Telangana High Court
M.D., Apsfc, Hyd. Ano. vs K. Satyanarayana, Secbad. on 12 October, 2022
Bench: Ujjal Bhuyan, C.V. Bhaskar Reddy
THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN
AND
THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY
W.A.No. 170 of 2013
JUDGMENT: (Per the Hon'ble the Chief Justice Ujjal Bhuyan)
Heard Mr. N.Hamsa Raj, learned counsel for the appellants
and Mr. L.Ravichander, learned Senior Counsel for the respondent.
2. This writ appeal has been preferred against the order
dated 20.03.2012 passed by the learned Single Judge allowing
W.P.No.21183 of 2008 filed by the respondent as the writ
petitioner.
3. Respondent as the writ petitioner had filed the related writ
petition taking exception to the notice dated 20.08.2004 issued by
the appellants for recovery of outstanding dues of
Rs.3,29,87,255.00 under the Andhra Pradesh Revenue Recovery
Act, 1864 (briefly 'Revenue Recovery Act' hereinafter).
4. According to the respondent, he retired as Senior General
Manager of Nizam Sugars Limited and thereafter became a
member of the Board of Directors of Nandini Trinity Poly
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Chemical Private Limited, which was subsequently renamed as
Pankom Chemicals (briefly 'the company' hereinafter). The
company had availed loan from the appellants to the extent of
Rs.43,33,811.00. Respondent stood as guarantor. According to the
respondent, he had resigned from the company on 13.05.1990
whereafter, he did not have any connection with the company.
On 31.08.1999, respondent received a notice raising a demand of
Rs.146 lakhs comprising of principal amount of Rs.43.34 lakhs and
the balance being interest amount. This was followed by another
notice dated 21.09.1999. It was thereafter, that proceedings were
initiated vide the order dated 20.08.2004 under Section 52-A of the
Revenue Recovery Act demanding Rs.43,33,811.00 towards
principal amount and Rs.2,86,50,725.00 towards interest. Aggrieved
by the aforesaid, the related writ petition came to be filed.
5. Appellants contested the writ petition by filing counter-
affidavit.
6. According to the appellants, they had provided loan to
M/s.Chlorate India Limited, which was however sold and
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purchased by the company in 1987 under Section 29 of the State
Financial Corporations Act, 1951 (briefly 'the SFC Act'
hereinafter). Thereafter, appellants sanctioned further loan to the
company. However, the company committed default in repayment
of loan for which assets of the company were seized by the
appellants under Section 29 of the SFC Act whereafter plant and
machinery were sold. This was followed by land and buildings of
the company being sold. After adjusting the sale consideration,
company still owed a sum of Rs.3,29,87,330.00 as on 30.06.2004.
Appellants exercised their right to recover the outstanding dues by
invoking Section 52-A of the Revenue Recovery Act.
7. Learned Single Judge considered the rival contentions and
noted that even according to the appellants the loan originated in
the year 1987. Additional loans were advanced in the year 1989.
8. Learned Single Judge referred to the decision of the Supreme
Court in State of Kerala Vs V.R. Kalliyanikutty1 in which
Supreme Court held that a debt, which is barred by law of
AIR 1999 SC 1305
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limitation cannot be recovered by resorting to recovery proceedings
under the Revenue Recovery Act; the object being speedy recovery
of dues and not enlargement of the right to recover. Thereafter,
learned Single Judge held as follows:
It is not disputed that this court in catena of cases
held that the proceedings under ROR Act cannot lay
for recovery of the amount, which was barred by
limitation. In similar circumstances where loan was
advanced by A.P. State Finance Corporation in the
year 1971, this court in N.A. Radha v. State of A.P.,
[2000(2) ALD 560] held that the claim of the
Corporation is barred by limitation and cannot be
recovered under the provisions of A.P. ROR Act.
The respondents however rely upon the decision
in Jagadish Rai vs. Haryana Financial
Corporation [AIR 2008 P&H 50] wherein it was held
that the provisions of Limitation Act cannot be made
applicable to the proceedings initiated under
section 32G of the State Financial Corporations Act
because, neither there is any express provision made
in the Act referring to the Limitation Act nor any
necessary intendment is inferable. However in view
of the categorical pronouncement of the apex Court
in V.R. Kalliyanikutty's case (supra), that a debt
barred by limitation cannot be recovered by resorting
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to the provisions of the ROR Act, which principle
has been followed by this court in a number of cases,
including one cited above i.e., N.A.Radha's case
(supra), it is held that the 2nd respondent-Corporation
cannot seek to recover the debt, which is admittedly
barred by time by recourse to the proceedings under
ROR Act through the first respondent."
9. Though learned counsel for the appellants submitted that the
limitation period of three years would commence from the date of
sale of the assets of the company in which event, the impugned
proceedings would be within time, we are not inclined to accept the
said contention. As rightly held by the learned Single Judge, the
limitation would commence from the date of default and not from
the date of selling of assets for default in repaying the dues.
Admittedly, the default occurred prior to 31.08.1999 when
respondent was served with the demand notice. That being the
position, we decline to interfere with the order passed by the
learned Single Judge.
10. Writ appeal is devoid on merit and is accordingly dismissed.
No costs.
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As a sequel, miscellaneous petitions, pending if any, stand
dismissed.
__________________
UJJAL BHUYAN, CJ
_______________________
C.V.BHASKAR REDDY, J
Date: 12.10.2022
LUR/PRAT
