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Patna High Court

Brajesh Kumar SinghversusThe State Of Bihar and Ors

Decided
Disposal
ALLOWED

Holding

Certificate proceedings against the petitioner in his personal capacity are beyond jurisdiction and must be quashed.

Summary

The petitioner, Brajesh Kumar Singh, challenged certificate proceedings initiated against him personally under the cooperative banking law, contending that the loan was granted by the Sasaram Bhabhua Central Co-operative Bank as a juristic entity and not personally guaranteed by him. The court examined prior decisions, notably Nawal Kishore Pd. Singh v. State of Bihar (2006) and Kanhaiya Lal v. State of Bihar (2022), which held that officials acting in their official capacity cannot be sued personally for corporate liabilities. It was held that the certificate proceedings against the petitioner in his individual capacity lacked jurisdiction and were therefore invalid. Consequently, the certificate case No. 06/2016‑17 was quashed as against the petitioner. The writ petition was allowed to the extent indicated, directing that any further action must be directed against the corporate entity or its current office bearers, not the individual petitioner.

Issues considered

  • Can certificate proceedings under the cooperative banking Act be instituted against individuals acting in their official capacity?
  • Does the absence of a personal guarantee render the certificate proceedings against the petitioner void of jurisdiction?
  • Is the order under Section 10 of the Act rejecting the petition under Section 9 legally valid?

Legislation cited

Subjects

  • certificate proceedings
  • juristic entity
  • corporate liability
  • cooperative bank
  • writ petition
  • quash
  • official capacity

Judgment

                       IN THE HIGH COURT OF JUDICATURE AT PATNA
                                 Civil Writ Jurisdiction Case No.12476 of 2017
                  ======================================================
                  Brajesh Kumar Singh S/o Bipin Bihar Singh, R/o Village- Hurka, P.O.-Hurka,
                  P.S.-Tilauthu, District-Rohtas.

                                                                                 ... ... Petitioner/s
                                                     Versus
            1.    The State Of Bihar.
            2.    The District Magistrate, Rohtas.
            3.    The District Certificate Officer, Rohtas, Sasaram.
            4.    The Sasaram Bhabhua Central Co-operative Bank, Sasaram, Rohtas through
                  its Managing Director.
            5.    The Managing Director, Sasaram Bhabhua Central Co-operative Bank,
                  Sasaram, Rohtas-cum-Certificate Officer.
            6.    The Branch Manager, Sasaram Bhabhua Central Co-Operative, Tilauthu,
                  Branch, Tilauthu, Rohtas.

                                                            ... ... Respondent/s
                  ======================================================
                  Appearance :
                  For the Petitioner/s   :      Mr. Jay Prakash Singh, Advocate.
                  For the Respondent/s   :      Mr. Mr. Mahendra Prasad Verma, AC to SC 20.
                  For the Bank           :      Mr. Bindhyachal Rai, Advocate.
                  ======================================================
                  CORAM: HONOURABLE MR. JUSTICE A. ABHISHEK REDDY
                                     ORAL ORDER

10   02-04-2026                   Learned counsel appearing on behalf of the petitioner

                    submits that the matter is squarely covered by the Judgment of

                    this Hon’ble Court passed in CWJC No. 474 of 2024 dated

                    11.12.2024.

                                  2. Learned counsel appearing on behalf of the

                    Respondent-Bank fairly submits that the above reported

                    judgment is applicable to the facts of the present case.

                                  3. This Court in the above mentioned CWJC relying
Patna High Court CWJC No.12476 of 2017(10) dt.02-04-2026
                                           2/3




         on the judgment in the case of Nawal Kishore Pd. Singh vs.

         State of Bihar reported in 2006 (3) BLJ 676 and in the case of

         Kanhaiya Lal V. State of Bihar reported in 2022 (2) PLJR 553

         has held as under: -

                                            “5. This Court in the case of
                                 Nawal Kishore Pd. Singh vs State of Bihar
                                 reported in 2006 (3) BLJ 676 under similar
                                 circumstances has held as under:-
                                                “However, in view of the fact
                                     that the said purported agreement, which
                                     has been executed, has been executed by
                                     the petitioners in their official capacity,
                                     there cannot be any dispute that they
                                     cannot be proceeded in their individual
                                     capacity. Loan was granted by the
                                     Central Cooperative bank to the
                                     Transport Cooperative Society. Both are
                                     juristic entities. It was not a loan
                                     personally granted to the petitioners nor
                                     was any such loan personally guaranteed
                                     by the petitioners nor the petitioners
                                     stood surety for the said loan.
                                                4. In that view of the matter,
                                     the entire certificate proceedings as
                                     against the petitioners in their individual
                                     capacity is wholly without jurisdiction
                                     and is liable to be quashed. The order
                                     passed under Section 10 of the Act
                                     rejecting the petitioners’ petition under
                                     Section 9 of the Act denying liability is
                                     erroneous on the face of it. It has no
                                     legal sanctity. The same is liable to be
                                     quashed and is quashed in so far as it
                                     relates to the petitioners in their personal
                                     capacity is concerned. It will be open to
                                     the Central Cooperative Bank to
           Patna High Court CWJC No.12476 of 2017(10) dt.02-04-2026
                                                      3/3




                                                substitute the names by names of the
                                                present office bearers who again, it is
                                                made clear, would not be liable in their
                                                personal capacity. It is elementary that a
                                                Corporate entity cannot by itself stand up
                                                in Court proceedings. It has to act
                                                through a person. It is only for that
                                                limited purpose, the names of office
                                                bearers would be there in the certificate
                                                proceedings.”
                                                       6. Likewise a Division Bench of
                                            this Hon'ble Court in the case of Kanhaiya
                                            Lal v. State of Bihar reported in 2022(2)
                                            PLJR 553 has held as under:-
                                                           “... which has examined a
                                                similar matter and held that the
                                                certificate proceedings against the
                                                Directors of a Company incorporated
                                                under the provisions of Companies Act
                                                could not lie as the Company has an
                                                independent juristic Corporate entity.”

                                 4. Having regard to the law laid down by this Court,

                    the Certificate Case No. 06/2016-17 stands quashed as against

                    the petitioner herein.

                                 5. With the above directions, the present writ petition

                    stands allowed to the extent indicated.



                                                         (A. Abhishek Reddy, J)
shakir/-

U


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