Revenue recovery for financial corporation dues upheld where special statute authorises arrears of land revenue recovery.

Recovery proceedings were not time-barred because the revenue recovery steps were initiated in 1994-95, before the loan repayment period expired on 10 February 1997, so the debt was not yet stale when action commenced. The Kerala Revenue Recovery Act could be used to recover dues of the Kerala Financial Corporation because section 34(2) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 preserved the State Financial Corporations Act, 1951, and section 32G of that Act authorises recovery as arrears of land revenue. The statutory scheme therefore supported use of the revenue recovery machinery, and the challenge failed.

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Issues: (i) whether the recovery proceedings were barred by limitation; (ii) whether the Kerala Revenue Recovery Act could be invoked to recover amounts due to the Kerala Financial Corporation in view of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Issue (i): whether the recovery proceedings were barred by limitation.

Analysis: The loan agreements provided for repayment in monthly instalments ending on 10 February 1997. The revenue recovery steps were initiated in 1994-95, before the repayment period expired. On that factual basis, the demand could not be treated as a time-barred debt at the time proceedings were commenced.

Conclusion: The plea of limitation was rejected and the issue was decided against the appellant.

Issue (ii): whether the Kerala Revenue Recovery Act could be invoked to recover amounts due to the Kerala Financial Corporation in view of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993.

Analysis: Section 34(2) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 preserves the operation of the State Financial Corporations Act, 1951. Section 32G of the State Financial Corporations Act, 1951 specifically authorises recovery of amounts due to a financial corporation as arrears of land revenue. Since arrears of land revenue are recoverable under the Kerala Revenue Recovery Act, 1968, the corporation was entitled to invoke that machinery. The earlier decision relied on by the appellant did not displace this statutory scheme in the presence of Section 32G.

Conclusion: The invocation of the Kerala Revenue Recovery Act was upheld and the issue was decided against the appellant.

Final Conclusion: The challenge to the revenue recovery proceedings failed in full, and the order under challenge was sustained.

Ratio Decidendi: Where the governing special statute expressly authorises recovery of dues as arrears of land revenue, the general recovery machinery may be invoked consistently with that statute, and a challenge based on the overriding provision of a later enactment will fail if the earlier special statute is expressly saved.

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