Antappan; Lalappan Augustine; Mariamma Augustine alias Tessy Mathew; Ponnamma Augustine alias Anitha Jossy vs. N. Sivasankaran Unni (Arbitrator/Co-operative Assistant Registrar) and Alappuzha District Co-operative Bank Limited

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN** **TUESDAY, THE 28TH DAY OF FEBRUARY 2012/9TH PHALGUNA 1933** ## **WP(C).No. 4883 of 2012 (I)** ## **-------------------------APPEAL.NO..47/2005 of KERALA CO-OPERATIVE APPELLATE TRIBUNAL,TVM. -------------------------------** ## **PETITIONER(S):** **-----------------------** **1. ANTAPPAN,AGED 47, S/O. LATE C.V. AUGUSTINE,** **CHALUTHARA HOUSE, AMBALAPPUZHA, ALAPPUZHA.** **2. LALAPPAN AUGUSTINE, AGED 41, S/O. LATE C.V. AUGUSTINE, CHALUTHARA HOUSE, AMBALAPUZHA, ALAPPUZHA.** **3. MARIAMMA AUGUSTINE ALIAS TESSY MATHEW, AGED 49, D/O. LATE C.V. AUGUSTINE AND W/O.MATHEW JOSEPH, CHALUTHARA HOUSE, AMBALAPUZHA, ALAPPUZHA, PRESENTLY RESIDING AT THOPPIL HOUSE, ANGADI, CHANGANACHERRY, KOTTAYAM DISTRICT.** **4. PONNAMMA AUGUSTINE ALIAS ANITHA JOSSY, AGED 44, D/O. LATE C.V. AUGUSTINE AND W/O. JOSSY JOSEPH, CHALUTHARA HOUSE, AMBALAPUZHA, ALAPPUZHA, PRESENTLY RESIDING AT PADINJAREKKALAM HOUSE, CHETHIPPUZHA, CHANGANACHERRY, KOTTAYAM DISTRICT.** **BY ADVS.SRI.PRAKASH P.GEORGE SRI.B.PREMNATH SRI.SADER E.REAZ** **RESPONDENT(S):** **---------------------------** ## **1. MR.N.SIVASANKARAN UNNI, ARBITRATOR/CO-OPERATIVE ASSISTANT REGISTRAR,** - **OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE** - **SOCIETIES,ALAPPUZHA.PIN-688 001** **2. ALAPPUZHA DISTRICT CO-OPERATIVE BANK LIMITED NO. 4310,** - **REPRESENTED BY ITS GENERAL MANAGER, ALAPPUZHA.PIN-688 001** **BY ADV.SRI.P.K.VIJAYAMOHANAN,SC,ALP.DIST.CO-OP** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 28-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** **WP(C)NO.4883/2012** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **P1 COPY OF THE AWARD IN ARC NO.214/2002 PASSED BY THE 1ST RESPONDENT.** - **P2 COPY OF THE APPLICATION FOR CERTIFIED COPY FILED IN APPEAL NO.47/2005 BEFORE THE CO-OPERATIVE APPELLATE TRIBUNAL, THIRUVANANTHAPURAM.** - **P3 COPY OF THE MEMORANDUM OF DEPOSIT OF TITLE DEEDS CREATED BY MR.C.V.AUGUSTINE ON 24/06/1999.** - **P4 COPY OF THE LETTER DATED 24/06/1999 SENT BY THE MANAGER, DISTRICT COOPERATIVE BANK, ALAPPUZHA TO THE BRANCH MANAGER, DISTRICT COOPERATIVE BANK, AMBALAPPUZHA.** - **P5 COPY OF THE DEED OF HYPOTHECATION DATED 24/06/1999 EXECUTED BY MR.C.V.AUGUSTINE** - **P6 COPY OF THE PLAINT IN OP(ARBITATION) NO.214/2002.** - **P7 COPY OF THE JUDGMENT IN APPEAL,NO.47/2005 PASSED BY THE COOPERATIVE APPELLATE- TRIBUNAL, THIRUVANANTHAPURAM.** **RESPONDENT'S EXHIBITS: NIL** ## **/TRUE COPY/** ## **P.S.TO.JUDGE** **sts** ## **P.N.RAVINDRAN, J. ----------------------------------------W.P(C).No.4883 of 2012 ----------------------------------------Dated this the 28[th] day of February, 2012** ## **JUDGMENT** Ext.P7 judgment delivered by the Kerala Co-operative Tribunal partly allowing an appeal filed by the petitioners and modifying Ext.P1 award by reducing the future interest awarded by the Arbitrator from the date of suit till realisation, is under challenge in this writ petition. The brief facts of the case are as follows. 2. The petitioners' father late C.V.Augustine availed a loan from the second respondent bank on 24.6.1999. The loan was secured by the mortgage of a parcel of land belonging to the debtor. He had also executed a promissory note in favour of the second respondent bank. The petitioners' father defaulted repayment of the loan. The bank thereupon filed A.R.C.No.214 of 2002 before the Joint Registrar of Co-operative Societies, Alappuzha. Ext.P6 is a copy of the plaint in the arbitration case. In the plaint the second respondent claimed that as on 31.7.2002 the sum of Rs.3,98,246/- was due from the predecessor-in- **W.P(C).No.4883 of 2012** ## -:2:- interest of the petitioners under various heads. The predecessorin-interest of the petitioners received notice in the arbitration case and he entered appearance, but he did not file a written statement. The Arbitrator thereafter passed Ext.P1 award dated 29.3.2003 whereby he permitted the second respondent bank to recover from the defendant and his sureties, the sum of Rs.3,98,246/- with future interest on the principal sum of Rs.2,25,000/- at 22% per annum from 1.8.2002. The defendant passed away thereafter, on 29.7.2004. Since the award was not satisfied, the bank took steps to execute the award and in execution of the award an item of property belonging to the petitioners was brought to sale on 21.7.2005 for realising the sum of Rs.5,49,000/- due under the award. 3. Petitioners 1 and 2 thereupon filed W.P.(C)No.21417 of 2005 in this Court challenging the sale proclamation. By judgment delivered on 19.7.2005 this Court disposed of the said writ petition with a direction that a copy of the award will be furnished to the petitioner, if they apply for the same. This Court also directed that further action on the basis of the sale proclamation shall stand adjourned by a period of four months in the event of the petitioners depositing the sum of Rs.40,000/- per ## **W.P(C).No.4883 of 2012** -:3:- month payable on or before the 20[th] of every month commencing from August, 2005. This Court also directed that if the amount is not paid as directed, the order will stand recalled automatically. 4. The petitioners thereafter applied for and obtained a copy of Ext.P1 award and filed an appeal, A.P.No.47 of 2005 before the Kerala Co-operative Tribunal, challenging the award. In that appeal they contended that blank signed papers obtained from their predecessor-in-interest were used to fabricate documents. It was contended that the creation of the equitable mortgage was not legal and valid for the reason that Alappuzha is not a notified town. By Ext.P7 judgment delivered on 28.8.2010 the Kerala Co-operative Tribunal, after giving credit to the payment of Rs.1,60,000/- made by the petitioners pursuant to the judgment of this Court in W.P.(C)No.21417 of 2005, permitted the second respondent bank to realise from the petitioners and their assets the sum of Rs.2.36,196/- together with simple interest at 12% from the date of suit, till realisation. The Kerala Cooperative Tribunal also permitted the petitioners to clear off the liability in instalments of Rs.50,000/- per mensem, with the rider that in the event of the petitioners committing default in remitting any two consecutive instalments, the second respondent bank will ## **W.P(C).No.4883 of 2012** -:4:- be entitled to realise the entire amount in lump. In this writ petition the petitioners challenge Ext.P7 judgment and seek the following reliefs:- - _i) To call for the records in ARC No.214/2002 of the 1[st] respondent and in AP 47/2005 of the Kerala Co-operative Tribunal, Thiruvananthapuram, scrutinize the same and to set aside Ext.P7 Judgment by issuing a writ of certiorari or other appropriate writ, direction or order and to remand the matter to the 1[st] respondent with a direction to the 1[st] respondent to dispose of the matter afresh on merits after permitting the petitioners to file written statement and to adduce evidence._ - _ii) To issue any other appropriate writ, direction or order declaring that Mr.C.V.Augustine and the petitioners are not at all liable to pay the amount as per Ext.P7 and that the second respondent is not entitled to realize the amount as per Exts.P6 and P7 from the petitioner, who are the legal heirs of deceased Mr.C.V.Augustine, as the remedy available for the second respondent to realize the amount in Ext.P6 and P7 is barred by the law of Limitation._ 5. The main contention raised in the instant writ petition is that as Ext.P3 memorandum was not registered, no valid equitable mortgage has been created and therefore the arbitration case filed beyond the period of three years from the date of ## **W.P(C).No.4883 of 2012** -:5:- disbursement of the loan is barred by limitation. It is also contended that the predecessor-in-interest of the petitioners had not given any acknowledgment in writing and therefore, the arbitration case filed after the expiry of the period of three years from 24.6.1999, is liable to be dismissed on the ground that it is barred by limitation. 6. I heard Sri.Prakash P.George, learned counsel appearing for the petitioner and Sri.P.K.Vijayamohanan, learned standing counsel appearing for the second respondent bank. I have also gone through the pleadings and the materials on record. Shorn of details, the main contention raised by the petitioners is that the claim made by the second respondent bank is barred by limitation. In my opinion the said contention is plainly untenable and without _**-**_ any merit. In _**Thilakan v. M.C.V. Co operative Society and others**_ , 1974 KLT 657, a learned single Judge of this Court considered the question whether the provisions contained in the Limitation Act, 1963, apply to adjudications under section 69 of the Kerala Co-operative Societies Act, 1969. It was held that the provisions of the Limitation Act, 1963 cannot be read as applicable to proceedings before the Arbitrator under the Kerala Cooperative Societies Act, 1969. The said decision was affirmed by ## **W.P(C).No.4883 of 2012** -:6:- a Division Bench of this Court in _**Thilakan v. Mankai Coir - Vyavasaya Co operative Society Ltd**_ ., 1978 KLT 256, wherein it was held that the Arbitrator not being a Court governed by the provisions of the Code of Civil Procedure, the provisions of the Limitation Act have no application to the adjudication conducted by him under the Kerala Co-operative Societies Act. Still later, _**-**_ another Division Bench of this Court in _**Kavi Rajan v. Co operative Tribunal**_ , 1989 (2) KLT 895, held that the Limitation Act does not apply to proceedings under the Kerala Co-operative Societies Act. In the absence of any stipulation in the Kerala Cooperative Societies Act, 1969 to the effect that the Limitation Act will apply to proceedings under section 69 thereof, and also for the reason that no period of limitation is prescribed in the Kerala Co-operative Societies Act for institution of monetary claims, the contention of the petitioner that the principles underlying the Limitation Act apply to proceedings before the Arbitrator under the Kerala Co-operative Societies Act does not merit acceptance. In such circumstances, it is not really necessary for this Court to decide whether a valid mortgage was created by deposit of title deeds. However, for sake of completeness I propose to consider the said contention also. **W.P(C).No.4883 of 2012** -:7:- 7. Ext.P3 memorandum executed by the predecessor-ininterest of the petitioners reads as follows:- ## MORTGAGE EQUITABLE Mortgage (Memorandum Accompanying Deposit of Deeds) ## MEMORANDUM I/We C.V.Augustine, Chaloothra Agencies, Chaloothra Veedu, Ambalapuzha, aged....... year....... in consideration of the sum of Rs.225000 (Rupees Two Lakhs Twentyfive Thousand only) advanced to me by The Alleppey District Co-operative Bank Ltd., registered under Kerala Co-operative Societies Act with registered Head Office at Alleppey, the receipt whereof I/we do hereby acknowledge, have this, the day herein below mentioned, deposited with the said The Alleppey District Co-operative Bank Ltd., the deeds and documents set out in the list hereto as security, for the repayment of the said sum of Rs.225000 (Rupees Two lakhs and Twenty five thousand only) with interest thereon at the rate of 19% per annum from the date hereof till full payment. In Witness This day .............. **==> picture [90 x 23] intentionally omitted <==** ## 8. A Division Bench of this Court has in _**Allahabad Bank v.**_ _**Ley Bros and others**_ , 2010 (1) KHC 624 held that the very act of deposit of title deeds with the intention to provide the property **W.P(C).No.4883 of 2012** -:8:- as a security is sufficient to constitute an equitable mortgage, that quite often what is found is that later a memorandum of deposit of title deeds is taken by the mortgagee, which only evidences the creation of an earlier equitable mortgage by deposit of title deeds and that in such cases, the memorandum of deposit of title deeds, which evidences the creation of an earlier equitable mortgage, need not be registered. The Division Bench held that if, on the other hand, the terms of the transaction are reduced to writing and it is by the said document that the mortgage is created, then, for a valid mortgage, the document has to be registered. In the instant case it is evident from Ext.P3 memorandum that it was executed to evidence the creation of an earlier equitable mortgage by deposit of title deeds. Therefore, as held by the Division Bench of this Court in _**Allahabad Bank v. Ley Bros and others**_ (supra) Ext.P3 memorandum was not required to be registered. If that be so, even assuming that the Limitation Act applies to an adjudication under section 69 of the Kerala Cooperative Societies Act, the arbitration case being one to enforce payment of money secured by a mortgage, the period of limitation prescribed is 12 years computed with reference to the date on which the money sued for became due. In the instant ## **W.P(C).No.4883 of 2012** -:9:- case, the loan was advanced on 24.6.1999. The arbitration case was instituted within 12 years from the date on which the money sued for became due. For that reason also, it cannot be said that the arbitration case is barred by limitation. I accordingly hold that there is no merit in the writ petition. The writ petition fails and is dismissed. **P.N.RAVINDRAN, Judge.** **ahg.** **P.N.RAVINDRAN, J. --------------------------W.P(C).No.4883 of 2012 ----------------------------** ## **JUDGMENT** **28[th] February, 2012**