IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 32308 of 2008(U)
1. BHUVANESWARY, ALAPPANTHARA,
... Petitioner
2. K.R. RAVI, KUNDELATTU, DO....DO....
3. MADHAVIKUTTY AMMA, VADAKKEVELIYIL,
4. RETNAMMA, ALAPPANTHARA, DO....DO.....
5. K.J. YOHANNAN, KUTTIPPURATH VEEDU,
Vs
1. THE JOINT REGISTRAR OF CO-OPERATIVE
... Respondent
2. THE ALAPPUZHA DISTRICT CO-OPERATIVE
3. THE NODAL OFFICE, THE ALAPPUZHA
4. THE S.L. PURAM, SERVICE CO-OPERATIVE
For Petitioner :SRI.J.OM PRAKASH
For Respondent :SRI.S.P.ARAVINDAKSHAN PILLAY
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :01/06/2009
O R D E R
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.
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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
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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
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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
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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
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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
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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
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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
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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