Dismissed

Aurangabad District Co-Op Agricultural and Rural Multipurpose Dev Bank Ltd. v. Union of India and Ors.

Bombay HC15 Nov 2014WP/899/2009

Case brief

AI extract

What is this about?

The court examined a challenge to the respondent bank adjusting Agricultural Debt Waiver Scheme funds against the petitioner bank's dues. Holding that the appropriation followed the law and the petitioner failed to write off farmers' liabilities, the petition was dismissed.

What did the court decide?

Writ petition dismissed. Rule discharged. No costs.

Aurangabad District Co-Op Agricultural and Rural… — Company and Corporate | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD WRIT PETITION NO. 899 OF 2009

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Aurangabad District Cooperative Agricultural and Rural Multipurpose Development Bank Ltd., Aurangabad Through it's Chairman, Krushna Sahebrao Patil Dongaonkar, Age 34 years, Occ. Chairman, R/o. Pratibha, Khadkeshwar, Aurangabad.

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.. PETITIONER.

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VERSUS

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1] Union of India, Through it's Secretary (Financial Services) Finance Ministry, New Delhi.

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2] National Bank for Agricultural and Rural Development Maharashtra Regional Office, 54, Wellesley Road, P.B. No. 5, Shivaji Nagar, Pune- 411 005 Through it's Dy. General Manager.

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3] The Administrator, Maharashtra State Cooperative Agricultural and Rural Multipurpose Development Bank Ltd., 15-1, Morvi Lane, Chowpaty, Mumbai – 400 007.

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.. RESPONDENTS.

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Mr. P.B. Shirsath, Advocate for petitioner, Mr. S.B. Deshpande, ASGI for respondent No.1. Mr. A.S. Shelke, Advocate for respondent No.3

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CORAM : B.P. DHARMADHIKARI & A.M. BADAR, JJ. DATE : 15TH NOVEMBER, 2014.

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ORAL JUDGMENT : [ PER B.P. DHARMADHIKARI, J] :-

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1] Challenge by the District Cooperative Agricultural and Rural Multipurpose Development Bank Limited at Aurangabad, is to the action of respondent No.3 in adjusting the amount of Agricultural Debtors Loan Waiver Scheme towards its other dues.

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2] This Court has admitted the matter on 27.6.2011 for final hearing. Accordingly, we have heard Advocate Shirsath for the petitioner, Advocate Shelke for respondent No.3 and Mr. Deshpande, ASGI for respondent No.1.

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3] Advocate Shirsath has tendered communication sent by him by RPAD on 28.10.2014 to Liquidator/manager of petitioner bank about the pendency of this petition, pointing out that it is listed for final hearing. The said communication is received by petitioner bank on 29.10.2014. The communication as also RPAD, are taken on record and marked as Exhibit “X” and “Y”, respectively. We do not see any difficulty in allowing Mr. Shirsath, Advocate to assist the court in adjudication of the writ petition.

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4] By inviting attention to the implementation of Circular No. 1/2008, Advocate Shirsath submits that Agricultural Debt Waiver and Debit Relief Scheme, 2008 ( for short, “ADWDR Scheme”) was/is a special measure adopted by the respondent No.1 – Central Government

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to benefit the farmers. It's amount, therefore, must be credited to the Loan Account of Farmers, so that, the entry of loan recorded in their respective names, in revenue records, is deleted and they become eligible for consideration or grant of fresh loan. He submits that this being a Special Scheme, respondent No.3 who is the banker of petitioner, cannot and should not have appropriated any amount, received under that scheme for recovering other amounts from petitioner. He points out that the petitioner bank was entitled to total amount of Rs.52,21,00,000/- ( Rupees Fifty Two Crores Twenty One Lacs) towards Debt Waiver and out of it, an amount of Rs.26,10,55,000/- (Twenty Six Crores Ten Lacs Fifty Five Thousand) has been released by Central Government for its disbursement to petitioner. The entire amount was received by respondent No.3, which high handedly did not further disburse it to petitioner. Under Government instructions, on 24.10.2008, it released an amount of Rs.10,00,000/- (rupees Ten Lacs) only to meet the long over-due salary claims. Further amount of Rs.69.50 Lacs was released on 11.11.2008, for salary and other dues of employees. Thus, petitioner could get only amount of Rs.79.50 Lacs out of the total amount of Rs.26,10,55,000/-. He further submits that a legal notice dated 24.11.2008 was served upon respondent No.3 and respondent No.3 forwarded an erroneous reply to it on 11.12.2008. He contends that

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amounts due and payable by predecessor bank of petitioner could not have been adjusted out of that amount. The stand in reply dated 11.12.2008, or then, stand in reply affidavit filed before this Court, is thus misconceived and liable to be discarded.

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Our attention is also invited to communication dated 22^nd October, 2008 sent by NABARD ( respondent No.2) to respondent No.3. He submits that there was express direction, not to appropriate the funds received under Debt Waiver Scheme, towards any other dues and this direction has been violated by respondent No.3. He, therefore, seeks direction to respondent Nos. 2 and 3 to remit the amount of Rs.26,10,55,000/- in the account of the petitioner for its proper utilization and for implementation of the above mentioned ADWDR Scheme, 2008.

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5] Advocate Shelke appearing for respondent No.3 states that the Loan Waiver Scheme has been properly implemented and the Agriculturist members of petitioner have received its benefits. The members are not before this Court. He invited attention to clause No.17 of the Circular dated 29.12.1999, by which, erstwhile Maharashtra State cooperative Agricultural and Rural Development Bank was divided/abolished and separate banks were created for each

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District. According to him, dispute of present nature must be placed

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for consideration before the Commissioner for Cooperation and Registrar of Cooperative Societies, whose decision is made final.

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6] He further contends that after receipt of the amount of Loan Waiver Scheme from respondent No.1, its credit has been given to petitioner with direction to petitioner to suitably write off/reduce the liabilities of concerned agriculturist members. Thus, petitioner ought to have acted accordingly and taken steps to see that the benefit actually reaches the agriculturist members. Refusal/omission of petitioners to do so is contrary to the scheme.

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7] Our attention is also invited to reply given to petitioners on 11.12.2008 and to the reply affidavit filed before this court. Learned counsel Mr. Shelke states that respondent No.3 sought guidance from State Government vide letter dated 7.11.2008 and direction issued under Section 79A of the Maharashtra Cooperative Societies Act, 1960 by State Government have been adhered to. The details of amount outstanding adjusted, given in para 17 of the said reply affidavit are also pressed into service by him. Reply given to respondent no.3 by respondent No.2 on 30^th December, 2008 is also relied upon to urge that respondent No.2 has endorsed the action of respondent No.3.

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8] Learned ASGI Mr. Deshpande, on behalf of respondent No.1, supports the arguments of Advocate Shelke.

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9] Advocate Shirsath, in reply, submits that the Loan Waiver Scheme, being a Special Scheme, the amount must have physically reached the petitioners so as to allow them to appropriate it initially towards the outstanding loan amounts of agriculturist members, and then, for its further utilization in accordance with the aims and objects of petitioner bank. The general lien available to any bank could not have been exercised by respondent No.3 in present matter.

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10] The facts are not in dispute. Respondent No.3 has pointed out that on 31.3.2008, it had to recover an amount of Rs.86,77,10,064.33 from petitioner bank, while, its total collection was Rs.41,27,913.33/- only. After adjusting this collection, the liability of petitioner was reduced to 86,35,82,151/- only. The amount of Rs.28.66 Crores was sanctioned to petitioner under the ADWDR Scheme, 2008. Out of it, respondent No.3 paid an amount of Rs.79.50 Lacs to petitioner for defraying its essential expenditure. The remaining amount of Rs.27.86 Crores was adjusted towards dues of NABARD, Central Government, MSC Bank (overdraft), General Debentures, NCDC, Rural Housing Board, and Goa State Cooperative Debentures etc. After adjusting this amount, the respondent No.3 had

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still to recover amount of Rs. 6137.03 Lacs or Rs. 61.37 Crores from petitioner bank.

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11] The facts noted also shows that amount of Loan Waiver was actually received by respondent No.3 and accordingly, it sent an intimation to petitioner. Petitioner could have accordingly written off loan liabilities of agriculturist members or reduced their liabilities proportionately. Petitioner bank did not take any such steps. It cannot be said that respondent No.3, in any way, obstructed the flow of amount and, therefore, agriculturist members could not get benefit of the Loan Waiver Scheme. Respondent No.3 Bank made necessary book entries, credited the amount received to the account of the petitioner bank and thus, reduced the amount payable by petitioner to it, proportionately. Correctness or propriety of this exercise was and could have been the issue between petitioner and respondent No.3. Agriculturist members could not have been made to suffer on account of said dispute. Petitioner unnecessarily insisted and wanted entire amount in cash to reach it, so as to enable it to appropriate the same as per its desire. It has not disputed its liability to pay the amount to respondent No.3. Thus, respondent No.3, who has to recover huge amount from petitioner got amount on account petitioner, utilized it to reduce the liability of petitioner. The only question is, whether the

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amount could have been accordingly appropriated by respondent No.3.

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12] The circular issued by respondent No.1, dated 28^th May, 2008, extends the benefit of Loan Waiver Scheme in respect of following loans only:-

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(a) disbursed between March 31, 1997 and March 31, 2007. (b) overdue on December 31, 2007 and

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will be eligible for debt waiver/debt relief under the

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Scheme.

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13] It is not in dispute that respondent No.1 released amount only in relation to those loans and respondent NO.3 also utilized that amount accordingly. Book entries of receipt of amount and or reduction/wiping out/writing off liability of respective agriculturist could have been taken only by petitioner. Petitioner did not take those entries, but, merely because petitioner did not take those entries, it does not mean that amount was not released under the Scheme. However, once amount reached respondent No.3, respondent No.3 could have appropriated it, in accordance with law, in best possible manner. Respondent No.3, therefore, gave credit for that amount to petitioner and thus, adjusted it towards the pressing dues in accordance with law. Correctness of this exercise is not under challenge. The only contention of petitioner is that, as amount was

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released under Loan Waiver Scheme, its adjustment by respondent No.3 was not legally open. The contention is liable to be rejected.

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14] Respondent No.3 has credited the amount to petitioner and as such, petitioner could have very well reduced/written off, loan liability of agriculturist members. It was not open to petitioner to use that amount for any other purpose. The amount received by petitioner thereafter could have been, in normal course, remained in its account with respondent No.3 only. We, therefore, find that this act of respondent No.3 in appropriating the amount, cannot be said to be unjustified or illegal.

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15] In this situation, no case is made out warranting interference in writ jurisdiction. If petitioner finds anything wrong with the heads under which appropriation is made by respondent No.3, it is open to petitioner, to approach the Commissioner for Cooperation, and Registrar of Cooperative Societies, and obtain proper verdict from him, as per clause 17 of the Government decision dated 29.12.1999. In the result, writ petition is dismissed. Rule is discharged. No costs.

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[A.M. BADAR] [B.P. DHARMADHIKARI] JUDGE JUDGE.

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grt/-

Aurangabad District Co-Op Agricultural and Rural Multipurpose Dev Bank Ltd. v. Union of India and Ors.

Case brief

What is this about?

What did the court decide?

Aurangabad District Co-Op Agricultural and Rural Multipurpose Dev Bank Ltd. v. Union of India and Ors.

Case brief

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What did the court decide?

What the court decided

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