JUDGMENT
1. This writ petition under Articles 226 and 227 of the Constitution has been filed by the State of Assam for issuance of a direction in the nature of certiorari for quashing the proceeding in O.A. 137/97 pending before the Debt Recovery Officer, Guwahati, hereinafter referred to as ‘the Tribunal’ and also for a direction in the nature of mandamus against the recovery officer not to proceed against the writ petitioner for realisation of the amount.
2. The relevant facts are that respondent M/s. Everest Cycle Ltd., Gopinath Nagar, Guwahati obtained commercial loan from the respondent State Bank of Blnaker and Jaipur to the tune of Rs. 10,00,000/-. The present writ petitioner stood as surety in respect of the said loan. As the respondent failed to repay the loan the Bank Instituted Title Suit No. 22/97 and 22/98. The said suits were decreed ex parte as the present writ petitioner as well as the borrower chose not to contest the proceedings. The suit was decreed by the Asstt. District Judge No. 1 at Guwahati and thereafter Title Execution Case No. 5/82 was instituted in the said Court for realisation of the amount. During the pendency of the said Execution Proceeding the Recovery of Debts Due to the Bank and Financial Institution Act, 1993, for short ‘the Act’, came into force with effect from 26-4-93. In view of the provisions contained in Section 31 of the Act, the said Title Execution Case No. 22/98 was transferred to the Tribunal.
3. Before the Tribunal the State of Assam raised a preliminary objection stating, inter alia, that the amount cannot be recovered by theTribunal from the State as the said Act is not applicable in respect of the State. It was submitted that the State of Assam is not a ‘person’ under Section 19 of the Act. The learned Presiding Officer of the Tribunal heard the matter and vide the impugned order dated 3-12-98 rejected the contention of the writ petitioner and directed to Issue a recovery certificate for Rs. 13,91,854.98 paise together with interest. Hence the present writ petition.
4. I have heard Mr. P. G. Barus, learned Advocate General, Assam and Mr. N. M. Sarmah, learned counsel for the respondent Bank.
5. Section 19(1) of the Act reads as follows :
“Where a bank or a financial institution has to recovery any debt from any person. It may make an application to the Tribunal within the local limits of whose jurisdiction,–
(a) the defendant, or each of the defendants where there are more than one, at the time of making application, actually and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of defendants, where there are
more than one, at the time of making the application, actually and voluntarily resides or carries on business, or personally works for gain; or
(c) the cause of action, wholly or in part, arises.”
6. Learned Advocate-General Shri Barua has submitted that State of Assam is not a ‘person’ as stated in Section 19 of the Act and as such, the above Act is not applicable for recovery of the amount by the Tribunal. Referring to Article 12 of the Constitution it is stated that there is a distinction between the State and a person and the Civil Court could have proceeded against the writ petitioner but so far the jurisdiction of the Tribunal is concerned, it is limited to a ‘person’ as stated in Section 19 of the act. The word ‘person’ has not been defined In the Act.
7. The Dictionary meaning of ‘person’ as described in Black’s Law Dictionary, 5th Edition reads as follows :
“Person.– In general usage, a human being (i.e. natural person), though by statute term may Include a firm, labour organizations, partnerships, associations, corporations, legal representatives, trustees, trustees in bankruptcy, or receivers. National Labour Relations Act. Bankruptcy Act. ‘Person’ includes Individual, partnership, and corporation, but not governmental unit.”
8. In support of his submission learned Advocate General has referred to a recent decision of the Apex Court in the case of Krishnan v. Krishnaveni, AIR 1997 SC 987. The Apex Court held (para 9) :
“Under Sub-section (3) of Section 397 revisional Jurisdiction can be invoked by “any person” but the Code has not defined the word “person”. However, under Section 11 of the IPC, “person” includes any company or association or body of persons, whether incorporated or not, By implication, the State stands excluded from the purview of the word “person” for the purpose of limiting its right to avail the revisional power of the High Court under Section 397(1) of the Code for the reason that the State, being the prosecutor of the offender, is enjoined to conduct prosecution on. behalf of the society and to take such remedial steps as it deems proper. Besides, in view of the principle laid down In the maxim ex debito justitiae, i.e. in accordance with the requirement of justice, the prohibition under Section 397(3) on revisional power given to the High Court would not apply when the State seeks revision under Section 401. So the State is not prohibited to avail the revisional power of the High Court under Section 397(1) read with Section 401 of the Code.”
As stated above, the word ‘person’ has not been defined in the Act. Section 3(42) of the General Clauses Act provides ‘person’ shall include any company or association or body of individual whether incorporated or not.
9. Learned counsel for the respondent Bank, on the other hand, submits that the Government cannot be excluded from the ambit of definition of ‘person’, and has placed reliance on the observation of the Hon’ble Allahabad High Court in the case of State of U. P. v. Kanhaiyalal Mukund Lal Sarraf, AIR 1956 Allahabad 383. The Hon’ble High Court held (para 6) :
“The definition in the General Clauses Act is not exhaustive and we are entitled to look to the Indian Contract Act, itself to find out what the legislature intended that the word ‘person’ should mean. A contract involves an agreement between a promisor and a promisee, and under Section 2 of the Act every promisor and promisee is a person; it appears clear therefore that every contract is an agreement between parties who are ‘person’ within the meaning of the Act.
If the Government is not a person within the meaning of Section 72 it is not in my opinion a person within the meaning of the other sections of the Act where that term is used; and the consequence of accepting the view advanced by the Advocate General would be that Government cannot enter into contracts, Article 295 of the Constitution refers specifically to the rights, liabilities and obligations of the Government of India and of the Government of a State arising out of contract, and it is a matter of common knowledge that the Central and State Governments in India are constantly entering into contracts.
Contracts of letting of service and freight are matters of every day occurrence, and as far as I am aware it has never been suggested that a Government is not competent to enter into a contract because it is not a person. The object of the Contract Act requires, in my opinion, that the word ‘person’ should have an extended sense, and I have no difficulty in holding that it includes the State
Government.”
10. In the case of Bharat Petroleum Corporation Ltd. v. Union of India, AIR 1992 Punj and Har 248 it was held (para 12) :
‘The word ‘person’ having not been defined in the Act, reference can be made to the provisions of the General Clauses Act, 1897. Section 3(42) defines a person to include ‘any company or association or body of individual, whether incorporated or not.’ The petitioner-company is obviously included within the definition of a ‘person’. Accordingly, the claim made on its behalf cannot be sustained.”
11. However, this Court in the matter of an election petition in the case of Kashiram Reang v. Bajuhan Reang, AIR 1982 NOC 70 Gauhati held that State Govt. is not a ‘person’ within Section 3(42) of the General Clauses Act and the State Govt. cannot be held to the Agent of returned candidate.
12. The definition of ‘person’ in the General Clauses Act is not exhaustive but is inclusive one and hence, in my opinion, the definition must be applied only where the context does not otherwise require. Here, I would like to recapitulate the observation of the Hon’ble Calcutta High Court in a case reported in AIR 1938 Calcutta 745. It was observed :
“In order to decide whether, in a particular instance, the word ‘person’ includes an artificial person or a corporation or a company, regard must be had to the setting in which the word ‘person’ is placed, to the circumstances in which it is used and, above all to the context in which it stands. If there is any presumption that the word ‘person’ includes a corporation, the presumption is no more than of a slight nature, and therefore, easily displaced. One has to consider the subject-matter of the particular enactment in which the word ‘person’ appears and especially the immediate context in which it is used in order to decide whether that presumption will apply or whether it will not”.
13. I, therefore, hold that the definition of the word ‘person’ in the context of Article 226 or Article 12 of the Constitution in the light of the definition in the General Clauses Act, the connotation, meaning would be different. On the other hand, as stated in the case of Krishnan, (AIR 1997 SC 987) (supra) the word ‘person’ will have altogether different interpretation so far the criminal law is concerned. In the criminal Jurisdiction the State has been placed at a different pedestal as the protector of the social justice and hence the exclusion of State from the purview of the word ‘person’ used in Section 397(3) Cr.P.C. cannot be imported while defining the said word in the context of Contract Act or Partnership Act. It is a common knowledge that the modern State, besides other State activities, participates in commercial transaction. When the State stood as a surety/guarantor in respect of any loan given by the Bank, it cannot be said that the amount cannot be recovered from it in view of Section 19 of the Act. Such a narrow interpretation will be out of context. The State itself borrows money from Bank and financial institution and if the objection raised by the writ petitioner is accepted then in that case the Bank and financial institution will not be able to recover the amount from the State in view of Section 19 of the Act. Learned counsel for the respondent further submits that in order to woo the foreign investor or foreign companies the State is going all out to offer counter guarantee for due performance of the contract. Hence in the present context the State cannot be excluded by stating that he is not a ‘person’ under Section 19 of the Act,
14. In the case of Jogendra Nath Naskar v. Commr. of Income-tax, Calcutta, AIR 1969 SC 1089, the Apex Court explaining the concept of Hindu Deity and God held that the Hindu Deity falls within the meaning of the word ‘individual’ and can be treated as unit of Association under Section 3 of the Act.
15. In view of the above. I hold that the word ‘person’ cannot be given a restricted meaning to exclude the ‘State’ for the purpose of recovery of debt under the Act when the State was allowed to stand as surety/ guarantor, the State is bound by its obligation. The impugned order passed by the Presiding Officer of the Tribunal needs no interference.
16. In the result, the writ petition is dismissed.