SUDHA DEVI Vs. STATE OF U P

JUDGEMENT

(1.) One Dwarika Prasad took a loan of Rs. 1,72,426, from the U. P. Financial Corporation (respondent No. 2) (hereinafter referred to as " the Corporation") for purchasing a truck on February 19, 1982. The petitioner, Smt. Sudha Devi, and her husband, Sim Krishna Murari Sharma executed a guarantee bond in favour of the Corporation. It is not disputed that the borrower, Shri Dwarika Prasad, failed to repay the aforesaid loan in terms of the agreement executed. The Corporation has initiated proceedings for recovery of the entire outstanding demand which Shri Dwarika Prasad had failed to repay against the petitioner who had admittedly executed the guarantee bond. It is these recovery proceedings which have been challenged in the present writ petition.

(2.) At the admission stage, the contesting respondent (Corporation) was served and it was represented by Shri V.M. Sahai. Counter and rejoinder affidavits have been exchanged between the parties and the present writ petition is being disposed of finally in accordance with the rules of the court.

(3.) Learned counsel for the petitioner has challenged the recovery proceedings on the ground that the borrower had pledged the truck for which he had taken the loan from the Corporation and the recovery should first be made from the borrower after getting the pledged truck sold. Reliance has been placed on a decision of the Supreme Court in Sheela Devi v. Mohan Samp [1987] 2 SCC 235. It has also been argued that the guarantee bond cannot supersede the provisions of the U. P. Public Moneys (Recovery of Dues) Act, 1972 (hereinafter referred to as " the Act"), and, in view of the provisions of Section 4(2}(a) of the Act, proceedings should first be taken for sale of the things pledged, and if the proceeds of such sale are less than the sum due, then proceedings should be taken for recovery of the balance as if it were an arrear of land revenue.