- (1.) PALOK Basu, J. The petitioner Pawan Kumar Jain admittedly a guarantor on behalf of respondent No. 4 M/s Shri Gayatri Alloy Steels Pvt. Ltd. has chal lenged the citation dated 7-8-1997 for the sum of Rs. 2, 02, 22, 741. 99 paise which has been issued in accordance with the provisions contained in the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972 (for short the recovery Act ).
(2.) SHRI Ravi Kiran Jain Assisted by SHRI Pramod Kumar Jain has been heard at great length in support of this writ peti tion. SHRI Murli Dhar, learned Senior Ad vocate has argued the matter on behalf of the Pradeshiya Industrial and Investment Corporation of U. P. Ltd. (for short, PICUP ). Since the time ran out, in fact the arguments proceeded and concluded for about half an hour more than the Court hours, the writ petition was dismissed with the order: "for the reasons to be furnished on Mon day the 1st September, 1997, the writ petition is dismissed summarily. " Hence the reasons are supplied. Shri Ravi Kiran Jain has argued principally three points which are as under - First argument of Shri Ravi Kiran Jain was that the present citation indicates an arbitrary action on the part of PICUP inasmuch as the action taken against the guarantor is unfair particularly because Section 29 proceedings under State Finan cial Corporation Act have been initiated against the original borrower M/s Shri Gayatri Alloy Steels Pvt. Ltd. , a Company registered under the Indian Companies Act in which the petitioner was Promo tor Director, but had withdrawn himself by resignation later on. Shri Murli Dhar pointed out that while it is true that a notice has been issued under Section 29 of the State Financial Corporations Act, 1951 (for short the S. FC. Act) but posses sion has not yet been taken over and the original borrower had not only failed to pay the principal amount with interest in due course of time but has also failed to honour and make payments in accordance with the one time settlement (O. TS. ).
(3.) SHRI Ravi Kiran Jain has relied upon the decisions of the Hon'ble Supreme Court reported in the following cases: (1) Dwarika Nath, AIR 1989 SC 1642 paras 23 to 29. (2) Magan Lal Chagan Lal, AIR 1984 SC 2009. (3) Mahesh Chandra's case, AIR 193 SC 935. (4) Andhra Pradesh Financial Corpora tion, AIR 1994 SC2151. (5) Bharat Explosives Ltd, AIR 1994 Al lahabad 123. The aforesaid five decisions were relied upon to advance on argument that the principal-debtor should have been proceeded against first and if no money could be recovered from the company's property or unit or factory then alone original borrower may have been per sonally proceeded with and it is only there- after that the petitioner guarantor could have been proceeded with. This action of the PICUP has been characterized as violative of Article 14 of the Constitution of India because it was contended, that by picking up the guarantor first under the Recovery Act the proceedings under Sec tion 29 of the S. F. C. Act may have been rendered ineffective. The argument proceeded that after exhausting the remedy under Section 29 alone the petitioner guarantor may have been asked to make the payment.;