Shri Prem Kumar Bhatia & Ors. v. Haryana Financial Corporation & Ors.

This petition seeks a direction for quashing the recovery certificate dated 28.4.2006 (Annexure P-17)

Case of the petitioners is that certain loans were advanced by Haryana Financial Corporation and Haryana State Industrial Development Corporation for the business of the petitioners, but on account of default in payment, the unit of the petitioners was taken over by the respondents. Plant, machinery, land and building were sold. Since, according to the respondent No.1, the same were not sufficient to satisfy the C.W.P. No.4883 of 2007 2 loan, certificate (Annexure P-18) under Section 32G of the State Financial Corporations Act, 1951 was issued on 27.4.2006 to recover the amount as arrears of land revenue. It has also been mentioned that the claim for repayment of loan was highly inflated, inter-alia by capitalizing the penal interest, which was against the law laid down by the Hon’ble Supreme Court in Central Bank of India v. Ravindra 2002(1) SCC 367 para 55 =AIR 2001 SC 3095.

In the reply filed, action of sale and issuance of recovery certificate have been sought to be justified on the basis of contract between the parties.

We have heard learned counsel for the parties. Though several questions have been raised, we cannot go into the disputed questions except the issue of capitalizing penal interest which is covered in favour of the petitioners, by the law laid down by the Hon’ble Supreme Court in Central Bank of India (supra). Without going into the question whether in fact the penal interest has been capitalized, we direct that if penal interest has actually been capitalized, the respondents will make necessary adjustments. The remaining questions, whether calculations made by the respondents are valid and whether there is justification for sale or issuance of recovery certificate, being disputed questions, the writ petition is not an appropriate forum for settling such questions. The C.W.P. No.4883 of 2007 3 petitioners will be at liberty to take appropriate remedies, if so advised.