Prem Chand Gupta and others vs Haryana Financial Corporation and others

Jawahar Lal Gupta, J.—The petitioners pray for the issue of a writ in the nature of mandamus "restraining the respondents from adopting coercive measure .... for recovery of the amount of loan ...".

Mr. Sachin Mittal, learned counsel for the petitioners, contends that the collateral security had been furnished. The liability of the surety is co-extensive with that of the judgment-debtor. Thus, the respondents should proceed against the surety instead of proceeding against the petitioners.

We are unable to accept this contention. It is the admitted position that the petitioners had taken a loan in the year 1992. It had closed down the unit and handed over possession of the premises to the Haryana Financial Corporation on a date which has not been disclosed. On February 17, 1994, the unit was auctioned for a sum of Rs. 2.3 lakhs. The remaining amount is still due from the petitioners. Nothing has been paid after February 17, 1994, in this situation, we are not surprised that the respondent-Corporation is resorting to coercive measures to recover the amount of money due from the petitioners. Equally, the claim of the petitioners that the Corporation should proceed against the surety cannot be accepted, Firstly, the liability is primarily that of the petitioners. There is nothing in law to debar the Corporation from proceeding against the person/s who had actually borrowed the money. Secondly, the surety is not even a party before us. In fact, it appears that the petitioners are attempting to avoid payment on the pretext or the other. Having taken the loan, they are under a duty to repay. The Corporation has a right to recover. Coercive measures are one of the permissible methods. We find no infirmity so as to call for any interference in the proposed action of the respondents.

Mr. Sachin Mittal has placed reliance on the decision of a Division Bench of this court in Joginder Singh and others Vs. Haryana Khadi and Village Industry Board, Ambala and others, . In this case, it was, inter alia, held that the authority should try to recover the dues by sale of mortgaged properties before proceeding to take coercive measures. There is no quarrel with the proposition. However, in the present case it is the admitted position that the only property mortgaged by the petitioners with the respondent-Corporation was the industrial unit. That has already been auctioned and an amount of Rs. 2,30,000 has been recovered. It is for the purpose of recovery of the remaining amount that the Corporation is proceeding to take further action. In doing so, the respondent-Corporation is not violating any of the provisions of law. Mr. Mittal has then referred to the decision of a learned single judge in Mukhtiar Singh v. Punjab National Bank [1993] (1) 103 PLR 260. In this case, the surety had approached the court against the order passed by the executing court. While rejecting his petition it was observed that the liability of the surety is coextensive with that of the principal debtor. Again there is no quarrel with this proposition. However, in the present case, the Corporation is only trying to recover its dues from the borrowers. In doing so, it is not violating any of the provisions of law.

No other point has been raised.

Resultantly, we find no merit in this writ petition. We are satisfied that the petitioners are only trying to pass on their liability to the surety. The Corporation is entitled to recover the money from the principal-debtor, i.e., the petitioners. The action in doing so calls for no interference.

The writ petition is, accordingly, dismissed in limine.

A copy of this order shall be communicated by tax to the court of Ms. Seema Rathee, junior Civil judge, Karnal and the District judge, Karnal, immediately as a suit, etc. between the parties is said to be pending.