Dismissed

Elsy Bose v. the District Collector

Kerala HC4 Sept 2012WP(C)/6588/2012

Case brief

AI extract

What is this about?

Petitioner, a former Chairperson, challenged revenue recovery proceedings against her personally for a society loan. The High Court held that her personal signature on the agreement made her jointly and severally liable regardless of her tenure, invalidating her reliance on society bylaws. The writ petition was dismissed.

What did the court decide?

The writ petition is dismissed as it fails.

Elsy Bose Vs the District Collector — Civil Procedure and Limitation | Kerala HC (2012)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE ANTONY DOMINIC

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TUESDAY, THE 4TH DAY OF SEPTEMBER 2012/13TH BHADRA 1934

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WP(C).No. 6588 of 2012 (W)

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PETITIONER:

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ELSY BOSE, AGED 43 YEARS, W/O.LATE BOSE VARGHESE, POOMATTATHIL, PAINGOTTOOR P.O, KADAVOOR VILLAGE KOTHAMANGALAM TALUK 686 671

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BY ADVS.SRI.S.ABHILASH SRI.K.SIJU SMT.BINDU GEORGE

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RESPONDENTS:

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1. THE DISTRICT COLLECTOR, COLLECTORATE KAKKANAD, ERNAKULAM 682 030

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2. DEPUTY TAHASILDAR, REVENUE RECOVERY, KOTHAMANGALAM TALUK 686 691

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3. VILLAGE OFFICER, VILLAGE OFFICE, KADAVOOR, KOTHAMANGALAM 686 671

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4. CHAIR PERSON, COMMUNITY DEVELOPMENT SOCIETY,

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PAINGOTTOOR GRAMA PANCHAYATH,CHATHAMATTAM P.O, KOTHAMANGALAM 686 671

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5. THE SECRETARY, PAINGOTTOOR GRAMA PANCHAYATH,

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PAINGOTTOOR , KOTHAMANGALAM 686 671

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6. THE BRANCH MANAGER, UNION BANK OF INDIA,

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KADAVOOR BRANCH , KOTHAMANGALAM 686 671

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R1 TO 3BY GOVERNMENT PLEADER SRI.RINNI STEPHEN R4, R5 BY ADVS.SRI.P.M.BENZIR SRI.G.G.MANOJ SRI.JAICE JACOBSRI.A.S.P.KURUP, SC, UBI R6 BY ADV. SRI.A.S.P.KURUP, SC, UBI

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 04-09-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK

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WP(C).No. 6588 of 2012 (W)

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APPENDIX

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PETITIONER'S EXHIBITS

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EXT.P1	A TRUE COPY OF THE DEMAND NOTICE ISSUED U/S. 7 & SECTION 34 OF THE REVENUE RECOVERY ACT
EXT.P2	A TRUE COPY OF THE REPRESENTATION SUBMITTED BEFORE THE EXECUTIVE DIRECTOR, KUDUMBASREE AND TO THE 1ST RESPONDENT DISTRICT COLLECTOR,ERNAKULAM DATED 7.1.2012
EXT.P3	A TRUE COPY OF THE DECISION TAKEN BY THE ASSESSMENT COMMITTEE

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EXT.P4 A TRUE COPY OF THE RELEVANT PAGES OF KUDUMBASREE BY LAW.

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RESPONDENTS' EXHIBITS :

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EXT.R6A. COPY OF ARTICLES OF AGREEMENT DATED 3.5.2005 EXECUTED BY PETITIONER AND VEO KADAVOOR IN FAVOUR OF THE BANK.

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EXT.R6B. COPY OF ARTICLES OF AGREEMENT DATED 3.5.2005 EXECUTED BY PETITIONER AND VEO KADAVOOR IN FAVOUR OF THE BANK.

/ TRUE COPY /

P.A. TO JUDGE

ANTONY DOMINIC, J.

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W.P.(C) NO.6588 OF 2012(W)

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Dated this the 4^th day of September, 2012

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J U D G M E N T

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Petitioner was the Chairperson of the Community Development Society, Paingottoor Grama Panchayat during the period 2004-2006 and 2008-2011. During 2005, CDS availed of a loan from the 6^th respondent Bank, for the purpose of providing gas connection to 234 women beneficiaries residing within their area. At that time, the petitioner was the Chairperson and she along with the Secretary of the CDS executed Ext.R6(a) and R6(b) agreements. The loan became repayable from 2007. However, repayment was defaulted. As a result the Bank initiated revenue recovery proceedings. This lead to the issuance of Ext.P1 notice under Section 7 of the Revenue Recovery Act to the petitioner and also to the Principal Secretary of the CDS. It is thereupon this writ petition has been filed challenging the proceedings and contending that the petitioner executed her agreement in her capacity as Chairperson of the CDS and that for the liability of the CDS, the petitioner cannot be made personally liable.

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WPC.No. 6588/2012

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:2 :

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In support of this contention, counsel referred me to clause 19 of Ext.P4, the bylaws of the CDS, which provides that the members of the CDS alone will be liable. However, contention raised by the Bank is that loan was availed of by the CDS on the strength of Ext.R6(a) and (b) agreements and that as per the provisions of these agreements the liability is joint and several. It is stated that therefore irrespective of whether the petitioner is still a Chairperson or not, being a party to the agreements, she has the liability.

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I have considered the submissions made. It may be true that the petitioner executed the agreements while she was a Chairman of the CDS. Having executed the agreements her obligation to the Bank will have to be determined in the light of the provisions of the agreement. In this context clause 13 of Ext.R6-A and clause 12 of Ext..R6-B agreements are relevant and therefore are extracted below for reference.

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R6-A “13. The borrower agrees that its members' liability to the bank for its dues under the credit facility availed is joint and several.”

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R6-B “12. Should the Borrower be more than one individual, all shall be bound jointly and severally and the firm or members of the firm, such firm and all members from time to time thereof shall be bound

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WPC.No. 6588/2012

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:3 :

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hereby jointly and severally notwithstanding any changes in the constitution or style thereof and whether such firm consists of or be reduced to one individual at any time and also such individual members and their respective heirs, executors and administrators and that should the Borrower be a Limited company, a corporate or unincorporated body, committee, firm, partnership, trustees or debtors on a joint account, the provisions herein contained shall be construed and take effect where necessary as if the words importing the singular number also included the plural number and lastly that if the Borrower be more than one individual at any time any notice served on any one of such individuals shall be deemed to be service of such notice on all such individuals. “

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A reading of these provisions show that irrespective of whether the petitioner ceased to be the Chairperson of the CDS or not, she continues to be jointly and severally liable for the liability of the CDS to the Bank. If that be so, Bank cannot be faulted for initiating revenue recovery action against the petitioner.

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In so far as the provisions of Ext.P4 bylaw relied on by the petitioner is concerned, although it is true that in terms of the provisions contained in clause 19 of the bylaws, the liability of the CDS is the liability of the members, still fact remains that the provisions of the bye law cannot be pressed into service against the Bank with which the petitioner has entered into agreements.

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WPC.No. 6588/2012

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:4 :

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Therefore, the recovery proceedings initiated by the Bank cannot be resisted relying on the provisions of the bylaws of the CDS.

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Petitioner has yet another complaint that although the member Secretary is also liable, proceedings are continued only against her. Ext.P1 notice issued under Section 7 of the Revenue Recovery Act shows that it is issued to the Secretary also. Therefore proceedings have been initiated not only against the petitioner but also against the Secretary. If that be so, there is no substance in the contention of the petitioner and at any rate the respondents are liable to continue the proceedings not only against the petitioner but also against the other defaulters. In such circumstances I do not find any substance in the writ petition.

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Writ petition fails and is dismissed.

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(ANTONY DOMINIC) JUDGE

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vi/

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WPC.No. 6588/2012

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:5 :

Elsy Bose v. the District Collector

Case brief

What is this about?

What did the court decide?

Elsy Bose v. the District Collector

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

Case details

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