IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No.13042 of 2008 Date of decision: 10.11.2008 Bhagat Singh Bhungarni & others. -----Petitioners Vs. The State of Punjab and others. -----Respondents CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. G.R.P. Singh, Advocate for the petitioner. Mr. G.S. Gill, Advocate for respondents. ----- JUDGMENT: 1. This petition seeks quashing of letter (Annexure P- 2) to S.S.P. dated 7.1.2008, seeking police help and letter dated 9.6.2008 (Annexure P-5), taking over the mortgaged properties which were valued at Rs.38.30 lac. C.W.P. No.13042 of 2008 2. Case of the petitioners is that petitioner No.1 took a loan of Rs.1.95 lac on 11.8.1988 for purchasing a mini bus. On default of payment, the Financial Corporation has taken deemed possession of the mortgaged property. The petitioner has already paid a sum of Rs.2.83 lacs which was adjusted against interest from time to time. The Financial Corporation offered One Time Settlement, vide letter dated 9.8.2001 (Annexure P- 1) on payment of Rs.2.12 lac in instalments. The petitioner could not pay the said amount and thereafter, as on 15.1.2008, demand of Rs.22,70,837/- was raised. 3. On 1.8.2008, while issuing notice, following order was passed:- “The petitioners had borrowed a sum of Rs.01,95,000/- in the year 1988 for the purchase of Mini Bus under “General Transport Scheme”. Till date, the petitioner has paid a sum of Rs.02,83,000/- which has been adjusted towards the interest. The present account position is as follows:- (Amt. in Rs.) Outstanding/Default 22,70,837/- Principal & expenses 1,85,895/- Interest (with further intt. from 20,84,942/- 15-01-2008) 2 C.W.P. No.13042 of 2008 The respondents have attached the residential house of the petitioners and agricultural land of the guarantors. Learned counsel for the petitioners submits that similarly situated persons who also availed of loan from the respondents, have been granted concession and one time settlement has been arrived at between them. Therefore, the petitioners should have also been treated similarly. Learned counsel for the petitioners states that the petitioners are ready and willing to make some payment as full and final payment to the respondents. Notice of motion for 15.10.2008. In the meantime, sale of the attached property of the petitioners as well as the property belonging to the guarantors shall not be effected. In order to test the bonafides of the petitioners, they are directed to deposit a sum of Rs.1 lac on or before the next date of hearing.” 4. Learned counsel for the petitioner submits that the amount of Rs.1 lac was deposited and further demands are arbitrary, particularly when penal interest has also been capitalized in violation of law laid down by the Hon’ble 3 C.W.P. No.13042 of 2008 Supreme Court in Central Bank of India v. Ravindra AIR 2001 SC 3095. He has also submitted that the Financial Corporation had a remedy of moving the Court under Section 31 of the State Financial Corporation Act, 1951 (for short, “the Act”), but the Financial Corporation chose to proceed under Section 29 of the Act. The Financial Corporation has, thus, made discrimination against the petitioners in not granting waiver, which has been granted in some other cases. The Financial Corporation has proceeded against the house of the petitioners which is exempted from attachment under Section 60 of the Civil Procedure Code. 5. In the reply filed, stand of the respondents is that they are proceeding as per the contract in a commercial transaction and the petition raises disputed questions as to the amount due. The Financial Corporation had option of invoking Section 29 of the Act and was not bound to proceed under Section 31 of the Act. The allegation of discrimination has also been denied. It has also been stated that Section 60 of Civil Procedure Code was not applicable. 6. We have heard learned counsel for the parties. 4 C.W.P. No.13042 of 2008 7. No doubt the petitioners have paid a sum of Rs.2,83,000/- against the total principal amount of Rs.1,95,00/-, which has mostly been adjusted towards interest, the payments have been given over a scattered period and as per the contract, certainly, more amount is due. Even if demand raised is higher, quantification is a disputed question. The petitioners did not pay as per One Time Settlement offer. 8. Disputed questions do arise as to the amount to be paid by the petitioners and on disputed facts, it cannot be held that nothing is due against the petitioner or that no claim can be made by the respondents or that the respondents cannot proceed under Section 29 of the Act against mortgaged properties. Section 60 CPC does not apply. The said provision applies only to execution of decree of civil court. There is no merit in the plea of discrimination. 9. There is no dispute with the proposition that the Corporation being a public authority has to act fairly, but without settling the disputed questions, we cannot issue any direction to the Financial Corporation, at this stage, except saying that if the Corporation wishes to dispose of the property, it will allow the petitioners to bring a buyer and the sale by the 5 C.W.P. No.13042 of 2008 Corporation will be by following due process, in such a way that best price of the property is fetched and after adjusting its dues, the remaining amount be remitted to the petitioners. The Corporation cannot capitalize penal interest as held in Central Bank of India (supra) and if that has been done, the Corporation will make necessary adjustment accordingly. If any amount is recovered in excess, the petitioners will be entitled to get the same refunded. For remaining disputes, if any, the petitioners will be at liberty to have their liability quantified in appropriate proceedings, if so advised. 10. The petition is disposed of accordingly. (ADARSH KUMAR GOEL ) JUDGE November 10, 2008 (L. N. MITTAL ) ashwani/gs JUDGE 6