Rajasthan High Court - Jaipur
Sishupal Singh And Ors vs R F C on 13 February, 2013
In the High Court of Judicature for Rajasthan at Jaipur Bench Jaipur Judgment Sishupal Singh and ors vs. Rajasthan Financial Corporation and another S.B.Civil Misc. Appeal No.253/2000 under Section 32(9) of the State Financial Corporation Act, 1951 against the judgment and decree dated 22.12.1999 passed by the Addl. District and Sessions Judge, Sikar in Civil Misc. Case No.28/1994 Date of Judgment - 13.2.2013 Present Hon'ble Mrs Justice Nisha Gupta Mr.Arun Kumar Sharma for the appellants. Mr.Arjun Singh for the respondents. By the Court:
This Misc. Appeal under Section 32(9) of the State Financial Corporation Act, 1951 has been filed against the judgment and decree dated 22.12.1999 passed by the Addl. District Judge, Sikar in Civil Misc. Case No.28/1994,whereby the decree for Rs.2,72,105/- has been passed against the appellants.
Contention of the appellants is that they applied for a loan to run his own truck to Rajasthan Financial Corporation, Jaipur on 24.7.1982. On this application, loan of Rs.1,77,000/- was sanctioned by the respondents on 11.11.1982. The appellant no.1 deposited various sums at different times but however the respondents seized the truck of appellant no.1 on 19.3.1989 on the plea that the installments were not deposited in time and terms of the agreement were flouted. Appellant no.2 and 3 are the guarantors of the loan amount. The truck was auctioned and Rs. 1,34,500/- has been adjusted towards original loan amount. Thereafter the respondents filed a suit under section 31(aa) of the State Financial Act to recover the said amount and the court below has passed the judgment and decree along with interest.
The contention of the appellants is that the judgment passed by the lower court is contrary to law. No suit under section 31 (aa) of the State Financial Act is maintainable against the original-debtor and at the same time against the sureties. Civil court cannot pass money decree because proceedings under section 31 and 31(aa) of the Act are in the nature of executing proceedings and hence the order like impugned one is unwarranted.
Per contra, further contention of the respondents is that admittedly the loan was sanctioned on 11.11.1982, in any case, the respondents were of the view that appellants have defaulted in payment of loan amount and execution process has started on 19.3.1989 by seizing the truck of the appellant no.1 but the proceedings under section 31 of the Act have been started in 1994 which are clearly barred in view of the Article 137 of the Limitation Act.
Per contra, the contention of the respondents is that there is no infirmity in the impugned order. Admittedly, the amount of Rs.2,72,105/- was due against the appellant which was considered by the court below and rightly ordered for the above and application cannot be held barred by limitation as proceedings under section 31 are like seeking reliefs in execution application and hence section 137 of the limitation Act has no application on such applications.
Heard learned counsel for the parties and perused the impugned judgment. The facts as regard sanction of the loan,seizure and auction of the truck are not in dispute. The contention of the present appellants is that a money decree could not be passed under the provisions of section 31 of the Act and reliance has been placed on AIR 2001 Rajasthan 4, M/s O.K. Gaur & Compnay and another vs Rajasthan Finance Corporation where it has been held in para no. 9.
In view of the above decisions, it can be said without hesitation that on an application under Sec. 31 of the State Financial Corporation Act, 1951, a decree for money cannot be passed because the reliefs which can be granted under Sec. 32 are against the property whereas a money decree is to be passed by the Civil Court against the concerned person i.e. the judgment debtor.
In view of the above, it can be safely concluded that a money decree should not be passed on an application under section 31 of the Act and in the present case, the court below has wrongly passed the money decree under the provisions of section 31 of the Act.
Further contention of the appellants is that proceedings are barred by limitation and reliance has been placed on 2006 DNJ (SC) 508 Maharashtra State Financial Corporation vs Ashok K. Agarwal and ors, it has been categorically held that applications under section 31 sub clause 1 (aa) and 32 of the Financial Corporation Act, Article 137 would apply. Admittedly, the loan was advanced on 11.11.1982 whereas the proceedings have been started in the year 1994 and period of limitation prescribed under section 137 of Limitation Act is only three years. Hence,in view of the above, the proceedings for enforcement of liability against the sureties are time barred. The respondents have relied upon 1997 (2) WLC 199 where it has been held that in proceedings under section 31 sub clause 1 of State Financial Act, Article 137 of Limitation Act has no application but this view cannot be found good. In view of the opinion of the Supreme Court in the case Maharashtra State Financial Corporation vs Ashok K. Agarwal and ors (supra) where it has been held:
6.Article 137 of the Limitation Act applies in the facts of the present case. When Article 137 is applied, the application moved by the appellant- Corporation on 2nd January, 1992 for proceeding against the sureties i.e. the respondents herein, was clearly barred by time and the courts below were correct in holding so. To recall the facts of the present case, the notice demanding repayment of the amount of loan was issued against the borrower, that is, M/s. Crystal Marketing Private Limited on 8th March, 1983 and the application under Sections 31 and 32 of the State Financial Corporation was filed against the said borrower on 25th October, 1983. The liability of sureties had crystalised then.
7.The amendment under Section 31 of the State Financial Corporation Act which authorises the State Financial Corporations to take action under Section 31 of the Act for enforcing the liability against the sureties, was brought about in the year 1985 by introduction of sub-section (aa) in Section 31 (1) of the Act. Even after this amendment the appellant did not wake up to take any step against the sureties in the present case. Notice was issued to the sureties only on 7th December, 1991 and the application for enforcement of liability against them was filed on 2nd January, 1992. The application, therefore, was clearly barred by time.
In view of the above, the order of the court below is unsustainable in view of the fact that money decree could not be passed on the application under section 31 of the Act and at the same time, proceedings are time barred. Hence the impugned judgment is liable to be quashed. The appeal is allowed and the judgment dated 22.12.1999 passed by the Addl.District Judge, Sikar in Civil Misc. Case no. 28/1994 is quashed and set aside.
(Nisha Gupta),J om Item No.76 All corrections made in the judgment/order have been incorporated in the judgment/order being emailed.
Om Prakash P