Back
2020 Supreme(UK) 168
IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Sharad Kumar Sharma, J.
Jariph Alam - Appellant
Versus
District Magistrate Nainital And Others - Respondent
Writ Petition No. 899 of 2020
Decided On : 20-06-2020
Parikshit Saini, Advocate, Anurag Bisaria, Advocate, Sonia Chawla, Advocate, Paresh Tripathi, Advocate
Headnote:
U.P. ZAMINDARI ABOLITION AND LAND REFORMS ACT, 1950 - Section 279(1)(a) - Recovery of arrears of land revenue - Process of recovery - Issuance of writ of demand or citation to appear - Levy of recovery charges - Not permissible - Rule 284(2) - Exception - Sale of immovable property other than land - Not applicable to land mortgaged for advancement of loan.
Fact of the Case:
The petitioner, a marginal farmer, had taken an agricultural loan from the respondent bank. He defaulted in remittance of EMI. The bank initiated recovery proceedings by issuing a recovery citation under Section 280 of the U.P. Zamindari Abolition and Land Reforms Act, 1950, demanding a total of Rs. 6,46,728/-. The petitioner challenged the recovery citation, contending that the bank was not entitled to levy recovery charges as the recovery process had not reached the stage of sale of the mortgaged property.
Finding of the Court:
The court held that the bank was not entitled to levy recovery charges as the recovery process had not reached the stage of sale of the mortgaged property. The court relied on Section 279(1)(a) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, which provides for the issuance of a writ of demand or citation to appear as the first step in the recovery process. The court also relied on Rule 284(2) of the U.P. Zamindari Abolition and Land Reforms Rules, 1952, which provides that recovery charges can be levied only when immovable property other than land is sold. The court held that the exception in Rule 284(2) did not apply to land mortgaged for the advancement of a loan.
Issues: 1. Whether the bank was entitled to levy recovery charges as the recovery process had not reached the stage of sale of the mortgaged property.
Ratio Decidendi: The court held that the bank was not entitled to levy recovery charges as the recovery process had not reached the stage of sale of the mortgaged property. The court relied on Section 279(1)(a) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, which provides for the issuance of a writ of demand or citation to appear as the first step in the recovery process. The court also relied on Rule 284(2) of the U.P. Zamindari Abolition and Land Reforms Rules, 1952, which provides that recovery charges can be levied only when immovable property other than land is sold. The court held that the exception in Rule 284(2) did not apply to land mortgaged for the advancement of a loan.
Final Decision: The court allowed the writ petition and quashed the recovery citation issued by the bank. The court directed the bank to refund the recovery charges already collected from the petitioner.
JUDGMENT
Sharad Kumar Sharma, J. - This Writ Petition is heard through Video Conferencing.
2. The brief facts, which indulges consideration in the present Writ Petition is that the petitioner claims himself to be a poor marginal farmer, who is the holder of Kisan Credit Card, as issued by respondent No. 4 in his favour, bearing Account No. 200. He has submitted in the Writ Petition that he is recorded in the revenue records as Shreni-3 khastadar, with an Assami rights in relation to the land recorded in Khata No. 47; for the fasli year 1426 to 1431, which he has extended for the mortgage of the property for advancement of financial assistance for agricultural purposes, as would be apparent from the entries made in the khatuni in the last column, that for the purposes of advancement of agricultural loan, from respondent Nos. 3 and 4 his agricultural property was mortagaged.
3. According to the Kishan Credit Card / Passbook, as issued by the respondent No. 4, which happens to be the primary Agricultural Cooperative Credit Society, is shown to have sanctioned and advanced a loan of Rs.2,30,400/- towards 'Khadyan Ansha (ka)' and Rs. 57,600/- was advanced towards 'khadyan Ansha (kha)', during the period of the validity of the Kishan Credit Card from 2012 to 2015. The petitioner has come up with the case, that the said 'land' , which has been registered in his name, he is recorded therein as cotenure holder with the others lies in Village Chausala, Tehsil Haldwani, District Nainital, he is exclusively utilizing the land for agricultural purposes. Here the consideration of word, 'land' which is referred too, would be necessary, because the land here would be read in accordance with the land as defined under Section 3 (14) of the U.P. Z.A. & L.R. Act which is quoted hereunder :-
"(14) "Land" [except in Sections 109, 143 and 144 and Chapter VII] means land held or occupied for purposes connected with agriculture, horticulture or animal husbandry which includes pisciculture and poultry farming;
4. The petitioner had taken an agricultural loan from the respondent No. 3. Admittedly, as per the pleadings of the Writ Petition, after receiving the cash credit limit, as sanctioned to the petitioner, in the year 2012, for the total amount of Rs. 2,88,000/-, he had committed a default in remittance of EMI. As the consequence thereto, the bank had initiated the proceeding for recovery of the amount due to be paid as arrears of land revenue, by invoking the provisions contained under Section 280 of the Zamindari Abolition Act, by issuing of the impugned recovery citation dated 13th February, 2018, whereby, the bank has raised a total demand of Rs. 6,46,728/-, as an amount due to be paid by the petitioner to respondent Bank.
5. Under the prevalent law, the financial institutions, extending the financial assistance to the farmers or to any other industrial units or establishments, since they do not have their own machinery to enforce the recovery proceedings, in an event of default committed by the borrower, they normally reserve their rights as per the terms of the loan agreement; to recover the same by resorting to the process of recovery as provided under the U.P.Z.A. & L.R. Act as arrears of land revenue. The provisions of the U.P. Z.A. & L.R. Act has been given a special legal status in view of Article 31 (B) of the Constitution of India, which in accordance with its 9 Schedule, Entry 11; refers to and includes the provisions of U.P. Z.A. & L.R. Act, 1950 :-
"11. The Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 (Uttar Pradesh Act I of 1951)"
6. While resorting to the process of recovery by invoking the provisions contained under the U.P. Z.A. & L.R. Act, the same is to be governed by the Rules as framed under the Act, while exercising the Rule making powers under Section 294, which constitutes to be the part of Chapter X of the Act, in relation to the Land Revenue, under the Z.A. & L.R. Act, which deals with the processes of col
