Special recovery procedure for State dues upheld as a reasonable classification and not arbitrary under Article 14.

Section 3 of the Public Moneys (Recovery of Dues) Act, 1965 was upheld as a valid special recovery mechanism for State advances made for public developmental purposes. The classification between the State and ordinary private creditors was found to rest on a real and intelligible differentia, because expedited recovery of public funds serves the legislative objective of enabling fresh advances for industrial and welfare activities. The availability of a civil suit did not invalidate the special procedure, and the absence of express statutory guidelines was not sufficient to show arbitrary power or hostile discrimination. The Court held that the Act's object and scheme supplied adequate guidance and that the procedure was reasonably related to its purpose.

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Issues: Whether Section 3 of the Public Moneys (Recovery of Dues) Act, 1965 violates Article 14 of the Constitution of India by conferring an arbitrary and discriminatory recovery remedy on the State Government.

Analysis: The Act was enacted to secure speedy recovery of loans and similar dues advanced by the State for public developmental purposes. The classification between the State and ordinary private creditors was held to rest on a real and intelligible distinction, because public funds advanced for industrial and other welfare purposes needed expeditious recovery so that fresh advances could be made. The availability of a civil suit did not destroy the validity of the special procedure, and the absence of express statutory guidelines was not, in the circumstances, enough to show arbitrary power or hostile discrimination. The Court held that the statute itself furnished sufficient guidance through its object and scheme, and that the special procedure bore a reasonable relation to the legislative purpose.

Conclusion: Section 3 does not offend Article 14 and is not discriminatory or arbitrary.

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