IMPORTANT POINT
The proceedings for recovery initiated by U.P. Financial Corporation under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 on 6-1-2001 are not maintainable in view of Section 34(2) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Headnote:The Recovery of Debts Due to Banks and Financial Institutions Act, 1993-Section 34(2)-Act to have overriding effect-State Financial Corporation Act, 1951-Section 32G-Recovery of Amounts Due to Financial Corporation as an arrears of Land Revenue-U.P. Public Monies (Recovery of Dues) Act, 1972- Section 3-Recovery of certain dues as arrears of land revenue-Whether the proceedings for recovery initiated by U.P. Financial Corporation under the U.P. Act 6-1-2001 are maintainable in view of Section 34(2) of the Act?-High Court holding "Yes"-Appeal against-Whether High Court is right? (No)-Appeal allowed-Proceedings under U.P. Act quashed-Case law on interpretation of statutes considered.
       Held : Section 34 of the Act consists of two parts. Sub-section (1) deals with the over-riding effect of the Act notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than the Act. Sub-section (1) itself makes an exception as regards matters covered by sub-section (2). The U.P. Act is not mentioned therein. The mode of recovery of debt under the U.P. Act is not saved under the said provision i.e. sub-section (2) which is of considerable importance so far as the present case is concerned. Even a bare reading therein makes it clear that it is intended to be in addition to and not in derogation of certain statutes; one of which is the Financial Act. In other words, a Bank or Financial institution has the option or choice to proceed either under the Act or under the modes of recovery permissible under the Financial Act. To that extent, the High Court s conclusions quoted above were correct. Where the High Court went wrong is by holding that proceedings under the U.P. Act were permissible. U.P. Act deals with separate modes of recovery and such proceedings are not relatable to proceedings under the Financial Act. (Para 9)
       Held further : Two principles of construction - one relating to casus omissus and the other in regard to reading the statute as a whole - appear to be well settled. Under the first principle a casus omissus cannot be supplied by the Court except in the case of clear necessity and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the Legislature. "An intention to produce an unreasonable result", said Danckwerts, L.J., in Artemiou v. Procopiou (1966 1 QB 878), "is not to be imputed to a statute if there is some other construction available". Where to apply words literally would "defeat the obvious intention of the legislation and produce a wholly unreasonable result" we must "do some violence to the words" and so achieve that obvious intention and produce a rational construction. [Per Lord Reid in Luke v. I.R.C. (1966 AC 557) where at p. 577 he also observed: "this is not a new problem, though our standard of drafting is such that it rarely emerges".] Therefore, the High Court s conclusions holding proceedings under the U.P. Act to be in order are indefensible. (Para 14)
       Held finally : The impugned order is set aside and the proceedings under the U.P. Act are quashed. It shall be, however, open to the Corporation to take such action under the Act or the Financial Act as is legally available to it. The appeal is allowed without any costs. (Para 16)

JUDGMENT

Arijit Pasayat, J.-Leave granted.

2. The only question that falls for determination in this case is whether the proceedings for recovery initiated by U.P. Financial Corporation (hereinafter referred to as the Corporation ) under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 (in short the U.P. Act ) on 6-1-2001 are maintainable in view of Section 34(2) of the Recovery of Debts Due to Bank and Financial Institutions Act, 1993 (in short the Act ).

3. Factual position sans unnecessary details is as follows:

Certificate was issued under the U.P. Act for recovery of certain dues from the appellant for its alleged failure to comply with the terms and conditions of loan granted to it; similar failure was alleged by three Directors and three guarantors. On 14-2-2001 Citation for recovery was issued by the Tehsildar, Varanasi, for recovery of the alleged dues as arrears of land revenue. Appellant challenged the said action before the Allahabad High Court in CMWP No. 13738 of 2001 on the ground that after the enactment of the Act, the proceedings were not maintainable. Reliance was placed on the provisions contained under Section 32(G) of the State Financial Corporation Act, 1951 (in short the Financial Act ) to contend that no other proceeding is permissible to be taken under the Act. Reference was made to Sections 17 and 34 of the Act to substantiate his stand. Stand of the Corporation before the High Court was that alternative modes of recovery were prescribed under different statutes and one cannot stand on the way of the other mode. Choice was left upon to the Corporation to act either under the Act or under the modes permissible under the Financial Act. Proceedings initiated under the U.P. Act were covered by the said Act. A Division Bench of the High Court on consideration of the rival submissions held that the language of Section 34(2) of the Act placed the position beyond controversy and concluded as follows:-

"The choice is clearly left open to the Financial Corporation which may proceed under the D.R.T. Act or may proceed under the other modes of recovering the debts as are permissible under the S.F.C. Act., i.e. it can proceed under the provisions of the U.P. Public Money (Recovery of Dues) Act."

4. Judgment of the High Court dated 27-4-2001 is under challenge.

5. In support of the appeal learned counsel for the appellant submitted that the field of operation so far as the Act is concerned, has been clearly delineated in Allahabad Bank vs. Canara Bank and Anr. (2000 (4) SCC 406). Section 34 of the Act confers overriding effect vis-a-vis others statutes. The only exceptions to such overriding effect are enumerated in sub-section (2) thereof. Proceedings under the U.P. Act are not encompassed by the exceptions. On the contrary, the action permissible so far as Financial Act is concerned, can be spelt out from Section 32(G) of the said Act.

6. In response, learned counsel for the Corporation submitted that Allahabad Bank s case (supra) has no application to the facts of the case. Under the U.P. Act, there is no question of any adjudication of dues payable and once there is default, there is statutory empowerment to issue a certificate in terms of Section 3 of the said Act. With reference to the decision of this Court in Director of Industries, U.P. and Ors. vs. Deep Chand Agarwal (1980 (2) SCC 332), it was submitted that validity of the said provisions has been upheld by this Court and the procedure adopted in the present case has been held to be legally permissible. The authorized functionary can take action, the moment there is default and no adjudicatory process is involved. The procedure is not in conflict with any proceeding that can be taken under the Act. The statutory intention for enactment of the Act was to do away with the cumbersome procedures involved for recovery and provisions are not inconsistent with any provision of the U.P. Act, which in terms of Section 3(3) prohibits institution of a case

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2002 Supreme(SC) 1291

IMPORTANT POINTThe proceedings for recovery initiated by U.P. Financial Corporation under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 on 6-1-2001 are not maintainable in view of Section 34(2) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Cases Referred (9)

IMPORTANT POINT
The proceedings for recovery initiated by U.P. Financial Corporation under the Uttar Pradesh Public Monies (Recovery of Dues) Act, 1972 on 6-1-2001 are not maintainable in view of Section 34(2) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.