SIJANDRAN and SHANTHA RAVEENDRAN v. THE IRINJALAKUDA SERVICE CO-OPERATIVE BANK LTD. and others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN** # **THURSDAY ,THE 27TH DAY OF SEPTEMBER 2018 / 5TH ASWINA, 1940 WP(C).No. 25175 of 2018** ## **PETITIONER/S:** |**1**||**SIJANDRAN**| |---|---|---| |||**AGED 41 YEARS**| |||**S/O.MACHINGAL RAVEENDRAN,KARUKULANGARA, IRINJALAKUDA,**| |||**MUKUNDAPURAM TALUK,THRISSUR DISTRICT, PIN - 680 121.**| |**2**||**SHANTHA RAVEENDRAN AGED 62 YEARS**| |||**W/O.MACHINGAL RAVEENDRAN,KARUKULANGARA,**| |||**IRINJALAKUDA,MUKUNDAPURAM TALUK,THRISSUR DISTRICT,**| |||**PIN - 680 121.**| |||**BY ADV. SRI.RAJESH CHAKYAT**| |**ENT/S**|**:**|| |**1**||**THE IRINJALAKUDA SERVICE CO-OPERATIVE BANK LTD.**| |||**IRINJALAKUDA TOWN BRANCH,IRINJALAKUDA.P.O.,THRISSUR**| |||**DISTRICT, PIN - 680 121,REPRESENTED BY IT'S**| |||**SECRETARY.**| |**2**||**THE ASSISTANT REGISTRAR OF**| |||**CO-OPERATIVE SOCIETIES(GENERAL),MUKUNDAPURAM,**| |||**IRINJALAKUDA, PIN - 680 121.**| |**3**||**THE SALE OFFICER**| |||**ASST. REGISTRAR OF CO-OPERATIVE SOCIETY (GENERAL)**| |||**OFFICE,MUKUNDAPURAM, IRINJALAKUDA, PIN - 680 121.**| |||**BY ADVS.**| |||**SMT.LAYA SIMON**| |||**SRI.SHEEJO CHACKO**| ## **RESPONDENT/S:** ## **OTHER PRESENT:** ## **SRI K.P.HARISH, SENIOR GOVERNMENT PLEADER** **WP(C).No. 25175 of 2018** **2** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** ## **JUDGMENT** **The petitioners, who availed a loan for 45₹ lakhs (wrongly shown as 44 lakhs in the writ₹ petition) from the 1[st] respondent Bank on 31.03.2016 by mortgaging their property having an** **extent of 19 cents in Survey No.1090 of Porathusserry village, have filed this writ petition under Article 226 of the Constitution of India, seeking a writ of mandamus commanding the 1[st] respondent to consider Ext.P3 representation dated 27.06.2018 and a writ of mandamus commanding the respondents to allow and accept the entire due amount in 20 equal monthly instalments. The further relief sought for is a writ of mandamus commanding the 1[st] respondent to regularise the loan account and permit them to clear the overdues in 5 equal monthly instalments.** **2. On 26.07.2018, when this writ petition came up for admission, this Court issued urgent** **WP(C).No. 25175 of 2018** **3** **notice on admission by speed post to respondents 1 to 3 returnable within three weeks. The learned Senior Government Pleader took notice on admission for the 2[nd] respondent. This Court granted an interim stay of all recovery proceedings pursuant to Exts.P2 and P5 notices for a period of one month, on condition that the petitioners deposit a sum of 5,00,000/- within two weeks. The said₹ interim order was extended by two weeks on 31.08.2018.** **3. A counter affidavit has been filed by the 1[st] respondent opposing the reliefs sought for in this writ petition.** ## **4. Heard the learned counsel for the** **petitioners, the learned counsel for the 1[st]** **respondent Bank and also the learned Senior Government Pleader appearing for the 2[nd] respondent. Despite service of notice, none appears for the 3[rd] respondent Sale Officer.** **WP(C).No. 25175 of 2018** **4** **5. Going by the averments in the writ petition, the petitioners initially availed two overdraft facilities from the 1st respondent Bank to the tune of 15 lakhs each and the same were₹ settled completely. Later, they availed a loan for ₹45 lakhs in the year 2015-16 by mortgaging their property having an extent of 19 cents in Survey No.1090 of Porathusserry Village. In the writ petition it is also averred that the 1[st] petitioner is an entrepreneur, who started a safety lock manufacturing unit, which is a patented product. Since the product is at the initial stage, he has to invest lot of money. Now the product is finally ready for sale. But in the meanwhile, due to extensive investment in manufacturing process, the repayment of the loan was defaulted and the Bank initiated arbitration proceedings. The 1[st] respondent Bank filed ARCM R No.3960/2017 before the 2[nd] respondent Arbitrator, which culminated in Ext.P1 award dated 31.10.2017** **WP(C).No. 25175 of 2018** **5** **permitting the Bank to recover an amount of ₹53,44,950/- together with interest at the rate of 16% (14%+2%). In terms of Ext.P1 award, the 3[rd] respondent Sale Officer issued Ext.P2 notice demanding a total sum of 57,16,527/-. On receipt₹ of Ext.P2 demand notice, the petitioners submitted Ext.P3 request on 27.06.2018 before the 1[st] respondent Bank seeking instalment facility and also waiver of interest. Despite receipt of Ext.P3 representation, the 3[rd] respondent has issued Ext.P5 demand notice dated 21.07.2018. It was in such circumstances that the petitioners have moved this Court in this writ petition seeking appropriate reliefs.** **6. As can be seen from the counter affidavit filed by the 1[st] respondent Bank, the petitioners originally availed two overdraft facilities for a total sum of 30 lakhs on 25.03.2013. ₹ They did not repay either the principal or the interest. In order to avoid coercive steps, the petitioners** **WP(C).No. 25175 of 2018** **6** **approached the 1st respondent Bank for grant of an ordinary loan on the strength of Gahan for an amount of ₹45 lakhs. Accordingly, the said loan was sanctioned for a sum of 45 lakhs on condition₹ that the petitioners have to repay the same in 120 monthly instalments. After availing the said loan, the only remittance made by the petitioners is for - a sum of ₹35,417/ . As on 04.08.2018, the total liability comes to 59,07,132/-.₹** **7. A reading of the counter affidavit filed by the 1[st] respondent would make it explicitly clear that the averments in paragraph 1 and 2 of the writ petition that the petitioners, who availed two overdraft facilities from the 1[st] respondent Bank to the tune of 15 lakhs each,₹ have settled the said dues completely and that, after availing the loan for ₹45 lakhs, the repayment of the loan was defaulted, are made for suppressing material facts from the notice of this Court. The fact that after availing the overdraft** **WP(C).No. 25175 of 2018** **7** **facility to the tune of 15 lakhs each from the 1₹ st respondent Bank, the petitioners have not paid even a single instalment, is not disclosed in the writ petition. It is also not disclosed that the said liability was settled by availing a fresh loan for 45 lakhs in the year 2015. In addition₹ to this, the fact that, after availing the loan for 45 lakhs, the only remittance made by the₹ petitioners is a paltry sum of 35,417/- is also₹ not disclosed in the writ petition.** **8. On account of the default committed by the petitioners in effecting repayments, the 1[st] respondent Bank initiated arbitration proceedings by filing ARCM R No.3960/2017, under Section 69 of the Kerala Co-operative Societies Act. The 2[nd] respondent Arbitrator, in exercise of his powers under Section 70 of the Act, passed Ext.P1 award dated 31.10.2017 for a sum of ₹53,44,950/together with interest at the rate of 16%. In the absence of an appeal filed by the petitioners** **WP(C).No. 25175 of 2018** **8** **under Section 82(1)(e) of the Act, before the Cooperative Tribunal, Ext.P1 award passed by the 2[nd] respondent Arbitrator has attained finality. Once, the recovery steps initiated by the 1[st] respondent Bank in E.P.No.459/2018 is in terms of the award passed by the Arbitrator in Ext.P1 award, the petitioners have no legal right to claim waiver of interest. Having failed to challenge Ext.P1 award by initiating appropriate proceedings under Section 82(1)(e) of the Act, the petitioners cannot now seek regularisation of the loan account by repaying the overdues in monthly instalments.** **9. On 27.06.2018, the petitioners have moved Ext.P3 application seeking instalment facility and waiver of interest. The specific stand taken by the 1[st] respondent Bank in the counter affidavit is that since the petitioners have not chosen to make any remittance after availing the loan for ₹45 lakhs, other than the payment of 35,417/-,₹** **WP(C).No. 25175 of 2018** **9** **they are not entitled either for instalment facility or regularisation of the loan account. Once the proceedings initiated by the 1[st] respondent Bank under Section 69 of the Act has culminated in an award passed by the Arbitrator, in exercise of his powers under Section 70 of the Act, the petitioner cannot seek regularisation of the loan account. The only option available to such defaulters is payment of the dues in terms of the award.** **10. In Prestige Lights Limited v. State Bank of India [(2007) 8 SCC 449] the Apex Court reiterated that a prerogative remedy is not a matter of course. Therefore, in exercising extraordinary power, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, the court may dismiss the action without adjudicating** **WP(C).No. 25175 of 2018** **10** **the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible.** **11. In Prestige Lights' case (supra) the Apex Court held further that, under Article 226 of the Constitution of India, the High Court is exercising discretionary and extraordinary jurisdiction. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the court, the writ court may refuse to entertain** **WP(C).No. 25175 of 2018** **11** ## **the petition and dismiss it without entering into** ## **merits of the matter. Paragraphs 33 and 34 of the said judgment read thus:** _“33.It is thus clear that though the appellantCompany had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter._ _34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136 (CA)], in the following words:_ _"It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex parte statement he should made a full and fair disclosure of all the_ **WP(C).No. 25175 of 2018** **12** _material facts - facts, not law. He must not misstate the law if he can help it - the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the imperfect statement." (Emphasis supplied)_ **12. It is well settled that, a litigant who invokes the extraordinary jurisdiction of this Court under Article 226 of the Constitution must come with clean hands and clean objects. The judicial proceedings are sacrosanct, and no person would be allowed to abuse the judicial process, particularly, in public law remedy. In writ proceedings, the court places implicit faith on the parties and their pleadings, as it does not indulge in any fact finding or roving enquiry of what has been asserted. Since Article 226 of the Constitution of India espouses equity jurisprudence, a litigant who has approached the** **WP(C).No. 25175 of 2018** **13** **Court with unclean hands, without disclosing full facts, is not entitled for any reliefs.** **13. In Dhananjay Sharma v. State of Haryana and others (1995) 3 SCC 757 the Apex Court held that filing of false affidavit, or making false statement on oath in courts aims at striking a blow at the Rule of Law and no court can ignore such conduct which has the tendency to shake public confidence in the judicial institutions, because the very structure of an ordered life is put at stake. It would be a great public disaster if the fountain of justice is allowed to be poisoned by anyone resorting to filing of false affidavits or giving of false statements and fabricating false evidence in a court of law.** **14. In Muthu Karuppan, Commissioner of Police, Chennai v. Parithi Ilamvazhuthi and another [(2011) 5 SCC 496], the Apex Court expressed the view that filing of a false affidavit should be effectively curbed with a** **WP(C).No. 25175 of 2018** **14** **strong hand. In Sciemed Overseas Inc. v. BOC India Limited and others (2016) 3 SCC 70], the Apex Court held that the observations in Muthu Karuppan's case (cited supra) was made in the context of contempt of court proceedings, the view expressed must be generally endorsed to preserve the purity of judicial proceedings.** **15. Having considered the submissions made by the learned counsel on both sides and the pleadings and materials on record, in the light of the law laid down in the decisions referred to supra, conclusion is irresistible that this writ petition is nothing but an abuse of process of Court. The petitioners, who are chronic defaulters, have no legal right to seek any instalment facility or waiver of interest or regularisation of loan account.** **Though this is a fit case which writ petition can be dismissed imposing exemplary cost, considering the fact that in terms of the interim** **WP(C).No. 25175 of 2018** **15** **order of this Court dated 26.07.2018, the** **petitioners have already paid a sum of** **₹5,00,000/-, this writ petition is dismissed as devoid of merits. No order as to costs.** ## **Sd/-** ## **ANIL K.NARENDRAN** ## **JUDGE** ## **APPENDIX** ## **PETITIONER'S/S EXHIBITS:** **EXHIBIT P1 : A TRUE COPY OF THE AWARD IN ARCMR3960/2017 DATED 31.10.2017. EXHIBIT P2 : A TRUE COPY OF THE DEMAND NOTICE DATED 19.6.2018. EXHIBIT P3 : A COPY OF THE REPRESENTATION DATED 27.6.2018 AND ITS POSTAL RECEIPT. EXHIBIT P4 : A TRUE COPY OF THE POSTAL ACKNOWLEDGMENT CARD. EXHIBIT P5 : A TRUE COPY OF THE SALE NOTICE DATED 21.7.2018 ISSUED BY THE 3RD RESPONDENT.** **AV/29/9**