Agriculturist challenging recovery citation issued via U.P. Agricultural Credit Act, 1973, arguing existing DRT proceedings under NDBC Act, 1973 bars State Act recovery court held State Act applies to State sponsored loans.
Writ petition dismissed; recovery citation dated 16.9.2021 upheld.
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Court No. - 39
Case :- WRIT - C No. - 29234 of 2021
P etitioner :- Agriserve Producer Company Limited And Another Respondent :- Union Of India And 4 Others Counsel for Petitioner :- Kamal Krishna Roy
Counsel for Respondent :- A.S.G.I.,C.S.C.,Krishna Mohan Asthana
Hon'ble Mrs. Sunita Agarwal,J.
Hon'ble Vipin Chandra Dixit,J.
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Tribunal, the recovery certificate has been forwarded by the bank which has resulted in issuance of the recovery citation dated 16.9.2021. It is vehemently argued that the bank cannot proceed simultaneously under the Act, 1993 as also under the U.P. Agricultural Credit Act, 1973, for recovery of the same loan.
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M/s Alka Ice and Cold Storage Pvt ltd vs State of U.P reported in (2012) 7 ADJ 520 to assert that it was held therein that the Act of 1993 will not override the provisions of U.P. Act of 1973 as it is not hit by Section 34(2) of the Act, 1993. It is contended that the U.P Act of 1973 has all the attributes of the Act, 1993, to protect the interest of the borrower as well as the speedy recoveries of the dues of the bank sponsored by the Central Government and State Government under its various scheme for the benefit of agriculturist or for agricultural purposes. The loan extended to the petitioners herein is the loan under the Government Sponsored Scheme, which is covered by the U.P. Act of 1973. The recovery of outstanding loan as arrears of land revenue, therefore, cannot be faulted. The documents pertaining to the loan in question namely the sanction letter dated 5.1.2018 has been placed before us to demonstrate that the purpose of term loan was to set up a milk collection centre and trading of milk and milk products and the rate of interest applied therein was as applicable to SY and D-01 for agricultural loans. The term loan was to be released stage wise and the subsidy of 25% under dairy entrepreneurship development scheme was admissible at different stages as indicated in the sanction letter.
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other institutional credit agencies and for matters therewith or incidental thereto.
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the applicability of U.P. Act, 1972. Considering the definition of “Debt” under the 1993 Act and placing reliance on the full Bench judgment of this Court in Sharda Devi vs State of U.P reported in (2001) 3 UPLBEC 1941, it was held therein that the recovery can be made for the dues of more than Rs.10 lacs under the U.P. Public Moneys (Recovery of Dues) Act, 1972 as arrears of land revenue, if the financial assistance is provided under the State sponsored scheme.
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Recovery Tribunal established under the recovery of Debts due to Banks and Financial Institutions Act, 1973 as the amount was more than Rs.10,00,000/- and the Act, 1993 will override the provisions of the U.P. Agricultural Credit Act, 1973. It was argued therein that Section 2(g) of the Act, 1993 which defines 'debt' as liability of any person towards the bank/financial institution covers the debt or amount due which is recoverable under the Act of 1993. It was further argued that Section 34 of the Act of 1993 will have an overriding effect and sub section (2) of Section 34 does not mention the U.P. Act 1973, which otherwise saves the mode of recoveries under the Act of 1993 mentioned in that sub Section. The U.P. Act of 1973, as such, is not saved under Section 34(2) of the Act of 1993.
“ 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
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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. ”
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agricultural debt, even if the outstanding amount is more than Rs.10 lacs, can, thus, be pursued under the U.P. Act of 1973.
Order Date :- 17.11.2022 Harshita
Digitally signed by HARSHITA Date: 2022.11.19 12:23:25 IST Reason: Location: High Court of Judicature at Allahabad
3 issues framed by the court
Whether a bank can recover an agricultural loan advanced under a State sponsored scheme as arrears of land revenue under the U.P. Agricultural Credit Act, 1973 when a recovery application is pending b
Whether the doctrine of election of remedy prevents the bank from availing both the recovery proceedings under the Debt Recovery Tribunal Act, 1993 and the U.P. Agricultural Credit Act, 1973 simultane
Whether the definition of 'debt' under Section 2(g) of the Debt Recovery Act, 1993 includes advances made under State sponsored schemes recoverable under State legislation.
Colour shows how this judgement treated each authority
M/s Transcore vs Union of IndiaReferred¶16
AIR 2007 SC 712 · Who else cites this
M/s Alka Ice and Cold Storage Pvt ltd vs State of U.PAffirmed¶17
(2012) 7 ADJ 520
Sanjay Gupta vs State of U.P and othersExplained¶26
(2011) 8 ADJ 647
Sharda Devi vs State of U.PExplained¶27
(2001) 3 UPLBEC 1941
4 provisions across 2 enactments
Agriserve Producer Company Limited
Union Of India
Sunita Agarwal
Vipin Chandra Dixit
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
