R.H. Zaidi, J.
1. By means of this petition filed under Article 226 of the Constitution of India, petitioner prays for issuance of a writ, order or direction in the nature of certiorari quashing the sale proclamation dated 28.3.1992. order dated 30.5.1992 passed by the Sub-Divisional Magistrate. Meerut confirming the sale of the properties owned by the petitioner and the order dated 5.4.1999 passed by the Commissioner, Meerut Division, Meerut dismissing the objections filed by the petitioner under Rule 285-I of the rules framed under the U. P. Zamindari Abolition and Land Reforms Act, for short hereinafter referred to as 'the Rules' and 'the Act'.
2. The relevant facts of the case giving rise to the present petition, in brief, are that it was on an application made by Shri Narendra Singh Tyagi, Secretary, Chini Mill Majdoor Hitkari Samiti, Meerut, Z.A. Form No. 74 for recovery of an amount of Rs. 75.99.445 towards the salary, wages and gratuity of the workmen working in the said factory was issued by the Collector, Meerut. On the basis of the said form dated 28.3.1992, sale proclamation fixing 28.4.1992 for auction of the property specified in the form for recovery of aforesaid amount, was issued. The petitioner as soon as came to know about the aforesaid proceedings, filed objection against the sale before the Collector. Prayer for stay of further proceedings was also made. As no action was taken and no order was passed on the objection of the petitioner by the Collector, the petitioner filed Writ Petition N.o. Nil of 1992 challenging the validity of the recovery proceedings contending that no amount was outstanding against the petitioner in respect of salary, wages, gratuity, etc. and that no recovery certificate was issued by any competent authority. The said writ petition was disposed of finally with the direction that until disposal of the representation, the recovery proceedings shall remain in abeyance and were to be subject to the order passed on the representation. The order dated 20.4.1992 is quoted below :
'Heard learned counsel for the petitioner, the petitioner by means of this writ petition has sought for quashing the recovery proceeding in pursuance of the citation dated 28.3.1992. Annexure-2 of writ petition. The ground of attack in this case is that the recovery proceedings has been initiated without giving opportunity to the petitioner or even the total amount due which the petitioner is liable to pay and he even made a representation before the District Magistrate, respondent No. 1 which is Annexure-3 to the petition and the said representation has yet not been disposed of by respondent No. 1.
Having heard learned counsel for the petitioner, the learned standing counsel and on the facts and circumstances of this case. we dispose it of today at the stage of admission finally in accordance with the rules of the Court. Since only relief which the petitioner seeks is that he was not aware of the total dues for which the recovery has been sought and for which he has also made representation. In view of this, we direct respondent No. 1 to dispose of the petitioner's representation. Annexure-3 of the petition within two weeks from the date of the certified copy of this order is produced before it. The petitioner is also directed to file certified copy of this order with another copy of the said representation Annexure-3 of petition within two weeks from today.
Until disposal of the said representation, the recovery proceedings shall be kept in abeyance and shall be subject to the order passed in the said representation.
With the aforesaid observations, the present writ petition is disposed of finally.
Certified copy of this order be issued to the counsel for the petitioner on payment of usual charges today.'
3. The aforesaid order passed by this Court was communicated to the Collector as well as the officer conducting the auction sale, before the auction sale could take place but he deliberately violating and flouting the order passed by this Court held the auction on 28.4.1992 and the property in dispute worth more than Rs. five crores was sold only for an amount of Rs. 93.01.000 without following the procedure prescribed for the same. The petitioner filed an application before the Commissioner, respondent No. 1. and prayed for quashing the auction proceedings under Rule 285-1 of the rules framed under the Act. The Commissioner by his order dated 19.5.1992 entertained the objection and stayed the auction proceedings and confirmation of sale till disposal of the case. The order dated 19.5.1992 is quoted below :
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4. The information of the said stay order was communicated to the Sub-Divisional Magistrate and the Tehsildar on 21.5.1992 ; but as they had refused to receive the same, the copies of the order were sent to them by registered post which was received by the Sub-Divisional Magistrate on 22.5.1992. The Sub-Divisional Magistrate acting in utter disregard of the order passed by the Commissioner, confirmed the auction sale on 30.5.1992. It has also been stated that Immediately thereafter, i.e.. 2.6.1992, the possession over the property in dispute was delivered to the auction purchaser, respondent No. 6. By order dated 18.2.1993. after hearing the counsel for the parties, the Additional Commissioner (Judicial), while dealing with the objection of the petitioner, held that auction of the properties of the petitioner and confirmation of the same, were bad in law and were liable to be set aside as there was no recovery certificate issued by any competent authority and further in view of order dated 20.4.1992 passed by the High Court and order dated 19.5.1992 passed, by the Commissioner, neither auction could be held nor it could be confirmed. Having recorded the said findings, he referred the matter to the Board of Revenue. However, the Board of Revenue did not accept the reference and turned down the same on the ground that the Additional Commissioner (Judicial) has no jurisdiction to dispose of the objection filed under Rule 285-1 of the rules and directed the Commissioner to dispose of the objection. Challenging the validity of the order passed by the Board of Revenue, the petitioner again filed Writ Petition No. 45726 of 1993, which was partly allowed by this Court by judgment and order dated 21.10.1997 and the matter was sent back to the respondent No. 1 for decision afresh in the light of the observations and directions made by this Court. The operative portion of the said order is quoted below :
'In the result, this writ petition succeeds in part. The Impugned order passed by the Board of Revenue shall stand modified requiring the Commissioner, the respondent No. 3 to consider and finally dispose of the objections filed by the petitioner under Rule 285-1 of the U. P. Zamindari Abolition and Land Reforms Act as well as the revision filed against the order confirming the sale in question dated 30.5.1992 in accordance with law within a period not laler than three months from the date of the production of a certified copy of this order.
There shall, however, be no order as to costs.'
5. Thereafter, the Board of Revenue sought comments from the Collector on the representation of the petitioner. In compliance of the order passed by the Board of Revenue, the Collector submitted his comments. The matter was thereafter sent to the Collector by the Board of Revenue. The Collector by his order dated 18.12.1995. removed the receiver, who was continuing since before, holding that no amount was outstanding against the petitioner nor any recovery certificate was pending disposal. The receiver was also directed to prepare inventory and a Chartered Accountant was appointed to audit the accounts from 1984 to 1995. The petitioner filed a representation before the Board of Revenue as the petitioner wanted the audit of accounts from 1977 to 1984. As no action was taken on the representation filed by the petitioner, the petitioner again had to approach this Court and to file Writ Petition No. 10220 of 1996. This Court entertained the petition and on 8.4.1996 issued direction to the Chairman of the Board of Revenue to decide petitioner's representation and communicate the order to the petitioner by 30.6.1996. In compliance of the order passed by this Court, the Board of Revenue issued a direction to the Collector to submit a report. The Collector, thereafter, submitted his report to the effect that from 3.1.1977 to 24.10.1990. amount of Rs. 1.16.10.101.53 was outstanding against the petitioner. After going through the material on the record, the Chairman, Board of Revenue found that the attachment of compensation of the petitioner's land was illegal inasmuch as the statement of provisional deductions was rejected by the Prescribed Authority and the order dated 20.2.1992 of the Collector was illegal. The Chairman directed the Collector to pay the balance amount after adjusting Rs. 1,62,02,402.20. which was due under the demand notice if there was no recovery certificate in respect of the said amount against the petitioner. Since the amount outstanding was Rs. 1.16 crores and the Chairman directed deduction of Rs. 1.62 crores, the petitioner once again filed Writ Petition No. 31378 of 1996. This Court on 17.7.1997 granted interim order directing the payment of Rs. 4,33,94,783.40 after deducting Rs. 1,62.02.402.20, within two months with the remarks that this payment shall be subject to final decision.
6. It was on 21.10.1997 thatWrit Petition No. 45726 of 1993 waspartly allowed by this Court and theCommissioner was directed todispose of the objection as well as therevision filed against confirmation ofauction sale within three months.Since the orders passed by the Boardof Revenue as well as by this Courtwere not complied with, the petitionerwas obliged to file contempt petitionNo. 2611 of 1997 for non-complianceof the order dated 17.7.1997, referredto above, on which notices wereissued to the respondents to showcause as to why action under theContempt of Courts Act be not takenagainst them. The petitioner on28.1.1998 also filed an applicationbefore the Commissioner in Case No.15/91-92 of 1992 to determinewhether there was any recoverycertificate or notice of demand issuedbefore the auction dated 28.4.1992.Thereafter, arguments were heard bythe Commissioner andorder/Judgment was reserved. TheWrit Petition No. 9716 of 1992 wasdisposed of with the direction todecide the application dated28.1.1998 of the petitioner. TheCommissioner rejected the objectionof the petitioner and approved theauction dated 28.4.1992 andconfirmation of sale dated 30.5.1992.The Commissioner found that therewere public dues against thepetitioner for recovery of which,auction was held and auction of theproperties owned by the petitionerwas legal and valid. Hence, thepresent petilion.
7. On behalf of respondents No. 1 to 7, three counter-affidavits - one by respondent Nos. 1 to 3 ; second by respondent Nos. 4 and 5 and third by respondent Nos. 6 and 7. were filed. In brief, stand taken by the contesting respondents is that the auction and confirmation of sale were valid and legal, orders were passed after considering the entire material on the record and after hearing the petitioner. It was stated that actually auction was held on 27.3.1992 but since the highest bid was under-priced, the auction was cancelled on 28.3.1992 by the respondent No. 3. It has also been contended that there was outstanding dues against the petitioner and as such the property in question was valldly auctioned on 28.4.1992 and that the sale was rightly confirmed on 20.5.1992 in accordance with law. It has also been urged that the stay order dated 19.5.1992 passed by the Commissioner was not served upon the respondent Nos. 2 and 3 before auction was held. Although, the order of the High Court dated 20.4. J992 was served on 28.4.1992 upon respondent Nos. 2 and 3, after the completion of auction proceedings. Respondent Nos. 4 to 7 also asserted that the order of High Court was served upon them after 1.10 p.m. on 28.4.1992 and the order of the Commissioner dated 19.5.1992 was served on 3.6.1992.
8. The facts stated in the aforesaid counter-affidavits were controverted and denied by the petitioner by filing the rejoinder-affidavits and it was asserted that the entire proceedings were null and void. [n the rejoinder-affidavit filed in reply to the counter-affidavit filed by respondents No. 6 and 7, it has been specifically asserted by the petitioner that the stay order passed by the Commissioner was served upon the respondent No. 3 and the Tehsildar on 21.5.1992 and the same was also sent by the registered post with A/D to respondent No. 3 and the Tehsildar on 22.5.1992. The copies of the registered letter and the registration receipts dated 22.5.1992 have been filed as Annexures R.A. 2 and R.A. 3 to the rejoinder-affidavit.
9. Learned counsel for the petitioner vehemently urged that in the present case, no recovery certificate was Issued by the competent authority, therefore, the Collector, Meerut had no jurisdiction to proceed to recover the amount in question as arrears of land revenue and to issue Z.A. Form No. 74. The Jurisdiction of the Collector in recovery matters starts after the receipt of the recovery certificate issued by the competent authority and not before. In the present case, it was urged that no recovery certificate was at all issued by any competent authority. It was also urged that Shri Narendra Singh Tyagi had no right to make an application dated 20.8.1991 for initiation of recovery proceedings inasmuch as the amount in question could not be recovered as arrears of land revenue. Learned counsel for the petitioner also urged that the Collector. Meerut had no jurisdiction to proceed further to auction the properties owned by the petitioner without deciding the objection filed by the petitioner before him and to issue Form No. 74. Similarly, it was also urged that the auction officer also had no jurisdiction to hold auction and deprive the petitioner of its properties. It was also submitted that the respondents have deliberately acted illegally and in violation of the order passed by this Court on 20.4.1992 whereby the Collector was directed to decide the objection before proceeding further. Learned counsel for the petitioner also pointed out several irregularities in conduct of sale on account of which, the sale proceedings were liable to be set aside. It was also contended that without deciding objection under Rule 285-1. neither sale could be held nor the same could be confirmed. Lastly, it was urged that no amount was outstanding against the petitioner as the amount in question was already recovered/adjusted from the money received by the Collector from the sale of Putha-farm, which was owned by the petitioner. Therefore, there was no question of recovering the said amount again.
10. On the other hand, learned counsel appearing on behalf of the respondents as well as the learned standing counsel submitted in reply of arguments made by learned counsel for the petitioner that the auction proceedings were conducted and concluded by the respondents in accordance with law and did not suffer from any illegality or infirmity. It was urged that since inspite of demand being made by Shri Narendra Singh Tyagi to pay the amount in question, no payment was made, he, therefore, had no option but to approach the Collector for recovery of the said amount. It was also urged that the Collector, Meerut on the application filed by Shri Narendra Singh Tyagi rightly issued Z.A. Form No. 74 even though no recovery certificate was issued by the competent authority. Learned counsel urged that the impugned orders did not suffer from any illegality or infirmity. This writ petition was. therefore, liable to be dismissed.
11. I have considered the submissions made by learned counsel for the parties and also carefully perused the record.
12. The questions, which arise for consideration by this Court are as to whether the amount in question could be recovered as arrears of land revenue ; as to whether the amount in question could be recovered in absence of any recovery certificate issued by competent authority ; as to whether without deciding the objection filed by the petitioner under Rule 285-I. the Collector and the auction officer had the jurisdiction to proceed further to hold the auction sale and confirm the sale ; as to whether the authorities below have failed to comply with the orders passed by the Hon'ble Court dated 20.4.1992 and as to whether the auction sale in question was bad in law and was liable to be set aside for several irregularities committed by the authorities below in conducting the sale.
13. The U.P. Public Moneys (Recovery of Dues) Act. 1972 (U. P. Act No. XXIII of 1972). provides for the recovery of dues payable to the State Government or to the Uttar Pradesh Financial Corporation or any other corporation notified by the State Government in that behalf or to any other nationalised or scheduled bank or to Government company and to validate certain acts done and proceedings taken in the past and to provide for matters connected therewith. Section 3 of the said Act provides for recovery of certain dues as arrears of land revenue, which reads as under :
'3. Recovery of certain dues as arrears of land revenue.--(1) Where any person is party :
(a) to any agreement relating to a loan, advance or grant given to him or relating to credit in respect of. or relating to hire-purchase of goods sold to him by the State Government or the Corporation, by way of financial assistance ; or
(b) to any agreement relating to a loan, advance or grant given to him or relating to credit in respect of, or relating to hire-purchase of goods sold to him. by a banking company or a Government company, as the case may be, under a State-sponsored scheme ; or
(c) to any agreement relating to a guarantee given by the State Government or the Corporation in respect of a loan raised by an industrial concern : or
(d) to any agreement providing that any money payable thereunder to the State Government or the Corporation shall be recoverable as arrears of land revenue ; and such person :
(i) makes any default in repayment of the loan or advance or any Instalment thereof; or
(ii) having become liableunder the conditionsof the grant to refundthe grant or anyportion thereof,makes any default in the refund of suchgrant or portion orany instalmentthereof; or
(iii) otherwise fails to comply with the terms of the agreement, -then, in the case of State Government, such officer as may be authorised in that behalf by the State Government by notification in the Official Gazette, and in the case of the Corporation or a Government company, the Managing Director or where there is no Managing Director then the Chairman of the Corporation, by whatever name called thereof, and in the case of a banking company, the local agent thereof, by whatever name called may send a certificate to the Collector, mentioning the sum due from such person and requesting that such sum together with costs of the proceedings be recovered as if it were an arrear of land revenue.
(2) The Collector on receiving the certificate shall proceed to recover the amount stated therein as an arrear of land revenue.
(3) No suit for the recovery of any sum due as aforesaid, shall lie in the civil court against any person referred to in subsection (1).
(4) in the case of any agreement referred to in sub-section (1) between any person referred to in that section and the State Government or the Corporation, no arbitration proceedings shall lie at the instance of either party either for recovery of any sum claimed to be due under the said sub-section or for disputing the correctness of such claim :
Provided that whenever proceedings are taken against any person for the recovery of any such sum he may pay the amount claimed under protest to the officer taking such proceedings, and upon such payment the proceedings shall be stayed and the person against whom such proceedings were taken may make a reference under or otherwise enforce an arbitration agreement in respect of the amount so paid, and the provisions of Section 183 of the Uttar Pradesh Land Revenue Act, 1901, or Section 287A of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, as the case may be. shall mutatis mutandis apply in relation to such reference or enforcement as they apply in relation to any suit in the civil court.
(5) Save as otherwise expressly provided in the proviso to sub-section (4) of this section or in Section 183 of the U. P. Land Revenue Act, 1901, or Section 287A of the U. P. Zamindari Abolition and Land Reforms Act, 1950 every certificate sent to the Collector under sub-section (1) shall be final and shall not be called in question in any original suit, application (including any application under the Arbitration Act. 1940) or in any reference to arbitration and no Injunction shall be granted by any Court or other authority in respect of any action taken or intended to be taken in pursuance of any power conferred by or under this Act.'
14. The aforesaid statutory provision clearly provides the dues of money which can be recovered as arrears of land revenue. The money in question, admittedly, does not fall in any one of the categories of money provided under Section 3 of the Act.According to the letter of Shri Narendra Singh Tyagi, dated 20.8.1991 (Annexure-1 to the writ petition), the money in question was alleged to be the arrears of amount of salary, wages and gratuity of the workmen working in the petitioner mill, which does not come in any one of the categories of the money provided under Section 3 of the Act. referred to above. Therefore, the said amount was not recoverable as arrears of land revenue. Further, admittedly, in the present case, no recovery certificate or a certificate as provided under sub-section (2) of Section 3. referred to above, was issued by any competent authority. The Collector, Meerut. therefore, merely on the basis of a letter written by Shri Narendra Singh Tyagi. who had no jurisdiction to approach the Collector, could not proceed to recover the amount in question as arrears of land revenue. The Collector, apparently, acted illegally and in excess of his jurisdiction in issuing Z.A. Form No. 74 and to ask the Tehsildar concerned to recover the amount in question and to pay the same to the complainant or to the workmen of the company. This Court vide order dated 16.3.1999 directed the respondent No. 1 to produce the recovery certificate, if any, issued by the competent authority for recovery of the money in question. This Court also by order dated 20.4.1992 directed the respondent No. 1 to decide the objection filed by the petitioner before proceeding further to recover the money in question. The respondent No. 1 acting wholly illegally in excess of his jurisdiction and in disregard of the orders passed by this Court, proceeded to auction the property in dispute owned by the petitioner. Therefore, the entire recovery proceedings conducted by the authorities below are null and void. A reference in this regard may be made to the decision in the case of M/s. Rewa Gases Private Limited v. State of U. P. and others. 1998 (2) AWC 1523 : 1998 (33) ALR 316, wherein it was ruled by a Division Bench of this Court as under :
'9. Both the remaining arguments have, however, enoughforce. As already noted above, none of the petitioners took any advantage of entering into any transaction under the provisions of any State-sponsored Scheme. Likewise. at no point of time, the petitioners seem to have approached M/s. U. P. Carbide and Chemicals Ltd. for according any financial assistance or loan under any State-sponsored scheme. Obviously, the transactions of the petitioners were simple mercantile transactions. It appears that M/s. U. P. Carbide and Chemicals Ltd. had supplied some goods/ materials to each of petitioners and price thereof has not been paid by any of the petitioners to the aforesaid supplier. Consequently, in view of the provisions noted above, M/s. U. P. Carbide and Chemicals Ltd., on facts of these cases cannot invoke any of the clauses (a), (b), (c) and (d) of Section 3 of the Recovery Act against any of the petitioners for recovery of the money which it claims to be due against them under ordinary business transaction.'
Similar view was taken in M/s. Veer Traders. Saharanpur v. Auto Traders Limited, Pratapgarh and others, 1998 ALJ 156. wherein it was ruled as under :
'It Will, therefore, be seen that the Collector gets jurisdiction to recover the amount stated in the recovery certificate as arrears of land revenue only if there is a valid recovery certificate, i.e.. as recovery certificate signed by a person competent in the case of a Corporation the certificate has to be signed only by the Managing Director or if there is no Managing Director then the Chairman of the Corporation by whatever name he is called. No other officer of the company is authorised to sign the recovery certificate such as is contemplated under Section 3 of the Act.'
15. Thus, it is settled view of this Court that in the absence of recovery certificate Issued by a competent authority, no recovery proceedings can be initiated by the Collector. As stated above. Mr. Narendra Singh Tyagi has no right to make an application to the Collector for recovery of the amount in question as neither the said money was public money within the meaning of the term used under the aforesaid Act nor there was any recovery certificate issued by a competent authority in respect thereof. The respondents have, thus, acted wholly illegally and in excess of their jurisdiction in putting the properties of the petitioner to public auction and to confirm the sale. It may be noted that even after the specific directions of this Court, contesting respondents failed to produce any valid recovery certificate in respect of the amount in question. Thus, the whole recovery proceedings are non-est and on the basis of the same, petitioner cannot be deprived of its properties.
16. Learned counsel for the petitioner is also right in his submission that without deciding the objection filed by the petitioner, the respondent No. 1 had no jurisdiction to auction the properties in question. It is not disputed that on receipt of Z.A. Form No. 74, petitioner filed an objection on 12.4.1992 before the respondent No. 1. which was not decided and auction was held by the respondents. Not only the objection filed by the petitioner was Ignored by the contesting respondents but also the direction issued by this Court in Civil Misc. Writ Petition No. Nil of 1992. vide order dated 20.4.1992, which was served upon the contesting respondents well within the time, to decide the objection before proceeding further with the auction proceedings. A reference in this regard may also be made to the decisions of this Court in the case 1996 (1) CCC 190 and Smt. Prabha Devi v. Bhoop Singh and another. 1991 (18) ALR 94. Not only the auction was held in violation of the orders passed by this Court but the auction sale was also confirmed without deciding the objection filed by the petitioner under Rule 285-1 of the Rules framed under the Act, therefore, the auction sale held by the respondents was illegal and invalid.
17. Learned counsel for the petitioner also pointed out several irregularities and mistakes committed by the authorities concerned in publishing and conducting the sale of the property in dispute. It was stated that before the sale in question, no citation or notice of demand was ever issued by the petitioner as required under Section 280 read with Rule 242 of the Rules framed under the Act. Before putting the properties to sale, the alleged defaulter is to be provided an opportunity to pay the amount in question by issuing a citation or notice of demand. In the instant case, authorities below have acted illegally ignoring the view taken by this Court in the cases of Jalal Uddin v. State of U. P. and others, 1985 AWC 163 : Smt. Chandrawati and another v. U. P. State Electricity Board, Lucknow and others, 1986 ALJ 1451 ; Desh Bandhu Gupta v. N. L. Anand and Rajinder Singh, JT 1993 (5) SC 313 ; Lal Chand v. VIIIth Additional District Judge and others, 1997 (3) AWC 1782 : JT 1997 (3) SC 367, as well as in Smt. Shanti Devi v. State of U. P. and others, 1979 RD 203.
18. According to learned counsel for the petitioner, the sale proclamation served upon the petitioner was also illegal as in the same, no amount, which was allegedly due on account of wages and gratuity, etc. against the petitioner was mentioned in the sale proclamation or under any other Act. Many other Irregularities, as stated above, were pointed out by learned counsel for the petitioner upon which, the sale in question was liable to be set aside. After holding that the money in question could not be recovered as arrears of land revenue and the authorities below had no jurisdiction to proceed to recover the amount in question as arrears of land revenue in the absence of the recovery certificate. It is not necessary to deal with several other arguments made by learned counsel for the petitioner. This petition is, therefore, liable to be allowed and the impugned orders are liable to be quashed. It is, however, observed that if actually some amount of wages. salary or gratuity is outstanding against the petitioner, the contesting respondents can recover the same by taking recourse to the proceedings under the Payment of Wages Act as well as under the U. P. Industrial Disputes Act.
19. For the facts and reasons stated above, this petition succeeds and is hereby allowed. The order dated 5.4.1999 (Annexure-23), order dated 30.5.1992 (Annexure-7). sale proclamation dated 28.3.1992 (Annexure-2) are hereby quashed and the respondents are directed to restore back status quo ante as on before the auction sale dated 28.4.1992 was held, within a period of two weeks from the date a certified copy of this order is communicated to the competent authority.