Back
2007 Supreme(All) 2287
AIR 2008 ALLAHABAD 6
S. N. SRIVASTAVA, J.
Chander and etc.
Versus
State of U.P. and Ors.
S. R. Verma, A. K. Verma, for Petitioners; Jai Singh, R. B. Sahai, S. C., for Respondents.
The recovery of agricultural loans must adhere to the procedures outlined in the U.P. Agricultural Credit Act, and any recovery beyond the principal amount was impermissible. Valid loan agreements and fair treatment of agriculturists are essential.
Headnote:
Agricultural Loan - Recovery Procedure - U.P. Agricultural Credit Act - [SUMMARY OF ACT SECTIONS]
Fact of the Case:
The petitioners were granted agricultural loans for purchasing tractors, and recovery agents appointed by the banks forcibly seized the tractors. The court scrutinized the recovery proceedings and charges imposed by the banks.
Finding of the Court:
The court found that the recovery proceedings were not in accordance with the U.P. Agricultural Credit Act and the banks were engaging in unfair practices, including charging excessive interest and employing private recovery agents.
Issues: The issues included the validity of the loan agreements, the legality of recovery procedures, and the applicability of the U.P. Agricultural Credit Act and U.P.Z.A. and L.R. Act.
Ratio Decidendi: The court held that recovery of agricultural loans must adhere to the procedures outlined in the U.P. Agricultural Credit Act, and any recovery beyond the principal amount was impermissible. It also emphasized the need for valid loan agreements and fair treatment of agriculturists.
Final Decision: The writ petitions were allowed, and the recovery proceedings initiated against the petitioners were quashed. The banks were restrained from making recovery through any recovery agent except under the provisions of the U.P. Agricultural Credit Act. The court issued a general mandamus to ensure compliance with its directions.
1. Civil Misc. Writ Petition No. 4177 of 2007 : A brief resume of necessary facts in this writ petition is that the State Bank of India Meja Branch District Allahabad sanctioned a sum of Rs. 2,98000/- to the petitioner against purchase of Tractor on 30-7-2004 and in connection with the aforesaid loan, agricultural and admeasuring 1.232 hectuares situated in village Banwari Khas Pot Shukulpur P. S. Manda Tahsil Koraon District Allahabad and also land admeasuring .560 situated in village Unchdah was pledged to the Bank. The total land pledged to the Bank admeasures 1.792 hectares. It would appear from the record that the petitioner repaid certain amount details of which are enumerated in the writ petition. It would further appear that Bhola Singh Patel and Dharmendra Singh arrayed as Opp. parties 3 and 4 who claimed themselves to be Recovery Agent appointed by the Bank, forcibly took away the Tractor on 26-10-2005. Thereafter, a notice was served to the petitioner cautioning that in case, petitioner failed to repay the loan, the tractor seized by the Bank will be put to auction on 24-12-2006 followed by publication of auction sale notice appearing in newspaper on 15-12-2006 and 16-12-2006.
2. Civil Misc. Writ Petititon No. 4052 of 2007 : In this case, the petitioner was sanctioned loan to the tune of Rs. 3 lac against purchase of tractor on 13-3-2004. He paid certain amount and thereafter, there occurred default in payment account of natural calamities. It would further appear that one R.B.S. Associates arrayed as Opp. party No. 4 claiming himself to be recovery Agent appointed by the Bank forcibly took away tractor on 4-1-2007.
3. Civil Misc. Writ Petition No. 4758 of 2007 : In this case, loan granted to the petitioner was to the tune of Rs. 3,25000/- against purchase a tractor payable in 7 years. It would appear that the petitioner deposited the Ist installment, and thereafter, unforeseen calamity befell him and his entire house and crops were engulfed in the raging fire. In this case, M/s. Gorakhpur Financial Services, Gorakhpur which was appointed as recovery agent by the Bank took forcible possession of the Tractor to force recovery of the loaned amount.
4. Civil Misc. Writ Petititon No. 4584 of 2007 : In this case, the petitioner was granted loan to the extent of Rs. 1,65000/- to purchase tractor by U.P. Sahkari Gram Vikas Bank Ltd., Etawah in the month of Jan, 1996 and as a security, the land admeasuring 1.109 hectare was mortgaged. It is urged that petitioner repaid a sum to the tune of Rs. 2,70,536/- and still notice was issued for recovery of Rs. 1,58,225/-.
5. Civil Misc. Writ Petition No. 3463 of 2007 : In this case it would appear that the petitioner was sanctiioned loan of Rs. 2,50,000/- on 31-12-2000 for purchase of a tractor and to secure the loaned amount, agricultural land belonging to the petitioner was pledged to the Bank. It would further appear that the amount was agreed to be payable in nine year and the first installment of Rs. 80000/- was deposited in August, 2003 while second installment of Rs. 13,490/- was paid on 18-12-2000. Again, it would appear, a third installment of Rs. 95000/-was paid in June, 2004. A total sum of Rs. 1,88000/- is indicated to have been paid and yet the Bank issued citation demanding Rs. 2,50,000/- failing which it was postulated, the amount would be recovered as arrears of land revenue.
2. In Writ Petition No. 3463 of 2007 and also in Writ Petition No. 4585 of 2007, Reserve Bank of India was impleaded and notices were issued. Sri Yashwant Verma, learned counsel appearing for Reserve Bank of India, assisted the Court by placing certain material facts relating to agricultural land. It has been submitted by Sri Yashwant Verma that so far as rate of interest is concer
