IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH.
C.W.P. No.13042 of 2008
Date of decision: 10.11.2008
Bhagat Singh Bhungarni & others.
-----Petitioners
Vs.
The State of Punjab and others.
-----Respondents
CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL
HON'BLE MR JUSTICE L.N. MITTAL
Present:- Mr. G.R.P. Singh, Advocate
for the petitioner.
Mr. G.S. Gill, Advocate
for respondents.
-----
JUDGMENT:
1. This petition seeks quashing of letter (Annexure P-
2) to S.S.P. dated 7.1.2008, seeking police help and letter dated
9.6.2008 (Annexure P-5), taking over the mortgaged properties
which were valued at Rs.38.30 lac.
C.W.P. No.13042 of 2008
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2. Case of the petitioners is that petitioner No.1 took a
loan of Rs.1.95 lac on 11.8.1988 for purchasing a mini bus. On
default of payment, the Financial Corporation has taken deemed
possession of the mortgaged property. The petitioner has
already paid a sum of Rs.2.83 lacs which was adjusted against
interest from time to time. The Financial Corporation offered
One Time Settlement, vide letter dated 9.8.2001 (Annexure P-
1) on payment of Rs.2.12 lac in instalments. The petitioner
could not pay the said amount and thereafter, as on 15.1.2008,
demand of Rs.22,70,837/- was raised.
3. On 1.8.2008, while issuing notice, following order
was passed:-
“The petitioners had borrowed a sum of
Rs.01,95,000/- in the year 1988 for the purchase of
Mini Bus under “General Transport Scheme”. Till
date, the petitioner has paid a sum of Rs.02,83,000/-
which has been adjusted towards the interest. The
present account position is as follows:-
(Amt. in Rs.)
Outstanding/Default 22,70,837/-
Principal & expenses 1,85,895/-
Interest (with further intt. from 20,84,942/-
15-01-2008)
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The respondents have attached the residential house
of the petitioners and agricultural land of the
guarantors.
Learned counsel for the petitioners submits that
similarly situated persons who also availed of loan
from the respondents, have been granted concession
and one time settlement has been arrived at between
them. Therefore, the petitioners should have also
been treated similarly.
Learned counsel for the petitioners states that the
petitioners are ready and willing to make some
payment as full and final payment to the
respondents.
Notice of motion for 15.10.2008.
In the meantime, sale of the attached property of the
petitioners as well as the property belonging to the
guarantors shall not be effected. In order to test the
bonafides of the petitioners, they are directed to
deposit a sum of Rs.1 lac on or before the next date
of hearing.”
4. Learned counsel for the petitioner submits that the
amount of Rs.1 lac was deposited and further demands are
arbitrary, particularly when penal interest has also been
capitalized in violation of law laid down by the Hon’ble
C.W.P. No.13042 of 2008
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Supreme Court in Central Bank of India v. Ravindra AIR
2001 SC 3095. He has also submitted that the Financial
Corporation had a remedy of moving the Court under Section
31 of the State Financial Corporation Act, 1951 (for short, “the
Act”), but the Financial Corporation chose to proceed under
Section 29 of the Act. The Financial Corporation has, thus,
made discrimination against the petitioners in not granting
waiver, which has been granted in some other cases. The
Financial Corporation has proceeded against the house of the
petitioners which is exempted from attachment under Section
60 of the Civil Procedure Code.
5. In the reply filed, stand of the respondents is that
they are proceeding as per the contract in a commercial
transaction and the petition raises disputed questions as to the
amount due. The Financial Corporation had option of invoking
Section 29 of the Act and was not bound to proceed under
Section 31 of the Act. The allegation of discrimination has also
been denied. It has also been stated that Section 60 of Civil
Procedure Code was not applicable.
6. We have heard learned counsel for the parties.
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7. No doubt the petitioners have paid a sum of
Rs.2,83,000/- against the total principal amount of Rs.1,95,00/-,
which has mostly been adjusted towards interest, the payments
have been given over a scattered period and as per the contract,
certainly, more amount is due. Even if demand raised is higher,
quantification is a disputed question. The petitioners did not
pay as per One Time Settlement offer.
8. Disputed questions do arise as to the amount to be
paid by the petitioners and on disputed facts, it cannot be held
that nothing is due against the petitioner or that no claim can be
made by the respondents or that the respondents cannot proceed
under Section 29 of the Act against mortgaged properties.
Section 60 CPC does not apply. The said provision applies only
to execution of decree of civil court. There is no merit in the
plea of discrimination.
9. There is no dispute with the proposition that the
Corporation being a public authority has to act fairly, but
without settling the disputed questions, we cannot issue any
direction to the Financial Corporation, at this stage, except
saying that if the Corporation wishes to dispose of the property,
it will allow the petitioners to bring a buyer and the sale by the
C.W.P. No.13042 of 2008
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Corporation will be by following due process, in such a way
that best price of the property is fetched and after adjusting its
dues, the remaining amount be remitted to the petitioners. The
Corporation cannot capitalize penal interest as held in Central
Bank of India (supra) and if that has been done, the
Corporation will make necessary adjustment accordingly. If
any amount is recovered in excess, the petitioners will be
entitled to get the same refunded. For remaining disputes, if
any, the petitioners will be at liberty to have their liability
quantified in appropriate proceedings, if so advised.
10. The petition is disposed of accordingly.
(ADARSH KUMAR GOEL )
JUDGE
November 10, 2008 (L. N. MITTAL )
ashwani/gs JUDGE