IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC MONDAY, THE 1ST JUNE 2009 / 11TH JYAISHTA 1931 WP(C).No. 32308 of 2008(U) --------------------------------------- PETITIONER(S): ----------------------- 1. BHUVANESWARY, ALAPPANTHARA, S.L. PURAM P.O., CHERTHALA 2. K.R. RAVI, KUNDELATTU, DO....DO.... 3. MADHAVIKUTTY AMMA, VADAKKEVELIYIL, DO.....DO...... 4. RETNAMMA, ALAPPANTHARA, DO....DO..... 5. K.J. YOHANNAN, KUTTIPPURATH VEEDU, MUHAMMA P.O., CHERTHALA. BY ADV.MR.J.OM PRAKASH RESPONDENT(S): -------------------------- 1. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), ALAPPUZHA. 2. THE ALAPPUZHA DISTRICT CO-OPERATIVE BANK LTD., REPRESENTED BY ITS GENERAL MANAGER, ALAPPUZHA. 3. THE NODAL OFFICE, THE ALAPPUZHA DISTRICT CO-OPERATIVE BANK, CHERTHALA BRANCH. 4. THE S.L. PURAM, SERVICE CO-OPERATIVE BANK LTD., NO. A64,REPRESENTED BY ITS SECRETARY, S.L. PURAM P.O., CHERTHALA. BY GOVT. PLEADER MR.K.C.SANTHOSHKUMAR BY ADVS. MR.P.K.VIJAYAMOHANAN,SC,ALP.DIST.CO-OP FOR R2-3 MR.S.P.ARAVINDAKSHAN PILLAY FOR R4 SMT.N.SANTHA FOR R4 MR.S.A.ANAND FOR R4 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01/06/2009, ALONG WITH WPC NO. 4519 OF 2009 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ANTONY DOMINIC, J. ================ W.P.(C) NOs. 32308 OF 2008 & 4519 OF 2009 ==================== Dated this the 1st day of June, 2009 J U D G M E N T Petitioners in these writ petitions are the members of the 4th respondent, the S.L. Puram Service Co-operative Bank Ltd. In these writ petitions what they are complaining of is that although they were eligible for the benefit of waiver of loans available to small farmers as per the provisions of the Agricultural Debt Waiver and Debt Relief Scheme, 2008, they were not extended the benefits thereunder. 2. In so far as WP(C) No.32308/08 is concerned, the facts of the case are that petitioners 1 to 5 herein, being members of the 4th respondent Bank, have availed of loans under the Kissan Credit Card Scheme. The first petitioner availed of a loan of Rs.25,000/- on 31/3/2001, the second petitioner availed a loan of Rs.20,000/- on 19/12/2000, petitioners 3, 4 and 5 availed loan of Rs.50,000/- each on 11/8/2000, 15/11/2000 and 9/2/2005 respectively. According to the petitioners, the loans were thus disbursed prior to 31/3/2007 and were overdue as on 31/12/2007 and were remaining unpaid as on 29/2/2008. WPC 32308 OF 2008 & 4519 /09 :2 : 3. It was while so that the Government of India announced the Debt Waiver scheme referred to above, a copy of which is Ext.P6. In terms of Clause 3.6 of the Scheme, petitioner submits that they are small farmers and referring to Clause 4, they say that Ext.P6 scheme covers the loans availed of under the Kissan Credit Card Scheme as well and this is not a matter of dispute. Petitioners submit that as per clause 5.1, they are entitled to total waiver of the liability. In implementation of the scheme, the 4th respondent Bank published a list of eligible defaulters and the petitioners were not included in the list. By Exts.P7 to P12 submitted to the 3rd respondent, petitioners represented against their non inclusion in the list published by the 4th respondent. There was no action on the representations and therefore the writ petition has been filed praying for directing disposal of Exts.P7 to P11 representations and also to direct the 4th respondent to extend them the benefit of Ext.P6 Debt Waiver Scheme. 4. Counter affidavits have been filed by respondents 2, 3 and 4. In the counter affidavit, the 2nd and 3rd respondents would WPC 32308 OF 2008 & 4519 /09 :3 : contend that on receipt of Exts.P7 to P11, the grievances raised were considered by the Grievance Redressal Officer. It is stated that on enquiry, it was found that all the petitioners have closed their loans under the Kissan Credit Card Scheme on 30/11/2007 and converted the outstanding loans into ordinary loans. On this basis, it is stated that as on 31/12/2007, no loans under the Kissan Credit Card Scheme was subsisting and outstanding to claim the benefit of Ext.P6 scheme. 5. In the counter affidavit filed by the 4th respondent, it is stated that the Junior Inspector of the 3rd respondent Bank inspected the 4th respondent Bank and that out of 126 loans extended under the Kissan Credit Cards, he deleted 9 of them and that 5 of those deleted are that of the petitioners herein. According to the Bank, thereupon they issued Exts.R4(a) to (e) notices to the petitioners calling upon them to pay up the amounts due and informed that on their failure, the loans will be converted into ordinary loans. It is stated that there was no response to the notices and therefore on 30/11/2007,the loans were converted into non agricultural loans. On this basis, the WPC 32308 OF 2008 & 4519 /09 :4 : Bank contends that as on 31/12/2007, no amount was outstanding under the Kissan Credit Card Scheme and therefore the petitioners are not entitled to the benefit of Ext.P6 Scheme. 6. In so far as WP(C) No.4519/09 is concerned, the petitioner herein had availed of a loan of Rs.2 lakhs under the Kissan Credit Card Scheme in May 2006. Similar to the complaint raised by the petitioners in WP(C) No.32308/08, he also submits that his loan was outstanding as on 31/12/2007 and was remaining unpaid as on 29/2/2008. On this basis, he also pleads that he is eligible for the benefit of Ext.P6 scheme and that the same has been wrongly denied. 7. In the counter affidavit filed by the 3rd respondent Bank in WP(C) No.4519/09, they are denying the eligibility of the petitioner for the benefit claimed. According to the 3rd respondent, on inspection of the Bank, it was found that the eligibility of the petitioner was only up to the limit of Rs.1,25,000/- and that accordingly, his limit was fixed at Rs.1,25,000/- on 30/11/2007. It is stated that at that time excess amount due from the petitioner was Rs.42,820/- and that this was converted into non agricultural WPC 32308 OF 2008 & 4519 /09 :5 : loan with intimation to the petitioner. It is stated that, therefore as on 31/12/2007, the Kissan Credit Card Account was operative and there was no overdue in the account, in which event only the petitioner can claim the benefit of Ext.P6 scheme referred to above. 8. In this case no counter affidavit has been filed by the 4th respondent Bank. 9. The case of the petitioners in WP(C) No.32308/08 is that conversion of the loans was without notice to them and that too, without even an application made by them. 10. In so far as WP(C) No.4519/09 is concerned, there also the petitioner complains that he was not put on notice about the reduction in the limit and that the conversion of Rs.42,820/- was also without notice to him. 11. Admittedly, but for the fact that the conversions referred to above have been ordered and implemented by the Bank, the loans would have been overdue as on 31/12/2007. The petitioners specific contention is that the conversion was effected without notice to them and the conversion was without even an WPC 32308 OF 2008 & 4519 /09 :6 : application made by them. Bank has no case in the counter affidavit filed in WP(C) No.32308/08 that petitioners had made any applications for conversion of the loan as done by them. On the other hand, in WP(C) No.32308/08, the Bank only says that they had issued Exts.R4(a) to (e) notices and that it was because there was no response from the petitioners that they had ordered conversion of the loans. 12. In my view, if the loan is to be converted and the obligations of the loanee are to be altered, that necessarily has to be based on an agreement between the parties, which atleast requires an application by the loanee concerned. On the other hand, if for some reason the loan was granted to an ineligible person or inadmissible amounts has been granted, it may be possible for the Bank to reduce, cancel or recall the loan and as a consequence thereof, the loanee may become a defaulter. In such a situation the remedy available to the Bank is to take recourse to the procedure available for recovery of the amount due. In this case, but for the fact that the loans were converted, the loanees would have been defaulters and the Bank's remedy WPC 32308 OF 2008 & 4519 /09 :7 : would have been to take recovery steps against such defaulters. Instead of doing that, what the Bank has done is that they have taken unilateral action for conversion of the loans by sanctioning other loans and that too, without even an application in this behalf. This, in my view, is impermissible. 13. True the Bank has a case that it has issued notices to the petitioners in WP(C) No.32308/08 and also to the petitioner in WP(C) No.4519/09 and that there was no response. It is the specific case of the petitioners that they have not received any such notice or intimation from the Bank and the Bank has not placed anything on record to prove service of these notices on the respective petitioners. In such a case, I cannot go by the mere assertion of the Bank, which has been disputed in the reply filed by the petitioners. 14. Therefore, I must accept the case of the petitioners that the loans were converted without even applications made by them and hence such unilateral conversion is illegal. In my view, the case of the petitioners deserves to be reconsidered ignoring the alleged conversion that has been relied on by the Bank to WPC 32308 OF 2008 & 4519 /09 :8 : deny the benefit to the petitioners. 15. Although in so far as WP(C) No.4519/09, the loan was for Rs.2 lakhs, however, the 2nd respondent Bank on examination found that the petitioner's eligibility for loan was only for Rs.1,25,000/-. Though the petitioner is challenging this reduction,having regard to the fact that it was based on the assessment of the eligibility of the petitioner that such reduction was ordered by the 2nd respondent and carried out by the 4th respondent, I do not find anything irregular in such action of the Bank warranting interference. Similarly, the remittance of Rs.54,007/-, from the fixed deposit also was on the consent of the petitioner and therefore cannot be faulted. 16. Therefore, I dispose of these writ petitions with the following directions. 17. That the 4th respondent Bank shall reconsider the case of the petitioners for extending them the benefit of Agricultural Debt Waiver and Debt Relief Scheme, 2008, ignoring the conversion of the loan that is relied on against them. Orders thereon shall be passed, as expeditiously as possible, at any rate WPC 32308 OF 2008 & 4519 /09 :9 : within 4 weeks of production of a copy of this judgment. Needles to say that on such examination, if the petitioners are found eligible for the benefit the scheme, the same will be extended to them and if the liability is thus discharged, the documents of title deposited by the petitioners will be released to them. ANTONY DOMINIC, JUDGE Rp