Statutory Appeal Remedy Under PDR Act Must Be Exhausted Despite Jurisdictional Challenges to Public Demand

The petitioners, a partnership firm and its partners, moved the High Court to quash a notice issued under Section 7 of the Bihar and Orissa Public Demand Recovery (PDR) Act, 1914, dated May 6, 2013, in Certificate Case No. 17/2013-14.

They challenged the initiation of recovery proceedings on the grounds that no valid agreement existed under Clause 15 of Schedule-1 read with Section 3(6) of the Act, thereby arguing the dues did not constitute a "public demand".

They further alleged that the Certificate Officer failed to record satisfaction as required under Sections 5 and 6 of the Act and contested a warrant of arrest issued against them.

During the hearing, both parties agreed that the legal issues were squarely covered by a recent Supreme Court precedent.

1. Whether the initiation of the certificate proceeding was illegal due to the absence of a jurisdictional agreement to qualify the dues as a "public demand" under the PDR Act.

2. Whether the petitioners should be relegated to the statutory remedy of appeal despite the challenge to the jurisdiction of the Certificate Officer.

The court primarily relied on the precedent established by the Hon’ble Supreme Court of India in Pawapuri Rice Mills v. Bihar State Food and Civil Supplies Corporation Ltd. & Ors. (2024 SCC OnLine SC 3777), which held that while Rice Millers may raise jurisdictional facts in writ petitions, they should generally avail themselves of the statutory remedies provided under the PDR Act.

Section 60 of the Bihar & Orissa Public Demand Recovery Act, 1914, which provides for a statutory appeal against orders passed by a Certificate Officer.

The High Court observed that the controversy regarding the recovery of dues from Rice Millers under the PDR Act had been recently resolved by the Supreme Court in the Pawapuri Rice Mills case.

The Supreme Court had clarified that even if procedural deviations or jurisdictional facts are alleged, the appropriate course is for the aggrieved parties to invoke the statutory remedy of appeal rather than seeking extraordinary relief under Article 226.

Following this logic, the High Court determined that the petitioners have an efficacious statutory remedy under Section 60 of the PDR Act.

To ensure justice, the Court applied the Supreme Court's direction to condone any delays in filing such appeals, given the time spent pursuing the writ remedy.

It directed the petitioners to file a statutory appeal under Section 60 of the PDR Act within one month from the receipt of the order.

The Court ordered the appellate authority to condone the delay and dispose of the appeal on its merits within three months of filing.

All pending interlocutory applications were disposed of accordingly.