IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 19.10.2011 CORAM THE HONOURABLE MR. JUSTICE ELIPE DHARMA RAO and THE HONOURABLE MR. JUSTICE R.SUBBIAH Writ Appeal Nos.367 to 369 of 2009 and M.P.Nos.1,1,1,2 and 2 of 2009 The Sakramallur Primary Agricultural Co-operative Bank Ltd.,Sakramallur Post, Arcot T.K.Vellore District, rep. by its Special Officer. ... Appellant in all the W.As. Vs 1.S.Gowthaman ... R-1 in W.A.No.367 of 2009 2.C.Ramadoss Naidu ... R-1 in W.A.No.368 of 2009 3.R.Anandan ... R-1 in W.A.No.369 of 2009 4. The State of Tamil Nadu rep. by its Secretary to Government, Co-op., Food and Consumer Protection(CC1) Department, Fort St. George, Chennai-600 009. ... R-2 in all the W.As. (R-2 is impleaded as formal respondent and no relief is sought for). Prayer:- Writ Appeals filed under Clause 15 of the Letters Patent against the common order, dated 14.10.2008, made in W.P.Nos.6757 to 6759 of 2008. To issue a writ of mandamus directing the 1st respondent to issue the certificate of waiver of loan to the petitioner in terms of G.O. Ms. No. 70 Co-op Food and Consumer Protection (CC1) Dept. dated 13.5.2006 of the 2nd respondent not withstanding the inquiry under section 81 of the Tamil Nadu Coop Societies Act 1983 into the affiars of the 1st respondent society. For Appellant : Mr.P.S.Sivashanmugasundaram For Respondents : Mr.S.Venkataraman for R-1 Mr.N.Srinivasan, Addl. Govt. Pleader for R2 https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T (Judgment of the Court was delivered by ELIPE DHARMA RAO,J.) These writ appeals are directed against the common order, dated 14.10.2008, made in W.P.Nos.6757 to 6759 of 2008, wherein the writ petitions filed by the petitioners, who are first respondent herein, were disposed of, directing the first respondent therein, who is the appellant herein, to issue the Certificate of Waiver of loan to them, if there is no legal impediment, within a period of four weeks from the date of receipt of copy of that order. 2. The writ petitions were filed by the petitioners/first respondent herein seeking a direction to the first respondent therein, the Sakramallur Primary Agricultural Co-operative Bank Limited, in short "the Bank", the appellant herein, to issue the certificate of waiver of loan to them in terms of G.O.Ms.No.70, Co-operative, Food and Consumer Protection (CC1) Department, dated 13.05.2006, issued by the second respondent therein, not withstanding the inquiry under Section 81 of the Tamil Nadu Co-operative Societies Act, 1983, into the affairs of the Bank. 3. The matter relates to waiver of loan to the agriculturalists on the basis of the Government Order issued by the second respondent herein as per G.O.Ms.No.70, Co-operative, Food and Consumer Protection (CC1) Department, dated 13.05.2006, read with the guidelines, which were laid down in the subsequent order in G.O.Ms.No.96 Co-operative, Food and Consumer Protection (CC1) Department, dated 05.07.2006. 4.It is the case of the writ petitioners, who are the members of the Bank, that they availed K.C.C. Loan to the tune of Rs.68,650/-, Rs.15,000/- and Rs.44,500/- respectively from the Bank on such terms and conditions as applicable and due to drought followed by unprecedented floods, extensive damage was caused to the crops pushing them to heavy loss thereby making it impossible to repay the loan and the writ petitioners have become defaulters and arbitration proceedings came to be held and though the decree came to be passed, the same has not been executed and hence, the Bank declined to grant fresh loan for cultivation and thus, the entire operation came to a standstill due to want of funds. 5.It is also the case of the writ petitioners that when there was demand from the public to write off the loans, on consideration of the same, the Government has passed G.O.Ms.No.70, Co-operative, Food and Consumer Protection (CC1) Department, dated 13.05.2006, https://hcservices.ecourts.gov.in/hcservices/ waiving the entire loan including the principle and interest and one of the conditions for application of the abovesaid Government Order is that the benefit of waiver was not applicable to bogus and benami loans and subsequently, the Banks were directed to issue Certificate of Waiver of loan and interest to the farmers within a period of ten days and pursuant to the same, the writ petitioners have made representations to the Bank requesting them to issue Waiver Certificate and to give additional crop loan, but the Bank, instead of considering their representations and issuing Waiver Certificates and granting additional crop loans, informed the writ petitioners that an inquiry under Section 81 of the Tamil Nadu Co- operative Societies Act came to be ordered into the affairs of the Bank and hence, certificates would not be given to them. 6.It is the further case of the writ petitioners that though they have approached the Bank and pleaded that the inquiry was limited to the working of the Bank and it had nothing to do with the loans given to its members and hence, they may be given the Certificates of Waiver, since the inquiry under Section 81 of the said Act into the affairs of the Bank could not be a ground to deny their legitimate right conferred by the aforesaid Government Order, the Bank refused to give the same. Hence, the writ petitioners have constrained to the file the writ petitions seeking the aforesaid directions. 7. When the writ petitions came up for final disposal, the learned single Judge, disposed of the same by directing the first respondent therein to issue Certificate of Waiver of loan to the writ petitioners, if there is no legal impediment, within a period of four weeks from the date of receipt of copy of that order, after following the earlier orders in W.P.Nos.25804, 25806 and 29274 of 2006, dated 01.09.2006, wherein it was held that, 'taking into consideration of the fact that Government has issued G.O.Ms.No.70, Coop., Food and Consumer Protection (CC1) Department, dated 13.05.2006 waiving the loan amount and pursuant to the said Government Order, necessary instructions were issued by the Registrar of Co-operative Societies to issue certificates of Waiver but the respondent has not passed any order till date for issuance of the said certificate required by the petitioner and the fact that except the said inquiry, no other inquiry has been initiated, this Court is of the view, there may not be any impediment in directing the respondents to issue the certificate of waiver to the petitioners and accordingly, the first respondent is directed to issue certificates of waiver to the petitioners if there is no legal impediment within a period of two weeks from the date of receipt of a copy of this order'. Aggrieved of the above, the present writ appeals have been filed. https://hcservices.ecourts.gov.in/hcservices/ 8. Heard the learned counsel for the appellants and the learned counsel for the first respondent as well as the learned Additional Government Pleader appearing for the second respondent. 9. It is the contention of the learned counsel for the appellants that the learned single Judge ought not to have dismissed the writ petition mainly on the ground that no writ will lie against the Primary Agricultural Co-operative Society, in view of the judgment rendered by the Hon'ble Larger Bench in W.A.No.1573 of 1998, dated 29.09.2006, in the case of K.Marappan -vs- The Deputy Registrar of Co-operative Societies, Namakkal and another reported in (2006 [4] CTC 689). It is also contended that unfortunately, the report of the inquiry conducted under Section 81 of the Tamil Nadu Co-operative Societies Act was not placed before the learned single Judge for consideration. 10. The learned counsel for the appellant further submitted that it is not right in contended by the writ petitioners that the inquiry report under Section 81 of the aforesaid Act is only in connection with the affairs of the Bank, but it is also with regard to the genuineness of the loan granted to the farmers with a view to extend the benefit as per the Government Order in G.O.Ms.No.70, which is referred to above, and in the inquiry, which was conducted on 15.04.2005, it is found that loans were granted to the benamies and on the basis of fake documents and as per the inquiry report dated 27.09.2005, it was found that the Committee Members of the Managing Committee of the appellant Bank, who had administered the said Bank, when they were in office, were found responsible for fabricating documents arbitrarily as if crop loans had been disbursed to the writ petitioners and thereby they had caused financial loss to the Bank and in the list of annexure, which was enclosed in the said report, the names of the writ petitioners were figured as Membership Nos.1692, 1265 and 3493 respectively and hence, the order of the learned single Judge directing the Bank to issue certificates of waiver of loan, following the earlier order of the High Court, is liable to be set aside. 11. It is also submitted by the learned counsel for the appellants that against the inquiry conducted under Section 81 of the Tamil Nadu Co-operative Societies Act, if the report goes against the servants or officers of the Society, the Registrar has got power to initiate surcharge proceedings under Section 87 of the said Act for recovery of the amount and he can initiate criminal proceedings against them for breach of trust. For the aforesaid reasons, it is finally submitted that the order of the learned single Judge is liable to be set aside. https://hcservices.ecourts.gov.in/hcservices/ 12. We have gone through the entire materials placed on record and also considered the documents, which were filed in support of the contentions raised by the learned counsel for the appellant. It is seen that without asserting as to whether any inquiry was conducted as contemplated under the provisions of the Tamil Nadu Co-operative Societies Act or not, the earlier order has been passed, by holding that except the inquiry no other inquiry has been initiated, which, in our considered opinion, is not correct. Further, in the present case on hand, directions were issued to the Bank to give certificates of waiver of loans to the writ petitioners, on the basis of the earlier order, which is illegal, as it is the admitted case of the writ petitioners that they have committed default, pursuant to which, arbitration proceedings were initiated and after completion of the same, a decree was passed, but when the Bank is going to execute the decree, the writ petitioners came forward with the writ petitions with mala fide intention, thereby not allowing the appellant to proceed with the execution of the decree. 13. In view of the above, the order under challenge in these writ appeals is liable to be set aside, and it is, accordingly, set aside. The writ appeals are allowed. Connected M.Ps. are closed. However, there will be no order as to costs. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar. bs. To The State of Tamil Nadu rep. by its Secretary to Government, Co-op., Food and Consumer Protection(CC1) Department, Fort St. George, Chennai-600 009. 1 cc to Government Pleader, Sr. 64458 W.A.Nos.367 to 369 of 2009 UG (CO) kk 3/11 https://hcservices.ecourts.gov.in/hcservices/