The proceedings under Section 31 of the State Financial Corporation Act are not akin to execution proceedings, and therefore, Article 136 of the Limitation Act does not apply. However, Article 137 of the Limitation Act applies to such proceedings.

Rajiv Sharma, J.

1. The brief facts necessary for the adjudication of this petition are that the respondent No. 1-Corporation had advanced loan to the petitioner through its sole proprietor on 22.6.1989 and 27.10.1990. The agreement(s) of hypothecation deeds were prepared on 22.6.1989 and 27.10.1990, besides creating equitable mortgage under Section 58 (f) of the Transfer of Property Act, 1882 by depositing the title deed of the properties of the petitioner concern in favour of the Corporation vide letters dated 22.6.1989 and 27.10.1990. The petitioner availed a term loan of Rs. 8.40 lacs during the years 1989-1990 on different dates. The mortgaged/hypothecated moveable assets were sold on 28.10.1995 for Rs. 0.70 lac and Immovable assets were also sold on 22.2.1997 for Rs. 1.38 lacs. There was a shortfall in the recovery of loan dues and a sum of Rs. 78,95,237/- as on 10.6.2005 was still outstanding in the loan amount of the petitioner concern including interest up to 9.6.2005. The Respondent No. 1-Corporation filed an application under Section 32-G of the State Financial Corporation Act, 1951, hereinafter referred to as the 'Act', for issuance of recovery certificate for Rs. 78,95,237/- before the Specified Authority appointed by the State Government under Section 32-G of the State Financial Corporation Act, 1951. The petitioner concern took various objections against the application and the relief prayed therein including that the application was barred by limitation. The Specified Authority passed an order on 19.7.2006 whereby the Recovery Certificate for recovery of Rs. 75,44,075/- was passed against the petitioner concern and the same was directed to be recovered as arrears of land revenue together with pendente lite and future interest at the rate of 12.5 per cent per annum.

2. In sequel to order dated 19.7.2006, Annexure P-7, the Collector (Recovery), J.P. Financial Corporation, Shimla has directed the petitioner concern on 11.4.2007 to deposit the amount on 8.5.2007.

3. Mr. R.K. Gautam, learned Senior Advocate has strenuously argued that orders dated 19.7.2006 passed by the Specified Authority and the Collector (Recovery), J.P. Financial Corporation, Shimla dated 11.4.2007 are not sustainable in the eyes of law. He has primarily relied upon Maharashtra State Financial Corporation v. Ashok K. Agarwal and Ors. AIR 2006 SC 1584 , to buttress the submission that the application was barred by limitation.

4. Mr. Ajay Sharma, learned Counsel for the respondents has supported the two orders dated 19.7.2006 and 11.4.2007.

5. I have heard the learned Counsel for the parties and have gone through the record carefully.

6. It is evident from the pleadings of the parties that the loan was advanced by the respondent-corporation on 22.6.1989 and 27.10.1990. The agreement of hypothecation was prepared on 22.6.1989 and 27.10.1990 itself. The equitable mortgage was created under Section 58(f) of the Transfer of Property Act, 1882 by depositing the title deeds of the property of the petitioner concerned. Mortgaged hypothecated moveable assets were sold on 28.10.1995 for Rs. 0.70 lacs and Immovable assets were sold on 22.2.1997 for Rs. 1,38,000/-. The application has been preferred by the respondent-corporation under Section 32-G of the State Financial Corporation Act, 1951.

7. A specific ground has been taken in the reply filed by the petitioner concern that the application was barred by limitation. According to Mr. R.K. Gautam, the loans were advanced in the years 1989-1990 and the same could be recovered within a period of three years. He further contended that while dealing with the application under Sections 31 and 32 of the Act, there is no decree or order of the Civil Court being executed and the same is covered under Article 137 of the Limitation Act.

8. Mr. Ajay Sharma, learned Counsel for the respondents has strenuously argued that the application under Sections 31 and 32 of the Act are in the nature of execution proceedings, the