Limitation for recovering sum due as arrears of land revenue under the U.P. Public Moneys (Recovery of Dues) Act, 1972
Limitation for recovering sum due under U.P. Public Moneys Recovery Act
Allahabad High Court in Narendra Kumar And Anr. vs Collector And Ors. on 23 March, 2004 Equivalent citations: (2004) 2 UPLBEC 2037 held :
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.
