# Surendra Kumar v. State of U.P. & Ors

- **Citation:** (2026) 2 ILRA 1625
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-02-17
- **Case number:** Writ C No. 43641 of 2007
- **Bench:** Ajit Kumar, Mrs. Swarupama Chaturvedi
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/surendra-kumar-v-state-of-u-p-ors-54184
- **Pages:** 7

## Text

2 All. Surendra Kumar Vs. State of U.P. & Ors.
1625
farming for its survival, particularly in view of the submission made by the petitioner in the
rejoinder that the same land was mortgaged with the Bank of India by the deceased at the time of
purchasing a tractor in the year 2011. This fact ought to have been properly examined by the
authorities instead of rejecting the petitioner's claim in a casual manner. 22. In view of the above
discussion, this Court is of the considered view that the rejection of the petitioner's claim is based
on an unduly drawn narrow interpretation of the scheme and merely based on assumptions not
supported by proper enquiry, and therefore, the writ petition deserves to be allowed and is hereby
allowed. The impugned order dated 25.08.2021 passed by the respondent no. 2, District
Magistrate, Kannauj, rejecting the petitioner's claim under the 'Mukhyamantri Krishak Durghatna
Kalyan Yojana' and the information order dated 31.07.2021 issued by respondent no. 3 are hereby
quashed. The matter is remanded to the District Magistrate, Kannauj, to reconsider the petitioner's
claim afresh in accordance with law and in the light of the observations made hereinabove, after
affording an opportunity of hearing to the petitioner and after conducting a proper enquiry, if
required. The said exercise shall be completed expeditiously, preferably within a period of eight
weeks from the date of production of a certified copy of this order. No order as to costs."

18. In view of the above legal proposition which is fully applicable to the facts of this case, in
our considered view, the writ petition deserves to be allowed. Thus the writ petition is allowed and
the impugned order dated 24.06.2022 passed by respondent no. 2, District Magistrate, Auraiya, is
accordingly quashed insofar as it relates to the petitioner's application regarding deceased Ajay
Kumar Singh. The matter is remanded to the District Magistrate, Auraiya, for fresh consideration of
the petitioner's claim in accordance with law. The petitioner may file a fresh representation within
four weeks from the date of receipt of a certified copy of this order, which shall be decided by the
competent authority by a reasoned and speaking order within a further period of eight weeks. No
order as to costs.
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(2026) 2 ILRA 1625
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 17.02.2026

BEFORE

THE HON'BLE AJIT KUMAR, J.
THE HON'BLE MRS. SWARUPAMA CHATURVEDI, J.

Writ C No. 43641 of 2007

Surendra Kumar ...Petitioner
Versus
State of U.P. & Ors. ...Respondents

Issue for consideration
The main issue before the court was whether recovery proceedings under general recovery statutes are
maintainable for large dues in presence of special recovery laws governing financial institutions.

Headnotes
1626 INDIAN LAW REPORTS ALLAHABAD SERIES
A. Civil law-Constitution of India,1950-Article 226-SARFAESI Act,2002- Section 13(4)-Recovery
of Debts Due to Banks and Financial Institutions Act,1993-U.P. Public Moneys (Recovery of
Dues)
Act,1972-Revenue
Recovery
Act,1890-
State
Financial
Corporations
Act,1951Maintainability of recovery-Recourse to U.P. Public Moneys (Recovery of Dues) Act,1972Revenue Recovery Act,1890-Amount exceeding Rs. 10 lac-Overriding effect of special statutesApplicability of SARFAESI Act,2002 and Recovery of Debts Due to Banks and Financial
Institutions Act,1993-Jurisdictional error-Improper exercise of recovery powers-Recovery
certificate liable to be quashed.(Para 11 to 23)
Held
The court held that the recovery proceedings initiated under general laws were without jurisdiction. The field
of recovery for financial institutions is governed by special enactments which have overriding effect. The State
Financial Corporation, being covered under the definition of financial institution, was required to adopt
measure under the SARFAESI Act. Consequently the recovery certificate and consequential orders were
quashed. (E-6)

Case law Cited
Man Mohan Rai Vs Financial Corporation & Ors, 2014 (8) ADJ 25 (DB)-referred to.

List of Acts
Constitution of India,1950
SARFAESI Act,2002
Recovery of Debts Due to Banks and Financial Institutions Act,1993
U.P. Public Moneys (Recovery of Dues) Act,1972
Revenue Recovery Act,1890
State Financial Corporations Act,1951

List of Keywords
Recovery, Financial Institution, SARFAESI Act, RDB Act, Arrears of land revenue, Jurisdictional error, Recovery
certificate, Quashing.

Case Arising from
CIVIL JURISDICTION: WRIT-C No.- 43641 of 2007
Surendra Kumar Vs. State of U.P. & Ors
From the judgment and order dated 17.02.2026 of the High Court of judicature at Allahabad.

Appearances for Parties
Adv. for Petitioner(s):-
J.P. Pandey
Advs. for Respondent(s):-
C.S.C., D. Awasthi, Mohd. Saleem Khan

(Delivered by Hon'ble Ajit Kumar, J.
&
Hon'ble Mrs. Swarupama Chaturvedi, J.)

1. Heard Sri J.P. Pandey, learned counsel for the petitioner, Sri Utkarsh Kharwar, learned
Advocate holding brief of Mohd. Saleem Khan, learned counsel for the State Financial
Corporation, Sri Mukul Tripathi, learned Standing Counsel for the State and perused the record.
2 All. Surendra Kumar Vs. State of U.P. & Ors.
1627

2. Petitioner before this Court claims to be a third party to the advance made by the State
Financial Corporation to the erstwhile proprietor of the proprietorship firm namely, M/s N.B.
Industries, which of course been run by his father.

3. It is stated that in order to realize the dues and clear the debts, the State Financial
Corporation had already auctioned the industrial unit of the firm and now has sought to per se
recovery of the interest part from the petitioner for seven years since death of his father. Two fold
arguments have been advanced by learned counsel appearing for the petitioner which is as under:-

(i) Firstly, the amount of recovery admittedly being more than Rs. 10 lakh is not
recoverable by the State Financial Corporation taking recourse to the provisions as contained under
the Revenue Recovery Act, 1890 or U.P. Public Moneys (Recovery of Dues) Act, 1972 as has been
admitted in the counter affidavit, by way of arrears of land revenue.

(ii) Secondly, the petitioner having not succeeded the proprietorship of his father, he
could not have been saddled with the liability to clear the dues of the proprietorship firm inasmuch
as the industrial unit having been auctioned and sold away, no liability would be upon a third party
who was not connected with the proprietorship firm.

4. In support of his first submission, learned counsel has placed reliance upon judgment of
Division Bench of this Court in the matter of Man Mohan Rai vs. U.P. Financial Corporation
And Others, 2014 (8) ADJ 25 (DB), and has placed before the Court paragraph nos. 2, 5, 7, 8, 10,
11, 12, 15, 16 and 17 of the said judgment.

5. It is contended that the legal issue was raised in the said case as to the maintainability of the
recovery proceedings under the U.P. Public Moneys (Recovery of Dues) Act, 1972 in the face of
the emergence of the new law in which name of Recovery of Debts and Bankruptcy Act, 1993 and
the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act,
2002.

6. Sri Pandey has placed relevant provisions of two Acts to buttress his arguments on point no.
(i) and also reliance has been placed on paragraph no. 44 of the counter affidavit.

7. Meeting the submissions, learned counsel for the State Financial Corporation though tried
to defend the recovery for the reasons assigned in the counter affidavit, but could not cite any
judgment to the contrary, nor could place any other judgment to draw any inference there from that
the ratio of the judgment in case of Man Mohan Rai (supra), stood diluted subsequently.

8. Having heard learned counsel for the respective parties and having perused the record, we
first proceed to dealt with the argument raised as point no. (i) and if, as we are of the considered
view, this argument is upheld, the recovery would stand vitiated in law and there may not be
necessity to dealt with point no. (ii).

9. From the recovery certificate which has been issued in the matter and which has been
brought on record at page no. 37 of the paper book, we find that it was issued under the Revenue
1628 INDIAN LAW REPORTS ALLAHABAD SERIES
Recovery Act, 1890 (as amended in the year 1966) by the Managing Director, U.P. Financial
Corporation and addressed to the Deputy Commissioner, Delhi (West), to issue a consequential
recovery order. It transpires from the record that he petitioned against the recovery certificate
before the authority but the Managing Director rejected the same vide order dated 28.08.2007
which has been challenged before this Court and therefore, it appears that before the consequential
action could have been taken by the Commissioner of Delhi, petitioner had approached this Court
and got the order for interim protection on 12.09.2007.

10. We have perused the recovery certificate and it transpires that the principal amount is
found to be nil whereas the interest has been charged for back seven years @ Rs. 7,340.06/- per day
w.e.f. 21.06.2005. It, therefore, clearly comes out that the State Financial Corporation has sold
away the entire assets of the firm to clear its debts and now for the interest part recovery has been
issued.

11. Upon reading the recitals contained in the recovery certificate, we find that the recourse
has been taken to the Revenue Recovery Act, 1890 to pursue the recovery of dues of the State
Financial Corporation under Section 32G of the State Financial Corporation Act, 1951. Relevant
provisions as contained under Section 32G of the Act, 1951 is reproduced hereunder:-

"Section 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 respect of any
accommodation granted by it to any industrial concern, the Financial Corporation or any person
authorised by it in writing in this behalf, may, without prejudice to any other mode of recovery,
make an application to the State Government for the recovery of the amount due to it, and if the
State Government or such authority, as that Government may specify in this behalf, is satisfied,
after following such procedure as may be prescribed, that any amount is so due, it may issue a
certificate for that amount to the Collector, and the Collector shall proceed to recover that amount
in the same manner as an arrear of land revenue."

12. A bare reading of the aforesaid provisions clearly demonstrate that the power is vested
with the State Financial Corporation to recover the dues from the industrial concerned by pursuing
it through the Collector of the District who would consequentially act as a recovery officer to
recover the dues by way of arrears of land revenue. Naturally, therefore, the Revenue Recovery
Act, 1890 would come into play for the purposes of initiation of action of recovery pursuant to the
recommendation made by the State Financial Corporation. However, upon perusal of para no. 33 of
the counter affidavit sworn by one Sri K.S. Sonkar, Deputy Senior Manager (Law), U.P. Financial
Corporation, the recovery certificate is claimed to have been issued under the U.P. Public Moneys
(Recovery of Dues) Act, 1972. Thus, in view of this admission made in para no. 33 of the counter
affidavit, there would be no quarrel about the status of the recovery as a land revenue and the
modus operandi is the U.P. Land Revenue Act.

13. Admittedly, the recovery is of more than one crore, may be by way of dues towards the
interest as against the loan advanced to the industrial concerned and, therefore, the question rightly
framed is, as to whether such recovery could have been pursued whereas the recovery under the
U.P. Public Moneys (Recovery of Dues) Act, 1972 could not be of an amount more than 10 lakhs
2 All. Surendra Kumar Vs. State of U.P. & Ors.
1629
in view of the provisions contained under the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (hereinafter referred to as 'Act of 1993') and more especially in the
circumstances when the Securitisation and Reconstruction of Financial Assets and Enforcement of
Securities Interest Act, 2002 had already come into existence prior to the recovery in question
being pursued by the State Financial Corporation.

14. The controversy as to the legal issue may not detain us any longer in view of the judgment
of the Division Bench which has remained unreplied to in the sense that no contrary judgment has
been cited before us. Division bench in Man Mohan Rai (supra), has dealt with this specific issue
and overriding effect of Section 34 of Act of 1993.

15. Although the question no. (i) as framed above would stand answered in favour of
the petitioner but we would like here to also notice the Act of 2002 which in view of the
judgment of Supreme Court can equally be invoked by way of measures to recover the dues
by the Banking as well as Non-Banking Financial Institution.

16. Section 2(1)(m) of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 defines 'financial institution' as under:-

 "Section 2(1)(m) : ?financial institution? means?(i) a public financial institution
within the meaning of section 4A of the Companies Act, 1956 (1 of 1956);

(ii) any institution specified by the Central Government under sub-clause

(ii) of clause (h) of section 2 of the Recovery of Debts Due to Banks and Financial
Institutions Act, 1993 (51 of 1993);

(iii) the International Finance Corporation established under the International
Finance Corporation (Status, Immunities and Privileges) Act, 1958 (42 of 1958);

(iiia) a debenture trustee registered with the Board and appointed for secured
debt securities;

(iiib) asset reconstruction company, whether acting as such or managing a trust
created for the purpose of securitisation or asset reconstruction, as the case may be;

(iv) any other institution or non-banking financial company as defined in clause
(f) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934), which the Central
Government may, by notification, specify as financial institution for the purposes of this
Act."

17. Section 2(1)(ma) of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 defines 'financial lease' as under:-
1630 INDIAN LAW REPORTS ALLAHABAD SERIES

"Section 2(1)(ma) ?financial lease? means a lease under any lease agreement of
tangible asset, other than negotiable instrument or negotiable document, for transfer of
lessor's right therein to the lessee for a certain time in consideration of payment of agreed
amount periodically and where the lessee becomes the owner of the such assets at the
expiry of the term of lease or on payment of the agreed residual amount, as the case may
be."

18. The State Financial Corporation of the State of U.P. is a creation of statutes to
advance loan and grant financial lease to raise an industrial concerned for any amount and
comprehensive Act namely, State Financial Corporation Act, 1951 was enacted by the State
Legislature. Since it is a body corporate, created under the statute without any financial
limits, this Non-Banking Financial Institution would not land into any of the exception
clauses of the Securitisation and Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 to hold it back from issuing any recovery for recovering its
dues to get cleared its debts.

19. In the circumstances, therefore, in our considered view the measures as prescribed
under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 would have been also adopted by the State
Financial Corporation.

20. Upon a pointed query being made, learned respondent Corporation could not bring
to our notice any provisions of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002, which may otherwise operate as a bar from
any action under this Act by the State Financial Corporation more especially in the
circumstances when it is Non-Banking Financial Institution falling within the meaning of '
financial institution' as prescribed under the Act of 2002 which is reproduced herein above.

21. So we are also of this view that in view of the provisions contained under the the
Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002, the measures ought to have been adopted under Section 13(4) by the State
Financial Corporation instead of taking recourse to the Revenue Recovery Act, 1890 or
U.P. Public Moneys (Recovery of Dues) Act, 1972.

22. Thus, in view of the above, the recovery certificate deserves to be quashed and the
petition deserves to be allowed on this score alone. So far as second question is concerned
regarding liability, that stage has yet not arisen because we are holding the recovery as
untenable. This question would be decided in an appropriate case when it comes for
consideration of this Court in a matter of recovery, though legally but whether reasonable.

23. Accordingly, the writ petition succeeds and is allowed. The order recovery
certificate dated 30.09.2005 is hereby quashed, so also the decision taken by the competent
authority of the State Financial Corporation to uphold the recovery certificate vide order
dated 09.07.2007, the same is also quashed. It is left open for the respondents to pursue the
2 All. Sughar Singh Vs. State of U.P. & Ors.
1631
recovery otherwise if tenable by taking recourse to such provisions as may be available in
law.
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(2026) 2 ILRA 1631
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.02.2026

BEFORE

THE HON'BLE PRAKASH PADIA, J.

Writ C No. 44707 of 2025

Sughar Singh ...Petitioner
Versus
State of U.P. & Ors. ...Respondents
ISSUE FOR CONSIDERATION
Whether a person who does not fall within the expression "person aggrieved" under Section 198(4) of the
U.P. Zamindari Abolition and Land Reforms Act, 1950, can maintain proceedings for cancellation of lease and
invoke writ jurisdiction under Article 226 of the Constitution challenging orders passed therein; and what is
the scope and meaning of the term "person aggrieved".
HEADNOTE
U.P. Zamindari Abolition and Land Reforms Act, 1950 - ss.198(4), 333 - Constitution of India -
Art.226 - Petition for cancellation of lease alleging that land was not vacant and allotment in
favour of private respondents was illegal - Proceedings initiated under Section 198(4) -
Dismissed by Collector - Revision dismissed - Writ petition filed - Maintainability.

Held: Proceedings under Section 198(4) can be initiated either suo motu or by a "person aggrieved" - A
"person aggrieved" must be a person who has suffered a legal grievance, i.e., a person against whom a
decision has been pronounced which has wrongfully deprived him of something or wrongfully affected his title
- The expression does not include a person who suffers from a psychological or imaginary injury or mere
disappointment or personal inconvenience.
A stranger who is not an aggrieved person cannot maintain a writ for certiorari or mandamus - A stranger
cannot be permitted to meddle in proceedings unless he satisfies that he falls within the category of aggrieved
persons - Existence of a legal right is a condition precedent for invoking writ jurisdiction under Article 226 - A
person shall have no locus standi to file a writ petition if he is not personally affected by the impugned order
or his rights have neither been directly nor substantially invaded - Only a person who has suffered a legal
injury can challenge the action.
In the instant case, aggrieved by the allotment of Plot No. 1560M in favour of Respondent Nos. 5 and 6, the
petitioner instituted proceedings for cancellation of the lease, asserting possession over the land, though
admittedly no formal allotment had ever been made in his favour - The petitioner had no legal allotment in
his favour at any point of time and thus had no enforceable right over the land in question - The petitioner
does not fall within the definition of "person aggrieved".
In absence of any legal injury or enforceable right, the writ petition is not maintainable. [Paras 10, 11, 13,
14, 15, 17] (E-5)