Skip to main content

Public money - Can claim be abandonment if suit withdrawn unconditionally?

Himachal Pradesh Financial Corporation Vs. Anil Garg

The Respondent applied for a loan of Rs.1.90 lakhs in 1989 to purchase a Swaraz Mazda truck and executed a hypothecation deed.

Repayment schedule commenced from 10.1.1990 culminating on 10.7.1994. Rs.10,000/- only was repaid on 6.3.1991. The vehicle was seized on 6.5.1991 under Section 29 of the State Finance Corporation Act, 1951 and auction sold on 4.9.1991 for a sum of Rs.1.46 lakhs. A Money Suit was filed before the Senior Sub Judge, Shimla for recovery of the balance of Rs.1,25,270/- along with future interest and costs.

The Suit was withdrawn on 12.12.1995 under Order 23, Rule 1 of the Code of Civil Procedure stating that the Appellant desired to proceed under the Himachal Pradesh Public Moneys (Recovery of Dues) Act, 1973. The Suit was dismissed as withdrawn. Recovery Certificate was then issued under the Act on 19.4.1996 for a sum of Rs.1,94,283/- followed by a warrant of arrest.

7. The Respondent thwarted the Certificate proceedings by filing a Suit before the Senior Sub Judge, Shimla contending that the fresh proceedings were barred due to withdrawal of the Suit without any liberty, and that the claim was time barred. An interim-order was obtained, but ultimately the Suit was dismissed for non-prosecution on 21.5.2001.

8. Another loan of Rs.30,000/- was availed by the Respondent on 15.12.1988 for a trunk industry and a hypothecation-deed executed in respect of property bearing Khata/Khatuni No.102/347, Khasra No.1014. The last installment of the loan was payable on 10.1.1996.

The Respondent remitted Rs.4,000/- in May 1991 and Rs.1,000/- in November 1991. A request was made before the Collector for recovery certificate on 12.11.1992, and the Certificate was issued on 3.9.1994.

The Respondent objected that no prior notice was given and that the proceedings were time barred.

9. The Respondent instituted C.W.P. No. 1102 of 2002 before the High Court questioning both the recovery proceedings. The writ petition was allowed on technical grounds with liberty to the Appellant for proceeding afresh in accordance with law. Fresh show cause notices were then issued in respect of the two loans on 26.11.2002 and 2.11.2002 respectively, followed by fresh recovery certificates on 10.3.2003 for recovery of Rs.5,50,165/- and Rs.61,503.92/- respectively.

10. The Respondent again filed C.W.P. No.136 of 2005 pursuant to which the impugned order came to be passed.

11. The High Court relying on Sarguja Transport Service v. State Transport Appellate Tribunal, AIR 1987, held that the Suit having been withdrawn unconditionally for inexplicable reasons, and without any liberty granted under Order 23 Rule 1 of the Code of Civil Procedure for initiating appropriate legal proceedings, it amounted to abandonment of the claim for the truck loan. It would be contrary to public policy and abuse of the process of law to allow any fresh proceeding for the same cause of action. The doctrine of election was also invoked. The loan with regard to the trunk industry was held to be time barred as no action was taken for recovery from 1996 till 2002.

12. The factum of loan is not in dispute. No explanation was furnished why the installments were not repaid and the loan closed. A pittance was repaid. The loan was disbursed from public funds of the tax payers’ money. The Respondent was a trustee for the loan amount.

It could not become a windfall for him. All attempts by the Appellant for recovery were successfully thwarted by the Respondent by either filing a Suit or successive writ petitions. The sanguine confidence of the Respondent is also reflected by his failure to appear in the present proceedings despite valid service of notice.

13. The question whether there has been an abandonment of the claim by withdrawal of the Suit is a mixed question of law and fact as held in

# Ramesh Chandra Sankla v. Vikram Cement, (2008) 14 SCC 58

The language of the order for withdrawal will not always be determinative. The background facts will necessarily have to be examined for a proper and just decision.

The Hon'ble Supreme Court while allowing the appeal held that the High Court factually erred in holding that the trunk loan was time barred because the Appellant took no steps for recovery of the dues from 1996 till 2002 overlooking the Certificate dated 3.9.1994.

21. In conclusion, it is held that the proceedings in a Suit are essentially different from proceedings under the Act. The withdrawal of the Suit was no bar to proceedings under the Act. There was no bar under the Act to the proceedings. There had been no abandonment of claim by the Appellant. It would be contrary to public policy to prevent the Appellant from recovering the loan. The recovery proceedings were not time barred. The order of the High Court is held to be unsustainable and is set aside. The auction notice dated 13.01.2005/15.01.2005 under Section 85 of the Act shall now proceed in accordance with law and be concluded at the earliest expeditiously.

Comments

Popular posts from this blog

MACT - Permanent disability - calculate - compensation - Supreme Court - Part 2

1) C. K. Subramonia Iyer vs. T. Kunhikuttan Nair - AIR 1970 SC 376 2) R. D. Hattangadi vs. Pest Control (India) Ltd. - 1995 (1) SCC 551 3) Baker vs. Willoughby - 1970 AC 467 4) Arvind Kumar Mishra v. New India Assurance Co.Ltd. - 2010(10) SCALE 298 5) Yadava Kumar v. D.M., National Insurance Co. Ltd. - 2010 (8) SCALE 567) 5. The heads under which compensation is awarded in personal injury cases are the following : Pecuniary damages (Special Damages) (i) Expenses relating to treatment, hospitalization, medicines, transportation, nourishing food, and miscellaneous expenditure. (ii) Loss of earnings (and other gains) which the injured would have made had he not been injured, comprising : (a) Loss of earning during the period of treatment; (b) Loss of future earnings on account of permanent disability. (iii) Future medical expenses. Non-pecuniary damages (General Damages) (iv) Damages for pain, suffering and trauma as a consequence of the injuries. (v) Loss of amen

Distinction between “Loss to the Estate” and “Loss of Estate”

A subtle but fundamental distinction between “Loss of Estate” and “Loss to the Estate” was discussed in Omana P.K. and others v. Francis Edwin and others (2011 (4) KLT 952). This Judgment was challenged before the Apex Court, which has now dismissed the Appeal. The question raised in this case, was whether a certain sum which the dependants received as compensation for untimely death of Judgment debtor in a motor accident is attachable in Execution Proceedings. In this case, Justice Thomas P. Joseph speaking for the Kerala High Court had held the following (relying on The Chairman, A.P.S.R.T.C, Hyderabad vs. Smt. Shafiya Khatoon and Others) Capitalized value of the income spent on the dependents, subject to relevant deductions, is the pecuniary loss sustained by the members of his family through his death. The capitalized value of his income, subject to relevant deductions, would be the loss caused to the estate by his death. In other words, what amount the dependents would have got le

Full & Final payment - No dues certificate - end of contract

Whether after the contract comes to an end by completion of the contract work and acceptance of the final bill in full and final satisfaction and after issuance a `No Due Certificate' by the contractor Supreme Court of India Supreme Court of India R.L. Kalathia & Co. vs State Of Gujarat on 14 January, 2011 Author: P Sathasivam Bench: P. Sathasivam, B.S. Chauhan IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 3245 OF 2003 R.L. Kalathia & Co Appellant(s) Versus State of Gujarat .... Respondent(s) JUDGMENT P. Sathasivam, J. 1) This appeal is directed against the judgment and final order dated 07.10.2002 passed by the Division Bench of the High Court of Gujarat whereby the High Court set aside the judgment and decree dated 14.12.1982 passed by the Civil Judge, (S.D.), Jamnagar directing the State Government to pay a sum of Rs.2,27,758/- with costs and interest and dismissed the Civil Suit as well as cross objections filed by the a