Mahabir Singh vs State Bank of India and others

Rakesh Tiwari, J.—Heard learned counsel for the appellant and perused the record.

The plaintiff appellant challenges the judgment and decree dated 2.2.2010 passed by the Additional District Judge, Court No.4, Moradabad in Civil Appeal No. 31 of 2004, Mahabir Singh versus State Bank of India and others arising out of the judgment and decree dated 27.4.2004 passed by the Civil Judge (Senior Division) Court No.1, Moradabad in Original Suit No. 652 of 1998, Mahabir Singh versus State Bank of India and others.

The plaintiff appellant has challenged the recovery certificate dated 28.7.1997 in the suit aforesaid on the ground that it is void and infructuous.

The facts of the case are that the plaintiff appellant desired to start business of manufacturing sugar by "Gurh'', hence he applied to the U.P. Khadi Gramoudyog Board, Lucknow for recommendation to the State Bank of India to sanction him loan as he did not have any ready money to start the aforesaid business. On the recommendation of Khadi Gramoudyog Board, the State Bank of India Branch Dhanaura, District J.P. Nagar sanctioned loan of Rs.22,900/ on 25.1.1986, which was to be repaid in six monthly instalments of Rs. 2862/ each with interest, the first instalment being due on 25.7.1986. The plaintiff appellant did not repay the instalments of the said loan on the ground that he suffered loss in the business. As a number of instalments had fallen due which had not been repaid by the appellants, he claimed to have approached the Bank for giving the details of the amount due.

It is alleged that the Bank did not provide him the account as such the matter lingered on.

Ultimately, the Bank issued recovery certificate dated 28.4.1997 to the District Magistrate, J.P. Nagar for recovery of amount of Rs.47,548/ as arrears of land revenue under Section 11A of U.P. Agricultural Credit Act, 1973. On coming to know about the recovery certificate the plaintiff appellant filed Original Suit No. 652 of 1998 aforesaid for declaring recovery certificate dated 28.7.1997 as void and infructuous and for permanent injunction against the recovery certificate on 9.11.1998.

The trial Court on the basis of pleadings of the parties framed following issues.

After considering the oral and documentary evidence, the provisions of Section 3(3) of U.P. Public Recovery of Dues Act,1972, the provisions of Section 330C of the U.P. Z.A. & L.R. Act in respect of recovery, the provisions for sponsored schemes as well as the cases settled on the point, dismissed the suit of the plaintiff appellant with cost vide judgment and decree dated 27.4.2004. The plaintiff appellant challenged the judgment and decree aforesaid by means of Civil Appeal No. 31 of 2004 in the Court of Additional District Judge, Court No.4, Moradabad. The first appellate Court confirmed the judgment and decree dated 27.4.2004 of the trial Court vide its judgment and decree dated 2.2.2010.

Aggrieved by the aforesaid judgment and decree dated 2.2.2010, the present second appeal has been filed.

Learned counsel for the plaintiff appellant has challenged the recovery certificate issued against the plaintiff appellant as illegal, void and ineffective on the following grounds:

"(a) That the amount of Rs.22,900/ was advanced to the plaintiff on 25.1.1986 by defendant no.1 whereas this amount has been shown as Rs.36,046/ in the recovery certificate.

(b) That the recovery certificate has been issued under Section 11A of U.P. Agricultural Credit Act, 1973 which is wrong as the loan in suit is not an agricultural loan and it is a loan for industrial purpose.

(c) That the defendant no.1 has charged and is charging 14% compounded interest whereas interest at the rate of 4% simple yearly interest should have been charged from the plaintiff being a loan granted on the recommendation of Khadi and Gramoudyog Board, Lucknow.

(d) That the amount is shown in the recovery certificate is wrong and excess.

(e) That the recovery certificate has been issued without issuing any notice to the plaintiff and also without completing formalities which are required to be taken before issuing recovery certificate.

(f) That recovery certificate has been issued giving any reply to the notice dated 13.11.1997 sent by plaintiff to defendant no.1.

(g) That the recovery certificate is barred by limitation.

(h) That the loan recovered through recovery certificate cannot be recovered by issuing recovery certificate."

It appears from the written statement of the Bank that its case before the courts below was that on receipt of notice, the Bank contested the suit by filing written statement. It denied the averments made in the plaint and came out with the case that the plaintiff appellant had not come with clean hands and had concealed material facts; that he was given loan on the recommendation of the U.P. Khadi Gramoudyog Board; that the loan account no. MTL 12/2 was highly irregular as the plaintiff appellant was not repaying the loan amount due to which a sum of Rs.36,046/ became due up to 30.9.93 and thereafter from 1.10.93 till the date of issuance of recovery certificate on 28.7.97 and a further sum of Rs.11502/ became payable by him towards interest. Thus, the total amount of Rs.47548/ was due against the plaintiff appellant up to 28.7.97 till the date of issuance of recovery certificate.

It was also stated that after completing all the legal formalities the plaintiff appellant had been granted loan. He had filled up the loan agreement and was informed about the terms, conditions as well as the nature of the loan agreement. It was denied that the plaintiff appellant had ever approached the Bank for the details of the account and that in the circumstances the bank was compelled to issue demand notice dated 16.9.91 against the plaintiff appellant under the U.P. Public Money Recovery of Dues Act within prescribed limitation for repayment of loan and that the recovery was being made under Section 11A of U.P. Agricultural Credit Act, 1973, hence it would not become illegal as mentioning of a wrong section would not invalidate the recovery certificate. It was also the case of the Bank that the Bank is entitled to charge interest at the rate of 12.5% and there was no provision for charging 4% simple interest as claimed by the plaintiff appellant but the plaintiff appellant does not want to repay the loan taken by him with malafide intention.

The moot question which therefore, arises for consideration before the Court as to what was the terms and conditions of the loan agreement and its nature.

The plaintiff appellant claims that the loan taken by him was not an agricultural loan. The loan agreement had not been filed by the plaintiff appellant before the courts below by which it could be established that the loan taken by the plaintiff appellant was in the nature of agricultural loan or commercial loan or any other types of loan. The explanation given by the learned counsel for the plaintiff appellant is that he was never provided any copy of the loan agreement by the Bank. Be that as it may, since he was executing the loan agreement, he had a right to demand a copy of the loan agreement signed by him. In case it was not provided by the Bank,the same could have been got summoned by him from the Bank. It was upon the plaintiff ,who had filed the suit challenging the recovery certificate, to prove his case. From perusal of the judgment and decree of the trial Court as well as of the first appellate Court it is apparent that the plaintiff appellant has come out with the case that the recovery certificate issued under the U.P. Agricultural Credit Act, 1973 would not apply and he was only liable to pay 4% simple interest on it.

The aforesaid objections could have been proved by the plaintiff appellant from the loan agreement which was never filed by him in support of his case as it would have contained the interest applicable on loan amount and the mode of payment of loan as well as the nature of the loan amount whether it was agricultural or not.

It appears from the record that the plaintiff appellant has not even deposited the first instalment on the ground that he suffered loss in the business. On loan having been granted the borrower is given a schedule of payment and the instalments due. The plaintiff appellant had all the informations regarding the instalments of loan which he had to pay as well as the rate of interest. In the facts and circumstances of the case, since the plaintiff appellant has failed to establish his own case, the Court is not inclined to interfere in the concurrent findings of facts recorded by both the courts below. The substantial question of law must arise from the pleadings of the parties. In my considered opinion, no substantial question of law arises in this second appeal as to whether U.P. Agricultural Credit Act, 1973, U.P. Public Money Recovery of Dues Act,1972 will apply in the case in as much as the plaintiff appellant has to first prove the nature of loan taken by him which he has utterly failed to prove.

For all the reasons stated above, the second appeal is accordingly dismissed.