IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 8TH AUGUST 2011 / 17TH SRAVANA 1933 WP(C).No. 2738 of 2007(A) ------------------------- OA.424/1998 of DEBT RECOVERY TRIBUNAL, ERNAKULAM .................... PETITIONER: ------------------- V.SOMANATHA PILLAI, S/O.VELAYUDHAN PILLAI, AGED 65 YEARS, RESIDING AT 'KARTHIKA', KEERTHI NAGAR, ELAMAKKARA, KOCHI- 682 026. BY ADV. SRI.P.JACOB VARGHESE SRI.V.MANOJ KUMAR SRI.VARUGHESE M EASO SMT.PRAISHEEL PRAKASAM SRI.VIVEK VARGHESE P.J. SRI.K.G.ARUN RESPONDENT(S): --------------- 1. M/S.INDIAN BANK, M.G.ROAD, ERNAKULAM, REPRESENTED BY THE BRANCH MANAGER. 2. UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF AGRICULTURE, NEW DELHI. 3. THE RECOVERY OFFICER, DEBT RECOVERY TRIBUNAL, ERNAKULAM. ADV. SRI.CYRIAC KURIAN, CGSC FOR R.2 BY STANDING COUNSEL (BANK) SRI.S.EASWARAN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08/08/2011 ALONG WITH WPC NO.28840 OF 2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ln APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 : TRUE COPY OF ORDER DATED 06.06.2001 IN O.S.NO.424/1998 OF DRT, ERNAKULAM. EXHIBIT P2 : TRUE COPY OF ORDER IN APPEAL NO.12/2006 OF DEBT RECOVERY APPELLATE TRIBUNAL, CHENNAI. EXHIBIT P3 : TRUE COPY OF NOTICE OF DEMAND DATED 01.08.2006 BY THE RECOVERY OFFICER. EXHIBIT P4 : TRUE COPY OF LETTER DATED 12.11.2006 BY THE PETITIONER TO THE RECOVERY OFFICER. EXHIBIT P5 : TRUE COPY OF LETTER DATED 17.05.2002 BY THE RESPONDENT BANK. EXHIBIT P6 : TRUE COPY OF LETTER DATED 22.02.2001 BY THE PETITIONER TO THE RESPONDENT BANK. EXHIBIT P7 : TRUE COPY OF KERALA FARMERS DEBT RELIEF BILL 2006 DATED 25.10.2006 PASSED BY LEGISLATURE 29.12.2006. EXHIBIT P8 : TRUE COPY OF PAPER REPORT DATED 17.08.2006 MALAYALA MANORAMA DAILY EXHIBIT P9 : TRUE COPY OF PAPER REPORT DATED 17.08.2006 MALAYALA MANORAMA DAILY. RESPONDENTS EXHIBITS: EXHIBIT R1(a) : COPY OF THE APPLICATION, O.A.NO.424 OF 1998 TOGETHER WITH EXHIBITS FILED BY THE FIRST RESPONDENT BEFORE THE DEBTS RECOVERY TRIBUNAL, ERNAKULAM. EXHIBIT R1(b) : COPY OF THE STATEMENT OF ACCOUNT SUBMITTED BY THE FIRST RESPONDENT BEFORE THE THIRD RESPONDENT. /TRUE COPY/ P.A TO JUDGE S.SIRI JAGAN, J. ---------------------------- W.P.(c) Nos.2738 of 2007 and 28840 of 2008 --------------------------------------------------------- Dated this the 8th day of August, 2011 JUDGMENT The petitioner in W.P.(c) No.2738/2007 is a borrower of money from the Indian Bank, the first respondent in that Writ Petition. The petitioner is challenging an order of the Debt Recovery Appellate Tribunal filed against Ext.P1 exparte decree of the Tribunal, as well as Ext.P3 order of the Recovery Officer of the Debt Recovery Tribunal in terms of Ext.P2 order. For non- payment of the amounts due, the Recovery Officer has initiated proceedings for recovery, which has resulted in sale of the mortgaged properties. The petitioner in W.P.(c) No.28840/2008 is the purchaser of the mortgaged property, in the sale proceedings conducted by the Recovery Officer for recovery of the decree debt. He is aggrieved by non-delivery of the property to him, although, he had paid the entire purchase price. In so far as, the contentions in W.P.(c) No.28840/2008 depends upon the result of W.P.(c) No.2738/2007, that Writ Petition is considered first. W.P.(c) Nos.2738 2 2. Ext.P2 order of the Debt Recovery Tribunal reads thus: “1. The appellant who is the second defendant in the OA-424/1998 on the file of DRT, Ernakulam, remained exparte and an exparte order was passed. The appellant has not chosen to file any application to set aside the exparte decree before the DRT, but had straight away filed this Appeal. I have heard the Ld. Advocate for the Appellant and the first respondent. 2. Though the Appellant had raised several grounds in the appeal, he has restricted his submission only with regard to the interest of half yearly rest, as ordered by the Tribunal. It is the contention of the Appellant that the loan advanced to the Appellate was an agricultural loan and as a matter of fact, the Respondent Bank itself in Para-2 of the OA has stated that, “ The Bank granted a plantation crop loan under the agricultural short term loan to the limit of Rs.4.50 lakhs.” It is therefore, submitted that the half yearly rest as claimed by the Bank and also awarded by the Tribunal are not correct and in support of his contention, the Appellant relied upon the case of Corporation Bank, appellant vs. D.S.Gowda & Another, Respondents-(1994) 5 SCC 213. In the said case, the Hon'ble Supreme Court, after having discussed the charging of interest and the rest applied for, at length, and also relying upon the various Circulars issued by the RBI from time to time, in exercise of powers conferred by Section-21/35-A of the Banking Regulation Act, pointed out that the said circulars/directives provide that the agricultural advances should not be treated on par with commercial loans in so far as the rate of interest is concerned because the farmers do not have any regular source of income except the sale proceeds of their crops which income they get once a year. The question of recovery of interest with quarterly of six monthly rests from farmers is, therefore, not feasible. Therefore, to allow the banks to charge interest on quarterly or half-yearly rests from farmers would tantamount to virtually W.P.(c) Nos.2738 3 compelling them to pay compound interest, since they would not be able to pay the interest except once in a year i.e.when they receive the income from sale proceeds of their crops. Ultimately held that, ”According to circulars/directives, so far as the loans for agricultural purposes are concerned, at best interest may be charged with yearly rests and may be compounded if the loan/instalment becomes overdue”. It was further held that interest charged with six- monthly rests was clearly in contravention of the RBI circulars and directives and ultimately ruled that the Bank was not entitled to charge interest with half yearly rest and they are entitled to charge interest only with annual rest. 3. The Ld. Advocate for the Respondent bank has submitted that the appellant has not established that he is a farmer and that the loan advanced was for agricultural purposes. 4. The contention of the Ld. Advocate for the Respondent cannot be accepted for the simple reason that the Respondent Bank in Para-2 of the OA itself has described the loan as a plantation crop loan under the agricultural short term loan and as such, I am of the view that the Appellant had established that the loan granted was an agricultural loan and he is entitled to the benefit of the decision referred above. Hence, I am inclined to accept the contention of the Appellant that the decree passed by the DRT granting half yearly rest is not correct and the same is liable to be set aside. 5. In the result, the decree and judgment dated 06.06.2001 passed by the DRT, Ernakulam, is confirmed except the half-yearly rests awarded by the Tribunal and the same is modified as Annual rests. The rest of the Judgment rendered is left unaltered. With the above said modification with regard to the interest, the Appeal is disposed of.” (underlining supplied) W.P.(c) Nos.2738 4 3. Ext.P2 order is in favour of the petitioner accepting in toto the only contention raised by the petitioner before the Debt Recovery Appellate Tribunal. But the contention of the petitioner is that petitioner's other contentions were not properly considered by the Appellate Tribunal. According to the petitioner, the yearly rests have to be applied from the beginning, which contention of the petitioner has not been considered. It is further submitted that the Appellate Tribunal has misapplied the ratio of the decision in Corporation Bank v. D.S. Dowda and another [(1994) 5 SCC 230]. The petitioner therefore, seeks the following reliefs: a) issue a writ of certiorari or such other writ, order or direction, quashing Exhibits P1, P2 and P3 and b) cost of this proceedings; and c) to grant such other and further reliefs that petitioners may pray for and this Court may deem fit and proper in the facts and circumstances of this case; 4. I have considered the rival contentions in detail. At the out set, I note that, I can only consider the contentions of the petitioner, which have been raised before the Appellate Tribunal W.P.(c) Nos.2738 5 and rejected. Paragraph 2 of Ext.P2 order starts with the following sentence: “Though the appellant had raised several grounds in the Appeal, he has restricted his submission only with regard to the interest of half yearly rest, as ordered by the Tribunal.” The operative portion of the judgment in Ext.A2 shown in paragraph 5, which reads thus: In the result, the decree and judgment dated 06.06.2001, passed by the DRT, Ernakulam, is confirmed except the half-yearly rests awarded by the Tribunal and the same is modified as Annual rests. The rest of the Judgment rendered is left unaltered. From the same, I find that the only contention raised by the petitioner has been considered and accepted in toto. If the petitioner has a grievance that any of the other contentions though raised have not been considered which is not apparent from Ext.P2 order, the petitioner ought to have invoked the review jurisdiction of the Appellate Tribunal, without which he cannot invoke the jurisdiction of this Court. 5. In so far as, from the order, it is clear that the only contention of the petitioner had been considered and decided in W.P.(c) Nos.2738 6 his favour, I do not think that this Court can interfere in that order, which is in favour of the petitioner. In the above circumstances, W.P.(c) No.2738/2007 is dismissed. 6. In view of the fact that W.P.(c)No.2738/2008 is dismissed, there cannot be any impediment for delivery of the property to the petitioner, pursuant to the sale proceedings by the Recovery Officer. Accordingly, the 4th respondent in that writ petition namely, the Recovery Officer, Debt Recovery Tribunal, Kerala and Lakshadweep, Ernakulam shall take appropriate steps to deliver the property sold to the petitioner in that Writ Petition to him and take it to its logical conclusion, as expeditiously as possible, at any rate, within one month from the date of receipt of a copy of this judgment. S.SIRI JAGAN,JUDGE ln /True copy/ P.A. to Judge