1 S/3 Hearing S.B. CIVIL WRIT PETITION NO.1263/2002. Purshottam Vs. State & Ors. Date of Order :: 20th August 2008. HON'BLE MR. JUSTICE DINESH MAHESHWARI Mr. Tribhuvan Gupta ] Mr. Usman Ghani ], for the petitioner. Mr. Rajesh Joshi, for the respondent No.2 ..... BY THE COURT: By way of this writ petition, challenge is given by the petitioner to the proceedings as adopted by the respondent Rajasthan Financial Corporation ('RFC') under Section 32-G the State Financial Corporations Act, 1951 ('the Act of 1951') for recovery of the amount allegedly due against him. Though several of the contentions have been urged by the learned counsel for the petitioner with reference to the facts of the case questioning the very competence of the proceedings under Section 32-G of the Act of 1951 viz., that the amount sought to be recovered cannot be said to be of any money due and legally recoverable, that recovery of the amount against the loan advanced as back as on 26.05.1981 had already gone beyond limitation, and that the respondent RFC earlier filed an application under Section 31(1)(aa) of the Act of 1951 but the same was rejected by the learned District Judge on 17.04.2000 and the respondent RFC never 2 bothered to take appropriate proceedings within limitation for recovery of the amount from the petitioner, principal debtor; and then, such contentions have been countered by the learned counsel for the respondent with the submissions that the respondent RFC has rightly and lawfully proceeded under Section 32-G of the Act of 1951, that there is no bar of limitation operating against the recovery proceedings, and that the proceedings under Section 31 (1)(aa) of the Act of 1951 being confined against the guarantor and taken up for limited purpose, would not operate as res judicata; and the learned counsel for the parties have referred to the several of the decided cases in support of their contentions; but and however, such of the contentions are not being gone into for the order proposed to be passed in this matter. Apart from the aforesaid, one of submissions of the learned counsel for the petitioner is that even if the proceedings were adopted under Section 32-G of the Act of 1951, the requirements thereof have not been carried out and the certificate as sought to be relied upon by the respondents (Annex. R/2/1) is merely a forwarding letter asking the Tehsildar concerned to effect the recovery but before issuing the same, even the limited inquiry for the purpose of Section 32-G of the Act of 1951 was not carried out. This submission has been responded on behalf of the respondent RFC in the manner that specific notices were issued to the petitioner and 3 his reply was considered and thereafter, the recovery certificate was issued. The document Annexure R/2/1 is said to be the recovery certificate and to the same effect are taken the averments in paragraph (e) (Page 57 of the paper-book) in reply to the grounds of the writ petition. The procedure that has purportedly been adopted by the respondent RFC does not appear to be in conformity with the requirements of Section 32-G of the Act of 1951 that reads as under:- “32G. Recovery of amounts due to the Financial Corporation as an arrear of land revenue.- Where any amount is due to the Financial Corporation in respect of any accommodation granted by it to any industrial concern, the Financial Corporation or any person authorised by it in writing in this behalf, may, without prejudice to any other mode of recovery, make an application to the State Government for the recovery of the amount due to it, and if the State Government or such authority, as that Government may specify in this behalf, is satisfied, after following such procedure as may be prescribed, that any amount is so due, it may issue a certificate for that amount to the Collector, and the Collector shall proceed to recover that amount in the same manner as an arrear of land revenue.” Both the learned counsel have referred to the decision of the Hon'ble Supreme Court in the case of Delhi Financial Corporation & Anr. Vs. Rajiv Anand & Ors. : (2004) 11 SCC 625. Noticeable it is that in the said decision, the Hon'ble Supreme Court has observed that the proceedings under 4 Section 32-G of the Act of 1951, though in the nature of execution proceeding, but is not the recovery proceeding pursuant to a decree of the Court and in cases of amount due to Financial Corporation, it is a recovery proceeding by simple arithmetical calculations or simple verification. The Hon'ble Supreme Court has also pointed out that the said Section 32- G contemplates a limited inquiry and that there is no provision barring the jurisdiction of the Civil Courts. The Hon'ble Supreme Court held,- “Section 32-G provides that the State Government or the authority will issue a certificate after following the procedure. The words “after following the procedure” necessarily indicate that principles of natural justice have to be complied with. Thus, notice would have to be issued, the party concerned would have to be heard and then only the order would be passed. We see no substance in the submission that the order must always be a speaking order or a reasoned order. Considering the fact that the provisions only contemplate arithmetical calculations or simple verification, the question of any reasoned or speaking order does not arise. All that is to be stated is that the amount is found due. On that basis the certificate of recovery is to be issued. We, therefore, see no substance in the submission that the provision is arbitrary or discriminatory.” The respondents have alleged the document Annexure- R/2/1 to be the certificate contemplated by Section 32-G of the Act of 1951. If that were to be treated as certificate, this Court is unable to find it conforming to the requirements of Section 32-G of the Act of 1951 where the State Government or the specified authority could issue a certificate after following the 5 prescribed procedure for recovery of any amount so due. Learned counsel for the petitioner has rightly pointed out that the document Annexure R/2/1 is nothing but a forwarding letter from the office of the Collector, Bhilwara to the Tehsildar, Bijolian whereby an application received from the Dy. G.M. (R), RFC, Bhilwara for recovery of an amount of Rs. 3,64,985/- was forwarded for effecting such recovery. Nothing has been stated on the satisfaction of the authority about the amount being due. In the notice as issued by the Rajasthan Financial Corporation on 27.04.2001 (Annex. 6), the petitioner was only called upon to make payment and was informed that else legal recourse shall be taken under Section 32-G of the Act of 1951. By another notice dated 20.11.2001 (Annex.7), the petitioner was called upon to submit his objections and else would be forwarded a certificate to the Collector for recovery of amount. The petitioner has alleged to have filed reply to such notice but then, there is no material available on record to find precisely that the satisfaction of the authority concerned was recorded about the amount being due. This Court is of opinion that recording of such satisfaction remains fundamental and, as pointed out by the Hon'ble Supreme Court in the case of Delhi Financial Corporation (supra), it is on the basis of such statement of the amount being due that the certificate for recovery is to be issued. The manner in which the respondent 6 RFC has chosen to adopt the proceedings and the other respondents have proceeded to enforce the recovery, cannot be said to be in accord with the requirements of Section 32-G of the Act of 1951. In the aforesaid view of the matter, the impugned notice dated 17.01.2002 as issued by the Tehsildar, Bijolian for coercive recovery of the amount from the petitioner cannot be sustained and is required to be quashed. However, this Court would hasten to add that other submissions as sought to be made by the parties and as briefly noticed at the outset have not been gone into and nothing has been pronounced thereupon; and it is left open for the authority concerned to proceed in the matter in accordance with law. As a result of the aforesaid, this writ petition succeeds to the limited extent as indicated above. The recovery notice as issued by the Tehsildar, Bijolian (Annex.8) dated 17.01.2002 is quashed; however, the authority concerned is otherwise left free to proceed in the matter in accordance with law. In the circumstances of the case, there shall be no order as to costs of this writ petition. (DINESH MAHESHWARI), J. Mohan/