THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.24061 OF 2003 DATED JULY, 2011 BETWEEN Ch.Venugopal Reddy …Petitioner And The Branch Manager, Andhra Pradesh State Financial Corporation, Nalgonda Branch, Nalgonda and another. …Respondents THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.24061 OF 2003 ORDER: The notice dated 05.07.2003 issued by the Andhra Pradesh State Financial Corporation (APSFC), invoking Section 52-A of the Andhra Pradesh Revenue Recovery Act, 1864 (for brevity, ‘the Act of 1864’) and calling upon the petitioner to pay a sum of Rs.25,43,305/-, is called in question in this writ petition. The petitioner availed term loan and working capital facilities from the APSFC in the year 1990. Owing to default in repayment, his Unit was seized by the APSFC under Section 29 of the State Financial Corporations Act, 1951 (for brevity, ‘the Act of 1951’) on 24.09.1991. The said Unit was liquidated and the amount realized was adjusted against his dues. However, owing to the outstanding remaining in his account, the impugned notice dated 05.07.2003 was issued to the petitioner under the provisions of the Act of 1864 proposing to recover the said amount as arrears of land revenue in the event of his failure to repay the amount due within the stipulated time. The petitioner assails the said action primarily on the ground that it is barred by limitation. This very issue fell for consideration before the Supreme Court in STATE OF KERALA v. V.R. KALLIYANIKUTTY[1]. That case pertained to the Kerala State Financial Corporation and a similar action initiated under the provisions of the Kerala Revenue Recovery Act, 1968 for realizing its dues from a defaulter after the expiry of the period of limitation for effecting such recovery. The Supreme Court observed that the Kerala Revenue Recovery Act, 1968 merely provided a process for speedy recovery of moneys due and opined that as the said Act did not create a new right, the person claiming recovery thereunder cannot claim recovery of amounts which are not legally recoverable nor can a defence of limitation available to a debtor in a suit or other legal proceeding be taken away under the provisions of the said Act. The Supreme Court therefore affirmed that only claims which are legally recoverable and which were not time-barred could be recovered under the provisions of the Kerala Revenue Recovery Act, 1968. This ratio was followed by this Court in N.A.RADHA v. STATE OF ANDHRA PRADESH[2]. That case pertained to the APSFC and its action in seeking recovery of time-barred amounts by taking recourse to the Act of 1864. This Court applied the law laid down in KALLIYANIKUTTY1 and held that recovery of the term loan amount by the APSFC under the provisions of the Act of 1864 in that case was barred by limitation. Faced with this insurmountable legal position, Sri T.Durga Reddy, learned standing counsel for the APSFC, vociferously argued that the Judgment in KALLIYANIKUTTY1 did not take into account Section 46-B of the Act of 1951 which gave overriding effect to the provisions of that Act over other laws. He contended that the law of limitation would therefore have no application to the recoveries effected under the Act of 1951. As Section 32-G was inserted by Amendment Act 43 of 1985 in the Act of 1951 and provided for recovery of amounts due to the State Financial Corporations through the aegis of the State by treating the same as arrears of land revenue, he argued that the claim of the APSFC embodied in the impugned notice dated 05.07.2003 could not be defeated on the ground that it was time-barred. The learned standing counsel placed reliance in this regard on the Judgment of a Division Bench of Punjab and Haryana High Court in JAGDISH RAI v. HARYANA FINANCIAL CORPORATION[3]. It is pertinent to note that Section 32-G of the Act of 1951 authorizes the State Government to satisfy itself, after following such procedure as may be prescribed, that the amount claimed by the State Financial Corporation is due and only thereupon, issue a certificate for that amount to be recovered as an arrear of land revenue. Therefore, Sri T.Durga Reddy, learned standing counsel, is not correct in stating that the said provision gives a carte blanche to the State Financial Corporations to use the provisions of the Act of 1864 at their discretion without reference to other laws. The obligation imposed upon the State Government to ascertain, in accordance with the prescribed procedure, that the amount claimed by the State Financial Corporation is due, would mean that the State Government would necessarily have to go into the issue as to whether it is ‘legally due’. The Supreme Court in KALLIYANIKUTTY1 discussed this very aspect in great detail. The Judgment of the Punjab and Haryana High Court in JAGDISH RAI3 did not deal with the ratio laid down by the Supreme Court in KALLIYANIKUTTY1 though reference was made therein to the said Judgment. The Division Bench held that the provisions of the Limitation Act, 1963 could not be made applicable to proceedings initiated under Section 32-G of the Act of 1951 because there is no express provision made nor any necessary intendment is inferable in this regard. With due respect to the learned Division Bench of the Punjab and Haryana High Court, this Court is bound by the law laid down by the Supreme Court in KALLIYANIKUTTY1. Further, this Court is not willing to accept the argument of Sri T.Durga Reddy, learned standing counsel, that the Supreme Court did not consider the aspect of the applicability of the law of limitation to recoveries under the Act of 1951. Perusal of the Judgment i n KALLIYANIKUTTY1 reflects that the case itself turned upon this aspect. Merely because no mention was made in KALLIYANIKUTTY1 of Section 46-B of the Act of 1951 in specific terms, it cannot be construed that the Supreme Court was not aware of the said provision. On facts, the learned standing counsel would submit that the amount sought to be recovered could not be treated as a time-barred claim as the APSFC was not in a position to compute the exact amount due and payable by the petitioner earlier, as its attempts to liquidate the collateral security failed to fructify in spite of sale notices being issued in excess of 20 times. The fact however remains that the default in repayment of the loan relates back to the year 1991 and the recovery sought to be effected in the year 2003 is well beyond the prescribed period of limitation. The ratio in KALLIYANIKUTTY1 would therefore apply on all fours to the case on hand. The Writ Petition is accordingly allowed setting aside the impugned notice dated 05.07.2003 issued by the APSFC under Section 52-A of the Act of 1864. Parties shall bear their own costs. ____________________ SANJAY KUMAR, J. _______ JULY, 2011. VGSR [1] (1999) 3 SCC 657 [2] 2000 (2) ALD 560 [3] AIR 2008 P&H 50