2004 (3) TMI 788 - HC - Indian Laws

Summary

Issues Involved:
1. Limitation for recovering dues as arrears of land revenue under the U.P. Public Moneys (Recovery of Dues) Act, 1972.
2. Validity of recovery proceedings after a significant lapse of time.
3. Impact of waiver/write-off by the creditor on the recovery process.
4. Legality of arrest in recovery proceedings.

Detailed Analysis:

1. Limitation for Recovering Dues as Arrears of Land Revenue:
The primary issue was whether there is any limitation for recovering sums due as arrears of land revenue under the U.P. Public Moneys (Recovery of Dues) Act, 1972. The court observed that the Act does not explicitly provide any limitation period for recovery. However, it emphasized that the objective of the Act is "speedy recovery of dues." The court referred to the Apex Court's interpretation in *Director of Industries, U.P. v. Deep Chand Agarwal* and *V.R. Kalliyanikutty*, which highlighted that the Act was enacted to provide a speedier remedy for the State Government to realize loans. The court concluded that the absence of a specific limitation period does not imply indefinite recovery rights, especially when the recovery is not pursued promptly.

2. Validity of Recovery Proceedings After a Significant Lapse of Time:
The court examined whether the recovery certificate issued in August 2000 was barred by time. It noted that although the Act does not specify a limitation period, the reasonable period for recovery should align with the time during which a suit could be filed. The court emphasized that the law of limitation is in public interest, ensuring actions are taken within a reasonable time. The court found that the recovery proceedings initiated in 1979 and concluded in 1982, with the subsequent eighteen-year delay, barred the recovery in 2000 by time. The court cited *Sharda Devi v. State of Bihar*, asserting that even in the absence of a statutory limitation, actions must be taken within a reasonable period.

3. Impact of Waiver/Write-off by the Creditor on the Recovery Process:
The court considered the impact of the Corporation's Board of Directors waiving off/writing off the loan in 1986. It concluded that this action constituted a "conscious giving up of the right" to recover the amount. The court referred to definitions in Black's Law Dictionary, which describe waiver as "the intentional or voluntary relinquishment of a known right" and write-off as removing an asset deemed uncollectible from the books. The court held that the waiver/write-off, coupled with the time-barred status of the recovery, rendered the recovery proceedings initiated in 2000 invalid.

4. Legality of Arrest in Recovery Proceedings:
The court examined the legality of the petitioner's arrest in the recovery proceedings initiated in 2000. It concluded that arrest and detention must comply with the procedure established by law. Given that the recovery proceedings were time-barred and the loan had been waived off, the court found that nothing survived to justify the recovery or the arrest. The court held that the arrest was arbitrary, illegal, and violative of Article 21 of the Constitution, which guarantees the right to liberty.

Conclusion:
The court quashed the recovery proceedings initiated against the petitioners and awarded costs of Rs. 10,000/- to the petitioners. The judgment underscored the importance of timely action in recovery proceedings and affirmed that the waiver/write-off by the creditor and the lapse of time barred the recovery.