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2011 DIGILAW 2151 (PNJ)

Bhajan Singh v. Punjab Financial Corporation

2011-12-02

PERMOD KOHLI, TEJINDER SINGH DHINDSA

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JUDGMENT PERMOD KOHLI, J. - The petitioners herein had secured loan of Rs.2,77,000/-for purchase of a truck from the Punjab State Financial Corporation (hereinafter referred to as “the Corporation”) in the category of Ex-Servicemen. One Mansa Singh and Jaswant Singh stood as guarantors in respect of the aforesaid loan and also mortgaged their agricultural land as security. The Corporation filed application under Section 31 (i) (aa) of the State Financial Corporation Act, 1951 for recovery of the loan amount and interest accrued thereon in the Court of Additional District Judge, Fatehgarh Sahib. This application was allowed by the Additional District Judge vide judgment dated 19.12.2002 and an execution petition was filed by the respondent no.2 for recovery of the amount allowed by the court. The first execution application was dismissed for default and an application for its restoration also came to be dismissed. In the meanwhile, petitioner no.1 was offered the benefit of SEMFEX OTS scheme of the Corporation as a one time settlement. Petitioner no.1 was asked to pay an amount of Rs.3,27,270/-. He paid an amount of Rs.1.00 lac, but failed to pay the balance amount. On the further offer by the Corporation, the petitioner no.1 deposited the entire outstanding amount on 25.9.2007 against a proper receipt. It seems that under the arrangement between the State Government and the Corporation simple interest due on the loan amount was payable by the State Government. In so far as petitioner no.1 is concerned, he deposited the entire amount payable by him under the OTS Scheme. Petitioner no.1 requested for release of charge over the mortgaged property and to issue No Due Certificate vide representation dated 13.2.2008 which was followed by further representations. The grievance of the petitioner no.1 is that despite payment of the entire amount under the OTS Scheme, respondent-Corporation has failed to release the charge and also to withdraw legal cases against him. Petitioner no.1 has also placed on record information sought under RTI Act to demonstrate that in similarly situated cases, No Due Certificates have already been issued. This petition has accordingly been filed seeking a direction to the Corporation to issue No Due Certificate and also to release the security documents and to withdraw legal cases. 2. Petitioner no.1 has also placed on record information sought under RTI Act to demonstrate that in similarly situated cases, No Due Certificates have already been issued. This petition has accordingly been filed seeking a direction to the Corporation to issue No Due Certificate and also to release the security documents and to withdraw legal cases. 2. The Corporation in its reply has simply stated that the State Government was required to pay the simple interest on the loan amount and on failure of the State Government to pay interest, the documents could not be released. It has further been mentioned that in the meeting dated 23.11.2007, it has been decided to release the documents on payment of the interest amount by the State Government. 3. During the course of the argument, learned counsel for the petitioners has placed on record a letter dated 31.10.2011 where under the Corporation has committed to issue No Due Certificate and also to return the original documents, subject to withdrawal of the present case filed by the petitioners. He has also been asked to deposit Rs.7500/-on account of legal fee. Today the State of Punjab has also filed a short reply. In para 3 of the reply, it is stated that the action on the prayer of the petitioners is to be taken by respondents no.1 and 2. As regards the liability of the State Government is concerned, it is stated that in case any proposal is received from the Administrative Department and the Finance Department, the same shall be considered as per law. Learned counsel appearing for the Corporation has vehemently argued that the Corporation is entitled to interest from the State Government and unless the interest amount is released by the State Government, the Corporation is not bound to release the documents. 4. We have heard learned counsel for the parties. The stand of the Corporation is totally unjustified. Under the OTS Scheme, petitioner no.1 was to pay the demanded amount under the Ex-servicemen category. He accepted the offer and deposited the amount as per the demand. Under the Scheme and the arrangement between the State Government and the Corporation, the interest, if any, is payable by the State Government and not by the petitioners. Thus, the petitioners cannot be taken to ransom by the Corporation for non-discharge of the liability by the State Government. He accepted the offer and deposited the amount as per the demand. Under the Scheme and the arrangement between the State Government and the Corporation, the interest, if any, is payable by the State Government and not by the petitioners. Thus, the petitioners cannot be taken to ransom by the Corporation for non-discharge of the liability by the State Government. Even from the latest communication dated 31.10.2011 while committing to issue No Due Certificate and return the original documents, the Corporation has demanded the legal fee of Rs.7500/-from the petitioners which action on the part of the Corporation cannot be justified. This is another attempt on behalf of the Corporation to force and coerce the petitioners to pay the legal fee which the petitioners is not liable to pay under law. Under these circumstances and particularly, in view of the letter dated 31.10.2011, this petition is allowed. The Corporation is directed to issue No Due Certificate and also to release the mortgaged property and issue discharge certificate in respect of the mortgaged property within a period of one month from the date of receipt of a copy of this order. The Corporation is not entitled to charge any legal fee from the petitioners as claimed in the letter dated 31.10.2011. On failure of the Corporation to do so, the petitioners shall be at liberty to initiate contempt proceedings against the Officer(s)/Official(s) of the Corporation who shall be liable for violation of the above directions under law. This order shall not prevent the Corporation from claiming any amount on account of interest that may be payable by the State Government. Petition allowed.