Professional Documents
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Judgement
Judgement
With
ORDER
K.V. Viswanathan, J.
1. Leave granted.
Signature Not Verified
Digitally signed by
satish kumar yadav
Date: 2024.05.08
15:57:29 IST
Reason:
1
2. The present appeals arise from the judgment of a
Act, 1979 (for short “the Recovery of Dues Act”) read with
principle that the Limitation Act merely bars the remedy and
3
of Cold Rolled Strips, steel sockets, pipe and tube products,
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right under Section 29 of the State Financial Corporations
Act.
Rs.99.32 lakhs.
informed the said ING Vysya Bank that the latter will not be
responsible for the dues of the HSIDC Ltd, and that the
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“left/closed”. The order determining the amount due as Rs.
the Recovery of Dues Act for a sum of Rs. 243.11 lakhs, was
issued.
7
xiii. On 12.07.2013, appellants filed CWP No. 15983 of 2013
order.
executed.
Financial Corporation.
9
vi. The Haryana Financial Corporation has set-out the
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lodged with them was not in their jurisdiction and as
such recovery cannot be effected. Further, the directors
residing at Gurgaon & Delhi had shifted to some
unknown places. However, as the new addresses of one of
the Directors Sh. Charanjeet Gaba were found out, fresh
RCs were issued to Collectors Delhi (Central, East, South
& West), Gurgaon & Sri Nagar (Kashmir) on 19.04.2010
u/s 32G of the State Financial Corporations Act.
However, the Recovery Certificate dated 19.04.2010 was
quashed by the High Court of Punjab and Haryana vide
order dated 02.12.2011 passed in CWP No. 12226 of
2010 on the ground that the same was issued without
affording the Petitioners an opportunity of personal
hearing. The Corporation was given liberty to proceed
after hearing the petitioner and giving him opportunity to
file his objections.
xxx xxx xxx
7. Accordingly, personal hearings were given to
defaulting borrowers/guarantors for sum determination
under Section 32-G of the State Financial Corporations
Act, 1951 on 11.12.2013, 19.03.2014 and 06.08.2014,
objection raised by Sh. Charanjeet Gaba,
borrower/guarantor verbally during the personal hearing
as well as through various representations were dealt in
detail in the proceeding of personal hearing held on
06.08.2014. However, as no constructive proposal for
repayment/settlement under the new Settlement Policies
of HFC-2011 was recived from Sh. Charanjeet Gaba or
other borrowers/guarantors, Recovery Certificate was
issued to Collectors, Srinagar, Solan (HP), Gurgaon &
Delhi on 08.10.2014 for the recovery of Rs.
14,55,11,275/- with further interest @24% from
01.03.2014, the same stand challenged by the petitioner
before the Hon’ble High Court as stated above.”
(emphasis supplied)
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vii. The appellant challenged the proceedings dated 06.08.2014
viii. In the Special Leave Petition filed before this Court, the
follows:
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learned counsel, V.R. Kalliyanikutty (supra) has clearly held that
Acts, like the Recovery of Dues Act, are intended for speedy
barred debts.
8. The questions that fall for consideration are, firstly, are the
initiated against them under the Recovery of Dues Act are barred
13
Kalliyaikutty (supra) contrary to the holding in Bombay Dyeing
under the Kerala Revenue Recovery Act, 1968. This apart, the
object of the Kerala Revenue Recovery Act was only for speedy
legally recoverable.
Kalliyanikutty (supra) held that the Kerala Recovery Act did not
create any new right and that it merely provided a process for
speedy recovery. In view of the same, it held that since the Act
did not create any right, the person claiming recovery cannot
under the Kerala Revenue Recovery Act. The plea that the
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statute of limitation merely bars the remedy and does not touch
upon the right was not accepted by the Court by holding that the
Recovery Act and that unless the Act expressly provided for
that principle will not apply. Ultimately, the Court held that
limitation only bars the remedy and does not extinguish the debt.
16
time-barred wages did vest in the State, since the Act did not, in
provision for the workers making the claim, the Act was held to
existed.
12. It is well settled that the laws of limitation only bar the
17
Motichand (supra) was a case which inter alia dealt with
did not create any additional right to recover and enforce the
18
enforcement to reover the amount due, even if the amounts due
Act are relevant for the purposes of the present case. They read
as under:
19
(emphasis supplied)
under:-
16. This apart, for the purposes of the present case, the relevant
“2. Definitions
In this Act, unless the context otherwise requires, -
(c) “defaulter” means a person who either as principal or as
surety, is a party –
(i) to any agreement relating to a loan, advance or grant given
under that agreement or relating to credit in respect of, or relating
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to hire-purchase of, goods sold by the State Government or the
Corporation, by way of financial assistance;
(2) The Officer or the Managing Director, as the case may be,
referred to in sub-section (1), shall send a certificate to the
Collector mentioning the sum due from the defaulter and
requesting that such sum together with the cost of proceedings be
recovered as if it were an arrear of land revenue.
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sued. That the two are distinct appears from the fact that the
right of action may be destroyed (as by prescription) while the
debt remains
A power may be defined as ability conferred upon a person by
the law to alter, by his own will directed to that end, the rights,
duties, liabilities or other legal relations, either of himself or of
other persons. Powers are either public or private. The former
are those which are vested in a person as an agent or instrument
of the functions of the state; they comprise the various forms of
legislative, judicial, and executive authority…The correlative of
power is a liability. This connotes the presence of a power vested
in someone else, as against the person with the liability. It is the
position of one whose legal rights (in the wide sense) may be
altered by the exercise of a power…the most important form of
liability is that which corresponds to the various powers of
action and prosecution. Such liability is independent of the
question whether the particular action or prosecution will be
successful, and is therefore independent of (say) the duty to pay
damages for a civil wrong”
(emphasis supplied)
As would be clear from the passage above, a debt is not the same
thing as the right of action for its recovery. While the debt is the
right in the creditor with the corelative duty on the debtor the
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distinct power which continues notwithstanding that another
the bar of limitation. The same is the case with the provisions of
that scenario the further question would be: Whether the time
and since the Division Bench in the Impugned Order was not
engaged with that issue, we refrain from dealing with the same.
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“3. ...Under Section 71, however, there is a provision for
extending the Act to recovery of certain other dues if the
Government is satisfied that it is necessary to do so in public
interest. Under Section 71 it is provided as follows:
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institution or any class or classes of institutions and on such
Kalliyanikutty (supra):
10. The same reasoning would apply in the present case also.
The Kerala Revenue Recovery Act does not create any new right.
It merely provides a process for speedy recovery of moneys due.
Therefore, instead of filing a suit, (or an application or petition
under any special Act), obtaining a decree and executing it, the
bank or the financial institution can now recover the claim under
the Kerala Revenue Recovery Act. Since this Act does not create
any new right, the person claiming recovery cannot claim
recovery of amounts which are not legally recoverable nor can a
defence of limitation available to a debtor in a suit or other legal
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proceeding be taken away under the provisions of the Kerala
Revenue Recovery Act. In fact, under Section 70 of the Kerala
Revenue Recovery Act, it is provided that when proceedings are
taken under this Act against any person for the recovery of any
sum of money due from him, such person may, at any time before
the commencement of the sale of any property attached in such
proceedings, pay the amount claimed and at the same time
deliver a protest signed by himself to the officer issuing the
demand or conducting the sale as the case may be. Sub-section
(2) of Section 70 provides that when the amount is paid under
protest, the officer issuing the demand or the officer at whose
instance the proceedings have been initiated, shall enquire into
the protest and pass appropriate orders. If the protest is
accepted, the officer disposing of the protest shall immediately
order the refund of the whole or part of the money paid under
protest. Under sub-section (3) of Section 70, the person making a
payment under protest shall have the right to institute a suit for
the refund of the whole or part of the sum paid by him under
protest.
11. Therefore, under Section 70(3) a person who has paid under
protest can file a suit for refund of the amount wrongly
recovered. In law he would be entitled to submit in the suit that
the claim against which the recovery has been made is time-
barred. Hence no amount should have been recovered from him.
When the right to file a suit under Section 70(3) is expressly
preserved, there is a necessary implication that the shield of
limitation available to a debtor in a suit is also preserved. He
cannot, therefore, be deprived of this right simply by making a
recovery under the said Act unless there is anything in the Act
which expressly brings about such a result. Provisions of the said
Act, however, indicate to the contrary. Moreover, such a wide
interpretation of “amount due” which destroys an important
defence available to a debtor in a suit against him by the
creditor, may attract Article 14 against the Act. It would be ironic
if an Act for speedy recovery is held as enabling a creditor who
has delayed recovery beyond the period of limitation to recover
such delayed claims.
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12. In the case of New Delhi Municipal Committee v. Kalu Ram
[(1976) 3 SCC 407] relying on the Privy Council decision in
Hansraj Gupta v. Dehra Dun-Mussoorie Electric Tramway Co.
Ltd. [AIR 1933 PC 63 : 60 IA 13] this Court interpreted Section
7 of the Public Premises (Eviction of Unauthorised Occupants)
Act, 1958 in a similar way. Under that section where any person
is in arrears of rent payable in respect of any public premises,
the Estate Officer may, by order, require that person to pay the
same within such time and in such instalments as may be
specified in the order. While considering the meaning of the
words “arrears of rent payable” this Court examined whether
Section 7 creates a right to realise arrears of rent without any
limitation of time. The Court observed that the word “payable”
is somewhat indefinite in import and its meaning must be
gathered from the context in which it occurs. In the context of
recovery of arrears of rent under Section 7, this Court said that if
the recovery is barred by the law of limitation, it is difficult to
hold that the Estate Officer could still insist that the said amount
was payable. When a duty is cast on an authority to determine
the arrears of rent the determination must be in accordance with
law. Section 7 only covers arrears not otherwise time-barred.
include legally recoverable debts i.e. debts which are not time-
SCC 407 and third, is the decision of this Court Deep Chand
(supra).
31
Application was made under Section 186(1) of the Indian
under Section 186 since the section did not create new liability
Occupants) Act, 1958. The Court noted that the word ‘payable’
While the landlord could file an eviction suit on the ground that
this Court in KGU Trust (supra) which are of relevance for the
the principle that the Limitation Act only bars the remedy and
does not extinguish the debt. The Court also noted Halsbury’s
would only take away the remedy while leaving the right
set-off, the Limitation Act does not prevent him from recovering
a suit and another being a remedy under the Act – and that the
Constitutionality of the U.P Act, the Court noted that the object
of the U.P Act was to enable speedy recovery of money and that
(supra)]
29. While it is true that the U.P Act, similar to the Haryana
speedy recovery of dues, this does not take away from the fact
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that the right was vested in the Financial Corporations to recover
the loans through the said Acts, notwithstanding any other right,
which provides for a suit by the debtor for refund after payment
of the issue.
Board, 2023 INSC 560. One of the questions which the Court
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was faced with was whether the statutory bar on recovery of
would apply to such dues and that Electric Utilities could not
33. Let the papers along with this order be placed before
…..…………………J.
(Surya Kant)
…..…………………J.
(K.V. Viswanathan)
New Delhi;
May 08, 2024
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