Moinuddin vs State Of U.P. And Others
2011 Latest Caselaw 623 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?Court No. - 35
 

 
Case :- WRIT - C No. - 14167 of 2011
 

 
Petitioner :- Moinuddin
 
Respondent :- State Of U.P. And Others
 
Petitioner Counsel :- Mohammad Parvez
 
Respondent Counsel :- C.S.C.,K.M. Asthana
 

 
Hon'ble Sunil Ambwani,J.

Hon'ble Kashi Nath Pandey,J.

We have heard Sri Mohd. Parvez, learned counsel for the petitioner. Learned standing counsel appears for respondent Nos. 1 to 3. Sri K.M. Asthana appears for respondent No. 4 - the United Bank of India.

The petitioner is challenging the recovery of commercial loan taken by him from the respondent Bank under the U.P. Public Money (Recovery of Dues) Act 1972, by issuing a recovery certificate. It is stated that Government dues or the dues of the Bank advanced under any State sponsored scheme can only be recovered under the Act.

Counsel for the petitioner has relied upon a Full Bench decision of the Court in Sharda Devi Vs. State of U.P. and others [2001 UPLBEC (3) 1941). The Full Bench held that the Banking Company can recover its dues under the U.P. Public Money (Recovery of Dues) Act 1972, only where the loan has been advanced or paid to the borrower under a State Sponsored Scheme.

Sri K.M. Asthana appearing of the Bank was required to seek instructions in the matter. He states that the loan was passed under a scheme prepared by the Bank itself, known as  United Trade Credit Scheme. The loan was sanctioned on 25.9.2004. The borrower committed default in payment of the instalments, and thus the account was declared Non Performance Assets (NPA), and recovery certificate was issued.

He submits that earlier the borrower approached for One Time Settlement, which was accepted by the bank, however, he did not comply with the OTS terms.

Learned counsel for the petitioner submitted that United Trade Scheme was not the State sponsored scheme, which was launched by the Bank for the benefit of the individual and was a commercial transaction. The Bank was therefore not entitled to recover the amount under the U.P. Public Money (Recovery of Dues) Act 1972, by issuing a recovery certificate to the Collector.

For the aforesaid reason, we allow the writ petition to the extent that the citation dated 19.2.2011 issued by the Tehsildar, Tehsil Soraon, District Allahabad for recovery of bank loan under the United Trade Credit Scheme is set aside. The recovery proceedings under the provisions of U.P. Public Money (Recovery of Dues) Act 1972, are also set aside. It will be open to the Bank, to recover the amount, under any other mode available to it in law.

Order Date :- 30.3.2011

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