Regular Second Appeal No.962 of 2008 (O & M ) IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: February 11 , 2011. Regular Second Appeal No.962 of 2008 (O & M ) Haryana Financial Corporation ….Appellant Versus Jai Singh Dhull and others ..Respondents CORAM: HON’BLE MR. JUSTICE MOHINDER PAL. 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not. 3. Whether the judgment should be reported in the Digest? Present: Mr.Rajesh Hooda, Advocate, for Mr. Kamal Sehgal, Advocate, for the appellant. Mr. Arvind Singh, Advocate, for the respondents. -.- MOHINDER PAL, J. Appellant-defendant Haryana Financial Corporation (hereinafter referred to as the `appellant-Corporation) is in second appeal aggrieved against the judgments and decrees passed by both the Courts below whereby suit filed by the plaintiffs-respondents Nos. 1 Regular Second Appeal No.962 of 2008 (O & M ) to 4 was decreed to the effect that defendant No.2, the Tehsildar- cum-Assistant Collector Ist Grade, Karnal (proforma respondent No.4) will not adopt coercive method of arresting the plaintiffs for the recovery of the loan amount. I have heard the learned counsel for the parties and have gone through the records of the case. The appellant-Corporation had issued recovery certificate for recovering an amount of Rs.14,65,183/- as arrears of land revenue from the plaintiffs-respondents. The plaintiffs-respondents had floated a Company under the name and style of M/s. I.P.Textiles Pvt. Ltd. at Panipat for manufacturing bed sheets, blaknets etc. in the year 1991. The plaintiffs applied for loan to the appellant-Corporation to the extent of Rs.7.50 lacs. The appellant-Corporation, after examining the proposal of the plaintiffs-respondents, sanctioned a loan of Rs.5.98 lacs against mortgage of land on which the unit was established. The plaintiffs- respondents started committing defaults in repaying the instalments of loan as per the loan agreement. The plaintiffs-respondents had also executed a bond of guarantee for guaranting repayment of loan given to the plaintiffs-respondents. Since the plaintiffs-respondents failed to repay the loan amount to the appellant-Corporation, the possession of the Unit of the plaintiffs was taken over by it (appellant- Corporation) and thereafter sold for Rs.2.75 lacs on 7.4.1999. Since the outstanding amount was much more than the total amount recovered from the sale of assets, the appellant-Corporation proceeded to issue recovery certificate against the plaintiffs for recovering the amount as arrears of land revenue under the Haryana Public Money Regular Second Appeal No.962 of 2008 (O & M ) (Recovery of Dues) Act, 1979 (for short `the Act’). The plaintiffs- respondents, apprehending their arrest in case of use of coercive measures, sought a decree for permanent injunction restraining defendant No.2, the Tehsildar-cum-Assistant Collector Ist Grade, Karnal (proforma respondent No.4) from effecting recovery of Rs.14,65,183/- in view of the recovery certificate issued by the appellant-Corporation by adopting coercive method of arresting the plaintiffs. The trial Court decreed the suit of the plaintiffs-respondents to the effect that defendant No.2, Tehsildar-cum-Assistant Collector Ist Grade, Karnal (proforma respondent No.4) will not adopt coercive method of arresting the plaintiffs for the recovery of the loan amount. The appellant- Corporation went in appeal challenging the judgment and decree passed by the trial Court, which was dismissed by the lower appellate Court. Learned counsel for the plaintiffs-respondents referred to the judgments reported as Gomti Devi Vs. Kalka Co-operative House Building Society Ltd. and others, 1988 P.L.J 416, Darshan Singh vs. Assistant Registrar, Co-operative Societies, Yamuna Nagar, 2001 (4) R.C.R (Civil) 167 and Anil Kumar Vig vs. Deputy Commissioner, Central Excise Division, Ambala City and others, 2006 (4) R.C.R (Civil) 776 and contended that after recording satisfaction that the steps taken for recovery did not fructify, resort to arrest and detention can be made and that a person straightway cannot be put to arrest and detention without resorting to other steps. He further argued that arrest and detention of loanee cannot be resorted to unless all other remedies to recover amount of loan have been exhausted. Further, that an authority executing an order to recover the amount is to first take other steps and in case they do not Regular Second Appeal No.962 of 2008 (O & M ) fructify then only can resort to arrest. There can be no dispute with the view taken in the aforesaid authorities, but the instant is a case where all efforts of the appellant-Corporation to recover the loan amount from the plaintiffs-respondents had failed and it was only thereafter that it (appellant-Corporation) had issued recovery certificate for recovering the loan amount as arrears of land revenue from the plaintiffs-respondents. The plaintiffs-respondents had taken the loan on 27.3.1992 and a period of more than seventeen and a half years has elapsed, but they have not repaid the loan amount to the appellant-Corporation. As noticed above, efforts had been made by the appellant-Corporation to recover the loan amount from the personal assets of the plaintiffs-respondents. The mortgaged assets of the plaintiffs-respondents have already been sold by the appellant- Corporation. The claim of the appellant-Corporation is that since the total loan amount could not be recovered from the plaintiffs- respondents even after sale of the Company of the plaintiffs- respondents and other assets, they (plaintiffs) being guarantors are personally liable to pay the outstanding loan amount. It is further case of the appellant-Corporation that had there been personal assets belonging to the plaintiffs-respondents, it (appellant-Corporation) would have got the same attached through the Collector, which is being done by it in cases of recovery as arrears of land revenue under the Act. The appellant-Corporation had sent notice to the plaintiffs-respondents for repaying the remaining amount of loan, but the plaintiffs did not choose to put in appearance in the office of the appellant-Corporation forcing the appellant-Corporation to issue recovery certificate against the plaintiffs-respondents because they (plaintiffs) had offered personal Regular Second Appeal No.962 of 2008 (O & M ) guarantee and had executed bond of guarantee on 27.3.1992. The recovery certificate issued by the appellant-Corporation cannot be said to be against law. It is in accordance with the terms of deed dated 27.3.1992. The recovery certificate was issued because the total amount of loan could not be recovered by the appellant- Corporation even after the sale of the Company of the plaintiffs- respondents and their other assets. The appellant-Corporation was left with no other remedy to recover the amount of loan from the plaintiffs-respondents except by issuing the recovery certificate. The facts and circumstances, discussed above, suggest that both the Courts below were not right in decreeing the suit of the plaintiffs- respondents to the effect that defendant No.2, the Tehsildar-cum- Assistant Collector Ist Grade, Karnal (proforma respondent No.4) will not adopt coercive method of arresting the plaintiffs for the recovery of the loan amount. Resultantly, this appeal is allowed, the impugned judgments and decrees passed by both the Courts below are set aside and it is held that defendant No.2, the Tehsildar-cum-Assistant Collector Ist Grade, Karnal (proforma respondent No.4) will be at liberty to adopt coercive method of arresting the plaintiffs-respondents for the recovery of the loan amount in case they fail to repay the loan amount. Suit filed by the plaintiffs-respondents is, thus, dismissed. Decree sheet be prepared accordingly. There shall be no order as to costs. Dated: February 11, 2011. (MOHINDER PAL) ak JUDGE