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Om Aggarwal v. Haryana Financial Corporation & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 4942 of 2007)Decided 23 Feb 2015
Civil Appeal No. 4942 of 2007
Justice Ranjan Gogoi · Justice Abhay Manohar Sapre

Background

The appellant, a promoter of a mushroom-farming company, had taken financial assistance from the Haryana Financial Corporation, which later invested in his company's shares under a "Buy-Back Agreement." When the Corporation sought to recover dues as arrears of land revenue under the Haryana Public Moneys (Recovery of Dues) Act, 1979, the appellant filed a civil suit asking the court to declare the agreement void and the recovery notice illegal. The trial court, the appellate court, and the High Court all held that the civil suit itself was not permitted because the special Act barred civil courts from hearing such recovery-related disputes.

Decision Breakdown

The Supreme Court agreed with the lower courts. Section 3(4) of the 1979 Act expressly removes civil courts' jurisdiction over any case relating to recovery of dues from a "defaulter," and the plaint itself showed the appellant fell within that definition and that his claims directly challenged a recovery under the Act. The Court distinguished a precedent relied on by the appellant (the "Unique Butyle" case), noting it concerned a different (UP) statute with different wording and did not address whether a civil suit was barred. The Court clarified it was not examining whether the underlying recovery demand was itself valid, only that the civil court had no power to decide that question at all. The appeal was dismissed.

Lesson Learnt

When a special law expressly takes away civil courts' jurisdiction over a particular category of dispute (here, recovery of dues by a financial corporation), a person affected cannot sidestep that bar by filing an ordinary civil suit: they must use whatever remedy the special statute itself provides.

Official source (sci.gov.in)View Judgment (PDF)

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