Paravur S.N.V. Regional Co-operative Bank Ltd. v. State of Kerala and others

**IN THE HIGH COURT OF KERALA AT ERNAKULAM** **PRESENT:** **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** **MONDAY, THE 6TH DAY OF AUGUST 2018 / 15TH SRAVANA, 1940** **WP(C).No. 19395 of 2015** ## **PETITIONER :** **THE PARAVUR S.N.V. REGIONAL CO-OPERATIVE BANK LTD.NO.1685 S.PARAVUR P.O., KOLLAM -691 301, REPRESENTED BY ITS PRESIDENT.** **BY ADVS.SRI.B.SURESH KUMAR SMT.ANUROOPA JAYADEVAN** ## **RESPONDENTS :** ## **1. THE STATE OF KERALA** **REPRESENTED BY ITS PRINCIPAL SECRETARY TO THE CO-OPERATIVE DEPARTMENT, SECRETARIAT, FORT P.O., THIRUVANANTHAPURAM - 695 023.** ## **2. THE REGISTRAR OF CO-OPERATIVE SOCIETIES** **OFFICE OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES, FORT P.O, THIRUVANANTHAPURAM - 695 023.** **3. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) OFFICE OF THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, CIVIL STATION, KOLLAM- 691 013.** **4. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, ARBITRATOR CUM SALE OFFICER, THE PARAVUR S.N.V. REGIONAL CO-OPERATIVE BANK LIMITED NO. 1685,** - **S. PARAVUR P.O., KOLLAM-691 301.** ## **5. THE DISTRICT COLLECTOR,** **KOLLAM, CIVIL STATION P.O., KOLLAM - 691 013.** ## **6. SUDARSANAN K.** **VILAYIL VEEDU, SANTHI NAGAR - 7, AYATHIL P.O., KOLLAM - 691 017.** **R6 BY ADV. SRI.K.SUBASH CHANDRA BOSE** **R4 BY SR. GOVERNMENT PLEADER SRI.BIMAL K.NATH** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 06-08-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **csl** ## **WP(C).No. 19395 of 2015 (Y)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS :** **EXHIBIT-P1-TRUE COPY OF THE GEHAN/MORTGAGE DEED DATED 11/12/2008 EXECUTED BY THE SIXTH RESPONDENT IN FAVOUR OF THE SOCIETY AT THE SUB REGISTRAR'S OFFICE, ERAVIPURAM.** **EXHIBIT-P2-TRUE COPY OF THE AWARD IN A.R.C.NO.194/2013 DATED 23/04/2013 PASSED BY THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES.** **EXHIBIT-P2(a)-TRUE COPY OF THE ENGLISH TRANSLATION OF THE RELEVANT PORTION OF EXHIBIT-P2.** - **EXHIBIT-P3-TRUE COPY OF THE REPRESENTATION DATED 03/05/2013 SUBMITTED BY THE 6TH RESPONDENT BEFORE THE HONOURABLE CHIEF MINISTER** **EXHIBIT-P4-TRUE COPY OF THE COMMUNICATION DATED 27/05/2015 ISSUED BY THE DISTRICT COLLECTOR, KOLLAM TO THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL)** ## **EXHIBIT-P4(a)-TRUE COPY OF THE ENGLISH TRANSLATION OF EXHIBIT-P4** **EXHIBIT-P5-TRUE COPY OF THE COMMUNICATION DATED 08/06/2015 ISSUED BY THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (ARBITRATOR CUM SALE OFFICER)** **EXHIBIT-P5(a)-TRUE COPY OF THE ENGLISH TRANSLATION OF RELEVANT PORTION OF EXHIBIT-P5.** ## **RESPONDENTS' EXHIBITS:** **EXHIBIT-R6(a)-TRUE COPY OF THE REPRESENTATION SUBMITTED BEFORE THE CHIEF MINISTER OF KERALA DATED 12.2.2014 AND ITS ENGLISH TRANSLATION.** **EXHIBIT-R6(b)-TRUE COPY OF THE LETTER DATED 26.6.2014 SENT TO THE FIFTH RESPONDENT DISTRICT COLLECTOR FROM THE CO-OPERATIVE DEPARTMENT SECRETARY AND ITS ENGLISH TRANSLATION.** **EXHIBIT-R6(c)-TRUE COPY OF THE PROFILE OF THE SIXTH RESPONDENT UPLOADED IN THE SOCIAL MEDIA.** **EXHIBIT-R6(d)-TRUE COPY OF THE LETTER ISSUED TO THE CO-OPERATIVE REGISTRAR DATED 10.6.2014 AND ITS ENGLISH TRANSLATION.** **//TRUE COPY//** **P.S. TO JUDGE** ## **ANIL K. NARENDRAN, J.** ---------------------------------------- W.P.(C) No.19395 of 2015 ----------------------------------------Dated this the 6[th] day of August, 2018 ## _**JUDGMENT**_ The petitioner is a Co-operative Society registered under the Co-operative Societies Act, 1969. The sixth respondent, who is a member of the petitioner Society with membership No.D42083, availed a loan for Rs.7.5 lakhs by executing Exhibit-P1 Gehan in favour of the petitioner on 11.12.2008, in respect of 6.07 Ares of land in Re.Sy.No.409/1-2 in Vadakkevila Village in Kollam District, covered by settlement deed No.3112 of 1997 of the Sub Registrar’s Office, Eravipuram. After availing the loan, the sixth respondent defaulted repayment. The petitioner Society filed ARC No.194 of 2013 before the third respondent Joint Registrar of Co-operative Societies, who passed Exhibit-P2 award dated 23.4.2013, allowing the petitioner Society to recover an amount of Rs.10,19,289/- together with interest at the rate of 16% per annum from 11.1.2013 and other expenses from the sixth respondent and his assets. In the absence of any challenge made by the sixth respondent, Exhibit-P2 award has attained finality. 2. On 26.6.2013, the petitioner Society filed E.A.No.545 of 2013 before the third respondent Arbitrator for executing Exhibit-P2 award and as per the said Execution Application, the amount due from : **:2::** W.P.(C) No.19395/15 the sixth respondent as on 15.6.2015 comes to Rs.13,10,522/-. The sixth respondent submitted Exhibit-P3 representation dated 3.5.2013 before the Chief Minister of Kerala requesting that the loan availed by him from the petitioner Society and also from the Pallimukku Branch of Kollam District Co-operative Bank may be written off as he is involved in the work of national integration for the last 30 years. Pursuant to Exhibit-P3 representation made before the Chief Minister, the fifth respondent District Collector issued Exhibit-P4 communication dated 27.5.2015 addressed to the third respondent Joint Registrar to keep in abeyance the attachment/sale of the property of the sixth respondent, considering the fact that the request made by the petitioner, who is involved in Gandhian movement of enforcing prohibition of liquor, is pending before the Government. 3. Based on Exhibit-P4 communication of the fifth respondent, the fourth respondent Assistant Registrar of Co-operative Societies issued Exhibit-P5 communication dated 8.6.2015, whereby the petitioner Society is directed to keep in abeyance the execution of Exhibit-P2 award. Feeling aggrieved by Exhibits-P4 and P5 communications, the petitioner Society is before this Court with this Writ Petition seeking a writ of certiorari to quash Exhibits-P4 and P5. 4. On 29.6.2015, when this Writ Petition came up for admission, the learned Government Pleader took notice for respondents : **:3::** W.P.(C) No.19395/15 1 to 5. Notice was ordered to the sixth respondent through speed post and the matter was ordered to be listed after two weeks. By order dated 29.6.2015, this Court has also suspended the operation of Exhibits-P4 and P5 communications. 5. A counter affidavit has been filed on behalf of the fourth respondent, wherein it has been pointed out that Exhibit-P2 award passed by the Arbitrator has attained finality in the absence of statutory appeal filed by the sixth respondent. Once the award has become final, the petitioner Society is entitled to execute the same against the sixth respondent and his assets. 6. A counter affidavit has been filed by the sixth respondent, wherein it is contended that he is a social worker, who has devoted his life for the cause of spreading the ideals and principles of Mohandas Karamchand Gandhi, the Father of our Nation, by conducting and arranging regular and continuous convocations, lecturers and awareness programs in the educational institutions in the State with the permission of the Education Department, particularly with the object of inspiring the youth to follow the ideals of the Father of our Nation, to uphold the principles of non-violence, brotherhood and peaceful behaviour and approach to all living beings, humanitarian approach to the burning problems, etc. A reading of the counter affidavit would show that Exhibit-P2 award passed by the Arbitrator has attained finality in : **:4::** W.P.(C) No.19395/15 the absence of statutory appeal filed by the sixth respondent. On account of the coercive steps initiated by the petitioner Society, the sixth respondent moved Exhibit-P3 representation before the Chief Minister, requesting to write off the debt due to the petitioner Society as he borrowed the amount for meeting expenses and for conducting programmes under the auspices of the Kerala Pradesh Gandhi Yuvamandalam. Based on that representation, the fifth respondent District Collector issued Exhibit-P4 communication dated 27.5.2015 to the third respondent Joint Registrar. Based on Exhibit-P4, the fourth respondent Assistant Registrar issued Exhibit-P5 communication to the petitioner Society. 7. Heard the learned counsel for the petitioner, the learned Senior Government Pleader appearing for respondents 1 to 5 and also the learned counsel appearing for the sixth respondent. 8. The learned counsel for the petitioner would contend that Exhibits-P4 and P5 communications are issued by the fourth and fifth respondents absolutely without any authority of law and as such they are liable to be interfered with by this Court under Article 226 of the Constitution of India. 9. Per contra, the learned counsel for the sixth respondent would contend that, it was after considering the reasons stated in Exhibit-P3 representation, the fifth respondent District Collector has : **:5::** W.P.(C) No.19395/15 issued Exhibit-P4 communication, which was followed by Exhibit-P5 communication of the fourth respondent Assistant Registrar, which warrants no interference in this Writ Petition. 10. The learned Senior Government Pleader would advance arguments, in terms of the contentions raised in the counter affidavit filed on behalf of the fourth respondent. 11. The sole issue that arises for consideration in this Writ Petition is as to whether Exhibits-P4 and P5 communications issued by the fourth and fifth respondents can be sustained in the eye of law. 12. The fact that the sixth respondent has defaulted repayment of the loan availed from the petitioner Society is not in dispute. It is also not in dispute that in ARC No.194 of 2013, the third respondent Arbitrator passed Exhibit-P2 award dated 24.3.2013, in favour of the petitioner Society, for a sum of Rs.10,19,289/-, in exercise of his powers under Section 70 of the Kerala Co-operative Societies Act, 1969. If the sixth respondent was feeling aggrieved by Exhibit-P2 award, he should have invoked the statutory remedy, by filing an appeal before the Cooperative Tribunal, under Section 82(1)(e) of the said Act. 13. When the petitioner Society initiated coercive steps to execute Exhibit-P2 award, the sixth respondent moved Exhibit-P3 representation before the Chief Minister, which resulted in Exhibit-P4 communication dated 27.5.2015 issued by the fifth respondent District : **:6::** W.P.(C) No.19395/15 Collector, whereby the third respondent Joint Registrar was directed to keep in abeyance the execution of Exhibit-P2 award. Based on ExhibitP4 communication, the fourth respondent- Assistant Registrar issued Exhibit-P5 communication dated 8.6.2015. During the course of arguments, the learned counsel for the sixth respondent could not point out any provision under the Kerala Co-operative Societies Act or the Rules made thereunder, whereby the fifth respondent District Collector is authorised to issue a direction, as contained in Exhibit-P4 communication. 14. 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 Co-operative 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. 15. 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 policies for the benefit of the members and the general public. In the : **:7::** W.P.(C) No.19395/15 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 shall have the power to write off agricultural or non-agricultural debts of borrowers of any Society. 16. 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. 17. In **Authorised Officer, State Bank of Travancore v.** : **:8::** W.P.(C) No.19395/15 **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 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. 18. In the instant case, the sixth respondent who availed a loan for Rs.7.5 lakhs from the petitioner Society has defaulted repayment of monthly instalments. The petitioner Society filed A.R.C.No.194 of 2013, which was allowed by Exhibit-P2 award dated 23.4.2013. In the absence of any challenge made by the sixth respondent, Exhibit-P2 award has attained finality. The pleadings and materials on record would show that at the time of availing the loan, the sixth respondent has executed Exhibit-P1 Gehan, offering as security his property having an extent of 15 cents (6.07 Ares) comprised in Re.survey No.409/1-2 in Vadakkevila Village in Kollam District. The recovery steps initiated by the petitioner Society in terms of Exhibit-P2 award cannot be interfered with by respondents 1 to 5 on the ground that the sixth respondent devoted his life for the cause of spreading ideas and principles of Mohandas Karamchand Gandhi, the Father of our Nation, as averred in his counter : **:9::** W.P.(C) No.19395/15 affidavit. 19. Having considered the submission made by the learned counsel on both sides, this Court finds no valid grounds to sustain Exhibit-P4 communication dated 27.5.2015 of the fifth respondent District Collector and Exhibit-P5 communication dated 8.6.2015 of the fourth respondent Assistant Registrar of Co-operative Societies, whereby the petitioner Society is directed to keep in abeyance the execution of Exhibit-P2 award. In the result, this writ petition is disposed of by setting aside Exhibit-P4 communication dated 27.5.2015 of the fifth respondent District Collector and Exhibit-P5 communication dated 8.6.2015 issued by the fourth respondent Assistant Registrar of Co-operative Societies. No order as to costs. Sd/- **ANIL K. NARENDRAN JUDGE** csl