Shri Prem Kumar Bhatia & Others vs Haryana Financial Corporation … on 14 November, 2008

     IN THE HIGH COURT OF PUNJAB AND HARYANA AT

                        CHANDIGARH.


                                         C.W.P. No.4883 of 2007
                                     Date of decision: 14.11.2008


Shri Prem Kumar Bhatia & others.
                                                   -----Petitioners
                               Vs.
Haryana Financial Corporation and others.
                                                -----Respondents


CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL
            HON'BLE MR JUSTICE L.N. MITTAL


Present:-   Mr. P. K. Mutneja, Advocate
            for the petitioners.

            Mr. Puneet Gupta, Advocate
            for respondents No.1-HFC.
                  -----

ORDER:

1. This petition seeks a direction for quashing the

recovery certificate dated 28.4.2006 (Annexure P-17)

2. Case of the petitioners is that certain loans were

advanced by Haryana Financial Corporation and Haryana State

Industrial Development Corporation for the business of the

petitioners, but on account of default in payment, the unit of the

petitioners was taken over by the respondents. Plant,

machinery, land and building were sold. Since, according to the

respondent No.1, the same were not sufficient to satisfy the
C.W.P. No.4883 of 2007

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loan, certificate (Annexure P-18) under Section 32G of the State

Financial Corporations Act, 1951 was issued on 27.4.2006 to

recover the amount as arrears of land revenue. It has also been

mentioned that the claim for repayment of loan was highly

inflated, inter-alia by capitalizing the penal interest, which was

against the law laid down by the Hon’ble Supreme Court in

Central Bank of India v. Ravindra 2002(1) SCC 367 para 55

=AIR 2001 SC 3095.

3. In the reply filed, action of sale and issuance of

recovery certificate have been sought to be justified on the basis

of contract between the parties.

4. We have heard learned counsel for the parties.

5. Though several questions have been raised, we

cannot go into the disputed questions except the issue of

capitalizing penal interest which is covered in favour of the

petitioners, by the law laid down by the Hon’ble Supreme Court

in Central Bank of India (supra). Without going into the

question whether in fact the penal interest has been capitalized,

we direct that if penal interest has actually been capitalized, the

respondents will make necessary adjustments. The remaining

questions, whether calculations made by the respondents are

valid and whether there is justification for sale or issuance of

recovery certificate, being disputed questions, the writ petition is

not an appropriate forum for settling such questions. The
C.W.P. No.4883 of 2007

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petitioners will be at liberty to take appropriate remedies, if so

advised.

6. The petition is disposed of accordingly.

                                    ( ADARSH KUMAR GOEL )
                                              JUDGE


November 14, 2008                          ( L. N. MITTAL )
ashwani                                           JUDGE