Uttarakhand High Court
M/S Ekta Electrotech Pvt. Ltd. And ... vs State Of Uttarakhand And Others on 21 November, 2022
IN THE HIGH COURT OF UTTARAKHAND AT
NAINITAL
THE CHIEF JUSTICE SHRI VIPIN SANGHI
AND
JUSTICE SHRI RAMESH CHANDRA KHULBE
Special Appeal No.220 OF 2022
21st NOVEMBER, 2022
M/s Ekta Electrotech Pvt. Ltd. and others ......Appellants
Vs.
State of Uttarakhand and others ......Respondents
Presence: -
Mr. B.N. Molakhi, learned counsel for the appellants.
Mr. Anil Bisht, learned Addl. C.S.C. for the State.
Mr. Shubhang Dobhal, learned counsel for respondent no.3-Bank.
JUDGMENT: (Per Shri Vipin Sanghi, Chief Justice)
The issue in the present appeal is whether
respondent no.3-Bank could invoke the provisions of
Section 3 of the Uttar Pradesh Public Moneys (Recovery of
Dues) Act, 1972 as applicable to the State of Uttarakhand
for the purpose of recovering its dues, in relation to the
loans advanced to the appellant.
2. The learned Single Judge has dismissed the
writ-petition preferred by the appellant, questioning the
action taken by the respondent-bank under Section 3 of
the aforesaid Act, by placing reliance on Section 37 of the
SARFAESI Act, which states that the provisions of the
SARFAESI Act are not in derogation of several enactments
mentioned in the said section "or any other law for the
time being enforced". On that basis resort to the Uttar
Pradesh Public Moneys (Recovery of Dues) Act, 1972 by
respondent-bank has been found by the learned Single
Judge to be proper.
3. A perusal of the said Act of 1972 shows that the
expression "Corporation" is define to mean the Uttar
Pradesh Financial Corporation established under the State
Financial Corporation Act, 1951, and it includes any other
Corporation owned or controlled by the Central
Government or the State Government and specified in a
notification issued in that behalf by the State Government
in the Official Gazette.
4. Respondent no.3-UCO Bank is not a Corporation
as defined in the Act of 1972.
5. Section 3(1) of the Act of 1972 lays down as to
when recovery of certain dues could be made as arrears of
land revenue. The said section, in so far as, it is relevant
reads as follows:-
"3 - Recovery of certain dues as arrears of
land revenue- (1) Where any person is party,-
(a) to any agreement relating to a loan, advance
or grant given to him or relating to credit in
respect of, or relating to hire-purchase of goods,
sold to him by the State Government or the
Corporation, by way of financial assistance; or
(b) to any agreement relating to a loan, advance
or grant given to him or relating to credit in
respect of, or relating to hire-purchase of goods
sold to him, by a banking company or a
Government Company, as the case may be, under
a State sponsored scheme; or
(c) to any agreement relating to a guarantee
given by the State Government or the Corporation
in respect of a loan raised by an industrial
concern; or
(d) to any agreement providing that any money
payable thereunder to the State Government 1[or
the Corporation] shall be recoverable as arrears of
land revenue; and such person--
(i) makes any default in repayment of the
loan or advance or any instalment thereof;
or
(ii) having become liable under the
conditions of the grant to refund the grant or
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any portion thereof, makes any default in
the refund of such grant or portion or any
instalment thereof; or
(iii) otherwise fails to comply with the terms
of the agreement;
then, in the case of the State Government, such
officer as may be authorised in that behalf by the State
Government by notification in the Official Gazette, and in
the case of the Corporation or a Government Company
the Managing Director 1[or where there is no Managing
Director then the Chairman of the Corporation, by
whatever name called] 2[or such officer of the
Corporation or Government Company as may be
authorised in that behalf by the Managing Director or the
Chairman] thereof, and in the case of a banking
company, the local agent, thereof, by whatever name
called, may send a certificate to the Collector,
mentioning the sum due from such person and
requesting that such sum together with costs of the
proceedings be recovered as if it were an arrear of land
revenue."
6. The loans advanced by the banking company
would be recoverable by resort to Section 3 of the Act of
1972, if such loans were granted "under a State sponsored
scheme" and respondents have not stated as to whether
the loans advanced to the appellant were under the State
sponsored scheme.
7. Learned counsel for the respondent-bank has
placed reliance on Clause (d) of Section 3 (1) of the
aforesaid Act.
8. In our view the said clause is not attracted in
the case of the respondent-bank for the reason that the
respondent-bank is not "State Government" or "the
Corporation" which, as we have noticed hereinabove,
means the Uttar Pradesh Financial Corporation or a
Corporation owned and controlled by the Central
Government or the State Government, which is notified in
the Official Gazette by the State Government. Therefore,
the only provision which entitles the respondent-bank to
invoke the provisions of 1972 Act is Section 3 (1)(b),
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provided the loans have been granted by the bank under
the State sponsored scheme.
9. Learned counsel for the respondent-bank seeks
time to take instructions in this regard.
10. Let an affidavit be filed by the respondent-bank
in this regard within four weeks.
11. List on 17.04.2023.
12. Interim order to continue.
________________
VIPIN SANGHI, C.J.
________________________
RAMESH CHANDRA KHULBE, J.
Dated: 21st November, 2022
BS/SK
