9911796707
TMI Blog2008 (9) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... . Petitioners are sureties for the due payment of the loan. As there was default on the part of the borrower to pay the loan amount, in 1992 assets of the company were seized and sold in accordance with Section 29 of the State Financial Corporations Act, 1951 (the Act, for brevity). It is alleged that the sale-cum-recall notice under Section 29 of the Act was not issued to the petitioners. In August 2005 third respondent sent a communication dated 08.08.2005 to the second petitioner in W.P. No. 26014 of 2005 informing that an amount of ₹ 87.20 lakhs is due from the borrower. The petitioners were asked to pay the said amount failing which action under the Andhra Pradesh Revenue Recovery Act, 1864 (RR Act, for brevity) would be initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Andhra Pradesh 2000(2)ALD560 . Opposing the case, the learned Standing Counsel for SFC made two submissions. First, he contends that the debt sought to be enforced in accordance with Section 52-A of RR Act is not time barred debt. According to the learned Counsel on 05.10.1999 SFC issued notices to the petitioners calling upon them to pay a sum of ₹ 7,20,000/- failing which action was proposed under Section 52-A of RR Act. Secondly, he submits that when action is initiated subsequent to the enforcement of debt under Section 29 of the Act for recovery of balance dues, the ratio in Kalliyanikutty (supra) has no application. He placed reliance on a recent judgment of this Court in Kumar Chemicals and Fertilizers (P) Limited v. Andhr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nforcing liability of surety for transferring management to financial corporation and/or for ad interim injunction restraining Industrial Concern from transferring or moving machinery from the premises. The procedure to be adopted by the District Judge in respect of such applications is contained in Section 32 of the Act. Sub-section (9) thereof provides for an appeal to the High Court against order of District Judge passed under Section 32(7) of the Act. In 1985 the Act was amended. In addition to making amendments to various other provisions, Section 32G was added, which reads as under. 32G. Recovery of amounts due to the Financial Corporation as an arrear of land revenue Where any amount is due to the Financial Corporation in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1978. As per this notification rupee loans and foreign exchange loans (term loans) granted to Industries for land, buildings, plant and machinery, sanctioned by SFC are recoverable in the same manner as arrears of land revenue under provisions of Section 52A of RR Act. Thus, reading Section 32G of the Act and Section 52A of RR Act makes it clear that SFC may recover the loan amount due to it as arrears of land revenue under RR Act. It is no doubt true that Section 52A of RR Act does not specifically contemplate recovery of amounts due to SFC under Sub-section (1) of Section 52A of RR Act. But, notification in G.O. Ms. No. 287, dated 03.02.1978, referred to hereinabove specifically lays down that SFC may recover the loans and advances toget ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is expressly preserved. Instead of the bank or the financial institution filing a suit which is defended by the debtor, the creditor first recovers and then defends his recovery in a suit filed by the debtor. The rights of the parties are not thereby enlarged. The process of recovery is different. An Act must expressly provide for such enlargement of claims which are legally recoverable, before it can be interpreted as extending to the recovery of those amounts which have ceased to be legally recoverable on the date when recovery proceedings are undertaken. Under the Kerala Revenue Recovery Act such process of recovery would start with a written requisition issued in the prescribed form by the creditor to the collector of the District as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the period of limitation would not apply, and it is only in cases where SFC invokes Section 52A of RR Act read with Section 32G of the Act, period of limitation applies. To get over this aspect of the matter learned Standing Counsel has placed before this Court Xerox copy of the notice dated 05.10.1999 issued by the third respondent to the petitioners in both the writ petitions calling upon them to pay an amount of ₹ 7,20,000/-, failing which action was proposed under RR Act. This Court is not able to comprehend as to how a notice demanding payment by the creditor to the debtor extends period of limitation as per Section 18 of the Limitation Act, 1963. Secondly, there is not even a whisper about issue of such notices in the counter ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
