K.M.M. Salim v. Niranam Service Co-operative Society, Ltd. and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **WEDNESDAY, THE 15TH DAY OF OCTOBER 2014/23RD ASWINA, 1936** ## **WP(C).No. 31011 of 2008 (P)** **-----------------------------------------** ## **PETITIONER(S) :** **-------------------------** **K.M.M.SALIM, AGED 35 YEARS, S/O.MUHAMMED ALI, KOLLAMTHAZICHAYIL HOUSE, NIRANAM.P.O., THIRUVALLA - 689 621.** **BY ADVS.SRI.C.V.MANUVILSAN SMT.K.VIDYA** ## **RESPONDENT(S) :** - **----------------------------** **1. NIRANAM SERVICE CO-OPERATIVE SOCIETY, LTD NO.108, REPRESENTED BY ITS SECRETARY, NIRANAM.P.O., THIRUVALLA, PATHANAMTHITTA.** **2. PATHANAMTHITTA DISTRICT CO-OPERATIVE BANK LTD, REPRESENTED BY ITS GENERAL MANAGER, HEAD OFFICE PATHANAMTHITTA.** **3. THE DISTRICT COLLECTOR,** ## **PATHANAMTHITTA, CIVIL STATION, PATHANAMTHITTA.** **4. THE TAHSILDAR, THIRUVALLA, TALUK OFFICE.** **5. THE DEPUTY COLLECTOR(RR), PATHANAMTHITTA.** **6. STATE OF KERALA, REPRESENTED BY ITS SECRETARY, DEPARTMENT OF REVENUE, SECRETARIATE, THIRUVANANTHAPURAM.** **R2 BY ADV. SRI.JACOB P.ALEX, S.C, R3 TO R6 BY GOVERNMENT PLEADER SRI.R.RANJITH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15-10-2014, ALONG WITH W.P.(C).NO.15281 OF 2007, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** Msd. ## **WP(C).No. 31011 of 2008 (P)** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS** ## **-------------------------------------** **EXHIBIT P1 : A TRUE PHOTOCOPY OF THE COMPLAINT FILED BY THE PETITIONER AS CONSUMER OP NO.203/04 BEFORE THE CDRF, PATHANAMTHITTA.** - **EXHIBIT P2 : A TRUE PHOTOCOPY OF THE ORDER IN CONSUMER OP NO.203/04 DATED 25.01.2005, PASSED BY THE CDRF, PATHANAMTHITTA.** - **EXHIBIT P3 : A TRUE PHOTOCOPY OF THE CERTIFICATE DATED 09.01.2006, ISSUED BY THE PRESIDENT OF CONSUMER DISPUTE REDRESSAL FORUM.** - **EXHIBIT P4 : A TRUE PHOTOCOPY OF THE CERTIFICATE DATED 07.06.2006, ISSUED BY THE 3RD RESPONDENT.** - **EXHIBIT P5 : A TRUE PHOTOCOPY OF THE ORDER VIDE NO.R2-24914/06 DATED 27.06.2008, PASSED BY THE 5TH RESPONDENT.** **EXHIBIT P6 : A TRUE PHOTOCOPY OF THE APPEAL MEMORANDUM PREFERRED BY THE PETITIONER AGAINST EXHIBIT P5 ORDER.** ## **RESPONDENT(S)' EXHIBITS** **-----------------------------------------** ## **NIL** ## **//TRUE COPY//** **P.A.TO JUDGE.** Msd. ## **K. VINOD CHANDRAN, J. ===================== W.P.(C) Nos.31011 of 2008 - P and 15281 of 2007 ====================== Dated this the 15[th] day of October, 2014** ## **J U D G M E N T** The writ petitions project the very same issue, but, however on different aspects of challenge; concerning the dues of the Niranam Service Co-operative Society, which is the party respondent in both the writ petitions. The petitioner in W.P.(C) No. 31011 of 2008 was an account holder with the respondent Society and on being unable to realize the fixed deposit remitted with the respondent Society, he was before the Consumer Disputes Redressal Forum (CDRF), Pathanamthitta with Ext.P1 complaint. 2. The CDRF, Pathanamthitta by Ext.P2, allowed the claim raised by the petitioner/complainant and directed disbursement of the fixed deposit of Rs.1,00,000/- along with interest @12% interest per annum from the date of the W.P.(C) No.31011 of 2008 - P 15281 of 2007 **2** fixed deposit receipt. Compensation amounting to Rs.5,000/- and cost of Rs.1,000/- was also allowed, as is indicated in Ext.P2. A certificate was issued under Exts.P3 and P4 for revenue recovery proceedings by the District Collector. Subsequent to that, Ext.P5 order was passed which is challenged in the above writ petition. 3. Ext.P5 took into account Section 35(2), of the Kerala Co-operative Societies Act, 1969 (for brevity, 'the Act') and found that without the consent of the financing Bank ie., the petitioner in W.P.(C) No. 15281 of 2007, no transfer could be effected. The finding was that there was a charge created in favour of the financing Bank. Section 35 (1) and (2) of the Act reads as under:- 35(1) Notwithstanding anything contained in any law for the time being in force, but subject to any prior claim of the Government in respect of land revenue or any money recoverable as land revenue, any debt or outstanding demand owing to a society by any member or past member or deceased member shall be a first charge- (a) upon the crops or other agricultural produce of such member for the raising of which the loan was taken from the Society by such member; and W.P.(C) No.31011 of 2008 - P 15281 of 2007 **3** (b) upon any cattle, fodder for cattle, agricultural or industrial implements or machinery, or raw materials for manufacture, supplied or purchased in whole or in part out of any loan given, by the society, or on any article manufactured from raw materials so supplied or purchased. (2) No person shall transfer any property which is subject to a charge under sub-section(1) except with the previous permission in writing of the society which holds the charge. 4. Section 35(1) of the Act, creates a first charge with respect to any debts, due from a member, past member or deceased member upon the crops or other agricultural produce or any cattle, fodder for cattle, agricultural or industrial implements or machinery or raw materials purchased in whole or part, out of a loan. Section 35(2) provides that no transfer of the property; subject to such a charge under Section 35(1) of the Act, shall be made except with the previous permission in writing of the Society, which holds such first charge. Primarily, it is to be noticed that, the charge created is on the items mentioned above and is not on immovable property. 5. The claim raised by the District Co-operative Bank, the financing Bank, who is the petitioner in the other writ W.P.(C) No.31011 of 2008 - P 15281 of 2007 **4** petition, is that huge amounts are due to the financing Bank from the respondent Society as also there are other dues, which have crystallized into awards under Section 69 of the Act as also various orders of the CDRF. The respondent Society being a member of the financing Bank, the charge would be operative, is the argument. 6. The learned Counsel for the respondent Bank would plead for a rateable distribution, which however cannot be considered at this stage, especially since the writ petitions are pending from the year 2007 to 2008, and the other claims which are said to have crystallized in an adjudication is not before this Court. Any person having any claim under an award or an order for reason of money due, ought to have initiated appropriate proceedings, for recovery. This Court at present is only concerned with the impugned order in W.P.(C) No. 31011 of 2008, wherein, the petitioner challenges Ext.P5 order. The petitioner who had been diligently prosecuting the claim cannot in his endeavour, be defeated on the basis of unrepresented claims. Even the W.P.(C) No.31011 of 2008 - P 15281 of 2007 **5** financing Bank does not have a claim for recovery, as against its member, the respondent Society. 7. Ext.P5 order has been issued on the wrong premise that there is a first charge created with respect to the dues to the financing Bank, on the landed property of the respondent Society. Admittedly, the respondent Society is a member of the District Co-operative Bank. But, however there are no items available, as of now, for creating a first charge as provided under Section 35(1) of the Act, since, admittedly, the society is defunct. The recovery proceedings now can be taken only against the landed property of the respondent Society. There is no charge created as per Section 35(1) of the Act on the landed property of the Society, in favour of the financing Bank or any other claimants, who have obtained awards or orders either under the Co-operative Societies Act or under the Consumer Protection Act, 1986 8. In such circumstance, Ext.P5 has to be set aside. The revenue recovery authorities have to proceed against **6** W.P.(C) No.31011 of 2008 - P 15281 of 2007 the property of the respondent Society and if the sale of the respondent societie's properties are effected; after adjusting the amounts due to the petitioner, as is evidenced from Ext.P2 award, along with any interest due, the balance shall be retained with the revenue recovery authorities for being adjusted against any other dues of the respondent Society. 9. The writ petition W.P.(C) No.15281 of 2007, filed by the financing Bank, raises the following prayers. (i) to issue a writ of certiorari quashing Exts.P1 and P2 in so far as it direct the sale of the property and assets of the 4[th] respondent society without obtaining consent of the petitioner which is having first charge over the assets and property of the 4[th] respondent society; (ii) to declare that the Consumer Disputes Redressal Forum has no power or authority to entertain a petition filed by the 5[th] respondent for realisation of the deposit amount made in the 4[th] respondent society; (iii) to issue a writ of mandamus, order or direction commanding and compelling the District Collector, Pathanmthitta to consider and pass appropriate orders on Ext.P3 petition filed by the petitioner Bank before proceeding with the sale of property of the 4[th] respondent society; (iv) to issue an interim stay of all further proceedings pursuant to Exts.P1 and P2 for sale of immovable properties of the 4[th] respondent society without discharging the liability due to the petitioner Bank. **7** W.P.(C) No.31011 of 2008 - P 15281 of 2007 10. Insofar as the first prayer is concerned, this Court having found that, there is no charge on the property of the respondent Society as per Section 35 of the Act, there is no requirement for any consent as mandated under Section 35(2). In any event, when recovery proceedings are initiated as permitted in an enactment, herein Consumer Protection Act, under orders obtained by the competent authority/forum or Court constituted under such enactment, it cannot be said that the consent of the financing Bank would be required. The issue with respect to the jurisdiction of the CDRF has been settled by a catena of decisions and reiterated in **Enathu Service Co-operative Bank Ltd.** v. **Consumer Disputes Redressal Forum [2011 (1) KLT 573]** , which have unequivocally declared that, the same is an alternate remedy, which any consumer could avail of, dehors the other remedies available to him/her. 11. It is in disposal of Ext.P3 that, the revenue recovery authorities have passed an order, which was **8** W.P.(C) No.31011 of 2008 - P 15281 of 2007 impugned in the other writ petition. In such circumstance, none of the above prayers could be successfully agitated at this point of time. However, definitely the financing Bank could approach the appropriate authority for winding up or raise a claim with respect to the amounts recovered on sale of the property retained with the revenue recovery authorities, after satisfying the claim raised by the petitioner in W.P.(C) No.31011 of 2008. W.P.(C) No.31011 of 2008 stands allowed. W.P.(C) No.15281 of 2007 stands dismissed; however with the above observations. Parties are left to suffer their respective costs. Sd/- **K. VINOD CHANDRAN, JUDGE** SB // True Copy // P.A To Judge.