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TMI Blog1980 (2) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... th interest at the rate of 3 per cent per annum calculated from March 25, 1960. The mortgage deed provided that the respondent should spend ₹ 7,000 out of the loan advanced on the purchase of machineries for manufacturing panel pins and wire nails and the balance of ₹ 8,000 on the construction of a building for the purpose of the said industry and for no other purpose. The respondent also agreed to observe truly the Uttar Pradesh Rules for the Advance of Loan for Developing Cottage Industries in the Rural Area promulgated by the State Government and also to permit the Director of Industries, U.P. or any official deputed by him to inspect his accounts for the purpose of verifying whether the amount borrowed had been utilised for the specified purpose. The respondent hypothecated under the deed his house by way of security for the loan. Clause (8) of the mortgage deed, however, inter alia provided that if any of the installments payable by the respondent as mentioned in the deed was not paid on the stipulated date then the entire amount due under the deed could be recovered by the State Government as arrears of land revenue. The mortgage deed was signed, by the Director o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Government over and above the remedy by way of a suit, leaving it to the unguided discretion of the State Government to resort to one or the other and that the remedy available under the Act was more drastic or prejudicial to the party concerned than the suit. Accordingly the High Court quashed the recovery proceedings initiated by the revenue authorities. Aggrieved by the decision of the High Court, the Director of Industries, U.P. and the revenue authorities have come up in appeal to this Court. 4. The impugned Act was passed in the year 1965 to provide for speedy recovery of certain classes of dues payable to the State or to the Uttar Pradesh Financial Corporation. The Act contains three Sections. The first Section deals with the title of the Act and extent of its operation. The second Section is the definition Clause Section 2(b) of the Act defines the expression 'financial assistance' as any financial assistance (i) for establishing, expanding or running any industrial undertaking; or (ii) for purposes of vocational training; or (iii) for the development of animal husbandry; or (iv) for purposes of any other kind of planned development; or (v) for relief against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hhagganlal (P) Ltd. v. Municipal Corporation of Greater Bombay and Ors. [1975] 1 S.C.R The question for determination in this case is whether Section 3 of the impugned Act violates Article 14 of the Constitution. In order to decide this question, it is necessary to determine the object of the Act and whether the classification made between the State on the one hand and others who have also advanced moneys under mortgage deeds bears any reasonable relation to the object of the statute. The Act is passed with the object of providing a speedier remedy to the State Government to realize the loans advanced by it or by the Uttar Pradesh Financial Corporation. The State Government while advancing loans does not act as an ordinary banker with a view to earning interest. Ordinarily it advances loans in order to assist the people financially in establishing an industry in the State or for the development of agriculture, animal husbandry and for such other purposes which would advance the economic well-being of the people. The amounts so advanced are repayable in easy installments with interest which would ordinarily be lower than the rate of interest payable on loans advanced by banking inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), one expects the officer concerned to avail himself of the procedure prescribed by the Act and not to resort to the dilatory procedure of the ordinary civil court. In that case, the legality of the provisions of the Bombay Government Premises (Eviction) Act, 1955 and the provisions contained in Chapter VA of the Bombay Municipal Corporation Act, 1888 which provided a speedier remedy to recover possession of premises belonging to the State Government. and the Bombay Municipal Corporation which were in unauthorised occupation of any person was questioned on the ground that the remedies under the said provisions were more onerous than the remedy by way of a suit which was also available to the State Government and the Corporation. While upholding the above provisions, Alagiriswami, J. who spoke for the majority observed thus: The statute itself in the two classes of cases before us clearly lays down the purpose behind them, that is premises belonging to the Corporation and the Government should be subject to speedy procedure in the matter of evicting unauthorized persons occupying them. This is a sufficient guidance for the authorities on whom the power has been conferred. With ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly a Bank belonging to the princely State of Jhalawar. Its assets, including moneys due to it, became vested in the United State of Rajasthan under the covenant executed by the Ruler of Jhalawar along with other Rulers by which the United State of Rajasthan was formed. On the promulgation of the Constitution of India, the United State of Rajasthan became the State of Rajasthan in the Indian Union and all its assets including the Jhalawar State Bank and its dues vested in the State of Rajasthan. In that case the question which arose for consideration was whether moneys which had been advanced by the Jhalawar State Bank could be recovered by taking proceedings under the Rajasthan Public Demands Recovery Act, This Court held that the amounts could be recovered by the State of Rajasthan after the Bank had become vested in it as a public demand under the Rajasthan Public Demands Recovery Act and that the said Act did not offend Article 14 of the Constitution even though it provided a special facility to the Government as a banker for the recovery of the bank's dues for the Government could legitimately be put in a separate class for this purpose. In the latter case i.e. the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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