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Bharat Singh v. Punjab National Bank & Ors. - CR-1187-1996 [2006] RD-P&H 12852 (19 December 2006)

CR No.1187 of 1996 -: 1 :-


CR No.1187 of 1996

Date of decision: December 15, 2006.

Bharat Singh



Punjab National Bank & Ors.


Present: Shri Chander Singh, Advocate for the petitioner.

Shri H.N. Mehtani, Advocate for respondent No.1.

Surya Kant, J. (Oral)

The issue which arises for consideration in this revision petition is whether, notwithstanding the decree passed by the civil Court or interest awarded by it, the executing court can restrict payment of interest at the rate not more than 6% per annum or total entitlement of a decree-holder to be not more than double of the principal amount, if it was taken as an "Agricultural loan".

[2]. A brief reference to the facts may be made.

[3]. The petitioner and proforma respondents No.2,3 and 4 took a loan of Rs.59,800/- from the respondent No.1, i.e., Punjab National Bank for the purchase of a tractor and its implements. The agreed rate of interest was 12.5% per annum. The loan was taken on 1.7.1982. Its installments were not paid in time by the petitioner and other loanees. The Bank filed a suit for recovery of Rs.1,15,184/-, which was decreed by the civil court vide CR No.1187 of 1996 -: 2 :-

judgment and decree dated 9.4.1990 with a future interest @ 6% per annum "from the date of institution till realization of the decretal amount", as it was an agricultural loan. The Bank impugned the above stated judgment and decree to the extent of award of interest @ 6% per annum only. Its appeal was accepted by The first appellate court vide its judgment and decree dated 1.4.1991, accepted the appeal and directed the petitioner and his co-loanees to pay interest @ 12.5% per annum on the decretal amount from the date of filing of the suit.

[4]. No further appeal was filed by the petitioner and his co-loanees against the above stated judgment and decree of the first appellate court and the same attained finality.

[5]. Execution proceedings were initiated by the Bank in which the petitioner moved objection petition, inter-alia, alleging that since the loan was taken for agricultural purposes, the decree holder was not entitled to claim interest @ beyond 6% per annum. The aforesaid objection was presumably founded upon sections 3(a)(i)(c) and 3(a)(ii) read with section 4 of the Haryana Relief of Agricultural Indebtedness Act, 1989, as according to the petitioner that debt he had paid and/or he was willing to pay equivalent to double the amount of principal loan amount to discharge his debt liability. The afore-mentioned objection petition having been impliedly turned down by the executing court, the petitioner has approached this court.

[6]. Learned Counsel for the petitioner has placed reliance upon two judgments of this Court in the case of:- (i) Krishan Lal v. State Bank of Patiala, 1990 PLJ 249; and a D.B. Judgment in (ii) Jagdish Chander v.

Punjab National Bank, 1994 PLJ 304.

CR No.1187 of 1996 -: 3 :-

[7]. On the other hand, learned counsel for the Punjab National Bank relies upon Section 21-A of the Banking Regulations Act, 1949, the scope of which has been elaborately explained by the Hon'ble Supreme Court in the case of State Bank of India v. Yasangi Venkateswara Rao, 1999 ISJ (Banking) 232. He has also relied upon a judgment of a learned Single Judge of this Court in the case of Punjab National Bank v. Shishu, 2001 ISJ (Banking) 205 wherein reference to the Haryana Agricultural Credit Operation and Misc. Provisions Act, 1973 was also made, but relying upon the judgment of the Hon'ble Supreme Court in State Bank of India v.

Yasangi Venkateswara Rao (supra), it was held that even in the case of an 'agricultural loan', the loanee was liable to pay interest at the agreed rate.

[8]. A brief reference to the provisions of the Haryana Relief of Agricultural Indebtedness Act, 1989 is required to be made at this stage.

Section 2(b) of the Act defines an "agriculturist" whereas Section 2(c) defines "bank" which means (i) banking company as defined in the Banking Regulation Act, 1949; (ii) the State Bank of India; (iii) a subsidiary bank, as defined in the State Bank of India (Subsidiary Banks) Act; (iv) a corresponding new Bank; (v) any banking institution notified by the Central Govt.; and/or (vi) other notified financial institutions, etc. etc. Section 2(g) defines "debt" which includes all liabilities owing to a creditor including a bank, in cash or kind, secured or unsecured, payable under a decree or order of a civil court or otherwise and subsisting on the date of commencement of this Act.

[9] Sections 3 and 17 of the Act have material bearing on the issue and the same are reproduced below:-

"3. Discharge of debt Notwithstanding anything contained in CR No.1187 of 1996 -: 4 :-

any enactment for the time being in force or in any contract or other instrument having the force of law, - (a) every debt, together with any interest payable thereon, owed on the commencement of this Act by a debtor shall be deemed to be wholly discharged, if -

(i) he had in the discharge of his debt, paid a sum exceeding or equivalent to double the amount of the principal at any time before the commencement of this Act; (ii) he, in the discharge of his debt, pays, after the commencement of this Act, a sum which, together with any sum already paid in the discharge of such debt, is equivalent to double the amount of this principal; (b) every property pledged or mortgaged by a debtor whose debt is deemed to be discharged under clause (a) shall stand released and shall vest in him free from all encumbrances when such debt is deemed to be discharged; (c ) subject to the provisions of clause (a), the liability of a debtor to repay the debt, together with any interest payable thereon, shall not exceed twenty per cent of the gross value of his annual income from his occupation multiplied by seven and such liability shall be spread for repayment over a period upto seven years to be reckoned from the date of order of adjudication. No recovery of amount in excess of the debt liability scaled down shall be made and the portion of debt in excess thereof shall be extinguished.

17. Bar of civil suits.- No civil courts shall entertain- CR No.1187 of 1996 -: 5 :-

(a) any suit, appeal or application for revision- (i) to question the validity of any procedure or the legality of any order issued under this Act; or

(ii) to recover any debt which is deemed to have been duly discharged under the provisions of this Act; (b) any application to execute a decree passed by a civil court against a debtor;

(c ) any suit for declaration, or any suit or application for injunction affecting any proceedings under this Act before the Board.

This section bars the jurisdiction of any other civil court to question the validity or legality of any order passed by the Board. The Act does not specifically bar the jurisdiction of the civil court to entertain a suit relating to the debts but the present Act being a special Act impliedly bars the remedy under general law. Even if a civil suit is pending in respect of any agricultural debt, the debtor can approach the Board to determine his liability and the decision of the Board shall prevail."

[10]. At this stage, it may also be noticed that State legislature has the exclusive domain to legislate in respect of "agriculture", "land", "land improvement", "agricultural loans", "money lenders" and "relief of agricultural indebtedness" (Ref: Sr. No.14,18 and 30 of List-II of our Constitution). There can be no doubt that the 1989 Act is directly referable to the aforesaid "subjects".

[11]. On the other hand, the Banking Regulations Act, 1949 CR No.1187 of 1996 -: 6 :-

undoubtedly falls within the subjects "Serial No.38 and 45", i.e. "Reserve Bank of India" and "Banking" of List I Union List of the Seventh Schedule of the Constitution of India.

[12]. The question arises as to whether a "Central Legislation" which falls within the domain of the Union List, can have overriding effect on a Legislation enacted by the State Legislature in respect of a subject matter which exclusively falls within its domain under the State List? In other words, the question would arise as to whether Section 21-A of the Banking Regulations Act, 1949 can defeat, frustrate or defunct the legislative object for which the Haryana Relief of Agricultural Indebtedness Act, 1989 has been enacted by the State Legislature?

[13]. The afore-mentioned issue(s), however, have not been considered by the Learned Single Judge in the case of Punjab National Bank v. Shishu (supra) wherein reference to the provisions of the Haryana Agricultural Credit Operation and Misc. Provisions (Banks) Act, 1973 (instead of Haryana Relief of Agricultural Indebtedness Act, 1989) has been made. Similarly, the aforesaid question has not been considered either by the Division Bench or by the Learned Single Judge in Jagdish Chander and Krishan Lal's cases (supra), which are being relied upon by the learned counsel for the petitioner.

[14]. As the issues raised here-in-above are likely to arise in a good number of cases and if the plea raised by the petitioner is accepted, it will also mean that the executing court, by virtue of Section 17 of the 1989 Act, can go behind the decree passed by a civil court. In the light of the above noted provisions, legal position and the facts, I am of the considered view that the matter requires consideration by a Larger Bench.

CR No.1187 of 1996 -: 7 :-

[15]. Accordingly, let the papers of this case be placed before Hon'ble the Chief Justice for constitution of appropriate Bench.

December 15, 2006. [ Surya Kant ]

kadyan Judge


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