IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C) No. 81 of 2008(I)
1. VILAPPIL SERVICE CO-OPERATIVE BANK LTD.,
... Petitioner
Vs
1. THE COMMISSIONER OF POLICE,
... Respondent
2. A.KASIM KUNJU,
For Petitioner :SRI.BABU S. NAIR
For Respondent :GOVERNMENT PLEADER
The Hon'ble MR. Justice THOTTATHIL B.RADHAKRISHNAN
Dated :11/03/2008
O R D E R
THOTTATHIL B.RADHAKRISHNAN, J.
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W.P(C).No.81 OF 2008
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Dated this the 11th day of March, 2008
JUDGMENT
“C.R.”
The second respondent availed a loan from the first
respondent and executed an agreement in terms of Section 37
(1) of the Kerala Co-operative Societies Act, 1969, hereinafter,
‘the Act’. By the force of that agreement, the petitioner was
entitled to request the employer of the second respondent to
make deductions from the salary of the second respondent for
remittance towards the defaulted loan account. The petitioner
made such request to the first respondent Commissioner of
Police. No action followed. Thereafter, the second respondent
retired from service. The retiral benefits are not covered by
Section 37 agreement between the petitioner and the second
respondent.
2. In the aforesaid circumstances, notice was issued to the
first respondent to show cause why deductions were not
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2
promptly made while the second respondent was in service. A
counter affidavit has been placed on record, taking the stand
that the salary certificate was issued by the Sub Inspector of
Police, who does not have authority to do so, while it is the
Accounts Officer, who is the drawing and disbursing officer, is
the only one who is authorised to issue a salary certificate and
also to make deductions in terms of the Act. The thrust of the
counter affidavit is that there is no consensus by the competent
authority, viz., the Accounts Officer, to comply with any
agreement under Section 37.
3. A plain reading of Sub-sections (1) and (2) of Section 37 of
the Act would show that what is contemplated is an agreement
between the creditor and the debtor, whereby, the debtor agrees
to the creditor requesting for deduction from salary in case of
default in repayment of loan. Once such an agreement is
executed between the creditor and the debtor, Section 37 (2)
obliges the employer of the debtor to act in terms of any request
made by the creditor, provided the request falls on the basis of
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3
the agreement under Section 37 (1). Once that is done, the
responsibility to make deductions in terms of Section 37 (2) does
not depend upon the volition of the employer. It is a statutory
obligation. The provisions of the Act also enjoin penalty for non-
compliance of the obligation under Section 37 (2). Section 94
(5) of the Act provides that any employer or officer, who, without
sufficient cause, fails to deduct any amount as required by Sub-
section (2) of Section 37, shall be punishable with fine, which
may extend to Rs.5,000/-. Such a penalty is also provided for
persons who deduct the amount but fail to pay it to the creditor
within a period of 7 days. What is provided thereby is a
punishment which means, on being inflicted with that penalty,
the officer against whom such an order is passed would stand as
one who is found to be guilty of an offence. In the context of
Section 37 (2), it essentially would tantamount to dereliction of
duties.
4. The plea in the counter affidavit that the salary certificate
was not issued by the competent authority and therefore,
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4
Section 37 agreement is not binding is unsustainable. Equally
unsustainable is the stand taken in the counter affidavit that the
competent officer empowered to make deductions from the
salary has not signed the papers under Section 37. The further
plea that the second respondent had been transferred out of the
station in question does not also hold good, because, if the
immediate superior officer at a particular point of time is
requested by a creditor under Section 37 of the Act, it is
obligatory that such request is forwarded to the competent
officer who is the superior officer at that time. The creditor
cannot be forced to hunt down the appropriate officer who
should be moved for relief in terms of Section 37 (2).
5. As of now, the second respondent has retired from service.
Therefore, in terms of the agreement under Section 37 (1)
between the petitioner and the second respondent, there can be
no recovery against the second respondent. For that short
reason, this writ petition is liable to be dismissed.
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In the result, the writ petition fails. The same is
accordingly dismissed.
Sd/-
THOTTATHIL B.RADHAKRISHNAN,
Judge
kkb.