IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON WEDNESDAY, THE 8TH JUNE 2011 / 18TH JYAISHTA 1933 WP(C).No. 6462 of 2009(C) ------------------------- PETITIONER: --------------- BABY JOSEPH, S/O.JOSEPH, AGED 45 YEARS, KUTHIVALACHEL HOUSE, KANATTUPARA P.O., KOTTAYAM. BY ADV. SRI.JAMES KURIAN RESPONDENTS: --------------- 1. UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF FINANCE, NEW DELHI. 2. THE RESERVE BANK OF INDIA, REPRESENTED BY ITS REGIONAL DIRECTOR, RESERVE BANK OF INDIA OFFICE, THIRUVANANTHAPURAM. 3. THE FEDERAL BANK LIMITED, REPRESENTED BY ITS BRANCH MANAGER, THE FEDERAL BANK LTD., KOLLAPPALLY BRANCH, KOLLAPPALLY. 4. GRIEVANCE REDRESSAL OFFICER, AGRICULTURAL DEBT WAIVER AND DEBT RELIEF SCHEME, THE FEDERAL BANK LTD., FEDERAL TOWERS, ALUVA. R1 BY ADV. SRI.P.PARAMESWARAN NAIR,ASG OF INDIA R3 AND R4 BY SRI.K.ANAND (A.201) AND BY SMT.LATHA KRISHNAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08/06/2011, ALONG WITH WPC NO. 6490 OF 2009 AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 6462 of 2009(C) APPENDIX PETITIONER'S EXHIBITS EXT.P1 : COPY OF THE AGREEMENT DATE D 26.12.2005 BETWEEN THE LONEES AND THE 3RD RESPONDENT BANK EXT.P2 : COPY OF THE SCHEME PUBLISHED BY THE 2ND RESPONDENT. EXT.P3 : COPY OF THE PETITION SUBMITTED BEFORE THE 4TH RESPONDENT BY THE PETITIONER. EXT.P4 : COPY OF THE COMMUNICATION DATED 5.9.2008 ISSUED BY THE 4TH RESPONDENT. EXT.P5 : COPY OF THE REGISTERED NOTICE ISSUED BY THE 3RD RESPONDNET BANK DATED 15.03.2011 /TRUE COPY/ P.S. TO JUDGE. P.R. RAMACHANDRA MENON, J. .............................................................................. W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 ......................................................................... Dated this the 8th June , 2011 J U D G M E N T The issue involved in all these cases is similar. Eligibility to have the benefit of the Scheme (Agricultural Debt Waiver and Debt Relief's Scheme, 2008) is the subject matter of consideration. (The facts and circumstances are described with reference to the pleadings in the writ petition No.6491 of 2009). 2. The petitioners are farmers described as 'small farmers' as given under clause 3.6 of the Scheme. Agricultural loans were availed by the petitioners from the respondent Bank on 26.12.2005 executing agreements in this regard, as to the terms of repayment, as evident from Ext. P1. As per Ext. P1, it was stipulated that the due date was 26.12.2008 ie., on completion of three years, which was the loan period and the manner of repayment was shown as 'lump sum', with yearly interest to be serviced. 3. The learned counsel for the petitioners submits that by virtue of the nature of the scheme and terms stipulated, the interest should have been appropriated by the Bank only on W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 2 December 26th of every year, since it was stipulated in Ext. P1 agreement that the interest was to be serviced every year and further since the loan was disbursed only on 26.12.2005. It is also stated that the Bank appropriated interest in respect of the years 2006 and 2007 as on 31.03.2006 and 31.03.2007 respectively, though the actual appropriation was effected only subsequently, as discernible from the proceedings. In the meanwhile, the Government of India declared a Scheme, copy of which has been produced as Ext. P2, whereby much benefits were stipulated to be paid to the farmers like petitioners and similarly situated persons. The petitioners came within the category of 'small farmers' as the extent of property owned by them was much less than 2 hectors as described in the writ petitions. The status of the petitioners as 'small farmers' is not disputed from the part of the respondent Bank. By virtue of the stipulation under the scheme, the petitioners contend that the 'small farmers' and 'marginal farmers' (defined under clauses 3.6 and 3.5 respectively) are entitled to have 'full waiver' as given under clause 5.1; while the 'other farmers' defined under clause W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 3 3.7 who are having more than 2 hectors (more than 5 acres) are eligible only for interest rebate to an extent of 25%. 4. By virtue of the credentials of the petitioners to have the benefit under Ext. P2, they preferred necessary applications , but the same were turned down by the Bank holding that the petitioners did not come within the Scheme as there was no amount 'overdue as on 31.03.2007' from any of the petitioners as stipulated under 'clause 4' of Ext. P2 scheme. It is stated that as per the prescribed norms of the 'Federal Kissan Credit ' Scheme ( the name stated as given to the particular type of loan), interest was to be appropriated on the 31st of March and 30th of September, every year. But because of the administrative exigencies pointed out from the staff of the S& T department of the Bank, it was being appropriated as on 31st March of every year, which in fact was being satisfied by the petitioners as well, without demur. As such, there was no overdue amount in the account of the petitioners as on 31.12.2007, so as to make them eligible to have the benefit of the Scheme . Ext. P3 petition preferred by the petitioners before W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 4 the grievance cell was rejected vide Ext.P4 reply, which made them to approach this Court for immediate interference in view of the coercive proceedings. 5. The respondent Bank has filed a counter affidavit mainly contending that the writ petition itself is not maintainable; that there is no jurisdiction for the 3rd and 4th respondents and that there is no merit as well. 6. With regard to the question of maintainability, reliance is sought to be placed by the Bank on the decision rendered by the Apex Court in AIR 2003 Supreme Court 4325 (Federal Bank Ltd. vs. Sagar Thomas and others ), which was a case where termination of service of an employee was challenged by filing writ petition under Article 226 of the Constitution. The matter came up for consideration before the Apex Court and after hearing, it was observed that there was no statutory duty or public duty vested upon the Bank to have enquired with the matter as it was purely a matter of contract and thus declined jurisdiction over the Bank. 7. Coming to the issue involved in the present case, this W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 5 Court finds that, it is not mere a question of loan transaction pursuant to Ext. P1 agreement and the cause of action is based in respect of the subsequent turn of events, when the Government formulated and notified Ext.P2 Scheme for providing debt relief to the deserving lots. The scope and object of the said Scheme is very much discernible from the relevant provisions and it was after considering the hard realities that the Government thought it fit and proper to extend the benefit to the deserving persons giving appropriate direction to the RBI for causing the Scheme to be implemented through the concerned Banks like the respondent Bank. This was rather a 'matter of policy' and an attempt was made to see that no prejudice was caused to the Banks concerned from whom loan has been taken by the borrowers. The benefit to be extended by the concerned to persons who come within the purview of the Scheme was sought to be satisfied, by extending/providing equal amount, as made available from the concerned Banks, through the RBI. As such, much above the contractual rights and liberties, there was a 'public duty' upon the respondent Bank to have given effect to W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 6 Ext. P2 Scheme formulated by the Central Government and sought to be implemented through the RBI, to extend the benefit to the deserving group of farmers. Since there is a public duty upon the Bank, if there is any failure in discharging such duty or if the terms of the Scheme are not properly implemented or if the benefits payable under the Scheme are not given due to some or other lapse or mistakes, it is liable to be corrected by invoking the power under Article 226 of the Constitution of India. As such, the question of maintainability is answered in favour of the petitioners. 8. Coming to the merits of the case, the relevant clause of Ext. P2 Scheme dealing with the question of 'Eligible amount' reads as follows: “4.1. The amount eligible for debt waiver or debt relief as the case may be (hereinafter referred to as the eligible amount) shall comprise of (a) in the case of short terms production loan, the amount of such loan (together with applicable interest) (i) disbursed upto March31, 2007 and W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 7 overdue as on December, 31,2007 and remaining unpaid until February 29, 2008, (ii) It is admitted from the part of the Bank (or rather undisputed) that as per the terms of the Scheme, interest was liable to be appropriated, as on the last day of March and the last day of September every year; while interest in the case of the petitioners were being appropriated as on the last day of March alone in view of some administrative reasons pointed out by S&T Department of the Bank. It is only due to pursuing such course, that the interest payable by the petitioners happened to be appropriated as on 31st of March, leaving the position to be contended by the Bank that there was no due as on 31.12.2007 , to have the petitioners made eligible to claim the benefits under Ext.P2 Scheme. The administrative difficulty of the concerned Department of the Bank cannot be taken as a ground to deny the benefits to the petitioners, if they actually were coming within the purview of the Scheme otherwise. Going by the admitted version of the Bank, interest could have been W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 8 accrued and appropriated as on 31st March and 30th September respectively and as such, after remittance/appropriation of interest as on 31st of March, 2007, there accrued further interest to be appropriated as on 30th September, 2007, which was admittedly not satisfied after the said date and was lying due as on 31.12.2007. This being the position, denying the benefit of Ext.P2 Scheme to the petitioners, because of the internal arrangement with regard to appropriation of interest by the respondent Bank, cannot place any hurdle on the way of the petitioners in claiming such benefits legally payable under Ext. P2. This Court holds that the petitioners are very much entitled to have the benefit of Ext. P2 Scheme, as they are coming within the purview of the Scheme as stipulated in clause 4.1 of Ext. P2. 9. The remaining question is whether there is any culpable inaction on the part of the respondent Bank or whether any prejudice will be caused to the Bank. Going by the specific nature of the pleadings raised by the Bank, it is seen that the Bank has been considering the issue on the basis of the factual W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 9 position, particularly when there was no objection from the part of the petitioners in having appropriated interest as on 31st March in 2006 and 2007 and hence that the next yearly interest due could have only been on 31st March 2008 and never before. Though the course pursued by the Bank cannot be justified, this Court finds that there is no wilful attempt to deny the rights and benefits to the petitioners or to make any unlawful gain. 10. With regard to the liability on 'writing off' the loan amount, by virtue of the fact that they are 'small farmers' as defined under clause 3.6 of Ext.P2 Scheme, it is rather undisputed that such amounts are liable to be reimbursed by the RBI, in conformity with the stipulation in the Scheme evolved by the Central Government as a matter of policy. Inspite of completion of service of notice to the Central Government and the RBI, no counter affidavit has been filed from their side, presumably for the reason that they may not have any dispute with regard to the facts and figures or as to the scope of the Scheme or even as to the liability to have the amount reimbursed, once the eligibility of the borrowers to have the W.P.(C) No. 6462, 6490, 6491 & 6522 OF 2009 10 benefit under the Scheme is satisfied and the amount is disbursed to them by the concerned Bank. As it stands so, this Court hereby declares that the respondent Bank is entitled to have the amount reimbursed by the RBI in terms of the Scheme. In the above circumstance, all the above writ petitions are allowed, declaring the eligibility of the petitioners to have the benefit of Ext. P2 Scheme. The respondent Bank is directed to take further steps to give effect to the same and finalise the proceedings accordingly, which shall be done as expeditiously as possible, at any rate, within one month from the date of receipt of a copy of this judgment. No cost. P.R. RAMACHANDRA MENON, JUDGE. lk