Miss. K.T. Sulochana Nair Vs. Managing Director, Orissa State Financial Corporation and ors. - Court Judgment

Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot be entertained i.e. cannot be admitted for consideration unless the statutory deposit is made and for this purpose the court has the discretion either to grant time to make the deposit or not. no formal order condoning the delay is necessary, an order of adjournment would suffice. the provisions of limitation embodied in the substantive provision of the sub-section (1) of section 173 of the act does not extend to the provision relating to the deposit of statutory amount as embodies in the first proviso. therefore an appeal filed within the period of limitation or within the extended period of limitation, cannot be admitted for hearing on merit unless the statutory deposit is made either with the memo of appeal or on such date as may be permitted by the court. no specific order condoning any delay for the purpose of deposit under first proviso to sub-section (1) of section 173 is necessary. [new india assurance co. ltd. v md. makubur rahman, 1993 (2) glr 430 and new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - 2,70,600/ -for purchase of a truck and for that purpose the petitioner became his guarantor and she mortgaged her property described in the schedule of the notice under annexure-7. it is their further case that the corporation took steps to seize the vehicle in question but having failed in their attempt to safeguard the loan advanced to oppositeparty no. to appreciate the contention raised, it would be appropriate to extract section 29(1) of the act ;where any industrial concern, which is under a liability to the financial corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof for in meeting its obligation in relations to any guarantee given by the corporation or otherwise fails to comply with the terms of its agreement with the financial corporation, the financial corporation shall have the right to take over the management or possession of both of the industrial concern as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the financial corporation. ' a bare reading of the aforesaid provision makes it abundantly clear that the financial corporation shall have the right to take over the management or possession of both of the industrial concern as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the financial corporation.g.b. patnaik, j. 1. the short question that arises for consideration in the present writ application is whether the right conferred to the financial corporation under section 29 of the state financial corporations act (hereinafter referred to as 'the act') extends over the property mortgaged with the corporationby a guarantor or not. this question arises under the following circumstances :-- the petitioner had mortgaged her property for securing a term loan that had been granted by the corporation in favour of opposite party no. 4 for purchase of a vehicle bearing registration no. 1267. as the loanee did not pay up the instalment dues, the corporation served the notice on the petitioner under annexure-7 calling upon her to clear the demanded dues with interest thereon within fifteen days from the date of the issue of the letter failing which the properties mortgaged by the petitioner in favour of opposite party no. 4 should be taken over under section 29 of the act. the petitioner averred in the writ application that opposite party no. 4 persuaded her to be a witness for sanction of the loan amount and in the process managed to get the petitioner's properties mortgaged with the corporation and when the petitioner came to know of the same, she intimated the corporation for withdrawal of the guarantorship but did not receive any reply from the corporation until the notice under annexure-7 was issued by the corporation. she, therefore, moved this court for the relief of quashing the letter of the corporation, annexed as annexure-7. 2. mr. palit, appearing for the petitioner raises the sole contention that under section 29 of the act the corporation can take possession of the property of the loanee but not the property of the guarantor and in support of the said contention reliance was placed on a full bench decision of the allahabad high court in the case of munnalal gupta v. uttar pradesh financial corporation, air 1975 all 416. 3. the stand of the corporation in thecounter-affidavit filed is that the loanee, opposite party no. 4, took the loan amount of rs. 2,70,600/ - for purchase of a truck and for that purpose the petitioner became his guarantor and she mortgaged her property described in the schedule of the notice under annexure-7. it is their further case that the corporation took steps to seize the vehicle in question but having failed in their attempt to safeguard the loan advanced to oppositeparty no. 4 it had no other option than to take action under section 29 of the act and since the petitioner had voluntarily mortgaged her property with the corporation, in view of the provisions of section 29 of the act there cannot be any fetter on the power of the corporation to take action under section 29 of the act in respect of the property of a guarantor which had been mortgaged with the corporation. 4. in view of the rival stands of the parties, the sole question that arises for consideration is whether a guarantor's property which had been mortgaged with the corporation can be taken possession under section 29 of the act when the loanee did not pay up the loan amount. to appreciate the contention raised, it would be appropriate to extract section 29(1) of the act ;-- 'where any industrial concern, which is under a liability to the financial corporation under an agreement, makes any default in repayment of any loan or advance or any instalment thereof for in meeting its obligation in relations to any guarantee given by the corporation or otherwise fails to comply with the terms of its agreement with the financial corporation, the financial corporation shall have the right to take over the management or possession of both of the industrial concern as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the financial corporation.' a bare reading of the aforesaid provision makes it abundantly clear that the financial corporation shall have the right to take over the management or possession of both of the industrial concern as well as the right to transfer by way of lease or sale and realise the property pledged, mortgaged, hypothecated or assigned to the financial corporation. there is nothing in the aforesaid provision to indicate that the right under section 29 of the act is only in respect of the property of the loanee mortgaged with the corporation. on the other hand, all properties mortgaged with the corporation would come within the purview of section 29 of the act. mr. palit, however, with reference to the full bench decision of the allahabad high court argues with vehemance that a guarantor's property cannot come within the purview of section 29 of the act. in the aforesaid case, their lordships of the allahabad high court after analysing the provisions contained in sections 29 31 and 32 of the act came to hold that the speedy remedy contained in sections 31 of the act is available not against the surety but against the borrower only. the aforesaid conclusion was based on reading of sections 31 and 32 of the act together more particularly sub-section (4) of sections 32 of the act. but the said conclusion, in our considered opinion, will not apply to an action under section 29 of the act. in fact, in the aforesaid decision, their lordships also observed that there is no conflict between the two provisions contained in sections 29 and 31 inasmuch as the right of the corporation under section 29 in general to proceed against the mortgaged property remains intact but could be enforced not by the speedy remedy provided for in sections 31 but by taking recourse to the general law. in other words, though the corporation can take possession of the mortgaged property of a guarantor under section 29 of the act but cannot sale the same by taking recourse to the power conferred under sections 31 of the act and, on the other hand, can only sale by following the ordinary law contained in the transfer of property act and the code of civil procedure. but at the same time there cannot be any fetter on the power of the corporation under section 29 to take possession of the property of the surety also. in this view of the matter, we do not find any infirmity in the letter of the corporation, annexed as annexure-7, and the full bench decision of the allahabad high court, on which mr. palit relied upon, does not support the contention raised by the learned counsel for the petitioner. 5. in the premises, as aforesaid, we do not find any merit in this writ application which is accordingly dismissed but in the circumstances, there would be no order as to costs. the interim order dated 26-4-1991 stands vacated. d.m. patnaik, j. 6. i agree.