Andhra HC (Pre-Telangana)
The Andhra Bank Farmers' Service ... vs State Of Andhra Pradesh And Others on 11 September, 1989
Equivalent citations: AIR1990AP200, AIR 1990 ANDHRA PRADESH 200
ORDER
1. In order to extricate Co-operative Societies from their financial distress and with a view to rendering assistance to agriculturists so as to enable them to secure credit from Co-operative Credit Societies, the Government of Andhra Pradesh passed G.O.Ms. No. 7, Food and Agriculture (Coop. III) Department dated 5-1-1987. The reasons that impelled; for issuing the G.O. as stated in the preamble and the reliefs granted are :
"The mounting incidence of overdues in Agricultural Credit Co-operatives in Andhra Pradesh on account of repeated . natural calamities is affecting fresh flow of credit for agricultural production and. also the eligibility of the co-operative credit institutions for providing credit for various economic amelioration programmes. Government, after careful consideration of the above situation, have decided to sanction special ;concessions this year to agriculturists which would provide relief from their debt burden and also act as an incentive for prompt repayment co-operative loans. In order to mitigate the hardship of the members of Agricultural Credit Co-operatives, Government have decided to provide the following reliefs.
a) Incentive interest rebate will be provided for repayment on or before the due date of current co-operative loans by subsidising interest to an extent of 5.5%.
b) Interest and penal interest on arrears of co-operative loans will be waived in full provided the principal overdue as on 30th June 1986 is repaid in full on or before 30th June, 1987."
Paragraph 10 of the G.O. says :
"Government will reimburse Primary Agricultural Co-operative Societies and Primary Agricultural Development Banks fully to the extent of interest rebate or interest waived extended to the members."
By para 12, the Registrar of Co-operative Societies "is requested to ensure that all Co-operative institutions covered under this scheme implement these orders,"
2. The annexure to the G.O. deals with accounting procedure for implementation of interest rebate/waiver. Para 1 of the annexure says that the Secretary of the Cooperative institution concerned shall issue two receipts to the members availing of the Concessions under the scheme loan for cash remittance and the other for adjustment to the extent of rebate allowed or interest waived indicating the details of the loan number the amount of current or arrear loan paid and the date of repayment.
3. The petitioner is a Farmers' Service Co-operative Society, Okal, Geesikonda Mandal, Warangal District, registered in the year 1980. The case of the petitioner is that it had advanced many crop loans mid-term loans etc., to the members of the Co-operative Society for improving and developing agriculture. About 1233 members availed of the benefit of total waiver of interest by paying the principal amount within the time stipulated under the said G.O. and the total amount o'f interest waived was Rs. 15,25,517-40. About 768 members had availed of the benefit of rebate of interest of 5.5 per cent in respect of the current year loans and the amount of interest which was allowed by way of rebate was Rs. 1,85,199-26. The Society had prepared claims with regard to the waiver and rebate of interest and submitted the same to the District Co-operative Officer, Warangal, the third respondent. The Society borrowed huge amounts from the Andhra Bank, which is its financing Bank and provided loans to its members. Because of the directions contained in the G.O. to waive the interest and grant rebate of interest the Society was unable repay the tolal loans raised from the Andhra Bank. Alleging that the Government and the Registrar of the Co-operative Societies had not reimbursed the said amounts in spite of several demands this writ petition was filed seeking a writ of mandamus directing the respondents to reimburse a total amount of Rs. 18,35,248.65 to the petitioner-society towards interest waived and rebate of interest together with interest at the rate of 12 percent from 1-7-87 till the date of payment.
4. In the counter-affidavit filed on behalf of the respondents the stand taken is that the total claim submitted by the petitioner society was for Rs. 17,43,625.28 and after the claim was audited the same was submitted to the Registrar of Co-operative Societies for release of the amount. Out of the amounts claimed a sum of Rs. 7,33,920-00 was released in two spells; Rs. 1,56,920-00 on 1-7-88 and Rs. 5,77,000/- on 8-9-88. As no time limit was mentioned for reimbursement the respondents.
"are not responsible for the aileged denial of further loaning by the financing Bank."
The petitioner-society will get loans from its financing bank according to its eligibility. The Government are not liable to pay any interest to the petitioner-society on the amounts claimed towards interest waived and interest rebate.
5. The only question for consideration in this writ petition is whether the petitioner is entitled to claim interest on the amounts payable to it under G.O. Ms. No. 7 dated 5-1-87? No time limit was fixed in the G.O. for reimbursement. What was granted under the G.O. was only special concession to agriculturists in order to relieve them from "their debt burden and also act as an incentive for prompt repayment of co-operative loans."
Although theoretically it could be said that but for the concessions granted by the G.O. Ms. No. 7 the Co-operative Societies would have proceeded against their members for realisation of the entire arrears due along with interest, viewed from a realistic angle it is clear that the Societies were not in a position to recover even the loans advanced let alone the interest. It is only to extricate the Cooperative Societies from that predicament and to help the agriculturists to overcome their debt burden the "special concessions" were sanctioned by the G.O. Ms. No. 7. No enforceable right has accrued to any of the Co-operative Societies under the G.O. to claim interest because of delayed implementation of the concessions sanctioned. It is not as if the Government is not willing to implement the G.O.; the counter-affidavit admits the commitment of the Government and it is averred in the counter-affidavit that a sum of Rs. 7,33,920.00 was already released in favour. of the petitioner-society. The enforceable part of the G,O. confined to providing reliefs as mentioned in Cls. (a) and (b) of the G.O. extracted supra. If delayed payment under the G.O. had caused extra financial commitments to a Society, that would not be a valid ground to claim interest for the interregnum between the date of G.O. and the date of payment. It is needless to mention that unless the petitioner has a legally enforceable right no mandamus can issued. Equity is also not in favour of the petitioner.
6. The Privy Council in Bengal Nagpur Rly, Co. Limited v. Ruttanji Ramji, (1938) 1 Mad LJ 640 at p. 644 : (AIR 1938 PC 67)^ dealing with the question whether interest was payable to the contractor for the period prior to the institution of the suit in respect of a work relating to a railway contract executed by him observed :
".....the solution of this question depends, not upon the Civil Procedure Code, but upon substantive law. Now, interest for the period prior to the date of the suit may be awarded, if there is an agreement for the payment of interest at a fixed rate, or it is payable by the usage of trade having the force of law, or under the provisions of any substantive law entitling the plaintiff to recover interest, as for instance, under S. 80 of the Negotiable Instruments Act, 1881, the Court may award interest at the rate of 6% per annum, when no interest is specified in the promissory note or bill of exchange. There is in the present case neither usage nor any contract express or implied to justify the award of interest. Nor is interest payable by virtue of any provision of the law governing the case."
The Privy Council followed the view taken by the House of Lords in Maine and New Brunswick Electrical Power Co. Ltd. v. Hart, 1929 AC 631 at p. 640:
"In order to invoke a rule of equity it is necessary in the first instance to establish the existence of a state of circumstances which attracts the equitable jurisdiction, as, for example, the non-performance of a contract of which equity can gave specific performance."
The view taken by the Privy Council was follwed by the Supreme Court in Union of India v. Rallia Ram, .
7. The learned Government Pleader says thai the balance of the amount mentioned in the counter-affidavit to be paid to the petitioner under G.O.Ms. No. 7 will be paid within two (2) months from the date of the receipt of this order.
8. For the foregoing reasons, the writ petition fails and accordingly it is dismissed but in the circumstances without costs.
9. Petition dismissed.