Problems and Prospects of Collecting Public Demand

INTRODUCTION:

Revenue is one of the primary sources of income of the Government of Bangladesh. It is collected from different sources, such as taxes and non-taxes sectors. Public Demand Recovery is one of them from which our government collects a large portion of amount regarding arrear on revenue on immovable property or from fines on those etc. During the time of collecting, the administrative body faces some crucial problems, consequently, sometimes they are not able to collect the demands accurately. This study will find out the problems specifically and it will also show the laws which are in existence for the purpose. There is a Act for Public Demand Recovery with some objectives few of them is to create a speedier and easier procedure, to recover public demand payable to the government or to any other person other than the government. But the Act solely could not be able to achieve the objectives; accordingly this study will help the administrative body to take the initiative in a smoother way.

BRIEF HISTORYOF THE PUBLIC DEMAND RECOVERY ACT, 1913:

Public demand is a very common issue. It deals with land revenue, public revenue or government revenue. Which has been going on since the past and has spread to the present. It has been practiced in the Indo-Pak sub-continent since long ago. It’s spread gained rain during the Hindu, Muslim and English periods. In the past, the Zamindars used to let their land to be cultivated by peasants or subjects and in return collected a hefty rent from them. Peasants considered it their religious duty to pay revenue to the government or state. So, they used to pay revenue to the government or zamindar for the land they used. But not everyone was able to pay the revenue. Those who could not pay the revenue on time had to face various kinds of corporeal punishment such as: Chastisement, torture, imprisonment and sometimes effecting forfeiture or sale of the property of the defaulters. But the Muslim period, they did not like the policy of permanently evicting these defaulters from the land. The British followed Muslim principles for their early administrative work. Although they made many other rules for collecting revenue from time to time.During the British rule, they wanted to collect the various dues from the people as soon as possible and fairly, so that their demands are met and the state benefits are properly received. But the conventional method was time consuming for which they were afraid of harassment to get various taxes and privileges.

The Acts enacted before 1913 had various problems such as defects of uncertainty, obscurity and obduracy relating to the law of recovery of arrears of revenue. Then the Public Demand Recovery Act 1913 was passed, which is the final shape of public demand, and it provides special procedure for the realization of the public demand exclusively other than revenue. This Act helps the British to get several benefits which are:-

• State Administration: - Government has to spend different amounts of money to run the state, which comes from different governmental sources. The government can easily collect money from all those sources through this act.

• Avoid Procrastination: - Since civil procedure is a long term procedure. So, it becomes very complicated to collect this money from the people. Although this money is spent on the welfare of the people, this law makes it possible to collect the money from them at the earliest.

• Freedom from Harassment: - Civil court proceedings act as a long harassment. This Act helps in speedy recovery of rent by getting rid of this harassment.The British enacted this law mainly to get rid of this harassment of revenue collection.

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PROBLEMS RELATING TO COLLECTING PUBLIC DEMAND IN BANGLADESH:

The Public Demand Recovery Act is a positive law. This law is one of our best finding. The simplicity of this Act is the specialty of this Act But there are some crucial problems with respect to collecting public demand that obstruct our country’s economy. Such are enumerated below:

• Defects in Laws

The laws of public demand have some defects that ultimately hinder the collection of public demand. Defects of laws need to be identified at first. Those defects are discussed as follows:

o Definition Clauses of the Public Demand Recovery Act are not exhaustive:

Certificate Officer: The definition of ‘Certificate Officer “in the Public Demand Recovery Act is not exhaustive. The Certificate officer is one who conducted the certificate case under the Public Demand Recovery Act. Section 3(3) of the said Act says,

“Certificate-officer” means a Collector, a Upazila Nirbahi Officer, a Upazila Magistrate, and any officer, appointed by a Collector , with the sanction of the Commissioner to perform the functions of a Certificate-officer under this Act;”

“But here, no qualification regarding the officer who is appointed by the Collector with the sanction of the Commissioner is mentioned. Any empowered officer must have vast knowledge about the certificate cases, public demand, all the proceedings related to civil suits, list of defaulters and the power and duties he can exercise. He should have such knowledge as he deemed to be a civil court under Section 57. Otherwise, he cannot properly collect the public demand.

Person: Where any public demand payable to any person other than Collector is due, may send to the Certificate Officer a written requisition for the recovery. Here no definition of “person” is given. So, any question can be raised about who can give a written requisition to recover public demand or whether the person giving the written requisition is empowered or not.

Material irregularity: For the reason of material irregularity in the certificate proceedings or non-publishing or conducting a sale, any sale of immoveable property under the execution of a certificate can be set aside.30But there is no definition for material irregularity. It can cause confusion for the certificate debtor that this would be a material irregularity, and for this reason, he may be deprived of the right to set aside the sale of immoveable property under the execution. Even material irregularities can be misinterpreted.

Substantial Injury: No sale shall be set aside on this ground or any such ground unless the certificate officer is satisfied that the applicant has sustained substantial injury by reason of the non-service of the irregularity. But what is a substantial injury that is not mentioned. So, without any correct definition of “substantial injury,” it can be confusing to a certificate officer or affected person as to whether any substantial injury has occurred or not.

o The Certificate Officer is not bound to file certificate cases: If any public demand is due to the collector, then the certificate officer may sign the certificate case. Here the certificate officer has been given discretionary power so that he is not bound to sign a certificate case even if the amount is due or the defaulter has a mala fide intention to not pay the revenue.

o No remedies when original notice is defective: When a notice is found defective under Section 7 of the Act of 1913, there is no related remedy provided in the Act and its Rules under Schedule II. But if a particular notice is found defective or not in accordance with the law, a second notice can be issued.

o No hearing after serving demand notice: Section 10A of the Public Demand Recovery Act, 1913 says,

“.....for the recovery of any dues under the Bangladesh House Building Finance Corporation Order, 1973 or the Bangladesh Krishi Bank Order, 1973, or the Co-operative Societies Act, 1940 or the Customs Act, 196] or for the recovery of any loan advanced by the 4[Government], or for the recovery of any money referred to in Article 15 of ScheduleI] the Certificate-officer shall, instead of causing a notice prescribed under section 7 to be served upon the certificate-debtor, cause a demand-notice to be served upon the certificate- debtor by registered post with acknowledgement due requiring the certificate-debtor to deposit with the Certificate-officer the amount of his debt within thirty days of the service of such notice.”

But in such case section 9 and 10 shall not apply.34 That means no objection can be raised or petition can filed and no hearing will be held after serving the demand notice. In the event of default under this demand notice, the certificate officer will proceed to execute the certificate. So, here is not maintaining the principle of natural justice that the right to be heard.

o Certificate Officer has been given Over Power: In the Public Demand Recovery Act, 1913, the certificate officer conducted the certificate cases for the recovery of public demand. This Act gives immense power to the certificate officer. Section 3 provides the discretionary power to issue the certificate. According to Section 57, the certificate officer is deemed to be a court. So he can misuse his power and act arbitrarily.

o The Period of notice for the payment the due is too short: Certificate debtor is served with a notice for the payment of the debt or to file a petition within 30 days. In cases of agriculture, the debtors are farmers, and in our country most of the farmers are poor. When money becomes due from them, it becomes tough for them to repay it within that period.

o Not defined the procedure for payment on public demand: The Public Demand Recovery Act, 1913, provides three modes of execution for recovering public demand. These are: 1) attachment 2) Sale; and 3) Arrest and detention under civil prison. A notice is served on the certificate debtor to repay the due within 30 days or give petition. If he fails to pay within 30 days, the certificate officer shall execute the certificate. In the Act and Rules, there are no provisions relating to the process of the payment within those periods. Rules 18A–18I of Schedule II of the Public Demand Recovery Act, 1913, provide the provisions relating to the payment of amounts due to ‘Grainshee’ but not other defaulters.

o Severe Punishment is given for very little amount of Public Demand :There are generally three modes of execution for recovering the public demand. These are: 1) attachment 2) sale and 3) arrest and detention under civil prison. These modes are necessary to execute the certificate. But for the execution of a certificate, having a certificate debtor detained in civil prison for a period of six months of an amount of debt exceeding 50 taka is like severe punishment for tiny offence.

o Recovery of Public Demand is optional for the concerned authority under many Laws: When public demand is payable to any person other than the collector, such person may send to certificate officer a written requisition. Schedule I of the Act provides the list of public demand. Schedule I also provides the list of Act, where the creditor or authority can recovery the public demand. But in many cases recovery is not mandatory. And if the law provides recovery of public demand as optional than the public demand may not be recovered fully. Some of them are-

Under the Public Accountant's Default Act, 1850, Government may recover money from public accountant and sureties on account of loss as public demand. Section 55 of the Survey Act 1875 says, any fine under Sections 51, 52, 53 may be recovered as public demand. Any sums ordered under in the Stamps Act, 1898 may be recovered as public demand. Excise officer may prepare certificate signed by him and sent to District Collector when any excise revenue is due under the Excise and Salt Act, 1994. Arrears due from farmers of ferries may be recovered as public demand under the Ferries Act, 1885. Section 138 of the Income Tax Ordinance, 1984 provides the certificate for recovery of tax. Here says, the Deputy Commissioner of Taxes forward to the Tax Recovery Officer a certificate for the recovery of the tax for the default of the assesse. All money payable to government may be recovered as public demand is held in The Forest Act, 1927.

In such laws the recovery of public demand is given respective authority. But such law gives discretionary power to them that they may recover such money when it become due. Therefore, if no compulsory to recover the revenue to the respective authority then the public demand can not be recovered fully.

• Co-ordination gap between the Selected and Elected body

“Everyone is for coordination, but no one wishes to be coordinated, at least not just now.”

—    Jon Bennett (2000)

According to dictionary meaning, “Coordination is the ability to use different parts of the body together smoothly and efficiently.” In Bangladesh, elected bodies are not capable enough to connect with the selected bodies through communication. As a result, elected bodies in field level such as Upazila and Union Parishad cannot maintain all the procedures of collecting public demand. However, the most severe problem in policy implementation in case of collecting public demand in field administration in Bangladesh is coordination.

• District Magistrate is not authorizing the officer who is deserved to be a Certificate Officer: District Magistrates have this title and the power to redelegate the authority to others. But they have been slow in vesting this power in the Upazila Magistrates where it should be. Understaffed, the District Magistrates should be authorized to appoint temporary servers and clerks to handle the certificate case-load. Also, officers of the Grameen Bank, the BKB, and some others have been permitted to become their own Certificate Officers, but as of FY86, no bank has actually done this. This option is being avoided because a coercive collection function would hurt the image of bankers.

• Intermediary Problem: As we know an intermediary is someone who works in the middle of two sides. They are also call facilitator or agent. Government has employed several tiers employees for several operations of the country. The bureaucrat and tier employees work as an agent of govt for the governmental works. So long levels in governmental process makes it delay for the process. The intermediary problem is a major problem in any governmental works aspects. In public demand recovery, the long tier affects the process too. As in Bangladesh, there is a group of people who always try to make profit without acting in a vital or legalised place. Legislatives also have some impacts in collection. Their recommendation mind and abuse of political powers cuts the public demands amounts a lot.

• Reluctance to file certificate by certificate officer: As the certificate officer is not bound to file certificate cases, he is not seen filing certificate in respect of every due. Sometimes that makes the certificate officer biased against the defaulters who failed to pay revenue. This is one of the reasons our country is deprived of its revenue.

• The effect of corona on forest revenue: The reduced revenue collection by the forest department can be the result of COVID-related interventions brought by the government, as well as reduced tourism activities and official activities that affected the revenue during the academic year.

• Certificate cases are not filled for every demand: 1,40,000 certificate cases have been filed against defaulters for the repayment of agricultural loans until June 2021. So the maximum numbers of certificate cases are filled for agriculture loans and land revenues. But certificate cases are not being filed in other cases.

• Not implementing the existing laws: The Public Demand Recovery Act has been examined by USAID's rural finance project and found to be acceptable. But what is not adequate is the implementation of the existing law on overdue loans.  We have many laws, but the authority is not implementing them, and as a result, collecting of public demand is not property done. Another reason is that there is no proper and strong monitoring authority to monitor and controlthis practice of corruption and there is also absence of exemplary penal provision of laws.

• Lack of digitalization in recovery process: Usually, the revenue collection process of government is conventional. As a result, there is lack of fairness in recovery. There stay some opportunities of corruption in collection process that leads a falling short of recovery. If government digitalize the collection process like motor bike regulation violation and digital payment slip, it will help the authority to recover the amount fairly and execute the act properly.

• Struggles for recovering the fines of the authority: In most cases, the public demand is a fine, charges due or arrear payment, so there is some hostile relationship among the authority and the payer. Sometimes, this conflict forces a struggling act to be accomplished for the authority. Meanwhile, the political power is abused to get redemption from the charges or not executing the rules. So, the collector should have the authority to manage the situation.

• Heavy workload for the officials: The number of officials who can obtain certificates from the certificate officer is inadequate. They are not skilled and trained, and the formal justice system is under tremendous pressure with an inadequate number of officials and staff to rightly deal with a heavy workload. As a result, the case backlogs add up.

• Corruption of local recovery body: The authority related to the recovery of public demand in local level where the main amount is collected is corrupted in recovery process; As a result, government don’t receive the proper balance associated with public demand and it isn’t deposited in the government form. That falls short of recovery process. Main drawback of land administration and the prime epidemic of proper service is enormous corruption ( Southern Land). In TIB report, every year, among the total corruption in the services sector, 40% to 50% occurs in land services. There is no proper and strong monitoring system to monitor and control this practice of corruption.

• Children and family members of defaulters are sufferers: Section41 says When the certificate officer is satisfied that the certificate debtor is a minor of sound mind, he shall, in any proceedings under the act, permit him to be represented by any suitable person. The provisions of this section are imperative, and the certificate and its execution without the appointment of such a guardian will be null.  Sector 43provides for the procedure for the substation of the legal representative of the deceased certificate debtor in the circumstances when the certificate debtor dies subsequent to the making of the certificate. Then a fresh certificate must be issued against the legal representative of the deceased certificate debtor. But if the legal representative is a minor, what will be the consequences? Whether a minor representative will get a guardian under Section 41 of the Public Demand Recovery Act, 1913 But in real practice, the scenario is fully opposite. A case of Magura, where the children are accused of a certificate case. They have to bear the burden of the agricultural loan that their dead father borrowed earlier. Nayeb have borrowed 10,000 taka for an agriculture loan from the main branch of BD Krishi Bank Magura on December 3, 1991 but may not have been able to repay the loan on time. At one stage, the loan stood at 23,200 taka, including interest. Unfortunately, Nayeb died of hydrophobia in 1993. The bank filled the case with accusations against his wife and the little children. Then the wife fled her husband’s house along with her children and took shelter at her father's house. Such type of cases affect the lives of family members and make their lives much more miserable.

• Problems on Agricultural Loan: About two lakh farmers across the country are facing certificate cases for defaulting on agriculture loans. The financial burden caused grave concern among affected families, farmers, and banks. Agriculture researchers said that farmers become loan defaulters for not getting just prices for their produce due to crop losses. Interest on agricultural loans makes the burden even heavier for poor farmers. The Public Demand Recovery Act applies in case of non-payment of electricity bill, gas, government dues.

However agricultural loan is a different thing. Millions of farmers are involved here. In case of floods, droughts, natural calamities, they cannot pay the loan. Due to which they cannot refund the money.

• No Specific time schedule for collecting: Like the tax, public demand isn’t collected centrally and in a fixed time. This don’t follow schedule of payments. So, for non-concurrent schedules, the collection process struggles. So, if it follows a specific time schedule may help to upgrade the recovery process. Separate time binding should be there to ease the process.

• Lack of public demand publicity towards public: In most of the cases, the certificate holder and debtor don’t know about the existing act dealing with public demand recovery. So as a result, if the situation occurs that to be charged, the parties unknowingly aren’t charged and make short of revenues. In this case, the known party may corrupt the process and take the amount in favour of them

• Lack of education: Education is a major barrier for any kind of formal works. Illiteracy is a hindrance to the collection of public demand too. The people don’t know the circumstances; reason of public demand may make unnecessary effect to decrease it. So as a result, the government fell shortage of revenues receipt as a whole for national budget.

• Lack of adequate knowledge of public demand: Public demand is process of collecting charge in forms of revenues for the government. But most of the people associate with it has shortage of proper knowledge about it and application of it. Sometimes, for not going through the law, the certificate officer often charges the same way the law suggest. Sometimes, the process has completed under table too. So for applying the process, it is needed proper adequate knowledge in all people such certificate officer, certificate debtor, holder about application of law for recovery.

• Reluctance to pay the debt by general people: After taking a loan, some debtors seem to have a habitual reluctance to pay the debt properly, even without any reasonable cause. Even though they do not want to follow any laws relating to public demand. Many government institutions are unwilling to pay bills on time, even for several years. This is creating extra stress.

• Limitation period of recovery of public demand: The limitation period for the recovery of public demand for agriculture loans is due to any person other than the collector is 3 years. So the certificate is filled within the three years of default. Even banks have no other option without this. So they put much pressure on the defaulters and their representatives. Such pressure make mental health issue for them, and for this reason many suicidal cases and attempts are reported.

• Dues from autonomous, semi-autonomous, and local organizations: The government owes 3 lakh 55 thousand crores to the autonomous, semi-autonomous, and local organizations of the country. Out of this, the amount of expired money is 1 lakh 93 thousand 600 crores, and the current interest rate is 1 lakh 61 thousand crores. And in one year the total arrears increased by 54 thousand crores. The amount owed to these institutions is almost equal to the cost of 12 Padma bridges. Some organizations are unable to pay these amounts for a long time. As a result, the amount in arrears is increasing every year. Out of this, the largest amount is owed to the Bangladesh Power Development Board. As of June 30 of last year, the amount due to the company, including interest and principal, was Tk 91 thousand 10 crores. 51 thousand 367 crores are owed to Dhaka Wasa, which is in the second position. Some organizations are unable to pay these amounts for a long time. As a result, the amount in arrears is increasing every year. The biggest weakness of our state agencies is a lack of skills. Besides, there is corruption and political influence. It increases the cost of the organization as a whole.

• Inadequate publicity of local government information centre and digital centre : As most of the time, the public demand is recovered in local level of administration, so digitalisation of the information centre and union digital centre is a must thing. But people most of the time is unable to perceive about the given facility of A2i and Union Digital Centre benefits regarding this. The access to information and automation of payment procedures may help to organise the recovery process.

• Unscrupulous official’s unethical activity regarding recovery: Often there is news of officials’ unethical activity in Upazilla Land office; they activate settlement in their way through bribing and clueless payment. So, their activities make the revenues suffering. The money is collected without receipt; the official doesn’t submit those in the govt treasury. Moreover, they charge more than limit. As a result, the public also bears more but government get the benefit. These unethical actions keep the process struggling. Including the above problems, there are a lot of issues in local and central, public level, that creates hindrance in recovery process to be optimised. So, the whole process should be monitored and supervised to get the optimum recovery in public demand.

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RECOMMENDATIONS

This Act should mention the qualifications of the Certificate Officer, who is authorized by the collector. Certificate Officer has been more discretionary power he must be bound to exercise his power to recover the public demand. Certificate Officer should be sincere to his power and duties; He shouldn’t be biased towards any defaulters and engage with any accused. The provision under Board’s Instruction 9 that requires a postcard notice to be given to defaulters before issuing a certificate to inform them that the payment is due should be mandatory. Filing an objection and having a hearing should be included after giving a demand notice under 10A (2) (3).A full repayment procedure for debt is needed. 30 days is too short for the repayment of dues; the time period of payment due needs to be fixed based on the status of the debtor. The reschedule system can be introduced when the defaulters are farmers. Recovery due to public demand is optional under many Acts that must be mandatory under law for the certificate officer to be bound to do so.Every law relating to demand must be properly implemented by the authority. A high rate of corruption occurs in land administration services that need to be checked. A monitoring body is needed to check for such drawbacks. The police should perform their duties properly when any arrest warrant is issued. He should not engage with any accused person. The revenue collection is reduced as a result of COVID-19. The government should come forward to tackle the post-COVID situation. Children and the widow of a deceased defaulter suffer the most. They should be treated with the utmost care as they won’t have fled from their house or be facing any mental or physical issue. The property of the dead defaulters should be used to meet public demand. Maximum certificate cases are related to the agriculture loans. Farmers are the ones who contribute the most to our country, so they must be given the maximum opportunity to repay the debt. They fail to pay dues for facing natural catastrophes like storms, rain, drought, and heavy rain. For these reasons, farmers are not getting fair prices for their produce due to crop losses. So the time for payment must be extended, and a rescheduling system must be introduced. All the debtors and autonomous, semi-autonomous, and local organizations should pay the public demand in a timely manner. ADR is required to solve the disputes. Substantive legal training is required for the officials. The certificate officer should exercise his power with fairness, equity, and neutrality.

The problem can be also sorted by reduction of coordination gap between the selected and elected body by fixing a monthly meeting or by under the supervision of the superior body in a regular basis so that the elected body of field level can submit their inconvenient or troublesome activity. Supervision by the superior body or authorised authority shall supervise stricken for removing the intermediary even in case o necessity the people should be listed and exclude them for each area of the concerned offices. The relating laws shall provide some provisions relating to the punishment or penalty procedure for unscrupulous officials as suspension or with fine or discharge. Fourthly, our society is not well concerned about ETIN, so create awareness about the payment of any bill throughout the website without any hazard. The government should fix a time period for collecting public demand and implement the procedure under the legal observation along with that government can declare some fair and give rebate for removing reluctancy in case of making payment. Sixthly, the authorised authority may modify properly of online platform. In next, government may make the publicity of UDC and a2i for establishing the easiest procedure. At lastly but not the least decentralising the tax fair, as a result people get the vibe as a fair all over the country and make payment as their duty to festive mood.

CONCLUSION:

The Public Demand Recovery Act of 1913 plays an important role by recovering public revenues, public areas, fees, cost, taxes, etc. All the modes of execution for certificates are so exhaustive. Certificate cases are so observed in respective cases. Numbers of certificate cases are high. There are still some problems at the legal and field levels. That hinders the collection of public demand and gives extra pressure to the certificate debtor. To improve such a situation, implementing the existence law, raising awareness among people, running a campaign relating to public demand, training up officials, the sincerity of the certificate officer, and ADR are required. This study highlights the positive aspects and also the problems of the situation of collecting public demand. The solutions under this study will help to improve the situation. Considering the matter, the government should come forward to fulfil the objectives of the Public Demand Recovery Act of 1913.

This Article is written by Shoena Akter, Farzana Suvra and Mst. Sultana Yasmin. All the writers are students of the Department of Land Management of Law, Jagannath University.

Note:- This Article was written using proper citations. But for the purpose of simplifying the writings to the readers, citations are not used in this electronic form. But you can request one of the writers to get the actual one, which used proper citations.