Petitioner filed a writ seeking reversal of a Lok Ayukta order dismissing his maladministration complaint regarding refusal by respondents to adjust a prized chitty amount against his outstanding loan due to inadequate security. The High Court found no arbitrariness and dismissed the petition.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
THURSDAY, THE 1ST DAY OF DECEMBER 2016/10TH AGRAHAYANA, 1938
WP(C).No. 4769 of 2014 (U)
PETITIONER :
R.ANILKUMAR, S/O. RAJASHEKHARAN NAIR, AGED 38 YEARS, RESIDING AT T.C 50/351-1, "SREENANDANAM", KALADY, KARAMANA P.O., THIRUVANANTHAPURAM.
BY ADVS.SRI.SABU GEORGE
SRI.NIDHI BALACHANDRAN
RESPONDENT(S):
1. THE KERALA STATE FINANCIAL ENTERPRISES LTD. 'BADRATHA', MUSEUM ROAD, CHEMBUKAVU,
THRISSUR, PIN-680 003, REPRESENTED BY ITS MANAGING DIRECTOR.
2. THE BRANCH MANAGER, KERALA STATE FINANCIAL ENTERPRISES LTD.,
CHALAI BRANCH, THIRUVANANTHAPURAM-695 033.
BY ADV. SRI.JIMMY GEORGE THADATHIL, SC, KSFE
SRI.P.V.LONACHAN,SC,KSFE LTD. SRI.ALEXANDER.C.V., SC,
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01-12-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
sts
WP(C).No. 4769 of 2014 (U)
APPENDIX
PETITIONER(S)' EXHIBITS
RESPONDENT(S)' EXHIBITS: NIL
/TRUE COPY/
P.A.TO JUDGE
sts
SHAJI P. CHALY, J.
W.P.(C) No.4769 of 2014
Dated this the 1st day of December, 2016
JUDGMENT
Petitioner is a subscriber to a Chitty having Sala of Rs.15,00,000/-, and has availed a chitty loan amounting to Rs.5,00,000/- after mortgaging his property. In the 7th auction, the chitty was auctioned in favour of the petitioner for an amount of Rs.12,24,500/-. As per the Kerala Chitties Act, 1975, and the terms and conditions of the Chitty loan, the loan amount was to be first adjusted from the prize money when the chitty is auctioned or drawn in favour of a subscriber. However, petitioner did not obtain the prize money. Petitioner was under the bonafide belief that respondent No.2 had adjusted the loan amount from the prize money and the balance amount was deposited, is the contention of the petitioner. That apart, it is stated, after holding the prize money for more than 2 ½ years, respondent No.2 has issued Ext.P4, demanding repayment of the entire loan amount of Rs.5,00,000/- together with interest and threatened of initiation of Revenue Recovery steps in case of failure.
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petitioner are all admitted in the counter affidavit. That apart, it is stated, as per the chitty loan rules, the loan amounts will be first adjusted from the prize money, when the chitty is auctioned or drawn in favour of the petitioner. Ext.P3 produced by the petitioner are the rules of the chitty loan scheme, which glaringly lays down the rules of taking loan from the respondent company. The 1st rule clearly states that the chitty loan is only available to customers who comply with several conditions along with producing adequate securities as per the norms of the company. Petitioner produced adequate security for availing the loan of Rs.5,00,000/-. The 9th rule in Ext.P3 stipulates that, if the subscriber auctions the chitty, the prize amount would be set off against the loan amount outstanding, and the balance amount would be paid on the basis of adequate security. It is submitted that the said furnishing of adequate security is for securing the payment of future instalments in the chitty. Petitioner herein refused to comply with the said rule, which led to the factual matrix, which culminated in filing of the writ petition.
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drawal of prize money of Rs.12,24,500/-, as and when the petitioner produces sufficient security for the future instalments in accordance with the terms of Ext.P3 rules. The chitty loan was only for an amount of Rs.5 lakhs, where the Branch Manager of the 2nd respondent himself can accept the property as security. However, the future liability in the chitty at the time of prizing the chitty was more than 11 lakhs and hence the documents relating to the security ought to be sent, scrutinized and approved by the Regional office of the 1st respondent company. While the documents of the petitioner were sent to the Regional office, defects were noted dissuading the petitioner from withdrawal of the prize money, like Death certificate of one of the prior title holders of property was not produced, up-to-date land tax receipt, possession certificate with survey numbers and sketch with side measurements, Prop I form and affidavit to be filled up properly, and alternate security for unsecured amount to be produced. It is also stated, petitioner was under the mistaken belief that the property already provided as security towards chitty loan can also be extended as security towards the prized amount. However, when the said document was forwarded to the
W.P.(C) No.4769 of 2014
5
Regional Office, several defects were noted for non-acceptance of the same property as security. It was very well known to the petitioner, however the petitioner did not care to rectify the defects noted, and therefore the respondents were not in a position to release or adjust the prized chitty amount for want of sufficient security. These are the background facts put forth by the parties, to decide the issues raised in the writ petition.
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contentions raised in the writ petition. The Lok Ayukta has verified Ext.P3 rules and has arrived at a finding that there is no shortcomings, deficiency or maladministration on the part of the respondents in not adjusting the said amount. It is clear from the pleadings put forth by the respective parties, petitioner failed to offer sufficient security to the prized chitty amount which is much more higher than the amount of loan availed by the petitioner and the petitioner failed to provide sufficient security for such adjustment. The release of the prized amount and the adjustment of the prize amount against the loan transactions is very well guided by Ext.P3 Rules. However, petitioner has not cared to extend adequate security as provided under the Rules, nor the Rules as per Ext.P3 is not under challenge in this writ petition.
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the petitioner to interfere with Ext.P6 order passed by the Lok Ayukta.
Resultantly, writ petition fails and accordingly, it is dismissed.
Sd/- SHAJI P. CHALY JUDGE
//true copy//
P.S. to Judge
St/03.12.2016
3 issues framed by the court
Whether the failure to adjust the prized chitty amount against the outstanding loan was arbitrary under the Kerala Chitties Act rules.
Whether the impugned order of the Lok Ayukta dismissing the maladministration complaint warrants judicial interference.
Whether the petitioner's lack of adequate security justifies withholding the prized chitty amount.
R.Anilkumar
Kerala State Financial Enterprises Ltd. 'Badratha'
Branch Manager, Kerala State Financial Enterprises Ltd.
Shaji P. Chaly
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
