High Court of KeralaSingle Judge2021-09-29Writ petition dismissed; petitioner’s contentio...

C. Vinod Kumar v. Thiruvananthapuram Service Co-operative Bank Ltd and others

Case / Petition Number:WP(C) No.7649 of 2021

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Sathish Ninan, J.
Judgment Date: 2021-09-29
Court Decision / Holding: The writ petition is dismissed. The petitioner’s contentions are devoid of merit and are rejected. The bank is entitled to recover the debt in the manner it chooses, consistent with statutory provisions and established court precedents.
Final Disposition: Writ petition dismissed; petitioner’s contentions rejected; bank permitted to recover the debt as per statutory framework.

Parties to the Case

Appellants / Petitioners

C. Vinod Kumar

Respondents

Thiruvananthapuram Service Co-operative Bank Ltd represented by its Secretary, Press Road, Pulimoodu, Thiruvananthapuram 695 001
Sale Officer, Thiruvananthapuram Service Co-operative Bank Limited, Press Road, Pulimoodu, Thiruvananthapuram 695 001
Sindhu, D/O. Vasantha, Kra-1, Krishnaprabha, PoozhikunU, Industrial Estate P.O. Thiruvananthapuram 695 019
Reena, D/O. Vasantha, Kamalavilasom, Opposite Anjanaya Workshop, Industrial Estate P.O. Thiruvananthapuram 695 019
M.S. Suja, W/o. Late Ravikumar, Josevilas, Velyamcode, Maranelloor P.O. Thiruvananthapuram 695 126

Legal Representation & Advocates

Counsels for Petitioners

• R. Sunil Kumar
• A. Salini Lal

Counsels for Respondents

• Ligey Antony
• S. Krishna Kumar (MANGALAM)
• D. Sajeev
• Varsha G. Nair

Case Synopsis & Summary

The petitioner, C. Vinod Kumar, acts as a surety for a loan taken by the predecessor-in-interest of respondents 3 to 5 from Thiruvananthapuram Service Co-operative Bank Ltd. The loan, sanctioned in 2004, led to ARC proceedings and an award dated 13 December 2013 (Ext.P1). Pursuant to an undertaking to recover the debt from his salary, the bank issued Ext.P2 notice to his employer. The petitioner challenges three points: (a) the debt is barred by limitation; (b) after an award is passed, the remedy is to execute under Section 76 of the Co-operative Societies Act; and (c) since the debt is secured by a mortgage of the principal debtor, salary proceeds should not be touched without exhausting remedies against the principal debtor. The court notes that under Section 76(b)(ii) of the Co-operative Societies Act, an award for recovery of money can be executed within twelve years from the date of the award, making the limitation claim unfounded as the period would extend to 2025. On the remedy after an award, it cites Trivandrum Cooperative Agricultural Rural Development Bank v. State of Kerala (ILR 2004 (3) Ker. 282) and Sasidharan Nair v. Trivandrum Cooperative Urban and others (2009 (2) KLT 280) to hold that securing an award does not negate Section 37 of the Co-operative Societies Act. On the mortgage contention, the court reiterates that a creditor need not be compelled to proceed against the principal debtor or mortgaged property first, referencing Section 128 of the Indian Contract Act and judgments including SBI v. Indexport Registered and Bank of Bihar Ltd. v. Dr. Damodar Prasad. The court ultimately dismisses the petition, upholding the bank’s right to recover the debt and rejecting the petitioner’s challenges.

Provisions of Law Cited

Section 76(b)(ii) of the Co-operative Societies ActSection 37 of the Co-operative Societies ActRule 74 of the Co-operative Societies RulesRule 75 of the Co-operative Societies RulesSection 128 of the Indian Contract Act

Legal Doctrines & Maxims

Surety's liability co-exists with that of the principal debtor.
Creditor may choose the mode of recovery; need not first exhaust against the principal debtor.
Securing an award does not override the applicability of Section 37 of the Co-operative Societies Act.
The object of the guarantee should not be defeated by restricting remedies against the surety.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner argued (i) the debt is barred by limitation, (ii) once an award is passed, the remedy is to execute under Section 76 of the Co-operative Societies Act, and (iii) since the debt is secured by mortgage, the salary of the surety cannot be touched without exhausting remedies against the principal debtor.

Contentions of Respondents

The respondents contended that the award can be executed within the statutory period under Section 76(b)(ii); the remedy after an award is not restricted to execution alone; deduction from salary under Section 37 of the Co-operative Societies Act is permissible; the creditor is free to choose the mode of recovery, and the mortgage cannot bar recovery from the surety.

Cited Precedents (4)

Case Name	Citation	Treatment	Explanation
Trivandrum Cooperative Agricultural Rural Development Bank v. State of Kerala	ILR 2004 (3) Ker. 282	Positive	Used to support that securing an award does not bar application of Section 37 of the Co-operative Societies Act.
Sasidharan Nair V v. Trivandrum Cooperative Urban and others	2009 (2) KLT 280	Positive	Followed the above proposition that securing an award does not negate statutory remedies.
SBI v. Indexport Registered	1992) 3 SCC 15	Positive	Cited for the proposition that creditor is not required to proceed against the principal debtor before the surety.
Bank of Bihar Ltd. v. Dr. Damodar Prasad	AIR 1969 SC 297	Positive	Supported the view that the guarantee does not defeat recovery rights against the surety and the creditor’s remedy may not be easily curtailed.

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Extracted Judgment Text

Exact text extracted from official judgment records.

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE SATHISH NINAN** **WEDNESDAY, THE 29[TH] DAY OF SEPTEMBER 2021 / 7TH ASWINA, 1943** **WP(C) NO. 7649 OF 2021** ## **PETITIONER:** C.VINOD KUMAR AGED 50 YEARS S/O. CHANDRAMOHANAB NAIR T/C 41/2111(10 MYTHRI NAGAR, VALIYAVILA, THIRUVANANTHAPURAM. BY ADVS. R.SUNIL KUMAR SMT.A.SALINI LAL ## **RESPONDENTS:** 1 THIRUVANANTHAPURAM SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY, PRESS ROAD, PULIMOODU, THIRUVANANTHAPURAM 695 001. 2 SALE OFFICER, THIRUVANANTHAPURAM SERVICE CO OPERATIVE BANK LIMITED, PRESS ROAD, PULIMOODU, THIRUVANANTHAPURAM 695 001. 3 SINDHU, D/O. VASANTHA, KRA-1, KRISHNAPRABHA, POOZHIKUNU, INDUSTRIAL ESTATE P.O. THIRUVANANTHAPURAM 695 019. 4 REENA, D/O. VASANTHA, KAMALAVILASOM, OPPOSITE ANJANAYA WORKSHOP, INDUSTRIAL ESTATE P.O. THIRUVANANTHAPURAM 695 019. 5 M.S. SUJA , W/O. LATE RAVIKUMAR, JOSEPVILAS, VELYAMCODE, MARANELLOOR P.O. THIRUVANANTHAPURAM 695 126. BY ADVS. LIGEY ANTONY S.KRISHNA KUMAR (MANGALAM) D.SAJEEV VARSHA G NAIR THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ## **SATHISH NINAN, J.** **= = = = = = = = = = = = = = = = = = W. P. (C) No.7649 of 2021** **= = = = = = = = = = = = = = = = = = Dated this the 29[th] day of September, 2021** **J U D G M E N T** The petitioner is a surety for a loan availed by the predecessor-in-interest of respondents 3 to 5 from the 1[st] respondent Bank. The loan was availed in the year 2004. Consequent on the default in repayment of the loan, the 1[st] respondent filed ARC proceedings which culminated in Ext.P1 award dated 13.12.2013. At the time of sanction of the loan, the petitioner had executed an undertaking/agreement to have the debt recovered from his salary. Seeking recovery in terms of the agreement, Ext.P2 notice was issued by the Bank to the petitioner's employer for payment in terms of the agreement. It is aggrieved thereby that the petitioner has approached this Court. **W. P. (C) No.7649 of 2021** -: 2 :- 2. Heard Sri.R.Sunilkumar the learned counsel for the petitioner, Sri.D.Sajeev the learned counsel for the 1[st] respondent and Sri.S.Krishnakumar the learned counsel for respondents 3 and 4. 3. Sri.R.Sunilkumar, the learned counsel for the petitioner urges three pronged challenge:- - (a) The debt is barred by limitation. (b) An award having been passed, the remedy is only to execute the award in terms of Section 76 of the Cooperative Societies Act. (c) The debt being secured under a mortgage by the principal debtor, without exhausting remedy against the same, the salary of the petitioner cannot be proceeded against. 4. As noted first above, award was passed on - 13.12.2013. Section 76 (b) (ii) of the Co-operative **W. P. (C) No.7649 of 2021** **==> picture [34 x 10] intentionally omitted <==** Societies Act provides that an award for recovery of money can be executed within twelve years from the date of award. The said period would expire only in the year 2025. Therefore, the plea of limitation is unfounded. 5. As regards the contention that, having obtained an award the only remedy is to execute the same, this Court in _**Trivandrum Cooperative Agricultural Rural Development Bank v. State of Kerala**_ **(ILR 2004 (3) Ker. 282)** held that, securing of an award does not operate against the applicability of Section 37 of the Co-operative Societies Act. The said view was followed in _**Sasidharan Nair V v. Trivandrum Cooperative Urban and others (2009 (2) KLT 280**_ . Moreover, it is to be noted that Section 37 says, “deduction for satisfaction of any debt or other demand owing by the member to the Society”. A debt payable under an award is nothing less but a debt or demand payable to the **W. P. (C) No.7649 of 2021** -: 4 :- Society. So long as the debt or demand is outstanding, deduction of amounts from the salary towards the debt or demand could be effected in terms of Section 37. Therefore, the said contention fails. 6. As regards the third contention that the respondent-Bank has to first proceed against the mortgaged property of the judgment debtor, it has to be stated that the debtor cannot dictate to the creditor as to the manner in which the debt is to be recovered. Unless otherwise restricted under the decree, it is within the wisdom of the creditor to choose such steps for easy and fast recovery of his debt. As per Section 128 of the Indian Contract Act, a surety's liability is co-existence with that of the principal debtor. The Apex Court has in _**SBI v. Indexport Registered (1992) 3 SCC 15**_ **9** held that the creditor cannot be compelled to proceed first **W. P. (C) No.7649 of 2021** -: 5 :- against the principal debtor or the mortgaged property. In _**Bank of Bihar Ltd. v. Dr. Damodar Prasad AIR 1969 SC 297**_ , the Apex Court held, “The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the suerty...The security will become useless if his rights against the surety can be so easily cut down.” The option is with the creditor to decide as to the manner the debt is to be recovered. Rule 74 of the Co-operative Societies Rules also provide that it is the option of the decree-holder to decide on the mode of execution. Further, as per Rule 75, if the decree holder does not indicate the mode of execution, then movable assets are firstly liable to be proceeded against and then only the immovable property need be proceeded against. Anyway, that question arises only when the award is sought to be executed in terms of **W. P. (C) No.7649 of 2021** -: 6 :- Section 76 of the Act r/w Rule 74 of the Rules. It does not come into play in the present case since there is no such proceeding. Therefore, the said contention also fails. 7. To conclude, the contentions of the petitioner are devoid of merit and are only to be rejected. The writ petition fails and is accordingly dismissed. Sd/- **SATHISH NINAN JUDGE** kns/- //True Copy// P.S. to Judge ## **APPENDIX OF WP(C) 7649/2021** PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE AWARD IN FILE NUMBER 1471/2011 OF ASSISTANT REGISTRAR (GENERAL) CO OPERATIVE SOCIETIES. EXHIBIT P2 TRUE COPY OF THE LETTER ISSUED FROM THE RESPONDENT BANK DATED 18/1/2021. EXHIBIT P3 TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT BANK DTD. 9.3.2021. EXHIBIT P4 TRUE COPY OF THE LETTER DATED 9/3/2021 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT. -----