Kerala High Court
R.Anilkumar vs The Kerala State Financial Enterprises ... on 1 December, 2016
Author: Shaji P. Chaly
Bench: Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
THURSDAY, THE 1ST DAY OF DECEMBER 2016/10TH AGRAHAYANA, 1938
WP(C).No. 4769 of 2014 (U)
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PETITIONER :
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R.ANILKUMAR,
S/O. RAJASHEKHARAN NAIR, AGED 38 YEARS,
RESIDING AT T.C 50/351-1, "SREENANDANAM",
KALADY, KARAMANA P.O., THIRUVANANTHAPURAM.
BY ADVS.SRI.SABU GEORGE
SRI.NIDHI BALACHANDRAN
RESPONDENT(S):
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1. THE KERALA STATE FINANCIAL ENTERPRISES LTD.
'BADRATHA', MUSEUM ROAD, CHEMBUKAVU,
THRISSUR, PIN-680 003,
REPRESENTED BY ITS MANAGING DIRECTOR.
2. THE BRANCH MANAGER,
KERALA STATE FINANCIAL ENTERPRISES LTD.,
CHALAI BRANCH, THIRUVANANTHAPURAM-695 033.
BY ADV. SRI.JIMMY GEORGE THADATHIL, SC, KSFE
SRI.P.V.LONACHAN,SC,KSFE LTD.
SRI.ALEXANDER.C.V., SC,
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 01-12-2016, THE COURT ON THE SAME DAY DELIVERED
THE FOLLOWING:
sts
WP(C).No. 4769 of 2014 (U)
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APPENDIX
PETITIONER(S)' EXHIBITS
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P1 : COPY OF THE MORTGAGE AGREEMENT EXECUTED ON 19.3.2009 BY THE
PETITIONER IN FAVOUR OF RESPONDENT NO.1.
P2 : COPY OF THE CHITTY LOAN AGREEMENT EXECUTED ON 20.3.2009 BY THE
PETITIONER IN FAVOUR OF RESPONDENT NO.1.
P3 : COPY OF THE RULES OF THE CHITTY LOAN SCHEME.
P4 : COPY OF THE NOTICE NO.NCL/994/130 DTD. 27.10.2011.
P5 : COPY OF THE NOTICE DTD. 23.12.2011.
P6 : COPY OF THE ORDER DTD. 28.11.2013 IN COMPLAINT NO.487 OF 2012
BEFORE THE HON'BLE LOK AYUKTA, THIRUVANANTHAPURAM.
RESPONDENT(S)' EXHIBITS: NIL
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/TRUE COPY/
P.A.TO JUDGE
sts
SHAJI P. CHALY, J.
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W.P.(C) No.4769 of 2014
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Dated this the 1st day of December, 2016
JUDGMENT
Petitioner is a subscriber to a Chitty having Sala of Rs.15,00,000/-, and has availed a chitty loan amounting to Rs.5,00,000/- after mortgaging his property. In the 7th auction, the chitty was auctioned in favour of the petitioner for an amount of Rs.12,24,500/-. As per the Kerala Chitties Act, 1975, and the terms and conditions of the Chitty loan, the loan amount was to be first adjusted from the prize money when the chitty is auctioned or drawn in favour of a subscriber. However, petitioner did not obtain the prize money. Petitioner was under the bonafide belief that respondent No.2 had adjusted the loan amount from the prize money and the balance amount was deposited, is the contention of the petitioner. That apart, it is stated, after holding the prize money for more than 2 = years, respondent No.2 has issued Ext.P4, demanding repayment of the entire loan amount of Rs.5,00,000/- together with interest and threatened of initiation of Revenue Recovery steps in case of failure. W.P.(C) No.4769 of 2014 2
2. Thereupon, petitioner caused to issue Ext.P5 notice requesting to take remedial action to rectify the maladministration on their part and to withdraw Ext.P4. Since no action was taken by the respondents, petitioner filed Complaint No.487 of 2012 before the Lok Ayukta, Thiruvananthapuram, alleging maladministration on the part of the respondents. The Lok Ayukta heard the matter, and passed Ext.P6 order, dismissing the complaint filed by the petitioner, finding that there is no maladministration on the part of the respondents. The inaction on the part of the respondents in not adjusting the loan amount from the amount prized in favour of the petitioner and not depositing the balance amount, as provided under the Kerala Chitties Act, 1975 is arbitrary and illegal. Therefore, it is the contention of the petitioner, the demand made by the respondents to remit the loan amount with interest is illegal, arbitrary and unreasonable.
3. Respondents have filed a counter affidavit disputing the allegations and claims and demands made by the petitioner. The subject matter in respect of the subscription of the chitty, and availing of the loan as submitted by the W.P.(C) No.4769 of 2014 3 petitioner are all admitted in the counter affidavit. That apart, it is stated, as per the chitty loan rules, the loan amounts will be first adjusted from the prize money, when the chitty is auctioned or drawn in favour of the petitioner. Ext.P3 produced by the petitioner are the rules of the chitty loan scheme, which glaringly lays down the rules of taking loan from the respondent company. The 1st rule clearly states that the chitty loan is only available to customers who comply with several conditions along with producing adequate securities as per the norms of the company. Petitioner produced adequate security for availing the loan of Rs.5,00,000/-. The 9th rule in Ext.P3 stipulates that, if the subscriber auctions the chitty, the prize amount would be set off against the loan amount outstanding, and the balance amount would be paid on the basis of adequate security. It is submitted that the said furnishing of adequate security is for securing the payment of future instalments in the chitty. Petitioner herein refused to comply with the said rule, which led to the factual matrix, which culminated in filing of the writ petition.
4. It is also stated, petitioner auctioned the chitty at the 7th auction on 25.07.2009, and became entitled to the W.P.(C) No.4769 of 2014 4 drawal of prize money of Rs.12,24,500/-, as and when the petitioner produces sufficient security for the future instalments in accordance with the terms of Ext.P3 rules. The chitty loan was only for an amount of Rs.5 lakhs, where the Branch Manager of the 2nd respondent himself can accept the property as security. However, the future liability in the chitty at the time of prizing the chitty was more than 11 lakhs and hence the documents relating to the security ought to be sent, scrutinized and approved by the Regional office of the 1st respondent company. While the documents of the petitioner were sent to the Regional office, defects were noted dissuading the petitioner from withdrawal of the prize money, like Death certificate of one of the prior title holders of property was not produced, up-to-date land tax receipt, possession certificate with survey numbers and sketch with side measurements, Prop I form and affidavit to be filled up properly, and alternate security for unsecured amount to be produced. It is also stated, petitioner was under the mistaken belief that the property already provided as security towards chitty loan can also be extended as security towards the prized amount. However, when the said document was forwarded to the W.P.(C) No.4769 of 2014 5 Regional Office, several defects were noted for non-acceptance of the same property as security. It was very well known to the petitioner, however the petitioner did not care to rectify the defects noted, and therefore the respondents were not in a position to release or adjust the prized chitty amount for want of sufficient security. These are the background facts put forth by the parties, to decide the issues raised in the writ petition.
5. Heard learned counsel for the petitioner and the learned Standing Counsel appearing for the respondents, and perused the documents on record and the pleadings put forth by the respective parties.
6. As discussed above, the subject issue raised in this writ petition relates to non-adjustment of the prized chitty amount against the chitty loan availed by the petitioner. It is an admitted fact that the petitioner has approached the Lok Ayukta, alleging maladministration against the respondents in not doing so. However, as per Ext.P6 order, Lok Ayukta dismissed the complaint stating that there is no maladministration on the part of the respondents. On a close reading of Ext.P6, it is unequivocally clear, the contentions raised in the complaint before the Lok Ayukta are similar to the W.P.(C) No.4769 of 2014 6 contentions raised in the writ petition. The Lok Ayukta has verified Ext.P3 rules and has arrived at a finding that there is no shortcomings, deficiency or maladministration on the part of the respondents in not adjusting the said amount. It is clear from the pleadings put forth by the respective parties, petitioner failed to offer sufficient security to the prized chitty amount which is much more higher than the amount of loan availed by the petitioner and the petitioner failed to provide sufficient security for such adjustment. The release of the prized amount and the adjustment of the prize amount against the loan transactions is very well guided by Ext.P3 Rules. However, petitioner has not cared to extend adequate security as provided under the Rules, nor the Rules as per Ext.P3 is not under challenge in this writ petition.
7. On an evaluation of the fact circumstances, and reckoning the legal circumstances from Ext.P3 Rules of the chitty loan scheme, I am of the considered opinion, there are no legal infirmities, arbitrariness or other unfairness on the part of the respondents in not adjusting the prized chitty amount against the loan amount remaining due from the petitioner, and there are no reasons convincingly put forth by W.P.(C) No.4769 of 2014 7 the petitioner to interfere with Ext.P6 order passed by the Lok Ayukta.
Resultantly, writ petition fails and accordingly, it is dismissed.
Sd/-
SHAJI P. CHALY JUDGE //true copy// P.S. to Judge St/-
03.12.2016