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Uttarakhand High Court · body

2015 DIGILAW 46 (UTT)

Trilok Singh v. District Magistrate Bageshwar

2015-01-19

ALOK SINGH

body2015
JUDGMENT Alok Singh, J. 1. In all these writ petitions, identical questions of facts and law are involved, therefore, all these petitions are heard together and are being disposed of by this common judgment. 2. Petitioners of all the petitions are borrower, who have taken loan/financial assistance from the bank i.e. Uttarakhand Gramin Bank under the loan agreement available on each file as Annexure no.2. Since, petitioners failed to make repayment of the financial assistance received by them, bank was pleased to issue recovery certificates to the collector for recovery of the outstanding amount as arrears of land revenue under Section 3 of the U.P. Public Moneys (Recovery of Dues) Act, 1972. 3. Now, question arises - As to whether outstanding amount can be recovered by invoking the provisions of the U.P. Public Moneys (Recovery of Dues) Act, 1972? Section 3 of the Act reads as under: “Recovery of certain dues as arrears of land revenue – (1) Where any person is 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 or the Corporation, by way of financial assistance. (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 of goods sold to him by a banking company or a Government Company, as the case may be, under a State sponsored scheme. (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.” (d) To any agreement providing that any money payable thereunder to the State Government [or any Corporation] shall be recoverable as arrears of land revenue; and such person – (i) Makes any default in repayment of the loan or advance or any installment thereof. (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 of any installment thereof. (iii) Otherwise fails to comply with the terms of the agreement. 4. (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 of any installment thereof. (iii) Otherwise fails to comply with the terms of the agreement. 4. Then, in the case of the State Government, such officer as may be authorised in that behalf by the State Government by notification in the Official Gazette, and in the case of Corporation or a Government Company the Managing Director [or where there is no Managing Director then the Chairman of the Corporation, by whatever name called] [or such officer of the Corporation or Government Company as may be authorised in that behalf by the Managing Director or the Chairman] thereof, and in the case of a banking company, the local agent, thereof, by whatever name called, may send a certificate to the Collector, mentioning the sum due from such person and requesting that such sum together with costs of the proceedings be recovered as if it were an arrear of land revenue. (2) The Collector on receiving the certificates shall proceed to recover the amount stated therein as an arrear of land revenue. (3) No suit for the recovery of any sum due as aforesaid shall lie in the civil court against any person referred to in sub-section (1). (2) The Collector on receiving the certificates shall proceed to recover the amount stated therein as an arrear of land revenue. (3) No suit for the recovery of any sum due as aforesaid shall lie in the civil court against any person referred to in sub-section (1). [(4) In the case of any agreement referred to in sub-section (1) between any person referred to in that sub-section and the State Government or the Corporation, no arbitration proceedings shall lie at the instance of either party either for recovery of any sum claimed to be due under the said sub-section or for disputing the correctness of such claim: Provided that whenever proceedings are taken against any person for the recovery of any such sum he may pay the amount claimed under protest to the officer taking such proceedings, and upon such payment the proceedings shall be stayed and the person against whom such proceedings were taken may make a reference under or otherwise enforce an arbitration agreement in respect of the amount to be paid, and the provisions of Section 183 of the Uttar Pradesh Land Revenue Act, 1901, or Section 287-A of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, as the case may be, shall mutatis mutandis apply in relation to such reference or enforcement as they apply in relation to any suit in the civil court. (5) Save as otherwise expressly provided in the proviso to sub-section (4) of this section or in Section 183 of the U.P. Land Revenue Act, 1901 or Section 287-A of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 every certificate sent to the Collector under sub-section (1) shall be final and shall not be called in question in any original suit, application (including any application under the Arbitration Act, 1940) or in any reference to arbitration and no injunction shall be granted by any court or other authority in respect of any action taken or intended to be taken in pursuance of any power conferred by or under this Act.]” 5. Recovery certificate can be issued to recover the outstanding amount as arrear of land revenue under Section 3 (1) of the Act only in either of four contingencies provided under sub-sections (a), (b), (c) and (d) of sub-section (1) of Section 3. Recovery certificate can be issued to recover the outstanding amount as arrear of land revenue under Section 3 (1) of the Act only in either of four contingencies provided under sub-sections (a), (b), (c) and (d) of sub-section (1) of Section 3. As per Sub-Section (a) of Sub-Section (1) of Section 3, where borrower is a party to an agreement relating to a loan, advance or grant, or credit in respect of or relating to hire-purchase of goods, sold to him, by the State Government or the Corporation; as per Sub-section (b) of sub-Section (1) of Section 3, if a borrower in a party to an agreement relating to loan, advance or grant or credit in respect of, or relating to hire-purchase of goods sold to him, by a banking company or a Government company under a State sponsored scheme; as per sub-Section (c) of sub-Section (1) of Section 3, if a borrower is a party to an agreement relating to a guarantee given by the State Government or the Corporation in respect of a loan raised; or as per sub-Section (d) of sub-Section (1) of Section 3, such agreement provides that outstanding amount shall be recoverable as arrears of land revenue. 6. In my considered opinion, sub-section (a) and sub-section (b) of sub-section (1) of Section 3 would be attracted only when financial assistance is provided to the borrower to purchase such goods under the hire-purchase agreement which are sold by the State Government or by the Corporation or by the banking company or a Government Company. Any other financial assistance may be under the State sponsored scheme, which does not relate to purchase of goods sold by the banking company or Government company shall not be recoverable under the provisions of U.P. Public Moneys (Recovery of Dues) Act, 1972. 7. Hon’ble Apex Court in the case of Iqbal Naseer Usmani vs. Central Bank of India and Others, (2006) 2 SCC 241 , in paragraph No.6, has held as under:- “6. There is no doubt that the first respondent is a banking company within the meaning of Section 2(f) of the Act. Section 3 (1) (b) of the Act provides that where any person is a party. There is no doubt that the first respondent is a banking company within the meaning of Section 2(f) of the Act. Section 3 (1) (b) of the Act provides that where any person is a party. “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 a banking company or a government company, as the case may be, under a State-sponsored scheme.” And such person makes any default in the repayment of the loan or advance or any instalment thereof, on a certificate as to default along with a request from the company concerned to the Collector, the Collector shall proceed to recover the amount stated therein as arrears of land revenue. While there is no doubt that the appellant had obtained a loan from the first respondent banking company and defaulted in repayment thereof, there is no evidence to suggest that the loan was relating to hire-purchase of goods sold to him under a “State-sponsored scheme”. The learned counsel for the respondent frankly conceded that the loan was not under any such “State-sponsored scheme”. In our view, the provisions of the Act are not intended to supplant the machinery for execution of all decrees under the provisions of the Code of Civil Procedure. They can only be utilized for recovery of sums due in the special cases enumerated in Section 3 (1) of the Act.” 8. As per the dictum of the Hon’ble Apex Court, that financial assistance must be in relation to hire-purchase of goods sold to the borrower by State Government or State Corporation or Government Company or banking company. 9. Since loan was not extended in favour of the petitioners to purchase the goods sold by State Government or Corporation or banking company or Government company, therefore, neither sub-section (a) nor sub-section (b) of sub-section (1) of Section 3 can be invoked in the present case and admittedly, in the present case, State Government or Corporation is not a guarantor in respect of the loan in question nor loan agreement provides that outstanding amount shall be recoverable as arrears of land revenue. Therefore, sub-sections (c) or (d) of sub-section (1) of Section 3 too, have no application. Therefore, all the petitions deserve to be allowed. 10. Consequently, all the petitions are allowed. Therefore, sub-sections (c) or (d) of sub-section (1) of Section 3 too, have no application. Therefore, all the petitions deserve to be allowed. 10. Consequently, all the petitions are allowed. Impugned citations are hereby quashed. However, it is clarified that bank shall be at liberty to proceed against the petitioners to recover the outstanding amount in accordance with law. 11. CLMA Nos. 428 of 2015, 424 of 2015, 425 of 2015 and 427 of 2015 also stand disposed of accordingly. 12. Let copy of this judgment be kept in all the connected writ petitions.