Sheeja A. v. Assistant Registrar of Co-operative Societies (General) and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SUNIL THOMAS MONDAY, THE 25[TH] DAY OF OCTOBER 2021 / 3RD KARTHIKA, 1943** **RP NO. 474 OF 2021** **AGAINST THE ORDER/JUDGMENT IN WP(C) 26423/2018 OF HIGH COURT OF** **KERALA, ERNAKULAM** ## **REVIEW PETITIONER/1st RESPONDENT/PETITIONER:** SHEEJA .A. AGED 46 YEARS D/O. MUHAMMED KUNJU, RESIDING AT PONKATTIL PUTHEN VEEDU, CHEKKAKONAM P.O., KARAKULAM, THIRUVANANTHAPURAM695564. BY ADVS. S.V.PREMAKUMARAN NAIR R.T.PRADEEP M.BINDUDAS K.C.HARISH ## **RESPONDENTS/PETITIONER IN IA & RESPONDENTS 2 TO 6/RESPONDENTS:** 1 ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) OFFICE OF ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), THIRUVANANTHAPURAM-695001. 2 ARBITRATOR-CUM-SPECIAL SALE OFFICER, PEROORKADA SERVICE CO-OPERATIVE BANK LTD. NO.1412, PEROORKADA, THIRUVANANTHAPURAM-695005. 3 PEROORKADA SERVICE CO-OPERATIVE BANK LTD. NO.1412, REPRESENTED BY ITS SECRETARY, PEROORKADA, THIRUVANANTHAPURAM-695005. 4 MAHESWARI AMMA, M.K.NIVAS, CHETTIVILAKOM, KUDAPPANAKUNNU, THIRUVANANTHAPURAM-695043. 5 SMITHA NAIR, M.K.NIVAS, DNRA 51, DURGA NAGAR, N.C.C.ROAD, PEROORKADA P.O., THIRUVANANTHAPURAM-695005. 6 DISTRICT POLICE CHIEF, OFFICE OF COMMISSIONER OF POLICE, VAZHUTHACAUD, 2 **RP Nos.474/2021, 26423/2018** THIRUVANANTHAPURAM-695014. BY ADV N.UNNIKRISHNAN ## **OTHER PRESENT:** GP V VENUGOPAL THIS REVIEW PETITION HAVING COME UP FOR ADMISSION ON 5.10.2021, ALONG WITH WP(C).26423/2018, THE COURT ON 25/10/2021 DELIVERED THE FOLLOWING: 3 **RP Nos.474/2021, 26423/2018** ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE SUNIL THOMAS MONDAY, THE 25[TH] DAY OF OCTOBER 2021 / 3RD KARTHIKA, 1943 WP(C) NO. 26423 OF 2018** ## **PETITIONER:** SHEEJA .A. AGED 44 YEARS D/O. MUHAMMED KUNJU, RESIDING AT PONKATTIL PUTHEN VEEDU, CHEKKAKONAM P.O., KARAKULAM, THIRUVANANTHAPURAM - 695564. BY ADVS. SRI.S.V.PREMAKUMARAN NAIR P.S.ANJU SMT.M.BINDUDAS SRI.K.C.HARISH SRI.R.T.PRADEEP ## **RESPONDENT/S:** 1 ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) OFFICE OF ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), THIRUVANANTHAPURAM - 695001. 2 ARBITRATOR-CUM-SPECIAL SALE OFFICER PEROORKADA SERVICE CO-OPERATIVE BANK LTD. NO.1412, PEROORKADA, THIRUVANANTHAPURAM - 695005. 3 PEROORKADA SERVICE CO-OPERATIVE BANK LTD. NO.1412 REPRESENTED BY ITS SECRETARY, PEROORKADA,THIRUVANANTHAPURAM - 695005. 4 MAHESWARI AMMA M.K. NIVAS, CHETTIVILAKOM, KUDAPPANAKUNNU, THIRUVANANTHAPURAM - 695043. 5 SMITHA NAIR M.K. NIVAS, DNRA 51, DURGA NAGAR, N.C.C. ROAD, PEROORKADA P.O., THIRUVANANTHAPURAM - 695005. **RP Nos.474/2021, 26423/2018** 4 6 DISTRICT POLICE CHIEF OFFICE OF COMMISSIONER OF POLICE, VAZHUTHACAUD, THIRUVANANTHAPURAM - 695014. BY ADVS. SRI.N.UNNIKRISHNAN,SC,PEROORKADA S.CO.O GOVERNMENT PLEADER V.VENUGOPAL R. SUNIL KUMAR A. SALINI LAL THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 5.10.2021, ALONG WITH RP.474/2021, THE COURT ON 25/10/2021 DELIVERED THE FOLLOWING: 5 **RP Nos.474/2021, 26423/2018** ## **COMMON JUDGMENT** ## **[RP Nos.474/2021, 26423/2018]** The writ petitioner has approached this court aggrieved by the proceedings initiated against her in execution of an award passed under the Co-operative Societies Act. One Gopakumar, who is the son of the 4[th] respondent and the brother of the 5[th] respondent, had approached the 3[rd] respondent Co-operative Bank for a loan. Said Gopakumar availed the loan, with the petitioner, the 4[th] respondent and 5[th] respondent as co-sureties. The property jointly held by Gopakumar, 4[th] and 5[th] respondents was offered as security. Ext.P5 Gehan was executed in favour of the society. Ext.P6 to P8 are the loan documents. By Ext.P6, the petitioner, Gopakumar and the 5th respondent had jointly executed a bond wherein the petitioner agreed to attach her salary in case of default. Alleging that the loan went in default, the society filed ARC No.1535/2014. An award was passed as Ext.P11, dated 15/7/2014, against all the respondents. Ext.P11 was brought in execution and the salary of the petitioner was ordered to be attached. This is under challenge in the present proceedings. 2. The respondents have appeared and filed separate counter affidavits. Heard the learned counsel for the petitioner and the learned counsel for the respondents. 3. The specific contention of the writ petitioner was that, her liability under Ext.P11 award was only on the basis of Ext.P6 bond, executed by her. 6 **RP Nos.474/2021, 26423/2018** Once, the loan transactions stands adjudicated and an award is passed, there cannot be an execution on the basis of bond. No liability can be cast on the basis of bond. It was contended that, the recovery of salary, as against the petitioner, was ultra vires of section 37 (1) of the Kerala Co-operative Societies Act. It was further contended that, Ext.P6 stood extinguished on the passing of the award and the society cannot bank on Ext.P6, to seek recovery of the award amount. Yet another contention advanced by the petitioner was that the attachment of salary was only possible under Rules 75 and 76 of the Cooperative Societies **Rules** . It was contended that in the case at hand, the Society had initiated proceedings for recovering the amount by sale of the immovable property and thereafter the society cannot initiate proceedings for recovery personally from the sureties. 4. Regarding the claim under section 37 of the Co-operative Societies Act, learned counsel for the petitioner invited my attention to a Division Bench decision reported in _**Archana T.A.v Travancore Devaswom Board , Tvm and Others (2015 (4) KHC 766 (DB)).**_ In this case, it was held that, dues of the deceased husband cannot be recovered from the wife and the society was not legally entitled to proceed against the salary of the wife for the amount recoverable from the late husband even though she has owned up that liability by undertaking in a plain paper. The case involved in the above cited Division Bench decision has absolutely no relation with the facts involved in the present case. On the other hand, a Single Bench of this court in **Sivaprasad K.S. And Another v. Assistant Registrar, Tvm. & others (2015 KHC 7020)** had 7 **RP Nos.474/2021, 26423/2018** held that section 37 of the Act does not dilute the privileges of the power of the creditor Bank to have the recovery at its option, either from the principal borrower or the guarantor and enabling provision cannot be elevated and placed on the pedestal of being mandatory, thereby defeating the very right of a person for whose benefit the provision, in the first place, has been brought into effect. 5. The learned counsel for the petitioner vehemently contended that in the light of Section 37(1), only a member can be proceeded against under the Co-operative Societies Act. It was contended that petitioner was not liable to be proceeded against. The 3[rd] respondent society in its counter affidavit had contended that the petitioner had availed membership from the society and had submitted an application before the society which was accepted by the society. The true copy of the application for membership submitted by the petitioner was produced as Ext.R3(c). Share was also taken on 16/10/2006 and she was granted membership No.69597/C and True copy of the extract of the Admission Register in respect of the petitioner was produced as Ext.R3(d). The loan was granted by Ext.P4 dated 20/11/2006. Evidently, the petitioner was a member as on the date of sanctioning the loan. Hence, the contention of the learned counsel for the petitioner relying on Section 37(1) of the Kerala Co-operative Societies Act is unsustainable. 6. Another contention of the learned counsel for the petitioner was that the liability was cast on the petitioner only by virtue of Ext.P6 bond. It was contended that, the bond has no independent existence and the society 8 **RP Nos.474/2021, 26423/2018** cannot bank on Ext.P6, to cast liability after Ext.P11 award was passed. The learned counsel, to support this contention relied on a decision in _**Gopakumar V. P.Easwar Pillai (AIR 2006 Kerala 242),**_ wherein, it was held that document by which time for payment of amount as per earlier agreement was extended was a bond, as it creates an obligation on the part of the signatory to pay the amount. This decision has no connection with the facts of this case. In this regard , it is essential to refer to Ext.P11 award passed by the Arbitrator. By Ext.P11, the principle amount with interest and expenses was ordered to be recovered from the sale of movable and immovable properties of the defendants 1,2,3 and 4 and also by creating a charge over the property mortgaged to the bank. Evidently, Ext.P6 has merged in the award and it was the award that was sought to be executed. However, in the award it was specifically stated that personal liability was cast on the petitioner herein, who was the 4[th] defendant in Ext.P11. Hence, the contention of the learned counsel for the petitioner on the basis of Ext.P6 is not legally sustainable. 7. Another contention set up by the learned counsel for the petitioner was on the basis of Rules 74,75 and 76 of the Co-operative Societies Rules. The learned counsel contended that after having initiated proceedings for recovery of money from the property under Rule 74, the bank cannot be permitted to contend that they can be proceeded against surety. Rule 75 deals with the order in which the proceedings have to take place. It was stated that normally the execution proceedings shall be taken firstly by proceeding against the movable property of the defaulter , but shall not preclude the 9 **RP Nos.474/2021, 26423/2018** immovable properties. Immovable properties being proceeded against simultaneously, if there is no movable properties or if the sale proceeds of the movable property are not available for attachment and sale. However, neither Rule 75 nor Rule 76 restrain the decree holder from proceeding against the sureties and their assets, if the movable property cannot be practically proceeded against. 8. This court at the time of admission had granted an interim stay of the proceedings. However, by an order of this court dated 15/7/2021, the interim stay was vacated. Since the matter was being adjourned for one reason or other, Review Petition No.474/2021 was filed to review the above order, vacating the order of stay. When the review petition came up for hearing, this court granted an order to maintain status quo which continues even now. Since the purpose of review petition was to revoke the order vacating the stay and by virtue of the status quo, the present position was continuing , I feel that the review petition need not be perused further and accordingly it is closed. The writ petition fails and is dismissed. Sd/- ## **SUNIL THOMAS** **JUDGE** dpk 10 **RP Nos.474/2021, 26423/2018** ## **APPENDIX OF WP(C) 26423/2018** PETITIONER EXHIBITS EXHIBIT P1 TRUE COPY OF THE LOAN APPLICATION DATED 1.11.2006 BY THE DECEASED BEFORE THE 3RD RESPONDENT BANK. - EXHIBIT P2 TRUE COPY OF TAX RECEIPT DATED 26.9.2006 WITH RESPECT TO THE AFORESAID PROPERTY IN THE NAME OF DECEASED AND 4TH AND 5TH RESPONDENTS. - EXHIBIT P3 TRUE COPY OF NON-LIABILITY CERTIFICATE DATED 9.10.2006 ISSUED FROM THE OFFICE OF 6TH RESPONDENT. - EXHIBIT P4 TRUE COPY OF ORDER OF SANCTION OF LOAN DATED 20.11.2006. - EXHIBIT P5 TRUE COPY OF GEHAN DATED 15.11.2006 EXECUTED BY DECEASED AND 4TH AND 5TH RESPONDENTS. - EXHIBIT P6 TRUE COPY OF BOND DATED 20.11.2006 EXECUTED BY DECEASED, 5TH RESPONDENT AND PETITIONER. - EXHIBIT P7 TRUE COPY OF BOND DATED 20.11.2006 EXECUTED BY DECEASED AND 4TH RESPONDENT. - EXHIBIT P8 TRUE COPY OF BOND DATED 20.11.2006 EXECUTED BY DECEASED. - EXHIBIT P9 TRUE COPY OF ARC NO.1535/2014 DATED 5.2.2014 BEFORE THE 2ND RESPONDENT. - EXHIBIT P10 TRUE COPY OF STATEMENT OF DECEASED AS WELL AS 4TH AND 5TH RESPONDENTS DATED 15.7.2014. EXHIBIT P11 TRUE COPY OF AWARD DATED 15.7.2014 BY 2ND RESPONDENT. EXHIBIT P12 TRUE COPY OF E.P.NO.235/2017 SEEKING TO RECOVER AN AMOUNT OF RS.22,73,478/- FROM **RP Nos.474/2021, 26423/2018** 11 THE IMMOVABLE PROPERTY. EXHIBIT P13 TRUE COPY OF STATEMENT AS REGARD RECOVERY FROM 20.11.2006 TO 7.6.2018. EXHIBIT P14 TRUE COPY OF STOP MEMO DATED 4.6.2018 BY 3RD RESPONDENT TO STOP RECOVERY FOR THE MONTHS OF MAY, JUNE AND JULY. RESPONDENTS EXHIBITS: EXT.R3(A): COPY OF JUDGMENT DATED 12/10/2011 IN W.P.(C)NO.26861/2011 EXT.R3(B) COPY OF THE INTERIM ORDER DATED 25/9/2018 IN W.P.(C) NO.26423/2018 EXT.R3(C) COPY OF THE APPLICATION FOR MEMBERSHIP BY THE WRIT PETITIONER. EXT.R3(D): COPY OF THE EXTRACT OF ADMISSION REGISTER IN RESPECT OF THE WRIT PETITIONER EXT.R3(E): COPY OF LOAN APPLICATION NO.002434 OF LATE SHIR M.K.PADMAKUMAR ALONG WITH SURETIES INCLUDING THE WRIT PETITIONER, SMT.SHEEJA.A. EXT.R3(F): COPY OF NOTICE DATED 10/6/2014 IN ARC NO.1535/14 SERVED TO THE WRIT PETITIONER. EXT.R3(G): COPY OF CONSENT LETTER DATED 20/11/2006 OF THE PETITIONER. EXT.R3(H) COPY OF APPLICATION DATED 6/6/2018 SUBMITTED BY THE WRIT PETITIONER TO THE RESPONDENT. EXT.R5(A): COPY OF THE ORDER MC NO.47/2014 EXT.R5(B): COPY OF PLAINT IN OS NO.1183/2017 EXT.R6(A): COPY OF THE NON LIABILITY CERTIFICATE ISSUED TO THE PETITIONER.