Deepa.K.R. v. Service Co-operative Bank (South)

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **TUESDAY,THE 25TH DAY OF SEPTEMBER 2018 / 3RD ASWINA, 1940** ## **WP(C).No. 22439 of 2014** ## **PETITIONER:** **DEEPA.K.R. W/O.ADV.MADHU,MADHAVAM,PUTHIYAKAVU, K.S.PURAM P O, KARUNAGAPPALLY,KOLLAM 690 544** **BY ADV. SMT.E.V.MOLY** ## **RESPONDENTS:** **SERVICE CORPORATIVE BANK** **(SOUTH) NO.1731,CHAVARA SOUTH P O, KOLLAM-691 583, REPRESENTED BY ITS SECRETARY/MANAGER.** **BY ADVS. SRI.V.G.ARUN SRI.T.R.HARIKUMAR SRI.R.K.K.RAVINDRANATH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **W.P.(C)No.22439 of 2014** ## **:-2-:** ## **J U D G M E N T** The petitioner, who is the daughter of Sri.Keshavan Pillai and Smt.Radhamma, has availed two loans of Rs.3,50,000/- each from the respondent Service Co-operative Bank in the year 2007, offering as security 10 Ares of land comprised in Re-survey No.672/6/1 in the name of her brother-inlaw and 8 Ares in Re-survey No.342/5 in Karunagapally Taluk, registered in the name of late Keshavan Pillai. The petitioner has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the respondent Bank to produce the records relating to Ext.P4 award in A.R.C.No.461/11 dated 28.11.2011 and to allow her to close the entire loan accounts in terms of Ext.P2 circular No.01/2014. The petitioner has also sought for a writ of mandamus commanding the respondent Bank to consider waiver ## **W.P.(C)No.22439 of 2014** ## **:-3-:** of interest/penal interest in the loan account. 2. On 27.8.2014 when this writ petition came up for admission, this Court admitted the matter on file and issued urgent notice by speed post to the respondent, returnable in two weeks. 3. A counter affidavit has been filed by the respondent on 27.3.2015 opposing the reliefs sought for in this writ petition. 4. On 4.9.2018 the learned counsel for the respondent Bank on instructions submitted that the total liability in respect of the loan availed by the petitioner's mother as on that date comes to Rs.9,16,401/- and that, considering the peculiar facts and circumstances, the Bank has tentatively decided to settle the said liability at Rs.7,26,833/-, if the petitioner is prepared to remit the said amount within one month. Learned counsel for the petitioner sought time to get ## **W.P.(C)No.22439 of 2014** ## **:-4-:** instructions and the matter was adjourned to 10.9.2018. 5. On 10.9.2018, the case was adjourned to 12.9.2018. On 13.9.2018, when this writ petition came up for further consideration, the learned counsel for the petitioner submitted that the petitioner intends to settle the dues in the next One Time Settlement Scheme, which is likely to be introduced by the Government in February, 2019. After recording the said submission made by the learned counsel for the petitioner, this writ petition was ordered to be listed to 18.9.2018. On that day, there was no representation for the petitioner; hence the same is listed today for further consideration. 6. Heard the learned counsel for the petitioner and also the learned counsel for the respondent Bank. ## **W.P.(C)No.22439 of 2014** ## **:-5-:** 7. The pleadings and materials on record would show that the petitioner's father and mother availed two loans in the year 2007 for a sum of Rs.3,50,000/- each, after mortgaging 10 Ares of land comprised in Re-survey No.672/6/1, which is in the name of the petitioner's brother-in-law and 8 Ares in Re-survey No.342/5 in Karunagapally Taluk, registered in the name of late Keshavan Pillai. Sri.Keshavan Pillai died on 26.5.2018 and Smt.Radhamma died on 3.10.2012. On account of default in repayment, the respondent Bank filed A.R.C.No.460/2011 against Sri.Keshavan Pillai and A.R.C.No.461/2011 against Smt.Radhamma. As far as the award passed in A.R.C.No.460/2011 is concerned, the legal heirs of Sri.Keshavan Pillai has already cleared the entire dues and the loan account has also been closed. As far as the award in A.R.C.No.461/2011 is concerned, it is in relation ## **W.P.(C)No.22439 of 2014** ## **:-6-:** to the loan availed by the petitioner's mother Smt.Radhamma. The award was passed during her life time. The award in A.R.C.No.461/2011 has attained finality, in the absence of any appeal filed by Smt.Radhamma before the Co-operative Tribunal, invoking the provisions under Section 82(1)(e) of the Kerala Co-operative Societies Act. 8. The averments in this writ petition would show that the petitioner is not in a position to pay the entire dues in lump sum and she is seeking settlement of the dues in terms of One Time Settlement Scheme, i.e., 'Aswas Scheme 2011'. Though this writ petition is one filed on 26.08.2014 claiming the benefit under the 'Aswas Scheme 2011', the petitioner has not chosen to move this writ petition after 27.8.2014. On 3.8.2018, it is listed before this Court by the Grouping Section. Though the averments in the writ petition ## **W.P.(C)No.22439 of 2014** ## **:-7-:** are to the effect that the petitioner is eager to settle the entire dues within a reasonable time, the conduct of the petitioner would show that her intention was only to protract the recovery proceedings initiated by the respondent Bank in terms of the award passed by the Arbitrator, which is of the year 2011. 9. Despite the fact that the respondent Bank has offered a concession of nearly Rs.2 lakhs by taking a tentative decision to permit the petitioner to settle the dues at Rs.7,26,863/-, if she is prepared to pay the said amount within one month, the petitioner is not prepared to accept that offer. Now the stand taken by the learned counsel for the petitioner is that the petitioner will settle the dues in the next One Time Settlement Scheme, which will be introduced by the Government in February 2019. ## **W.P.(C)No.22439 of 2014** **:-8-:** 10. Section 66A of the Kerala Co-operative Societies Act deals with the powers of the Registrar to give directions. As per Section 66A, subject to the provisions of the Act and the Rules made thereunder, the Registrar may issue general directions and guidelines to any or all of the Cooperative Societies in furtherance of the purpose of the Act or for implementing the Government policy for the benefit of the members and the general public. 11. As held by a Division Bench of this Court in **Abdu Rahiman Nagar Service Co-operative Bank Ltd. v. State of Kerala (2014 (1) KLT 664),** Section 66A of the Act enables the Registrar to issue general directions and guidelines to any or all of the Co-operative Societies in furtherance of the purpose of the Act or for implementing Government ## **W.P.(C)No.22439 of 2014** ## **:-9-:** policies for the benefit of the members and the general public. In the said decision, this Court was dealing with the challenge made against Circular No.41/11 issued by the Government, whereby an One Time Settlement Scheme, namely, 'Aswas - 2011' was introduced giving waiver of the dues of the defaulters for settlement of their liabilities, at the rate and in the manner as stated therein. The learned Single Judge relying on the provisions of Section 74F of the Act repelled the challenge against that Circular. After referring to Section 75F of the Act, which provides that, notwithstanding anything contained in any Act or Rules, no authority or commission, other than the Government or Registrar, shall have the power to write off agricultural or non-agricultural debts of borrowers of any Society, the Division Bench held that, by virtue of Section 74F, the Government ## **W.P.(C)No.22439 of 2014** **:-10-:** shall have the power to write off agricultural or non-agricultural debts of borrowers of any Society. 12. A reading of the provisions under Section 66A and 74F of the Act would make it explicitly clear that the power conferred on the Registrar under Section 66A and that conferred on the Government or the Registrar under Section 74F, is to issue general directions, guidelines or schemes. Under the said provisions, neither the Government nor the Registrar have the power to issue orders to write off agricultural or non-agricultural debts of an individual borrower of any Society. 13. In **Authorised Officer, State Bank of** **Travancore v. Mathew K.C. (2018 (3) SCC 85)** , the Apex Court held that loans by financial institutions are granted from public money generated at the tax payer's expense. Such loans does not become the property of the person taking ## **W.P.(C)No.22439 of 2014** ## **:-11-:** the loan, but retains its character of public money given in a fiduciary capacity as entrustment by the public. Timely repayment also ensures liquidity to facilitate loan to another in need, by circulation of the money and cannot be permitted to be blocked by frivolous litigation by those who can afford the luxury of the same. 14. Having considered the pleadings and materials on record and also the submissions made by the learned counsel on both sides, this Court finds that this writ petition is nothing but an abuse of process of Court which cannot be entertained in exercise of the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. In the result, this writ petition fails and the same is accordingly dismissed. It is made clear that it is for the respondent Bank to proceed ## **W.P.(C)No.22439 of 2014** ## **:-12-:** against the security offered by the petitioner, in case the petitioner fails to remit the dues. All pending interlocutory applications are closed. Sd/- **JUDGE** **ANIL K.NARENDRAN JUDGE** ami/28.9.18 ## **APPENDIX** **PETITIONER'S EXHIBITS:** **EXHIBIT P1 COPY OF THE DEATH CERTIFICATES EXHIBIT P2 COPY OF THE CIRCULAR NO.01/14 EXHIBIT P3 COPY OF THE RECEIPT FOR PAYMENT EXHIBIT P4 COPY OF THE AWARD NO.461/2011 DATED 28/11/2011** **RESPONDENT'S EXTS :** **EXHIBIT R1 TRUE COPY OF THE WRITTEN REQUEST DATED 14.2.2014 MADE BY SHRI.MADHU TO THE ASST.REGISTRAR OF CO-OPERATIVE SOCIETIES, KARUNAGAPPALLY EXHIBIT R2 TRUE COPY OF THE CIRCULAR NO.5/2015.** **//TRUE COPY//** **P.A.TO JUDGE** **ami/**