IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR THURSDAY, THE 24TH JULY 2008 / 2ND SRAVANA 1930 WP(C).No. 23027 of 2003(N) -------------------------- PETITIONERS: ------------ 1. RAJASREE P.K., W/O. KANAKA PARAMBIL GOPAN, P.O. RAMAVARMAPURAM, ANAPPARA DESOM, THRISSUR. 2. GOPAN.K.S., KANAKAPARAMBIL HOUSE, RAMAVARMAPURAM P.O., ANAPPARA DESOM, THRISSUR. BY ADV. SRI.C.A.CHACKO RESPONDENTS: ------------- 1. THE STATE OF KERALA, REPRESENTED BY DISTRICT COLLECTOR, THRISSUR DISTRICT. 2. DEPUTY TAHSILDAR (R.R), THRISSUR TALUK, THRISSUR. 3. THE MANAGER, DHANALAKSHMI BANK LTD., KURICHIKKARA, THRISSUR DISTRICT. 4. MR. DEVADAS.M., MANAGING PARTNER, INTERNATIONAL ASSOCIATES, MENATH HOUSE, KANDASSANKADAVU P.O., THRISSUR. R1 AND R2 BY G.P. SMT. SMITHA BY ADV. SRI.C.K.KARUNAKARAN,SC,DHANALAKSHMI BAN FOR R3 BY ADV. SRI.T.RAJASEKHARAN NAIR FOR R4 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 24/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: 2 APPENDIX PETITIONER'S EXHIBITS: EXT.P1 TRUE PHOTOCOPY OF THE RECEIPT OF THE ISSUE OF DEMAND DRAFT FOR RS. 60225/ TO THE 3RD RESPONDENT BY THE FOURTH RESPONDENT DATED 16.7.99 EXT.P2 TRUE PHOTOCOPY OF THE COMPLAINT DATED 25.10.99 ISSUED TO THE 3RD RESPONDENT BY THE 1ST PETITIONER. EXT.P3 TRUE PHOTOCOPY OF THE LETTER DATED 29.10.99 ISSUED TO THE 4TH RESPONDENT BY THE THIRD RESPONDENT. EXT.P4 TRUE PHOTOCOPY OF THE LETTER DATED 12.11.99 TO 3RD RESPONDENT BY THE FIRST PETITIONER. EXT.P5 TRUE PHOTOCOPY OF THE LETTER DATED 28.12.99 TO THE THIRD RESPONDENT BY THE PETITIONER. EXT.P6 TRUE PHOTOCOPY OF THE ORDER IN OP 1145 OF 1999 DATED 23.3.2000 OF THE CONSUMER DISPUTES REDRESSAL FORUM, THRISSUR. EXT.P7 TRUE PHOTOCOPY OF THE DEMAND NOTICE ISSUED BY THE 2ND RESPONDENT TO THE PETITIONERS DATED 10.6.2003 THIRD RESPONDENT'S EXHIBITS: EXT.R3(a) TRUE COPY OF FIRST PETITIONER'S APPLICATION DATED NIL ADDRESSED TO THE DISTRICT INDUSTRIES CENTRE, THRISSUR. EXT.R3(b) TRUE COPY OF FIRST PETITIONER'S AFFIDAVIT DATED 10.7.99 EXT.R3(c) TRUE COPY OF THE APPLICATION OF THE FIRST PETITIONER FOR THE LOAN DATED 16.7.99 EXT.R3(d) TRUE COPY OF THE QUOTATION NO. IA 341/99 DATED 12.7.99 ADDRESSED TO THE FIRST PETITIONER. EXT.R3(e)TRUE COPY OF THE COVERING LETTER DATED 16.7.99 ADDRESSED TO THE FOURTH RESPONDENT. EXT.R3(f) TRUE COPY OF THE RESPONDENT'S LETTER DATED 16.8.99 TO THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, THRISSUR. EXT.R3(g) TRUE COPY OF ACKNWOELDGED OF LIABILITY DATED 8.7.2002 EXT. R3(h) TRUE COPY OF DPN DATED 16.7.99 EXT.R3(i) TRUE COPY OF THE TERM LOAN AGREEMENT DATED 16.7.99 EXECUTED BY PETITIONERS. 4TH RESPONDENT'S EXHIBITS: EXT.R4(a) TRUE PHOTOCOPY OF THE RECEIPT DATED 20.12.2003 ISSUED BY THE 2ND PETITIONER TO THE 4TH RESPONDENT. TRUE COPY P.S. TO JUDGE. C.N. RAMACHANDRAN NAIR, J. -------------------------------------------- W.P.C. NO. 23027 OF 2003 -------------------------------------------- Dated this the 24th day of July, 2008 JUDGMENT Petitioners are challenging recovery proceedings for recovery of loan availed by them from the third respondent under PMRY Scheme for starting an industry. The case of the petitioners is that the amount was directly paid by the third respondent to fourth respondent for supply of machinery for starting the industry. However, after collecting the amount, fourth respondent did snot supply machinery, is the case of the petitioners. The case of the fourth respondent is that repayment was made in instalments and Ext.R4(a) is produced which is receipt for repayment of Rs. 20,000/- to the second petitioner. However, second petitioner denied having received the amount from the fourth respondent. Counsel for the third respondent rightly submitted that borrower being petitioners, recovery is to be made from them. Even though DD was taken in the name of the fourth respondent at the request of petitioners, contract for purchase of machinery is between the petitioners and fourth respondent. Obviously there is no 2 privity of contract between third and fourth respondents and for contractual violation by the fourth respondent, the remedy is for the petitioners and not for third respondent. It is also conceded that petitioners have approached the Consumer Disputes Redressal Forum and obtained award against the fourth respondent, which they are free to execute. However, since recovery is permissible from petitioners and guarantors, W.P. is disposed of directing the second respondent to proceed for recovery against the petitioners if payment is not made. As already stated, petitioners are free to execute the award against the fourth respondent. It will be open to the petitioner to go for settlement with the Bank and if payment is offered within a reasonable time, bank will give incentives because petitioners could not start the industry. (C.N. RAMACHANDRAN NAIR) Judge kk 3