Dismissed

M/S Rashtriya Gramodyog Sansthan and Another v. Mukhya Karyapalak Adhikari U.P. Khadi and Others

Allahabad HC30 Sept 2019WRIC/41224/2002

Case brief

AI extract

What is this about?

A writ petition challenging recovery proceedings under the UP Khadi and Village Industries Board Act, 1960. The petitioners, having received an illegal loan for a non-notified industry, argued that recovery was invalid. The Court held that petitioners must return the illegal disbursement and allowed the recovery proceedings.

What did the court decide?

The writ petition was dismissed; recovery proceedings were upheld.

M/S Rashtriya Gramodyog Sansthan and Another Vs… — Banking and Recovery | Allahabad HC (2019)

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Court No. - 34

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Case :- WRIT - C No. - 41224 of 2002

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Petitioner :- M/S Rashtriya Gramodyog Sansthan And Another Respondent :- Mukhya Karyapalak Adhikari U.P. Khadi And Others Counsel for Petitioner :- Shashi Nandan,Jyant Kumar,S.P. Srivastava,U.N.Sharma

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Counsel for Respondent :- C.S.C.,I.M. Kushwaha,Sandeep Kumar Srivastava

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Hon'ble Sudhir Agarwal,J. Hon'ble Rajeev Misra,J.

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Heard Sri Jayant Kumar, learned counsel for petitioners and Mr. S.K. Srivastava, learned counsel for respondents.

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Learned counsel for petitioners submits that recovery certificate issued under the Uttar Pradesh Khadi and Village Industries Board Act, 1960 (hereinafter referred to as 'Act, 1960'), does not come within the scheduled 'village industry' and therefore, recovery could not have been made. Reliance is placed by learned counsel for petitioners on an interim order passed by this court in Writ Petition No. 39562 of 2001 (M/s Mandeep Grihaudyog Seva Sanstan and Another Vs. Uttar Pradesh Khadi & Gramodyog Board Anaj Dal Prasadhan) & Others, wherein this Court passed following interim order on 7.12.2001:

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"It is contended that the petitioners were granted loan for the purpose of setting an industry to manufacture spices/masala and the said industry has not been notified as "village Industries" within the meaning of section 2 (viii) of U.P. Khadi and Village Industries Board Act, 1960 and consequently the amount can not be recovered as arrears of land revenue as provided in section 35 A of the said Act.

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Sri Rajeev Sharma, who appears for respondent no.1 is granted three weeks time to file a counter affidavit. List for admisission in the week commencing 7.1.2002.

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Meanwhile, further proceedings for recovery of the amount from the petitioners in pursuance of recovery certificate dated 31.8.2001 shall remain stayed till 31.1.2002."

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Aforesaid writ petition was subsequently allowed by a short order dated 19.1.2004, which reads as under:

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" We have heard Sri S.D. Singh, learned counsel for the petitioners and Sri Rajeev Sharma, learned counsel appearing for respondents

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The respondents issued recovery certificate for recovering certain amount. this recovery certificate has yet not been withdrawn as stated in paragraph no.4 of the

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application dated 20.7.2002. Sri Rajeev Sharma states that recovery certificate has been withdrawn by the Respondents. Since the recovery has been withdrawn by the respondents, there is no question of recovering the amount from the petitioners.

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This writ petition is allowed with a direction to the respondetns that since recovery certificate issued against the petitioners has been returned back by the respondents, U.P. Khadi and Gramodyog Board (Anaj Dal Parishad), Kanpur, therefore the petitioners are not liable to pay any recovery amount."

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Placing reliance upon above quoted orders, learned counsel for petitioners submits that present writ petition is identical to writ petition, wherein said orders have been passed. He, therefore, submits that present writ petition is also liable to be allowed.

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However, when questioned as to which authority has granted loan to petitioners, learned counsel for petitioners submitted that loan has been granted by Uttar Pradesh Khadi and Village Industries Board, Lucknow under the provisions of Act, 1960.

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In case, contention raised by learned counsel for petitioners is accepted then disbursement of loan to petitioners by Board is void-ab-initio . Therefore, the logical coloray is that if disbursement of loan is itself illegal, then recovery of same is bound to be just and legal. Petitioners have taken public money illegally even though it could not have been disbursed by respondent for setting up an industrial unit, which was not covered within the definition of the term 'Village Industries' defined under section 2 (viii) of Act, 1960. Disbursement of loan to petitioners is therefore, illegal. As such, petitioners have no right to retain the loan amount disbursed illegally. Petitioners ought to have returned the amount without any delay. Thus, if Uttar Pradesh Khadi and Village Industries Board has taken steps for recovery, it cannot be said to be illegal for the reason that the loan advanced to petitioners is de-horse of Act, 1960.

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In such circumstances, petitioners who have approached this Court under Article 226 of Constitution of India, cannot be granted any relief in exercise of extraordinary discretionary jurisdiction. This Court cannot come to the rescue of the petitioners, so as to enable it to retain the loan amount, which has been disbursed illegally.

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We, therefore, find no reason to interfere with the impugned recovery proceedings initiated against petitioners.

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8. Dismissed.

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Order Date :- 30.9.2019 Arshad

M/S Rashtriya Gramodyog Sansthan and Another v. Mukhya Karyapalak Adhikari U.P. Khadi and Others

Case brief

What is this about?

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M/S Rashtriya Gramodyog Sansthan and Another v. Mukhya Karyapalak Adhikari U.P. Khadi and Others

Case brief

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What did the court decide?

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