Romeo Jacob v. Trissur District Co-operative Bank Ltd. (and Prakasan)

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN** **FRIDAY, THE 15TH DAY OF NOVEMBER 2013/24TH KARTHIKA, 1935** **WP(C).No. 20974 of 2008 (V) ----------------------------** **PETITIONER:** **--------------------------** **ROMEO JACOB, S/O.JACOB MEKATTUKULAM HOUSE, NUNDUR DESOM, ANJUR VILLAGE THRISSUR TALUK, THRISSUR** **BY ADVS.SRI.R.MANOJ** **SMT.PRABHA R.MENON** **RESPONDENTS:** **----------------------------** ## **TRISSUR DISTRICT CO.OP.BANK LTD., TRISSUR** **2. PRAKASAN, S/O.KARAPPAN, VATTAKULANGARA HOUSE, PONNORE DESOM EDAKALATHUR VILLAGE, TRISSUR TALUK** **R1 BY ADV. SRI.V.G.ARUN,SC,THRISSUR DIST.CO-OP BAN R1 BY ADV. SRI.T.R.HARIKUMAR,SC,THRISSUR DIST.CO.O R1 BY ADV. SRI.P.C.SASIDHARAN R1 BY ADV. SRI.C.A.MAJEED** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15-11-2013 ALONG WITH WP(C)NO. 8582/2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **WP(C).No. 20974 of 2008 (V)** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **EXT.P1 : TRUE COY OF the PASS BOOK EXT.P2 : TRUE COPY OF THE NOTICE DT 29.11.2003 EXT.P3 : TRUE COPY OF THE PETITION FILED BY THE BANK BEFORE THE JOINT REGISTRAR OF CO-OP. SOCIETIES IN ARC NO. 725/2004 DT 13.8.2004** - **EXT.P4 : TRUE COPY OF THE AWARD PASSED BY THE JOINT REGISTRAR OF CO-OP. SOCIETIES DATED 22.11.2005** - **EXT.P5 : TRUE COPY OF THE MEMORANDUM OF REVISION PETITION IN R.P NO.224 OF 2006 DATED SEPTEMBER 2006** - **EXT.P6 : TRUE COPY OF THE DEMAND DRAFT DRAWN IN FAVOUR OF THE BANK , DT 7.8.2007** - **EXT.P7 : TRUE COPY OF THE AWARD PASSED BY THE KERALA CO-OP TRIBUNAL DT 17.12.2007** - **EXT.P8 : TRUE COPY OF THE DEMAND LNOTICE SERVED ON APPELLANT DT 13.5.2008** ## **RESPONDENTS' ANNEXURES: NIL** ## **//TRUE COPY//** ## **P.A. TO JUDGE** **jma** ## **K. VINOD CHANDRAN, J - - - - - - - - - - - - -- - - - - - - - - - - - - - - - W.P(C) Nos.20974 of 2008 - V & 8582 of 2013 W** **- - - - - - - - - - - - - - - - - - - - - - - - - - - -** ## **Dated this the 15[th] day of November, 2013** ## **J U D G M E N T** Both the writ petitions are filed on the same subject matter, being the default committed by the petitioner in a loan availed of from the 1[st] respondent Bank and the recovery of which was proceeded against as per Ext.P4 award confirmed by Ext.P7. Admittedly, the petitioner had availed of a loan in which, default was committed and the respondent Bank had filed an arbitration case under the Kerala Cooperative Societies Act, 1969. Ext.P4 is the award passed thereon and the same was challenged in revision before the Co-operative Tribunal, which also concluded in Ext.P7. While Ext.P4 reduced the interest claimed by the respondent Bank to 18%, the Co-operative Tribunal further reduced it to 15%. 2. The learned Counsel perfectly understanding the jurisdiction conferred on this Court in judicial review of the orders passed by the fact finding bodies, raises two questions of law relating to the award and it is confirmation, WPC.20974/2008 & 8582/2013 : 2 : for assailing the recovery. The first issue raised based on a judgment of the Constitution Bench of the Hon'ble Supreme Court in Central Bank of India v. Ravindra [2002(1) KLT 743 (SC)], is that penal interest cannot be capitalised. The second argument is put forward on the question of limitation; that the proceedings initiated by the respondent Bank is beyond the limitation period of three years. 3. The learned counsel would take me to Ext.P1, which shows the balance due in the principal and interest as on 11.7.2002 and takes me to Exts.P2 and P3 dated respectively 29.11.2003 and 13.8.2004 being the notice of demand and plaint before the arbitration court. In Ext.P2 the total defaulted amount shown along with interest is Rs. 5,77,282/-, which has mounted to Rs.6,25,302/-, when the plaint was filed. The learned counsel though not inviting this Court to make any computation, specifically points out that without penal interest being capitalised, such a huge amount could not have been arrived at. Hence, it is prayed that the capitalisation of penal interest may be excluded. 4. With respect to the contention regarding limitation, it is very evident that the petitioner had made a WPC.20974/2008 & 8582/2013 : 3 : deposit of Rs.99,495/- on 11.7.2002 and the plaint is admittedly filed on 13.8.2004, hence, that contention necessarily has to fail. 5. The next contention is with respect to capitalisation of penal interest. On a reading of the plaint produced as Ext.P3, it is clear that the interest due under the agreement was 18% as is evident in the second paragraph. While claiming the amounts due in paragraph 7 the respondent bank has claimed 21% interest which clearly indicates that the 3%, claimed in excess of the agreed rate of interest of 18% is the penal interest sought to be levied on the defaulted principal amount by the respondent Bank. This penal interest has been taken away completely insofar as Ext.P4 award is concerned, which limited the interest to 18% per annum being the agreed rate of interest as per the agreement executed by the petitioner at the time of availing the loan amount. As was noticed, the Co-operative Tribunal by Ext.P7, further reduced it to 15%. Hence, there is no penal interest levied on the petitioner's loan account and there is absolutely no question of capitalisation of penal interest which would vitiate the proceedings before the Arbitrator or the Co- WPC.20974/2008 & 8582/2013 : 4 : operative Tribunal and impede the recovery in any manner. In the circumstances, the question raised with respect to capitalisation also cannot be countenanced. The writ petition hence is devoid of merit and this Court is not persuaded to interfere Ext.P4 award as confirmed by Ext.P7. 6. At the time of admission, another learned Single Judge of this Court had passed an interim order in the above writ petition dated 11.7.2008 wherein the petitioner was directed to remit an amount of Rs. 1.5 lakhs within 30.09.2008 and further amount of Rs.50,000/-. The petitioner admits that the amount of Rs1.5 lakhs was not paid within the time stipulated therein and was paid after 20 days. The learned counsel for the respondent Bank would also admit the receipt of the amount but, further contends that the same is after the time stipulated by this Court. The petitioner obviously had not approached this Court for extension of time. With respect to the further directions in the order, regarding appearance before the Manager of the respondent Bank, necessarily when the payment was not made in time, there could not have been any appearance, as directed by this Court and respondent bank is not tied down by the directions issued thereon. WPC.20974/2008 & 8582/2013 : 5 : 7. In any event, as the matter stands now, the sale proceedings initiated against the petitioners property was also stayed in W.P(C)8582/2013. There is absolutely no reason why the matters should be kept pending without any benefit to either side. In the circumstance of the petitioner contending that the property sought to be proceeded against by the respondent bank was far more valuable than the amounts now due in the defaulted loan account, it is deemed fit that the following directions be issued. 1. The petitioner is directed to produce the certified copy of this Judgment before the first respondent bank within a period of two weeks from the date of receipt of a copy of this judgment, along with a deposit of Rs. 1 lakh. 2. On receipt, the first respondent bank shall compute the amounts due in the loan account in terms of Ext.P7 order of the Cooperative Tribunal and issue a statement of account to the petitioner within a week thereafter. WPC.20974/2008 & 8582/2013 : 6 : 3. The petitioner shall then, deposit 40% of the due amounts within a week thereafter, in computing which the deposit of Rs.1 lakh made as per direction (1) shall be included; 4. The respondent Bank shall further consider the grant of six instalments to the petitioner and the petitioner shall start the instalments on the date specified by the Bank so as to clear off the entire arrears due in the loan account. 5. If the condition of payment as directed above are not complied with or if any default is committed in the instalments, the bank shall be free to proceed against the property of the petitioner. 6. On the 6[th] instalment being paid, the petitioner shall be intimated as to the interest running in the loan account during the period of the instalments, which shall be paid as the 7[th] instalment. 7. On the petitioner satisfying the entire WPC.20974/2008 & 8582/2013 : 7 : amounts due, the title deeds shall be returned. Writ petition is disposed of with the above directions. ## Sd/- ## **(K. VINOD CHANDRAN, JUDGE)** jma //true copy// P.A to Judge