IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN WEDNESDAY, THE 19TH OCTOBER 2011 / 27TH ASWINA 1933 WP(C).No. 30052 of 2006(C) ------------------------------------- PETITIONER(S): ---------------------- 1. CHINNAMMA KURIAKOSE, W/O.LATE P.P.KURIAKOSE, PALLATHUKUDI VEEDU, ADIMALI. 2. BABU KURIAKOSE, S/O.LATE P.P.KURIAKOSE, PALLATHUKUDI VEEDU, ADIMALI. BY ADV. SRI.THAMPAN THOMAS SMT.V.O.PHILOMINA SMT.K.S.SABITHA RESPONDENT(S): ------------------------ 1. STATE OF KERALA, REP. BY SECRETARY CO-OPERATIVE DEPT., GOVERNMENT OF KERALA, TRIVANDRUM. 2. REGISTRAR OF CO-OPERATIVE SOCIETIES, TRIVANDRUM. 3. DEVIKULAM TALUK CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LIMITED NO.1-136, ADIMALI, REP. BY ITS SECRETARY. 4. THE SPECIAL SALE OFFICER, DEVIKULAM TALUK CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LIMITED NO.1-136, ADIMALI. 5. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES, IDUKKI. R1 & R2 BY GOVT. PLEADER ANITHA RAVINDRAN. R3 & R4 BY ADV. SRI.C.K.VIDYASAGAR SRI.P.CHANDY JOSEPH THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 19/10/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: STU WP(C).No. 30052 of 2006(C) APPENDIX PETITIONER'S EXHIBITS: P1 : COPY OF THE DEMAND DTD 23/12/2002. P2 : COPY OF THE JUDGMENT GP NO.4428/2003 DTD 05/09/2005. P3 : COPY OF NOTICE NO.L.C.45/05-06 DTD 31/10/2005. P4 : COPY OF THE ARBITRATION CASE FILED BEFORE JR DTD 09/12/2005. P5 : COPY OF THE LETTER DTD 03/01/2006 NO.C.R.C.5816/05. P6 : COPY OF THE PETITION DTD 19/01/2006. P7 : COPY OF THE JUDGMENT NO.W.A.194/2006 DTD 25/01/2006. P8 : COPY OF THE ORDER NO.G.L.T.(3) 5298/2006 DTD 10/02/2006. P9 : COPY OF THE SALE PROCEEDINGS NO.MEP 78/05 TO MEP 83/03 DTD 17/02/2006. P10: COPY OF THE CIRCULAR NO.9/2006 DTD 27/02/2006. P11: COPY OF THE JUDGMENT DTD 18/08/06 WPC NO. 7626/2006. P12: COPY OF RECEIPTS P13: COPY OF THE LETTER NO.LC 45/06-07 DTD 05/10/2006. P14: COPY OF THE STATEMENT FROM THE BANK. P15: COPY OF THE PETITION DTD 07/11/2006. P16 : COPY OF THE STATEMENT ALONG WITH THE REPRESENTATION. P17: COPY OF THE REPRESENTAION TO THE 2ND RESPONDENT. P18: COPY OF THE REPRESENTAION TO THE 5TH RESPONDENT. RESPONDENT'S EXHIBITS: R3(a) : COPY OF THE ENCUMBRENCE CERTIFICATE DTD 18/07/2007 ISSUED BY THE SUB.REGISTRAR, DEVIKULAM. R3(b): COPY OF THE LETTER DTD 12/10/2011 ISSUED BY THE 5TH RESPONDENT TO 3RD RESPONDENT. //TRUE COPY// STU P.A TO JUDGE. P.N.RAVINDRAN, J. ----------------------------------------- W.P(C).No.30052 of 2006 ----------------------------------------- Dated this the 19th day of October, 2011 JUDGMENT Late P.P.Kuriakose, husband of the first petitioner and father of the second petitioner, had availed seven loans from the third respondent bank. He passed away on 1.8.2000. The third respondent bank thereafter issued Ext.P1 notice dated 23.12.2001 to the petitioners calling upon them to remit the sum of Rs.14,44,604/- stated to be the amount due from late P.P.Kuriakose as on 30.9.2002. The petitioners thereupon filed O.P.No.4428 of 2003 in this Court. By Ext.P2 judgment delivered on 5.9.2005 a learned single Judge of this Court disposed of the said original petition with a direction to the petitioners to remit the amount demanded in 15 equal monthly instalments with future interest at the same rate at which the loan was granted. This Court also directed the third respondent bank to waive penal interest. In order to facilitate payment of the balance amount due in instalments, the bank was directed to furnish a statement of accounts within ten days from the date of receipt of a copy of the W.P(C).No.30052 of 2006 -:2:- judgment. This Court also directed that the first instalment shall be paid on or before 15.10.2005 and the balance on or before the 15th day of each of the 14 succeeding English calendar months. There was a further direction that if the petitioners default payment of any instalment, the judgment will stand recalled and the bank will be free to recover the entire amount due in lump. 2. Pursuant thereto the third respondent bank sent Ext.P3 letter dated 31.10.2005 to the petitioners enclosing along with it the statement of accounts as on 31.10.2005. By that letter, the petitioners were called upon to deposit the sum of Rs.19,95,140/- in 15 equal monthly instalments. The petitioners did not comply with the said direction. Instead, they filed W.A.No.194 of 2006 accompanied by a petition to condone the delay in filing the writ appeal. When the said writ appeal came up for admission hearing on 25.1.2006, the learned counsel appearing for the petitioners submitted that the petitioners are desirous of withdrawing the original petition itself. In the light of the said submission the petitioners were permitted to withdraw O.P.No.4428 of 2003 which was disposed of by Ext.P2 judgment. The petitioners thereafter moved the Registrar of Co-operative Societies by W.P(C).No.30052 of 2006 -:3:- submitting a representation and the Registrar in turn forwarded it to the Joint Registrar of Co-operative Societies, Idukki. 3. While matters stood thus, the third respondent bank brought the security to sale invoking the provisions contained in the Kerala State Co-operative (Agricultural and Rural Development) Banks Act, 1984. For want of bidders, the bank itself purchased the property in the auction held on 17.2.2006. Thereupon proceedings evidenced by Ext.P9 series were issued. The petitioners did not apply to have the sale held on 17.2.2006 set aside by filing an application under section 21 of the Kerala State Co-operative (Agricultural and Rural Development) Banks Act, 1984 after depositing the amount due. Instead, they filed W.P.(C)No.7626 of 2006 in this Court wherein they claimed the benefit of Ext.P10 circular dated 27.2.2006 issued by the Registrar of Co-operative Societies.. The petitioners had earlier filed a representation before the third respondent bank claiming the benefit of the said circular. By Ext.P11 judgment delivered on 18.8.2006 a learned single Judge of this Court disposed of the said writ petition with a direction to the third respondent bank to consider the said representation and pass appropriate orders W.P(C).No.30052 of 2006 -:4:- thereon expeditiously and at any rate within 45 days from the date of receipt of a copy of the judgment. This Court also directed that till a final decision is taken on the representation, further proceedings pursuant to the sale held on 17.2.2006 shall be kept in abeyance. As directed by this Court in Ext.P11 judgment, the bank issued Ext.P14 statement of accounts whereby the petitioners were informed that they have to pay the sum of Rs.20,75,047/- for closing the loan account under the one time settlement scheme. Instead of depositing the said amount, the petitioners submitted Ext.P15 representation before the bank requesting the bank to accept the sum of Rs.1,62,861/- in full and final settlement of the loan, to set aside the sale held on 17.2.2006 and to return the documents of title deposited by their predecessor in interest. This writ petition was thereafter filed on 14.11.2006 seeking the following reliefs:- i) to issue a writ of certiorari or any other appropriate writ, order or direction, calling for the records in this case and quash Exhibit P9, P13 and P14. ii) to issue a writ of mandamus or other appropriate writ, or direction compelling the 3rd respondent to prepare the statement of W.P(C).No.30052 of 2006 -:5:- accounts of the petitioners' loan without interest and settle the accounts of the petitioners as per Exhibits P10 and P11. iii) To direct the respondents 2 and 5 to decide the representations Exhibit P17 and Exhibit P18 and to interfere in the matter. iv) to issue a writ of mandamus or other appropriate writ or direction directing the 5th respondent to decide the arbitration case. 4. The main ground raised in the writ petition is that the demand made in Ext.P14 is not in accordance with Ext.P10 circular. It is contended that the third respondent bank has not extended to the petitioners the benefits flowing from Ext.P10 circular. The third respondent has filed a counter affidavit dated 4.12.2007. In paragraph 3 thereof it is stated that as on 24.10.2007 the sum of Rs.22,23,481/- was due and that after Ext.P11 judgment of this Court, Ext.P14 statement of accounts was furnished to the petitioners. It is stated that the petitioners have, without the knowledge and consent of the bank, disposed of the mortgaged property by assigning it to Smt.Anitha Roy as per sale deed No.3364/1996 and that in view of the interim order passed by this Court to maintain the status quo, the bank has not been in a position to proceed with the steps taken by it to realise W.P(C).No.30052 of 2006 -:6:- the dues. The petitioners have not filed a reply affidavit denying the statement in paragraph 9 of the counter affidavit that the mortgaged property stands transferred to Smt.Anitha Roy. 5. I heard Sri.Thampan Thomas, learned counsel appearing for the petitioners, Smt.Anitha Ravindran, learned Government Pleader appearing for respondents 1, 2, 4 and 5 and Sri.P.Chandy Joseph, learned counsel appearing for the third respondent. I have also gone through the pleadings and the materials on record. Sri.Thampan Thomas, learned counsel appearing for the petitioners, submitted that though this Court had by Ext.P11 judgment directed the bank to consider the petitioners' entitlement for the benefits flowing from Ext.P10 circular, and the Registrar of Co-operative Societies had thereafter issued several circulars extending benefits to persons who have availed loans from co-operative institutions, till date the bank has not extended to them the benefit of any of the circulars and therefore, the writ petition may be disposed of with a direction to the Government to examine the grievances voiced by the petitioners and to keep further proceedings pursuant to the sale held on 17.2.2006 in abeyance till the Government takes a decision in the matter. Per W.P(C).No.30052 of 2006 -:7:- contra, Sri.P.Chandy Joseph, learned counsel appearing for the third respondent bank submitted that the petitioners are chronic defaulters and that even during the lifetime of the principal debtor he had assigned the property to a third party without the knowledge and consent of the bank. The learned counsel also submitted that it is evident from the conduct of the petitioners in withdrawing O.P.No.4428 of 2003 that they are not interested in discharging the loan but only in preventing the bank from recovering the amounts due from them and that having regard to the conduct of the petitioners, the writ petition may be dismissed and the bank may be permitted to proceed with the steps taken by it to recover the amount due from the petitioners. 6. I have considered the submissions made at the Bar by the learned counsel appearing on both sides. It is evident from the pleadings and the materials on record that the mortgaged property was brought to sale on 17.2.2006 for realisation of the sum of Rs.21,63,850/- that was then due. Though the sale was held on 17.2.2006 and the petitioners were informed of the same, they did not take steps to challenge it in the manner stipulated in section 21 of the Kerala State Co-operative (Agricultural and W.P(C).No.30052 of 2006 -:8:- Rural Development) Banks Act, 1984. Instead they filed O.P.No.7626 of 2006 in this Court wherein they challenged the recovery proceedings initiated by the bank. A sale held under the Act can be set aside only on deposit of the bid amount. Sub- section (3) of section 21 of the Kerala State Co-operative (Agricultural and Rural Development) Banks Act, 1984 stipulates that where no application with deposit is made under sub-section (1) or where such application is made and disallowed, the Sale Officer may apply to the Registrar or any other officer empowered by him in this regard to make an order confirming the sale and, on the Registrar or such officer confirming the sale, it shall become absolute and the property shall be deemed to have vested in the purchaser from the time the property is sold. As in the Kerala Co-operative Societies Act, 1969, the Kerala State Co- operative (Agricultural and Rural Development) Banks Act, 1984 does not provide for an application to set aside the sale on grounds of irregularity or fraud. The sale held on 17.2.2006 has thus attained finality. The petitioners have not, for the past more than a decade, remitted any amount towards the liability. In such circumstances I am of the opinion that the only relief that can be W.P(C).No.30052 of 2006 -:9:- granted to the petitioners is to give them an opportunity to pay the amount due as on the date of sale, i.e. 17.2.2006, together with future interest at current lending rates. I accordingly dispose of the writ petition with the following directions: (a) The third respondent bank shall, within two weeks from the date of receipt of a certified copy of this judgment, inform the petitioners in writing of the amount which they should pay in lump to have the sale held on 17.2.2006 set aside. While determining the amount payable, the third respondent bank shall have due regard to the concessions, if any, to be extended to persons who have availed loans from co-operative institutions by the Registrar of Co-operative Societies. (b) The petitioners shall, within two months from the date of receipt of the communication, deposit the amount demanded without protest, in lump. (c) Upon the petitioners depositing the amount demanded, the third respondent bank shall inform the Registrar of Co- operative Societies, who in turn shall issue appropriate orders cancelling the sale held on 17.2.2006. The bank shall thereupon W.P(C).No.30052 of 2006 -:10:- return to the petitioners the documents of title deposited by the principal debtor. (d) It is clarified that if the petitioners do not comply with the directions contained herein, it will be open to the third respondent bank to move the competent authority for confirmation of the sale and to obtain delivery of the property. P.N.RAVINDRAN, Judge. ahg. P.N.RAVINDRAN, J. --------------------------- W.P(C).No.30052 of 2006 ---------------------------- JUDGMENT 19th October, 2011