M.R.A.ANSARI - (1.) The appellant is the Delhi Financial Corporation incorporated under the State Financial Corporations Act, 1951 (hereinafter referred to as the Act). The appellant filed an application in the Court of District Judge, Delhi, under Section 31 of the Act for the recovery of Rs. 1,89,376.92 paise from the respondent herein, Shri Ram Prashad, the sole proprietor of Delhi Steel and Foundry Works, Delhi. According to the averments in this application, the Punjab Financial Corporation had advanced a loan of Rs. 1,50,000.00 to the respondent under a mortgage deed dated 22nd April, 1963 and that the said Corporation had advanced a further loan of Rs. 50,000.00 to the respondent under the mortgage deed dated 7th December, 1964. The respondent had hypothecated certain properties belonging to him by way of security for the said loans. The loans were repayable with interest by instalments which were specified in the mortgage deeds. Under the Punjab Reorganization Act, 1966, the appellant took over all the assets and liabilities of the Punjab Financial Corporation Within the Union Territories of Delhi and Chandigarh. The appellant, therefore, became entitled to recover the loans advanced to the respondent under the two mortgage deeds. The respondent committed default in the payment of the instalments and under the terms of the mortgage deeds, became liable to pay the entire balance of the loans together with interest. The appellant issued a notice to the respondent calling upon the latter to pay the entire balance of the loans amounting to Rs. 1,89,376.92 paise together with interest at 8 per cent per annum. In spite of the notice, the respondent failed to make the payment. The appellant, therefore, filed the petition under Section 31 of the Act praying (a) that the hypothecated properties of the respondent be sold and the sale proceeds thereof be paid to the appellant towards the loan amount due from the respondent; (b) that an ad interim injunction be granted restraining the respondent from transferring or removing the mortgaged properties without the permission of the Board of Directors of the appellant Corporation; (c) that an ad interim attachment of the mortgaged properties be made as required by Section 32 of the Act; and (d) that any other relief be granted Which the Court may deem just and equitable for the protection of the interests of the appellant-Corporation. The respondent resisted the application filed by the appellant on various grounds. One of the grounds was that the Act was ultra vires of the Constitution of India, because the remedy under the ordinary law was open to the appellant for the recovery of the amount and that, therefore, the appellant cannot have a double remedy and as such, the Act was ultra vires of the Constitution.
(2.) On the pleadings of the parties, the following issues were framed: 1. Whether the respondent did not agree to the terms and conditions of the mortgage as stated in the mortgage deed dated 22-4-1963? 2. Whether the respondent did not agree to the terms and conditions of the mortgage as stated in the mortgage deed dated 7-12-1964? 3. Whether the petitioner is entitled to recover the suit amount and to take legal proceedings in its own name under the circumstances as stated in paragraph 7 of the petition? 4. Whether the respondent agreed to pay the original loan of Rs. 1,50,000.00 by seven instalments with the terms and conditions as stated in paragraph 8 of the petition? 5. Whether the respondent agreed to pay the second loan of Rs. 50,000.00 by 18 half yearly instalments on the terms and conditions as stated in paragraph 9 of the petition? 6. Whether the properties mortgaged with the petitioner by the respondents are other than those mentioned in the mortgage deeds? 7. Whether the respondent committed default in the payment of instalments of the principal amount and interest? 8. Whether the petitioner is a body corporate established in the manner as stated in para 1 of the petition? 9. Whether Shri K. C. Pandey, Indian Administrative Service, is the Managing Director of the Corporation and its principal Officer duly authorised to sign and verify all documents connected with the legal proceedings for and on behalf of the Corporation and to present the application under Section 31 of the Act? 10. To what relief, if any, is the petitioner entitled? 11. Whether the State Financial Corporations Act, 1951 is ultra vires the Constitution of India as alleged by the respondents?
(3.) Issues Nos. 1 to 9 were decided in favour of the appellant and against the respondent, because the appellant had adduced evidence in support of issues Nos. 3, 4, 5, 7, 8 and 9 and the respondent had not adduced any evidence in rebuttal on these issues and because the respondent did not adduce any evidence on issues Nos. 1, 2 and 6, the burden of which issues had been cast upon the respondent. On issue No. 11, however, the learned District Judge held that the Act was ultra vires the Constitution. In view of the finding on this issue, the learned District Judge dismissed the petition filed by the appellant. The appellant has preferred the present appeal against the said judgment of the learned District Judge.;