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Koppam Service Co-Operative Bank Limited No. 1205 v. State of Kerala

Kerala HC24 Jun 2016WP(C)/10930/2016

Case brief

AI extract

What is this about?

Petitioner bank challenged failure of respondent federation to repay matured fixed deposits totaling Rs.74.22 lakhs. Court affirmed联社 liability to repay the full principal amount from FDRs, permitting instalment payment for the federation. Interest accrual addressed by converting 50% to shares and waiving the rest.

What did the court decide?

Third respondent directed to repay Rs.74,22,912/- in instalments (50% within 4 months, balance in 8 monthly instalments) and convert 50% of accrued interest into shares within 2 months.

Koppam Service Co-Operative Bank Limited No. 1205 Vs… — Cooperative Societies | Kerala HC (2016)

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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 SHAJI P.CHALY

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FRIDAY, THE 24TH DAY OF JUNE 2016/3RD ASHADHA, 1938

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WP(C).No. 10930 of 2016 (M)

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PETITIONER(S):

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KOPPAM SERVICE CO-OPERATIVE BANK LIMITED NO. 1205 PULASSERY .P.O., PALAKKAD DISTRICT, PIN - 679 307, REPRESENTED BY ITS SECRETARY.

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BY ADVS.SRI.S.P.ARAVINDAKSHAN PILLAY SMT.N.SANTHA SRI.K.A.BALAN SRI.V.VARGHESE SRI.PETER JOSE CHRISTO SRI.S.A.ANAND SMT.L.ANNAPOORNA

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RESPONDENT(S):

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1. STATE OF KERALA

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REPRESENTED BY THE SECRETARY TO GOVERNMENT, DEPARTMENT OF CO-OPERATION, SECRETARIAT, THIRUVANANTHAPURAM, PIN - 695 001.

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2. REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM, PIN - 695 001.

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3. THE KERALA STATE CO-OPERATIVE RUBBER MARKETING FEDERATION LTD.,

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P.B.NO.15, GANDHI NAGAR, KOCHI, PIN - 682 020, REPRESENTED BY ITS MANAGING DIRECTOR.

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4. MANAGING DIRECTOR,

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THE KERALA STATE CO-OPERATIVE RUBBER MARKETINGFEDERATION LTD., P.B.NO.15, GANDHI NAGAR, KOCHI, PIN - 682 020.

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R3 &R4 BY SRI.K.RAMAKUMAR (SR.), SC SRI.S.M.PRASANTH

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R1 & R2 BY GOVERNMENT PLEADER SRI.T.R.RAJESH

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24-06-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 10930 of 2016 (M)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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----------------------EXT.P1: TRUE COPY OF THE RESOLUTION NO.4 DATED 08.03.2016 OF THE BOARD OF DIRECTORS OF THE BANK.

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EXT.P2: TRUE COPY OF THE FIXED DEPOSIT RECEIPT ISSUED BY RUBBER MARK IN FAVOUR OF THE BANK.

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EXT.P3: TRUE COPY OF THE FIXED DEPOSIT RECEIPT ISSUED BY RUBBER MARK IN FAVOUR OF THE BANK.

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EXT.P4: TRUE COPY OF THE FRIXED DEPOSIT RECEIPT ISSUED BY RUBBER MARK IN FAVOUR OF THE BANK.

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EXT.P5: TRUE COPY OF THE LETTER NO.FD/79/14-15 DATED 27-04-2015.

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EXT.P6: TRUE COPY OF THE LETTER DATED 01.12.2015 ISSUED BY THE BANK TO THE RUBBER MARK.

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EXT.P7: TRUE COPY OF THE LETTER NO.FD/15-16/605 DATED 01.01.2016.

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EXT.P7.(A): TRUE ENGLISH TRANSLATION OF EXT.P7.

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EXT.P8: TRUE COPY OF THE RELEVANT EXTRACT OF THE MINUTES OF THE MEETING HELD ON 11.03.2014.

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EXT.P8.(A): TRUE ENGLISH TRANSLATION OF EXT.P8.

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EXT.P9: TRUE COPY OF THE JUDGMENT DATED 25.03.2015 IN W.A.NO.595 OF 2015 OF THIS HON'BLE COURT.

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RESPONDENT(S)' EXHIBITS: NIL

//TRUE COPY//

P.A. TO JUDGE

dlk

SHAJI P. CHALY, J

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W.P.(C)NO.10930 OF 2016

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Dated this the 24^th day of June, 2016

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J U D G M E N T

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This writ petition is filed by the petitioner seeking

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direction to respondents 3 and 4 to return to the petitioner bank, the principle amounts covered by Exts.P2 to P4 fixed deposit receipts along with interest at the rate specified therein with effect from 11.03.2014 onwards and for other related reliefs.

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Material facts for the disposal of the writ petition are thus:-

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Petitioner bank has deposited amounts with the third respondent evident from Exts.P2, P3 and P4. The total principal amount contained under Exts.P2 to P4 is Rs.74,22,912/- (Rupees seventy four lakhs twenty two thousand nine hundred and twelve only). The fixed deposits have been matured and there is no dispute with respect to that. However, third

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W.P.(C)NO.10930 OF 2016 2

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respondent has failed to repay the amounts to the petitioner. It is in this background petitioner has approached this court by seeking necessary direction to the third respondent with respect to the fixed deposit receipts.

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Third and fourth respondent have filed counter affidavit refuting the allegations and claims and demands made by the petitioner. It is contended that there is no legal right enjoyed by the petitioner bank to get back the amounts deposited. That apart, it is contended that the actual principle amount of fixed deposit is only Rs.45,00,000/- (Rupees fourty five lakhs only) and the rest is interest accrued to actual/original fixed deposit amount of Rs.45 lakhs and therefore the claim for the amount of Rs.74,22,912/- (Rupees seventy four lakhs twenty two thousand nine hundred and twelve only) is unsustainable. That apart, it is contended that the third respondent has taken all steps to dispose of the unencumbered properties of the federation as per its

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W.P.(C)NO.10930 OF 2016 3

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order dated 11.02.2015 and already valuation report etc., etrc., are secured from the Tahsildar and District Collector. It is also contended that federation is ready to repay the actual fixed deposit of Rs.45,00,000/- (Rupees fourty five lakhs) in 24 equal monthly instalments waiving 50% interest and balance 50% interest converted into share in the third respondent federation as per the stipulation of the meeting dated 11.03.2014 convened by the Minister

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for Co-operation. Various other contentions are raised by the third respondent justifying the action on their part by not repaying the amounts due to the petitioner.

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Heard learned counsel for the petitioner, learned Government Pleader and learned counsel appearing for respondents 3 and 4. Learned counsel for the petitioner reiterated the contentions raised in the writ petition. Learned counsel has also brought to my attention Ext.P8, which is a proceeding dated 11.03.2014 of a meeting convened by the Minister for

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W.P.(C)NO.10930 OF 2016

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Co-operation in the presence of representatives of third and fourth respondents, representatives of other societies including the petitioner. Ultimately the meeting has resolved and arrived at a decision in the following manner:-

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(1) The third respondent will repay the

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actual principle amount of the fixed deposits made.

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(2) 50% of the interest will be converted

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as share of the third respondent.

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(3) Balance 50% interest will be waived by

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the respective societies/banks.

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Therefore, it is the contention of the learned

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counsel for the petitioner that the third respondent is duty bound to honour the decision taken in the said meeting.

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Per contra, learned counsel appearing for third and fourth respondents submitted that, as provided under clause (1) above, the third respondent is liable to repay only the actual amount as per the original fixed deposit held by the petitioner bank with

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W.P.(C)NO.10930 OF 2016

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the third respondent. That apart, it is contended that by calculating so the third respondent may be permitted to repay the amount in 24 monthly installments.

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Having considered the rival submissions made across the bar and perusal of pleadings and documents on record, the sole question to be considered is whether the petitioner is entitled to get the principle amounts covered under Exts.P2 to P4. As already stated, the principle amounts contained under Exts.P2 to P4 together is Rs.74,22912/(Rupees seventy four lakhs twenty two thousand nine hundred and twelve only). The contention raised by the learned counsel for the third respondent is that the said figure contained under Exts.P2 to P4 is on the basis of interest accrued to the original fixed deposit amount of Rs.45 lakhs deposited by the petitioner with the third respondent.

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The question remains whether such a contention raised by the third respondent can be

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W.P.(C)NO.10930 OF 2016

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sustained at all. Whatever amount contained under Exts.P2 to P4 shown as fixed deposit principle amount is the principle amount that is taken care of under Ext.P8 minutes of the meeting. Therefore the third respondent is bound to repay the same and convert 50% of the interest amount accrued thereunder as share of the third respondent federation and 50% interest is to be waived.

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Taking into account the factual circumstances discussed above, I am of the

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considered opinion that third respondent is liable to repay the amount of Rs.74,22,912/- (Rupees seventy four lakhs twenty two thousand nine hundred and twelve only) to the petitioner. In view of the submission made by the learned counsel that, the third respondent is in grave financial difficulties, I think it is only proper that the third respondent can be permitted to repay the amounts in instalments. Accordingly, 50% of the total amount referred above shall be paid by the third respondent to the petitioner

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W.P.(C)NO.10930 OF 2016

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within a period of four months from the date of receipt of a copy of this judgment and the balance in 8 equated monthly instalments starting from the month subsequent to the expiry of the four months stipulated above. It is also directed that 50% of the interest amount shall be converted by the third respondent against shares of the third respondent at the earliest and at any rate within a period of two months from the date of receipt of a copy of this judgment.

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The writ petition is disposed of accordingly.

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sd/-

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SHAJI P. CHALY, JUDGE

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R.AV

Koppam Service Co-Operative Bank Limited No. 1205 v. State of Kerala

Case brief

What is this about?

What did the court decide?

Koppam Service Co-Operative Bank Limited No. 1205 v. State of Kerala

Case brief

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What did the court decide?

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