Disposed

Thiruvananthapuram North Co-Operative Society Ltd. NO.T-1531, v. the Employment Director

Kerala HC22 May 2023WP(C)/5764/2022

Case brief

AI extract

What is this about?

This writ petition sought directions to recover loan dues from the retirement benefits of corporate sureties. The court held that the factual dispute regarding the consent deeds must be decided via statutory remedy under the Co-operative Societies Act, relegating the petitioner to that path while retaining an interim stay on disbursement.

What did the court decide?

Petitioner directed to file police application under the Kerala Co-operative Societies Act within one month. Interim stay on disbursement of retirement benefits for six months retained.

Thiruvananthapuram North Co-Operative… — Contract and Commercial Disputes | Kerala HC (2023)

¶1

W.P.(C).No.5764/2022

¶2

¶3

IN THE HIGH COURT OF KERALA AT ERNAKULAM

¶4

PRESENT

¶5

THE HONOURABLE MR. JUSTICE T.R.RAVI

¶6

MONDAY, THE 22 N D DAY OF MAY 2023 / 1ST JYAISHTA, 1945 WP(C) NO. 5764 OF 2022

¶7

PETITIONER:

¶8

THIRUVANANTHAPURAM NORTH CO-OPERATIVE SOCIETY LTD. NO.T-1531, KURAVANKONAM, KOWDIAR P.O., THIRUVANANTHAPURAM-3, REPRESENTED BY ITS SECRETARY, RADHEESH SASI.

¶9

BY ADVS. SRI.D.SAJEEV SRI.LIGEY ANTONY

¶10

RESPONDENTS:

¶11

1 THE EMPLOYMENT DIRECTOR, NATIONAL EMPLOYMENT SERVICE (KERALAM), EMPLOYMENT DIRECTORATE, VIKAS BHAVAN P.O., THIRUVANANTHAPURAM-695 133.

¶12

2 THE INSPECTOR GENERAL & COMMISSIONER OF POLICE, CITY POLICE OFFICE, KOCHI CITY, ERNAKULAM, PIN-682 001.

¶13

3 SARMILA.I.J., MEMBER NO.861, STEVE DALE, MRA 129-A, MOOLAVILAKAM, VANCHIYOOR P.O., THIRUVANANTHAPURAM-695 035.

¶14

4 ASWIN KUMAR.K.S., MEMBER NO.862, STEVE DALE, MRA 129-A, MOOLAVILAKAM, VANCHIYOOR P.O., THIRUVANANTHAPURAM-695 035.

¶15

5 K.E.ABRAHAM, MEMBER NO.863, KALAPURAKKAL HOUSE, ERAMALLOOR P.O., CHERTHALA,

¶16

W.P.(C).No.5764/2022

¶17

¶18

ALAPPUZHA, PIN-638 387, (WORKING AS JR.SUPERINTENDENT, CITY POLICE OFFICE, KOCHI CITY, ERNAKULAM, PIN-682 001).

¶19

6 S.JAYASANKAR KUMAR, MEMBER NO.864, JAYA NIKETHANA, TEMPLE ROAD, VARKALA P.O., THIRUVANANTHAPURAM-695 141, (WORKING AS EMPLOYMENT OFFICER, EMPLOYMENT DIRECTORATE, VIKAS BHAVAN P.O., THIRUVANANTHAPURAM-695 133). BY ADVS. SRI.LEEJOY MATHEW.V. SRI.C.S.MANILAL SRI.S.NIDHEESH SMT.MABLE C.KURIAN, SR.GOVT.PLEADER

¶20

THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 29.11.2022, THE COURT ON 22.05.2023 DELIVERED THE FOLLOWING:

W.P.(C).No.5764/2022

T.R. RAVI, J.

W.P.(C)No.5764 of 2022

¶25

Dated this the 22^nd day of May, 2023

¶26

JUDGMENT

¶27

Petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act,1969 (hereinafter referred to as the Act). The 3^rd respondent had availed of a loan and Ext.P1 is the loan application. Respondents 4 to 6 are the sureties for the loan. The sureties had produced non-liability certificates issued by their employers at the time of availing of the loan by the 3^rd respondent. The employers had also issued confirmation certificates in relation to the certificates. The sureties had consented to repay the loan from out of their salaries and properties, in case of default in payment by the 3^rd respondent. Exts.P9 and P10 agreements were also executed by the 4^th and 6^th respondents respectively, agreeing that in case of default and if their salary is not sufficient for the realisation of the dues, the same can be realized from the pensionary benefits and DCRG payable to them. The agreements are countersigned by their employers, undertaking to effect recovery of arrears from the

¶28

W.P.(C).No.5764/2022

¶29

¶30

benefits payable to the sureties and remit such amounts to the petitioner society.

¶31

The principal debtor committed default from the very

¶32

beginning and the petitioner issued notices to respondents 3 to 6 asking them to remit the arrears within 10 days from the receipt of notice. Further notice was issued to respondents 3 to 6 demanding an amount of Rs.5,46,300/- and informing them that proceedings under Section 37(1)(2) of the Act will be initiated without further notice, in case of non-payment. Requests to deduct the amount from the salary were also issued to the 1^st respondent. The petitioner also issued Ext.P16 notice to the District Treasury Officer, Wayanad requesting to recover Rs.4,95,000/-from the pensionary benefit of the 4^th respondent towards arrears for the loan. The writ petition has been filed seeking direction for recovery.

¶33

The 6^th respondent has filed a counter-affidavit. It is contended that a writ petition will not lie to enforce a contractual liability based on the tripartite agreement. It is submitted that the petitioner has a statutory remedy under the Act as well as the remedy by means of a civil suit. It is further submitted that willingness for recovery from salary alone has been given and

¶34

W.P.(C).No.5764/2022

¶35

¶36

there is no consent to recover from DCRG or retirement benefits. It is contended that DCRG or pension cannot be attached.

¶37

The 1^st respondent has also filed a counter-affidavit giving details of the amounts that had been recovered from the salary of the 6^th respondent and remitted to the petitioner towards the loan. Reliance is placed on the decision of the Hon’ble Supreme Court in Radhey Shyam Gupta vs. Punjab National Bank and Ors, 2009(1) SCC 376 to submit that retirement benefits like pension and gratuity cannot be attached by authorities for recovery of debts. It is submitted that the countersignatures by other officers have no legal sanctity as far as DCRG is concerned as the pension sanctioning authority of both 4^th and 6^th respondents is the Director of Employment.

¶38

The prayer in the writ petition is for a direction to the 1^st respondent to recover an amount of Rs.5,18,951/- from the pensionary benefits including DCRG payable to respondents 4 and 6 who are sureties in loan No.52/14-15, in the light of Exts.P9 and P10 consent deeds and Exts.P17 and P18 recovery requests made by the petitioner. It is not in dispute that respondents 4 and 6 have stood as sureties for the loan availed by the 3^rd respondent. Exts.P9 and P10 are stated to be consent letters

¶39

W.P.(C).No.5764/2022

¶40

¶41

issued by the sureties agreeing that the amount due under the loan account can be recovered from the DCRG and other retirement benefits due to them from their employer. A dispute has been raised as to whether Exts.P9 and P10 would amount to such a consent and whether the Officers who have given consent are entitled to countersign the said documents. The question whether amounts can be recovered from the DCRG under the Kerala Service Rules was considered by a Full Bench of this Court and in the decision in Chandran K. & Ors. V. Secretary, Local

¶42

Self Government Department & Ors. reported in [2020 (5) KHC 273] , it was held that DCRG stands excluded specifically under Rule 3 of KSR Part III. This Court also struck down Rule 3A which permits withholding of DCRG. The judgment of the Full Bench was challenged before the Hon’ble Supreme Court and by the judgment in Secretary, Local Self Government Department & Ors. V. Chandran K. & Ors. reported in [2022 (2) KHC 523] , the Hon’ble Supreme Court set aside the judgment of the Full Bench and held that it could not be opined that DCRG would have to be released in all situations. It was further held that if in the absence of disciplinary or judicial proceedings, in certain eventualities, amounts can be recovered

¶43

W.P.(C).No.5764/2022

¶44

¶45

from the DCRG. It can thus be seen that there is no absolute bar for withholding amounts from the DCRG. The only question then would be whether such a recovery can be made based on the consent expressed in Exts.P9 and P10. In the light of the specific dispute raised as to the effect of Exts.P9 and P10, I am of the opinion that it would not be proper for this Court in exercise of its jurisdiction under Article 226 of the Constitution to decide the issue, which is not a purely legal issue and will have to be considered on the basis of evidence. Interests of justice will be served if the petitioner is relegated to their statutory remedy under the Co-operative Societies Act for determination of the issue, retaining the interim direction issued by this Court to withhold a portion of the retirement benefits to respondents 4 and 6. The writ petition is hence disposed of directing the petitioner to invoke their statutory remedy for determination of the liability of respondents 4 and 6 as per the contract entered into between them and the petitioner. The necessary application shall be filed within one month from the date of receipt of a certified copy of this judgment. If such an application is filed as directed above, the period during which the matter was pending before this Court shall be excluded for the purpose of calculating

¶46

W.P.(C).No.5764/2022

¶47

¶48

the period of limitation for preferring the application. The interim direction issued on 21.2.2022 by this Court that an amount of Rs.2,25000/- each from the retirement benefits payable to respondents 4 and 6 shall not be disbursed, shall continue for a period of six months from today, during which time, the petitioner shall move the appropriate authority for interim directions to safeguard their rights.

T.R.RAVI JUDGE

dsn

W.P.(C).No.5764/2022

APPENDIX OF WP(C) 5764/2022

¶54

PETITIONER'S EXHIBITS

¶55

Exhibit P1 TRUE COPY OF THE LOAN APPLICATION SUBMITTED BY THE 3RD RESPONDENT BEFORE THE PETITIONER SOCIETY. Exhibit P2 TRUE COPY OF THE NON-LIABILITY CERTIFICATE DATED 04.09.2014 PRODUCED BY THE 4TH RESPONDENT. Exhibit P3 TRUE COPY OF THE NON LIABILITY CERTIFICATE DATED 25.08.2014 PRODUCED BY THE 5TH RESPONDENT. Exhibit P4 TRUE COPY OF THE NON LIABILITY CERTIFICATE PRODUCED BY THE 6TH RESPONDENT BEFORE THE BANK DATED 25.08.2014. Exhibit P5 TRUE COPY OF THE LOAN BOND DATED 14.11.2014 EXECUTED BY THE PRINCIPAL DEBTOR AND THE RESPONDENTS 4 TO 6 IN FAVOUR OF THE PETITIONER. Exhibit P6 TRUE COPY OF THE CONSENT DEED EXECUTED BY THE 4TH RESPONDENT AGREEING FOR SALARY RECOVERY AND RECOVERY FROM MOVABLE AND IMMOVABLE ASSETS. Exhibit P7 TRUE COPY OF THE CONSENT DEED EXECUTED BY THE 5TH RESPONDENT AGREEING FOR RECOVERY FROM SALARY AS WELL AS MOVABLE AND IMMOVABLE ASSETS. Exhibit P8 TRUE COPY OF THE CONSENT DEED EXECUTED BY THE 6TH RESPONDENT AGREEING FOR RECOVERY FROM SALARY AS WELL AS MOVABLE AND IMMOVABLE ASSETS. Exhibit P9 TRUE COPY OF THE AGREEMENT EXECUTED BY THE 4TH RESPONDENT AGREEING RECOVERY FROM SALARY AND PENSIONARY BENEFITS INCLUDING DCRG. Exhibit P10 TRUE COPY OF THE AGREEMENT EXECUTED BY THE

¶56

W.P.(C).No.5764/2022

¶57

¶58

6TH RESPONDENT AGREEING RECOVERY FROM SALARY AND PENSIONARY BENEFITS INCLUDING DCRG DATED 22.09.2014.

¶59

Exhibit P11 TRUE COPY OF NOTICE DATED 25.02.2015 ISSUED TO THE 3RD RESPONDENT. Exhibit P12 TRUE COPY OF THE NOTICE DATED 25.03.2015 ISSUED TO THE 4TH RESPONDENT. Exhibit P13 TRUE COPY OF THE NOTICE DATED 25.03.2015 ISSUED TO THE 6TH RESPONDNET. Exhibit P14 TRUE COPY OF SALARY RECOVERY REQUEST DATED 18.05.2015 ISSUED TO THE 1ST RESPONDENT. Exhibit P15 TRUE COPY OF THE SALARY RECOVERY REQUEST DATED 19.05.2015 ISSUED TO THE 1ST RESPONDENT. Exhibit P16 TRUE COPY OF THE NOTICE DATED 17.03.2017 ISSUED TO THE DISTRICT TREASURY OFFICER, WAYANADU. Exhibit P17 TRUE COPY OF THE REQUEST DATED 27.07.2017 ISSUED TO THE 1ST RESPONDENT TO EFFECT RECOVERY FROM THE 4TH RESPONDENT. Exhibit P18 TRUE COPY OF THE REQUEST DATED 21.01.2022 ISSUED TO THE 1ST RESPONDENT TO EFFECT RECOVERY FROM THE 6TH RESPONDENT.

¶60

RESPONDENTS' EXHIBITS

¶61

Exhibit R6(a)	TRUE COPY OF THE LETTER OF THE GOVERNMENT DATED 4/12/2017
Exhibit R6(b)	TRUE COPY OF THE LETTER OF THE GOVERNMENT DATED 25/7/2016
Exhibit R6(c)	TRUE COPY OF THE LETTER GIVEN TO THE
	RESPONDENT ON 2/7/2021, ATTESTED BY THE
	SECRETARY OF THE PETITIONER
ANNEXURE R1(A)	A TRUE COPY OF THE GOVERNMENT LETTER DATED
	04.05.2017

Thiruvananthapuram North Co-Operative Society Ltd. NO.T-1531, v. the Employment Director

Case brief

What is this about?

What did the court decide?

Thiruvananthapuram North Co-Operative Society Ltd. NO.T-1531, v. the Employment Director

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

K.J.Raju, Vs State Bank of India

Mrs. Bushara @ Busharabi., Vs the Authorized Officer

Georgekutty M.C Vs PNB Housing Finance Limited

M.T.Thankachan, Vs State of Kerala

Syamala Devi Vs State of Kerala

Sankaran Vs the Land Acquisition Officer & Special Tahsildar (La)