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2012 Supreme(All) 1444
[2012(7) ADJ 520 (DB)]
ALLAHABAD HIGH COURT
BEFORE : SUNIL AMBWANI AND A.N. MITTAL, JJ.
M/s. ALKA ICE AND COLD STORAGES PVT. LTD. AND OTHERS ....Petitioners
Versus
STATE OF U.P. AND OTHERS ....Respondents
(Civil Misc. Writ Petition No. 10154 of 2012, decided on 29th May, 2012)
Counsel :
Rajesh Kumar Tiwari for the Petitioners; Ms. Sudha Pandey and C.S.C. for the Respondents.
Headnote:U.P. Agricultural Credit Act, 1973—Sections 11-A, 11 and 12—U.P. Agricultural Credit Rules, 1975—Rule 27—Recovery of Debts due to Banks and Financial Institutions Act, 1993—Sections 2(g), 34—Recovery—Bank loan—Recovery proceedings—Agricultural Credit Act, 1973—Legality of—Loan amount mortgaged against agricultural land—Recovery of outstanding amount as arrears of land revenue—Challenge against—1973 Act provides for a complete procedure for recovery of dues—Transaction in question not an ordinary commercial transaction—Act of 1993 does not override provisions of Act of 1973—1973 Act has all the attributes of 1993 Act—Recovery of agricultural debt, even if the outstanding amount is more than Rs. 10 lacs can thus be pursued under U.P. Act of 1973—No ground found to interfere with recovery proceedings drawn by respondent-bank under 1973 Act. [Paras 22 to 25]
Result; Petition Dismissed.
By the Court.—We have heard Shri Rajesh Kumar Tiwari, learned counsel for the petitioner. Ms. Sudha Pandey appears for the Punjab National Bank-respondent No. 6. Learned Standing Counsel appears for the State respondents.
2. The pleadings have been exchanged and thus with the consent of the parties, the writ petition was heard.
3. This writ petition is directed against the recovery proceedings initiated by the Punjab National Bank against the petitioner by forwarding a recovery certificate to the Collector, Aligarh under Section 11A of the U.P. Agricultural Credit Act, 1973 (for short U.P. Act of 1973) read with Rule 27 of the U.P. Agricultural Credit Rules, 1975, for recovering an amount of Rs. 3,56,99,410/- as on 31.10.2011 with further interest at the rate of 15.5% thereon towards the term loans namely term loan No. 1 dated 6.11.2007 of Rs. 200 lacs; term loan No. 2 dated 30.3.2009 for Rs. 50 lacs, term loan No. 3 dated 30.3.2009 for Rs. 14.28 lacs and the working capital loan dated 30.11.2007 for Rs. 110 lacs.
4. The entire outstanding amount of loan is sought to be recovered from M/s Alka Ice and Cold Storage Pvt. Ltd., the petitioner, which has its registered office at 82, Avas Evam Vikas Colony, G.T. Road, Aligarh through its Director Shri Mohan Singh, Smt. Usha Singh, Smt. Alka Singh and Shri Kamal Singh for which they have mortgaged their agricultural (bhumidhari) land detailed in the recovery certificate. The petitioners have also prayed for quashing citation dated 26.12.2011 issued by the Tehsildar, Ghaziabad for the outstanding amount, as disclosed in the recovery certificate and interest and recovery charges.
5. This is the second writ petition against the recovery of the loans sanctioned, disbursed and utilised by the petitioner to establish a cold storage on mortgaged land and machinery. Earlier the bank had initiated proceedings for recovery by giving notice under Section 13 (2) of the SARFAESI Act, 2002 after classifying the account as non-performing asset (NPA) on 1.10.2008 on the defaults committed by the petitioner. The notice was challenged in Writ Petition No. 64263 of 2009 in which the High Court directed the respondents by order dated 4.12.2009 to decide the objections and until the objections are decided no coercive steps were to be taken. The bank has dropped the proceedings under the SARFAESI Act, 2002 as it could not have proceeded to attach and sale the agricultural properties in view of the bar under Section 31 (i) of the SARFAESI Act, 2002. The bank has thereafter initiated the proceedings for recovery under the U.P. Act of 1973.
6. Learned counsel appearing for the petitioner submits that after receiving notice under Section 13 (4) of the SARFAESI Act, 2002, the Directors of the company approached the respondent bank to represent and plead the hardships in the re-payment of the loan amount and requested to grant some time. It is stated that the respondent bank agreed and consequently the company deposited Rs. 28,22,000/- in cash credit account from 25.3.2010 to 5.11.2011. Since an amount of Rs. 8,89,740/- was deposited in excess in the cash credit account, the bank transferred the balance amount to the term loan account, thus reducing the outstanding balance in the term loan account.
7. It is submitted that on 30.11.2011 the Director of the company in accordance with the reply to the notice dated 23.11.2011 pointed out illegalities in the notice given by the bank demanding the outstanding amount and the rate of interest, which was excessive. On 30.11.2011 a letter was sent by the bank to the petitioner to approach it for One Time Settlement. A Director of the company attended the camp on 12.12.2011. He was required to submit a detailed proposal for repayment of the outstanding amount upto 25.12.2011. On 23.12.2011 the proposal was revised to be accepted by the bank. Thereafter the petitioner approached the bank many times but no one attended and heard his difficulties. The bank, thereaf
