The central legal point established is the interpretation of the definition of 'state sponsored scheme' under the U.P. Public Moneys (Recovery of Dues) Act, 1972, and its application to the loan in question.

Cyriac Joseph, C.J.

1. The challenge in this writ petition is against Annexure 1 Recovery Citation dated 15-07-2005. According to the petitioner, the loan taken by him from the first respondent Bank was under the Prime Minister's Rojgar Yojana and not under any 'state sponsored scheme' as defined in Section 2(g) of the U.P. Public Moneys (Recovery of Dues) Act, 1972 and therefore, the loan amount cannot be recovered from him invoking the provisions of Section 3 of the said Act.

2. Section 2(g) of the U.P. Public Moneys (Recovery of Dues) Act, 1972. defines 'state sponsored scheme' as follows :

"2(g) "State-sponsored scheme" means a scheme sponsored by way of financial assistance by the State Government under which the State Government either advances money to a banking company or a Government company for the purpose of disbursing loans, advances or grants or for purpose of sale of goods on credit or hire-purchase or guarantees or agrees to guarantee the repayment of a loan, advance or grant or the payment of the price of goods sold on credit or hire-purchase and includes any other scheme of financial assistance, by a banking company or a Government company, which is declared to be a State-sponsored scheme by the State Government by the notification in the Gazette.

3. Section 3 of the said Act provides as follows:

"3. Recovery of certain dues as arrears of land revenue.(1) Where any person is a party-

(a) to any agreement relating to a loan, advance or grant given to him or relating to credit in respect of, or relating to hire-purchase of goods sold to him, by the State Government or the Corporation, by way of financial assistance; or

(b) to any agreement relating to a loan, advance or grant given to him or relating to credit In respect of, or relating to hire-purchase of goods sold to him, by a banking company or a Government company, as the case may be, under a State-sponsored scheme; or

(c) to any agreement relating to a guarantee given by the State Government or the Corporation in respect of a loan raised by an industrial concern or

(d) to any agreement providing that any money payable thereunder to the State Government or the Corporation shall be recoverable as arrears of land revenue; and such person -

(i) makes any default in repayment of the loan or advance or any instalment thereof; or

(ii) having become liable under the conditions of the grant to refund the grant or any portion thereof makes any default in the refund of such grant or portion or any instalment thereof; or

(iii) otherwise fails to comply with the terms of agreement then, in the case of the State Government, such officer as may be authorised in that behalf by the State Government by notification in the official Gazette and in the case of Corporation or a Government company the Managing Director or where there is no Managing Director then the Chairman of the Corporation, by whatever name called or such officer of the Corporation or Government Company, as may be authorised in that behalf by the Managing Director or the Chairman thereof, and in the case of a banking company, the local agent thereof, by whatever name called, may send a certificate to the Collector, mentioning the sum due from such person and requesting that such sum together with costs of the proceedings be recovered as if it were an arrear of land revenue.

(2) The Collector on receiving the certificate shall proceed to recover the amount stated therein as an arrear of land revenue.

(3) No suit for the recovery of any sum due as aforesaid shall lie in the civil court against any person referred to in Sub-section (1).

(4) In the case of any agreement referred to in Sub-section(l) between any person referred to in that Sub-section and the State Government or the Corporation, no arbitration proceeding shall lie at the instance of either party either for recovery of any sum claimed to be due under the said Sub-section or for disputing the correctness of such claim :

Provided that whe