Dismissed

C.Vinod Kumar v. Thiruvananthapuram Service Co-Operative Bank Ltd.

Kerala HC29 Sept 2021WP(C)/7649/2021

Case brief

AI extract

What is this about?

The High Court of Kerala dismissed a writ petition by a surety challenging a bank's notice to recover a loan from his salary. The Court held the debt was not barred by limitation, the creditor could proceed against a surety independently, and mortgage remedies need not be exhausted first.

What did the court decide?

The writ petition was dismissed for lack of merit.

C.Vinod Kumar Vs Thiruvananthapuram Service… — Contract and Commercial Disputes | Kerala HC (2021)

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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 SATHISH NINAN

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WEDNESDAY, THE 29^TH DAY OF SEPTEMBER 2021 / 7TH ASWINA, 1943

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WP(C) NO. 7649 OF 2021

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PETITIONER:

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C.VINOD KUMAR AGED 50 YEARS S/O. CHANDRAMOHANAB NAIR T/C 41/2111(10 MYTHRI NAGAR, VALIYAVILA, THIRUVANANTHAPURAM. BY ADVS. R.SUNIL KUMAR SMT.A.SALINI LAL

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RESPONDENTS:

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1 THIRUVANANTHAPURAM SERVICE CO-OPERATIVE BANK LTD REPRESENTED BY ITS SECRETARY, PRESS ROAD, PULIMOODU, THIRUVANANTHAPURAM 695 001.

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2 SALE OFFICER, THIRUVANANTHAPURAM SERVICE CO OPERATIVE BANK LIMITED, PRESS ROAD, PULIMOODU, THIRUVANANTHAPURAM 695 001.

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3 SINDHU, D/O. VASANTHA, KRA-1, KRISHNAPRABHA, POOZHIKUNU, INDUSTRIAL ESTATE P.O. THIRUVANANTHAPURAM 695 019.

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4 REENA, D/O. VASANTHA, KAMALAVILASOM, OPPOSITE ANJANAYA WORKSHOP, INDUSTRIAL ESTATE P.O. THIRUVANANTHAPURAM 695 019.

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5 M.S. SUJA , W/O. LATE RAVIKUMAR, JOSEPVILAS, VELYAMCODE, MARANELLOOR P.O. THIRUVANANTHAPURAM 695 126.

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BY ADVS. LIGEY ANTONY S.KRISHNA KUMAR (MANGALAM) D.SAJEEV VARSHA G NAIR

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29.09.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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SATHISH NINAN, J.

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= = = = = = = = = = = = = = = = = = W. P. (C) No.7649 of 2021 = = = = = = = = = = = = = = = = = = Dated this the 29^th day of September, 2021

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J U D G M E N T

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The petitioner is a surety for a loan availed by

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the predecessor-in-interest of respondents 3 to 5 from

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the 1^st respondent Bank. The loan was availed in the

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year 2004. Consequent on the default in repayment of the loan, the 1^st respondent filed ARC proceedings which culminated in Ext.P1 award dated 13.12.2013. At the time

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of sanction of the loan, the petitioner had executed an undertaking/agreement to have the debt recovered from his salary. Seeking recovery in terms of the agreement, Ext.P2 notice was issued by the Bank to the petitioner's employer for payment in terms of the agreement. It is aggrieved thereby that the petitioner has approached this Court.

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W. P. (C) No.7649 of 2021

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-: 2 :-

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Heard Sri.R.Sunilkumar the learned counsel for

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the petitioner, Sri.D.Sajeev the learned counsel for the

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1^st respondent and Sri.S.Krishnakumar the learned

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counsel for respondents 3 and 4.

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Sri.R.Sunilkumar, the learned counsel for the

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petitioner urges three pronged challenge:-

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(a) The debt is barred by limitation.

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(b) An award having been passed, the remedy is only

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to execute the award in terms of Section 76 of the Co-

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operative Societies Act.

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principal debtor, without exhausting remedy against the same, the salary of the petitioner cannot be proceeded against.

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As noted first above, award was passed on

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13.12.2013. Section 76 (b) (ii) of the Co-operative

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W. P. (C) No.7649 of 2021 -: 3 :-

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Societies Act provides that an award for recovery of money can be executed within twelve years from the date of award. The said period would expire only in the year

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Therefore, the plea of limitation is unfounded.

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As regards the contention that, having obtained

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an award the only remedy is to execute the same, this Court in Trivandrum Cooperative Agricultural Rural Development Bank v. State of Kerala (ILR 2004 (3) Ker. 282) held that, securing

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of an award does not operate against the applicability of Section 37 of the Co-operative Societies Act. The

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said view was followed in Sasidharan Nair V v. Trivandrum Cooperative Urban and others (2009 (2) KLT 280 . Moreover, it is to be noted that Section 37 says, “deduction for satisfaction of any debt or other demand owing by the member to the Society”. A debt payable under an award is nothing less but a debt or demand payable to the

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W. P. (C) No.7649 of 2021 -: 4 :-

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Society. So long as the debt or demand is outstanding,

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deduction of amounts from the salary towards the debt or

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demand could be effected in terms of Section 37.

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Therefore, the said contention fails.

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As regards the third contention that the

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respondent-Bank has to first proceed against the mortgaged property of the judgment debtor, it has to be stated that the debtor cannot dictate to the creditor as

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to the manner in which the debt is to be recovered. Unless otherwise restricted under the decree, it is

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within the wisdom of the creditor to choose such steps

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for easy and fast recovery of his debt. As per Section 128 of the Indian Contract Act, a surety's liability is co-existence with that of the principal debtor. The Apex Court has in SBI v. Indexport Registered (1992) 3 SCC 15 9 held

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that the creditor cannot be compelled to proceed first

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W. P. (C) No.7649 of 2021

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-: 5 :-

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against the principal debtor or the mortgaged property. In Bank of Bihar Ltd. v. Dr. Damodar Prasad AIR 1969 SC 297 , the

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Apex Court held, “The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the suerty...The security will become useless if his rights against the surety can be so easily cut down.” The option is with the creditor to decide as to the manner the debt is to be recovered. Rule 74 of the Co-operative Societies Rules also provide that it is the option of the decree-holder to decide on the mode of execution. Further, as per Rule 75, if the decree holder does not indicate the mode of execution, then movable assets are firstly liable to be proceeded against and then only the immovable property need be proceeded against. Anyway, that question arises only when the award is sought to be executed in terms of

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W. P. (C) No.7649 of 2021

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-: 6 :-

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Section 76 of the Act r/w Rule 74 of the Rules. It does not come into play in the present case since there is no such proceeding. Therefore, the said contention also fails.

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To conclude, the contentions of the petitioner

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are devoid of merit and are only to be rejected.

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The writ petition fails and is accordingly

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dismissed.

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Sd/- SATHISH NINAN JUDGE

kns/-

//True Copy//

P.S. to Judge

APPENDIX OF WP(C) 7649/2021

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PETITIONER EXHIBITS

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EXHIBIT P1 TRUE COPY OF THE AWARD IN FILE NUMBER 1471/2011 OF ASSISTANT REGISTRAR (GENERAL) CO OPERATIVE SOCIETIES. EXHIBIT P2 TRUE COPY OF THE LETTER ISSUED FROM THE RESPONDENT BANK DATED 18/1/2021. EXHIBIT P3 TRUE COPY OF THE LETTER ISSUED BY THE PETITIONER TO THE 1ST RESPONDENT BANK DTD. 9.3.2021. EXHIBIT P4 TRUE COPY OF THE LETTER DATED 9/3/2021 ISSUED BY THE PETITIONER TO THE 2ND RESPONDENT.

C.Vinod Kumar v. Thiruvananthapuram Service Co-Operative Bank Ltd.

Case brief

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C.Vinod Kumar v. Thiruvananthapuram Service Co-Operative Bank Ltd.

Case brief

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