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2006 DIGILAW 2151 (RAJ)

Rajasthan Financial Corporation v. Baboo Lal

2006-07-07

R.S.CHAUHAN

body2006
Judgment R.S. Chauhan, J.-The appellant has challenged the order dated 09.02.1994 passed by the Additional District Judge, No. 3, Jaipur City, Jaipur whereby an application under Section 31 of the State Financial Corporation Act, 1951 (henceforth to be referred to as the Act of 1951 for short) filed by the appellant has been dismissed ostensibly on the ground that the application has been filed beyond the period of limitation. 2. Brief facts of the case are that the Respondent No. 1 had sought a loan from the Rajasthan Financial Corporation (henceforth to be referred to as the R.F.C. for short) for purchasing a vehicle. The said loan was sanctioned vide order dated 18.03.1981 and a loan for a sum of Rs. 89,000- was granted. From the said amount, the Respondent No. 1 had purchased a Matador City Bus, Model 1981 No. RRB-9988 bearing Engine No. D-223340 Chesis No. 3F-0229648. While the Respondent No. 1 had executed the deed of hypothecation, trust letter, affidavit and power of attorney, the Respondent Nos. 2 & 3 were included in the deed as guarantors and also executed a guarantee deed in favour of the R.F.C. wherein they have mortgaged the property mentioned in Para 4 of the application with specific conditions that they will not transfer the property till the loan is repaid. Despite repeated notices given to the Respondent No. 1, he failed to pay the said loan to the R.F.C. Therefore, on 23.07.1986 a notice was sent by the appellant under Section 30 of the Act of 1951. Since the Respondent No. 1 still failed to repay the loan, on 02.09.1986 the R.F.C. was taken possession of the bus and it was auctioned on 20.01.1989. A sum of Rs. 25,000/-was realized in auction. However, despite the auction of the bus, an outstanding amount of Rs. 66,845- was still outstanding due against the R.F.C. Therefore, the R.F.C. filed the aforesaid application. On the date of the filling of the application, the outstanding amount had increased to Rs. 86,614.98. After hearing the arguments of both the sides, the trial Court vide order dated 09.02.1994 dismissed the application under Section 31 of the Act of 1951 ostensibly on the ground that the said application is hit by limitation. On the date of the filling of the application, the outstanding amount had increased to Rs. 86,614.98. After hearing the arguments of both the sides, the trial Court vide order dated 09.02.1994 dismissed the application under Section 31 of the Act of 1951 ostensibly on the ground that the said application is hit by limitation. According to the learned Judge, the limitation period is only three years as the case is covered by Article 137 of the Limitation Act, 1963 (henceforth to be referred to as the Act of 1963). 3. Mr. Alok Garg, the learned Counsel for the appellant, has argued that in fact, an application under Section 31 of the Act of 1951 is not a plaint for filing of the suit but, in fact, has been considered as an application for attachment of property in execution of a decree at a stage posterior to the passing of a decree. Therefore, the said application falls under Section 136 of the Act of 1963 where the limitation period is twelve years. In order to substantiate his contention, he has relied upon the cases of The Gujarat State Financial Corporation vs. M/s. Natson Manufacturing Co. Ltd. & Ors., AIR 1978 SC 1765 and Rajasthan Financial Corporation vs. Banwari Lal & Ors., 1997 (2) WLC 199 . On the other hand, Mr. S.K. Jain, the learned Counsel for the respondents, has vehemently argued that the present appeal is beyond the period of limitation as prescribed under Section 32(9) of the Act of 1951. Therefore, this appeal is not even maintainable, as no application under Section 5 of the Limitation Act has been filed by the appellant. 4. We have heard both the learned Counsels for the parties and have perused the impugned order. 5. It is, indeed, a settled position of law that an application under Section 31(1) of the Act of 1951 is not a plaint for recovery of money. In the case of Gujarat State Financial Corporation (Supra). The Honble Supreme Court held, "the substantive relief in an application under Section 31(1) is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of decree." This Court in the case of Banwari Lal & Ors. In the case of Gujarat State Financial Corporation (Supra). The Honble Supreme Court held, "the substantive relief in an application under Section 31(1) is something akin to an application for attachment of property in execution of a decree at a stage posterior to the passing of decree." This Court in the case of Banwari Lal & Ors. (Supra), has also held that the period of limitation as prescribed under Article 137 of the Act of 1963 is not applicable to such an application. 6. As far as the contention raised by Mr. S.K. Jain is concerned, Section 32(9) of the Act of 1951 states as under:-Any party aggrieved by an order under Sub-section (4-A), Sub-section (5) or Sub-section (7) may, within thirty days from the date of the order, appeal to the High Court, and upon such appeal the High Court, after hearing the parties, pass such orders thereon as it thinks proper. A bare perusal the said sub-section clearly reveal that an order under Sub-section (4-A), Sub-section (5) and Sub-section (7) has to be passed by which the party is aggrieved before the limitation prescribed under Sub-section (9) becomes operative. However, in the present case, no order has been passed by the learned trial Court under Sub-section (4-A), Sub-section (5) and Sub-section (7 ). Therefore, the question of the RFC being aggrieved by such an order does not arise. Hence, the limitation prescribed under Sub-section (9) of Section 32 of the Act of 1951 is inoperative. It is pertinent to note that an order passed under Sub-section (4-A), Sub-section (5) and Sub-section (7) warrants that the learned trial Court should enter into the merits of the case. However, the impugned order is an order passed in limine where the learned trial Court has not entered into the merits of the case. It has dismissed the application solely on the ground of limitation. Therefore, the contention raised by the learned Counsel for the respondents wanting to invoke the limitation prescribed under Sub-section (9) of Section 32 of the Act of 1951 is without merit. 7. In the result, we quash and set aside the order dated 09.02.1994 and remand the case to the Additional District Judge No. 3, Jaipur City, Jaipur to rehear the application filed by the appellant under Section 31 of the Act of 1951 and to pass an appropriate order in accordance with the law. 7. In the result, we quash and set aside the order dated 09.02.1994 and remand the case to the Additional District Judge No. 3, Jaipur City, Jaipur to rehear the application filed by the appellant under Section 31 of the Act of 1951 and to pass an appropriate order in accordance with the law. This appeal is, hereby allowed.