The main legal point established was the invalidity of the certificate proceeding due to the appointment of an incompetent Certificate Officer and the preclusion of the BICICO from initiating a fresh certificate case without a specific agreement for loan recovery.

Aftab Alam, J.

1. This writ petition was filed initially on behalf of a company under the name & style of M/s Shobha Coir Foam Pvt. Ltd. which is incorporated under the Indian Companies Act. The company was represented by its Managing Director Shri Ajit Kumar Sinha. Later, a supplementary affidavit was filed stating that the writ petition sought to challenge a proceeding initiated against Ajit Kumar Sinha in his personal capacity and hence, the petition should have been filed on his behalf and not at the instance of the company. A prayer was made to substitute Ajit Kumar Sinha personally in place of the company.

2. In the facts and circumstances of the case, the prayer is allowed and Ajit Kumar Sinha is taken as the petitioner in this case.

3. The company M/s Shobha Coir Foam Pvt. Ltd. was a borrower from the Bihar State Credit & Investment Corporation Limited (BICICO for short). The petitioner, as the Managing Director of the company, was one of the guarantors for repayment of the loan taken from the BICICO. The lonee defaulted in payment of the loan and the BICICO had a claim of Rs. 129.09 lakhs against it. For recovery of its dues, the BICICO got a proceedings under the Public Demands Recovery Act instituted against the petitioner, Ajit Kumar Sinha.

4. This writ petition has been filed challenging the certificate proceeding held against the petitioner. The challenge is based on two grounds: (i) In the Deed of Agreement, there was no clause providing that the dues would be recoverable as public demand and (ii) the requisition was made, the certificate was issued and further proceedings on the basis of the certificate were held by one Shri O.P. Singh, Assistant Law Officer in the BICICO, who was appointed as the Certificate Officer. In regard to the first point, it was contended that in terms of Entry 15 under Schedule 1 of the Bihar Public Demands Recovery Act, any money payable to a company, corporation or a statutory body would be deemed as a public demand only in case it was agreed by a written agreement that it would be recoverable as such. In the absence of any clause in the Deed of Agreement, the loan of the BICICO will not come within the definition of public demand and no certificate proceeding would, therefore, be maintainable for its recovery. In support of the submission, reliance is placed on a decision of this Court in Sunil Kumar Mehrotra V/s. State of Bihar and Ors. and Anr. analogous case 2003 (3) PLJR 757.

5. As regards the second point, it was contended on behalf of the petitioner that the Assistant Law Officer of the BICICO being an employee of the Corporation could not be appointed as a Certificate Officer within the meaning of sec. 2(3) of the Act. In support of the submission, learned Counsel relied on a Bench decision of this Court in Babul Smokeless Fuel Industries (P) Ltd. and Ors. V/s. State of Bihar and Ors. 2003 (1) PLJR 362.

6. Taking up the second point first, Mr. Jitendra Singh, Counsel appearing for the BICICO submitted that though the requisition u/s. 5 of the Act was indeed made by Shri O.P. Singh and it was he who issued the certificate and conducted the proceedings on the basis of the certificate up to a certain stage, later on, he ceased to act as the Certificate Officer and the proceeding was now pending before a person whose appointment as Certificate Officer was unquestioned. He submitted that since the proceeding was now pending before a Certificate Officer whose appointment was beyond challenge, its validity can not be questioned on the ground that the certificate was issued by an incompetent person. He submitted that further proceedings in the certificate case will be saved by what he called the doctrine of de facto. He tried to support his submissions on the basis of a decision of the Supreme Court in Gokaraju Ranga Raju V/s. State of Andhra Pradesh -. He also cited two other decisions rendered by the Supreme Court, following the decision in Gokaraju Ranga Raju These are Pu