Back
Supreme Court Of India
DELHI FINANCIAL CORPN
Versus
RAJIV ANAND
Decided on March 24, 2004
A. State Financial Corporation Act, 1951, Section 32G - Appointment of Authority under the Act- The State Government appointed the respective Managing Directors as the authority under Section 32-G for recovery- The Delhi High Court held that the appointment of the Managing Director was against the principle that 'no man can be a judge in his own cause- However the Punjab and Haryana High Court upheld the appointment of the Managing Director as authority under the Act-Held mere appointment of an officer of the Corporation does not by itself bring into play the doctrine that 'no man can be a judge in his own cause'- For that it must be shown that the concerned officer had personal bias or a personal interest - Therefore the decision of the Delhi High Court was erroneous and the view taken by the Punjab and Haryana High Court was correct.[Para2 and 14]
B. State Financial Corporation Act, 1951, Sections 31, 32 and 32G -Whether Section 32-G of the Act can only apply to a principal debtor and not against a surety - Remedy u/s 32G is available even against surety- The amount would be due to a Financial Corporation either from the industrial concern and/or from a surety/guarantor-If the intention was to limit the procedure under Section 32-G only to the principal debtor then Legislature would necessarily have had to use the words "amount due from the principal debtor" or "amount due from the SSS
C. State Financial Corporation Act, 1951, Sections 32G and 33C - Nature of Proceedings- Contention that proceedings under Section 32G are like execution proceedings- Not accepted- Held where an amount can be ascertained by simple arithmetical calculations or by simple verification then only inquiry as contemplated by sub-section (1) of Section 33-C is required-In cases of amounts due to Financial Corporations all that is required is a simple arithmetical calculation or a simple verification- It is for that reason that in Section 32-G only a provision identical to Section 33-C(1) has been incorporated- A plain reading of Section 32-G shows that there is no lis or adjudication contemplated under Section 32-G.[Paras 18 to21 and 25]
( 1 ) ALL these appeals can be disposed of by this common judgment. In all these cases monies had been borrowed from financial corporations. Action was initiated under S. 32-G of the State Financial Corporations Act, 1951. The State Government having appointed the respective Managing Directors as the authority under S. 32-G, certificates of recovery were issued by the Managing Directors. Writ petitions were filed in the Delhi High Court and the Punjab and Haryana High Court challenging the appointment of the Managing Directors as the authority and the certificates of recovery.
( 2 ) THE Delhi High Court has, in the judgment impugned in Civil Appeals Nos. 4014-17 and 4018-21 of 1998, held that the appointment of the Managing Director was against the principle that "no man can be a judge in his own cause" and struck down the appointment of the Managing Director and accordingly struck down the certificate of recovery. On the other hand, the Punjab and Haryana High Court has in the judgment, impugned in Civil Appeal No. 7818 of 2002, disagreed with the view of the Delhi High Court and has upheld the appointment of the Managing Director. However, on facts of that case, it was held that the opportunity of being heard had not been granted and the matter was referred back for giving a hearing to the party and passing a fresh order. The financial corporations being aggrieved by the judgment of the Delhi High Court have come in appeal against that judgment. The party being aggrieved by the judgment of the Punjab and Haryana High Court has come in appeal against that judgment.
( 3 ) AT this stage it must be mentioned that even though the Delhi High Court allowed the writ petitions on the abovementioned ground, all other points raised in the writ petitions were answered against the party. Mr Mehta relied upon the authorities of this Court in the cases of Northern Rly. Coop. Society Ltd. v. Industrial Tribunal, Rajasthan, Jaipur and Employers, India Cable Co. v. Workmen and submitted that even though the findings on the other points were against his clients and the appeal had only been filed by the financial corporations, the respondents could still support that judgment on all available points. We have accepted that proposition. We, therefore, heard these appeals on all points canvassed before us.
( 4 ) THE first question which arises is whether the Managing Director of a corporation can be appointed by the State Government as the authority contemplated under S. 32-G of the State Financial Corporations Act. S. 32-G reads as follows:
"32-G. Recovery of amounts due to the Financial Corporation as an arrear of land revenue.-Where any amount is due to the Financial Corporation in respect of any accommodation granted by it to any industrial concern, the Financial Corporation or any person authorised by it in writing in this behalf, may, without prejudice to any other mode of recovery, make an application to the State Government for the recovery of the amount due to it, and if the State Government or such authority, as that Government may specify in this behalf, is satisfied, after following such procedure as may be prescribed, that any amount is so due, it may issue a certificate for that amount to the Collector, and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue. "
( 5 ) THE Delhi High Court relied upon, amongst others, the judgments of this Court in the cases of A. K. Kraipak v. Union of India, Gullapalli Nageswara Rao v. A. P, SRTC4 and Krishna Bus Service (P) Ltd. v. State of Haryana. On the basis of these judgments, the Delhi High Court held that S. 32-G was not unconstitutional. The Delhi High Court, however, held that S. 32-G postulates appointment of an independent person. The Delhi High Court held that the Managing Director or any other official of the financial corporation could not be appointed by the State Government as an authority under S. 32-G of the Act. The Delhi High Court has
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
