IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN TUESDAY, THE 13TH DAY OF DECEMBER 2011/22ND AGRAHAYANA 1933 WPC.No. 25617 of 2010 (B) ===================== PETITIONER(S) ============= 1 JOHN MATHEW,S/O. LATE MATHEW, AGED 50 KARIKAVAYALIL KADANADU.P.O KOTTAYAM DIST. BY ADVS. SRI.P.K.IBRAHIM RESPONDENT(S) ============== 1 THE KADANAD SERVICE CO-OPERATIVE BANK LTD. NO.K.2 KOLLAPPILLY ANTHINAD.P.O. PIN-686651 KOTTAYAM DIST. KERALA STATE REP. BY ITS SECRETARY. 2 SECRETARY TO CO-OPERATION, (GENERAL), SECRETARIAT TRIVANDRUM-695001. 3 THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL) COLLECTORATE KOTTAYAM-686001. 4 THE ASSISTANT REGISTRAR (GENERAL) CO-OPERATIVE SOCIETIES(GENERAL) MEENACHIL PALA-686589. WPC.No. 25617 of 2010 (B) 5 STATE OF KERALA, REP. BY SECRETARY TO CO-OPERATIVE DEPARTMENT SECRETARIAT TRIVANDRUM-695001. 6 SPECIAL SALE OFFICER, KIDANGOOR SCB GROUP KIDANGOOR OFFICE OF THE ASST. REGISTRAR OF CO-OPERATIVE SOCIETIES MEENACHIL PALA-686589. 7 THE GENERAL MANAGER, KOTTAYAM DISTRICT CO-OPERATIVE BANK KOTTAYAM-686001. BY ADVS.SRI.T.A.SHAJI SRI.MATHEW JOHN (K) BY GOVERNMENT PLEADER SRI. VINCENT BY SRI.T.A.SHAJI, SC, KOTTAYAM DIST.CO-OP. BANK THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 13-12-2011 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: DCS WPC.No. 25617 of 2010 (B) APPENDIX PETITIONER'S EXHIBITS :- EXT.P1 COPY OF THE REJECTION OF THE PETITIONER'S APPLICATION FOR WRITE OFF THE LOAN EXT.P2 COPY OF THE PETITION FILED BY THE PETITIONER BEFORE THE THIRD RESPONDENT AND OTHER REVENUE AUTHORITIES EXT.P3 COPY OF THE JUDGMENT IN W.P.C. 25152 OF 2008 DT. 20.08.2008 EXT.P4 COPY OF THE ORDER PASSED BY THE 4TH RESPONDENT DATED 22.09.2008 EXT.P5 COPY OF THE SALE NOTICE EXT.P6 COPY OF THE JUDGMENT IN W.P.C. 31761 OF 2008 DT, 29.10.2008 EXT.P7 COPY OF THE ORDER OF THE 3RD RESPONDENT DT. 31.12.2008 EXT.P8 COPY OF THE LAWYER NOTICE FORWARDED TO RESPONDENTS 1 AND 7 DT. 01.02.2009 EXT.P9 COPY OF THE LAWYER NOTICE DT. 03.03.2009 ISSUED TO THE FIRST RESPONDENT EXT.P10 COPY OF THE LAWYER NOTICE DT. 03.02.2009 EXT.P11 COPY OF THE JUDGMENT IN W.P.C. 23793 OF 2009 DT. 20.08.2009 EXT. P12 COPY OF THE LETTER OF THE FIRST RESPONDENT BANK TO THE 7TH RESPONDENT EXT.P13 COPY OF THE SALE NOTICE ISSUED BY THE 6TH RESPONDENT DCS WPC.No. 25617 of 2010 (B) RESPONDENT'S EXHIBITS:- EXT.R1(a) COPY OF THE LETTER DATED 25.04.2009 BY THE EXECUTIVE OFFICER OF THE KOTTAYAM DISTRICT CO-OPERATIVE BANK LTD. EXT.R1(b) COPY OF THE LETTER DATED 26.04.2009 BY THE GENERAL MANAGER. /TRUE COPY/ P.A. TO JUDGE DCS P.N.RAVINDRAN, J. --------------------------- W.P.(C) No. 25617 OF 2010 -------------------------- Dated this the 13th day of December, 2011 J U D G M E N T The petitioner availed two loans from the first respondent co- operative society. When the loans were not repaid, the society filed ARC Nos.4580 and 4622 of 2005 before the Assistant Registrar of Co- operative Societies, Meenachil. In the said arbitration cases awards were passed and they have attained finality. Even thereafter the petitioner did not repay the loans. The society thereupon took steps to execute the awards. In execution of the awards, two items of immovable properties belonging to the petitioner were brought to sale on 25.11.2008. Shortly before the property was brought to sale, the petitioner filed a representation dated 6.8.2008 before the Joint Registrar of Co-operative Societies (General), Kottayam seeking the benefit of the Agricultural Debt Waiver and Debt Relief Scheme, 2008. He thereafter filed W.P.(C) No. 25152 of 2008 in this Court wherein he sought expeditious orders on the said representation. By Ext.P3 judgment delivered on 20.8.2008 a learned Single Judge of this Court disposed of W.P.(C) No. 25152 of 2008 with a direction to the Joint Registrar of Co-operative Societies to take an appropriate decision on the said representation within two months from the date of receipt of WPC No.25617/2010 2 a copy of the judgment. The Joint Registrar of Co-operative Societies rejected the petitioner's request by letter dated 22.9.2008. It was thereafter that two items of immovable properties belonging to the petitioner were brought to sale on 25.11.2008. 2. The petitioner thereupon filed W.P.(C) No.31761 of 2008 in this Court wherein he claimed the benefit of the Agricultural Debt Waiver and Debt Relief Scheme, 2008 (hereinafter referred to as 'the Scheme' for short). By Ext.P6 judgment delivered on 29.10.2008, a learned Single Judge of this Court directed the Joint Registrar of Co- operative Societies (General), Kottayam to take an appropriate decision in the matter, within a period of three months. This Court also directed that until such time as a decision is taken in the matter , further proceedings pursuant to the impugned proceedings will remain suspended. The Joint Registrar of Co-operative Societies thereafter considered the petitioner’s representation, heard him, the President and Secretary of the first respondent society and others and passed Ext.P7 order dated 31.12.2008. By that order, the Joint Registrar of Co-operative Societies directed the first respondent society to forward in the prescribed proforma, the details necessary for considering the petitioner’s claim for benefits under the Scheme. The Joint Registrar of Co-operative Societies also directed the General Manager of WPC No.25617/2010 3 Kottayam District Co-operative Bank to consider whether the petitioner is eligible for benefits under the Scheme. 3. The petitioner thereafter caused Exts.P8, P9 and P10 notices to be issued to the first respondent society through his lawyer wherein he called upon the first respondent society and the General Manager of Kottayam District Co-operative Bank to comply with the directions issued by the Joint Registrar of Co-operative Societies in Ext.P7 order. The petitioner thereafter filed W.P.(C) No.23793 of 2009 in this Court. By Ext.P11 judgment delivered on 20.8.2009, a learned Single Judge of this Court held that if Ext.P7 order has become final, the first respondent society is bound to take further action on Ext.P7 as demanded in Exts.P8 and P9 and to do the needful in the matter within three weeks from the date of production of a copy of the judgment. The petitioner states that though pursuant to Ext.P11 judgment, the Secretary of the first respondent society forwarded Ext.P12 letter to the General Manager of Kottayam District Co-operative Bank recommending that the petitioner is entitled to benefits under the Scheme, all on a sudden Ext.P13 sale notice was issued by the sixth respondent Special Sale Officer proposing to sell two items of immovable property on 20.8.2010. In this writ petition, the petitioner challenges Ext.P13 and seeks the following reliefs: WPC No.25617/2010 4 “i. Issue a writ of certiorari or any other appropriate writs, directions or orders quashing Ext.P13 proceedings. ii. Issue a writ of mandamus or any other appropriate writs, directions or orders commanding respondents 1, 3 and 7 to obey and comply with the directions contained in Exts.P6 and P7. iii. Issue a writ of mandamus or any other appropriate writs, directions or orders commanding respondents 1, 3 and 7 to make immediate arrangements to renew the petitioner's loan application with regard to banana and tapioca cultivation.” 4. It is contended that as Ext.P11 judgment, whereby this Court directed the first respondent society to take further action pursuant to Ext.P7 order has attained finality, the steps taken by the sixth respondent Special Sale Officer to sell the property mortgaged by the petitioner at the time of availing the loans, without extending to him benefits under the Scheme, is arbitrary and illegal. It is contended that the Secretary of the first respondent society has in Ext.P12 letter recommended grant of benefits under the Scheme to the petitioner and therefore for that reason also the steps taken by the respondents to sell the property are liable to be set aside. 5. The first respondent society has filed a counter affidavit wherein it is stated that pursuant to Ext.P7 order it placed the necessary details before the General Manager of the Kottayam District Co-operative Bank to enable him to consider the question whether the WPC No.25617/2010 5 petitioner is eligible for benefits under the Scheme, that thereupon, the Executive Officer of Kottayam District Co-operative Bank sent Ext.R1(a) letter which is styled as a report to the Deputy General Manager of Kottayam District Co-operative Bank pointing out that the petitioner is not eligible for benefits under the Scheme for the reasons stated therein, that pursuant thereto, the General Manager of the Kottayam District Co-operative Bank sent Ext.R1(b) letter dated 26.4.2009 to the Joint Registrar of Co-operative Societies (General), Kottayam pointing out that the petitioner is not eligible for benefits under the Scheme and therefore necessary directions may be issued in the matter. It is contended that the loans availed by the petitioner are not eligible for benefits under the Scheme and therefore the petitioner is not entitled to any relief. It is also stated that pursuant to Ext.P7 order the petitioner’s eligibility for benefits under the Scheme was considered and he was found ineligible for benefits thereunder. The sixth respondent has sworn to a counter affidavit dated 3.2.2011 wherein relying on Ext.R1(a) letter it is contended that the petitioner is not entitled to benefits under the Scheme. The petitioner has filed a reply affidavit dated 14.3.2011 contending that in view of Ext.P7 order wherein he was found eligible for benefits under the Scheme, the stand taken by the respondents cannot be sustained. WPC No.25617/2010 6 6. I heard Sri.P.K.Ibrahim, learned counsel appearing for the petitioner, Sri.Domson J.Vattakuzhy, learned counsel appearing for the first respondent, Sri.Vincent, learned Government Pleader appearing for respondents 2 to 6 and Sri.T.A.Shaji, learned standing counsel appearing for the seventh respondent. The learned counsel appearing for the petitioner contended that in view of Ext.P7 order and Ext.P11 judgment of this Court which have attained finality, the respondents are bound to extend to the petitioner benefits under the Scheme. The learned counsel for the petitioner contended that in view of the categorical finding in Ext.P7 that the petitioner is entitled to benefits under the Scheme, the sale of the property for realisation of the amounts due from him is illegal. Per contra, the learned counsel for the respondents contended that the only direction issued by the Joint Registrar of Co-operative Societies in Ext.P7 was to consider the petitioner's entitlement for benefits under the Scheme and after such consideration he was found ineligible for benefits under the Scheme. 7. I have considered the submissions made at the Bar by the learned counsel appearing on both sides. I have also gone through the pleadings and the materials on record. Ext.R1(a) letter sent by the Executive Officer of Kottayam District Co-operative Bank discloses that the petitioner had availed a loan of Rs.75,000/- from the first WPC No.25617/2010 7 respondent society on 7.11.2000 for repayment of another loan. The loan was an Own Fund Ordinary Loan (OFOL 3782), carried interest at 18% per annum and had to be repaid over a period of 12 months. The petitioner committed default in repayment of that loan and as on 7.11.2001, the sum of Rs.44,500/- was due from him towards principal and the sum of Rs.3,500/- was due by way of interest. When the petitioner committed default in repaying the loan availed by him on 7.11.2000, the Managing Committee of the first respondent society resolved to grant a fresh loan of Rs.48,000/- (Rs.44,500+Rs.3500). For that purpose the petitioner submitted an application wherein he stated that the loan is required to raise tapioca crop. On that application the sum of Rs.48,000/- was sanctioned as loan on 21.11.2001, but there was no payment of money to the petitioner. The entire amount of Rs.48,000/- sanctioned as loan on 21.11.2001 was adjusted in the books of account for repayment of the loan availed on 7.11.2000. The period fixed for repayment of the loan sanctioned on 21.11.2001 was 12 months. The petitioner had likewise availed another loan of Rs.25,000/- on 5.12.2001 for agricultural purpose. The said loan also became over due on 5.11.2002. Thereupon a fresh loan OFMT 8013 (Own Fund Medium Term Loan) was sanctioned on 20.9.2003 with a repayment schedule of 30 months. It is in the WPC No.25617/2010 8 background of these facts that this Court has to consider whether the petitioner is entitled to benefits under the Scheme and whether he had been found eligible for such benefits by Ext.P7 order. 8. The term Direct Agricultural Loan is defined in paragraph 3.1 of the Scheme as follows: “Direct Agricultural Loans means Short Term Production Loans and Investment Loans provided directly to farmers for agricultural purposes. This would also include such loans provided directly to groups of individual farmers (for example Self Help Groups and Joint Liability Groups), provided banks maintain disaggregated data of the loan extended to each farmer belonging to that group.” Short Term Production Loans and Investment Loans provided directly to farmers for agricultural purposes are covered by the said definition. The term Short Term Production Loan is defined in paragraph 3.2 of the Scheme as follows: “Short Term Production Loan means a loan given in connection with the raising of crops which is to be repaid within 18 months. It will include working capital loan, not exceeding Rs.1 lakh, for traditional and non-traditional plantations and horticulture. (emphasis supplied) As per the said definition, a Short Term Production Loan is a loan given in connection with the raising of crops and has to be repaid within 18 months. 9. The term Investment Loan is defined in paragraph 3.3 of the Scheme as follows: WPC No.25617/2010 9 “Investment Loan means (a) Investment credit for direct agricultural activities extended for meeting outlays relating to the replacement and maintenance of wasting assets and for capital investment designed to increase the output from the land, e.g. Deepening of wells, sinking of new wells, installation of pump sets, purchase of tractor/pair of bullocks, land development and term loan for traditional and non-traditional plantations and horticulture; and (b) Investment credit for allied activities extended for acquiring assets in respect of activities allied to agriculture e.g. dairy, poultry farming, goatery, sheep rearing, piggery, fisheries, bee-keeping, green houses and biogas.” 10. The petitioner has no case that the loans granted to him are investment loans. Therefore this Court need not examine whether the loans advanced to him fall within the definition of the term investment loan. His case is that the loans were availed for agricultural purposes. Then the question is whether the loans were short term production loans. Going by the definition of the said term only loans given in connection with the raising of crops which are to be repaid within 18 months are covered under the Scheme. It is evident from Ext.R1(a) letter that the loan of Rs.25,000/- (OFMT 8013) sanctioned on 20.9.2003 was a medium term loan repayable over a period of 30 months. When that loan was sanctioned and the earlier loan sanctioned on 5.12.2001 was renewed, the Agricultural Debt Waiver and Debt Relief Scheme, 2008 was not even in contemplation. The WPC No.25617/2010 10 petitioner cannot therefore be heard to contend that a medium term loan repayable over a period of 30 months was sanctioned on 20.9.2003 to get over the provisions of the Scheme. Since the loan sanctioned on 20.9.2003 was a medium term loan repayable over a period of 30 months, going by the definition of the term Short Term Production Loan occurring in the Scheme, the petitioner cannot claim any benefit under the Scheme in respect of that loan. The same is the situation as regards the loan sanctioned as OFOL 3782 and also the loan of Rs.48,000/- which was sanctioned as OFOL 4070. The loan OFOL 3782 (Own Fund Ordinary Loan) was sanctioned on 7.11.2000 to enable the petitioner to repay an earlier loan and it was repayable over a period of 12 months with interest at 18%. The time for repayment of that loan expired on 7.11.2001. As on that day the sum of Rs.48,000/- was due from him. It was to repay that loan, which was in arrears, that the second loan OFOL 4070 was sanctioned. The amount sanctioned as loan was not disbursed to the petitioner. Instead it was adjusted in the books. This was also done at a point of time when the Scheme was not even thought of. Therefore the petitioner cannot in respect of that loan also contend that a fresh loan was granted to clear a pre-existing loan with a view to deny benefits under the Scheme to him. It is evident from Ext.R1(a) letter that the WPC No.25617/2010 11 loan of Rs.48,000/- was really not availed for agricultural purposes. It was sanctioned for repayment of a loan which was availed earlier for repayment of a pre-existing debt. By no stretch of imagination can it be said that the said loan is covered by the Scheme. 11. That takes me to the question whether as contended by the learned counsel for the petitioner the Joint Registrar of Co-operative Societies had in Ext.P7 order found the petitioner eligible for benefits under the Scheme. It is evident from the last two paragraphs of Ext.P7 order that the Joint Registrar of Co-operative Societies had only held that the petitioner’s claim for benefits under the Scheme has to be considered. He did not in unequivocal terms hold that the petitioner is entitled for benefits under the Scheme. All that was done in Ext.P7 order was to direct the first respondent society to forward the details necessary for considering the petitioner's claim for benefits under the Scheme in the prescribed proforma to the Kottayam District Co-operative Bank. The General Manger of the Kottayam District Co- operative Bank was directed to examine the proposal and to revert back to the Joint Registrar of Co-operative Societies. That was done though belatedly when Ext.R1(b) letter was sent. In such circumstances, as Ext.P7 order did not finally decide the rights of parties but had only directed the General Manger to consider the WPC No.25617/2010 12 petitioner’s eligibility for benefits under the Scheme, nothing turns on the direction in Ext.P11 judgment. That apart, by Ext.P11 judgment this Court had only directed the first respondent society to take further action on Ext.P7 as demanded in Exts.P8 and P9. What was demanded in Exts.P8 and P9 was compliance with the directions in Ext.P7. That direction stood complied with when the first respondent society forwarded the proposal which ultimately did not find acceptance at the hands of the General Manager of Kottayam District Co-operative Bank. Such being the situation, I am constrained to hold that the case put forward by the petitioner that he has been illegally denied benefits under the Scheme cannot be sustained. The first respondent society and the sixth respondent Special Sale Officer were therefore perfectly justified in proceeding to sell the security in execution of two awards that have attained finality. I accordingly hold that the challenge to Ext.P13 is misconceived and without any merit. The writ petition fails and it is dismissed. The parties shall bear their respective costs. P.N.RAVINDRAN, (JUDGE) vps WPC No.25617/2010 13 WPC No.25617/2010 14 WPC No.25617/2010 15