Allowed

Nissar A.K v. the Paravur S.N.Vregional Co-Operative Bank Ltd. No 1685

Kerala HC26 Jul 2018WA/600/2014

Case brief

AI extract

What is this about?

This two-judge bench addressed writ appeals challenging an Assistant Registrar's order granting borrowers a settlement scheme under a Registrar circular. The court held the Registrar had authority under Section 66A, the scheme was valid, and appellants met all conditions. The Single Judge's order denying benefit as a bank discretion was set aside.

What did the court decide?

Single Judge's judgment set aside; writ appeals disposed granting appellants benefit of the scheme without further payment.

Nissar A.K Vs the Paravur S.N.Vregional Co-Operative… — Cooperative Societies | Kerala HC (2018)

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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 V.CHITAMBARESH

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THE HONOURABLE MR. JUSTICE SATHISH NINAN

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THURSDAY, THE 26TH DAY OF JULY 2018 / 4TH SRAVANA, 1940

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WA.No. 600 of 2014 IN WPC. 2760/2013

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AGAINST THE JUDGMENT IN WP(C) 2760/2013 of HIGH COURT OF KERALA DATED 13-03-2014

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APPELLANT/RESPONDENTS 1 AND 2

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1 NISSAR A.K

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S/O.ABDUL KHARIM, VADAKKEBHAGAM VEEDU, THEKKUMBHAGAM P.O., PARAVUR, KOLLAM 691301.

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2 SUNAITHA NISSAR

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W/O.NISSAR, VADAKKEBHAGAM VEEDU, THEKKUMBHAGAM P.O., PARAVUR, KOLLAM-691301.

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BY ADVS.SRI.K.K.CHANDRAN PILLAI (SR.) SRI.A.S.SHAMMY RAJ

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RESPONDENT(S/PETITIONER AND 4TH RESPONDENT:

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1. THE PARAVUR S.N.V REGIONAL CO-OPERATIVE BANK LTD NO 1685 S.PARAVUR P.O., KOLLAM 691301, REPRESENTED BY ITS SECRETARY.

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2. THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) OFFICE OF THE ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES, CIVIL STATION, KOLLAM-691013.

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3. SULTHANA (DIED) REPRESENTED BY LEGAL HEIR SUNAITHA NISSAR, W/O.NISSAR, VADAKKEBHAGAM VEEDU, THEKKUMBHAGAM P.O., PARAVUR, KOLLAM-691301.

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R1 BY ADV. SRI.B.SURESH KUMAR

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R2 BY SENIOR GOVERNMENT PLEADER SMT.K.R.DEEPA

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THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 23-07-2018 ALONG WITH W.A Nos.1900/2016, 667/2017, 668/2017 & 722/2017, THE COURT ON 26-07-2018 DELIVERED THE FOLLOWING:

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vdv

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V.Chitambaresh & Sathish Ninan, JJ. ============================== W.A Nos.600 of 2014, 1900 of 2016, 667 of 2017, 668 of 2017 & 722 of 2017 ========================== Dated this the 26^th day of July, 2018

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JUDGMENT

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Sathish Ninan, J

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Ext P4 circular No.49/2010 dated 20.08.2010 was issued by the Registrar of Co-operative Societies offering scheme for settlement to borrowers from Co-operative Societies/Banks. The scheme was later withdrawn as per Ext P13 circular No.59/2013 dated 25.09.2013 of the Registrar. The appellants in the respective writ appeals had availed loans from the first respondent Bank. Seeking the benefit of Ext P4 circular they approached this Court in W.P(C) Nos.10543 of 2012, 10588 of 2012 and 10600 of 2012.

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W.A Nos.600 of 2014, 1900 of 2016, 667 of 2017, 668 of 2017 & 722 of 2017

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This Court as per judgment dated 07.09.2012 directed the Assistant Registrar to consider the issue and pass appropriate orders. Pursuant thereto Ext P3 order dated 01.12.2012 was passed by the Assistant Registrar granting the benefit of Ext P4 circular to the appellants. The same was challenged by the Bank in writ petition. The Learned Single Judge held that the grant of benefit under the circular is a discretion of the Bank and accordingly interfered with Ext P3 order of the Assistant Registrar. The same is under challenge by the appellants- borrowers.

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Though there is a challenge that the appellants

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are not eligible for the benefit of the scheme since the same was not in force at the time the appellants sought for its benefit, as is evident from the dates of Ext P4 and Ext P13 referred to supra, it admits of no doubt that the scheme was in vogue when the appellants

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W.A Nos.600 of 2014, 1900 of 2016, 667 of 2017, 668 of 2017 & 722 of 2017

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sought for its benefit.

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Though the learned counsel for the Bank, relying

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upon the judgment of this Court in Kallettumkara Service Co-Operative Bank v Registrar of Co-Operative Society ( 2005(3) KLT 483) , contend that Ext P3 circular is not valid in view of lack of authority for the Registrar to issue such circulars, we notice from paragraph 4 of the said judgment itself that the circular under challenge therein was issued at a point of time when Section 66A of the Co-operative Societies

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Act was not in force. Ext P4 circular is apparently issued under Section 66A of the Co-operative Societies Act and hence the challenge against the authority of the Registrar, does not stand. Apart from the same, it is to be noticed that in W.P(C) No.6906 of 2013 from which Writ Appeal No.1900 of 2016 arises, there was a

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W.A Nos.600 of 2014, 1900 of 2016, 667 of 2017, 668 of 2017 & 722 of 2017

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-: 4 :-

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specific challenge against Ext P4 circular, which was turned down by the learned Single Judge. The same has

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not been appealed against by the Bank. Therefore, Ext P4 stands. Incidently we also notice that the decision in Kallettumkara Service Co-Operative Bank v Registrar of Co-Operative Society (2005(3) KLT 483) referred to supra was distinguished and a notification similar to Ext P4 issued under Section 66A of the Co-operative Societies Act was upheld by a Division Bench of this Court Abdurahiman Nagar Service Co-Operative Bank v State of Kerala ( 2014(1) KLT 664) .

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Coming to the merits of the claim of the

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appellants, Ext P4 circular requires satisfaction of two conditions for the applicability of the scheme namely;

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The account must be a Non-Performing Asset.

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The loan amount should not be more than Rs.5 lakhs.

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W.A Nos.600 of 2014, 1900 of 2016, 667 of 2017, 668 of 2017 & 722 of 2017

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-: 5 :-

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It is not in dispute that the appellants satisfy these two conditions. We are unable to agree with the learned Single Judge that the appellants are not eligible for the benefit of Ext P4 scheme. There is nothing in the scheme suggesting that the grant of the benefit is at the discretion of the Bank. There is no reason to deny the benefit of the scheme to the appellants. For the reasons as stated above we hold that the appellants are eligible for the benefit of Ext P4 circular.

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As per the scheme the borrowers are required to pay the principal amount and interest equal to the principal amount and 10% of the interest towards establishment charges. Upon such payment the account is liable to be closed. Pursuant to the interim order passed in the writ petitions in the first round of litigation namely W.P(C) Nos. 10543 of 2012, 10588 of 2012 and 10600 of 2012, the principal amount with

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W.A Nos.600 of 2014, 1900 of 2016, 667 of 2017, 668 of 2017 & 722 of 2017

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-: 6 :-

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interest equal to the principal amount has been deposited by the appellants on 08.05.2012. It is not in dispute that at the time of passing of Ext P3 order by the Assistant Registrar all that remained for payment by the appellants is the establishment charges referred to supra. Pursuant to an interim order passed by this Court in the writ petitions, admittedly total amount of `5 lakhs has since been paid, which would undisputedly satisfy the establishment charges.

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We have already held that the appellants are eligible for the benefit of the scheme in question. On arriving at our conclusion, we suggested that the amounts in question be closed without requiring any further payments and that the appellants will not be entitled for any refund. The counsel on either sides accept the suggestion.

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W.A Nos.600 of 2014, 1900 of 2016, 667 of 2017, 668 of 2017 & 722 of 2017

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In view thereof, the judgment of the learned Single

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Judge is set aside and the writ appeals are disposed of

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as above.

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Sd/- V.Chitambaresh, Judge

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Sd/- Sathish Ninan, Judge