Satish Chandra, J. - (1.) UNDER an agreement dated 17th February, 1969, the Petitioner took a loan of Rs. 5,700/ -from the U.P. Agro Industrial Corporation, Lucknow. The Petitioner paid some installments but defaulted in paying some others, with the result that the authorities issued a recovery certificate for recovering a sum of Rs. 3,787/ - as principal and Rs. 4,800/ - as interest. On receipt of the recovery certificate a warrant for the arrest of the Petitioner was issued by the Tehsildar, Mahrajganj. This warrant was executed by the Amin who arrested the Petitioner on or about 2nd February, 1975. Near about this lime some properly, other than the property which was mortgaged under the instrument of loan, was put up for auction and sold for Rs. 8,000/ -.
(2.) THE Petitioner challenges these proceedings on the ground that they were illegal. The U.P. Public Moneys (Recovery of Debts) Act No. XXIII of 1972 applies to moneys advanced as loans by inter alia Corporations owned or controlled by the State Government. The U.P. Agro Industrial Corporation, which, in the present case, had advanced the money, is a Corporation within meaning of this Act. Section 3 of the Act makes the Act applicable to recovery of loans of the kind involved in the present case, because the loan was due to a corporation, as defined, under an agreement relating to the loan, Section 4 is an exception to Section 3. Under Clause (b) of Sub -section (2) of Section 4 it is provided that in every case of mortgage, charge or other encumbrances on immovable property, such property or, as the case may be, the interest of the defaulter therein, shall first be sold in proceedings for recovery of the sum due from that person as if it were an arrear of land revenue, and any other proceeding may be taken thereafter only if the Collector certifies that there is no prospect of realisation of the entire sums due through the first mentioned process within a reasonable time.
(3.) IT is thus clear that the recovering authorities are not free to take recourse to any one of the various modes of recovering money as arrears of land revenue prescribed either by the Land Revenue Act or by the Zamindari Abolition Act. Their power is curbed by this express provision. The prohibition is that they will first sell the mortgaged property. They can take recourse to any other mode of recovery only if the Collector certifies that there is no prospect of realisation of the entire sum through the first mentioned process. In the present case the recovering authorities made no attempt whatsoever to proceed to sell the mortgaged property. They, on the other hand, put up for auction some other agricultural property belonging to the debtor. That property was sold for Rs. 8,000/ -. It is obvious that the process to recover the money from the other property by putting it to auction sale without the requisite certificate from Collector was without jurisdiction. It is equally clear that the action of the Respondents in issuing a warrant for the arrest of the Petitioner and in arresting him actually was equally without jurisdiction and void.;