Neutral Citation No. - 2025:AHC:35744-DB Court No. - 29 Case :- WRIT - C No. - 7178 of 2025 Petitioner :- Dushyant Kumar Sharma And Another Respondent :- State Of U.P. And 3 Others Counsel for Petitioner :- Afzal Parvej,Arif Ikbal Counsel for Respondent :- C.S.C.,Krishna Kant Tiwari Hon'ble Ashwani Kumar Mishra,J. Hon'ble Donadi Ramesh,J. 1. Heard learned counsel for the petitioners, learned Standing Counsel for the State authorities and Shri Krishna Kant Tiwari, learned counsel for the respondent IDBI Bank. 2. It is stated that the petitioners had availed of cash credit facility and, therefore, initiation of recovery under the U.P. Public Moneys (Recovery of Dues) Act, 1972 would be impermissible in view of the law laid down by the Full Bench of this Court in the case of Sharda Devi vs. State of U.P. reported in 2001 (45) ALR 156. It is also submitted that the loan was otherwise not extended for any State or Central scheme. 3. Learned counsel representing the respondent IDBI Bank does not dispute the aforesaid contention and states that the Bank be permitted to proceed with recovery by approaching the Debts Recovery Tribunal. It is also stated that an Original Application has also been filed. 4. Law is settled that recovery proceedings under the Act of 1972 can only be initiated in specified circumstances where financial assistance has been made available to the borrower. The Full Bench in Sharda Devi's case (supra) has already held that initiation of recovery proceedings in respect of commercial loan would be impermissible under the Act of 1972. 5. It was decided that for the recovery of loan under the U.P. Public Moneys (Recovery of Dues) Act, 1972, what is decisive is whether the loan or advance or credit was given under a State Sponsored Scheme. It was opined that clause (b) applies to only such categories of loans or advances or credits which have been given under a State Sponsored Scheme by a banking company or a Government company and not to all kinds of loans or advances. 6. It was, thus, concluded that a banking company can recover its dues by taking recourse to Section 3 of the U.P. Public Moneys (Recovery of Dues) Act, 1972 only where the loan or advance or grant or credit has been given by it to a borrower under a State Sponsored Scheme and not otherwise. Any money advanced under cash credit limit facility by itself is not determinative of the matter as there is no prohibition under the Act for the State Government to notify such a facility as a State Sponsored Scheme. The real test is whether the banking company has made the advance, etc. under a State Sponsored Scheme. 7. In view of the law laid down by the Full Bench in Sharda Devi (supra), the recovery citation issued by the bank dated 20.02.2025 is liable to be quashed, inasmuch as, the recovery of outstanding commercial loan cannot be made as arrears of land revenue by invoking the provisions of U.P. Public Moneys (Recovery of Dues) Act, 1972. 8. While quashing the recovery citation dated 20.02.2025, the writ petition is allowed. It goes without saying that the respondent Bank may pursue the proceedings initiated under the SARFAESI Act, 2002 as also under the Recovery of Debt and Bankruptcy Act, 1993 for realisation of its outstanding dues. Order Date :- 11.3.2025 Ashok Kr. Digitally signed by :- ASHOK KUMAR High Court of Judicature at Allahabad