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SCA/6513/2008 22/ 22 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 6513 of 2008
With
SPECIAL
CIVIL APPLICATION No. 6455 of 2008
To
SPECIAL
CIVIL APPLICATION No. 6456 of 2008
With
SPECIAL
CIVIL APPLICATION No. 6570 of 2008
With
SPECIAL
CIVIL APPLICATION No. 6662 of 2008
With
SPECIAL
CIVIL APPLICATION No. 6965 of 2008
To
SPECIAL
CIVIL APPLICATION No. 6966 of 2008
With
SPECIAL
CIVIL APPLICATION No. 7161 of 2008
With
SPECIAL
CIVIL APPLICATION No. 7166 of 2008
To
SPECIAL
CIVIL APPLICATION No. 7168 of 2008
With
SPECIAL
CIVIL APPLICATION No. 7233 of 2008
With
SPECIAL
CIVIL APPLICATION No. 8926 of 2008
With
SPECIAL
CIVIL APPLICATION No. 9314 of 2008
With
SPECIAL
CIVIL APPLICATION No. 9681 of 2008
For
Approval and Signature:
HONOURABLE
MR.JUSTICE JAYANT PATEL
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
ANUBHAI
HAMIRBHAI KHASIYA - Petitioner(s)
Versus
SHREE
KODINAR TALUKA CO OP BANKING UNION LTD & 4 - Respondent(s)
=========================================================
Appearance
:
MR
HR PRAJAPATI for
Petitioner(s) : 1,
MR CHINTAN S POPAT for Respondent(s) : 1,
None
for Respondent(s) : 2 - 3.
MR KL PANDYA, AGP for Respondent(s) : 4
(in all the matters),
MS ARCHANA U AMIN for Respondent(s) :
5,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 10/09/2008
ORAL
JUDGMENT
As
in all the petitions common questions arise for consideration they
are being considered by this common judgement. The learned Counsel
for both the sides are heard for final disposal.
All
the petitioners are the agriculturists, who had taken agricultural
loans from the respondent Bank namely; Shree Kodinar Taluka Coop.
Banking Union Ltd. It appears that the loan was not fully paid and,
therefore, the procedure was undertaken by the respondent Bank for
recovery of the amount in certain cases
It
appears that the Scheme was declared by the Central Government known
as Agricultural Debt Waiver and Debt Relief Scheme 2008 (hereinafter
referred to as the Scheme ) and as per the said Scheme certain
debts of the agriculturists are to be given relief. In respect to
the loans to the farmers through Cooperative Banks or through
Cooperative Societies the scheme is to be regularised by Reserve
Bank of India (hereinafter referred to as ‘RBI’) or National Bank
for Agriculture of Rural Department (hereinafter referred to as
‘NABARD’). However, it appears that since the details of the scheme
were immediately not communicated to the respondent Bank, it
proceeded for recovery of the amount by resorting to the provisions
of the Gujarat Cooperative Societies Act (hereinafter referred to as
the ‘Act’) for recovery of the amount as per the award or as per the
recovery certificate, as the case may be. The respondent Bank also
proceeded for attachment of the land of the concerned agriculturists
and in certain cases the auction was also held. At that stage, all
the petitioners, except petitioners of Special Civil Applications
No.8926 and No.9314 of 2008, had challenged the said auction on the
part of the Bank for recovery of the amount by auctioning the
property of the petitioners and others and with other prayers. This
Court initially had directed for not to finalize the auction and,
therefore, as a result thereof, the offer of the auction purchaser
remained as it is and no further steps were taken. Ultimately, this
Court, vide order dated 9.5.2008, after hearing both the sides, had
directed the petitioner to deposit certain percentage of the
outstanding dues by providing different time periods and so far as
the auction held by the Bank in respect to the properties of the
debtors are concerned, direction was also given to the concerned
agriculturists to pay additionally the interest at the rate of 8%
per annum. The relevant direction to that aspect shall be referred
to at later stage. It appears that thereafter the petitioners,
barring petitioners of SCA Nos.8926 and 9314 of 2008, carried the
matter by preferring Letters Patent Appeal before the Division Bench
in LPA No.567 of 2008 and allied matters and in the said LPA, one of
the contentions raised on behalf of the respondent Bank was that the
scheme is not applicable to the debts of the petitioners and,
therefore, the Division Bench took the views that the question of
applicability of the scheme was required to be decided prior to
directing the concerned agriculturists to deposit the amount and,
therefore, the matter has been remanded back to this Court. The
pertinent aspect is that so far as the auction held pending the
proceedings are concerned, it was also observed by the Division
Bench as under:-
The
appellants are also held liable to pay interest on the amounts
deposited by the auction purchasers from the respective dates of the
deposits till the date on which the learned Single Judge decides the
petitions, at such rate as may be decided by the learned Single
Judge.
Therefore,
the liability to pay interest to the auction purchaser on the
amount, which was deposited by the respective auction purchasers for
participating in the auction of the property of the concerned
petitioners is not modified by the Division Bench. Under these
circumstances, the present petitions have come up for consideration
before this Court.
Heard
Mr.Prajapati, Mrs.Sangeeta Pahwa and Mr.Prachhak, learned Counsel
appearing for the respective petitioners, Mr.Ashish Shah for
Mr.Popat, learned Counsel in all the petitions for respondent No.1
Bank, Mr.Raval, learned Counsel for the concerned Respondent,
Ms.Archana Amin, learned Counsel for respondent No.5 Bank,
Mr.Pandya, learned AGP for the Government Authorities and Mr.Dagli,
learned Counsel for respondent No.4 in Special Civil Application
No.9314 of 2008.
It
appears from the scheme read with the affidavit-in-reply filed on
behalf of NABARD respondent No.5 herein that the scheme applies
to all agricultural debts, which remained unpaid as on 28.2.2008.
The definition speaks for various loans namely; Direct Agricultural
Loans, Short Term Production Loan, Investment Loan, etc. The scheme
is available to marginal and small farmers and other farmers. The
definition of the marginal farmers provide for holding of the land
up to 1 hectare (2.5 acres), for small farmers, it provides for
holding of the land more than 1 hectare, but up to 2 hectares (5
acres) and for other farmers, it has been provided for holding of
the land more than 2 hectares (more than 5 acres), which may include
all the farmers irrespective of their holding in the category of
other farmers. It is true that as per the scheme different
treatment is to be given for disbursement and set off of the debts
by extending relief through Central Government in respect of the
marginal farmers or small farmers or other farmers, but in view of
the scope provided under the Scheme, it is difficult to accept the
contention of the learned Counsel for the respondent No.1 Bank that
the scheme is not applicable to the debts of the petitioners, who
are admittedly agriculturists and the transaction of the loan
pertains to the category of the direct agricultural loans or short
term production loan or the investment loan, as covered in the
scheme. The aforesaid is apparent from the scope of the scheme,
which, inter alia, provides at 2.1 as under:-
2.1 The
scheme will cover direct agricultural loans extended to ‘marginal
and small farmers’ and ‘other farmers’ by Scheduled Commercial
Banks, Regional Rural Banks, Cooperative Credit Institutions
(including Urban Cooperative Banks) and Local Area Banks
(hereinafter referred to compendiously as ‘lending institutions’) as
indicated in the Guidelines.
As
observed earlier if all the categories of the farmers are
considered, it would also include the farmers holding the
agricultural lands exceeding 2 hectares, which would mean all the
farmers since the upper limit of holding of the agricultural lands
has not been provided to exclude certain farmers in the category of
other farmers . It is not the case of the respondent Bank that
the loans were not pertaining to the agricultural loans or short
term production loans or investment loans. It is also an admitted
position that the loans were granted by the bank, which is a
cooperative credit institution. Under these circumstances, it
cannot be said that the scheme is not applicable to the petitioners,
who are farmers and who obtained agricultural loans from the
respondent No.1 Bank and, therefore, the said contention of the
learned Counsel for the respondent No.1 Bank deserves to be rejected
and hence, rejected.
As
per the scheme, various modalities have been provided for
implementation of the scheme. The cut-off date for calculating the
eligibility amount can be gathered from paragraph 4.1(A) as well as
(B), which speak for amounts remaining unpaid or over due until
February 29, 2008. It is also an admitted position that the amounts
in respect to the loans of the petitioners, may be by way of the
award or by way of recovery certificate of the competent authority,
were unpaid or they were over due. Therefore, if the scheme is to
apply and the debts of the petitioners are to be covered in the
scheme, it will be required by the respondent No.1 Bank to give the
same treatment to all its agriculturist debtors and the petitioners
would fall in the same category of agriculturists’ status so as to
claim the benefits of the scheme as floated by the Central
Government. Therefore, the consequence would be that the
petitioners would be entitled for the benefits of the scheme
pertaining to the debts in question, which are subject matter of the
present petition.
The
next aspect, which may be required to be considered is for examining
the action on the part of the respondent No.1 Bank in proceedings
for recovery of the amount and the consequence thereof, whether
should be allowed to remain or if to be set aside or nullified, what
the equitable considerations should prevail qua the parties, who
have acted in bonafide.
It
appears that as per the respondent No.1 Bank, though the scheme was
floated, it had no details, whereas it is the case of the
petitioners that the scheme was also available to the respondent
No.1 Bank and it had started extending benefits to the other
similarly situated agriculturists, in spite of the same, a different
treatment was given in respect of the debts of the petitioners by
the respondent No.1 Bank by proceeding with the recovery of the
amount.
In
normal circumstances, if the Bank, who is holding the award in its
favour or recovery certificate in its favour, would be justified in
proceeding for recovery of the amount, unless there is any
prohibitory order of the competent forum known to law. It is an
admitted position that there were no prohibitory orders against the
respondent No.1 Bank in recovery of the amount. Therefore, if the
action is taken for recovery of the amount, at least the same cannot
be said as without any competence or jurisdiction or authority on
the part of the respondent Bank. May be that had the scheme in
detail been well within the knowledge of the respondent No.1 Bank
and in spite of the same, it proceeded further, the action at the
most could be said as unreasonable or arbitrary. The petitioners,
who are admittedly defaulters of the loan transaction cannot pitch
their case beyond the same. As it has happened in the present case,
the Bank has proceeded for recovery of the amount by disposal of the
properties by holding auction, but the fact remains that at the
initial stage in respect of all the petitions, since the petitions
were filed at the later stage after holding of the auctions in
certain cases, in certain cases auction was already held before the
matter was considered by this Court, the direction was already given
not to finalize the auction. Therefore, the consequential result is
that the auction was held, but not finalized. It is only in cases
of Special Civil Application Nos.8926 and 9314 of 2008, since no
Letters Patent Appeal was preferred, the Bank proceeded for
finalization of the auction and the respective auction purchaser has
paid the remaining amount of the auction. It is the case of the
respondent No.1 Bank as well as the auction purchaser in one of the
matters represented through Mr.Dagli, learned Counsel that the sale
certificates have been issued and the entry is also mutated in the
revenue record. However, the fact remains that there is no
authenticated record produced by either side to show that the
possession of the lands concerned to Special Civil Application
Nos.8926 of 2008 and 9314 of 2008 is handed over or that there are
additional rights created by altering the situation thereafter.
As
observed earlier, if the scheme is floated by the Central Government
in respect of all agriculturists and the petitioners are the
persons, who are covered by the said scheme and their debts are also
required to be given the same treatment as per the scheme and when
as per the scheme, the cut-off date is 29.2.2008, it would not be a
case to deprive the petitioners from the benefits of the scheme on
the ground that the respondent No.1 Bank during the later period
proceeded for recovery of the amount or that the auction has been
held and in two cases the amount is fully paid by the auction
purchaser.
As
such this Court, when earlier considered the matter, vide order
dated 9.5.2008, it was, inter alia, observed that if the petitioners
are desirous to get the benefits of the scheme, it would be required
for the petitioners to deposit the amount not less than the amount
received by the Bank so as to protect the land plus interest at the
rate of 8% per annum, so as to compensate the auction purchaser
towards the loss of interest, in the event the matter was to be
considered for issuing directions to the Bank for refund of the
amount to the auction purchaser. Thereafter, the directions were
given accordingly and as observed earlier, the Division Bench of
this Court in Letters Patent Appeal has also not modified the said
aspect of the liability of the concerned petitioners/land holders to
pay interest for compensating to the auction purchaser, but it only
left to the discretion of this Court about the rate of interest to
be made payable. In my view, interest at the rate of 8% per annum
can be said as reasonable for compensating the auction purchaser,
who did part with the amount, may be acting in bonafide, for
participating at the auction and at the later stage, either the
auction is not finalized or if finalized, the same is set at naught
by this Court. Even on equitable consideration also, the auction
purchaser, if after acceptance of the auction, is to be told that
the offer is not accepted or that the auction is to be cancelled, it
would be just and proper for the competent authority, who is to set
aside the auction to reasonably compensate the auction purchaser,
who acted in bonafide.
As
per the observations made hereinabove, since the petitioners are
found as eligible and entitled for the benefits of the scheme, it
would be required for the respondent No.1 Bank to extend the
benefits as per the Scheme to the respondent petitioners. If the
scheme is to operate in respect of the debts, which are subject
matter of the petitions, there may not be any question for disposal
of the properties of the concerned agriculturists, at least until
the default is made by concerned agriculturists in paying the amount
as per the scheme. Therefore, if the date is taken as the basis, as
was prevailing on 29.2.2008, no useful purpose would be served in
allowing the auction to stand and thereby to deprive the auction
purchaser from the land and it would be just and proper to set aside
the auction in view of the present facts and circumstances and
consequently to direct the respondent bank to refund the amount with
interest at the rate of 8% per annum, but it will be required for
the concerned petitioners, who is seeking cancellation of the
auction to bear the liability of the interest at the rate of 8% per
annum since the petitioners are desirous to protect the land and the
action of the Bank cannot be said as wholly without jurisdiction.
Even on the aspects of reasonableness, if the matter is examined the
petitioners are defaulters of the loans and, therefore, if the
payment has not been made and the bank has proceeded for recovery of
the amount, such an action cannot be said as unreasonable, more
particularly when as per the respondent Bank, all the details of the
scheme were not available or that the scheme was not applicable to
the Bank or the debts of the petitioners. In normal circumstances,
if the debtor is to save the property at the auction held for
recovery of the amount, the burden of bearing the liability to pay
the interest, which is to be paid by way of compensation to the
auction purchaser at the ultimate setting side of the auction, is
required to be passed over to the person, who is seeking the setting
aside of the auction. Considering the facts and circumstances, it
appears to the Court that the burden for bearing of the interest at
the rate of 8% per annum for compensating to the auction purchaser
shall be required to be borne by the respective petitioners.
As
observed earlier, since the petitioners are found as covered by the
Scheme and the debt which is subject matter of the petition is also
covered by the Scheme, it will be required for the respondent Bank
to intimate the respective petitioners about the actual amount to be
paid by the concerned petitioners for entitling the benefits of the
scheme and also the interest at the rate of 8% per annum, as
observed earlier, on the amount deposited by the auction purchaser
for participating at the auction or at the later stage by complying
with the conditions of the auction. The bank may give reasonable
time to the petitioners to deposit the amount and it will also be
required to the bank to undergo the necessary formalities for
getting the undertaking etc., as per the scheme and such formalities
may be completed, in any case, before 30th September,
2008.
In
view of the above, the following order:-
(a) It
is declared that the petitioners and the debts, which are subject
matter of the petitions are covered by the Agricultural Debt Waiver
and Debt Relief Scheme 2008. Consequently, the respondent No.1 Bank
would be required to extend the benefits as per the Scheme to the
concerned petitioners and the concerned petitioner(s) shall be
required to comply with the conditions for availing the benefits of
the Scheme.
(b) The
respondent No.1 Bank shall intimate to the petitioners within one
week from today, the amount payable by respective petitioners for
availing the benefits of the Scheme plus interest at the rate of 8%
per annum to be paid to the auction purchaser on the amount
deposited by the auction purchaser from the date of deposit until
30th September, 2008. While calculating the said amount,
the Bank shall deduct or shall give set off the amount already
deposited by the petitioners pending the petitions or the Letters
Patent Appeal.
(c) The
petitioners shall deposit the requisite amount with the respondent
Bank within two weeks from the date of intimation or, in any case,
on or before 30th September, 2008.
(d) Upon
the compliance of the aforesaid direction, the auction shall stand
set aside and the respondent Bank shall refund the amount deposited
by the auction purchaser may be 10% of the offer or the full amount,
as the case may be, with the interest at the rate of 8% per annum
from the date of deposit of the respective amount until 30th
September, 2008. The said amount shall be returned preferably on or
before 15th of October, 2008.
(e) Upon
the compliance of the aforesaid directions, the action of the
respondent Bank for recovery of the outstanding amount or for
disposal of the property of the petitioners shall not survive and
the Bank shall give the same treatment to the debts of the
petitioners as is required to be given as per the Scheme of the
Central Government.
(f) If
there is any dispute in implementing the Scheme, as per the Scheme,
the forum is provided for grievance redressal officer. Therefore,
in case of any difficulty, it would be open to the petitioners to
approach before such officer, including for calculation.
Mr.Shah,
learned Counsel appearing for the respondent No.1 Bank, states that
the operation of this order be stayed qua Special Civil Application
No.8926 of 2008 and Special Civil Application No.9314 of 2008 since
the auction has been held and finalized as no Letters Patent Appeal
was preferred. In my view, the Bank as such cannot have a better
right than the auction purchaser. Further, same treatment is to be
given to all similarly situated persons. Therefore, the said request
is declined.
Mr.Dagli,
learned Counsel for the auction purchaser also prayed for suspending
the operation of this order for some time, so as to enable his
client to approach before the higher forum. Considering the facts
and circumstances, even otherwise also the order is to take effect
for return of the amount after 30th September, 2008.
Therefore, the said request is declined.
The
petitions are allowed to the aforesaid extent. Rule made absolute
accordingly. No order as to costs.
10.9.2008 (Jayant
Patel, J.)
vinod
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