DAYANAND SINGH Vs. STATE OF BIHAR

JUDGEMENT

(1.) HEARD Mr. V.P. Singh, learned counsel for the petitioner and Shri Ram Kishore Prasad learned counsel appearing for the Union Bank of India.

(2.) IN this writ application, the petitioner has challenged the order of his detention passed by the Certificate Officer for realisation of the certificate dues in Certificate Case No. 393(3) of 1991 -92. From a perusal of the order sheet, it appears that a certificate proceeding was initiated against the petitioner at the instance of the respondents through Union Bank of India for recovery of a sum of Rs. 22,14,139.06. After necessary court fee was paid, notice under Section 7 of the Act was issued and it was ultimately served some time in September, 1992. Thereafter, when the petitioner did not appear, the Certificate Officer by order dated 29.9.1992 issued Distress Warrant against the petitioner. Again on 1.10.1992 since the petitioner did not file any show cause within the statutory period provided under Section 9 of the Act, the Certificate Officer again issued Distress Warrant. Even the Distress Warrant was not executed for a long time and un each and every date certificate holder, Bank, appeared in the proceeding and took necessary steps for recovery of the dues. It appears that by order dated 4.6.1993, again the Certificate Officer issued a notice calling upon the petitioner to show cause as to why he should not be put in civil prison for nonpayment of the certificate dues. The matter thereafter was adjourned from time to time awaiting the report. Again the court passed fresh order on 30.11.1993 issuing show cause notice as to why the petitioner should not be put in civil prison for non -payment of the certificate dues, even the notice was published in the newspaper. However, on 11.1.1994 the petitioner appeared and filed time petition for filing objection under Section 9 of the said Act and objection was filed and thereafter the case was adjourned on several dates on the prayer made by the petitioner. Ultimately by order dated 19.8.1995, fresh warrant of arrest was issued against the petitioner for the purposes of recovery of the certificate dues. Since the petitioner did not take any step after filing of the so called objection under Section 9 of the Act and ultimately on 15.7.1996 the officer appearing on behal1 of the Certificate holder filed an application disclosing some of the properties of the petitioner. Since the description of the property was not given, the certificate officer directed the certificate holder to supply the details. In the meantime, pursuant to the distress warrant issued by the certificate officer the petitioner was arrested and for his release, this writ application has been filed.

(3.) MR . V.P. Singh, learned counsel for the petitioner firstly submitted that when the loan amount was secured by immovable property, then the certificate officer cannot proceed for the recovery of the amount by putting the petitioner in civil prison. The learned counsel submitted that the only remedy available to the certificate officer was to put the mortgaged property on auction sale and recover the amount. Even assuming that the submission of Mr. Singh is correct that when the property was attached for auction sale, then the certificate amount could be realised only from the sale proceeds of auction, I am of the opinion that the creation of equitable mortgage by loanee for repayment of loan is nothing but by way of collateral security and the moment the loanee executes a promissory note, his personal liability arises and in such circumstances, the Bank has every right to recover the amount by .taking recourse to arrest and detention of the certificate debtor in prison, besides attachment and sale of the mortgaged property.