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1997 DIGILAW 464 (KER)

Jayapalan v. Kerala Financial Corporation

1997-12-03

K.S.RADHAKRISHNAN

body1997
Judgment :- Radhakrishnan, J. Question involved in this case is as to whether respondent-Corporation is justified in invoking the provisions of the Kerala Revenue Recovery Act for realisation of the amount due from the petitioner, without complying with the provisions of S.32-G of the State Financial Corporations Act, 1951., 2. Government of Kerala, in exercise of the powers conferred by S.71 of the Kerala Revenue Recovery Act, declared the provisions of the Act would be applicable to the recovery of amounts due from any person or class of persons to the Kerala Financial Corporation. By virtue of the said notification, proceedings were initiated to attach the property of the petitioner and Corporation took steps to recover the amount due to it. 3. Corporation, had sanctioned a loan of Rs. 86,000/- to the petitioner for establishment of.:; industrial unit. In order to secure repayment, petitioner executed loan agreement u 21.7.1989 followed by creation of equitable mortgage over 5 cents of land in Sy No. 2371713-1 of Pallipuram Village, belonging to him. He also executed hypothecation deed on 25.7.1989 hypothecating the plant and machinery of the unit in favour of the Corporation. As per the terms of the Loan agreement, petitioner agreed to repay the loan amount in 72 monthly instalments. Out of the loan amount of Rs. 86,000/- petitioner availed of only an amount of Rs. 71,300/-. 4. Petitioner defaulted payment of instalments and Corporation issued a notice recalling the loan amount. Since the amount was not repaid, Corporation issued a requisition to the District Collector for realisation of an amount Rs, 1,15,453/- as on 31.12.1993 with future interest. 5. A notice of demand was served on the petitioner, and sufficient time was given as per S.34 of the Revenue Recovery Act, petitioner did not file any objection to the said notice, nor did he pay the arrears. Second respondent therefore, issued a notice of attachment as contemplated under S.36 of the Revenue Recovery Act. Petitioner then approached this Court and filed O.P. No. 2006 of 1995 and the said Original Petition was dismissed. Petitioner has now approached mis Court for identical relief, but with a contention that respondents have no legal right to proceed under the Revenue Recovery Act without complying with S.320 of the State Financial Corporations Act, 1951. It is therefore, necessary to examine the provisions of the State Financial Corporations Art 6. Petitioner has now approached mis Court for identical relief, but with a contention that respondents have no legal right to proceed under the Revenue Recovery Act without complying with S.320 of the State Financial Corporations Act, 1951. It is therefore, necessary to examine the provisions of the State Financial Corporations Art 6. S.32-G of the Act is extracted below: "32G. Recovery of amounts due to the Financial Corporation as an arrear of land revenue. Where any amount is due to the Financial Corporation in respect of any accommodation granted by it to any industrial concern, the Financial Corporation or any person authorised by it in writing in this behalf, may, without prejudice to any other mode of recovery, make an application to the State Government for the recovery of the amount due to it, and if the State Government or such authority, as that Government may specify in this behalf, is satisfied, after following such procedure as may be prescribed, 'that any amount is so due, it may issue a certificate for that 'amount to the Collector, and the Collector shall proceed to recover dial amount in the same manner as an arrear of land revenue in the basis of the above mentioned provision, counsel for the petitioner submitted that' 'where any amount is due to the Corporation in respect of any accommodation granted by it to any industrial concern, the Corporation or any person authorised by it in writing in that behalf, has to make an application to the State Government for recovery of the amount due and only if the State Government or such authority is satisfied, it may issue a certificate for that amount to the Collector, and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue. 7. I am afraid, petitioner has not properly understood the scope of S.32-G. This section has been specifically engrafted in the Act, in order to enable the Financial Corporations to recover amounts due to them in respect of any accommodation granted by them to industrial concerns, and not other amounts as arrears of land revenue. This mode of recovery is in addition' to and not in derogation of other mode or modes of recovery available to them such as under S.31 of the State Financial Corporations Act, 1951. 8. This mode of recovery is in addition' to and not in derogation of other mode or modes of recovery available to them such as under S.31 of the State Financial Corporations Act, 1951. 8. Scope of S.32-G has to be understood in the light of S.46-B of the Act S.46-B is extracted below: "46B . Effect of act on other laws - The provisions of this Act and of any rules or orders made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any other law for the lime being in force or in the memorandum or articles of association of an industrial concern or in any other instrument having effect by virtue of any law other than this Act, but save" as' aforesaid, the provisions of this Act shall be in addition to, and not in derogation of, any other law for the time being applicable to an industrial concern." S.32-G of the- Act lays down a special provision for enforcement of the claims by Financial Corporations. It enables the Corporation to enforce its claim through a special mode of recovery prescribed thereunder. It, however, does not directly or by necessary implication imply that the Financial Corporation is debarred from taking recourse to any other process which may be conferred upon it or be available to it elsewhere by force of other laws of the land. The procedure prescribed in S.32-G for recovery of the amount is not in derogation of any other mode of recovery which is available to the Financial Corporation under any other law for enforcement of the claims. Remedy under S.32-G is not the sole or exclusive remedy available to the Financial Corporations. It is only an additional remedy which has been conferred upon the Financial Corporations. This has been made explicit by the latter part of S.46-B of the Act which says that the State Financial Corporations Act shall be in addition to, and not in derogation of, any other law for the time being applicable to an industrial concern. 9. In view of the above mentioned legal provisions contention of counsel for the petitioner that only on the basis of authorisation given by the Corporation in writing to the Government, if the State Government directs the concerned District Collector, the amount can be recovered as arrears of land revenue, cannot be sustained. 9. In view of the above mentioned legal provisions contention of counsel for the petitioner that only on the basis of authorisation given by the Corporation in writing to the Government, if the State Government directs the concerned District Collector, the amount can be recovered as arrears of land revenue, cannot be sustained. As I have already mentioned, S.46B clearly states that the Act shall be in addition to, and not in derogation of, any other law for the time being applicable to an industrial concern. Therefore, S.32G and 29 are all in addition to the mode of recovery applicable to industrial concerns under the Revenue Recovery Act. In view of the said legal position, respondents are justified in invoking the provisions of the Revenue Recovery Act. 10. It is pertinent to note that an identical question came up for consideration before a Division Bench of the Allahabad High Court in M/s. Ratan Sons Industries v. U.P. Financial Corporation, 1984 All. L. J. 44, wherein the Division Bench of the Allahabad High Court considered the question of applicability of S.31 of the Act vis-a-vis S.46B. S.31 is another mode of recovery just like S.32G. In the said decision, the Division Bench held that S.31 shall be in addition to and not in derogation of any other law for the time being applicable to an industrial concern. I respectfully follow the said decision. 11. Even otherwise, I am of the view that petitioner is not entitled to get any relief from this Court. Petitioner had earlier approached this Court challenging the validity of the action taken under the Revenue Recovery Act. That Writ Petition was dismissed. In the present Writ Petition also, he is challenging the same action taken under the Revenue Recovery Act but stating that the notice is illegal and violative of S.32-G of the Act. Since I have found the proceedings initiated by the Corporation is valid and legal, I do need not go into the question as to whether the present Writ Petition is hit by principles of res judicial. In the circumstances,1 do not find any reason to interfere with the steps taken by the Corporation for recovery of the amount due from the petitioner. Accordingly this O.P. is dismissed.