A. N. Varma, J. - (1.) BY means of this writ petition the petitioners have challenged the legality of certain recovery proceedings initiated by the U. P. Financial Corporation (hereinafter referred to as the Corporation) against the petitioners towards recovery of a loan advanced by it to the petitioners.
(2.) THE material facts are that the petitioners obtained a plot at Ghaziabad under a lease granted by the U. P. State Industrial Corporation with a view to installing a factory for electrical goods and steel furniture. By way of financial assistance the petitioners were sanctioned by the Corporation a loan of Rs. 1,00,000/- under a written agreement as well as a mortgage deed executed by the petitioners in favour of the Corporation by way of security for the re-payment of the loan. In pursuance of this loan the petitioners received the first instalment of Rs. 28,000/- on 21-6-1974. It is not disputed that the petitioners did not re-pay the amount advanced to them in terms of re-payment programme. THE Corporation thereupon served a notice of demand on the petitioners asking them to pay a sum of Rs. 37, 596-46 (vide Annexure CA-1) filed with the counter-affidavit of Onkar Singh Tyngi on behalf of the Collector and Tahsildar, Ghaziabad, towards the payment of the principal as well as the interest accrued thereon. On the petitioners' failure to comply with the notice, the Corporation sent a recovery certificate to the Collector, Ghaziabad for recovery of the aforesaid amount under the U. P. Public Moneys Recovery of Dues Act, 1972 as arrears of land revenue. In pursuance of the aforesaid certificate the Tahsildar took necessary steps for the auction sale of the aforesaid plot together with structures standing thereon. A sale proclamation was issued for 3rd May, 1972, a notice whereof was admittedly served on the petitioners on 26-4-1978. THE auction sale was postponed from time to time and eventually it took place on 8-8-1978 on which date it was sold to the respondent no. 5 and this Sal3 was confirmed on 14-12-1978. In pursuance of this a sale deed was duly executed in favour of the respondent no. 5 on 2-3-1979. THEreafter possession over the disputed property was also delivered to the said respondent on 6-2-1979. The assertions in the petition are that the petitioners were not informed of the postponed date of auction sale. The auction sale was held without issuance of any sale proclamation for the postponed dates. Further, the Corporation had given the petitioners to understand that it was directing postponement of the sale to enable the petitioners to clear off the outstanding dues and in spite of that assurance the Tahsildar went ahead with the auction sale. The corporation had even asked the Collector Dot to confirm the sale as according to it the price fetched at the auction. sale was much below the value of the property, but in spite of it the sale was confirmed. It is contended by the petitioners that legally resort could not be had by the Corporation to the U. P. Public Moneys (Recovery of Dues) Act as the Corporation was confined only to the specific remedy provided under Sec. 31 of the State Financial Corporation Act which was a Central Act and must therefore override the U. P. Public Moneys Recovery of Dues Act. The aforesaid allegations or contentions have been controverted by all the respondents in three separate counter-affidavits which have been filed respectively on behalf of the aforesaid Corporation, the Collector and Tahsildar as well as the private respondent no. 5, the auction purchaser.
(3.) THREE contentions have been raised by the petitioners and these are ;- (1) The auction sale having been postponed from time to time a fresh proclamation ought to have been issued in terms of Rule 285-G of the U. P. Zamindari Abolition and Land Reforms Rules in respect of each of the postponed dates including 8-8-1978 when the property was finally auctioned and as (according to the petitioners) fresh proclamations were not issued for the postponed dates, the sale held on 8-8-1978 must be held to be vitiated in law. (2) The entire recovery proceedings were void ab initio as the process of recovery of the dues provided under the U. P. Moneys (Recovery of Dues) Act, 1972 was not available to the U. P. Financial Corporation in view of Sees. 31 and 46-B of the State Financial Corporations Act. (3) The Corporation having written to the Collector and Tahsildar not to confirm the sale, the Collector acted with manifest illegality in confirming the sale. Having heard learned counsel for the parties, we find no merit in any of these contentions.;