Himachal Pradesh Financial ... vs Messers Luxmi Furnitures And Saw
2023 Latest Caselaw 16285 HP

IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

Civil Revision No.50 of 2009.

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Reserved on: 07.10.2023.

Date of decision: 13.10.2023.

Himachal Pradesh Financial Corporation

.....Petitioner/D.H.

                                   Versus
    Messers Luxmi Furnitures and Saw
    Mills                           .....Respondent/J.D.
    Coram

The Hon'ble Mr. Justice Tarlok Singh Chauhan, Judge.

Whether approved for reporting?1 Yes For the Petitioner : Mr. Ajay Sharma, Senior

Advocate with Mr. Atharv Sharma, Advocate.

For the Respondent : Mr. C.P. Sood, Advocate.

Tarlok Singh Chauhan, Judge

The issue which this Court is called upon to

adjudicate in this revision petition filed under Section 115

of the Code of Civil Procedure is whether the application

filed by the petitioner under Order 21 Rule 54 of CPC before

the learned executing Court for the attachment of land

Whether the reporters of the local papers may be allowed to see the Judgment?Yes

owned by J.D. No.2 i.e. Hem Raj Sood was time barred as

held by the Court below.

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Certain minimal facts need to be noticed.

2. The petitioner filed an application under Order

21 Rule 54 of CPC for attachment of the land owned by J.D.

No.2 on the allegation that the petitioner had already filed

an application before the Court below under Order 21 Rule

66 CPC for drawing up proclamation of sale of the already

attached immovable property of the respondents/J.D.s.

According to the decree-holder, it was not having

knowledge as to whether the respondent/J.D. was having

movable and immovable properties so as to release the

decretal amount. The execution petition was dismissed as

unsatisfied by the executing Court vide order dated

12.11.2003. Now, the D.H. has come to know that the J.D.

owns coparcenary property in Shimla. It was further averred

that as on 31.07.2005, an amount of Rs.15,23,085.34/- is

recoverable as per the decree dated 22.04.1974.

3. The respondents contested the application on

the ground of maintainability as also the same being barred

by time.

4. The learned executing Court dismissed the

execution petition as being time barred on the ground that

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the decree as passed on 22.04.1974 could not be permitted

to be executed, rather the same was beyond the period of

12 years.

5. It is vehemently argued by Shri Ajay Sharma,

Senior Advocate assisted by Shri Atharv Sharma, Advocate,

for the petitioner that the learned Court below has gone

totally astray by dismissing the application under Order 21

Rule 54 CPC which infact ought to have been considered as

execution petition under Sections 31 and 32 of the State

Financial Corporations Act, 1951, (for short 'Act').

6. On the other hand, Shri C.P. Sood, learned

counsel for the respondent would argue that once the

remedy has already been availed of by the petitioner under

Section 31(a) and (c) of the Act by selling the mortgaged

property which sale stood confirmed on 20.12.1979, then

the only remedy available to the petitioner for realising the

balance amount was to have filed a suit for recovery for

which the limitation is only three years and could not have

proceeded against respondent No.2, who was a surety in

the case, as the amendment under Section 31(aa) read

with 32(1A), whereby the Corporation was permitted to

enforce the law against surety, came into force only with

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effect from 21.08.1985

7. I have heard the learned counsel for the parties

and have gone through the records.

8. As regards the contention of the petitioner that

the application filed under Sections 31 and 32 of the Act is

in the nature of the execution proceedings, this Court in

LPA No.136 of 2008 in case titled Himachal Pradesh

Financial Corporation vs. M/s Lion Textile Industries

and others, decided on 24.05.2012, has clearly held that

the application under Sections 31 and 32 of the Act cannot

be said to be in the nature of the execution proceedings.

9. Once that be so, then the liberty earlier granted

by the executing Court to file fresh execution petition is

meaningless and rather the order is nonest and otherwise

does not extend the period of limitation as rightly

contended by the learned counsel for the respondent. The

reason being that once the remedy under Sections 31(a)

and (c) has been availed of by the petitioner by putting to

sale the mortgaged property, then the further remedy was

only to have filed civil suit that too within the prescribed

period of limitation as the petitioner after putting the

mortgaged property to sale was in full knowledge regarding

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the exact amount of dues to be recovered from the

respondent.

10. In coming to such conclusion, this Court draws

support from the judgments rendered by the Hon'ble

Supreme Court in Himachal Pradesh Financial

Corporation vs. Pawna and others (2015) 5 SCC 617,

Deepak Bhandari vs. H.P. State Industrial

Development Corpn. Ltd. (2015) 5 SCC 518 and

Sundaram Finance Limited vs. Noorjahan Beevi and

another (2016) 13 SCC 1, wherein the Hon'ble Supreme

Court held that once the Corporation initiates steps for

recovery of the amount by resorting to the provisions of the

Act (in this case Section 29), then the limitation period for

recovery of the balance amount would start only after

adjusting the proceeds from the sale of assets of the

industrial concern. As the Corporation would be in a position

to know as to whether there is a shortfall or there is excess

amount realised only after the sale of the

mortgaged/hypothecated assets.

11. In addition to the above, it also needs to be

noticed that the decree as sought to be executed by the

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petitioner is infact an order passed by the learned District

Judge, Hamirpur/Una Districts on 22.04.1974 in an

application filed by the petitioner under Sections 31(a) and

(c) of the Act and this application was filed only against

respondent No.1 and not respondent No.2 and, therefore,

also the application under Order 21 Rule 54 CPC seeking

attachment of the properties of respondent No.2 was

otherwise not maintainable.

12. Learned counsel for the petitioner would,

however, argue that the learned Division Bench of the

Punjab and Haryana High Court in K.P. Khemka and

another vs. Haryana State Industrial and

Infrastructure (2015) 4 RCR (Civ) 475 has held that the

Corporation has multiple remedies to recover the amount

and such remedies are independent and rather without

prejudice to the other remedies available to the petitioner

under the Act and, in particular, invited the attention of this

Court to paras 30 to 32 which read as under:

"30. Thus, a Corporation has multiple remedies i.e. to file a suit; to take recourse to Section 29; to take

recourse to Section 31; to take recourse to Section 32G of the SFC Act as well as under Section 3 of the

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Haryana Public Moneys (Recovery of Dues) Act, 1979.

In terms of Karnataka State Financial Corporation Vs. N. Narasimahaiah & others (2008) 5 SCC 176, the

proceedings against the guarantor cannot be initiated under Section 29 of the SFC Act, whereas proceedings under Section 31 of the said Act can be initiated against the industrial concern as well

against the borrower. Therefore, the Corporation can always decide to take recourse to proceedings under Section 29 and/or under Section 31 against the

industrial concern and against the borrower. The

remedy under Section 32G is without prejudice to any other remedy under the Act. Therefore, the Corporation is at liberty to initiate proceedings for

recovery of public dues even without withdrawing the proceedings under Sections 29 and 31 of the SFC Act,

such power being without prejudice to the provisions of Sections 29 and 31. On the other hand, the

Haryana Public Moneys (Recovery of Dues) Act, 1979 also confers another provision for recovery of public

dues as arrears of land revenue. This is still an additional remedy, which can be exercised by the Corporation at any stage.

31. In a judgment reported as Lachhman Dass Vs. State of Punjab, AIR 1963 SC 222, the right to recovery pubic money by a special procedure was upheld holding that it serves public purpose and is constitutionally permissible. It was held that When a State establishes a Bank, it is the funds of the State

to which the tax payers contribute that are utilized for running it. The State Bank differs from Banks

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established by private agencies in which the working

capital is subscribed by individuals and when a State does establish a Bank, it is with a view to confer

benefits on the general public, such as, for example, developing commerce and industry within its territories. On the other hand when private agencies establish a Bank it is as an investment for those who

subscribe capital to it. Thus, a Bank established by a State has got distinctive features which differentiate it from the other Banks and for purpose of Article 14

it forms a category in itself. It was held that a law

which provides for State funds being advanced to customers through State Bank can also provide for its being recovered in the same manner as revenue.

It was held as follows:

"22. It cannot be disputed that the

impugned Act and the rules framed thereunder put Patiala State Bank in a position different from that of the other

Banks under the ordinary law. The question is whether this difference amounts to discrimination within Article 14. The

contention of the respondents is that Patiala State Bank forms a category in itself and the law which prescribes a special procedure in relation to the settlement of disputes between that Bank and its customers is valid because it is based on a classification having a just relation to the objects of the legislation. It is the correctness of this contention that now falls to be considered. When a State establishes a Bank, it is the funds of the State to which the tax payers contribute that are utilised for running it. In this respect a State Bank

differs from Banks established by private agencies in which the working capital is subscribed by individuals. It should be

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noted that it is not part of the governmental

functions of a State to run a Bank, and when a State does establish a Bank, it is with a view to confer benefits on the general public, such as, for example,

developing commerce and industry within its territories. On the other hand when private agencies establish a Bank it is as an investment for those who subscribe capital to it. Thus a Bank established by a State

has got distinctive features which differentiate it from the other Banks and for purpose of Article 14 it forms a category in itself. The law is now well settled that while

Article 14 prohibits discriminatory legislation directed against one individual or

class of individuals, it does not forbid reasonable classification, and that for this purpose even one person or group of persons can be a class. Professor Willis says

in his Constitutional Law p. 580 "a law applying to one person or one class of persons is constitutional if there is sufficient basis or reason for it". This statement of the

law was approved by this Court in Chiranjit Lal Chowdhury v. Union of India AIR 1951 SC 41. There the question was whether a

law providing for the management and control by the Government, of a named company, the Sholapur Spinning & Weaving

Company Ltd. was bad as offending Article

14. It was held that even a single company might, having regard to its features, be a category in itself and that unless it was shown that there were other companies similarly circumstanced, the legislation must be presumed to be constitutional and the attack under Article 14 must fail. In Ram Krishna Dalmia v. Shri Justice S.R. Tendolkar AIR 1958 SC 538 this Court again examined in great detail the scope of Article 14, and in enunciating the principles applicable in

deciding whether a law is in contravention of that Article observed:

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"that a law may be constitutional even

though it relates to a single individual if on account of some special circumstances or reasons applicable to him and not applicable to others that

single individual may be treated as a class by himself."

23. On the principles stated above we are of the opinion that Patiala State Bank is a class

by itself and it will be within the power of the State to enact a law with respect to it. We are also of the opinion that the

differentia between Patiala State Bank and the other Banks has a rational bearing on

the object of the legislation. If the funds of the Patiala State Bank are State funds, a law which assimilates the procedure for the

determination and recovery of amounts due to the Bank from its customers to that prescribed for the determination and recovery of arrears of revenue must be held

to have a just and reasonable relation to the purpose of the legislation. A law which

provides for State funds being advanced to customers through State Bank can also

provide for its being recovered in the same manner as revenue."

32.Thus, we find that special summary procedure for the recovery of public money serves public purpose and payment of such public money cannot be permitted to be scuttled in the manner raised."

13. However, I find no merit in this contention

because taking the case of the petitioner at its best, the

maximum period of limitation which could have been

provided to the petitioner was 12 years from the date when

the amount was ascertained as aforesaid, whereas,

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admittedly, in the instant case, the application, which was

otherwise not maintainable, came to be filed far beyond the

period of 12 years.

14. In view of the aforesaid discussion and for the

reasons stated above, I find no merit in this revision petition

and the same is accordingly dismissed, along with pending

application(s), if any.

(Tarlok Singh Chauhan) Judge

13th October, 2023.

(krt)