JUDGMENT : M. B. Shah, J. The petitioner-original plaintiff Bank of Baroda had filed Regular Civil Suit No. 41 of 1978 before the Civil Judge, Junior Division, Sankheda for recovering Rs. 6,955/ - with interest for the amount lent and advanced by the Bank to Defendant-Respondent No. 1. It is the contention of the petitioner that cash credit facility was given to Defendant No. 1 for carrying on business to the extent of Rs. 5,000/-. Defendants 2 and 3 stood as guarantors. In pursuance of the said cash credit facility, Demand Promissory Note was executed by Defendant No. 1 on November 14, 1975. Defendants 2 and 3 had executed deed of guarantee on November 15, 1975. As the defendants failed to pay the aforesaid amount, the suit was filed for recovering the said amount. 2. Defendant No. 1 filed an application, Ex. 45, on 24th September, 1979 contending that in view of the provisions of Section 7 of the Gujarat Public Moneys (Recovery of Dues) Act, 1979 (hereinafter referred to as 'the Act'), the suit filed by the Bank abates. The learned Judge, by his judgment and order dated 29th September, 1979 upheld the contention of defendant No. 1 and held that as the suit was filed for recovery of loan given by way of cash credit and the purpose of the loan was development of the business, under the provisions of Section 3 read with Section 7 of the Act, the suit abates. Against the said judgment and order, the Bank has filed the present revision application. 3. From the order passed by the learned Judge it is apparent that the learned Judge has not considered the provisions of Section 3 at all nor has he applied his mind to the fact that the suit would not abate against the guarantors in any set of circumstances. He also ought to have considered that suit would abate only if the loan, advance or credit given is of specified nature as provided under Section 3(1) of the Act such as "financial assistance" or under "State sponsored scheme" or guarantee given by the State Government or a Corporation in respect of loan raised by an industrial concern or for any agreement providing that money payable to the State Government or the Corporation shall be recoverable as arrears of land revenue.
Section 3(1) of the Act reads as under : "3(1) Where any person is a party - (a) to any agreement relating to a loan, advance or grant given to him or relating to credit in respect of, or relating to hire-purchase of, goods sold to him by the State Government, the Corporation or, as the case may be, the Government Company by way of financial assistance, or (b) to any agreement relating to a loan, advance or grant given to him or relating to credit in respect of, or relating to hire-purchase or goods sold to him by a Bank or a Government Company, as the case may be, under a State sponsored scheme; or (c) to any agreement relating to a guarantee given by the State Government or the Corporation in respect of a loan raised by an industrial concern, or (d) to any agreement providing that any money payable there under to the State Government or the Corporation shall be recoverable as arrears of land revenue; and such person - (i) makes any default in payment of the loan or advance of any instalment thereof; or (ii) having become liable under the conditions of the grant to refund the grant or any portion thereof, makes any default in the refund of such grant or portion or any instalment thereof, or (iii) otherwise fails to comply with the terms of the agreement-then in the case of.... and in the case of a bank, the local agent thereof, by whatever name called, may send to the Collector a certificate as early as possible in the prescribed form mentioning the sum due from such person and requesting that such sum may be recovered as if it were an arrears of land venue.
and in the case of a bank, the local agent thereof, by whatever name called, may send to the Collector a certificate as early as possible in the prescribed form mentioning the sum due from such person and requesting that such sum may be recovered as if it were an arrears of land venue. (2) xxx xxx xxx (3) xxx xxx xxx (4) No suit for the recovery of any such due as aforesaid shall lie in a civil court against any person referred to in sub-section (1), and no injunction shall be granted by a Civil Court in respect of any action taken or intended to be taken in pursuance of the right conferred by this Section." A bare reading of the aforesaid sub-section (1)(a) of Section 3 reveals that if the loan, advance or grant or credit is by way of financial assistance then and then only the said debt would be covered by the provisions of Section 3 as well as Section 7. What is "financial assistance" is defined under Section 2(d). As in this case I am not concerned with the said provision, it is not necessary to refer to it. But this clearly shows that if the loan, advance, grant or credit is by way of financial assistance then and then only the provisions of Section 3 and Section 7 would be applicable. 4. Sub-section (1)(b) of Section 3 applies to loan, advance, grant or credit given under a State sponsored scheme. "State sponsored scheme" is defined under Section 2(1) of the Act which means a scheme sponsored or adopted by the State Government or an officer authorised by it in that behalf for development of agriculture or industry and notified as such by the State Government or the authorised Officer by a notification in the 'Official Gazette' for the purpose of the Act. It is an admitted position on record that loan or cash credit was not given to Defendant No. 1 under State sponsored scheme. No contention was raised by Defendant No. 1 that the said credit was given to him under any State sponsored scheme. Hence it is apparent that provisions of sub-section (1)(b) of Section 3 also would not be applicable to the loan or credit given to Defendant No. 1. The provisions of sub-sections (1)(c) and (d) are not applicable at all.
No contention was raised by Defendant No. 1 that the said credit was given to him under any State sponsored scheme. Hence it is apparent that provisions of sub-section (1)(b) of Section 3 also would not be applicable to the loan or credit given to Defendant No. 1. The provisions of sub-sections (1)(c) and (d) are not applicable at all. Under sub -section (4) of Section 3, no suit for recovery of any dues as provided in sub-section (1) of Section 3 would be maintainable in a Civil Court and that all suits of the nature referred to in sub-section (4) of Section 3 pending in any Civil Court shall abate as provided in Section 7 of the Act. It is true that a suit for recovery of any such dues provided under sub-section 3(1) shall not lie in a civil court against any person referred to therein and that pending suit would abate but that does not mean that if the suit is filed by a bank against any other person for recovery of loan, advance or credit which is not of specified nature, the suit would not be maintainable or it would abate. 5. Apart from the aforesaid aspect, the learned Judge ought to have further considered the fact that the provisions of Section 3, sub-section (4) read with Section 7 would not at all be applicable in the case of guarantors. Sub-section (4) of Section 3 only provides that no suit for recovery of any such dues as provided in sub-section (1) against any person referred to in sub-section (1) would lie in a civil court, Sub-section (1) of Section 3 nowhere provides that guarantors are also included under the said provision. The question is covered by the decision of this Court in the case of G.S.F.C. v. National Rifles Ltd. reported in 1983 (2) GLR 924 and, therefore, it does not require any further discussion. 6. In the above view of the matter, the revision application is allowed. The Judgment and order passed by the Civil Judge, Junior Division, Sankheda on Ex. 45 in Regular Civil Suit No. 41 of 1978 is quashed and set aside. The Civil Judge, Junior Division, Sankheda is directed to decide the suit within three months from the date of the receipt of the writ. No order as to costs. Rule made absolute.