Allowed

Varkey Dominic George v. State of Kerala

Kerala HC3 Apr 2014WP(C)/3599/2014

Case brief

AI extract

What is this about?

The petitioner, a surety, challenged an award against a deceased borrower. The court held the award invalid as it impleaded the deceased without impleading their legal heir. Additionally, the court rejected the petitioner's claim for relief under the Risk Fund Scheme due to the borrower's age exceeding the limit and delay in approaching the bank.

What did the court decide?

The impugned award is set aside with liberty to the Bank to proceed afresh against the legal heirs of the original borrower and the sureties.

Varkey Dominic George Vs State of Kerala — Cooperative Societies | Kerala HC (2014)

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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 K.VINOD CHANDRAN

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THURSDAY, THE 3RD DAY OF APRIL 2014/13TH CHAITHRA, 1936

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WP(C).No. 3599 of 2014 (Y)

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PETITIONER(S):

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VARKEY DOMINIC GEORGE, SON OF VARKEY, VATTAKUZHIYIL HOUSE, KALOORKAD, MOOVATTUPUZHA, ERNAKULAM-686 668.

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BY ADV. DR.K.P.PRADEEP

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RESPONDENT(S):

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1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY, DEPARTMENT OF CO-OPERATION, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001.

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2. SPECIAL SALE OFFICER, KAFC BANK GROUP, OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (G), MUVATTUPUZHA, MUVATTUPUZHA P.O., ERNAKULAM-686 669.

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3. KALLOORKAD FARMERS CO-OPERATIVE BANK NO.2605, KALLOORKAD P.O., MUVATTUPUZHA, ERNAKULAM-686 668, REPRESENTED BY ITS MANAGING DIRECTOR.

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4. JOHN FRANCIS, SON OF LATE ULAHANNAN JOHN, RATHAPILLIL HOUSE, KOLLORKAD VILLAGE, MUVATTUPUZHA TALUK, KALLOORKAD P.O., ERNAKULAM DISTRICT-686 668.

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R1 & R2 BY GOVERNMENT PLEADER SRI.NOUSHAD THOTTATHIL R3 BY ADV. SRI.PAUL K.VARGHESE

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03-04-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Kss

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WP(C).No. 3599 of 2014 (Y)

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APPENDIX

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PETITIONER(S)' EXHIBITS:

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EXHIBIT P1: COPY OF THE DEATH CERTIFICATE NO.D0020708-1202291 DATED 23.01.2014 ISSUED BY THE REGISTRAR OF BIRTHS AND DEATHS, KALLOORKAD GRAMA PANCHAYAT.

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EXHIBIT P2: COPY OF THE AWARD DATED 27.12.2010 PASSED IN CASE NO.2632/10 BY THE 2ND RESPONDENT.

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EXHIBIT P3: COPY OF THE DEMAND NOTICE NO. NIL DATED 23.03.2012 ISSUED BY THE 2ND RESPONDENT.

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EXHIBIT P4: COPY OF THE CIRCULAR NO.42/2008 DATED 23.06.2008.

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EXHIBIT P5: COPY OF THE REQUEST DATED 20.1.2014 SUBMITTED BY THE 4TH RESPONDENT TO THE 3RD RESPONDENT.

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RESPONDENT(S)' EXHIBITS:

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-----------------------------------------N I L

/TRUE COPY/

P.A.TO JUDGE

Kss

K. VINOD CHANDRAN, J.

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=====================

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W.P.(C) No. 3599 of 2014

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====================== Dated this the 3^rd day of April, 2014

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J U D G M E N T

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The petitioner is a surety to a loan availed of, by one Ulahannan John, who is no more. The 4^th respondent herein, who is the son of the deceased Ulahannan John, was another surety to the said loan. The loan of Rs.20,000/- was availed of, from the 3^rd respondent Bank, in the year 2008. Admittedly, there was a default committed in the loan and the original borrower died on 22.04.2010. The 4^th respondent who was the legal heir was before the Bank, claiming for benefit under the Risk Fund Scheme of 2008. The same is produced as Ext.R3(b) along with a counter affidavit filed by the 3^rd respondent. The 3^rd respondent also specifically states in the counter affidavit that the application made for benefit under Ext.R3(b) was rejected

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W.P.(C) No. 3599 of 2014

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since, the benefit would only enure to borrowers whose loan period expires before attaining the age of 65 years. It is not disputed that the original borrower was 93 when he expired on 22.04.2010. In such circumstance, the benefit under Ext.R3(b) was declined.

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In the present Writ Petition, the surety raises two contentions, one that Ext. P2 award passed against the dead person is non-est. It is also contended that the loan account would have been settled under Ext.P4, if the sureties were made aware of such benefit, having been conferred on the borrowers. Circular No. 42 of 2008, produced as Ext.P4 specifically grants relief to the extent of the interest payable from the date of death of the borrower to the satisfaction of the loan account, provided such satisfaction is made within one year of the date of death.

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Obviously in the instant case, the original borrower died on 22.04.2010 and till now the loan remains due and in default. In such circumstance, benefit under Circular No.

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W.P.(C) No. 3599 of 2014

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42 of 2008 could not be validly claimed. The contention that the petitioner was not aware of the said circular cannot be countenanced since there is no obligation on the Bank to inform the various circulars brought out by the Registrar to the borrowers. The petitioner also does not have a case that the death of th borrower was notified to the Bank. The petitioner also, being a member of the 3^rd respondent Co-operative Bank, and having stood as surety to a loan availed by another member, ought to have known the benefits conferred in such loan accounts and approached the respondent Bank, within the ime specified in the circular. On the aforesaid findings, it has to be held that the petitioner is not entitled to any relief as per Ext.P4.

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However, looking at the contentions raised as to the sustainability of the award it has to be noticed that, the deceased person was impleaded as the 2^nd respondent in the award, which was passed on 27.12.2010. The original borrower so impleaded had expired long before that on

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W.P.(C) No. 3599 of 2014

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22.04.2010. In such circumstance, the respondent Bank should necessarily have impleaded the legal heir of the deceased 2^nd defendant. The Bank does not also have a contention that the 4^th respondent who was impleaded as the 1st defendant in Ext.P2 award is the only legal heir.

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The learned counsel for the respondent Bank would argue that he is not claiming any reliefs against the 2^nd defendant and hence the award would be operative against the other two, who are sureties. Such an argument would be fallacious since the deceased person is the original borrower and the claim against the sureties cannot survive if the Bank absolves the original borrower from the liability. If the deceased were a surety necessarily this argument could have been taken up. In the instant case the award primarily casts the liability on the principal borrower and that being done, by virtue of the surety agreements the liability becomes joint and several. Without the original borrower in the party array no proceedings could have been

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W.P.(C) No. 3599 of 2014

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launched. In such circumstance, Ext.P2 award has to be set aside, however with liberty to the respondent Bank, to proceed afresh against the legal heirs of the original

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borrower as also the sureties.

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The Writ Petition is allowed. No costs.

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Sd/- K. VINOD CHANDRAN, JUDGE

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Varkey Dominic George v. State of Kerala

Case brief

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What did the court decide?

Varkey Dominic George v. State of Kerala

Case brief

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