Uttarakhand High Court
WPMS/3114/2015 on 26 February, 2021
Author: Manoj Kumar Tiwari
Bench: Manoj Kumar Tiwari
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
ON THE 26th DAY OF FEBRUARY, 2021
BEFORE:
HON'BLE SHRI JUSTICE MANOJ KUMAR TIWARI
Writ Petition (M/S) No. 3114 of 2015
BETWEEN:
Almora Urban Cooperative Bank ....Petitioner
(Mr. Siddhartha Sah, Advocate)
AND:
State of Uttarakhand and others.
....Respondents
(Mr. T.S. Phartiyal, Additional Chief Standing Counsel for the
State of Uttarakhand/respondent nos. 1 to 4)
JUDGMENT
Petitioner is an Urban Cooperative Bank, as defined under Section 2 (L-2) of the Uttarakhand Cooperative Societies Act, 2003. Petitioner advanced a loan to respondent no. 6, however, respondent no. 6 defaulted in repayment of the loan.
2. According to the petitioner, since it was a dispute between a Member and a Primary Cooperative Bank, therefore, the same was referred to Arbitration under Section 70 of the Act. The Deputy Registrar, as Arbitrator, gave his award on 29.01.2011, by declaring that the petitioner shall be entitled to recover a sum of ` 4,33,789/- from the borrower and if the said amount is not recoverable from the borrower, then the petitioner may recover the same from guarantors.
23. Learned counsel for the petitioner submits that the aforesaid award was not challenged by the borrower/guarantor, as such the same attained finality. Since neither the borrower nor the guarantor deposited the outstanding amount in terms of the award, therefore, petitioner made an application under Rule 333(a) of Uttarakhand Cooperative Societies Rules, 2004 to the Collector, Almora for execution of the award. The said application was supported by a certificate issued by District Assistant Registrar, Cooperative Societies, Almora. Since the assets mortgaged with the bank were situate within District Nainital, therefore, District Magistrate, Almora referred the matter to District Magistrate, Nainital vide letter dated 25.11.2014.
4. Petitioner is aggrieved by the communication dated 26.08.2015 issued by District Magistrate, Nainital, whereby the recovery certificate issued by the petitioner was returned with the remark that the amount cannot be recovered through the agency of Tehsil. The said communication refers to legal opinion given by Deputy District Government Counsel, Haldwani. The said opinion has been endorsed on a letter issued by Tehsildar, Haldwani, which is enclosed as Annexure-6 to the Writ Petition, wherein it has been stated that the letter issued by Secretary/General Manager, Almora Urban Cooperative Bank Ltd. does not meet the requirement of provisions contained under Section 92 of Uttarakhand Cooperative Societies Act, 2003, therefore, the amount due to the bank cannot be recovered through Tehsildar.
5. The sole question, which falls for consideration, is whether the amount due, to a 3 Cooperative Society or a Primary Cooperative Bank from a Member, can be recovered as arrears of land revenue, once the Arbitrator has decreed the claim of such Cooperative Society or a Primary Cooperative Bank.
6. Section 71 of Uttarakhand Cooperative Societies Act, 2003 provides for reference of dispute to arbitration and Section 70 of the Act provides that a dispute relating to the business of a Cooperative Society can also be referred to the Registrar. Section 71(4) of the Act provides that the decision given by the Registrar, the arbitrator or the board of arbitrators under this Section shall hereinafter be termed as award. Section 92 of the Act provides for execution of awards. Section 92(a) of the said Act provides that an award given under Section 71 may be executed in the manner provided by law for the time being in force for the recovery of arrears of land revenue, where the order is for the recovery of money. First proviso to Section 92(a) imposes a condition that an application for recovery of such amount should be made to the Collector and should be accompanied by a certificate signed by the Registrar or any person authorized by him on his behalf.
7. It is nobody's case that the application made by petitioner was not accompanied by certificate, as contemplated in the first proviso to Section 92(a). Second provision to Section 92(a) provides that an application for recovery of the amount, in terms of the award, is to be made within twelve years. In the present case, the award was made on 29.01.2011 and the application for execution was made on 29.04.2011, therefore, the embargo placed by second proviso is not 4 applicable to the present case. The District Magistrate, Nainital has issued the impugned communication based on the legal opinion given by Deputy District Government Counsel, Haldwani.
8. I have perused the opinion relied upon by the District Magistrate, Nainital, wherein it is opined that the recovery certificate issued by the petitioner does not meet the requirement of Section 92 of the Act. As discussed earlier, Section 92(a) of the Act provides for recovery of the amount due to a Cooperative Society, in terms of an award, as arrears of land revenue. Thus, it cannot be said that the recovery certificate issued by the petitioner does not meet the requirement of Section
92. Moreover, the recovery certificate issued by the petitioner fulfills the conditions, mentioned in first and second proviso to Section 92(a) of the Act, therefore, in my humble opinion, District Magistrate, Nainital was not justified in returning the recovery certificate issued by the petitioner.
9. In paragraph no. 11 of the Writ Petition, it is pleaded that the opinion given by Additional District Government Counsel is based on an erroneous reading of a Full Bench decision of Hon'ble Alahabad High Court in the case of Sharda Devi Vs. State of U.P. and others reported in (2001) 3 UPLBEC 1941. In the said judgment, it was held that the loan advanced by a commercial bank, under its Cash Credit Scheme, does not come within the ambit of State Sponsored Scheme, therefore, it cannot be recovered by Collector, by invoking provisions of U.P. Public Moneys (Recovery of Dues) Act, 1972. Although, there is no reference to the said judgment in the impugned communication issued by the District Magistrate, Nainital or in the 5 opinion relied by District Magistrate, Nainital, however, there is no dispute to the proposition laid down in the said judgment. It is settled position in law that a commercial loan, advanced by Commercial Banks, cannot be recovered as arrears of land revenue. The facts of the present case are entirely different, as the amount to the extent of decree given by Arbitrator under Section 71 (4) is being sought to be recovered as arrears of land revenue, which is permissible under Section 92 (a) of the Act. Thus, viewed from any angle, the impugned communication issued by District Magistrate, Nainital cannot be sustained in the eyes of law.
10. In view of the aforesaid discussion, the communication dated 26.08.2015 issued by District Magistrate, Nainital deserves to be quashed and is hereby quashed.
11. Accordingly, the writ petition stands allowed. Petitioner shall be at liberty to re-send the recovery certificate to the District Magistrate and the District Magistrate shall, thereafter, proceed to recover the amount, in accordance with law.
(MANOJ KUMAR TIWARI, J.) Navin