High Court Of Madhya Pradesh
A. M. SAPRE
SANTOSH MISHRA - Appellant
Versus
CENTRAL BANK OF INDIA - Respondents
W. P. 851 Of 2002
Decided On : 02/13/2003
Revenue Recovery Certificate - Challenge to legality and propriety of a Revenue Recovery Certificate issued under M. P. Lok Dhan (Shodhya Rashiyon Ki Vasuli) Adhiniyam, 1987 - S. 3 of M. P. Adhiniyam read with Rule 5 of M. P. Lok Dhan (Shodhya Rashiyon Ki Vasuli) Niyam, 1988 - S. 34 of the Recovery of Debt Due to Bank and Financial Institutions Act - Supreme Court's interpretation of RDB Act and its exclusive jurisdiction over recovery of debts due to banks and financial institutions
Fact of the Case:
The petitioner challenged the legality and propriety of a Revenue Recovery Certificate issued for the recovery of a loan amount. The petitioner stood as a guarantor for a loan advanced by a bank to a private limited company. The impugned demand was raised under S. 3 of M. P. Adhiniyam read with Rule 5 of M. P. Niyam.
Finding of the Court:
The court quashed the impugned demand, citing the Supreme Court's interpretation of the Recovery of Debt Due to Bank and Financial Institutions Act, which established the exclusive jurisdiction of the Tribunal for adjudication of dues, and the overriding effect of the Act on recovery actions under other statutes.
Issues: The legality and propriety of the impugned demand, the interpretation of S. 34 of the Recovery of Debt Due to Bank and Financial Institutions Act, and the applicability of the Supreme Court's decisions in similar cases.
Ratio Decidendi: The Supreme Court's interpretation of the Recovery of Debt Due to Bank and Financial Institutions Act established the exclusive jurisdiction of the Tribunal for adjudication of dues and the overriding effect of the Act on recovery actions under other statutes.
Final Decision: The court allowed the petition, quashed the impugned demand, and stated that the bank could take action under the RDB Act or any other legally available Act.
( 1 ) THE decision rendered in this writ shall also govern the disposal of other writ petitions being W. P. Nos. 183, 189, 190, 255, 268, 285, 286, 338, 393, 445, 499, 579, 597, 623, 704, 1367 of 2001 and 223, 401, 474, 475, 514, 1004 and 1507 of 2002, because all these writ petitions involve identical issues of facts and law.
( 2 ) BY filing the writ under Articles 226 and 227 of the Constitution of India, the petitioner has challenged the legality and proprietry of a Revenue Recovery Certificate (Demand), dated 22-3-2001 for recovery of Rs. 52,22,330/- issued at the instance of respondent No. 1 - Central Bank of India under S. 3 of M. P. Lok Dhan (Shodhya Rashiyon Ki Vasuli) Adhiniyam, 1987 (for short "m. P. Adhiniyam") read with Rule 5 of M. P. Lok Dhan (Shodhya Rashiyon Ki Vasuli) Niyam, 1988 (for short "m. P. Niyam" ).
( 3 ) IN view of the short legal controversy sought to be raised by the parties in this writ, it is really not necessary to narrate the facts in detail except which are relevant for the disposal of writs.
( 4 ) THE respondent No. 1 - a Nationalised Bank has advanced a loan (cash credit facility) to respondent No. 3 - a Private Limited Company. The petitioner has stood as guarantor for due discharge of the loan advanced to respondent No. 3 and has accordingly executed guarantee deeds in favour of respondent - Bank. On 22-3-2001 (Annexure P-1) impugned Certificate of Recovery towards outstanding loan amount of Rs. 52,22,330/- and interest under the M. P. Adhiniyam read with M. P. Niyam was issued at the instance of respondent No. 1 calling upon the petitioner as also the respondent No. 3 to pay the said amount as arrears of land revenue by 30-3-2002 for their alleged failure to comply with the terms and conditions of the loan granted by the respondent No. 1. It is this demand which is impugned by the petitioner in this writ. So far as other writs are concerned, some of them are filed by the principal borrower and some by guarantor. However, in so far as the issue of law is concerned , it is common in all these writs because in all these writs, impugned demand is raised under S. 3 of M. P. Adhiniyam read with Rule 5 of M. P. Niyam. Notice of the writ was issued to respondents. They are served and represented.
( 5 ) HEARD Shri G. M. Chafekar, senior counsel with Shri Vivek Phadke, Shri Amit Agrawal, Shri Asudani, Shri Ajay Bagadia, Shri S. R. Saraf, Shri Ramesh Saboo, Shri N. K. Dave, Shri Rakesh Saxena, Shri P. V. Bhagwat, Shri S. S. Garg, Shri Milind Phadke, Shri U. K. Choukse, Shri S. M. Dagaonkar, Shri Anand Pathak, Ku. Rekha Shrivastava, counsel for petitioner and Shri D. S. Kale, Shri S. S. Garg, Shri B. B. L. Agrawal, Shri P. Verma and Shri S. Mukati, Government Advocates, Shri R. S. Sanghi, Shri Milind Phadke, Shri Jindal, Shri Vinay Zelawat, Shri Namjoshi, Shri K. Kushwah, Shri K. C. Gupta, Shri K. N. Puntambekar, counsel for respondents.
( 6 ) LEARNED counsel for the petitioner's while assailing the legality and validity of the impugned demand in the first place contended that it is per se without jurisdiction. In the second place, it was contended that in view of S. 34 of the Recovery of Debt Due to Bank and Financial Institutions Act (for short hereinafter referred to as R. D. B. Act), the provisions of M. P. Adhiniyam could not have been put into operation for issuing the impugned R. R. C. (demand ). In the third place, it was contended that the provisions of R. D. B. Act will alone prevail for recovery of alleged dues by virtue of S. 34 of the Act and hence, respondent Bank had no authority /jurisdiction to invoke the provisions of M. P. Adhiniyam for making recovery of the alleged dues by issuing the impugned demand. Learned counsel mainly relied on the law laid down by their lordships of Supreme Court in the case of Allahabad Bank v. Canara Bank, (2000)4 SCC 406. It may also be mentioned that after the conclusion of the hearing of these writs on 9-12-2002, the Supreme Court render
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