VIJAYA KUMAR Vs. DISTRICT MAGISTRATE KANPUR

JUDGEMENT

(1.) THE petitioners were granted a loan of Rs. 83,000/- by the U. P. Financial Corporation, Kanpur in the month of December, 1983 in connection with their business of manufacture of micro rubber sheets. THE loan was a Medium Term Loan and was sanctioned to the tune of Rs. 5 lacs and Rs. 1 lac was to be repaid in 10 and 12 instalments respectively. Since there was default in the payment of the aforesaid loan as per terms of the contract, U. P. Financial Corporation (Opposite-party no. 3) issued a registered notice dated 8th August, 1988 calling upon the petitioners to pay all outstanding to the tune of Rs. 4,12,017.65 p within thirty days of the receipt of the said notice. It appears that in the said notice it was also stated that in case the said payment is not made recovery proceedings will be taken against the petitioners. THE petitioners have not filed a copy of the said registered notice dated 8th. August, 1988 issued by the U. P. Financial Corporation. THEy have, however, filed a reply to the said notice dated 9th September, 1988, a copy of which has been filed as Annexure VI to the writ petition A perusal of the said reply notice dated 9th September, 1988, however, shows that in fact a notice dated 8th August, 1988 was issued to the petitioners to deposit all the outstandings as aforesaid within thirty days from the date of the receipt of the notice failing which, it was stated, recovery proceedings will be taken against the petitioners. In the said reply letter dated 9th September, 1988 all that has been said is that certain payments have been made by the petitioners and, therefore, the recovery proceedings be stopped. THEreafter the petitioners wrote another letter dated 10th April 1989 (a copy of which has been filed as Annexure 7 to the writ petition) stating the causes of delay in payment and praying for allowing some more time to make the payment. In the petition a copy of the citation dated 27th July 1989 issued by the Naib Tehsildar (Finance and Revenue), Kanpur City for realisation of Rs. 4,54, 319/- has been filed as Annexure 8 to the writ petition. THE said amount included the principal amount in the sum of Rs. 3,52,830/- and interest and collection charges in pursuance of the said agreement between the parties. It is stated that the recovery in question is sought to be made against the petitioners under Section 3 of the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972 (hereinafter referred to as the Recovery Act).

(2.) AT the time of hearing, the only submission pressed by Sri Rakesh Dwivedi, learned counsel for the petitioners, was that resort to recover the amount under the provisions of the Recovery Act is harsher than the provisions of Section 32-G of the State Financial Corporation Act, 1951 (hereinafter referred to as the Financial Corporation Act). As such the said proceeding of recovery followed by the U. P. Financial Corporation is violative of Article 14 of the Constitution of India.

(3.) IT has been recently held by a Full Bench of this Court in Civil Mics. Writ No. 20818 of 1988 M/s. Krishna Utensils v. State Financial Corporation D/- 10th July, 1989-See 1989 AWC 971-that the remedy of recovery under the Recovery Act is not lost to the Financial Corporations by the insertion of section 32-G in the Financial Corporations Act. The question involved in the aforesaid Full Bench was slightly different than in the present case inasmuch as in the Full Bench case the question that arose for consideration was as to whether because of the insertion of Section 32-G in the Financial Corporations Act, the aforesaid provisions under the Recovery Act has been rendered void and inoperative qua the dues of the Financial Corporations. The Full Bench answered the said question in the negative. Further the vires of Recovery Act were also unsuccessfully challenged before the Full Bench. The Full Bench has ultimately held that Section 3 of the Recovery Act continues to be valid notwithstanding the insertion of Section 32-G in the Financial Corporations Act.