The High Court dismissed a writ petition challenging recovery proceedings against a borrower who admitted the debt but claimed inability to pay due to illness and poor company management, holding that inability to liquidate debt does not stall lawful recovery.
No relief was granted; the writ petition was dismissed with no costs.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction)
WEDNESDAY, THE FIRST DAY OF JULY TWO THOUSAND AND NINE
PRESENT
THE HON'BLE MR JUSTICE B.SESHASAYANA REDDY WRIT PETITION NO : 14787 of 2003
Between:
..... PETITIONER
AND
.....RESPONDENTS
Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue an appropriate Writ, Order or direction, more particularly one in the nature of Writ of Mandamus, declaring the impugned proceedings No.AFC/RRB (E)/RR Act/2003.04 303 dated 265-2003 issued by 3rd respondent in threatening to proceed U/sec.52-A of Revenue Recovery Act for recovery of alleged due amount of Rs.16,03,975.00 as illegal, arbitrary and violative of principles of natural justice and consequently direct the Respondents not to take coercive steps till accounts are settled by furnishing the statements to the petitioner company.
Counsel for the Petitioner: MR.Y.ASHOK RAJ
Counsel for the Respondents.: MR. J.PARDHASARADHI, STANDING COUNSEL.
The Court made the following :
O R D E R :
Petitioner is the Managing Director of M/s.Skarp Pharmaceutical Pvt. Ltd., Hyderabad. He raised a loan of Rs.13.75,000/- for establishing the pharmaceutical company. When he failed to liquidate the liability, the A.P. State Financial Corporation issued notice under Section 29 of the A.P. State Financial Corporations Act, on 26.05.2003 directing him to liquidate the liability of Rs.14,06,472/-. He submitted a representation expressing his inability to liquidate the liability. However, he undertook to pay interest subject to granting certain time. Thereafter, the respondents 2 and 3 issued proceedings No. AFC/RRB(F)/RRACA/2003-04/313, dated 26.05.2003 for recovery of Rs.16,03,975/- under Section 29 of the A.P. State Financial Corporations Act read with Section 52-A of the Revenue Recovery Act.
3. Rule Nisi came to be issued on 23.09.2003. An order of interim suspension as prayed for also granted on the even date subject to the petitioner depositing Rs.4.00 Lakhs with the concerned branch vide WPMP No.18321 of 2003.
4. Heard learned counsel appearing for the petitioner and learned Standing Counsel appearing for the respondents.
5. Learned counsel appearing for the petitioner submits that the petitioner is not in a position to liquidate the liability because of his illhealth and the company is being not run properly.
6. The factual aspect of the petitioner borrowing money from the A.P. State Financial Corporation is not in dispute. The petitioner also did not dispute the outstanding liability. He expressed inability to liquidate the liability in para.5 of the writ affidavit. Inability to liquidate the debt is not a ground to stall the proceedings initiated by the respondents to recover the outstanding liability in accordance with law.
7. In that view of the matter, the writ petition is devoid of merits and the
same is hereby dismissed. No costs.
______________________ B.SESHASAYANA REDDY, J.
Date:01st July, 2009. cs ..... ASSISTANT REGISTRAR // TRUE COPY // SECTION OFFICER To 1. 2. 2CD copies Form-NIC-OGS/WP{VSMI}
2 issues framed by the court
Whether inability to liquidate debt is a ground to stall recovery proceedings initiated by the financial corporation under relevant Acts.
Whether the writ petition challenging the recovery proceedings is devoid of merits.
3 provisions across 2 enactments
B. Padmanabham
State Financial Corporation
The Branch Manager, A.P. State Financial Corporation
Special Tahsildar, A.P. State Financial Corporation
B.SESHASAYANA REDDY
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
