STATE OF PUNJAB vs DHARAM SINGH

The Supreme Court held that the Government must first proceed against the mortgaged property before seeking personal recovery from the borrower, as stipulated in clause 4 of the loan agreement. The Court emphasized that the Government is bound by the terms of the agreement, which requires it to exhaust the contractual remedy of selling the mortgaged property before invoking clause (b) of Section 67 of the Punjab Land Revenue Act. The appeal was dismissed, affirming the High Court's decision that the loan amount cannot be recovered as arrears of land revenue without first selling the mortgaged property.