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Ram Dhani Seth v. The State Of U.P.& Others - WRIT - C No. 11593 of 2000 [2006] RD-AH 453 (6 January 2006)


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Court No. 34

Civil Misc. Writ Petition No. 11593 of 2000

Ram Dhani Seth Vs. The State of U.P. & Ors.


Hon. Dr. B.S. Chauhan, J.

Hon. Dilip Gupta, J.

This writ petition has been filed for quashing the citation dated 21.2.2000 issued by the Tehsildar and for a direction upon the respondents not to charge the penal rate of interest from the petitioner.

The record of the writ petition reveals that the petitioner has taken a loan of Rs. 1, 00,000/- from the Union Bank of India for establishing a Handloom Centre. The petitioner also took the cash credit facility to the limit of Rs. 4,00,000/- from the said Bank. The petitioner established the Handloom Carpet Unit and repaid the loan amount of Rs. 1, 00,000/- but became a defaulter to the extent of Rs. 3,81, 344/- in respect of the cash credit facility. Accordingly, the petitioner was served with a legal notice to pay the aforesaid amount. However, the petitioner did not pay the amount as a result of which recovery certificate was sent by the Bank to the Tehsil authorities for recovery of the amount due as arrears of land revenue and upon receipt of the recovery certificate, the Tehsildar issued the citation dated 21.2.2000 requiring the petitioner to deposit Rs. 4,19,439/- along with other incidental charges by 6.1.2000. It is this citation, which has been challenged by the petitioner on the ground that the loan was not advanced under any Government Scheme and, therefore, the same could not be recovered as arrears of land revenue.

We have heard the learned counsel for the petitioner and have perused the materials available on record.

On 7.1.2000 this Court, while entertaining writ petition, passed an order, in view of the statement made by the learned counsel for the petitioner, that the petitioner shall deposit Rs. 1,00,000/- within 15 days, the recovery proceedings shall remain stayed on deposit of the aforesaid amount and the petitioner shall be released from Jail on deposit of first instalment of Rs. 50,000/-.

Learned counsel for the petitioner has placed strong reliance upon a Full Bench decision of this Court in Smt. Sharda Devi Vs. State of U.P. & Ors,. (2001) 2 SAC 311 wherein it was observed as follows:-

"In view of the discussion made above, we are clearly of the opinion that a banking company can recover its dues by taking recourse to Section 3 of the Act only where the loan or advance or grant or credit has been given by it to a borrower under a State Sponsored Scheme and not otherwise. Any money advanced under cash credit limit Scheme by itself is not determinative of the matter as there is no prohibition under the Act for the State Government to notify such a facility as a State Sponsored Scheme. The real test is whether the banking company has made the advance, etc. under a State Sponsored Scheme."

In the present case the petitioner has not denied his liability to pay Rs. 3, 65,441/- as is clear from the averments made in paragraph 29 of the writ petition which is quoted below:-

"That, from the facts and circumstances enumerated in the writ petition it is crystal clear that the petitioner has clearly admitted his liability towards the repayment of the loan amount of Rs. 3,65,541/- which was outstanding against the petitioner on 31.3.1999. However, out of arbitrariness the respondent bank has shown the amount to be recovered from the petitioner as Rs. 4,19,439."

It is, therefore, a case where the petitioner has admitted the liability. In our opinion, the relief under Article 226 of the Constitution is discretionary and the Court can decline relief where the petitioner seeks to secure a dishonest advantage or perpetuate unjust gain. In the instant case as stated above, the petitioner admits the liability and all that he contends is that recovery cannot be made as arrears of land revenue. In such circumstances, we do not consider it to be a fit case where the petitioner should be permitted to raise this issue.

In Andhra Pradesh State Financial Corporation Vs. M/s. GAR Re-Rolling Mills & Anr., AIR 1994 SC 2151 the Hon'ble Supreme Court observed:-

"A court of equity, when exercising its equitable jurisdiction under Article 226 of the Constitution must so act as to prevent perpetration of a legal fraud and the courts are obliged to do justice by promotion of good faith, as far as it lies within their power. Equity is always known to defend the law from clefty evasions and new subtelities invented to evade law."

In the case of M.P. Mittal Vs. State of Haryana & Ors. AIR 1984 SC, 1888, the Hon'ble Supreme Court held as follows:-

"The appeal arises out of a writ petition, and it is well settled that when a petitioner invokes the jurisdiction of the High Court under Article 226 of the Constitution, it is open to the High Court to consider whether, in the exercise of its undoubted discretionary jurisdiction, it should decline relief to such petitioner if the grant of relief would defeat the interests of justice. The Court always has power to refuse relief where the petitioner seeks to invoke its writ jurisdiction in order to secure a dishonest advantage or perpetuate an unjust gain. This is a case where the High Court was fully justified in refusing relief."

The Hon'ble Supreme Court in State of Maharastra Vs. Prabhu (1994) 2 SCC 481 considered the equity jurisdiction of the High Court under Article 226 of the Constitution and pointed out as follows:-

"Even assuming that the construction placed by the High Court and vehemently defended by the learned counsel for respondent is correct should the High Court have interfered with the order of Government in exercise of its equity jurisdiction................. Where the Government or any authority passes an order which is contrary to rules or law it becomes amenable to correction by the courts in exercise of writ jurisdiction. But one of the principles inherent in it is that the exercise of power should be for the sake of justice. One of the yardstick for it is if the quashing of the order results in greater harm to the society then the court may restrain from exercising the power...........Therefore, even if the order of the Government was vitiated either because it omitted to issue a proper show-cause notice or it could not have proceeded against the respondent for his past activities the High Court should have refused to interfere in exercise of its equity jurisdiction as the facts of the case did not warrant interference.......... It is the responsibility of the High Court as custodian of the Constitution to maintain the social balance by interfering where necessary for sake of justice and refusing to interfere where it is against the social interest and public good."

The same position was reiterated by the Hon'ble Supreme Court in the case of Chandra Singh Vs. State of Rajasthan & Anr. AIR 2003 SC 2889 in which it was observed as follows:-

"Issuance of a writ of Certiorari is a discretionary remedy (Champalal Binani v. CIT, West Bengal, AIR 1970 SC 645). The High Court and consequently this Court while exercising its extra ordinary jurisdiction under Articles 226 or 32 of the Constitution of India may not strike down an illegal order although it would be lawful to do so. In a given case, the High Court or this Court may refuse to extend the benefit of a discretionary relief to the applicant."

In ONGC Ltd. Vs. Sendhabhai Vastram Patel & Ors,. reported in (2005) 6 SCC 454, the Supreme Court held as follows:-

"It is now well settled that the High Court and the Supreme Court while exercising their equity jurisdiction under Articles 226 and 32 of the Constitution as also Article 136 thereof may not exercise the same in appropriate cases. While exercising such jurisdiction, the superior courts in India may not strike down even a wrong order only because it would be lawful to do so. A discretionary relief may be refused to be extended to the appellant in a given case although the Court may find the same to be justified in law. [See S.D.S. Shipping (P) Ltd. V. Jay Container Services Co. (P) Ltd. (2003) 9 SCC 439]."

The observations made in the aforesaid decisions compel us not to grant relief to the petitioner as granting any relief would facilitate the petitioner in securing a dishonest advantage and perpetuate an unjust gain.

Learned counsel for the petitioner then contended that the Handloom Carpet Unit established by the petitioner was insured with the Oriental Insurance Company Limited and the insurance premium was paid by the Bank by deducting it from the cash credit account of the petitioner. This was done by the Bank from the year 1993 up to 15.11.1998 but after 15.11.1998 the Bank did not deposit the premium amount. In paragraph 15 of the writ petition, it has been stated that unfortunately it so happened that the Handloom Unit established by the petitioner was completely damaged by fire in the night of 3/4th May, 1999. The contention of the learned counsel for the petitioner is that the Bank acted contrary to the agreement by not depositing the premium after 15.11.1998 and if the premium had been deposited, the Handloom Unit would have been reimbursed for the damages caused on account of the fire.

We are not prepared to accept this submission of the learned counsel for the petitioner as the copy of the agreement entered into between the petitioner and the Bank in respect of the cash credit facility has not been placed on record. Learned counsel for the petitioner contended that the copy of the agreement was not supplied to the petitioner. It is difficult to conceive that a person who has taken the cash credit facility would not be possessed of the agreement entered into with the Bank. In any view of the matter, there is nothing on the record to even indicate that the petitioner had submitted any application before the Bank for supply of the agreement. In the absence of the agreement it is not possible to ascertain the terms and conditions under which the cash credit facility was extended to the Handloom Unit particularly whether it was obligatory on the Bank to pay the premium amount even when the petitioner defaulted in payment. This apart, the payment of the amount by the petitioner and the payment of the insurance premium by the Bank are two different issues and the petitioner cannot be permitted to contend that he would not pay the amount on this ground.

Learned counsel for the petitioner also contended that inspite of the directions issued by this Court the respondents have not filed any counter affidavit and, therefore, relief should be granted to the petitioner. In our opinion, it is for the petitioner to make out a case for the grant of relief and he cannot insist that the respondents must file a counter affidavit as has been held by the Supreme Court in State of Punjab & Anr. Vs. V.P. Duggal & Ors. AIR 1977 SC 196.

For all the reasons stated above, there is no merit in this petition. It is, accordingly, dismissed.

Dt/- 6.1.2006



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