Certificate proceedings cannot proceed ex parte where the certificate debtor was denied an effective opportunity to object and be heard.

The petitioner, proprietor of M/s Shankar Rice Plant, was involved in the procurement and custom milling of paddy/rice for the Bihar State Food and Civil Supplies Corporation (BSFC) during the 2012–13 procurement year.

A certificate proceeding was initiated against him under the Bihar and Orissa Public Demands Recovery Act, 1914 (“PDR Act”). An earlier certificate proceeding had been quashed by the High Court in C.W.J.C. No. 661 of 2016, with liberty to the Certificate Officer to proceed in accordance with law; thereafter, Certificate Case No. 08 of 2016–17 was instituted.

The Certificate Officer passed an order under Section 10 of the PDR Act on 3 July 2017 and subsequently issued a distress warrant on 18 August 2017.

The petitioner contended that his objections under Section 9 had not been properly received or considered, that the order was ex parte, and that the amount allegedly payable required prior determination through arbitration under the agreement between the parties.

Whether the Certificate Officer’s order dated 3 July 2017 was vitiated by violation of natural justice because the petitioner was not afforded an effective opportunity to file objections and be heard under the PDR Act.

Whether certificate proceedings for recovery could be initiated without prior adjudication and quantification of the amount allegedly payable, particularly where the underlying agreement contained an arbitration clause.

Whether the distress warrant issued on 18 August 2017 could be sustained when the underlying certificate order was passed ex parte.

The Court applied the Bihar and Orissa Public Demands Recovery Act, 1914, under which “public demand” includes arrears of money specified in Schedule I and interest chargeable up to the signing of the certificate under Part II.

Section 8-A treats outstanding loans and advances payable to the State Government or its departments or officials as recoverable as land revenue, while Section 9 concerns money payable where recovery as a public demand has been agreed to by written instrument.

The statutory scheme requires notice under Section 7, an opportunity to object under Section 9, and determination by the Certificate Officer under Section 10.

The Court also considered the Division Bench decision in Ram Niwas Sharma v. The Food and Consumer Protection Department, 2018 (4) PLJR 515, along with Nageshwar Prasad Singh v. Rai Bahadur Kashinath Singh, 1958 BLJR 820, and Budha Singh v. State of Bihar, AIR 1981 Pat 149, which were cited for the proposition that the existence and quantum of the liability may require determination before certificate proceedings are initiated.

The Court found that, although the impugned order recorded the petitioner’s appearance through counsel, it did not show that he had been afforded an effective opportunity to present objections or receive a meaningful hearing.

The order was therefore treated as ex parte and inconsistent with the procedural safeguards contemplated by Sections 7, 9 and 10 of the PDR Act. Since the certificate order itself was procedurally defective, the distress warrant founded upon it could not be allowed to operate.

The Court expressly refrained from determining whether the alleged liability had to be first quantified through arbitration or otherwise adjudicated, leaving those issues to be considered by the Certificate Officer after receipt of the petitioner’s objections and relevant documents, including any arbitration award.

The petitioner was directed to appear before the Certificate Officer on 16 September 2026 and file his objections and supporting documents, including any arbitration award. The Certificate Officer was directed to hear both the petitioner and BSFC, decide the matter on its merits, and pass a reasoned and speaking order within three months from the filing of the objections. No coercive action was to be taken against the petitioner until such order was passed.

The writ petition was accordingly disposed of.