Judgment

MISRA, J. :- The present appeal by special leave is directed against the judgment of a Division Bench of the High Court of Punjab and Haryana dated l3th September, 1971 dismissing the letters patent appeal against the judgment of a learned Single Judge dated 17th March, 1971 allowing the writ petition filed by the respondents.

2. The short question that falls for consideration in the present appeal is whether the amount of loan in question can be recovered as arrears of land revenue by arrest and detention in view of Cl. 4 of the loan agreement.

3. Dera Baba Nanak Co-operative House Building Society Ltd., respondent No. 2, was a registered society. It had 32 members to start with. The society entered into an agreement with the Government of Punjab whereunder the Government agreed to advance a loan of Rs. 1,02,000/- to its members under the lower income group housing scheme for the purpose of constructing residential houses on the site measuring 35,100 sq. ft. in Dera Baba Nanak. The agreement was evidenced by a written document. Under the terms of the agreement the government was to advance the loan in three instalments - the first instalment of Rs. 20,400/- was to be paid by the government on the execution of the deed of agreement, the second instalment of Rs. 51,000/- was to be paid on the completion of the houses to the plinth level and the last instalment of Rs. 30,600/- on the completion of the houses to the roof level. The members of the society on the other hand had to repay the loan advanced with interest in thirty annual instalments, the first instalment was to become due twelve months after the date of sanctioning the first instalment of loan. It was further stipulated that the society would mortgage the said sites together with houses erected or to be erected thereon thereafter to the government as security for the repayment of the said loan and interest. The loan agreement further contemplated that the government would recover the amount of loan first from the property mortgaged and if there was a shortfall then the, government shall be entitled to recover the same personally from the borrowers as well as from the movable or other immovable property belonging to the borrowers.

4. The society pursuant to the terms of the agreement executed the mortgage. The government in their turn issued a cheque for Rs. 71,400/- as payment towards the first two instalments on 24th of March, 1956. The third instalment of Rs. 30,600/- was, however, not paid by the government to the society on the ground that it had not furnished the required certificate that the houses had reached the roof level. The members of the society also failed to repay the loan as stipulated. In the situation a notice was issued by the Collector of the District to the members of the society to deposit the overdue instalments of loan and to appear before the Deputy Commissioner. Gurdaspur on August 24, 1964 to show, cause why the entire amount should not be recovered from them by means of arrest and detention. The society challenged the notice by filing a writ petition in the High Court. Its stand was that in the absence of any such stipulation in the loan agreement the amount could not be recovered by arrest of the members of the society in the first instance. The writ petition remained pending for more than six years but no instalments had been paid by the members of the society to the government during that period.

5. The claim was resisted by the government. The writ petition was, however, allowed by the learned single Judge by his judgment dated 17th March, 1971 holding that the government must resort to the contractual remedy which it reserved to itself when entering into the loan agreement. The State preferred a letters patent appeal which was summarily dismissed. The State has now approached this court by special leave.

6. The learned counsel appearing for the State relied upon cl. (b) of S. 67 of the Punjab Land Revenue Act. This section provides