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Uttarakhand High Court · body

2015 DIGILAW 33 (UTT)

Nisha Srivastava v. United Commercial Bank

2015-01-14

ALOK SINGH

body2015
ORDER Present petition is filed by the petitioner stating that a commercial loan was taken by the Chitransh Herbal Group in the shape of cash credit limit and over-draft facilities on 02.08.2007, outstanding amount of commercial loan cannot be recovered by invoking provisions of U.P. Public Moneys (Recovery of Dues) Act, 1972. 2. Counter-affidavit has been filed by the respondent No. 1 bank stating therein that M/s. Chitransh Herbal Group is a partnership firm and is engaged in manufacturing of organic manures and supply of herbal seedlings, therefore, loan advanced to M/s. Chitransh Herbal Group was agricultural loan, therefore, provisions of Uttar Pradesh Agricultural Credit Act, 1973 are applicable in the present case. Thus, outstanding amount can be recovered as arrears of land revenue under the provisions of U.P. Agricultural Credit Act, 1973. 3. To find out under which provision of law recovery certificate was issued, learned State counsel was directed to produce photostat copy of the recovery certificate allegedly issued by the bank. 4. Ms. Anjali Bhargava, Standing Counsel for the State has handed over the photostat copy of the recovery certificate issued by the respondent No. 1 bank, which is taken on record and is marked as A. 5. A bare perusal of photostat copy of the recovery certificate issued by the respondent No. 1 bank to the Revenue Authorities would reveal that recovery certificate was issued under Section 3 of the U.P. Public Moneys (Recovery of Dues) Act, 1972 (herein after referred as 'U.P. Act, 1972') for the recovery of the outstanding amount as arrears of land revenue. 6. This Court in the case of Micky Palta and others v. State of Uttarakhand and others in Writ Petition No. 1637 (M/S) of 2012 decided on 17.12.2014 has held that recovery can be initiated as arrears of land revenue under the provisions of U.P. Act, 1972 when either of the ingredients of Section 3 is available and has further held that commercial loan cannot be permitted to be recovered under the provisions of the U.P. Act, 1972, unless and until there is an agreement between the borrower and the bank that recovery shall be made as arrears of land revenue. 7. 7. Let me now examine as to whether outstanding amount of the agricultural loan granted under the provisions of the U.P. Agricultural Credit Act, 1973 (herein after referred as 'U.P. Act, 1973') can be recovered by issuing recovery certificate under Section 3 of the U.P. Act, 1972? 8. Sections 11 and 11A of the U.P. Act, 1973 as well as Rules 23 to 28 of the U.P. Agricultural Credit Rules, 1975 read as under: ' 11. Recovery of due of a bank through a prescribed authority (1) Notwithstanding anything contained in any law for the time being in force, an officer specified by the State Government by notification in the Gazette (hereinafter referred to as the prescribed authority) may, on the application of a bank by order, direct that any amount due to the bank on account of financial assistance given to an agriculturist be paid by the sale of the land or any interest therein or other immovable property which is charged or mortgaged for the payment of such amount: Provided that no order of sale shall be made under this sub-section unless the agriculturist has been served with a notice by the prescribed authority calling upon him to pay the amount due. (1-A) The provisions of the Limitation Act, 1963, shall apply in relation to an application under sub-section (1), as if such application were in suit in civil court for sale of the land or interest therein or other immovable property for enforcing recovery of the sum referred to in that sub-section. (2) An order passed by the prescribed authority shall, subject to the result of appeal under Section 12, be final and be binding on the parties. (3) Every order passed by the prescribed authority in terms of sub-section(1) or by the appellate authority under Section 12 shall be deemed to be a decree of a civil court and shall be executed in the same manner as a decree of such court by the civil court having jurisdiction. 11-A. Recovery in the case of personal security. (3) Every order passed by the prescribed authority in terms of sub-section(1) or by the appellate authority under Section 12 shall be deemed to be a decree of a civil court and shall be executed in the same manner as a decree of such court by the civil court having jurisdiction. 11-A. Recovery in the case of personal security. (1) Where any amount of financial assistance is granted by a bank to an agriculturist and the agriculturist fails to pay the amount together with interest on the due date, then without prejudice to the provisions of Sections 10-B and 11, the local principal officer of the bank, by whatever name called may forward to the Collector a certificate in the manner prescribed, specified the amount due from the agriculturist. (2) The certificate referred to in sub-section (1) may be forwarded to the Collector within three years from the date when the amount specified in the certificate fell due. (3) On receipt of the certificate, the Collector shall proceed to recover from the agriculturist, the amount specified therein together with expenses of recovery, as arrears of land revenue, and the amount due to the bank shall be paid after deducting the expenses of recovery and satisfying any Government dues or other prior charges, if any.' Rule 23. Application for sale of land or interest therein: Sections 11 and 25. (1) Where any charge or mortgage has been created on any land or interest or on any other immovable property in favour of a bank in respect of any financial assistance granted to an agriculturist and the whole or any part of amount due in respect thereof remains unpaid, the bank may apply to the Prescribed Authority for the sale of such land, or interest therein or other immovable property. (2) Every application by a Bank under sub-rule (1) shall be in Form D. The application shall be accompanied by sufficient number of copies thereof along with copies of notices in Form E for service on the agriculturist or his heirs or legal representatives, as the case may be. (3) A fee at the rate specified in Rule 12(3) shall be payable on every application referred to in sub-rule (1). (3) A fee at the rate specified in Rule 12(3) shall be payable on every application referred to in sub-rule (1). The amount of fee shall be deposited in Government Treasury or the State Bank of India under the Head mentioned in Rule 12(3) and the Treasury Challan shall be attached to the application as evidence of payment of the prescribed fee. (4) An attested copy of the document creating the charge of mortgage shall be filed along with application referred to in sub-rule (1). But the Prescribed Authority may summon the original as and when it is considered necessary. 24. Notice to the agriculturist: Sections 11 and 25. (1) On receipt of the application referred to in Rule 23, the Prescribed Authority shall cause to be noted thereon, the date of its presentation, and if it is satisfied that the application is in order, a notice in Form E shall be served on the agriculturist, his heir or legal representatives, as the case may be, calling upon him to pay the amount specified in the notice within a period of twenty-one days or to show cause why a direction for the sale of the property charged or mortgaged be not issued. (2) The notice referred to in sub-rule (1) shall be served in the manner laid down in Rule 14. 25. Order for sale of the property: Sections 11 and 25. (1) If the amount specified in the notice referred to in Rule 24 or any part thereof remains unpaid after the expiry of the time allowed therefor, or if no cause is shown, or where the cause shown is considered by the Prescribed Authority to be sufficient, the Prescribed Authority shall by order direct that the amount due to the bank be paid by sale of the property charged or mortgaged. (2) Every order under sub-rule (1) shall be in writing and shall contain the following particulars (a) the reasons on which the decision is based; (b) a direction as to costs and interest, if any; (c) the number of cases, and the names and description of the parties; (d) the date when the order was signed and pronounced. (3) A copy of the order under sub-rule (1) shall be sent to the Civil Court having jurisdiction and, subject to the result of appeal, if any, shall be executed as a decree of such court. 27. (3) A copy of the order under sub-rule (1) shall be sent to the Civil Court having jurisdiction and, subject to the result of appeal, if any, shall be executed as a decree of such court. 27. Certificate of recovery: Sections 11-A and 25. Every certificate referred to in sub-section (1) of Section 11-A shall be prepared in Form F and shall be sent to the Collector of the district in which the agriculturist or his heirs or legal representatives ordinarily reside or carry on the activities referred to in Section 2(a) or own properties. 28. Recovery as arrears of land revenue : Sections 11-A and 25. On receipt of the certificate in accordance with Rule 27, the Collector shall cause the same to be entered in a register maintained for the purpose and shall proceed to recover the amount specified in the certificate as arrears of land revenue.' 9. The bare perusal of Section 11 read with Rules 23, 24 and 25 would reveal that bank can move application in Form D for the recovery of the agricultural loan to the prescribed authority within the period of limitation by selling the property mortgaged or charged with the bank. Having received such application, Prescribed Authority shall issue notice on Form E and after hearing the borrower, Prescribed Authority shall by order direct to recover the amount due by selling the properties charged or mortgaged. 10. Section 11A of the Act read with Rules 27 and 28 demonstrates that without being prejudice the powers under Section 11 of the Act, recovery certificate in Form F can be issued to the Collector within the period of limitation for recovery of dues as arrears of land revenue. 11. Bare perusal of the photostat copy of the recovery certificate would reveal that it was not issued either under Section 11 or 11A of U.P. Act, 1973 rather the same was issued under Section 3 of the U.P. Act, 1972. 12. There is no limitation under the provisions of U.P. Act, 1972 while as per Sections 11 and 11A of UP Act, 1973, the recovery can be initiated within the period of limitation prescribed and request shall be made on the prescribed Forms as provided under the Rules. 13. In my considered opinion, Bank can not invoke provisions of U.P. Act No. 1972 for the recovery of agricultural loan. 13. In my considered opinion, Bank can not invoke provisions of U.P. Act No. 1972 for the recovery of agricultural loan. Agricultural loan can be recovered as per the provisions of U.P. Act of 1973 that too by adopting the procedure provided under the Rules. In the present case, Bank has not issued recovery certificate under Section 11-A read with Rule 27 of the Act, 1972, therefore, recovery certificate issued under Section 3 of the U.P. Act of 1972 is without jurisdiction. Thus, entire recovery proceedings pursuant to recovery certificate issued under Section 3 of the Act, 1972 stand vitiated. 14. Present petition is allowed. Recovery proceedings against the petitioner under the provision of U.P. Public Moneys (Recovery of Dues) Act, 1972 are hereby quashed. However, bank shall be at liberty to proceed in accordance with Act of 1973, if law of limitation permits so. Petition allowed.