JUDGMENT V.M. Sahai, J.
1. The questions that arise for consideration in this petition are whether there is any limitation for recovering the sum due as arrears of land revenue under the U.P. Public Moneys (Recovery of Dues) Act, 1972, and if there is none, whether recovery can be made within reasonable time or it is open to recover at any point of time?
2. The petitioners constituted a registered partnership firm, known as Adarsh Aluminium Industries to manufacture Aluminium Utensils. On 22.10.1973 an application was made by the firm to the U.P. Financial Corporation, Ghaziabad (in brief the Corporation) for granting loan of Rs. 2,00,000/- (Rupees Two lakhs only) for establishing the unit. The Corporation on 15.5.1974 sanctioned a loan of Rs. 1,80,000/-. Out of he sanctioned amount a total sum of Rs. 1,38,700/- was disbursed in instalments to the petitioners between 7.4.1975 to 17.7.1976. The entire amount of sanctioned loan was not disbursed, therefore, according to petitioners the unit could no go into production. The instalments were not paid, consequently the Corporation recalled the entire loan on 14.9.1978 and issued a recovery certificate on 2.1.1979 to the Collector under the U.P. Public Moneys (Recovery of Dues) Act, 1972 (in brief the Act) for recovering its dues as arrears of land revenue.
3. The Sub-Divisional Magistrate in recovery proceedings on 20.8.1981 auctioned the unit of the petitioners as well as the mortgaged Bhumidhari plot No. 439 belonging to the petitioner No. 2 Kailash Chand, area 6 Biswa and 15 biswansi, situated in village Khanpur, Pargana Dhar, Tehsil Anoopshahr, District Bulandshahr in favour of Shri Ved Prakash Sharma for Rs. 30,000/-. The personal assets of the petitioners were auctioned for Rs. 3,500/-. The Collector issued sale certificate on 20.8.1981. The petitioner No. 1 did not have any movable or immovable property and petitioner No. 2, after the auction sale, was left with no property. Only wearing apparels and utensils were spared. The Tehsildar after deducting the expenses, sent Rs. 30,134.50/- on 20.3.1982 to the Corporation along with a report that there remained no property or personal assets with the petitioners, therefore, no further recovery was possible from them. The recovery certificate was sent back by the Collector to the Corporation. Thereafter no effort was made either by the Corporation or by the Collector to recover any amount from the petitioners for about eighteen years.
4. Apart from the loan sanctioned by the Corporation in 1974 no other loan had been sanctioned or disbursed to the petitioners. The petitioners received a notice from the Corporation dated 29.6.2000 that they had taken loan of Rs. 1,38,700/- and till 20.3.2000 an amount of Rs. 48,03,281.94/- was due against them. It was also mentioned in the notice that recovery certificate had been sent to the Collector, Bulandshahr for recovering the aforesaid amount as arrears of land revenue. The notice stated that they may come to the Corporation for taking the benefit of one time settlement scheme. On 30.8.2000 the Collector issued recovery certificate and citation was issued on 12.9.2000 by Tehsildar, Siyana and the petitioner Kailash Chand was arrested for recovering the aforesaid amount. The petitioners have challenged the recovery certificate dated 30.8.2000, citation dated 12.9.2000 and arrest by means of this petition.
5. In the counter affidavit filed on behalf of the Corporation it is stated that the loan was sanctioned in the year 1974 and recovery was initiated in 1979. In Paragraph 20 it is stated that the recovery authorities informed the Corporation that no further recovery from the petitioners was possible as no personal assets were available with them. Therefore, the matter was considered by the Board of Directors of the Corporation in the meeting held on 31.3.1986 and the remaining loan was waived off/written off. In Paragraph 21 of the counter affidavit it is stated that the petitioners were not exonerated from the liabilities and they were contacted to repay the loan but since the loan was not paid recover certificate for Rs. 48,03,281.94/- was issued to the Collector on 30.8.2000. It is claimed that the recovery proceedings were not barred by time because recovery had been proceeding since 1981.
6. From Annexures-3 and 4 filed with the writ petition it is clear that the petitioner received a letter dated 29.6.2000, to take the benefit of one time settlement. It is further clear from the letter issued by the Corporation to Collector Bulandshahar, that in earlier recovery proceedings, the assets and the unit were sold and the balance amount was recovered from the personal property of the borrowers. From Paragraph 23 of the counter affidavit it appears that some correspondence took place between the Corporation and Tehsildar and on 16.12.2000 the Tehsildar informed that Sri Kailash Chandra, petitioner No. 2 had been arrested and. his moveable and immovable property had been attached. The allegation in Paragraph 19 of the writ petition that the petitioner No. 1 Narendra Kumar had learnt that warrant of arrest had been issued against him also was denied for want of knowledge.
7. The learned Counsel for the petitioners Sri Manish Kumar Nigam urged that recovery proceedings initiated by the Corporation on 30.8.2000 were barred by limitation and no amount could be recovered from the petitioner. He placed reliance on the decision of the Apex Court in State of Kerala and Anr. v. V.R. Kalliyanikutty and Anr. (1999) 3 SCC 657. He further urged that from Paragraph 20 of the counter affidavit it is clear that the Corporation on 31.3.1986 had waived off/written off the entire balance loan amount including interest due from the petitioner, therefore, no amount was due to the Corporation and recovery proceedings were illegal.
8. On the other (sic) Sri A.K. Gaur, the learned Counsel appearing for the Corporation urged that the recovery proceedings were valid and in accordance with law. He urged that no limitation for recovering the dues had been provided under the Act, therefore, the amount due could be recovered even after eighteen years. According to him the recovery proceedings initiated on 30.8.2000 being in continuance of the earlier recovery proceedings, could not be held illegal as the petitioners had not been exonerated from the liabilities. He urged that the recovery of public money was of paramount importance and the petitioners were not entitled to any relief. The learned Standing Counsel has adopted the arguments of Sri Gaur. 9. Section 3 of the Act provides that where any person is party to an agreement relating to loan, with the Government or Corporation etc. and he commits default in payment, the authorised officer of the Government or of Managing Director or Chairman of the Corporation etc. may send a certificate to the Collector to recover the sum due as arrears of land revenue. The section or the Act has not provided any limitation for recovery of such dues. But the objective of he Act indicates that the purpose of enactment was speedy recovery of dues. The nature of such Act was explained in Director of Industries, U.P. v. Deep Chand Agarwal, (1980) 2 SCC 332, by the Apex Court while dealing with the validity of U.P. Public Moneys (Recovery of Dues) Act, 1965, an analogous enactment. The Court observed that the Act was passed with the object of providing a speedier remedy to State Government to realise the loans advanced by it or by the Uttar Pradesh Financial Corporation. Explaining the need for speedy recovery, it said that the State Government while advancing loans did not act as an ordinary banker with a view to earning interest. Ordinarily it advances loans in order to assist the people financially in establishing an industry in the State or for the development of agriculture, animal husbandry or for such purpose which would advance the economic well-being of the people. Moneys so advanced have to be recovered expeditiously so that fresh advance may be made for the same purpose. It was with this object of avoiding the usual delay involved in the disposal of suits in Civil Courts and providing for an expeditious remedy that the Act was enacted. It has been reiterated by the Apex Court in V.R. Kalliyanikutty (supra) while dealing with Kerala Revenue Recovery Act, 1968 where the provision for recovery of arrears of land revenue are similar. The Court observed :
"Thus in public interest the State Government has made the said Act applicable for speedy recovery of loans given by a bank for agricultural purpose as well as for speedy recovery of loans given by Kerala Financial Corporation. The overall scheme of the Act, therefore, is to provide for speedy recovery, not merely of public revenue but also of certain other kinds of loans, which are required to be recovered speedily in public interest."
10. Recovery of the sum due under the Act speedily is thus, the main object of the Act. In V.R. Kalliyanikutty (supra) the Apex Court while examining the words 'amount due' in Kerala Revenue Recovery Act observed that the amount due could be amount which could be recovered in law. The Court held that an amount which is not recoverable for any valid reason ceases to be an amount due. The question, therefore, is that what is the meaning of the words 'sum due' in the Act and whether it continues to be so, irrespective of the time lapse or it ceases to be sum due after expiry of period during which recovery could be made in accordance with law. The words 'sum due' has not been defined in the Act. But the use of the word indicates that it must be valid and payable. The Apex Court in V.R. Kalliyanikutty (supra) had considered the question as to whether a debt which is barred by law of limitation can be recovered. The Court after examining the meaning of the expression 'amount due' held that the claims which are time barred are not amount due cannot be recovered, under law. For the same reason an amount or a debt which had become time barred cannot be recovered under the U.P. Public Moneys (Recovery of Dues) Act, 1972.
11. The question, therefore, is whether the recovery certificate issued in August, 2000 was barred by time? The Act does not provide for any period of limitation. But Sub-section (4) of Section 3 of the Act is extracted below : "3. (4) In the case of any agreement referred to in Sub-section (1) between any person referred to in that Sub-section and the State Government or the Corporation, no arbitration proceedings shall lie at the instance of either party either for recovery of any sum claimed to be due under the said Sub-section or for disputing the correctness of such claim :
Provided that whenever proceedings are taken against any person for the recovery of any such sum he may pay the amount claimed under protest to the officer taking such proceedings, and upon such payment the proceedings shall be stayed and the person against whom such proceedings were taken may make a reference under or otherwise enforce an arbitration agreement in respect of the amount to be paid, and the provisions of Section 183 of the Uttar Pradesh Land Revenue Act, 1901, or Section 287-A of the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, as the case may be, shall mutatis mutandis apply in relation to such reference or enforcement as they apply in relation to any suit in the Civil Court."
It permits the defaulters to pay the amount in protest, take recourse to proceedings as provided therein, upon which the provisions under Section 183 of U.P. Land Revenue Act, 1901 and Section 287-A of the U.P. Zamindari and Land Reforms Act 1950 mutatis mutandis apply as they applied to proceedings in a Civil Court. Section 287-A is extracted below :
"287-A. Payment under protest and suit for recovery.--(1) Whenever proceedings are taken under this Chapter against any person for the recovery of any (arrears of land revenue), (or for recovery of any sum of money recoverable as (arrears of land revenue) he may pay the amount claimed under protest to the officer taking such proceedings, and upon such payment, the proceedings shall be stayed and the person against whom such proceedings were taken may sue the State Government in the Civil Court for the amount so paid, and in such suit the plaintiff may, notwithstanding anything contained in Section 278, give evidence of the amount, if any, which he alleges to be due from him.
(2) No protest under this section shall enable the person making the same to sue in the Civil Court, unless it is made at the time of payment in writing and signed by such person or by an agent duly authorised in this behalf."
A person paying the amount under protest can approach the Civil Court. In such proceedings the plea of recovery being barred by time can be raised. In Kerala Revenue Recovery Act Section 72(2) provided for payment under protest and institution a suit for refund. The Apex Court in V.R. Kalliyanikutty (supra) held :
"In law he would be entitled to submit in the suit that the claim against which the recovery has been made is time-barred. Hence no amount should have been recovered from him. When the right to file a suit under Section 70(3) is expressly preserved, there is a necessary implication that the shield of limitation available to a debtor in a suit is also preserved. He cannot, therefore, be deprived of this right simply by making a recovery under the said Act. Unless there is anything in the Act which expressly brings about such a result. Provisions of the said Act, however, indicate to the contrary. Moreover, such a wide interpretation of 'amount due' which destroys an important defence available to a debtor in a suit against him by the creditor, may attract Article 14 against the Act. It would be ironic if an Act for speedy recovery is held as enabling a creditor who has delayed recovery beyond the period of limitation to recover such delayed claims."
It necessarily implies that the period of limitation provided for recovery of amount would be the period applicable in such cases. And if the recovery is not made within this period it becomes barred by time. It is true that the State ought not to suffer as if the claim becomes barred by limitation, the loss falls on the public. But the Act does not confer any new right on the State. The right to recover the sum due from the debtor flows from the agreement between the parties. It can be recovered either by a suit or through another procedure that is prescribed by the Act. The entire object of the Act is speedy recovery of dues of the State. The legislature did not provide for any limitation for the reason that the State would recover its dues expeditiously, without any delay. In the case in hand recovery proceedings under the Act had been initiated in 1979 and in 1981 the immovable property including personal assets of the petitioners were sold. The recovery certificate was returned by the Collector to the Corporation in 1982. Thereafter, the Corporation slept over the matter till the year 1999. Suddenly it woke up in 2000 and saddled interest liability of about Rs. 47,00,000/- (Rupees Forty Seven Lakhs) on a loan of Rs. 1,37,800/- taken in the year 1975. The law of limitation has been made in public interest providing for limitation for taking action within the time prescribed. The law expects everyone to be vigilant. If one sleeps over his right, the remedy due to lapse of time may become barred. The right to recover remains but it cannot be enforced except within the framework of law.
12. The law of limitation makes available a right of defence with the debtor to claim that after the expiry of period of limitation the remedy to recover the amount by the creditor from him had become time barred. The Act has been enforced for speedy recovery of dues of the State Government, U.P. Financial Corporation etc. as mentioned in the Act. It has not been enacted with a purpose to enlarge the limitation nor the rights of the creditor had been enlarged to recover claims of sum due that had become time barred. It is a settled law, that no one can extend the period of limitation by taking advantage of his own wrong. The Apex Court in Sharda Devi v. State of Bihar, (2003) 3 SCC 128, while considering the Section 30 of the Land Acquisition Act, 1894, which does not provide any limitation for making reference held as under:
"No period of, limitation for exercise of any statutory power is prescribed, the power can nevertheless be exercised only within the reasonable period; what is a reasonable period in a given case shall depend on the facts and circumstances of each case."
The reasonable period would be the period during which the suit could have been filed. Since the respondents slept over the matter for eighteen years, the recovery of loan in 2000 was barred by time. No effort has been made by the respondents to establish that the cause of action for recovery survived after eighteen years. Law recognises various events, which may extend the period of limitation or revive it. For instance, part payment during statutory period or acknowledgement to pay after running out of period of limitation. The allegation in Paragraph 16 of the writ petition that there was no correspondence between the petitioners and respondents after 1981 in respect of loan or arrears, nor the petitioners ever acknowledged any debt or loan after 1981, which could entitle the respondents to start recovery again, was vaguely denied. In reply to Paragraphs 12 and 14 of the writ petition the respondents have stated that the officers of the Corporation had been visiting and demanding arrears from petitioners. No material has been filed in support of it. The reference to Annexure-3 filed by the petitioners is irrelevant. This letter is the letter sent by the Corporation in the year 2000 to the petitioners to avail the benefit of one time settlement scheme. There is nothing to prove that the amount was demanded after 1981 and before 2000. It is of no help for the purpose of limitation. The counter affidavit has been filed by the Deputy Senior Manager Law of the Corporation. He has stated that, "officers of the Corporation during all the period kept on writing letters and made personal visits to the petitioners for repayment of loan". It is obviously an attempt to bring the recovery in period of limitation. But the allegation is not helpful to the respondents. The affidavit does not disclose the name of the officer or the date of visit. Nor any letter has been filed in support of the allegation that various letters were written demanding arrears. The affidavit has been sworn on personal knowledge without disclosing the source of information. It cannot be relied. It is insufficient to prove that limitation to start recovery survived after eighteen years.
13. The allegation in Paragraph 10 of the counter affidavit that property of the petitioners might not have been sold by revenue authorities is not supported by any material. Even assuming that the revenue authorities failed to discharge their duty in accordance with law, it could not stop the limitation. The cause of action for recovery of the loan arose when the petitioner committed default. The respondents initiated recovery within time. But once the recovery certificate was returned after sale of petitioners' assets, the recovery proceedings came to an end. If something remained or any property was not sold, the proceedings could have started but in accordance with law. The time taken to recover the amount was arrested when recovery proceedings were started. It started running again when recovery certificate was returned. Since no proceedings were initiated for nearly eighteen years, the proceedings for recovery became barred by time.
14. The recovery proceedings initiated in 2000 were further contrary to law as the Board of Directors of the Corporation in the meeting held on 31.3.1986 had waived off/written off the loan. It was vehemently argued that it did not exonerate the petitioners of their liability. The issue is not of exoneration but whether the creditor could exercise their right to recover the amount. We have already held that the recovery was barred by time. Therefore, the right could not be enforced, the loan was taken from the Corporation constituted under the State Financial Corporation Act, 1951. The Board of Directors through whom the Corporation functions had waived off/written off the balance dues of the petitioners. In Black's Law Dictionary, Sixth Edition, waiver means :
"The intentional or voluntary relinquishment of a known right."
In the same dictionary write off means :
"To remove from the books of account an asset which had become worthless. Most often referred to in connection with accounts or notes receivable which arc deemed worthless or uncollectible."
15. Therefore, once the amount was waived off or written off accepting the report of the Tehsildar, it was conscious giving up of the right. There is no material on record that the order of the Board of Directors was conditional. The Board having not reserved any right or made any conditional waiver, it could not initiate the recovery after eighteen years, because the sum due ceased to be recoverable or payable in law.
16. The next question is whether the petitioner No. 2 could have been arrested in recovery proceedings initiated in 2000. Arrest and detention is one of the modes of recovery. But such arrest must be in accordance with the procedure established by law. The proceedings for recovery were started initially in 1979 and they came to an end in 1982 with sale of assets of the petitioners, and return of recovery certificate. Once the recovery was initiated, property sold, loan and interest waived off then nothing survived which could form basis for initiating recovery of the same amount after lapse of eighteen years. The law does not permit it. The Constitution prohibits it. The action of the respondents was arbitrary and illegal as Article 21 of the Constitution guarantees right of liberty to every citizen. Arrest and detention under Sections 279 and 281 of the U.P. Zamindari and Land Reforms Act, 1950, for recovery as arrears of land revenue is one of the procedure to realise the sum due against a defaulter. But if the recovery becomes barred by time then the arrest of the petitioner was contrary to procedure established by law, thus, violative of Article 21 of the Constitution.
17. In the result this petition succeeds and is allowed. The recovery proceedings initiated against the petitioners are quashed.
18. The petitioners are entitled to costs which is assessed at Rs. 10,000/-.