The provisions of the U.P. Public Moneys (Recovery of Dues) Act, 1972, can only be invoked in specific cases related to loan agreements, advances, grants, or hire-purchase of goods sold by specified entities, as interpreted by the court.

Alok Singh, J.

1. In all these writ petitions, identical questions of facts and law are involved, therefore, all these petitions are heard together and are being disposed of by this common judgment.

2. Petitioners of all the petitions are borrower, who have taken loan/financial assistance from the bank i.e. Uttarakhand Gramin Bank under the loan agreement available on each file as Annexure no.2. Since, petitioners failed to make repayment of the financial assistance received by them, bank was pleased to issue recovery certificates to the collector for recovery of the outstanding amount as arrears of land revenue under Section 3 of the U.P. Public Moneys (Recovery of Dues) Act, 1972.

3. Now, question arises - As to whether outstanding amount can be recovered by invoking the provisions of the U.P. Public Moneys (Recovery of Dues) Act, 1972?

Section 3 of the Act reads as under:

“Recovery of certain dues as arrears of land revenue – (1) Where any person is 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.

(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.

(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.”

(d) To any agreement providing that any money payable thereunder to the State Government [or any 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 installment thereof.

(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 of any installment thereof.

(iii) Otherwise fails to comply with the terms of the agreement.

4. 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 certificates 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 (1) between any person referred to in that sub-section and the State Government or the Corporation, no arbitration proceedings 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 whenever proceedings are taken against any person for the recovery of any such sum he may pay the amount claimed under protest to the officer taking such proceedings, and upon such payment the proceedings shall be stayed and the person against whom such proceedings were taken may make a reference under or otherwise enforce an arbitration agreement in respect of the amount to be paid, and the provisions of Section 183 of the Uttar Pradesh Land Revenu