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2011 Supreme(All) 2362
[2011(8) ADJ 647 (DB)]
ALLAHABAD HIGH COURT
BEFORE : ASHOK BHUSHAN AND RAN VIJAI SINGH, JJ.
SANJAY GUPTA .....Petitioners
Versus
STATE OF U.P. AND OTHERS .....Respondents
(Civil Misc. Writ Petition Nos. 7347, 3121 and 9383 of 2011, 70077 of 2010, decided on 25th August, 2011)
Counsel :
Ashok Kumar and Swapnil Kumar, Praveen Kumar, K. Shahi and Rajendra Prasad for the Petitioner; Sudha Pandey, N.K. Pandey and D. Vaishya for the Respondents.
Headnote:(A) U.P. Public Moneys (Recovery of Dues) Act, 1972—Section 3—Recovery of Debts Due to Banks and Financial Institutions Act, 1993—Sections 1(4), 2(g), 17, 18 and 34—Recovery—Loan more than 10 lacks—Recovery certificate—Issued under Section 3 of Act 1972—Whether rightly issued—Question of—After examining relevant legal position, case laws and provisions of both Act, High Court came to conclusion that after enforcement of Act 1993, recovery of loan of more than 10 lacks—Is not permissible by issue of recovery certificate under Section 3 of Act 1972—But as loan in instant case is under State Sponsored Scheme, it does not come within ambit of definition of debt contained in Section 2 (g) of Act 1993—Its recovery under Section 3 of Act 1972—Therefore, not barred by Section 18 of Act 1993—High Court clarified Sections 17, 18 and 34 of Act 1993 and their ambit—Petitioners, who were found to be office bearers or members of Committee of Management of petitioner society and hold office—Are liable for payment, even if any one of them has ceased to be office bearer or member of Management Committee, as clause 13 of Bye Laws of Samiti does not give any exemption from liability to him—As such he cannot escape from his responsibility. [Paras 7 to 10, 12, 18, 19 and 22 to 24]
(B) Precedents—Division Bench of High Court—Finding itself difficult to accept view taken by Full Bench on certain legal point—But is bound to accept that view of Full Bench—Did not make reference to larger Bench for reconsideration of view taken by Full Bench. [Para 18]
Hon’ble Ashok Bhushan, J.—Heard Sri Swapnil Kumar, learned Counsel for the petitioner, Sri N.K. Pandey and Smt. Sudha Pandey for respondent No. 3 as well as learned standing counsel representing the respondent Nos. 1 and 2.
2. These four writ petitions raising common questions of facts and law, have been heard together and are being decided by this common judgment. Counter-affidavit has been filed by the Bank to which rejoinder affidavit has also been filed by the petitioner. For deciding all the writ petitions, it is sufficient to refer the pleadings in writ petition No. 7347 of 2011 Sanjay Gupta v. State of U.P., which is being treated as leading writ petition. In all these writ petitions, the petitioners have prayed for quashing the recovery certificate dated 28.7.2010/27.8.2010 issued by the Punjab National Bank addressed to the Collector for recovering the amount of Rs. 12,45601/- plus interest under the provisions of the U.P. Public Moneys Recovery of Dues) Act, 1972.
3. The brief facts giving rise to these writ petitions are; the respondent No. 4 Jai Ganpati Gramodyog Sewa Samit of which petitioner Sanjay Gupta was the Secretary and the respondent No. 5 was the President, made an application before the District Industry Officer, Jhansi for sanction of a loan for installing the unit of absorbent cotton under State sponsored scheme by the U.P. Khadi and Village Industry Commission (KVIC). The District Industry Officer vide letter dated 3.10.2006 directed the Branch Manager, Punjab National Bank Branch, Jokhanbagh Jhansi to disburse the term loan of Rs. 2,00000/- and working capital under the Cash Credit Limit of Rs. 15.00 Lacs. On the recommendation of the District Industry Officere, the Bank sanctioned fixed term loan of Rs. 2,00000/- and sanctioned 15,00000 cash credit Limit for working capital. An agreement was entered between the society and Bank on 10.11.2006. The account was opened with the signature of Secretary Sanjay Gupta and President Shailendra Maheshwari. Subsidy to the tune of Rs. 3,43,200 was also provided by the competent authority on 7.9.2007. At the time of sanction of the loan, the bye-law and memorandum of association was submitted by the society which contains the name of all the petitioners who have filed the above four writ petitions as office bearers/members of the society. On default being committed in repayment of the loan, recovery certificate dated 28.7.2010 was sent in which the names of Shailendra Maheshwari, Secretary and Sanjay Gupta Treasurer was mentioned. The recovery certificate was subsequently modified by letter dated 3.7.2010 in which name of all the writ petitioners were mentioned as office bears/members of the Committee of Management of the society. After recovery certificate dated 28.7.2010 was issued, representation was made by certain members against the amended recovery certificate dated 28.7.2010 on which the bank wrote a letter dated 6.9.2010 to the District Magistrate that recovery certificate dated 28.7.2010 be treated to be an effective recovery certificate and subsequent recovery certificate dated 26.8.2010 be treated as cancelled. The District Magistrate however, vide subsequent letter dated 26.10.2010 clarified that the responsibility for repayment of the loan is of the office bearers as well as members of the Committee of Management hence, recovery be effected on the basis of amended recovery certificate dated 26.8.2010. In writ petition No. 7347 of 2011 following reliefs have been prayed:
“I. Issue a writ, order or direction in the nature of certiorari quashing the recovery certificates dated 28.7.2010/27.8.2010 (Annexure No. 4 and 5 to this writ petition) issued by respondent No. 3 so far they relates to the petitioner.
II. Issue a writ, order or direction in the nature of mandamus restraining the respondent Nos. 1,2 and 3 and their agents to pursue the impugned recovery against petitioner.
III. Issue any other suitable writ order or direction, which this Hon’ble
