SURESH CHANDRA GUPTA Vs. COLLECTOR KANPUR NAGAR

JUDGEMENT

(1.) THE questions that call for determination in this writ petition are four fold; First, whether the U. P Public Moneys (Recovery of Dues)Act, 1972 (hereinafter called the State Act, 1972) has been rendered void and inoperative, after the insertion of Section 32-G in the State Financial corporation Act, 1951 (in short the Central Act, 1951) in so far as it relates to recovery of debt payable to the Corporation? Second, whether Section 3 of the State Act, 1970 is inconsistent with Section 32-G of the Central Act, 1951, and if it is so, what is the effect? third, whether the jurisdiction of the Collector to entertain an application of the Corporation for recovery under Section 3 of the State Act, 1972 of debt not being less than Rs. 10 lacs, is barred by Section 18 of the Recovery of Debts Due to the Bank and Financial Institutions Act, 1993 (in short the Central Act, 1993) ; fourth, whether the U. P. State Financial corporation having taken possession of the assets and properties of the borrower company under Section 29 of the Central Act, 1951 was bound to exhaust its remedy under the said provision before initiating recovery proceeding against the sureties/guarantors?

(2.) I have had the advantage of going through the draft judgment prepared by my learned Brother S. P. Mehrotra, j. , I respectfully do not agree with the conclusions arrived at by my learned brother Mehrotra, J. I would, therefore, write a separate judgment.

(3.) MINIMAL facts necessary to high-light the issues involved in the case may be stated thus; The U. P State Financial Corporation, party respondent No. 3 herein, sanctioned a term loan of Rs. 1. 75 crores in favour of M/s. J. S. Metal (P) Ltd. an 'industrial concern' a registered company incorporated under the companies Act, 1956 but out of the sanctioned loan only a sum of Rs. 1,42,48,000/- is said to have been disbursed to the Company. The petitioners who happened to be the Directors of the borrower company stood as sureties and executed bonds of personal guarantees for repayment of loan. The company failed to pay the instalments whereupon the U. P. State Financial Corporation, it is said, took possession of the mortgaged assets and properties of the company and issued public notice inviting offers, for sale under Section 29 of the State Financial Corporations, Act, 1951 on "as is where is basis" and invoked personal guarantee against the petitioners. The petitioners failed to pay the amount due whereupon certificate of recovery was issued under Section 3 of the U. P Public Moneys (Recovery of dues) Act, 1972 on the basis of which the Tehsildar issued the impugned citation dated 25. 1. 2002 to the petitioners to pay Rs. 3,00,10,400. 00 plus other charges or to appear personally on 10. 2. 2002. In re-the first and second questions: