mines (Taking over of Management) Act, 1973, the management of the coal mines vested in the Central Government with effect from 31-1-1973 and the colliery was managed till 30-4-1973. Thereafter Coal Mines (Nationilisation) Act, 1973 came into force from 1st May, 1973, and pursuant thereto the Colliery was vested in the Central Government. Under Section 25 of the said Act, right has been given to the Central Government to recover the amounts advanced by it for management of the coal mines. The claimant also claimed priority under the provision of Section 22(2) of the said Act of 1973 for the money advanced. In support of the claim, statement of accounts was filed by the claimant. However, pursuant to the order passed by the Commissioner of Payments the statement of accounts submitted
by the Bharat Cooking Coal Ltd was audited by the Auditor under the provisions of Section 19(6) of the said Act. As stated above, after the statement was audited, the claimant-respondent increased the claim from Rs. 3,18,618,45 paise to Rs. 3,92,696,98 paise by filing a petition to that effect. It further appears that initially the claimant filed two cases, one on behalf of the Union of India and another on behalf of the Bharat Cooking Coal Ltd., but by the order of the Commissioner the claim of the Bharat Cooking Coal Ltd.. was rejected being duplicate and the claim made by the claimant - Union of India was entertained.
4. The petitioner who was opposite party filed objection challenging the correctness and genuineness of the statement of accounts accompanied with the claim petition submitted by the claimant. Various other objections were raised challenging the correctness of the statement of accounts submitted by the claimant. The Assistant Commissioner of Payments after considering the entire documents and hearing the parties gave finding that the audited statement of accounts cannot be accepted in absence of corroborative evidence. The Assistant Commissioner further found that there was much discrepancy in the audited accounts and nothing has been brought by the claimant to substantiate the correctness of the said account. The Assistant Commissioner of Payments, therefore disallowed the claim as not maintainable. Aggrieved by the said order, the claimant - Union of India preferred an appeal before the District Judge, Dhanbad, as provided under the Act of 1973. The appellate Court allowed the appeal filed by the claimant and set aside the order passed by the Assistant Commissioner, Payments, Dhanbad, The appellate Court mainly relied on the amended provisions of Section 19 of the Coal Mines Nationalisation Act. The appellate Court held that the claim of the appellant claimant could not have been rejected in view of the provisions of Section 19(8) of the Act, which has been given retrospective effect from 1-5-1973.
Mr. Merathia, learned counsel appearing for the petitioners, assailed the order passed by the appellate authority as being illegal and wholly without jurisdiction. Learned counsel firstly submitted that the appellate Court committed grave error of law in allowing the appeal only on
the ground of the amended provisions inserted in Section 19 of the 1973 Act by virtue of the Coal Mines Nationalisation Law (Amendment) Act, 1986. Learned counsel submitted that even assuming that Sub-section (8)of Section 19 of the Act as amended by the aforesaid amendment was applicable in the instant case, the appellate Court completely misconstrued the said provisions, inasmuch as the presumption of correctness of the audited account is available only when it is not otherwise disproved. Learned counsel further submitted that the appellate Court without meeting the reasonings given by the Assistant Commissioner of Payments against the genuineness and correctness of the account has illegally held that the same was conclusive proof of the transaction of the amount shown therein learned counsel lastly submitted that even the appellate Court while reversing the finding of the Court of Commissioner failed to give its independent finding on the question of correctness of the audited account.
On the other hand, Mr. Trivedi, learned Standing Counsel for the Central Government, in support of the order passed by the appellate Court, submitted that the appellate Court rightly held that the audited account is conclusive proof of its correctness and in absence of cogent evidence adduced on behalf of the opposite party the Court has to accept the said account and make order for payment of the claimed amount.
5. Before appreciating the rival contentions of the learned counsel for the parties, it would be useful to look into the relevant provisions of the Act referred to hereinabove.
The Coal Mines (Taking over of the Management) Act, 1973 was enacted for the purpose of taking over the management of coal mines pending nationalisation of such mines in order to ensure rational and coordinated development of coal production and for promoting optimum utilisation of coal raised consistent with the growing requirements of the country. The Act came into force with effect from 31-3-1973. By the aforesaid Act, from the appointed day, the management of coalmines vested in the Central Government Pursuant to Section 6 of the said Act, the persons incharge of the management of such mine immediately before the appointed day became incharge of the management of such mines for and on behalf of the Central Government
and according to the provisions, the management of such mine was to he carried on by such person subject to the instruction of the Central Government. Immediately after about three months, Coalmines (Nationalisation) Act, 1973 came into force with effect from 1-5-1973, save and except Sections 30 and 31 which came into force from 30-6-1973. By reason of the aforesaid Act on the appointed day, all right, title and interest of the owners in relation to the coal mines specified in the Schedule- stood transferred and vested absolutely in the Central Government free from all encumbrances. For the purpose of payment of compensat to the coal mine owners. Commissioner of Payments, has been appointed. Section 20 of the said Act confers power to every person having a claim against owner of the coalmines to prefer claim before the Commissioner within stipulated period.
Section 23 of the Coal Mines (Nationalisation) Act 1973 gives power to the Commissioner to allow or reject a particular claim. Section 19 of the said Act as stood prior to the Amendment Act, 1986 is worth to be quoted hereinbelow :--
19. Statement of accounts in respect of the period of management by the Central Government, etc.-- (1) The Central Government or the Government Company, as the case may be, shall cause the books in relation to each coal mine, the management of which has vested in it under the Coal Mines (Taking over of Management) Act. 1973, to be closed and balanced as on the date immediately before the appointed day and shall cause a statement of accounts, as on that day, to be prepared, within such time, in such form and in such manner as may be prescribed, in relation to each such mine in respect of the transactions effected by it during the period for which the management of such coal mine remained vested in it:
Provided that where two or more coal mines were owned, before the commencement of this Act, by the same owner, a consolidated statement of accounts may be prepared for all the coal mines owned by such owner.
(2) All amounts received by the Central Government or the Government Company after the closure of such accounts shall where such accounts relate to transactions effected before
the appointed day, be included in the said statement of accounts in respect of the coal mine to which the said receipt relates.
(3) The Central Government or the Government Company in which the right, title and interest of coal mine stand vested shall be entitled to receive, up to the specified date to the exclusion of all other persons, any money due to the coal mine, realised after the appointed day notwithstanding that the realisations pertain to a period prior to the appointed day :
Provided that where such realisations have not been included in the statement of accounts as on the day immediately before the appointed day a supplementary statement of accounts shall be prepared and furnished at such intervals as may be prescribed, by the Central Government or the Government Company to the owner of the coal mine.
(4) .................................
(5) A copy of each statement of accounts prepared under this section shall be delivered by the Central Government or the Government company, as the case may be to the Commissioner and also to the owner:
Provided that where the number of owners is more than one, only one copy of the statement of accounts shall be given to the owners for the benefit of all of them.
(6) The statement of accounts prepared under this section shall be audited by a person who is qualified to be appointed as an auditor of a company under Section 226 of the Companies Act, 1956, and the auditor so appointed shall receive from the funds of the coal mine, such remuneration as the Central Government may fix.
(7) The audit of the statement of accounts shall be conducted in such manner as the Central Government may direct.'
By virtue of the Coal Mines Nationalisation Law Amendment Act, 1986, Sub-section (8) was added/substitued. Sub-section (8)as inserted reads as under:--
'(8) The statement of accounts audited under Sub-section (6) shall, unless the contrary is proved by conclusive proof in respect of every mailer entered therein.
Explanation.-- For the purposes of this section 'statement of accounts' means a statement in the form of receipts and payments, and does not
include any statement that may he prepared as a result of the closing and balancing of the books for the preparation of the profit and loss account and balance - sheet or any statement prepared in accordance with the normal commercial practice.'
6. From bare perusal of the aforesaid provisions of Section 19 of the said Act, it is manifest that it was obligatory on the part of the Central Government or the Government Company, as the ease may be, to cause the books in relation to each coal mines, whose management is vested in the Central Government to be closed and balanced as on the date immediately before the appointed day and also cause the statement of accounts as on that day to be prepared in respect of the transactions effected by it during the period for which the management of such coal mine remained vested in it. Sub-section (2) of Section 19 clarifies that all amounts received by the Central Government or the Government Company after closure of such accounts shall, where such amounts relate to transactions effected before the appointed day be included in the said statement of accounts in respect of the coal mine to which the said receipt relates. Sub-section (3) provides that only the Central Government or the Government Company is entitled to receive any money due to the coal mine realised after the appointed day notwithstanding that the realisation pertain to a period prior to appointed day. Proviso to subsection (3) of Section 19 obliges the Central Government or the Government Company to prepare a supplementary statement of accounts incase any amount realised pertaining to the period of management have not been included in the statement of accounts prepared under Sub-sections (1) and (2) of Section 19.
Sub-section (4) provides that the liability of the coal mine, not being liabilities arising out of advances made by the Central Government or the Government Company, which could not be discharged by the appointed day, may be discharged by the Central Government or the Government Company upto the specified date, out of the realisations effected before or after the appointed day or out of the advances or borrowing made up to the specified dale. It also provides that every payment so made shall be included in the statement of accounts as on the dalt immedaitely before the appointed day.
Sub-section (5) of Section 19 provides that a
copy of each statement of accounts so prepared in the manner stated hereinafter shall be delivered by the Central Government or the Government Company, as the case may be, to the Commissioner and also to the owner of the coal mines.
Sub-sections (6) and (7) of Section 19 makes it obligatory that the statement of accounts so prepared under this Section shall he audited by a person who is qualified to be appointed as an Auditor of the Company under Section 226 of the Companies Act, 1956, and the audit of the statement of accounts shall be conducted in such manner as the Central Government may direct.
The last Sub-section (8) of Section 19 provides that the statement of accounts so audited under Sub-section (6) shall be conclusive proof in respect of every matter entered therein, unless contrary is proved.
7. In the light of the aforesaid provisions the only question to be examined in this case is as to whether the appellate authority was correct in law in holding that in view of the provision of Section 19(8) of the Act, the claim of the claimant-respondent was bound to be allowed on the basis of the statement of accounts duly audited under the provision of Section 19(6) of the Act.
From the findings recorded by the Assistant Commissioner of Payments (hereinafter to be referred to as the 'Commissioner' for short) it appears that the correctness and genuineness of the statement of accounts was disbelieved by him by assigning various reasons.
8. The learned Commissioner has discussed about the correctness of the audited statement of accounts from paragraphs 32 to 58 of its order and ultimately held that the said statement of account was not correct and it is otherwise disproved in the absence of any corroborative evidence. Learned Commissioner has found the following discrepancies/irregularities in the audited statement of accounts:
(i) the statement of account is a summary of receipt and expenditures without disclosing the amount received from the Central Government. It has only disclosed the opening balance and various other receipts.
(ii) On the payment side, there is a disclosure of various payment on account of transaction prior to the taking over of the management or on account of the transaction subsequent to the taking
over of the management. There is no mention of closing the cash and balance as on 30-4-1973.
(iii) Profit and loss account as per the statement does not disclose anything. The entire statement of account also does not disclose the advance given by the Central Government.
(iv) A sum of Rs. 35,984.56 paise was shown as payment of advance bonus when after 30-4-1973 the question of payment does not arise. Several other discrepancies were shown with regard to payment of bonus.
(v) It was also found that the provisions of Section 19(1) of the Act was not complied with in its spirit, inasmuch as the transactions were not closed on 30-4-1973.
(vi) The Assistant Commissioner further found that the claimant has not disclosed as to how payment was made at the time of filing claim which is evident from the fact that at the first instance Rs. 318618,45 paise was claimed, but thereafter it was enhanced to Rs. 3,92,969,92 paise on the basis of the audit.
(vii) On verification of the statement of accounts from various books, contention was made that a sum of Rs. 5,00,000/- was released on account of sale but the same was not shown in the realisation head.
9. Besides the above, the learned Commissioner further found that on the objection raised by the petitioners-opposite party on the various entries of the statement of accounts, the claimant did not give satisfactory reply; rather the claimant took the stand that it was not the concern of the opposite party how particular amounts were paid to the customers. The Commissioner further came to the finding that the registers filed by the claimant disclose sale of coal at higher value and the claimant also admitted the realisation of Rs. 4,69,848.43.paise, and as such there was no justification to show the receipt of Rs. 3,80,870,60 paise. Accordingly, it was held that the statement regarding sales realisation in the receipt side was not in conformity with the register. On the item of payment of interest of Rs. 44,041/- the Commissioner found that the claimant could not explain as to why the interest was paid when the advance money was received from the Central Government. The claimant could not explain the circumstances under which the interest was paid. Further, the statement of accounts does not disclose
the break up figure of the amount received or payment made upto 30-4-1973 and upto the specified date, i.e. 30-6-1975 the break up figure has not been given.
For these reasons, the commissioner held that the claim of the claimant was not established in respect of the deficiencies and the audited statement of accounts cannot be a primary proof in support of the claim and the audited statement can be accepted only when it is supported by any corroborative documents justifying the claims.
10. From perusal of the order of the appellate authority it appears that the appellate authority proceeded on the basis that when an audited statement of account is prepared under Section 19(6) it shall be conclusive proof of entries and the claim based on the audited statement must be admitted by the Commissioner of payments. On this sole ground the order passed by the Commissioner of payments has been set aside.
11. In my opinion, the appellate authority has completely mis-construed and misinterpreted the provision of Section 19(8) of the said Act and has committed serious illegality and irregularity in arriving at that conclusion. The appellate authority has lost sight of the fact that Sub-section (8) of Section 19 put a rider that 'unless contrary is proved' the audited statement of accounts shall be conclusive proof in respect of every matter entered therein. Had the rider that 'unless contrary is proved' would not have been in the aforesaid provision, then the appellate authority to some extent might have been correct. It is well settled that when the law says that a particular kind of evidence would be conclusive as to the existence of a particular fact it implies that fact can be proved either by that evidence or by some otherevidence which the Court permits or requires to be advanced. When such other evidence is adduced it would be open to the Court to consider whether, upon that evidence, the fact exists or not. It is also well settled that where evidence which is made conclusive is adduced, the Court has no option but to hold that the fact exists. If that were not so it would be meaningless to call a particular piece of evidence as conclusive evidence. However, when evidence of a particular nature is made conclusive proof of existence of a fact, unless it was otherwise disproved, then the Court has to examine the evidence adduced in order to come to a conclusion that such evidence is
conclusive or not.
12. As noticed above, the learned District Judge, who is the appellate authority has completely over-looked the settled principles of law discussed hereinabove and has been totally influenced by the provision of Section 19(8) of the Act. The appellate authority has also not met the reasonings given by the Commissioner of payments in disbelieving the audited statement of accounts for the proof of certain transactions. In that situation, in my opinion, the order of the appellate authority suffers from serious illegality and infirmity which cannot be sustained in law. The appellate authority was required to meet the reasonings given by the Commissioner of payments and to give independent findings after discussing the evidence available on record.
13. For the reasons aforementioned, this writ petition is allowed, the impugned order passed by the appellate authority, namely, the VIIth Additional District Judge, Dhanbad, is set aside and the matter is remitted back to him to pass fresh order after hearing the parties in the light of the observations/directions made above and in accordance with law