# M/s Alka Ice and Cold Storages Pvt. Ltd. & others v. State of U.P & others

- **Citation:** (2012) 2 ILRA 851
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2012-05-29
- **Case number:** Civil Misc. Writ Petition No.10154 of 2012
- **Bench:** Sunil Ambwani, A.N. Mittal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-alka-ice-and-cold-storages-pvt-ltd-others-v-state-of-u-p-others-42183
- **Pages:** 11

## Headnote

Ms. Sudha Pandey
C.S.C.

U.P. Agricultural Credit Act1973-Section11-A-Recovery
of
loan
of
Rs.
3,56,99,410/-from M/S Alka Ice and
Cold Storage-as arrears of land revenue -
objection the amount excess than 10 Lac
can not be recovered as arrears of land
revenue-except
under
provisions
of
'Debt Recovery Act' or by suit for
recovery-held-misconceived-Act
of
73
being
Special
Act-providing
specific
mode of recovery after notice and appeal
by following Principle of Natural Justice -
attribute to Act of 1993 for protection of
the interest of borrower as well the
interest of bank for speedy recovery of
dues sponsored by Central or State Govt.
amount even exceed to Rs. 10 Lac can be
recovered
under
Act
of
73-petition
dismissed.

Held: Para 24

In the present case we are concerned
with the recovery under the U.P. Act of
1973, which is a special Act, which not
only provides for a specific modes of
recovery from movable, immovable and
the personal security, it also provides for
an order to be passed for recovery after
notice and an appeal to the appellate
authority, serving the principle of natural
justice. The U.P. Act of 1973 thus has all
the attributes of the Act of 1993 to
protect the interest of the borrower as
well as the speedy recovery of the dues
of the bank sponsored by the Central
Government
and
State
Government
under its various schemes for the benefit
of
agriculturists
or
for
agricultural
purposes. The recovery of agricultural
debt, even if the outstanding amount is
more than Rs.10 lacs, can thus be
pursued under the U.P. Act of 1973.
Case law discussed:
1993 (76) Company Case 523 (SC)

## Text

2 All] M/s Alka Ice and Cold Storages Pvt. Ltd. & others V. State of U.P & others
851
power dismissing the petitioner from
service under Rule 1975 can not be said to
be illegal.

10. In view of the above, there is no
merit in the writ petition. The writ petition
fails and is accordingly, dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.05.2012

BEFORE
THE HON'BLE SUNIL AMBWANI, J.
THE HON'BLE A.N. MITTAL, J.

Civil Misc. Writ Petition No.10154 of 2012

M/s Alka Ice and Cold Storages Pvt. Ltd.
and others

 ...Petitioners
Versus
State of U.P. & Ors.
 ...Respondents

Counsel for the Petitioner:
Sri Rajesh Kumar Tiwari

Counsel for the Respondents:
Ms. Sudha Pandey
C.S.C.

U.P. Agricultural Credit Act1973-Section11-A-Recovery
of
loan
of
Rs.
3,56,99,410/-from M/S Alka Ice and
Cold Storage-as arrears of land revenue -
objection the amount excess than 10 Lac
can not be recovered as arrears of land
revenue-except
under
provisions
of
'Debt Recovery Act' or by suit for
recovery-held-misconceived-Act
of
73
being
Special
Act-providing
specific
mode of recovery after notice and appeal
by following Principle of Natural Justice -
attribute to Act of 1993 for protection of
the interest of borrower as well the
interest of bank for speedy recovery of
dues sponsored by Central or State Govt.
amount even exceed to Rs. 10 Lac can be
recovered
under
Act
of
73-petition
dismissed.

Held: Para 24

In the present case we are concerned
with the recovery under the U.P. Act of
1973, which is a special Act, which not
only provides for a specific modes of
recovery from movable, immovable and
the personal security, it also provides for
an order to be passed for recovery after
notice and an appeal to the appellate
authority, serving the principle of natural
justice. The U.P. Act of 1973 thus has all
the attributes of the Act of 1993 to
protect the interest of the borrower as
well as the speedy recovery of the dues
of the bank sponsored by the Central
Government
and
State
Government
under its various schemes for the benefit
of
agriculturists
or
for
agricultural
purposes. The recovery of agricultural
debt, even if the outstanding amount is
more than Rs.10 lacs, can thus be
pursued under the U.P. Act of 1973.
Case law discussed:
1993 (76) Company Case 523 (SC)

(Delivered by Hon'ble Sunil Ambwani, J.)

1. We have heard Shri Rajesh Kumar
Tiwari, learned counsel for the petitioner.
Ms. Sudha Pandey appears for the Punjab
National Bank-respondent no.6. Learned
Standing Counsel appears for the State
respondents.

2.

The
pleadings
have
been
exchanged and thus with the consent of the
parties, the writ petition was heard.

3. This writ petition is directed
against the recovery proceedings initiated
by the Punjab National Bank against the
petitioner by forwarding a recovery
certificate to the Collector, Aligarh under
Section 11A of the U.P. Agricultural
Credit Act, 1973 (for short U.P. Act of
1973) read with Rule 27 of the U.P.
Agricultural Credit Rules, 1975, for
recovering an amount of Rs.3,56,99,410/-
852 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
as on 31.10.2011 with further interest at
the rate of 15.5% thereon towards the term
loans namely term loan no.1 dated
6.11.2007 of Rs.200 lacs; term loan no.2
dated 30.3.2009 for Rs.50 lacs, term loan
no.3 dated 30.3.2009 for Rs.14.28 lacs and
the working capital loan dated 30.11.2007
for Rs.110 lacs.

4. The entire outstanding amount of
loan is sought to be recovered from M/s
Alka Ice and Cold Storage Pvt. Ltd., the
petitioner, which has its registered office at
82, Avas Evam Vikas Colony, G.T. Road,
Aligarh through its Director Shri Mohan
Singh, Smt. Usha Singh, Smt. Alka Singh
and Shri Kamal Singh for which they have
mortgaged their agricultural (bhumidhari)
land detailed in the recovery certificate.
The petitioners have also prayed for
quashing citation dated 26.12.2011 issued
by the Tehsildar, Ghaziabad for the
outstanding amount, as disclosed in the
recovery certificate and interest and
recovery charges.

5. This is the second writ petition
against
the
recovery
of
the
loans
sanctioned, disbursed and utilised by the
petitioner to establish a cold storage on
mortgaged land and machinery. Earlier the
bank
had
initiated
proceedings
for
recovery by giving notice under Section 13
(2) of the SARFAESI Act, 2002 after
classifying the account as non-performing
asset (NPA) on 1.10.2008 on the defaults
committed by the petitioner. The notice
was challenged in Writ Petition No.64263
of 2009 in which the High Court directed
the respondents by order dated 4.12.2009
to decide the objections and until the
objections are decided no coercive steps
were to be taken. The bank has dropped
the proceedings under the SARFAESI Act,
2002 as it could not have proceeded to
attach and sale the agricultural properties
in view of the bar under Section 31 (i) of
the SARFAESI Act, 2002. The bank has
thereafter initiated the proceedings for
recovery under the U.P. Act of 1973.

6. Learned counsel appearing for the
petitioner submits that after receiving
notice under Section 13 (4) of the
SARFAESI Act, 2002, the Directors of the
company approached the respondent bank
to represent and plead the hardships in the
repayment of the loan amount and
requested to grant some time. It is stated
that the respondent bank agreed and
consequently
the
company
deposited
Rs.28,22,000/- in cash credit account from
25.3.2010 to 5.11.2011. Since an amount
of Rs.8,89,740/- was deposited in excess in
the
cash
credit
account,
the
bank
transferred the balance amount to the term
loan account, thus reducing the outstanding
balance in the term loan account.

7. It is submitted that on 30.11.2011
the Director of the company in accordance
with the reply to the notice dated
23.11.2011 pointed out illegalities in the
notice given by the bank demanding the
outstanding amount and the rate of interest,
which was excessive. On 30.11.2011 a
letter was sent by the bank to the petitioner
to approach it for One Time Settlement. A
Director of the company attended the camp
on 12.12.2011. He was required to submit
a detailed proposal for repayment of the
outstanding amount upto 25.12.2011. On
23.12.2011 the proposal was revised to be
accepted by the bank. Thereafter the
petitioner approached the bank many times
but no one attended and heard his
difficulties. The bank, thereafter, sent the
recovery certificate under the U.P. Act of
1973 giving rise to this writ petition. One
of the Directors of the bank namely Shri
2 All] M/s Alka Ice and Cold Storages Pvt. Ltd. & others V. State of U.P & others
853
Kamal Singh challenged the recovery in
Writ Petition No.1233 of 2012, which was
withdrawn as he had alleged there was
likelihood of compromise with the bank.

8. It is submitted that in view of the
Full Bench decision of this Court in Suresh
Chandra Gupta v. Collector, Kanpur
Nagar, AIR 2005 Alld. 320 the respondent
bank cannot recover the outstanding
amount form the petitioners as arrears of
land revenue. The bank, if it wanted to
recover the amount should have filed a suit
as the amount is more than Rs.10 lacs, in
the Debts Recovery Tribunal established
under the Recovery of Debts due to Banks
and Financial Institutions Act, 1993 (for
short the Act of 1993) and which will
override the provisions of the U.P. Act of
1973.

9. Learned counsel for the petitioner
has relied upon Section 2 (g) of the Act of
1993, which defines debt as liability of any
person
towards
a
bank/
financial
institution. The guarantees are given
during the course of business activity. The
amount due by a person namely the
guarantor and that debts within the
meaning of Section 2 (g) is recoverable
under the Act of 1993. Section 34 of the
Act of 1993 provides that the Act will have
an overriding effect. Sub-section (2) of
Section 34 saves the mode on recovery
under the Act of 1993, mentioned in subsection. The U.P. Act of 1973 is not saved
under Section 34 (2) of the Act of 1993. In
Unique Butyle Tube Industries (P) Ltd. v.
U.P. Financial Corporation, (2003) 2 SCC
455, the Supreme Court held with
reference to U.P. Public Monies (Recovery
of Dues) Act, 1972, as follows:-

"Section 34 of the Act consists of two
parts. Sub-section (1) deals with the
overriding effect of the Act notwithstanding
anything inconsistent therewith contained
in any other law for the time being in force
or in any instrument having effect by virtue
of any law other than the Act. Sub-section
(1) itself makes an exception as regards
matters covered by sub-section (2). The
UP Act is not mentioned therein. The mode
of recovery of debt under the UP Act is not
saved under the said provision i.e subsection (2). ... [T]he High Court went
wrong ... by holding that the proceedings
under the UP Act were permissible."

10. It is submitted that the Full Bench
in Suresh Chandra Gupta v. Collector,
Kanpur Nagar, AIR 2005 (All) 320
concluded its opinion in para 23 as
follows:-

"23. Our conclusions are as follows:

(a)In
case
of
repugnancy
or
inconsistency between the Central Act
under list-I and the State Act under list-II--
the Central Act shall prevail.

(b)The UP Public Moneys (Recovery
of Dues) Act, 1972 is neither contrary to
section 32-G of the State Financial
Corporation Act, 1951 nor is there any
repugnancy between the two. It is not void.

(c)The guarantors are covered under
the Recovery of Debt Due to Bank and
Financial Institution
Act,
1993
and
recovery proceedings against them can be
taken under this Act.

(d)Recovery proceedings can neither
be initiated against the principal borrower
nor against the guarantor under the UP
Public Moneys (Recovery of Dues) Act,
1972 if the debt is more than 10 lakhs:
854 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
recovery proceedings can only be initiated
under the 1993 Act."

11. Smt. Sudha Pandey appearing for
the respondent bank submits that in view
of the later judgment of this Court in M/s
Mak Plastic (P) Ltd. & Ors. v. U.P.
Financial Corporation & Ors., 2009 (1)
AWC 579; and Sanjay Gupta v. State of
U.P. & Ors., 2011 (8) ADJ 647 (DB),
which have followed Full Bench judgment
of this Court in Sharda Devi (Smt.) v. State
of U.P. & Ors., (2001) 3 UPLBEC 1941,
the recovery can proceed under the U.P.
Act of 1973, which provides for special
mode of recovery of agricultural credit.

12. It is submitted by Smt. Sudha
Pandey that in M/s Mak Plastic (P) Ltd.
(Supra) this Court has noticed that opinion
in Unique Butyle's case (Supra), which has
been referred by the Supreme Court to
Larger Bench. The State Government can
recover any amount due and payable to the
Financial Corporation (U.P. Financial
Corporation)
as
land
revenue.
The
recovery under Section (3) of the U.P.
Public Monies (Recovery of Dues) Act,
1972 of certain dues as arrears of land
revenue is made by the State Government
on the basis of agreement for the amount
advanced under any State sponsored
scheme. The State sponsored scheme does
not necessarily mean that the loan
advanced or grant is given by the State
alone. The State is only approver of the
scheme for financial assistance so that it
can be easier for a loanee to receive such
loans. If a loan is granted on the basis of
such scheme by the State Financial
Corporation, it is imperative on the State to
take steps to recover it irrespective of other
methods available under Central law.
Therefore, it is difficult to construe that the
State will not have any say to initiate
proceedings for recovery of loan or it
cannot recover the loan as arrears of land
revenue. In Unique Butyle's case the
Supreme Court held that the banks or
financial institutions have option or choice
to proceed either under the State Act or
under the modes of recovery permissible
under the Corporation Act, 1951. In case
of M/s Paliwal Glass Works & Ors. v.
State of U.P. & Ors. (Civil Appeal
No.5933 of 2005) decided on 21.9.2005, a
Division Bench of the Supreme Court held
that the Act of 1993 not only provides
expressly for exclusive adjudication by the
Tribunal but also the modes of recovery
and that Financial Corporation could only
recover the monies due to it under the
provisions of the Act of 1993, and not
under any other provision. The parallel
proceedings for recovery were allowed
only to the limited extent under Section 34
(2) of the Act of 1993. Section 32G of the
Corporation Act, 1951 cannot destroy the
exclusivity of the jurisdiction created under
the Act of 1993 as regards the mode of
recovery. The Corporation Act, 1951 is a
self-contained code and Section 32 (G)
should not be read as incorporating, by
reference the provisions of U.P. Act, 1972.
In Unique Butyle (Supra) the Supreme
Court held that scope of Section 32 (G) of
the Corporation Act, 1951, and its impact
on Section 34 (2) of the Act of 1993 was
not considered and thus the matter was
referred for consideration to Larger Bench.

13. In Sanjay Gupta v. State of U.P.
& Ors. (Supra) a Division Bench of this
Court considered the question of recovery
of loan of more than Rs.10 lacs under the
U.P. Act of 1972. It was held that recovery
certificate for recovery of loan of more
than Rs.10 lacs is not permissible to be
issued under Section 3 of the U.P. Act of
1972 but since the loan in that case was
2 All] M/s Alka Ice and Cold Storages Pvt. Ltd. & others V. State of U.P & others
855
given under a state sponsored scheme, it
did not come within the ambit of definition
of debt in Section 2 (g) of the Act of 1993
and therefore its recovery was not barred
by Section 18 of the Act of 1993. The
Division Bench relied upon the reasoning
given in M/s Mak Plastic (P) Ltd. & Ors. v.
U.P. Financial Corporation & Ors. (Supra)
and Full Bench judgment in Suresh
Chandra Gupta v. Collector, Kanpur Nagar
and concluded in para 19 as follows:-

"The judgment of the apex Court in
Unique Butyle (supra) that for recovery of
amount of more than 10 lacs, 1993 Act has
to be resorted and 1972 Act is not
applicable, is a pronouncement of the apex
Court which is binding on all courts.
However, in the said judgment, the
question was not for consideration as to
whether loan granted under the State
sponsored scheme are covered by the
definition of "debt" within the meaning of
section 2(g) whereas in the Full Bench
judgment in Sharda Devi's case (supra),
the
said
question
was
specifically
considered and answered. In the Full
Bench of Suresh Chandra Gupta and
another Vs. Collector, Kanpur Nagar
which was also a case where loan was
disbursed by the financial corporation and
the question whether the loan was under
any State sponsored scheme, had not
arisen nor considered. Thus, the said
judgment also does not help the petitioner
in the present case. When the Full Bench
judgment of our Court in Sharda Devi
(supra) had categorically held that the
loan granted under the State sponsored
scheme are not covered within the
definition of "debt" under section 2(g) of
1993 Act, the recovery under 1972 Act is
thus permissible for the Bank and no
objection can be taken by the petitioners
on the said ground. Thus, we do not find
any infirmity in the certificate for recovery
of the amount as arrears of land revenue
under 1972 Act and the contention of the
petitioner on the said ground cannot be
accepted."

14. In the present case it is stated in
the counter affidavit of Shri Girish
Chandra Agrawal, Authorised Officer,
Punjab National Bank, Branch Civil Lines,
Distt. Aligarh dated 20.3.2012, filed on
29.3.2012 that the petitioner failed to
deposit the regular installments of the loan
and thus answering respondent bank
classified all the loan accounts as nonperforming assets on 1.10.2008 and
proceeded under the SARFAESI Act,
2002. The petitioner deposited Rs.3 lacs on
13.9.2011, Rs.5 lacs on 29.9.2011, Rs.5
lacs on 17.10.2001, Rs.1.5 lacs on
20.10.2011, Rs.30,000/- on 4.11.2011 and
another Rs.30,000/- on 5.11.2011. A notice
was, thereafter, issued on 23.11.2011 to the
company and the Directors calling upon
them
to
pay
Rs.3,56,99,470/-
as
outstanding dues. In the objections filed
through
their
counsel
the
Directors
admitted that the loan facilities are by way
of agricultural loan, and alleged that the
bank cannot charge interest at the rate of
15.5%. The notice under Section 13 (4) of
the SARFAESI Act, 2002 was published in
the newspapers. Since Shri Mohan Singh is
the
Ex-Block
Pramukh
and
has
considerable political influence in the area,
no one came forward to offer bids, in
response to the auction notice and that sale
could not be completed even on the
reserved price. In the circumstances, the
bank proceeded under Section 11A of the
U.P. Act of 1973 by issuing recovery
certificates against the company as well as
Shri Mohan Singh, Smt. Usha Singh, Smt.
Alka Singh and Shri Kamal Singh.
856 INDIAN LAW REPORTS ALLAHABAD SERIES [2012

15. In paragraph 16 (VI) to (X) of the
counter affidavit it is stated as follows:-

"VI) That the Financial Assistance/
Loan was advanced by the respondent
bank to the petitioners for construction and
running of cold storage in Rural Area for
the purpose of storage of agricultural/
horticulture produce (Potatoes) of farmers
of the area of District Aligarh. The cold
storage is constructed on the Khata
No.439 Gata No.3/6 (a) Q 3/6 situated at
Vill. Sujanpur, Aligarh, hence there is no
agricultural land remains on the spot.

VII)
The
respondent
bank
has
forwarded the petitioner's project report in
respect of running of cold storage in rural
area (Village Sujanpur, Tehsil Khair,
District Aligarh) for sanction of subsidy of
Rs.50 lacs to the National Bank for
Agricultural
and
Rural
Development
(NBARD) under scheme of CISS and in
turn the NBARD has sanctioned Rs.50 lacs
and transferred the 50% of the subsidy i.e.
Rs.25 lacs in favour of M/s Alka Ice and
Cold Storage on 19.03.2009, which is
evident from the confirmation of deposit
letter of respondent bank. Photo copy of
the letter dated 19.03.2009 issued by
NBARD and Confirmation of Deposit
Letter of respondent bank is being filed
herewith and marked as Annexure No.CA1
to this affidavit.

VIII) The answering bank is also
annexing the photocopy of the Capital
Investment
Subsidy
Scheme
for
Construction/ Expansion/ Modernization
of
Cold
Storage
and
Storages
for
Horticulture Produce issued by National
Bank
for
Agricultural
and
Rural
Development as Annexure No.CA2 to this
affidavit and will produce the latest
circular dated 16th July, 2011 in respect of
Priority Sector Advances-Classification
Report wherein in Section 1 Under column
Agriculture Sub-Column Indirect Finance
the construction and running of cold
storage to store Agriculture Produce/
Products irrespective of their location
comes.

IX) That the respondent bank is also
annexing the copy of the letter dated
25.03.2012 written by the petitioner's
company wherein three postdated cheques
of Rs.20 lacs and one postdated cheque for
Rs.28 lacs were given to the respondent
bank by the petitioners but the same were
dishonored due to the insufficient fund in
the account of petitioner's in the concern
bank. Photo copy of the letter dated
25.03.2010 and 10.09.2010 is being filed
herewith and marked as Annexure No.CA3
to this counter affidavit.

X) That it is undisputed between the
parties that the financial assistance
provided to the petitioner for construction
and
running
of
Cold
Storage
for
Agricultural purpose within the meaning of
Section 2 (a) of the U.P. Agricultural
Credit Act, 1973 therefore, the respondent
bank issued recovery certificate under
aforesaid Credit Act and Rules.

In view of the above facts and
circumstances, the respondent bank has
proceeded under the provisions of U.P.
Agricultural Credit Act, 1973 and issued
the recovery certificate for recovery of
outstanding Dues from the petitioners."

16. The paragraph 20 is also relevant
for the purposes of deciding the case and is
quoted as follows:-

"20. That the contents of para no.25
and 26 of the writ petition are not admitted
2 All] M/s Alka Ice and Cold Storages Pvt. Ltd. & others V. State of U.P & others
857
in the form as stated. The contents under
para in reply are argumentative in nature
and suitable arguments may be advanced
at the time of hearing of case. However, it
is most respectfully submitted that:-

a) Admittedly the financial assistance
has been provided to the petitioner for the
purpose of construction and running of the
Cold Storage in the Rural Area for storage
of agricultural produce/ product and
horticulture produce (Potatoes) of the
farmers.
The
Agricultural
land
is
converted for use of running the cold
storage hence bar is not attracted as
provided in Sec.31 (i) of Act, 2002.

b) The U.P. Agricultural Credit Act,
1973 and U.P. Agricultural Credit Rules,
1975 is the valid piece of legislation.

c) A Division Bench of this Hon'ble
Court in the case "Sanjay Gupta Vs. State
of U.P. & others" reported in 2011 Vol.8
ADJ page 647 occasion to consider
whether recovery of outstanding dues more
than 10 lacs of rupees can be made as
arrears of the land revenue under the
provisions
of
U.P.
Public
Money
(Recovery of Dues) Act, 1972 and Division
Bench of this Hon'ble Court after
considering the Full Bench decision of this
Hon'ble Court rendered in the case of
"Sharda Devi v. State of U.P. and others"
reported in 2001 (3) UPLBEC 1941 and
considering the another Full Bench
decision rendering in case of "Suresh
Chandra Gupta Vs. State of U.P. and
others" reported in 2005 (3) UPLBEC
2210 and also considering the case of
Unique Butyle Tube Industries Ltd. Vs.
U.P. Financial Co. and others 2003 (2)
S.C.C. 455 and case of Eureka Forbs Ltd.
Vs. Allahabad Bank and others and other
cases came to the conclusion and held that
recovery can be made for rupees more
than 10 lacs under U.P. Public Money
(Recovery of Dues) Act, 1972 as arrears of
the land revenue if the financial assistance
is provided under the State Sponsored
Scheme by placing reliance on the case of
Sharda Devi.

In the present case also recovery
certificate and citation has been rightly
and validly issued under the provisions of
U.P. Agricultural Credit Act, 1973 for
recovery
of
outstanding
dues
for
Rs.3,56,99,410/- + interest + others
charges because the Credit Act, 1973 is a
valid piece of legislation and on the same
analogy as mentioned in the para 23 of the
Sharda Devi case to avoid repugnancy
between the Central Act and State Act,
both are a valid piece of legislation
therefore, in the peculiar circumstances of
the case when the proceeding fails under
the SARFAESI Act, 2002 the respondent
bank initiated proceeding under Credit
Act, 1973 as there is no bar to proceed
under Agricultural Act, 1973 in view of the
Section 37 of the SARFAESI Act, 2002."

17. The respondent bank has annexed
the letter of the General Manager, National
Bank
for
Agricultural
and
Rural
Development
(NBARD)
dated
19th
March, 2009 to the Asstt. General
Manager, Punjab National Bank, Regional
Office, Vibhav Nagar, Agra advising that
with reference to proposals under CISSCold Storage- NBARD has credited an
amount of Rs.25 lacs to the account of M/s
Alka Ice and Cold Storage, Civil Lines,
Aligarh with request to arrange minimum
credit to the borrower/ unit strictly in
accordance with the scheme guidelines.
The petitioner had on 5.9.2008 written to
the Branch Manager, Punjab National
Bank, Civil Lines, Aligarh for arranging
858 INDIAN LAW REPORTS ALLAHABAD SERIES [2012
inspection by Joint Monitoring Committee
so that second and final installment and
subsidy can be claimed.

18. The subsidy was given by
NBARD to the petitioner for setting up
cold storage for plantation and horticulture
produce providing for in Annexure-1;
capital
investment
subsidy
for
construction/ expansion/ modernisation of
cold storage and storages for horticulture
produce. The subsidy as claimed by the
bank was given under the Capital
Investment Subsidy Scheme (CISS) on the
recommendation of NBARD, which had
appraised the proposals and thus the loan is
specifically covered under Section 3 of the
U.P. Agricultural Credit Act, 1973.

19. The U.P. Act of 1973 was
enacted to make provisions to facilitate
adequate flow of credit for agricultural
production
and
development
through
banks
and
other
institutional
credit
agencies
and
for
matters
connected
therewith and incidental thereto. In Shyam
Singh v. Collector, Distt. Hamirpur,
U.P. & ors., 1993 (76) Company Case
523 (SC), the Supreme Court examined the
provisions of the Act and found that
Sections 10B, 11 and 11A prescribed three
procedures for recovery of the loan
advanced to an agriculturist. The definition
of 'agricultural purpose' in Section 2 (a) (ii)
includes the acquisition of implements and
machinery in connection with any such
activities. Section 10B is applicable, when
steps are taken for sale of any movable
property or agricultural produce. Section
11 prescribes the procedure for sale of land
or any interest therein, or any other
immovable property, which has been
charged or mortgaged for payment of the
amount advanced. Section 11A contains
special
provisions
namely
without
prejudice to the provisions of Section 10B
and 11 under which the bank may forward
to the Collector a certificate in the manner
prescribed specifying the amount due from
agriculturists. The amount due is to be
recovered by the Collector as land revenue
under Section 279 of the U.P. Zamindari
Abolition and Land Reforms Act. It was
held that where the recovery proceedings
are statutory in nature and the creditor is
itself the State, or an authority within the
meaning of Art.12 of the Constitution, the
right of the bank to follow one or the other
modes, separately or simultaneously, for
the realisation of the dues has to be
recognised.

20. In the present case the loan given
by the Punjab National Bank as an element
of State funding the application for grant of
loan under CISS-Cold Storage-NBARD,
with a subsidy of Rs.25 lacs, to be given
out of State funds. The financial assistance,
thus amount to purely a bank loan given by
way of commercial transaction. The
definition of bank under Section 2 (c) of
the U.P. Act of 1973 includes NBARD.
The loan was given for agricultural
purpose, which includes under Section 2
(a) (i) marketing of agricultural products,
their storage and transport and that
financial assistance under Section 2 (e)
includes loan, advance, guarantee or
otherwise for agriculture purpose. The Act
provides for recovery of dues under
Chapter IV, which includes Section 10B,
Section 11 and Section 11A. The recovery
under Section 11 (1) is through by an
officer specified by the State Government
by notification in the gazette. The State
Government has vide notification dated
7.1.1974 specified all Sub Divisional
Officers and Addl. Sub Divisional Officers
to be the Prescribed Authority within their
respective jurisdiction in the district. The
2 All] M/s Alka Ice and Cold Storages Pvt. Ltd. & others V. State of U.P & others
859
bank is required to make an application on
which the Prescribed Authority will pass
an order directing that any amount due to
the bank on account of financial assistance
be paid by the sale of the land or any
interest therein or other immovable
property
charged
or
mortgaged
for
payment of such amount, provided that no
order
shall
be
made
unless
the
agriculturists has been served with a notice
by
the
Prescribed
Authority.
The
provisions of the Limitation Act are
applicable and that the order passed by the
Prescribed Authority is subject to the result
of the appeal under Section 12 final and
binding on the parties. Section 12 provides
for an appeal against the order of
Prescribed Authority under Section 11 to
the appellate authority as may be specified
by the State Government by notification in
the gazette. By notification dated 7.1.1974
all the Collectors of the districts have been
given the powers of appellate authorities
within their respective jurisdiction.

21. Section 11 and 12 provide for a
complete procedure for recovery, which
provides for notice to the agriculturists,
and order to be passed by the prescribed
authority and appeal. Section 11 and 12 of
the Act are quoted as below:-

"11. Recovery of dues of a bank
through a prescribed authority.--

(1)
Notwithstanding
anything
contained in any law for the time being in
force an officer specified by the State
Government by notification in the Gazette
(hereinafter referred to as the prescribed
authority) may, on the application of a
bank by order, direct that any amount due
to the bank on account of financial
assistance given to an agriculturist be paid
by the sale of the land or any interest
therein or other immovable property which
is charged or mortgaged for the payment of
such amount :

Provided that no order of sale shall be
made under this sub-section unless the
agriculturist has been served with a notice
by the prescribed authority calling upon
him to pay the amount due.

(1-A)
The
provisions
of
the
Limitation Act, 1963, shall apply in
relation to an application under sub-section
(1), as if such application were a suit in
Civil Court for sale of the land or interest
therein or other immovable property for
enforcing recovery oft he sum referred to
in that sub-section.

(2) An order passed by the Prescribed
Authority shall, subject to the result of
appeal under Section 12, be final and be
binding on the parties.

(3) Every order passed by the
Prescribed Authority in terms of subsection (1) or by the Appellate Authority
under Section 12 shall be deemed to be a
decree of a Civil Court and shall be
executed in the same manner as a decree of
such Court by the Civil Court having
jurisdiction.

(4) [***]

12. Appeal- (1) Any party aggrieved
by an order of the Prescribed Authority
under Section 11 may within a period of
thirty days from the date of the order prefer
an appeal to such Appellate Authority as
may be specified by the State Government
by notification in the Gazette.
860 INDIAN LAW REPORTS ALLAHABAD SERIES [2012

(2) The Appellate Authority may,
after giving an opportunity of hearing to
the parties, pass such order as it thinks fit."

22. In the instant case the loan given
by the Punjab National Bank sponsored by
NBARD with subsidy is not a ordinary
commercial transaction for which the
provisions of the Act of 1993 may be
invoked. The U.P. Act of 1973 provides
for special mode of recovery, in which the
principles of natural justice inbuilt, with
the stages of notice, objection, reasons to
be given, limitation, finality to the orders
of Prescribed Authority and a statutory
appeal, before a recovery may be made.

23. It cannot be doubted that the
petitioner is in debt of a banking company
under Section 2 (g) of the Act of 1993. The
transaction, however, is not by way the
ordinary course of any business activity
undertaken by the bank or financial
institution falling within the meaning of
debt. A debt may be in the course of any
business activity undertaken by the bank or
financial institutions, it may also be a debt
advanced by the bank under a State
sponsored scheme or by the funds provided
by the Central Government or the State
Government for which a specific method
of recovery is provided in the State Act.
We are thus of the view that the Act of
1993, will not override the provisions of
the U.P. Act of 1973, even if it is not
specifically mentioned under sub-section
(2) of Section 34. In Unique Butyle Tube
Industries (P) Ltd. (Supra) the U.P.
Financial
Corporation
had
initiated
recovery, which was otherwise permissible
as the State Financial Corporation Act,
1951 has not been overridden by the Act of
1993 under the U.P. Public Monies
(Recovery of Dues) Act, 1972. In that
context it was held that the State Financial
Corporation Act could not have initiated
recovery under the U.P. Act of 1972,
which provides for separate modes of
recovery and such proceedings were not
relatable to proceedings under the State
Financial Act.

24. In the present case we are
concerned with the recovery under the U.P.
Act of 1973, which is a special Act, which
not only provides for a specific modes of
recovery from movable, immovable and
the personal security, it also provides for
an order to be passed for recovery after
notice and an appeal to the appellate
authority, serving the principle of natural
justice. The U.P. Act of 1973 thus has all
the attributes of the Act of 1993 to protect
the interest of the borrower as well as the
speedy recovery of the dues of the bank
sponsored by the Central Government and
State Government under its various
schemes for the benefit of agriculturists or
for agricultural purposes. The recovery of
agricultural debt, even if the outstanding
amount is more than Rs.10 lacs, can thus
be pursued under the U.P. Act of 1973.

25. For the aforesaid reasons, we do
not find any good ground to interfere with
the recovery proceedings drawn by the
Punjab National Bank under the U.P.
Agricultural Credit Act, 1973.

26. The writ petition is accordingly
dismissed.
---------
2 All] Shiv Charan Singh V. Additional Commissioner (Judicial), Meerut and others
861
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 10.07.2012

BEFORE
THE HON'BLE A.P. SAHI, J.

Civil Misc. Writ Petition No. 12531 0f 1995

Shiv Charan Singh

 ...Petitioner
Versus
Additional
Commissioner
(Judicial)
Meerut Division, Meerut and others

 ...Respondents

Counsel for the Petitioner:
Sri G.N. Verma
Sri M.C. Singh

Counsel for the Respondents:
C.S.C.

Imposition of Ceiling and Land Holding
Act,
1960-Section
10
(c)-Notice
declaring surplus land-by clubbing share
of brothers-by misinterpreting the bar of
Section 49 of the Consolidation Actadmittedly both claimants born prior to
abolition of Zamindari-are not entitled to
be jointly recorded over Khudkasht landheld-having
independent
rights
to
continue as tenure holders-their title can
not extinguished-authorities committed
great illegality by applying bar of Section
49 of U.P. Consolidation Act.

Held: Para 26

The parties may not have been at
variance during consolidation operations
and
not
having
got
their
shares
separated or mutated in records does not
take away their right to assert the same
so
long
as
their
title
has
not
extinguished. As explained above their
title survived and did not evaporate
merely because the entries were not
corrected which aspect is also covered
by the bench decision in the case of Ram
Chander (supra) referred to hereinabove.
The sons in their own independent right
continued as tenure holders and the
assertion of such rights by them is not
barred by applying Section 49 of the U.P.
Consolidation of Holdings Act, 1953 as
explained in the bench decision of Shri
Ram (supra). As a matter of fact the
reasoning
of
the
authorities
is
misconceived while applying Section 49
of the 1953 Act inasmuch as the
proceedings under the Ceiling Act are
not to determine such title that is
governed by a separate procedure under
the U.P. Z.A. & L.R. Act, 1950 or the U.P.
C.H. Act, 1953.
Case law discussed:
2011 (112) RD page 734 (Paragraph 7,
Paragraphs 48 to 49); 1969 AWR Pg. 686

(Delivered by Hon'ble A.P. Sahi, J.)

1. Heard Sri M.C. Singh, learned
counsel for the petitioner and the learned
Standing Counsel for the State.

2. This petition questions the
legality and validity of the orders passed
by
the
Prescribed
Authority
and
affirmance thereof in appeal by the
respondent no. 1 in proceedings under the
U.P. Imposition of Ceiling on Land
Holdings Act, 1960. An area of 7 bighas,
10 biswas and 11 biswansis has been
declared surplus in the hands of the
petitioner-tenure holder treating it to be in
excess of the maximum limit permissible
under the 1960 Act.

3. The petitioner Shiv Charan Singh
died during the pendency of the writ
petition and is now substituted by his
heirs.

4. The background of the case is that
the holding in question is ancestral and
was also recorded as Sir Khudkasht. Sir
Khudkasht is land brought under the
personal cultivation of the ex-zamindar