Disposed

Pushpa Ojha v. Almora Urban Co-Operative Bank Ltd.

Uttarakhand HC15 Dec 2020WPMS/2685/2019

Case brief

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What is this about?

The High Court disposed of a writ petition filed by a guarantor challenging a recovery citation and seeking relief to limit liability after deducting the value of auctioned secured assets. The Court held that guarantor liability is coextensive with the borrower's but, on humanitarian grounds, granted liberty to make a representation to the bank.

What did the court decide?

Liberty granted to petitioner to make representation to Competent Authority in Bank within ten days; bank to decide within two weeks; no coercive measures till decision.

Pushpa Ojha Vs Almora Urban Co-Operative Bank Ltd. — Service and Employment | Uttarakhand HC (2020)

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WPMS No. 2685 of 2019

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Hon’ble Manoj K. Tiwari, J.

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Mr. Manish Lahoni, Advocate holding brief of Mr. Amish Tewari, Advocate for the petitioner.

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Mr. Siddhartha Sah, Advocate for respondent-Bank.

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Mr. Vinod Nautiyal, Deputy Advocate General for the State of Uttarakhand.

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Heard learned counsel for the parties through video conferencing.

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Petitioner is guarantor in respect of a loan taken by Smt. Renu Pandey from Almora Urban Co-operative Bank, Branch Champawat. Since the principal borrower defaulted in repayment of loan, therefore, respondent Bank invoked Section 71 of the Uttarakhand Cooperative Societies Act, 2003 by referring the matter to Arbitrator.

¶8

The Arbitrator gave its award and decreed the claim of the Bank for recovery of `22,09,587.36 + interest from borrower and guarantor. The borrower challenged the award before Cooperative Tribunal by filing an appeal; however, the said appeal was subsequently dismissed for nonprosecution. Thus, the award of Arbitrator has attained finality.

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By means of this writ petition, petitioners have sought following relief:-

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(i) Issue a writ, order or direction in the nature of certiorari to quash the recovery citation dated 09.05.2019 i.e. annexure no. 3 passed by the respondents no. 3 & 4.

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(ii)Issue a writ, order or direction in the nature of mandamus directing the respondent no. 1 to accept the liability of the petitioner/guarantor to the extent of 1/3 (as there are three guarantors) after deducting the wroth of property attached from the amount of total liability of the principal borrower Smt. Renu Pandey.

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Learned counsel for the petitioner submits that petitioner is ready to repay only that part of the loan amount which remains after auction sale of the secured assets. He confines his prayer and submits that petitioner be permitted to make representation to the Competent Authority in the Bank and the Competent Authority be directed to take decision thereupon.

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It is settled position in law that liability of the guarantors in respect of loan is coextensive with that of the borrower. Thus, the relief claimed in the writ petition cannot be granted.

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However, having regard to the facts and circumstances of the case, the writ petition is disposed of with liberty to the petitioner to make representation to the Competent Authority in the Bank. If such representation is made within ten days from today, the Competent Authority in the Bank shall take decision thereupon, in accordance with law, within a period of two weeks thereafter.

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Till decision is taken on petitioner’s representation, no coercive measures shall be taken against them.

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Let certified copy of this order be supplied to the petitioners within 24 hours.

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(Manoj K. Tiwari, J.)

¶18

Aswal

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15.12.2020

Pushpa Ojha v. Almora Urban Co-Operative Bank Ltd.

Case brief

What is this about?

What did the court decide?

Pushpa Ojha v. Almora Urban Co-Operative Bank Ltd.

Case brief

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What did the court decide?

What the court decided

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