Dismissed

Sarvodaya Co-Operative Multi Purpose Society v. Registrar Co-Operative Societies and Ors.

Delhi HC4 Feb 2016W.P.(C)/2485/2012

Case brief

AI extract

What is this about?

The High Court dismissed the petitioner's writ petition challenging the Delhi Cooperative Tribunal's order setting aside debt awards against three borrowers. The Court held the Agricultural Debt Waiver and Debt Relief Scheme, 2008, was applicable, ruling for the borrowers despite a procedural flaw in appealing multiple awards.

What did the court decide?

The writ petition was dismissed, and the benefit of the ADWDR Scheme was extended to all three borrowers who were subjects of the Arbitrator's awards.

Sarvodaya Co-Operative Multi Purpose Society Vs… — Cooperative Societies | Delhi HC (2016)

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$~4

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- W.P.(C) 2485/2012 and CM No. 3030/2015

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SARVODAYA CO-OPERATIVE MULTI PURPOSE SOCIETY

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Through: Mr Pankaj Vivek and Mr Narender Sharma, Advs.

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versus

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REGISTRAR CO-OPERATIVE SOCIETIES AND ORS

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..... Respondent

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Through: Mr Anuj Aggarwal, Adv. for R-1 Mr Saurabh and Mr Rajiv Ranjan Mishra, Advs for respondent Nos.3 to 5

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CORAM:

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HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA

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O R D E R

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% 04.02.2016

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The petitioner, a Multi-State Cooperative Society based in the activity of advancing credits, is aggrieved by the order of Delhi Cooperative Tribunal dated 24.01.2012. The said Tribunal had set aside awards made against the respondents (hereinafter referred to as “the borrowers”). The appellants before the Tribunal—three individuals—had apparently borrowed amounts from the writ petitioner/society. These were agricultural loans. The awards were made some time in the year 2006-07. Although the three respondents/borrowers appealed, however, they impugned only where W.P.(C) 2485/2012 Page 1 of 7

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the award dated 16.08.2007 was passed. In the appeals, the respondents contested their liability on general grounds. It was also submitted that the awards were rendered without notice to them and consequently could not be sustained.

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The Tribunal before which the appeals were lodged was told by the present petitioner that the appeals were not maintainable on the ground of limitation. Besides, it was contended that the three borrowers had preferred only one appeal against one award and consequently, the other two awards had attained finality. The Tribunal took note of the Agricultural Debt Waiver and Debt Relief (ADWDR) Scheme, 2008, applicable to all nature of agricultural credit and advances, including those given by cooperative bodies. This Scheme was formulated in 2008 and applied inter alia to credits and advances made over to farmers fulfilling the conditions specified in it and who had borrowed amounts from credit institutions prior to 31.03.2007. The applicability of this Scheme was contested by the petitioner who argued that firstly this question was never urged and secondly that even the applicability of the scheme was no longer an issue since the Delhi Cooperative Bank Limited had rejected its claims for reimbursement in the event the Scheme was held applicable. The Tribunal, however, rejected all these contentions and ruled that the Scheme applies and thereafter remitted the matter for consideration and set aside award by the Arbitrator.

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It is argued by the counsel for the Society that the Tribunal fell into error in proceeding with deciding the legality of all three awards W.P.(C) 2485/2012 Page 2 of 7

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even though they were not before it. What was urged here is that the appeal concerned itself relates to one award only, i.e., the one rendered on 16.08.2007 and the other two awards were not before it. In these circumstances, there was no question of Tribunal being permitted to set aside the other two awards. In these circumstances, the Tribunal could not have set aside the awards which were not before it and left undetermined the correctness of the award which was, in fact, appealed against. It was urged next that the respondent-borrowers did not dispute their liability at any point of time and had, in fact, deposited the amount. In these circumstances, the question of applicability of ADWDR Scheme did not arise. It was thirdly argued that at best the Court should remit the matter for consideration afresh by the Tribunal on the ratio of applicability of the Scheme after hearing the petitioner.

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There cannot be any doubt ordinarily that a party aggrieved by an order—quasi judicial or judicial—has to seek its remedies separately. In the present case, the respondent/borrowers appeared to have filed one collective appeal in respect of one award. In that award all of them were made parties. This appeal was directed against one award in which Jagdish and his guarantor Parmod and Virender Kumar had been impleaded as party before the Arbitrator. The question here is whether the normal rule of applicability of judicial remedy against the final order should apply in the given facts of this case.

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The petitioner does not dispute that all the three borrowers, i.e.,

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W.P.(C) 2485/2012

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Page 3 of 7

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Jagdish and his two brothers Sunil and Raj Kumar sought the advances for the purpose of agricultural operations. Equally, there is no dispute to the fact that the amounts were disbursed by the petitioner to the three over a period of time up to 31.03.2007. In these circumstances, the question is whether the Tribunal acted within jurisdiction in holding that the provisions of ADWDR Scheme, 2008 applies. Clause 3 of the said Scheme defines Direct Agricultural Loans. Clause 3.2 defines a ‘Short Term Production Loan’ which means a loan given in connection with the raising of crops required to be repaid within 18 months. Clause 3.4 which is relevant states as follows:-

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“3.4 ‘Cooperative Credit Institution’ means a cooperative society that

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i) provides short-term crop loans to farmers and is eligible for interest subvention from the Central Government; or

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ii) carries on banking activities regulated or supervised by RBI or NABARD; or

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iii) is part of the Short-Term Cooperative Credit Structure of Long-Term Cooperative Credit Structure in a State or Union Territory.”

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Clause 3.5, 3.6, 3.7 define the expressions “Marginal Farmer” one who owns or is tenant of agricultural land up to 1 hectare; “Small Farmer” one who is owner or tenant of agricultural land of more than one hectare and up to 2 hectares and “Other Farmers” is one who is a farmer or tenant of agricultural land of more than two hectares. W.P.(C) 2485/2012 Page 4 of 7

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Page 4 of 7

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Clause 4.1 reads as follows:-

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“4.1 The amount eligible for debt waiver or debt relief, as the case may be (hereinafter referred to as the ‘eligible amount’) shall comprise of:

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(a) in the case of a short-term production loan, the amount of such loan (together with applicable interest):

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(i) disbursed up to March 31, 2007 and overdue as on December 31, 2007 and remaining unpaid until February 29, 2008;

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(ii) restructured and rescheduled by banks in 2004 and in 2006 through the special packages announced by the Central Government, whether overdue or not, and

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(iii) restructured and rescheduled in the normal course up to March 31, 2007 as per applicable RBI guidelines on account of natural calamities, whether overdue or not.”

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Clause 4.2 declares the loans which are ineligible, i.e., those advances obtained against pledge or hypothecation of agricultural produce and agricultural finance to corporate, partnership firms, societies other than Cooperative Credit Institutions, etc. The extent of duty waiver is spelt out in clauses 5 and 6. These are as follows:-

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“5. Debt Waiver

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5.1 In the case of a small or marginal farmer, the entire ‘eligible amount’ shall be waived.

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Debt Relief

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6.1 In the case of ‘other farmers’, there will be a onetime settlement (OTS) Scheme under which the farmer will be given a rebate of 25 per cent of the ‘eligible amount’ subject to the condition that the farmer pays the balance of 75 per cent of the ‘eligible amount’;

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W.P.(C) 2485/2012

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Page 5 of 7

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Provided that in the case of revenue districts listed in Annex-I, ‘other farmers’ will be given OTS rebate of 25 per cent of the ‘eligible amount’ or Rs. 20,000/-, whichever is higher , subject to the condition that the farmers pays the balance of the ‘eligible amount’.”

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In the present instance, it is not in dispute that the respondent/borrowers were marginal farmers. The question then is whether the petitioner is correct in contending that even otherwise the borrowers are not covered because the nature of the institution providing the credit is not covered by the Scheme. In the opinion of this Court, there cannot be any two views on this aspect. Clause 3.4(3) clearly states that a ‘Cooperative Credit Institution’ means ‘a cooperative society that is part of the short-term cooperative credit structure or long term cooperative credit structure in a State or Union Territory’. In the present case, the petitioner is a Multi-State Cooperative Society which clearly falls within clause 3.4 (3).

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This Court has stated at the outset that ordinarily a litigant aggrieved by an order or a judicial order or determination has to seek his remedy in respect of each of them. This would necessarily mean that if there are separate awards in respect of different borrowings even though the litigant might be one, separate appeals have to be preferred in the case of the borrowers who might be different; likewise there have to be separate appeals. However, the present situation, in our opinion, is exceptional in the sense that all the borrowers had obtained loans which were below Rs.50,000/- and

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W.P.(C) 2485/2012

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Page 6 of 7

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clearly fall within the definition of the expression “Marginal Farmers”. All of them had obtained the loan in the specified period, i.e., before 31.03.2007. As held earlier, they were marginal farmers and the petitioner, their creditors is a Cooperative Credit Institution under Clause 3.4 of the Scheme. Given the objective of such Scheme which is to provide relief to marginal farmers from rural and agricultural debt bondage, it would not be appropriate for this Court to reject two individuals who have not approached this Court but apparently are beneficiaries of the impugned order.

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In the above circumstances, the Court is of the opinion that the impugned order does not call for interference; at the same time, it is clarified that the benefit of the Scheme shall be made available to all the three individuals who have borrowed and who are the subject of the award by the Arbitrator. It is open to the petitioner to seek appropriate reimbursement/adjustment from the concerned funding agency, which is to administer the ADWDR.

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The writ petition is dismissed in the above terms.

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S. RAVINDRA BHAT, J

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DEEPA SHARMA, J

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FEBRUARY 04, 2016 bg

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W.P.(C) 2485/2012

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Sarvodaya Co-Operative Multi Purpose Society v. Registrar Co-Operative Societies and Ors.

Case brief

What is this about?

What did the court decide?

Sarvodaya Co-Operative Multi Purpose Society v. Registrar Co-Operative Societies and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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