Sri T.Raghavan Iyengar v. The Andhra Pradesh State Finance Corporation, Chirag Ali Lane, Hyderabad & Anr.

THE HON’BLE SRI JUSTICE SANJAY KUMAR WRIT PETITION NO.852 OF 2009 ORDER: The petitioner challenges the notice dated 31.12.2008 issued by the Andhra Pradesh State Financial Corporation under Section 52-A of the Andhra Pradesh Revenue Recovery Act, 1864 calling upon him to pay a sum of Rs.1,02,37,485/- failing which the said sum was proposed to be recovered as arrears of land revenue. This Court, by order dated 23.01.2009, directed the respondent Corporation not to initiate any further proceedings against the petitioner for recovering the alleged overdue amount. The petitioner was the Managing Director of M/s.Kubera Computer Services Private Limited, which had availed a term loan of Rs.4,10,000/- from the respondent Corporation during the year 1982. Upon default in the repayment of the loan, the respondent Corporation initially seized the unit of the company on 19.01.1987. However, the unit was restored to the company on 20.01.1987. Thereafter, owing to several defaults stated to have been committed by the company, the respondent Corporation is said to have decided to seize the unit and initiate action under Section 29 of the State Financial Corporations Act, 1951. No concrete action however appears to have been taken in this regard and ultimately the impugned notice under Section 52-A of the Andhra Pradesh Revenue Recovery Act, 1864 was issued on

31.12.2008. The petitioner assails the said notice on the simple ground that it is barred by the law of limitation. Reliance is placed on the Judgment Supreme Court in STATE OF KERALA v. V.R.KALLIYANIKUTTY[1], wherein the Supreme Court, while dealing with a recovery sought to be effected by the Kerala State Financial Corporation under the provisions of the Kerala Revenue Recovery Act, held that the Revenue Recovery Act merely provided for speedy recovery of loans and that as it did not create any new right, the person claiming recovery cannot claim recovery of amounts which are not legally recoverable. The Supreme Court further held that the defence of limitation available to a debtor in a suit or other legal proceeding cannot be taken away under the provisions of the Revenue Recovery Act. Sri M.S.Ramachandra Rao, learned standing counsel for the Andhra Pradesh State Financial Corporation, on the other hand, placed reliance upon the observations of the Supreme Court in M/S.HINDUSTAN TIMES LTD. v. UNION OF INDIA[2]. Therein, in the context of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, the Supreme Court, taking note of the fact that the said legislation did not contain any provision prescribing a period of limitation for recovery of damages which were due to the Trust Fund, observed that the rule that where no period of limitation is prescribed for exercise of power, still such a power must be exercised within reasonable time, cannot be made applicable to monies withheld by a defaulter who holds them in trust. It was further observed that an employer who had defaulted in making over contributions to the Trust Fund had the use of monies which did not belong to him at all and therefore it would not lie in the mouth of such a person to say that by reason of delay in exercise of powers under the said Act, he had suffered loss. It is however to be noticed that the observations of the Supreme Court in M/S.HINDUSTAN TIMES LTD.2 were made in the context of a welfare legislation, namely, the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The said observations cannot be made applicable mutatis mutandis to the case on hand involving an altogether different enactment, the State Financial Corporations Act,