Ashok Bhushan, J. - (1.) HEARD Sri Swapnil Kumar, learned Counsel for the petitioner, Sri N.K. Pandey and Smt. Sudha Pandey for respondent No. 3 as well as learned standing counsel representing the respondent Nos. 1 and 2.
(2.) THESE four writ petitions raising common questions of facts and law, have been heard together and are being decided by this common judgment. Counter-affidavit has been filed by the Bank to which rejoinder affidavit has also been filed by the petitioner. For deciding all the writ petitions, it is sufficient to refer the pleadings in writ petition No. 7347 of 2011 Sanjay Gupta v. State of U.P., which is being treated as leading writ petition. In all these writ petitions, the petitioners have prayed for quashing the recovery certificate dated 28.7.2010/27.8.2010 issued by the Punjab National Bank addressed to the Collector for recovering the amount of Rs. 12,45601/- plus interest under the provisions of the U.P. Public Moneys Recovery of Dues) Act, 1972. The brief facts giving rise to these writ petitions are; the respondent No. 4 Jai Ganpati Gramodyog Sewa Samit of which petitioner Sanjay Gupta was the Secretary and the respondent No. 5 was the President, made an application before the District Industry Officer, Jhansi for sanction of a loan for installing the unit of absorbent cotton under State sponsored scheme by the U.P. Khadi and Village Industry Commission (KVIC). The District Industry Officer vide letter dated 3.10.2006 directed the Branch Manager, Punjab National Bank Branch, Jokhanbagh Jhansi to disburse the term loan of Rs. 2,00000/- and working capital under the Cash Credit Limit of Rs. 15.00 Lacs. On the recommendation of the District Industry Officer, the Bank sanctioned fixed term loan of Rs. 2,00000/- and sanctioned 15,00000 cash credit Limit for working capital. An agreement was entered between the society and Bank on 10.11.2006. The account was opened with the signature of Secretary Sanjay Gupta and President Shailendra Maheshwari. Subsidy to the tune of Rs. 3,43,200 was also provided by the competent authority on 7.9.2007. At the time of sanction of the loan, the bye-law and memorandum of association was submitted by the society which contains the name of all the petitioners who have filed the above four writ petitions as office bearers/members of the society. On default being committed in repayment of the loan, recovery certificate dated 28.7.2010 was sent in which the names of Shailendra Maheshwari, Secretary and Sanjay Gupta Treasurer was mentioned. The recovery certificate was subsequently modified by letter dated 3.7.2010 in which name of all the writ petitioners were mentioned as office bears/members of the Committee of Management of the society. After recovery certificate dated 28.7.2010 was issued, representation was made by certain members against the amended recovery certificate dated 28.7.2010 on which the bank wrote a letter dated 6.9.2010 to the District Magistrate that recovery certificate dated 28.7.2010 be treated to be an effective recovery certificate and subsequent recovery certificate dated 26.8.2010 be treated as cancelled. The District Magistrate however, vide subsequent letter dated 26.10.2010 clarified that the responsibility for repayment of the loan is of the office bearers as well as members of the Committee of Management hence, recovery be effected on the basis of amended recovery certificate dated 26.8.2010. In writ petition No. 7347 of 2011 following reliefs have been prayed: "I. Issue a writ, order or direction in the nature of certiorari quashing the recovery certificates dated 28.7.2010/27.8.2010 (Annexure No. 4 and 5 to this writ petition) issued by respondent No. 3 so far they relates to the petitioner. II. Issue a writ, order or direction in the nature of mandamus restraining the respondent Nos. 1,2 and 3 and their agents to pursue the impugned recovery against petitioner. III. Issue any other suitable writ order or direction, which this Hon'ble Court may deem fit and proper under the facts and circumstances of the case." Sri Swapnil Kumar, learned counsel for the petitioner challenging the recovery certificate issued by the Bank has submitted that bank has no jurisdiction to issue recovery certificate under the provisions of U.P. Public Moneys (Recovery of Dues) Act, 1972. The loan being more than Rs. 10 lacs, it was obligatory for the bank to have taken steps for recovery in accordance with the provisions of Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as 1993 Act). It is submitted that any other mode of recovery by the Bank is without jurisdiction. Reliance has been placed on Section 1(4), 2(g) Section 17, 18 and 34 of the 1993 Act. Reliance has been placed on the judgment of the Apex Court in Unique Butyle Tube Industries (P) Ltd. v. U.P. Financial Corporation and another, (2003) 2 SCC 455; Eureka Forbs Ltd. v. Allahabad Bank and others, (2010) 6 SCC 193 Full Bench judgment of this Court in Suresh Chandra Gupta and another v. Collector, Kanpur Nagar, 2005(4) AWC 3342. In view of the aforesaid, it is submitted that recovery certificate issued under the 1972 Act is liable to be quashed. It is submitted that petitioners of writ petition Nos. 7077 of 2010 and 3121 of2011 are not office bearers of the society hence, they are not liable to pay any amount and recovery according to clause 13 of the bye-laws of the society, can be made only against office bearers of the society. It is submitted that amendment of the recovery certificate by amended recovery certificate dated 26.8.2010 is without jurisdiction.
(3.) LEARNED counsel for the respondent Bank refuting the submissions of learned counsel for the petitioners, contended that initiation of recovery under the 1972 Act is fully within the jurisdiction of the Bank. It is submitted that the loan which was taken by the Society whose office bearers are the petitioners, was a loan under State sponsored scheme and the provisions of 1993 Act are not applicable in so far as State sponsored scheme is concerned. It is submitted that for recovery of the loan granted under State sponsored Scheme, 1972 Act is still available. It is submitted that the loan in question cannot be termed as "debt" within the meaning of Section 2(g) of 1993 Act. It is submitted that the debt which is recoverable under the 1993 Act is a debt during course of any business activity undertaken by the Bank. In the present case, Bank has not sanctioned loan in exercise of its business activity rather loan has been sanctioned under the State sponsored scheme on recommendation of the District Industry Officer. The provisions of 1972 Act have not ceased to exist after the enforcement of 1993 Act and for recovery of loan granted under State sponsored Scheme, 1972 Act can be enforced. Reliance has been placed by the counsel for the Bank on Full Bench judgment of this Court in Sharda Devi (Smt.) v. State of U. P. and others, (2001) 3 UPLBEC 1941, judgment of the Apex Court in Unique Butyle Tube Industries (P) Ltd. v. U.P. Financial Corporation and another (supra) as well as Division Bench judgment in M/s Mak Plastic (P) Ltd. and others v. U.P. Financial Corporation and others, 2008 (7) ADJ 546. It is submitted that all the office bearers and members of the Committee of Management of the society are liable to repay the loan and the recovery certificate has rightly been amended on 26.8.2010. Allegations and counter allegations by one office bearer against another office bearer cannot be a ground for non payment of loan taken from the Bank. We have heard learned counsel for the parties and perused the record.;