TARUN AGARWALA ,AJAY BHANOT,JJ. - (1.) We have heard Sri Kushal Kant, learned counsel for the petitioners, Sri R.K.S. Chauhan, learned counsel appearing for respondent no. 1 and learned Standing Counsel for the State respondents.
(2.) The petitioners are Borrowers/Directors/Guarantors in M/s Mohan Agro Mills Ltd. A loan was taken from Pradeshiya Industrial and Investment Corporation of U.P. Ltd. (hereinafter referred to as 'PICUP') in the year 1991. Since the company failed to repay the loan, proceedings under Section 29 of the State Financial Corporation Act, 1951 for recovery of Rs. 5,03,18,400.25 along with interest were initiated. A recovery certificate dated 10.04.2002 was issued under the U.P. Public Money (Recovery of Dues) Act, 1972 (hereinafter referred to as "Act 1972"). This recovery certificate was apparently returned to PICUP in the year 2002 itself on the ground that the assets of Guarantors/Directors could not be located. On 26.02.2009 PICUP again sent a request to the District Magistrate to proceed with the recovery certificate as the whereabouts of the petitioners have been found and were located in Delhi. The petitioners being aggrieved by the initiation of fresh recovery proceedings have filed the present writ petition praying that the citation dated Nil issued by the Tehsildar for recovery of Rs. 5,03,18,400.25 plus interest should be quashed and that the original certificate dated 07.02.2002 could not be invoked pursuant to the covering letter dated 26.02.2009 which now indicates a recovery of Rs. 16.30 Crores.
(3.) The contention of the petitioner is two fold. It was contended that a notification dated 24.01.2004 was issued wherein PICUP was included as a financial institution by virtue of which PICUP would no longer initiate recovery proceedings under the Act 1972 and that the recovery could only be initiated under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (hereinafter referred to as "Recovery of Debts Act 1993"). In support of his submission learned counsel has relied upon a decision of Supreme Court in Unique Butyle Tube Industries (P) Ltd. v. U.P. Financial Corporation and others (2003) 2 SCC 455 , wherein it has been held that a financial institution within the meaning of the term "financial institution" in the Recovery of Debts Act 1993 cannot proceed under the Act 1972.;