The
Recovery Officer, Lakhimpur & Ors Vs. Smt. Ravindra Kaur & Ors [1996] INSC
1553 (4 December 1996)
N.P.
Singh, S.B. Majmudar
ACT:
HEAD NOTE:
O R D
E R
In
these appeals Recovery Officer functioning under the U.P. Co-operative
Societies Act, 1965 and others have brought in challenge the judgment and order
of the High Court of Judicature at Allahabad, Lucknow Bench in different writ petitions moved by the contesting
respondents. The High Court allowed the writ petitions of the contesting
respondents concerned and quashed the recovery proceedings initiated against
them in so far as they related to the execution order under Section 91 of the
Uttar Pradesh Co-Pradesh Co-operative Societies Act, 1965 (hereinafter referred
to as `the Act') by attachment and sale of the lands of the contesting
respondents. It is not in dispute between the parties that the original writ
petitioners being members of the co-operative societies concerned had taken
loans for seeds and manure etc. From these societies functioning under the Act.
When the contesting respondents did not repay the loans, the co-operative
societies which advanced the loans sought to enforce the statutory charge on
the properties of the writ petitioners as created by Section 39(a) of the Act.
Recovery proceedings for enforcing the said charge were initiated under Section
91 read with Section 39(a) by the appellant Recovery Officer. The contesting
respondent writ petitioners moved the High Court challenging these recoveries.
It was contended before the High Court by the contesting writ petitioner-lonees
that as the loans were taken for procuring seeds and manure etc.
charge
under Section 39(a) attached to the crops produced in the lands of the
contesting respondents by utilising seeds and manure procured out of the loan
amounts but the said charge did not fasten on the other properties and lands of
the writ petitioners and, therefore, proceedings under Section 91 against the
lands of the writ petitioners were illegal and liable to be queshed.
The
High Court accepted the said contention and allowed the writ petitions by
holding, on construction of Section 39 read with Section 91 of the Act that for
realisation of loans advanced for the objects mentioned in Section 39 (a) of
the Act, sale of the lands belonging to the writ petitioners could not be
effected unless the concerned societies obtained decrees of court of competent
jurisdiction as required by the provision to Section 39.
Writ
Petitions were accordingly allowed.
The
aforesaid decision of the High Court is challenged by the appellant on the
ground that the High Court had erred in not properly construing the provision
in Section 39 (a) read with Section 91 of the Act. In order to appreciate the
aforesaid contention, it is necessary to have look at the relevant provision.
Section 39 reads as under :- "S.39.- First charge of co- operative society
on certain assets. - Notwithstanding anything contained in the Provincial
Insolvency Act, 1920 (Act V of 1920), or in the Code of Civil Procedure, 1908
(Act V of 1908), or in any other enactment resisting to land tenure for the
time being in force, any debt or outstanding demand due to a co-operative
society by any member, past or present, or standing against the estate of any
deceased member, shall subject to any claim of the Central Government or the
State Government arising from a loan granted by it before, but not after, the
grant of the loan by the society, or in respect of land revenue or any sum
recoverable as arrears of land revenue, be a first charge –
(a) if
such debt or demand is due in respect of the supply of, or any loan to provide
the means for, seed, menure, labour subsistence, fodder for cattle or any other
thing incidental to the conduct of agricultural operations, upon the crops and
agricultural produce of such members;
(b) if
such debt or demand is due in respect of any loans to provide the means for
paying the rent or revenue of the land or for irrigation facilities, upon the
land whose rent or revenue has been so paid or, as the case may be, on which
the irrigation facilities have been provided;
(c) if
such debt or demand in due in respect of supply of, or any loans to provide the
means for the purchase of cattle, or other livestock, or for the purchase,
repair or maintenance of agricultural implements, transport equipments or
equipment for dairy or for other activities relating to animal husbandry, or
for making, replacing or purchasing of farmhouse or shed for cattle or for
other livestock or for making, repairing or purchasing of warehouse for storage
of agricultural produce, then upon the farm-produce of such members and also
upon the cattle, livestock so purchased, or upon the equipments, warehouse,
farm-house or shed so purchased, repaired, maintained or made wholly or
partially out of any such loan, and if the borrower is a land-holder, then upon
his land also, at any time within three years from the date on which the last
installment of such loan becomes repayable;
(d) if
such debt or demand is due in respect of the supply of, or any loan for the
purchase of raw material, industrial implements, plant and machinery,
workshops, warehouse or business premises, upon the raw material or other
things so supplied or purchased by such member ad in the case of a debt or
demand in respect of the supply, or for the purchase of raw materials also upon
the articles manufactured from such raw material;
(e) if
such debt or demand is due in respect of any loan for the purchase or
redemption of land, upon the land so purchased or redeemed;
(f) if
such debt or demand is due in respect of any loan for the purchase or
construction of any house or building or any portion thereof, or in respect of
the supply of materials for such constructions upon the house or building or
materials so purchased or constructed or supplied; and
(g) if
such debt or demand is due in respect of any loan of Rs.500 or more for
reclaiming or protecting land or for effecting improvement on land or for
preparation of land for orchard or plantation or for purchase of cattle,
agricultural implements, machinery, upon the land so sought to be reclaimed,
protected, improved or prepared, or upon the land for the use of which the
implements or machinery are sought to be purchased and in case of purchase of
cattle, upon any land of the borrower :
Provided
that along with the charge created under this section all other property of the
indebted member including any amount payable to him by a society shall be
liable to attachment and sale in execution of a decree in favour of the society
irrespective of the object of the loan." The next relevant section is
Section 91 which reads as under :- "S.91.- Enforcement of charge :-
Notwithstanding anything contained in Chapter IX, or any other law for the time
being in force, but without prejudice to any other mode of recovery provided in
this Act, the Registrar or any other gazetted officer subordinate to him and authorised
by him in this behalf may, on the application of a co- operative society and on
being satisfied of existence of the debt or outstanding demand make an order
directing the payment of such debt or outstanding demands due to the society by
any member or past or deceased member, by sale of the property or any interest
therein, which is subject to a charge under Section 39 :
Provided
that no order shall be made under this section, unless the member, past member
or the nominee, heir or legal representative of the deceased member, has been
served with a notice of the application and has failed to pay the debt or
outstanding demand within one month from the date of service".
A
conjoint reading of the aforesaid two provisions clearly shows that before a
charge can be enforced under Section 91 by way of recovery proceedings, it has
to be shown that the concerned property of the debtor was subjected to a
statutory charge under Section 39 and it is such a charged property which can
be sold in the summary manner as laid down by Section 91 for realising the
payment of debt of the members due to the outstanding demand of the society
against such members. Consequently, it has to be found out whether the proposed
sale of the property is referable to any charge which is settled on such
property under Section 39. Section 91 lays down the procedure for enforcement
of the charge which is referable to Section 39.
All
that Section 91 does is to provide a mode for enforcing the said charge. Once a
charge is found to have been created on the concerned property as per Section
39, then it would create an eveoutable right in favour of the society and a
corresponding obligation on the part of the lonee to satisfy his dues from the
sale of the charged property. When we turn to Section 39, we find that only
clause (a) of the said section would get attracted on the facts of the present
case. Clause (a) creates a statutory charge on the crops or produce of the land
which result out of the utilisation of the seeds or manure loan which is said
to have been taken by the concerned member. Therefore, the charge attaches to
the produce of the land and not on the land itself out of which the said
produce is realised. In this connection, we may usefully refer to clauses (b),
(c), (e) and (g) of Section 39 which create charge on land of the debtor member
under circumstances contemplated by theses clauses. It is not the case of the
appellants that any such charge on writ petitioners' lands was created under
these clauses. Learned counsel for the appellants fairly stated that clause (a)
of Section 39 cannot be effectively pressed in service because charge was not
created on the land on account of the fact that the loan was taken by the
concerned member for purchasing seeds or manure. However, his submission was
that charge on all other properties of the debtor was created in favour of the
society by the proviso to Section 39. A mere look at the proviso shows that it
would encompass in its fold all other properties of the indebted member
provided there is a decree in favour of the society. Then irrespective of the
object of the loan such a decree-holder society can proceed against any other property
of the judgment-debtor by attachment and sale on execution of the decree. The
proviso does not contemplate creation of any charge on these properties, it
contemplates execution of the decree for a given sum of money and such a decree
could be executed by attachment and sale of any of the properties of the
judgment-debtor even though not subjected to any charge under Section 39.
Proviso has nothing to do with creation of charge. Statutory charge is
contemplated by clauses (a) to (g) of Section 39 only. The very opening words
of the proviso show that along with the charge created under this section
meaning thereby under Section 39 clauses (a) to (g) respectively any other
property i.e. not subjected to charge also can be proceeded against if the society
has an executable decree against the debtor. All other properties mentioned in
the proviso mean those which are not the subject-matter of the charge. It
cannot, therefore, be said that proviso enlarges the scope of Section 39 (a) to
(g) and creates a further statutory charge. It must, therefore, be held that
the High Court was justified in taking the view that under the proviso no
further charge is created on other property of the lonee. Once that conclusion
is reached.
Section
91 dealing with enforcement of the charge goes out of picture. As the lands of
the writ-petitioners were not the subject-matter of any charge under Section
39, there was no occasion for Recovery Officer to proceed under Section 91 for
enforcement of such non-existing charge on the lands.
Till
the society obtained executable decrees on the basis of the loan amounts there
would arise no occasion for the society to get attachment and sale of other
uncharged property of the judgment-debtor by resort to the proviso to Section
39. It is also pertinent to note that execution of decree is contemplated by
Section 92 and not by Section 91.
Section
92 reads as under :- "S.92. -Execution of certain orders and awards. -
Every award made under Section 91, and capable of execution in the manner provided
below, and every order so capable of execution made by the Registrar under
Section 67 or sub-section (2) of Section 68 or under Section 91, or by the
liquidator under Section 74 or by an appellate authority on appeal under
Section 97 or 98 or on review under Section 99 or as an interlocutory order
under Section 100 or a certificate for recovery issued under Section 95-A
shall, if not carried out, be executed - (a) in the manner provided by law for
the time being in force for the recovery of arrears of land revenue:
Provided
that an application for the recovery of any such sum is made to the Collector
and accompanied by a certificate signed by the Registrar or any person authorised
by him in this behalf :
Provided
further that such application is made within 12 years from the date fixed for
payment in the order or award and if no such date is fixed, from the date of
the order or award, as the case may be;
or (b)
by the Registrar or any other person subordinate to him and empowered by him in
this behalf, by attachment and sale or sale without attachment of any property
of the person or the co-operative society against who the order or award has
been made; or (c) by the civil court having jurisdiction over the matter as if
the order or award were the decree of that court." For all these reasons,
therefore, it must be held that the High Court was justified in quashing the
steps taken by the appellants for sale of the lands belonging to the
respondents. We make it clear that our aforesaid conclusion is reached in the
context of the loans advanced under Section 39(a) of the Act. It would be open
to the appellants to pursue other remedies available for realisation of the
loan amounts advanced to the respondents writ-petitioners in accordance with
law. These appeals fail and are dismissed with no order as to costs.
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