Satish Chandra, J. - (1.) THIS petition under Article 226 of the Constitution questions the constitutional validity of the Public Moneys (Recovery of Dues) Act, 1965.
(2.) THE petitioner is a partnership concern carrying an the business of manufacture and sale of Khandsari suyar. Under a registered deed of agreement dated 8th September, 1961, the petitioner borrowed a sum of Rs. 1,00,000.00 from the U. P. State Financial Corporation. The loan was repayable in annual instalments of Rs. 10,00.00 beginning with 31st March, 1963. The petitioner paid the first instalment due on 31st March, 1953, but thereafter be defaulted in payment. On 13th June, 1966 the Financial Corporation served a notice on the petitioner requiring it to make the payment of the due instalments within fifteen days of the service of the notice. In spite of the notice the petitioner did not make any payment. The Corporation then issued a recovery certificate under the provisions of the impugned Act, to the Collector, Saharanpur, requesting him for realisation of the balance of the loan which came to Rs. 86,794.50. Thereupon the petitioner came to this Court. On December 4, 19G5 the State Legislature enacted the Public Moneys (Recovery of Dues) Act, 1965, to provide for speedy recovery of, inter alia, State dues. Section 3 of this Act authorises the Managing Director of the U. P. Financial Corporation to send a certificate to the Collector mentioning the sum due and requesting that such sum be recovered as if it were arrears of land revenue. This power comes into operation, if the debtor makes default in payment of the loan. Section 3 applies to three classes of persons only, Sub-section (1) of Section 3 states: "Where any person is party - (a) to any agreement relating to a loan advance or grant given to him by the State Government or the Corporation by way of financial assistance, or (b) to any agreement relating to a guarantee given by the State Government or the Corporation in respect of a loan raised by cm industrial concern, or (c) to any agreement providing that any money payable thereunder to the State Government shall be recoverable as arrears of land revenue,......" The section further makes it clear that the remedy provided therein was without prejudice to any other mode of recovery under any other law for the time being in force.
(3.) MR . S.C. Khare, appearing for the petitioner, submitted that this Act violated the equality guaranteed by Article 14 of the Constitution. The remedy provided by this Act was supplemental and not substitutive. It was more drastic than the normal remedy of recovering loan by a suit in the ordinary civil courts, in so far as the debtor or a defendant was concerned, The authority was conferred an unguided and an absolute power to pick and choose between its various debtors for applying this Act. The conferment of such a drastic and more prejudicial remedy coupled with an unguided discretion manifestly violated the right of equality under Article 14.;