CWP/8669/2010 of JOGINDER SINGH AT12.55PM Vs H.P.KHADI VILLAGE INDUSTRIES BOARD on 29 December 2011

1. Himachal Pradesh Khadi & Village Industries Board, throughits Secretary, Shimla, H.P. 2.Chief Executive Officer, Himachal Pradesh Khadi & Village Industries Board, Shimla.

3. The Tehsildar (Recovery), District Sirmour at Nahan, H.P.

………… Respondents.

Civil Writ Petition under Article 226 of the Constitution of India.

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Coram

The Hon’ble Mr. Justice V.K. Ahuja, Judge.

Whether approved for reporting?

For the Petitioner: Mr. N.K. Tomar, Advocate. For the respondents: Ms. Rita Goswami, Advocate, for respondents No.1 and 2.

Mr. J.S. Guleria, Assistant Advocate General, for respondent No.3.

---------------------------------------------------------------- Per V.K. Ahuja,Judge:

The present writ petition has been filed by the petitioner, praying that writ of mandamus may kindly be issued in favour of the petitioner and against the respondents, restraining them from recovering amount over and above the principal amount of Rs.13,000/- from the petitioner. The petitioner also claimed that writ in the nature of certiorari may be issued quashing the recovery order/letter Annexure P-2 issued by the respondents.

2. Briefly stated, the facts leading to the filing of the present writ petition are that the petitioner was granted a loan of Rs.13,000/- @ 4% per annum by respondents No.1 and 2 for setting up a laundry soap unit. A mortgage deed Annexure P-1 was also executed in this regard. The amount was to be paid in four monthly instalments. The petitioner alleged that due to tough competition, he could not compete with the market and incurred heavy losses. The petitioner stated that he is ready and willing to pay the principal amount of Rs.13,000/- along with interest @ 4% per annum, but the respondents have started process for recovery of the amount of Rs.55,721/- upto 31.3.2010, which is four times more than the principal amount. Hence, the petition filed by the petitioner.

3. A notice of the petition was issued to the respondents, who filed reply and pleaded that the petitioner is not entitled to any discretionary relief since he had not established any soap unit for which loan was obtained and did not furnish any utilization certificate to the respondents despite several requests. It was alleged that since the petitioner has not established any soap unit, he was not entitled to retain the money. Hence, the recovery proceedings were initiated under Section 33 of the H.P. Khadi & Village Industries Board Act, 1966. The amount was not paid despite several requests, therefore, proceedings for recovery of the amount were initiated.

4. I have heard learned counsel for the parties. 5. The first question which arises for consideration is that as to whether the loan was granted in favour of petitioner for establishment of laundry soap unit. The petitioner did not establish that any soap unit was set up and as such he was not entitled to the discretionary relief. The respondents have specifically pleaded in this regard, but no rejoinder was filed by the petitioner that he had set up the unit, submitted the utilization certificate for the amount and therefore, the averments made in the reply have to be believed.

6.

6. Apart from the above, there is nothing on record to show that any amount was paid by the petitioner at any time though the loan had been taken sometime in 1982. The amount was to be paid in four instalments in between the period from 2.9.1984 to 2.9.1987. However, no steps were taken by the petitioner at any time to pay the amount. The only ground taken by the petitioner is that the amount has multiplied to four times the principal amount and the respondents are not entitled to recover four times the amount which was originally granted to the petitioner. To substantiate his plea, he has relied upon the decision of the Hon’ble Supreme Court in Mhadagonda Ramgonda Patil and others vs. Shripal Balwant Raindeandothers, (1983) 3 Supreme Court Cases 298. The facts of the case are different since in that case the provisions of section 60 of Redemption of Mortgage were being considered and it was observed that there is an equitable rule of Damdupat. The creditor to recover at any given time the amount of interest which is in excess of the principal amount due at that time. The said decision is not applicable to the present facts since the facts are entirely different.

7. To rebut the above submissions, the learned counsel for the respondents had relied upon a decision of this Court in The H.P. State Industrial Development Development Corporation Ltd.,Shimla vs. M/s.Gobind Pharm Chem Pvt. Ltd.

and others, 2006 (2) Shim. LC 300. In that case the recovery proceedings were initiated by the H.P. State Industrial Development Corporation Ltd. and it was held that period commences on the date last instalment is due and it ends with the date on which payment is made. The defendants did not even pay the first instalment. The period continued till recall notice was issued. It was held that the loan agreements, hypothecation deeds and guarantee deeds prove the claim of the plaintiff.

8. In the present case, the loan was sanctioned in favour of the petitioner by the respondent-Board at a concessional rate of 4% per annum for setting up a laundry soap unit. The petitioner availed the concession, used the amount, but did not set up a unit and furnish the utilization certificate. Therefore, he was not entitled to any discretionary relief under the writ jurisdiction. It was a public money lying with the Khadi and Village Industries Board, which had to be given in accordance with law and the petitioner cannot be permitted to mis-utilize the amount and not to pay any interest. In so far as, the question of limitation is concerned, it was not a simple suit for recovery of money, but was that recovery proceedings were initiated on the basis of mortgage deed and as such the recovery proceedings were well within time, once the recall notice had been issued to the petitioner to pay the amount. There may be many disputed questions in regard to the loan and interest, as to whether the amount could be recovered or not, or the principal amount could be more than double or not, which questions are to be determined by the Civil Court and the appropriate remedy in such circumstances was only the Civil Court.

9. In view of the above discussions, I am satisfied that no case is made out for exercising the extraordinary writ jurisdiction in favour of the petitioner and as such the present petition is dismissed accordingly. The pending miscellaneous application (s), if any shall stand disposed of.

December 29, 2011 (rkv)

(V.K. Ahuja) Judge