Thevalakkara Panchayat Agricultural Improvement Co-operative Society Ltd v Union of India and others

``` INTHEHIGHCOURTOFKERALAATERNAKULAM PRESENT THEHONOURABLEMR.JUSTICERAJAVIJAYARAGHAVANV FRIDAY,THE2[ND]DAYOFFEBRUARY2024/13THMAGHA,1945 WP(C)NO.27837OF2023 ``` ``` PETITIONER: ``` ``` THEVALAKKARAPANCHAYATHAGRICULTURALIMPROVEMENT CO-OPERATIVESOCIETYLTDNO.Q1556 - THEVALAKKARAP.O.,PIN690524. REPRESENTEDBYITSSECRETARYGOPIKAR,AGED39YEARS,D/O. SARNGADHARAN,RESIDINGATKANNAKKARAVADAKATHIL CHAVARA(B)P.O.,KOLLAM BYADVS. BIJITHS.KHAN N.ANAND RAJESHO.N. HARIKRISHNANK.U. ``` ## **`RESPONDENTS:`** ``` 1UNIONOFINDIA MINISTRYOFCOMMUNICATIONS,SANCHARBHAVAN,20ASHOKAROAD, - NEWDELHI110001REPRESENTEDBYITSSECRETARY. 2DEPARTMENTOFPOST - POSTDIRECTORATEDAKBHAVAN,NEWDELHI110001. REPRESENTEDBYTHEDIRECTORGENERALOFPOST. 3POSTMASTER OFFICEOFTHEPOSTMASTER,KARUNANGAPILLY,KOLLAM, - PIN690518. 4STATEOFKERALA DEPARTMENTOFCO-OPERATIONSECRETARIAT, - THIRUVANANTHAPURAM,PIN695001. 5THEREGISTRAROFCO-OPERATIVESOCIETIES JAWAHARSAHAKARNABHAVAN,DPIJUNCTION,JAGATHY, - THIRUVANANTHAPURAM,PIN695014. 6NADIRSHAA PERIYANTAYYATHUNADUVILAKKARATHEVALAKKARA,KOLLAM, - PIN690524 SRI.S.MANU,DSGI SMT.MABLEC.KURIEN,SR.GP THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSIONON 02.02.2024,THECOURTONTHESAMEDAYDELIVEREDTHEFOLLOWING: ``` ``` WP(C)NO.27837OF2023 ``` ``` 2 ``` ## **JUDGMENT** The petitioner is the Thevalakkara Panchayat Agricultural Improvement Co-operative Society. They contend that a certain Vidhaydharan Pillai, a member of the Society, availed an agricultural loan for a sum of Rs.50,000/- on 7.4.2018 based on Ext.P1 loan agreement. The 6th respondent herein, a certain Nadirsha, stood as surety. It is the case of the petitioner that the aforesaid Nadirsha consented to the Society for recovery from his salary if the principal debtor commits default in paying the monthly installments. They contend that the 3rd respondent has witnessed, consented, and attested to the agreement as is revealed from Ext.P2. When Vidhyadharan Pillai committed default, steps were taken to realize the amount from the surety. It is contended that in exercise of powers conferred under Section 37, the Society requested the disbursing authority, the Postmaster, to deduct the amounts from the salary of the 6th respondent by issuing Ext.P5 requisition. The 3rd respondent, however, refused to consider the request by holding that the existing Rules do not permit recovery from pay and allowances other than Court attachments. Challenging Ext.P6, this writ petition is filed. The petitioner has also sought for direction to the 3rd respondent to effect recovery from the salary of the 6th respondent. 2. A statement has been filed by the DSGI for and on behalf of respondents 1 to 3. It is stated that the 3rd respondent, in his capacity as ``` WP(C)NO.27837OF2023 ``` ``` 3 ``` the Drawing and Disbursing Officer, has not entered into any agreement with the Society undertaking to recover any outstanding amount. It is stated that all that has been done by the 3rd respondent is attest the employment certificate of the 6th respondent wherein the details of his service/salary has been furnished. It is stated that the employment certificate will not translate into an agreement to recover dues from the salary of the 6th respondent. It is further stated that respondents 1 to 3 are not bound by any private agreement entered into by the petitioner and the 6th respondent. 3. The learned counsel appearing for the petitioner would point out that in Ext.P6, all that has been stated is that the recovery of the amount other than Court attachments is not possible. It is submitted that the contentions raised by the respondents in the statement filed before this Court cannot be used to supplement what has been stated in Ext.P6 order. It is further submitted that a perusal of Ext.P2 would disclose that the Postmaster, Karunagapally, has confirmed and accepted the personal sureties for payment of loan and that the employment certificate/ recovery undertaking has been signed. It is submitted that even if it is taken that the Postmaster as the Drawing and Disbursing Officer has not signed the agreement for recovery from salary, Ext. P3 will save the day. It is submitted that in view of Exts.P2 and P3, the stand taken by the respondents cannot be sustained. 4. The learned DSGI, however, would point out that in Ext.P2, the 3rd respondent has signed only on the employment certificate and not in ``` WP(C)NO.27837OF2023 ``` ``` 4 ``` the agreement for recovery from the salary. In the relevant portion of the agreement for recovery from salary issued in accordance with Section 37 of the Kerala Co-operative Societies Act, the name or the other details of the employee has not been mentioned, and the Drawing Officer has not affixed his signature and seal agreeing to recover the amount. 5. The learned Government Pleader would point out by referring to Section 37 of the Act that all that is required is that the employee shall sign and nothing more. 6. I have considered the submissions advanced and have perused the records 7. Section 37 of the Kerala Cooperative Societies Act reads as under: ## **37.Deduction from salary to meet society's claim in certain cases.--** Notwithstanding anything contained in any law for the time being in force, a member of a society, may execute an agreement in favour of the society providing that his employer or the officer disbursing his salary or wages shall be competent to deduct from the salary or wages payable to him by the employer, such amount as may be specified in the agreement and to pay the amount so deducted to the society in satisfaction of any debts or other demand owing by the member to the society. (2) On the execution of such an agreement the employer or the officer disbursing the salary or wages of any such member as is referred to in sub-section (1) shall, if so required by the society by requisition in writing and so long as such debt or demand or any part of it remains unpaid, make the deduction in ``` WP(C)NO.27837OF2023 ``` ``` 5 ``` accordance with the agreement and pay the amounts so deducted to the society within seven days from the date of the deduction. [Provided that this sub-section shall not apply if the employees, whose salary is to be deducted, are not informed at least thirty days in advance, by notice duly acknowledged, about the dues on loan or award amount. 8. Section 37 of the Act provides for a remedial mechanism for the creditor Bank to straight away deduct from the salary of the principal borrower or the guarantor without recourse to the due process of obtaining an award or a decree and then seeking remittances from the garnishee. Further not in dispute is the fact that the provision begins with a non-obstante clause. 9. A Division Bench of this Court in **Surendran v Mavelikkara Primary Cooperative Agril. and R.D. Bank Ltd.** [2005 (4) KLT 619], while interpreting Section 37 has observed thus: A plain reading of S.37 of the Act reveals that deduction in respect of the society's claim, can be made by the employer or disbursing officer only from the "salary" of the defaulting member of the society. To enable a recovery under S.37 of the Act, a member of a society will have to execute an agreement in favour of the society. In such agreement, certain specific terms as stated in sub-s.(1) of S.37 of the Act are to be incorporated. As per such statutorily stipulated terms, the employer or the officer disbursing salary/wages of the defaulting member shall be competent to deduct the amount specified in the agreement from the "salary/wages" of such employee. Sub clause (2) of S.37 of the Act also provides that on execution of such an agreement, such employer or the disbursing ``` WP(C)NO.27837OF2023 ``` ``` 6 ``` officer, if so required by the society, by requisition in writing shall deduct such amount in accordance with the terms of the agreement. ## 10. In the case on hand, the employment certificate said to have been executed by the employee reads as under ## AGREEMENT FOR RECOVERY FROM SALARY (As per Section 37 of the Kerala State Co-operative Society Act) I…………………………………….. (Name, Designation, Office & Department) hereby agree that in case of default of payment of monthly installments/ chitty / Loan held / availed by me Sri./Smt............... M. No.............. the Thevalakara Panchayat Agricultural Improvement Co-operative Society Ltd. No. Q. 1556; recoveries of such amounts as may be fixed by the Society from time to time may be made from my salary at source and also from my DCRG/Terminal benefits / VRS proceeds and other benefits. Signature of the Employee with date 22/3/18 agree to effect the above recoveries Signature Name Designation of the Drawing Officer place date (Office Seal) 11. It is apparent that the employment certificate is incomplete. Neither the name of the employee nor other details are filled up therein. The agreement also insists that the employer voluntarily agrees to effect the recovery and affix his name, signature, and seal underneath. As can be seen from the agreement above, the employer has not agreed to effect recovery ``` WP(C)NO.27837OF2023 ``` ``` 7 ``` from the salary. As rightly pointed out by the learned DSGI, the Drawing and Disbursing Officer has scored the portion meant for agreeing to effect recovery meaning whereby, that the refusal was communicated at the inception itself. 12. In that view of the matter, the contention of the petitioner that notwithstanding the failure to scrupulously comply with the minimum formalities, the 3rd respondent shall recover the amount from the salary of the employee cannot be sustained. No interference is warranted on Ext.P6. This writ petition is dismissed. Sd/- **RAJA VIJAYARAGHAVAN V JUDGE** ``` Sru ``` ``` WP(C)NO.27837OF2023 ``` ``` 8 ``` ## **`APPENDIX OF WP(C) 27837/2023`** |`PETITIONER EXHIBITS`|| |---|---| |`Exhibit P1`|`A TRUE COPY OF THE LOAN AGREEMENT DATED`| ||`07.04.2018.`| |`Exhibit P2`|`A TRUE COPY OF THE UNDERTAKING EXECUTED BY THE`| ||`6TH RESPONDENT DULY WITNESSED AND CONSENTED BY`| ||`THE 3RD RESPONDENT.`| |`Exhibit P3`|`A TRUE COPY OF THE CONFIRMATION DATED`| ||`06.04.2018 ISSUED BY RESPONDENT NO. 3.`| |`Exhibit P4`|`A TRUE COPY OF THE LETTER DATED 29.10.2021`| ||`ISSUED BY THE PETITIONER SOCIETY TO RESPONDENT`| ||`NO. 6.`| |`Exhibit P5`|`A TRUE COPY OF THE UNDATED REQUISITION ISSUED`| ||`BY THE PETITIONER TO RESPONDENT NO.3.`| |`Exhibit P6`|`A TRUE COPY OF THE COMMUNICATION DATED`| ||`26.08.2022 ISSUED BY RESPONDENT NO. 3 IN NO.`| ||`AC/RR/2022-23 TO THE PETITIONER.`|