HON'BLE SRI JUSTICE R. SUBHASH REDDY Writ Petition No.23230 of 2004 Order: The petitioner challenges notice dated 05-11-2004 issued in REF:TAH/ELEGANT PAPER/04 by the second respondent in exercise of powers under Section 52 of the Andhra Pradesh Revenue Recovery Act, 1864 distraining the property of the petitioner for the purpose of recovering the amounts due from M/s. Elegant Paper Boards Pvt. Ltd., in which the petitioner is a shareholder. 2. The petitioner is a shareholder in the aforesaid company, which is engaged in the business of manufacturing paperboards. The first respondent, Andhra Pradesh Industrial Development Corporation Ltd., disbursed term loan of Rs.91,10,700/- to the said company and the petitioner, along with some others, has executed a deed of guarantee towards security for the said loan. When the said company committed default in payment of principal amount and interest, the first respondent-corporation initiated proceedings under Section 29 of the State Financial Corporations Act, 1951 on 04-12-1998 and sold the assets of the company on 16-03-1999. Sale consideration was received by the respondents on 16-04-1999 and after adjusting the sale proceeds, still there was balance amount payable by the company to the tune of Rs.1,63,61,904/-, as on 31-05-1995. 3. To recover the said amount, as the petitioner was guarantor, having executed deed of guarantee, the first respondent-corporation issued demand notice dated 26-08- 2002 for recovery of balance amount of Rs.1,63,61,904/-. On the ground that the petitioner has not complied the said demand, proceedings were initiated under the provisions of the Andhra Pradesh Revenue Recovery Act, 1864 and distraint order/notice dated 05-11-2004 was issued distraining the property of the petitioner, i.e. Residential house bearing No.6-2-2, situated at L.B. Sastry Nagar, Chinagantyada, Visakhapatnam, informing that if the balance amount of Rs.1,63,61,904/- is not paid along with batta, the distrained property will be put to public sale. 4 . Though the notice dated 05-11-2004, whereby proceedings were initiated under the Andhra Pradesh Revenue Recovery Act, 1864, is questioned on several grounds, the only argument advanced by learned counsel for the petitioner, Sri K.V. Subrahmanya Narusu, is that as the amount due and payable is barred to be recovered under law of limitation, respondents cannot recover the same by initiating proceedings under the Andhra Pradesh Revenue Recovery Act, 1864. Learned counsel for the petitioner, in support of his argument, has relied on judgments in the cases of C.E. Cooper vs. Municipal Commissioner of Hyderabad, rep. by Addl. Commissioner, Secunderabad[1], State of Kerala v. V.R. Kalliyanikutty[2], N.A. Radha and others v. State of Andhra Pradesh and others[3], A. Laxmipathi and another v. Andhra Pradesh State Financial Corporation Ltd., Hyderabad and others[4]. 5. On the other hand, it is submitted by Sri B. Damodhar Reddy, learned counsel appearing for the first respondent- corporation that the petitioner, being the guarantor for the loan advanced to the company, is liable to pay the amount due to the corporation. It is submitted that the question of limitation is a mixed question of fact and law; as such, the petitioner cannot raise such dispute in this petition filed under Article 226 of the Constitution of India. 6. In view of the submissions of the learned counsel, the only question which falls for consideration is whether the amount due from the company, for which the petitioner stood as one of the guarantors, is barred by limitation and if so can proceedings be initiated under the provisions of the Andhra Pradesh Revenue Recovery Act, 1864 to recover the said amount. From the averments made in the counter affidavit, it is not in dispute that when the principal borrower/company defaulted in payment of the loan amount with interest, proceedings were initiated under Section 29 of the State Financial Corporations Act, 1951 on 04-12-1998 and the assets of the company were sold on 16- 03-1999 and the sale consideration was received by the first respondent-corporation on 16-04-1999. According to the first respondent corporation, after adjusting the sale proceeds, an amount of Rs.1,63,61,904/- was still due as on 31-05-1999. It is further also not in dispute that, for recovery of the amount due, the period of limitation prescribed under the Limitation Act, 1963 is three years. Though the balance amount due is to be recovered within a period of three years, but, demand notice was issued by the first respondent-corporation on 26-08-2002 demanding the petitioner to pay the balance amount. So far as initiation of proceedings under the Andhra Pradesh Revenue Recovery Act, 1864 is concerned, the distraint notice is issued distraining the property of the petitioner only on 05- 11-2004. In the case of C.E. Cooper (1 supra), while examining the power of the Municipal Corporation to recover the arrears of tax of more than three years, a Division Bench of this court has held that amounts not barred by limitation only can be recovered under the Revenue Recovery Act. In the said judgment, it is further held that any demand for tax for more than three years is barred by limitation. In the case of State of Kerala (2 supra), the Hon’ble Supreme Court, while examining the provisions of the Kerala Revenue Recovery Act, 1968, the provisions of which are akin to that of the Andhra Pradesh Revenue Recovery Act, 1864, was pleased to hold as follows: “A debt which is barred by the law of limitation cannot be recovered by resorting to recovery proceedings under the Kerala Revenue Recovery Act of 1968, the object is only speed of recovery and not enlargement of the right to recover. Words amounts due in S.71 and notifications issued thereunder do not refer to the amounts repayable under the terms of the loan agreements executed between the debtor and the creditor irrespective of whether the claims of the creditor has become time-barred, these words are legally recoverable. An amount “due” normally refers to an amount which the creditor has a right to recover.” 7. So far as the Andhra Pradesh Revenue Recovery Act, 1864 is concerned, the provision, which is analogous to provision under Section 17 of the Kerala Revenue Recovery Act, 1968, is Section 52-A. A reading of the provision under Section 52 of the Andhra Pradesh Revenue Recovery Act makes it clear that it empowers recovery of sums due to certain banks and other public bodies as arrears of land revenue. In view of the said provision under which the proceedings are initiated, the aforesaid judgment (2 supra) applies to the facts of the case on hand. 8. Further, in the case of N.A. Radha (3 supra), a learned single Judge of this court, with reference to the provisions under the Andhra Pradesh Revenue Recovery Act, 1864 and also Section 18 of the Limitation Act, 1963, has held that any acknowledgment of debt made after the expiry of the period of limitation does not constitute an acknowledgement under Section 18 giving rise to a fresh period of limitation. In the case of A. Laxmipathi (4 supra), another learned single Judge of this court, in identical circumstances, has held that once the period of limitation expires, loans and advances sanctioned by the State Financial Corporation cannot be said to be due so as to initiate proceedings under Section 52-A of the Andhra Pradesh Revenue Recovery Act, 1864. 9. Coming to the facts of the case on hand, even from the dates as mentioned in the counter affidavit, it is clear that the amounts, which were due to be recovered, were due as on 31- 05-1999 and by the time the first respondent-corporation has issued notice, three years period has elapsed and after issuance of such notice also, further period of 1 ½ years is taken to initiate proceedings under the Andhra Pradesh Revenue Recovery Act, 1864. In that view of the matter, this court is of the opinion that by the time proceedings under the said Act are initiated, the time prescribed for recovery has elapsed and, thus, the debt in question is clearly a time-barred one. Though it is submitted by the learned standing counsel for the first respondent-corporation that the question of limitation is a mixed question of fact and law, but, from a bare reading of the averments made in the counter affidavit, it is clear that the claim is barred by limitation. Hence, after lapse of so many years, it is not reasonable to drive the petitioner to file a suit. In view of the undisputed factual scenario and in view of the law laid down by the Hon’ble Supreme Court and the afore-referred cases, it is evidently a fit case to quash the proceedings initiated under the Andhra Pradesh Revenue Recovery Act, 1864. 10. For the aforesaid reasons, the notice dated 05-11-2004, issued by the second respondent in REF:TAH/ELEGANT PAPER/04, is hereby quashed. 11. The writ petition is allowed to the extent indicated above. There shall be no order as to costs. ___________________ R. SUBHASH REDDY, J. September 09, 2009 MRR [1] 1997 (5) ALT 466 (D.B.) [2] AIR 1999 SC1305 [3] 2002 (2) ALD 560 [4] 2008 (6) ALD 329