KARNATAKA PUBLIC MONEYS (RECOVERY OF DUES) ACT, 1979
16 of 1980
April 24, 1980
An Act to provide for the speedy recovery of certain classes of dues. Whereas, it is expedient to provide for the speedy recovery of certain classes of dues; Be it enacted by the Karnataka State Legislature in the Thirty-first Year of the Republic of India as follows
Section 1 Short title and commencement
(1) This Act may be called the Karnataka Public Moneys (Recovery of Dues) Act, 1979.
(2) Section 6 shall come into force at once. Other sections shall be deemed to have come into force on the Fifteenth day of June, 1976.
Section 2 Definitions
In this Act, unless the context otherwise, requires.-
11. Clause (a) substituted by Act No. 48 of 1981 and shall be and shall be deemed always to have been substituted. (a) "Banking company" means.-
(i) a banking company as defined in the Banking Regulation Act, 1949 (Central Act 10 of 1949);
(ii) the State Bank of India constituted under the State Bank of India Act, 1955 (Central Act 23 of 1955);
(iii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (Central Act 38 of 1959);
(iv) a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (Central Act 5 of 1970);
(v) a Regional Rural Bank constituted under the Regional Rural Banks Act, 1976 (Central Act 21 of 1976);
(vi) a corresponding new bank constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (Central Act 40 of 1980);
(vii) the Agricultural Refinance and Development Corporation constituted under the Agricultural Refinance and Development Corporation Act, 1963 (Central Act 10 of 1963); and
(viii) the Agricultural Finance Corporation Limited, a company incorporated under the Indian Companies Act, 1956 (Central Act 1 of 1956);]
(b) "Corporation" means the Karnataka State Financial Corporation constituted under the State Financial Corporation Act, 1951 and includes any other Corporation owned or controlled by the
(c) "Financial assistance" means any financial assistance.-
(i) for establishing, expanding, modernising, renovating or running any industrial undertaking; or
(ii) for purposes of vocational training; or
(iii) for the development of agriculture, horticulture, animal husbandry or agro-industry; or
(iv) for purposes of any other kind of planned development; or
(v) for relief against distress.
(d) "Government company" means a Government company as defined in S.617 of the Companies Act, 1956;
(e) "Industrial concern" has the meaning assigned to it in the State Financial Corporation Act, 1951 as amended from time to time;
(f) "Industrial undertaking" includes any undertaking for the manufacture, preservation, storage or processing of goods, or mining, or the hotel industry or the transport of passengers or goods, or the generation or distribution of electricity or any other form of power, or for the development of any contiguous area of land as an industrial estate;
Explanation.-The expression "processing of goods" includes any act of process for producing, preparing or making an article by subjecting any material to a manual, chemical, electrical or any other like operation.
(g) "Person" includes a legal representative or an assignee;
(h) "State sponsored scheme" means a scheme sponsored by way of financial assistance by the State Government under which the State Government either.-
(i) advances money to a banking company or a Government Company for the purposes of disbursing loans, advances or grants or for the purposes of sale of goods on credit or hire purchase;
(ii) guarantees or agrees to guarantee the repayment of a loan, advance or grant or the payment of the price of goods sold on credit or hire purchase.
(i) "Socially desirable scheme" means a scheme notified as such by the State Government under which a banking company advances money to any person by way of loan.
Section 3 Recovery of certain dues as Arrears of Land Revenue
(1) Where any person is party.-
(A) to any agreement relating to a loan, advance or grant given to him or relating to credit in respect of, or relating to hire-pur-chase of goods sold to him by the State Government or the Corporation, by way of financial assistance; or
(B) to any agreement relating to a loan, advance or grant to him or relating to credit in respect of or relating to hire-purchase of, goods sold to him by a banking company or a Government Company, as the case may be, under a State sponsored scheme; or
(C) to any agreement relating to a guarantee given by the State Government or the Corporation in respect of a loan raised by an industrial concern; or
(D) to any agreement providing that any money payable thereunder to the State Government shall be recoverable as arrears of land revenue; and such person.-
(a) makes any default in payment of the loan or advance or any instalment thereof; or
(b) having become liable under the conditions of the grant to refund the grant or any portion thereof, makes any default in the refund of such grant or portion or any instalment thereof; or
(c) otherwise fails to comply with the terms of the agreement, then -
(i) in the case of the State Government, such Officer as the State Government may by notification authorise in this behalf;
(ii) in the case of a Corporation or a Government Company, the Managing Director thereof; and
(iii) in the case of banking company, the local agent thereof by whatever name called, may send a certificate to the Deputy Commissioner, mentioning the sum due from such persons and requesting that such sum together with the cost of the proceedings and future interest at the 11. Substituted for the words "prescribed rate" by Act No. 37 of 1985, w.e.f. 21-10-1985 [agreed rate within the limits prescribed by the Reserve Bank of India and other Government Financing or Re-Financing Institutions from time to time] upto the date of recovery be recovered as if it were arrear of land revenue. A certificate sent to the Deputy Commissioner may be withdrawn at any time.
(2) The Deputy Commissioner on receiving the certificate shall proceed to recover the amount stated therein as an arrear of land revenue.
(3) On an application made by a banking company and on its furnishing a statement of accounts in respect of any sum due to it from any person in respect of a loan given to him under a socially desirable scheme the prescribed officer may, after making such enquiry as he deems fit, and after
(4) A certificate so granted by the prescribed officer shall be final and may be sent to the Deputy Commissioner by the banking company. The sum stated therein to be due and interest thereon at the 11. Substituted for the words "prescribed rate" by Act No. 37 of 1985, w.e.f. 21-10-1985 [agreed rate within the limits prescribed by the Reserve Bank of India and other Government Financing or Re-Financing Institutions from time to time] upto the date of recovery together with the cost of the proceedings shall be recoverable as an arrear of land revenue. A certificate sent to the Deputy Commissioner may be withdrawn at any time.
(5) No suit for the recovery of any sum due as aforesaid shall lie in a Civil Court against any person referred to therein if proceedings to recover the same are pending before the Deputy Commissioner:
Provided that in computing the period of limitation for the recovery of any such sum through Court, the period during which the filing of a suit in a Court is barred shall be excluded.
Section 4 Savings
(1) Nothing in Section 3 shall.-
(a) affect any interest of the State Government, the Corporation, a Government Company or any banking company, in any property, created by any mortgage, charge, pledge or other encumbrance; or
(b) affect any right or remedy against any person other than a person referred to in that section, in respect of a contract or indemnity or guarantee entered into in relation to an agreement referred to in that section or in respect of any interest referred to in clause (a).
(2) Where the property of any person referred to in Section 3 is subject to any mortgage, charge, pledge or other encumbrance in favour of the State Government, the Corporation, a Government Company or a Banking Company, then.-
(a) in every case of a pledge or hypothecation of goods, proceedings shall first be taken for sale of the goods pledged or hypothecated and if the proceeds of such sale are less than the sum due, then proceedings shall be taken for recovery of the balance as if it were an arrear of land revenue:
Provided that where the State Government is of the opinion that it is necessary so to do for safeguarding the recovery of the sum due to it or to the Corporation, a Government Company or a Banking Company, as the case may be, it may for reasons to be recorded direct proceedings to be taken for recovery of the sum due, as if it were an arrear of land revenue before or at the same time the proceedings are taken for sale of the goods pledged;
(b) in every case of a mortgage, charge or other encumbrance on immovable property, such property or, as the case may be, the interest of the defaulter therein, shall first be sold in proceedings for recovery of the sum due from that person as if it were an arrear of land revenue, and any other proceedings may be taken thereafter only if the Deputy Commissioner certifies that there is no prospect of realisation of the entire sum due through the first mentioned process within a reasonable time.
Section 5 Power to make rules
(1) The State Government, may, after previous publication, by notification, make rules to carry out the purposes of this Act.
(2) Every rule made under this section shall be laid, as soon as may be after it is made, before each House of the State Legislature, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session to the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule shquld not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.
Section 6 Repeal and Validation, etc
(1) The Karnataka Public Moneys (Recovery of Dues) Act, 1976 (Karnataka Act 79 of 1976), is hereby repealed.
(2) Notwithstanding any judgment, decree or order of any Court, anything done or any action taken (including rules or orders made, notices or certificates issued and proceedings initiated to recover any amount) or purported to have been done or taken under the Karnataka Public Moneys (Recovery of Dues) Act, 1976 (hereinafter referred to as the 1976 Act), shall be deemed to be as valid and effective as if such thing or action was done or taken under the corresponding provisions of this Act, which under sub-section (3) of Section 1 shall be deemed to have come into force on the 15th day of June, 1976, and accordingly no suit or other legal proceedings shall be maintained or continued in any Court questioning the validity of anything done or any action taken or purported to have been done or taken under the 1976 Act on the ground that the said Act is unconstitutional or void as it has not been reserved for the assent of the President and assented to by the President.
RULE:
KARNATAKA PUBLIC MONEYS (RECOVERY OF DUES) RULES, 1983
Whereas, the draft of the Karnataka Public Moneys (Recovery of Dues) Rules, 1983, was published as required by sub-section (1) of Section 5 of the Karnataka Public Moneys (Recovery of dues) Act, 1979 (Karnataka Act 16 of 1980), in Notification No. FD 102 PIF 81, dated 21st June, 1983 in Part IV-2-C(i) of the Karnataka Gazette, dated 30th June, 1983, inviting objections and suggestions from all persons likely to be affected thereby before 16th August, 1983; And whereas, the said Gazette was made available to the public on 23rd July, 1983; Whereas, after considering the suggestions/objections with respect thereto the Government, republished revised draft rules in Notification No. FD 102 PIF 81, dated 29th November, 1983 in Part IV-2C(i) of Karnataka Gazette, dated 8th December, 1983, inviting objections/suggestions from all persons likely to be affected thereby, before 26th December, 1983; Whereas, no objections/suggestions were received before the date specified. Now therefore, in exercise of the powers conferred by Section 5 of the Karnataka Public Moneys (Recovery of Dues) Act, 1979 (Karnataka Act 16 of 1980), the Government of Kamataka hereby makes the following rules, namely.
Rule 1 Title and commencement
(1) These rules may be called the Karnataka Public Moneys (Recovery of Dues) Rules, 1983.
(2) They shall come into force at once.
Rule 2 Definitions
In these rules, unless the context otherwise requires,
(a) "Act" means the Karnataka Public Moneys (Recovery of Dues) Act, 1979 (Karnataka Act 16 of 1980);
(b) "Form" means a form appended to these rules;
(c) "Section" means a section of the Act;
(d) "Contractual rate of interest" means the rate of interest payable as agreed to by the financing agency and the borrower at the time of sanction of financial assistance.
Rule 3 Prescribed Officer
The Prescribed Officer for the purpose of subsection (3) of S.3 OF THE Karnataka Public Moneys (Recovery of Dues) Act, 1979 shall be the officer authorised under item (i) of sub-clause (c) of clause (D) of sub-section (1) of the said section.
Rule 4 Certificate under Section 3
The certificate for the purposes of sub-clause (c) of clause (D) of sub-section (1) of S.3 OF THE Karnataka Public Moneys (Recovery of Dues) Act, 1979 and the certificate for the purposes of sub-section (3) of the said section shall be in Forms I and II respectively.
Rule 5 Application to be made by a Banking Company
The application under sub-section (3) of S.3 OF THE Karnataka Public Moneys (Recovery of Dues) Act, 1979 shall be in Form III.
APPENDIX 1 Certificate under sub-clause (c) of clause (D) of sub-section (1) of Section 3 of the Karnataka Public Moneys (Recovery of Dues) Act, 1979
FORM [See Rule 4]
FORM I
[See Rule 4]
Certificate under sub-clause (c) of clause
(D) of sub-section (1) of Section 3 of the Karnataka Public Moneys (Recovery of
Dues) Act, 1979
Whereas, Sri/Smt.(here mention
name of the person) borrowed a sum of Rsonas financial assistance
from(specify the name of the Government / Corporation / Government
Company / Banking Company) for.(here specify the purpose).
And whereas, he/she has. (here state
the circumstances referred to in (a) or (b) or (c) of clause (D) making him
liable).
Now, therefore, I, the undersigned hereby
certify that the sum due by him to. (specify the name of Credit Agency)
is Rs and interest at per cent (here mention contractual rate of
interest) on the balance due.
Authorised Officer/Managing Director of
Corporation/Managing Director of Government Company/Local agent of Banking
Company.
To
The Deputy
Commissioner,
District.
APPENDIX 2 Certificate under sub-section (3) of Section 3 of the Karnataka Public Moneys (Recovery of Dues) Act, 1979
FORM [See Rule 4]
FORM II
[See Rule 4]
Certificate under sub-section (3) of Section 3 of
the Karnataka Public Moneys (Recovery of Dues) Act, 1979
Whereas, Sri/Smt. (here mention
name of the person) borrowed a sum of Rson.as financial assistance
from(specify the name of the Government/Corporation/Government
Company/Banking Company) for. (here specify the socially
desirable scheme).
And whereas, the Banking Company.
(name to be specified) has made an application that a sum of Rsis due
towards the loan and the undersigned is satisfied after inquiry and after
giving opportunity to the said person to be heard is satisfied that a sum of Rsis
due to the Banking Company.
Now, therefore, I, the undersigned, hereby
certify that the sum due by him to. (specify the name of Credit Agency)
is Rsand interest atper cent (here mention contractual rate of
interest) on the balance due.
Prescribed Officer.
To
The Deputy
Commissioner,
District.
APPENDIX 3 Application under sub-section (3) of Section 3 of Karnataka Public Moneys (Recovery of Dues) Act, 1979
FORM
FORM III
Application under sub-section (3) of Section 3 of
Karnataka Public Moneys (Recovery of Dues) Act, 1979
Before.
1. Name of the Credit Agency
2. Name and Address of 'person' (legal
representative of an assignee)
3. Amount of financial assistance given
under the 'socially desirable scheme' (specify the scheme)
4. Date when the financial assistance/loan
was actually given
5. Total amount due including interest
upto...(here mention date)
6. Contractual rate of interest
It is
requested that the above mentioned sum due may be recovered as arrears of land
revenue.
Local Agent of the Banking Company |
