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TMI Blog2002 (7) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... der or direction in the nature of mandamus declaring the recovery proceedings in pursuance of the recovery certificate dated March 26, 2002, as barred by limitation for recovery of the loan of the year 1986. 2. It is, inter alia, alleged by the petitioners that M/s. GEE Kay Pipes Pvt. Ltd. is registered under the Companies Act, 1956, and that petitioner No. 1 is the managing director and petitioner No. 2 is the director of the said company, and that the U.P. Financial Corporation agreed in the financial year 1986-87 to grant term loan of Rs. 27,86,250 for machinery/equipment and other assets in favour of the said company, and that a sum of Rs. 26,03,050 could be released by the U.P. Financial Corporation out of the sanctioned amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings against the petitioners pursuant to the recovery certificate dated March 26, 2002, are barred by limitation in respect of the loan of the year 1986. In this regard, it is noteworthy that the petitioners have not laid the proper factual foundation in the writ petition for consideration of the plea of limitation. The petitioners have not filed the agreement, etc., entered into between the company and the U.P. Financial Corporation regarding the loan in question in the writ petition. The petitioners have also not filed the copy of the personal bond of guarantee executed by them as mentioned in annexure No. 5 to the writ petition. In the absence of relevant factual foundation and relevant documents, it is not possible to consider the plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by the company with the U.P. Financial Corporation and the terms and conditions of the personal bond of guarantee executed by the petitioners. However, the petitioners have not filed these relevant documents. In the absence of these documents, this plea raised on behalf of the petitioners cannot be considered. Even otherwise, the Full Bench decision in Smt. Sharda Devi s case ( supra ), mainly deals with the question of loan given under the State Sponsored Scheme. After examining the provisions of the U.P. Public Moneys (Recovery of Dues) Act, 1972, and other relevant provisions, it has been held by the Full Bench as follow (paragraph Nos. 31 and 32 of the said AIR page 12) : "...Therefore, if the borrower is not such a person who ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and circumstances of the case may justify. 32. In view of the discussion made above. We are clearly of the opinion that a banking company can recover its dues by taking recourse to section 3 of the Act only where the loan or advance or grant or credit has been given by it to a borrower under a State Sponsored Scheme and not otherwise. Any money advanced under case credit limit facility by itself is not determinative of the matter as there is no prohibition under the Act for the State Government to notify such a facility as a State Sponsored Scheme. The real test is whether the banking company has made the advance, etc., under a State Sponsored Scheme." This decision is not applicable to the present case. In the present case, loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said company to purchase the land and building of the unit for a sum of Rs. 3,75,000 as settled between the buyer and the Corporation. 9. In the circumstances, this plea raised on behalf of the petitioner cannot be accepted. 10. The fourth contention raised on behalf of the petitioner was that as the U.P. Financial Corporation had already taken possession of the unit of the company under section 29 of the State Financial Corporations Act, 1951, in the year 1991-92, it was not open to the U.P. Financial Corporation to take proceeding against the petitioners as guarantors under section 3 of the U.P. Public Moneys (Recovery of Dues) Act, 1972, for recovery of dues due against the company. Reliance in this regard has been placed upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se. As per the own showing of the petitioners, the U.P. Financial Corporation took over the possession of the unit of the company under section 29 of the State Financial Corporations Act, 1951, in the year 1991-92. The sale of the land and building of the unit of the company was made in September, 2001, for a sum of Rs. 3 lakhs and seventy-five thousand, and the sale of machinery etc., of the unit of the company was made on February 12, 2002, for a sum of Rs. 75,000. Thus as per own showing of the petitioners, the sale of the land/building and machinery, etc., of the company has already taken place. Thereafter recovery proceedings have been taken against the petitioners as guarantors. In view of this fact, it is evident that the decision in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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