Civil Writ Petition No. 8433 of 2009 1 In the High Court of Punjab and Haryana, at Chandigarh. Civil Writ Petition No. 8433 of 2009 Date of Decision: 7.9.2010 Daya Nand …Petitioner Versus Special Secretary to Government of Haryana, Co-operation Department, Chandigarh and Others …Respondents CORAM: HON’BLE MR. JUSTICE KANWALJIT SINGH AHLUWALIA. Present: Mr. M.P.S. Mann, Advocate for the petitioner. Mr. Himanshu Raj, Assistant Advocate General, Haryana, for respondents No.1 and 2. Mr. Pardeep Chahar, Advocate for respondent No.3. Kanwaljit Singh Ahluwalia, J. (Oral) The present writ petition has been filed with a prayer that a writ, in the nature of certiorari, be issued thereby quashing the order dated 3.11.2008 (Annexure P6), passed by respondent No. 1, whereby the revision petition, filed by the petitioner, was dismissed. Briefly stated, the petitioner was working as a Cashier in the Jhamri Co-operative Labour and Construction Society Limited (hereinafter referred to as “the Society”). The Society had taken a short term loan of Rs.14,000/- from the Rohtak Central Co-operative Bank Civil Writ Petition No. 8433 of 2009 2 Limited, Rohtak, now, after the bifurcation of the districts, named as Jhajjar Central Co-operative Bank Limited, Jhajjar (hereinafter referred to as “the Bank”). The Society had partly repaid the said loan, however, an amount of Rs.9,514.20 ps. was outstanding towards it. The Society further availed a cash credit limit amounting to Rs.30,000/-, which was renewed from time to time. On 29.6.1988, a balance of Rs.29,726.52 ps. was outstanding. At the relevant time, the principal amount along with the interest accrued thereon was Rs.39,240.72 ps. Due to non payment of the principal and the interest amount, respondent No.3-Bank had sought arbitration. The Assistant Registrar, Co-operative Societies, Jhajjar, while acting as an Arbitrator, gave an award dated 20.4.1993 (Annexure P1). Before the Arbitrator, the petitioner gave an undertaking that he will be responsible for the payment of amount on behalf of the Society. The operative portion of the award reads as under:- “...After considering all aspects I have come to the conclusion that the Jhamri Co-operative Labour and Construction Society through Sh. Dayanand Cashier will within 60 days pay a sum of Rs.30240/72 as principal amount, Rs.24187/90 as interest upto 30.9.92 and costs of Rs.200/- totalling Rs.63628/62 to the Rohtak Central Co-operative Bank Ltd., Rohtak. In the event, the payment is not made, the petitioner Bank shall have the right to get the amount recovered by arresting Dayanand s/o Sh. Shiv Lal, Cashier or by auctioning his moveable or immovable property. Interest at the rate of 16% per Civil Writ Petition No. 8433 of 2009 3 annum on the principal amount shall be payable till the payment is made. Information of the decision be communicated to the judgment debtor through U.P.C.”. Thereafter, in pursuance of award (Annexure P1), warrant of arrest (Annexure P2) was issued on 25.11.1993. The petitioner filed a revision petition against the award. As stated earlier, the revision petition was dismissed vide order dated 3.11.2008 (Annexure P6). Mr. M.P.S. Mann, Advocate, appearing for the petitioner, has submitted that the award (Annexure P1) was pronounced on 20.4.1993 and the same could be executed within a period of three years. He further submitted that recovery proceedings cannot be initiated after a period of three years and the execution of the award is beyond the period of limitation. He further submitted that the loan was availed by the Society and the petitioner is not individually responsible even though he had undertaken before the Arbitrator to repay the loan amount. Lastly, he submitted that the warrants issued is non-executable being barred by limitation. Learned counsel for the respondent-Bank submitted that the execution proceedings were initiated and warrants of arrest were issued within time. Therefore, it cannot be said that since the execution proceedings have not been culminated, the same are presumed to be barred by limitation. It is not disputed that the petitioner has paid the principal amount. It is only the interest amount which has not been paid. It is stated that the Arbitrator held that the penal interest payable by the Civil Writ Petition No. 8433 of 2009 4 petitioner shall be 16% per annum, in case the awarded amount was not paid as undertaken by the petitioner. Learned counsel for the petitioner has argued that the rate of interest, as ordered by the Arbitrator, is excessive and is not in consonance with the prevailing rates at the relevant time. When learned counsel for the respondent-Bank was asked as to how the interest at the rate of 16% per annum, so awarded by Arbitrator, is justifiable according to the banking norms, he submitted that since the principal amount has already been paid, the only concern of the Bank is to recover the amount of interest. He further submitted that in case this Court reduces the rate of interest and the amount to be paid by the petitioner, that will be in the financial interest of the respondent-Bank. Taking totality of the circumstances into consideration, this Court is of the view that in case the interest at the rate of 16%, as awarded by the Arbitrator, is reduced to 9%, it will serve the ends of justice. As stated earlier, this Court finds no merit in the arguments raised by learned counsel for the petitioner as the execution proceedings were initiated within time. However, the present writ petition is disposed of by modifying the award dated 20.4.1993 (Annexure P1) that the petitioner shall be liable to pay on the principal amount, as assessed by the Arbitrator, interest at the rate of 9% instead of 16% per annum. While calculating the rate of interest, the respondent-Bank shall take into consideration the observations made by Hon'ble the Apex Court in Central Bank of Civil Writ Petition No. 8433 of 2009 5 India v. Ravindra 2002(1) Important and Selected Judgments (Banking) 1 (SC). However, there will be no order as to costs. (Kanwaljit Singh Ahluwalia) Judge September 7, 2010 “DK”