IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 31ST JULY 2009 / 9TH SRAVANA 1931 WP(C).No. 32260 of 2007(M) -------------------------- PETITIONER(S): --------------- KOODARANHI SERVICE CO-OPERATIVE BANK LTD. NO.LL 74, KOODARANHI P.O., KOZHIKODE DISTRICT, REPRESENTED BY ITS PRESIDENT P.M.THOMAS. BY ADV. SRI.P.V.BABY SRI.R.KIRAN RESPONDENT(S): --------------- 1. JOHNY, S/O JOSEPH, PEDICKATTUKUNNEL HOUSE, KOODARANHI P.O., KOZHIKODE DISTRICT. 2. THRESSIA, W/O JOHNY, PEDICKATTUKUNNEL HOUSE, KOODARANHI P.O., KOZHIKODE DISTRICT. 3. ELIKUTTY, W/O JOHN, KIZHAKKEMURAYIL HOUSE, PEDICKATTUKUNNEL HOUSE, KOODARANHI P.O., KOZHIKODE DISTRICT. 4. THE DISTRICT CO-OPERATIVE BANK, KOZHIKODE. 5. THE JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES(GENERAL), KOZHIKODE. 6. STATE OF KERALA, REPRESENTED BY ITS SECRETARY TO CO-OPERATION DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM. ADV. SRI.P.V.KUNHIKRISHNAN FOR R4 GOVERNMENT PLEADER SMT.SMITHA SUKUMAR THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 31/07/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). No. 32260/2007. APPENDIX PETITIONER'S EXHIBITS: P1. COPY OF THE MODEL AGREEMENT FRAMED BY R4 BANK. P2. COPY OF THE AGREEMENT DTD.22.12.05 EXECUTED BY R1 IN FAVOUR OF THE PETITIONER BANK. P3. COPY OF THE AGREEMENT DTD.22.12.05 EXECUTED BY R2 IN FAVOUR OF THE PETITIONER BANK. P4. COPY OF THE AGREEMENT DTD.22.12.05 EXECUTED BY R3 IN FAVOUR OF THE PETITIONER BANK. P5. COPY OF THE ORDER DTD.10.8.2007 OF R5. Sdk+ ///True copy/// P.A. to Judge S.SIRI JAGAN, J. ================== W.P(C).No.32260 of 2007 ================== Dated this the 31st day of July, 2009 J U D G M E N T The petitioner is a co-operative society. They advanced loan amounts to respondents 1 to 3. Respondents 1 to 3 did not prepay the loan amounts in time. As per the agreement between the parties, respondents 1 to 3 were required to pay interest on the loan amounts and penal interest at the rate of 2 per cent for delayed payment of instalments. Respondents 1 to 3 ultimately paid the amounts with penal interest. Thereafter, it appears that the 1st respondent filed a petition before the Minister, which was forwarded to the 5th respondent, who, by Ext.P5 order, directed the petitioner to refund the penal interest collected from respondents 1 to 3. The petitioner society has filed this writ petition challenging Ext.P5. 2. According to the petitioner, loan amounts were disbursed to the borrowers as per agreements executed between the parties, which stipulate payment of interest and penal interest for non- payment of instalments on the stipulated dates. According to the petitioner, in fact that is the procedure followed by co-operative banks all over Kerala and nationalised banks in India. That cannot be termed as usurious at all. Further, according to the petitioner, no powers are vested with the 5th respondent to issue an order like Ext.P5 directing 2 the Society to refund any interest recovered from the borrowers. It is further contended that Ext.P5 order has been passed without hearing the petitioner. The petitioner, therefore, seeks the following reliefs: “i) issue a writ of certiorari or other appropriate writ, order or direction, calling for the records leading to Ext.P5 and quash the same; ii) declare that the penal interest recovered from respondents 1 to 3 as provided in Exts.P2 to P4 is not legally liable to be repaying to them as directed in Ext.P5.” 3. None of the respondents have chosen to file any counter affidavit. The learned Government Pleader could not tell me the provision of law under which the 5th respondent could validly issue an order like Ext.P5. Ext.P5 does not refer to any notice or hearing to the petitioner. Further, the relationship between the petitioner and respondents 1 to 3 is clearly one of contract. If respondents 1 to 3 are aggrieved by any amounts recovered from them by the petitioner, they had an alternative remedy by way of filing an arbitration case before the Arbitrator as provided under Section 69 of the Kerala Co- operatives Societies Act. For all the above reasons, Ext.P5 is without jurisdiction. Accordingly, the same is quashed. Sd/- sdk+ S.SIRI JAGAN, JUDGE ///True copy/// P.A. to Judge 3