IN THE HIGH COURT OF KERALA AT ERNAKULAM
WA No. 1237 of 2005()
1. SYNDICATE BANK, PUNALUR BRANCH,
... Petitioner
Vs
1. S.S.SHERIFF, S/O.A.S.RAWTHER,
... Respondent
2. STATE OF ERALA, REP. BY THE SECRETARY
3. DISTRICT COLLECTOR, COLLECTORATE,
4. TAHSILDAR (RR), PATHANAPURAM TALUK,
For Petitioner :SRI.R.S.KALKURA
For Respondent :GOVERNMENT PLEADER
The Hon'ble the Chief Justice MR.V.K.BALI
The Hon'ble MR. Justice M.RAMACHANDRAN
Dated :09/01/2007
O R D E R
(V.K.BALI, C.J & M.RAMACHANDRAN, J)
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W.A.No. 1237 of 2005
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Dated this the day of January, 2007
JUDGMENT
Ramachandran, J:
A public sector bank has come up in appeal feeling
aggrieved about the judgment dated 07-01-2005 rendered
in O.P.No.5184 of 2001. The bank was the 4th respondent
therein, and had advanced a loan to the petitioner in the
Original Petition (Ist respondent herein). When the
repayment was not forthcoming, they had filed a suit and
obtained a decree on 20-05-1989. E.P.No.95 of 1991
thereafter had been filed and it is pending before the Sub
Court, Kottarakkara. Revenue recovery proceedings were
initiated against the petitioner thereafter. A copy of the
notice issued in the year 2001 shows the amount of arrears
as Rs.3,44,021/-, which is produced as Ext.P2.
2. Such proceedings had been subjected to
challenge by the petitioner, contending that after obtaining
a decree it was impermissible to proceed with fresh steps of
[WA No.1237 of 2005]
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revenue recovery. It was also argued that the bank loan was
time barred to be recovered under the Revenue Recovery Act
and therefore the proceedings were to be interdicted.
3. Adverting to the judgment in State Bank of
India v. Kuttappan [1998 (20 KLT 130], the learned single
Judge held that recovery of amounts under the Revenue
Recovery Act would be permissible as the words “on account
of loan advanced” would take in the amount due under the
decree obtained on the basis of that loan. Therefore, there
was no question of limitation. However, the learned Judge
relying on the judgment in Andhra Pradesh State
Financial Corporation v. M/s.Gar Re-Rolling Mills and
another [AIR 1994 SC 2151], held that since a decree had
been obtained, it would have been incompetent for the Bank
to proceed simultaneously with Revenue Recovery
proceedings. It was suggested that it would be open to the
Bank either to withdraw the Execution Petition under the
Revenue Recovery Act or to give up the revenue recovery
proceedings until the execution proceedings are terminated.
[WA No.1237 of 2005]
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This, the appellant submits, laid the Bank in deep trouble, and
an interpretation of the provisions do not justify the dictum.
4. Mr.R.S.Kalkuara, appearing on behalf of the
appellant–Bank submits that in Kuttappan’s case (cited
supra), the same issue had come up for consideration and the
learned Judge at that time had also noticed the presence of
the Supreme Court judgment in Andhra Pradesh State
Financial Corporation’s case, but was of the view that since
the point is covered by a Full Bench decision of this Court in
Kerala Fisheries Corporation v. P.S.John [1996 (1) KLT
814], the objection made on such lines would not have been
sustainable. According to him, the learned Judge erred in
sidelining the decision of the Kerala High Court and had
sought to rely on a Supreme Court judgment, which dealt
with an altogether different legal proposition.
5. Mr.Kalkura submits that the Supreme Court was
examining an issue concerning the State Financial
Corporations Act, and specifically advertence was made to
Sections 29 and 31 of the said Act. Analysing Section 29 of
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the Act, the Supreme Court had held that it spoke about the
Corporation’s right to take over the management or
possession of a defaulting industrial concern. Section 31 of
the Act authorised Corporations to apply to the District Judge
for sale of the property pledged or mortgaged with them and
for applying for interim injunctions restraining the industrial
concern from transferring or removing its machinery. The
court was also examining the scope and impact of the
expression “without prejudice”, as appeared in Section 31 of
the Act, and had indicated that the reach and scope of the two
remedies were essentially different. Counsel submits that it
is not the case here, as the defaulter was a decree debtor.
The decree required to be executed in a time frame given. No
funds were forthcoming and for efficacious recoveries there
could not have been any bar for resorting to the remedies
provided under the Revenue Recovery Act. He had
highlighted the observations made in Kuttappan’s case that
the Revenue Recovery Act enables recovery of amounts in
public interest. The intention obviously was to quicken the
[WA No.1237 of 2005]
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process of recovery, so that amounts will be available to the
Bank for grant of fresh loans to the needy. Therefore, it was
not possible to hold that the two remedies were mutually
exclusive. There was no detriment, he submits, or scope for
objection as available to a judgment-debtor to contend that
the financing institution should adopt soft methods, and there
is bar against them in proceeding against him in the most
efficient manner. It is contended that after recovery by one
method, automatically the other steps will be withdrawn, as
the situation may demand.
6. We find considerable merit in the arguments as
above. Of course, learned counsel appearing for the
respondents submits that there is clear detriment and the two
methods of recovery simultaneously engineered are mutually
exclusive. However, we fail to find any substance in the
submissions. This cannot be considered as a contingency
found by the Supreme Court while examining the scope and
impact of Sections 29 and 31 of the State Financial
Corporations Act.
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7. Mr.Kalkura also referred to a recent judgment of
the Supreme Court rendered on 29-11-2006 [M/s.Transcore
v. Union of India and another – Civil Appeal Nos.1374/06
and connected cases]. The issue had been examined in detail
and it had been observed that the position was not to be
understood that while electing procedure prescribed by
Section 31 of the Act, the rights under Section 29 of the Act
stand extinguished. More importantly, it had also been
specifically observed that when proceedings were
independently taken as permissible under two separate
enactments (DRT Act and NPA Act), the shackles referred to
in A.P.State Financial Corporation’s case (cited supra) may
not have relevance. This, according to us, is a complete
answer of the issue agitated. The proceedings for execution
of a decree, and the proceedings initiated under the Revenue
Recovery Act are independent of each other in scope and
purport, and contextually issue of prejudice is irrelevant, as
the obvious attempt is to keep off the evil days to the
maximum extent. Therefore, discretion of the Court cannot
[WA No.1237 of 2005]
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be exercised in favour of the petitioner in the writ petition,
and we should not be oblivious of the plight of a decree
holder/financier.
8. Consequently, the judgment of the learned single
Judge is set aside. The Original Petition will stand dismissed.
No order as to costs.
V.K.BALI
(CHIEF JUSTICE)
M.RAMACHANDRAN
(JUDGE)
mks/