HIMACHAL PRADESH FINANCIAL CORPORATION versus ANIL GARG AND OTHERS

Citation: [2017] 2 S.C.R. 984 · Decided: 28-03-2017 · Supreme Court of India · Bench: RANJAN GOGOI · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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(2017] 2 S.C.R. 984 
HIMACHAL PRADESH FINANCIAL CORPORATION 
v. 
ANIL GARG AND OTHERS 
(Civil Appeal No. 661 of2008) 
MARCH 28, 20 I 7 
[RANJAN GOGOi AND NAVIN SINHA, JJ.) 
Himachal Pradesh Public Moneys (Recovery of Dues) Act, 1973: 
s.J(l)(d)(iv) and s.85 - Withdrawal of suit if amounts to 
abandonment of claim - Respondent availed loans but failed to 
repay - Recovery suit by appella11t subsequently withdrawn to 
initiate fresh recovery proceedings under the Act - Writ petition by 
responde111 challenging such proceedings - High Cour/ field that 
the suit having been withdraw11 without any liberty for initiating 
appropriate legal proceedings, the claim was abandoned by the 
appellant and hence proceedings under the Act were barred - On 
appeal, held: Whether there has been an abandonmenl of the ;:/aim 
by withdrawal of the suit is a mixed question of law a11d fact -
Language of the order for withdrawal will not always be 
determinative - The application for withdrawal of suit stated that it 
was being done to pursue remedies under the Act as the proceedings 
under the Act are more expeditious for recovery as compared to a 
suit - Therefore, there was no abandonment of claim by the appellant 
- Further, s. J(l)(d)(iv) provided !hat the remedy available t•nder 
the Act was without prejudice to any other remedy available under 
any other law- Withdrawal of the suit was lhus, no bar to proceedings 
under the Act - Himacha/ Pradesh Public Moneys (Recovery af 
Dues) Act, 2000 - State Finance Corporation Act, 1951 - s.29. 
Recovery proceedings under the Act - Distinction from 
proceedings in a suit - Held: Proceedings in a suit and recov.ery 
under the Ac/ are under different laws governed by different 
procedures and thus cannot be equated - A suit is instituted in a 
Court of law and is governed by CPC, while proceedings under the 
Act are before the executive authority statutorily empowered - Code 
of Civil Procedure, 1908. 
Doctrines/Principles - Public policy - Principle of - High 
984 
HlMACHAL PRADESH FINANCIAL CORPORATION v. ANIL 
GARG AND OTHERS 
Court restrained recovery of a public loan applying principle of 
public policy - Held: The phrase ~Jublic policy' is not capable of 
precise definition - Broadly it means what is in the larger interest of 
the society involving questions of righteousness, good conscience 
and equity upholding the law and not a retrograde interpretation -
It cannot be invoked to facilitate a loanee to avoid legal obligation 
for repayment of a loan. 
Words & Phrases - "Public policy" - Meaning of - Discussed. 
Code o.f Civil Procedure, 1908 - Or. 23, r. 1 - Bar under -
When applicable - Held: Bar u/Or. 23, r. 1 would apply only to a 
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fresh suit and not proceedings under the Act. 
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Allowing the appeal, the Court 
HELD: L The factum of loan is not in dispute. No 
explanation was furnished by the respondent why the installments 
were not repaid and the loan closed. A pittance was repaid. The 
loan was disbursed from public funds of the tax payers· money. 
The Respondent was a trustee for the loan amount. It could not 
become a windfall for him. All attempts by the Appellant for 
recovery.were successfully thwarted by the Respondent hy either 
filing a Snit or successive writ petitions. The sanguine confidence 
of the Respondent is also reflected by his failure to appen in the 
present proceedings despite valid service of notice. [Para 12] 
[989-G-H; 990-A] 
2.1 The question whether there has been an abandonment 
of the claim by withdrawal of the Suit is a mixed qnestion of law 
and fact. The language of the order for withdrawal will not always 
be determinative. The background facts will necessarily have to 
be examined for a proper and just decision. [Para 13] [!190-B] 
Sarguja Transport Service v. State Transport Appellate 
Tribunal AIR 1987 SC 88 : [1987] 1 SCR 200 - held 
inapplicable. 
Ramesh Chandra Sank/a v. Vikram Cement (2008) 14 
SCC 58 : [2008] 10 SCR 243 - relied on. 
2.2 The a11plication for withdrawal stated that it was being 
done to pursue remedies under the llimachal Pradesh Public 
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SUPREME COURT REPORTS 
(2017] 2 S C.R. 
Moneys (Recovery of Dues) Act, 1973. Undoubtedly, the 
11roceedings under the Act are more expeditious for recovery as 
compared to a Suit, which after decree is required to be followed 
by execution proceedings. Section 3(1)(d)(iv) of the Act provided 
that the remedy under

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