IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN WEDNESDAY, THE 18TH NOVEMBER 2009 / 27TH KARTHIKA 1931 WP(C).No. 4747 of 2008(M) ------------------------- PETITIONER(S): --------------- THE MEENACHIL EAST URBAN CO-OPERATIVE BANK LTD. NO.K.4266 REPRESENTED BY ITS GENERAL MANAGER, POONJAR THEKEKARA P.O., KOTTAYAM DISTRICT BY ADV. SRI.SHAJI THOMAS PORKKATTIL SRI.BINU PAUL SRI.T.V.VINU RESPONDENT(S): --------------- 1. STATE FARMER'S DEBT RELIEF COMMISSION, REPRESENTED BY ITS SECRETARY, MUDIPURA LANE, JAGADI, THIRUVANANTHAPURAM. 2. MATHAI ABRAHAM, VALLIYAMTHODATHIL HOUSE, PERINGULAM P.O., POONJAR, KOTTAYAM DISTRICT. ADV. SRI.P.V.GEORGE(PUTHIYIDAM) FOR R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 18/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C).No. 4747/08. APPENDIX PETITIONER(S)' EXHIBITS P1. COPY OF THE APPLICATION DTD.19.5.98. P2. COPY OF THE AWARD DTD.18.5.2000. P3. COPY OF THE APPLICATION DTD.18.1.07. P4. COPY OF THE LETTER DTD.29.1.07. P5. COPY OF THE ORDER DTD.5.10.07 IN CMP NO.639/07 OF R1. P6. COPY OF THE APPLICATION DTD.26.9.06 BY R2. P7. COPY OF THE APPLICATION DTD.3.4.98 BY R2. P8. COPY OF THE REQUEST OF R2. sdk+ ///True copy/// P.A. to Judge S.SIRI JAGAN, J. ================== W.P(C).No.4747 of 2008 ================== Dated this the 18th day of November, 2009 J U D G M E N T The petitioner is a co-operative bank. The 2nd respondent applied for a loan as per Ext.P1 application. That loan was granted and disbursed amounting to Rs.2,50,000/- on 28.5.1998. As per the loan agreement, the 2nd respondent was bound to pay 20% interest. The 2nd respondent committed default in repayment of the loan amount as per the loan agreement. The petitioner-bank filed ARC No.972/2000 under Section 69 of the Co-operative Societies Act. An award was passed in favour of the bank. The 2nd respondent filed a revision petition before the Tribunal. The Tribunal was not inclined to grant an interim order. The bank filed E.P.2181/2000 and issued a demand notice to the 2nd respondent. Pursuant thereto, the property was put in auction on 16.9.2003. The bank itself purchased the property in the auction. The delivery of the property has not yet taken place. While so, the 2nd respondent approached the Kerala State Farmers' Debt Relief Commission for benefits under the Kerala State Farmers' Debt Relief Commission Act, 2006 (“the Act” for short). The Commissioner passed Ext.P5 interim order as follows: “Heard the applicant and perused the Notice dated 16.9.2003 issued by the Special Sale Officer, Meenachil East Urban Co-op. Bank Limited No.4266. Poonjar, Kottayam. The applicant is prima-facie a framer as defined in the Kerala State Farmers' Debt Relief Commission W.P.C.4747/08 2 Act, 2006. Hence Sale or taking into possession of the property of the applicant pursuant to the said notice is stayed on the intention that the applicant is a distressed farmer ailing from coronary disease and economic drain of family income due to loss of Rubber, pepper and other crops until case is heard, with instruction to remit Rs.45,000/- in three equal instalments of Rs.15,000/- each or on before respective dates noted as 31.10.2007, 30.11.2007 and 30.12.2007.” The petitioner is challenging Ext.P5 order in this writ petition. 2. According to the petitioner, the debt due from the 2nd respondent to the petitioner-bank is not a debt as defined under Section 2(vii) of the Act. The petitioner contends that the Commission would get jurisdiction to entertain a petition under the Act only in respect of a debt as defined in the Act. The contention of the petitioner is that as is evident from Ext.P1 application for loan, the purpose of the loan mentioned therein is business. Further, the 2nd respondent stated in Ext.P1 that his annual income was Rs.5,75,000/- whereas in Ext.P6 application of the 2nd respondent before the Commission his income is given as Rs.15,000/-. In Ext.P1 the 2nd respondent gave his avocation as business, whereas in Ext.P6 he claims himself to be an agricultural labourer. It is also submitted that as is evident from Exts.P7 and P8, the petitioner is conducting the business of manufacturing packing cases from treated rubber wood and it is for that business purpose the 2nd respondent has taken loan from the petitioner-bank. In view of the same, according to the petitioner, the 2nd respondent is not an agriculturist nor is the debt one as defined in W.P.C.4747/08 3 the Act which qualify for the benefits under the Act. Therefore, the petition before the Commission filed by the 2nd respondent is clearly not entertainable by the Commission is the contention of the petitioner. 3. No counter affidavit has been filed by the 2nd respondent. However, the leaned counsel for the 2nd respondent would contend that agriculture allied commercial purposes are included within the definition of debt under Section 2(vii) and the 2nd respondent's debt would come under that. He would further submit that at the time of filing the application for loan, his annual income was Rs.5,75,000/- and his present income is Rs.15,000/- and that is what he has stated in Ext.P6. But he has no explanation for the discrepancy in Ext.P1 and Ext.P6 regarding his avocation. 4. I have considered the rival contentions in detail. 5. Section 2(vii) of the Act defines 'debt' thus: “2. Definitions.- In this Act, unless the context otherwise requires: xxx xxx xxx (vii) “debt” means any liability, whether secured or unsecured due from a farmer on or before the commencement of this Act whether payable under a contract, or under a decree, order of any Court or Tribunal, or otherwise, and includes, (a) any sum payable to, (i) an institutional creditor; (ii) a co-operative society; W.P.C.4747/08 4 (b) any sum borrowed by a farmer from the creditor; But does not include any loan amount taken by the farmer for commercial purposes or luxury other than agricultural allied commercial purposes, to augment his income and the amount payable to Central or State Governments or other State Governments or Governments of Union Territories and the amount due to Local Self Government Institutions, Statutory Bodies, Central or State Public Sector Undertakings and other Institutions as may be specified by the Government by notification;” As rightly pointed out by the counsel for the petitioner, in Ext.P1, the purpose of the loan is clearly mentioned as business. The petitioner has given his avocation also as business. There is absolutely no mention whatsoever in Ext.P1 that the loan is required for any agricultural purpose or agricultural allied commercial purpose. The 2nd respondent further states in Ext.P3 petition filed by him before the bank that he had obtained the loan for the purpose of business. In Ext.P6 letter from the 2nd respondent to the bank, he again submits that for the purpose of sale of rubber wood packing cases he needs loan from the bank. As per Ext.P8, he has submitted a project profile for packing cases from treated rubber wood. This evidence proves beyond reasonable doubt that the 2nd respondent obtained the loan for a purely commercial purpose and not for any agricultural or agricultural allied commercial purpose. That being so, the debt given to the 2nd respondent is clearly excluded from the provisions of the Act in view of the definition in Section 2(vii). Therefore, the Commission had no jurisdiction to entertain the petitioner's application and pass W.P.C.4747/08 5 Ext.P5 order. Accordingly, Ext.P5 order is quashed. 6. In the course of the consideration of the writ petition I directed the bank to state as to, for what amount they are prepared to settle the loan account. They submitted before me that instead of 20 per cent, they are willing to reduce the interest to 16 per cent, in which case, the petitioner would get a reduction of Rs.1,70,140/-. I directed the counsel for the 2nd respondent to ascertain from the 2nd respondent as to whether he is willing to avail of that opportunity. Despite granting time, the counsel for the 2nd respondent could not give any definite answer in respect of the same. Today he chose to argue the matter on merits instead of accepting the offer of the Bank. In view of the above, on equity also, the 2nd respondent is not entitled to any relief. In view of the stand taken by the 2nd respondent, I was inclined to award costs also. However, taking into account the fact that the 2nd respondent is a heart patient as stated by the counsel for the 2nd respondent, I take a lenient view and avoid awarding costs. The writ petition is disposed of as above. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge W.P.C.4747/08 6