Punjab-Haryana High Court
The Gurdaspur Primary Co-Operative ... vs The State Of Punjab And Ors. on 15 September, 2004
Equivalent citations: (2004)138PLR781
JUDGMENT M.M. Kumar, J.
1. This petition filed under Article 226 of the Constitution of India, by the Gurdaspur Primary Co-operative Land Mortgage Bank Limited, Gurdaspur challenges Award dated 28.02.1983 (Annexure P-2) passed by the Arbitrator under Section 55 of the Punjab Co-operative Societies Act, 1961 (for brevity, 'the Act'). It has also been prayed that order dated 05.09.1984 (Annexure P-3) passed by the Appellate Authority under Section 68 of the Act and the Order dated 23.07.1985 (Annexure P-4) passed by the Revisional Authority under Section 69 of the Act, which have affirmed the view of the Arbitrator be also set aside by issuing a writ of certiorari.
2. Facts in brief are that one Puran Singh (now represented by respondents No. 4 to 7) had applied for loan of Rs. 25,000/- somewhere in 1970. After scrutiny of his application, a loan of Rs. 15,000/- is alleged to have been approved. In lieu of the approval of loan, Puran Singh had mortgaged 60 Kanal 8 marlas of land vide registered Mortgage Deed 10.06.1970. On 25.03.1971, Puran Singh submitted to the petitioner bank an estimated bill issued by M/s Kisan Tractors House. The petitioner bank, thereafter, made payment of Rs. 15,000/- through Cheque No. 27906 dated 25.03.1971 to M/s Kisan Tractors House, D.T. 14, Civil Lines, Gurdaspur. The payment through cheque was released in the presence of Sarvshri Puran Singh, Hardeep Singh, Banta Singh and Kashmir Singh, residents of village Musara. When the instalment on account of loan advance was not paid, the petitioner bank issued a notice dated 24.08.1972 yet .even the first instalment was not paid. Similarly, notice was again issued on 08.06.1973. However, Puran Singh then moved an application on 11.02.1974 before the Assistant Registrar, Co-operative Societies, Gurdaspur for the appointment of an Arbitrator under Section 55 of the Act for resolving that dispute between him and the petitioner bank regarding the loan of Rs. 15,000/-. One Shri Purshotam Dass, Inspector was appointed as the Arbitrator who passed the award on 24.04.1974 (Annexure P-l). The findings recorded by the Arbitrator are discernible from para 14 of Award dated 28.02.1983 (Annexure P-2) which read as under: -
"Keeping in view all the above-stated facts I am of the view that Firm did not deliver the tractor to Shri Puran Singh, real owner nor paid the amount but paid the amount to Hardeep Singh which the firm owner admitted during his statement which he made before the Court that he knew Hardeep Singh and Kashmira Singh witnesses. It means that he knew that Hardeep Singh is the son of Banta Singh and not of Puran Singh and the affidavit of Hardeep Singh was deliberately taken by the firm to defraud Puran Singh. Further more the firm Kisan Tractor House was not a registered agency of any manufacturer of Tractors. They only supplied tractors while taking the same from an agency of Jalandhar but he failed to give the name of the firm. Shop was stated to be on rent but did not mention the name of the owners of the Shop nor named the person to whom he had to pay the rent. No agreement of any sort of between the firm and the Bank was supplied which could show that who out of the owners of the firm was authorised by the Bank to receive the amount."
3. On the basis of his findings, the Arbitrator concluded that Puran Singh or his legal representatives cannot be made liable for re-payment of loan of Rs. 15,000/- and the land belonging to Puran Singh, mortgaged to the petitioner bank, was to be deemed to be redeemed. The aforementioned findings have again been affirmed by the Appellate Authority, namely, the Assistant Registrar, in its Order dated 05.09.1984 (Annexure P-3) when appeal was filed by the petitioner bank under Section 68 of the Act. After re-examination of the whole evidence, the Appellate Authority has categorically held that the loan for the tractor was not paid to Puran Singh son of Labh Singh. It was further held that the award of the Arbitrator was based on well founded reasons and evidence. On filing of a revision petition under Section 69 of the Act, even the Revisional Authority, namely, Deputy Secretary (Appeals) came to the conclusion that there was a bounden duty placed on the petitioner bank to ensure delivery of the tractor or other agricultural machinery to the principal loanee as is provided in the publication titled as Loan Policies of The Punjab State Co-operative Agricultural Development Bank Limited Chandigarh. The aforementioned policy further provides the issuance of delivery certificate and the Manager of the bank is required to certify that the goods for which the loan has been sanctioned to a loanee has actually been delivered by the firm to the loanee in his presence.
4. Mr. D.S. Bali, learned counsel for the petitioner has argued that there is a direct relationship of lender and borrower between the petitioner bank and Puran Singh (now represented by respondents No. 4 to 7). According to the learned counsel once by a series of documents, it has been proved that he has applied for the loan, land was mortgaged and the cheque was given in the name of M/s Kisan Tractors House, Gurdaspur, it is established that petitioner bank has disbursed the loan to Puran Singh and any further dispute has to be between aforementioned Puran Singh and the firm M/s Kisan Tractors House, Gurdaspur. Learned counsel has emphasised that there is privity of contract between the petitioner bank and borrower Puran Singh (now represented by respondent Nos.4 to 7), and therefore if there is any dispute, it has to be resolved by Puran Singh with M/s. Kisan Tractors House, Gurdaspur.
5. Mr. Harjot Singh Bedi, learned counsel for respondent Nos.4 to 7 has argued that it is not a simple case of relationship of a borrower and a lender because there is a public policy governing the advancement of loan. Learned counsel has referred to the loan policies of the petitioner bank and the requirement of delivery certificate which show that an obligation is imposed on the petitioner bank that on advancement of loan it must verify that the loan has been utilised by the loanee for the purpose it has been advanced. The obligation is to be discharged by the Manager. The bank having failed to perform the aforementioned duty, cannot now claim that the recovery be effected from Puran Singh (now represented by respondents No. 4 to 7). The learned counsel has also argued that findings of fact have been recorded by the three statutory authorities which cannot be assailed in writ jurisdiction under Article 226 of the Constitution, and moreover, there is ample evidence on record to sustain those findings. The learned counsel has referred to various portions of the Award, Annexure P-2 to show that instead of delivering the tractor, loan amount of Rs. 14,200/- was paid to one Hardeep Singh, the alleged son of Puran Singh. He has emphasised that according to affidavit filed by Smt. Datar Kaur, widow of Puran Singh, they did not have any son with the name of Hardeep Singh. The learned counsel has also referred to para 12(iii) of the writ petition to argue that on their own the showing it is accepted by the petitioner bank itself that whenever the payment is to be made in the name of a third party, then the bank is to ensure that it has been utilised for the purpose the loan was advanced.
6. After hearing the learned counsel for the parties and perusing the impugned orders, I am of the considered view that there is no merit in this petition. There are categorical and concurrent findings of facts recorded by the Arbitrator, Appellate Authority and the Revisional Authority in their respective orders dated 28.02.1983 (Annexure P- 2), order dated Q5.03.1984 (Annexure P-3) and Order dated 23.07.1985 (Annexure P-4). All the statutory authorities have found as a matter of fact that the tractor for which the loan was advanced to Puran Singh (now represented by respondents No. 4 to 7) was neither delivered to him, nor the loan amount has been disbursed lo him. The aforementioned finding of fact is supported by the statement of Shri Sita Ram, Manager of the firm M/s Kisan Tractors House, Gurdaspur. It has also been found that verification with regard to the disbursement of loan and delivery of tractor was required to be undertaken within a period of one year by the petitioner bank. There are serious doubts as to whether M/s Kisan Tractors House, Gurdaspur was an approved firm for the purposes of delivery of tractors on the basis of loan advanced by the petitioner bank, one cannot lose sight of the fact that the findings further are that the amount of Rs. 14,200/- had been paid to one Hardeep Singh, who has no relationship with Puran Singh. It appears that the petitioner bank has failed to perform its obligation of ensuring that the loan is utilised for the purpose for which it has advanced, namely, the payment is made to Puran Singh for purchasing the tractor from M/s Kisan Tractors House. The certificate to which reference has been made by learned counsel for the respondents is in the form of Appendix 'K' of the 'Loan Policies of the petitioner bank which reads as under:-
"APPENDIX 'A"
Form of Receipt to be taken from the Borrower. Received Rs..........(in words) through Cheque No.........drawn upon.......Central Coop. Bank Ltd...... Dated ....... on in cash as detailed in the mortgage deed Co-operative Agricultural Development Bank Ltd........on account of loan sanctioned to me by the......Primary Co-operative Agricultural Development Bank Ltd.,.......for the following purposes:-
(a)Rs.........................Rs.
(b) Revenue Stamp."
The aforesaid obligation has not been fulfilled by the petitioner bank.
7. It is well settled that this Court while issuing a writ of certiorari cannot interfere with findings of fact unless it is shown that the findings were based on no evidence or suffer from error of jurisdiction. The issue has been analysed in details by the Supreme Court by referring to the judgments of various Constitution Benches in Surya Dev Rai v. Ram Chancier Rai and Ors., (2003)6 S.C.C. 675. Referring to the history of development of the writ of certiorari and its difference with supervisory jurisdiction of the High Court under Article 226/227 of the Constitution, their Lordship have summed up the principles which read as under:-
"(1) Amended by Act 46 of 1999 with effect from 1.7.2002 in Section 115 of the Code of Civil Procedure cannot and does not affect in any manner the jurisdiction of the High Court under Articles 226 and 227 of the Constitution.
(2) Interlocutory orders, passed by courts subordinate to the High Court, against which remedy of revision has been excluded by CPC Amendment Act 46 of 1999 are nevertheless open to challenge in, and continue to be subject to, certiorari and supervisory jurisdiction of the High Court.
(3) Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction i.e. when a subordinate court is found to have acted (i) without jurisdiction - by assuming jurisdiction where there exists, none, or (ii) in excess of its jurisdiction - by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.
(4) Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate courts within the bounds of their jurisdiction. When a subordinate court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.
(5) Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied: (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (ii) a grave injustice or gross failure of justice has occasioned thereby.
(6) A patent error is an error which is self-evident i.e. which can be perceived or demonstrated without involving into any lengthy or complicated argument or a long-drawn process of reasoning. Where two inferences are reasonably possible and the subordinate court has chose to take one view, the error cannot be called gross or patent.
(7) The power to issue a writ of certorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion. Care, caution and circumspection need to be exercised, when any of the above said two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and the error though calling for correcting is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred there against and entertaining a petition invoking certiorari or supervisory jurisdiction of the High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.
(8) The High Court in exercise of certiorari or supervisory jurisdiction will not convert itself into a court of appeal and indulge in reappreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character.
(9) In practice, the parameters for exercising jurisdiction to issue a writ of certiorari and those calling for exercise of supervisory jurisdiction are almost similar and the width of jurisdiction exercised by the High Courts in India unlike English courts has almost obliterated the distinction between the two jurisdictions. While exercising jurisdiction to issue a writ of certiorari, the High Court may annul or set aside the act, order or proceedings of the subordinate courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate court as to the manner in which it would act or proceed thereafter or afresh, the High court may in appropriate cases itself make an order in super session or substitution of the order of the subordinate court as the court should have made in the facts and circumstances of the case."
8. It is further appropriate to mention that in the case of Apparel Export Promotion Council v. A.K. Chopra, (1999)1 S.C.C. 759, it is well settled that in cases concerning departmental enquiry of the employee a findings of fact has been recorded then High court is not to normally interfere in such findings unless the finding is wholly perverse and/or legally untenable. Similar view has been taken in the case of Shama Prashant Raje v. Ganpatrao (2000)7 S.C.C. 522, Sawarn Singh v. Stale of Punjab, (1976)2 S.C.C. 868 and Indian Overseas Bank v. I.O.B. Staff Canteen Worker's Union, (2000)4 S.C.C. 245. Therefore, the findings of fact recorded by all the authorities below are candidly against the petitioner that there was dereliction of duty on the part of the officer of the petitioner bank. Therefore, the instant petition is liable to be dismissed.
9. The argument of the learned counsel that there is privity of contract between the petitioner bank and the Puran Singh, cannot be accepted because the nature of transactions, resulting into sanctioning of loan for the purchase of tractor is entirely different than the ordinary relationship of lender and borrower. In such like transactions, the relationship of lender and borrower in its pure form, does not come into existence. The creation of the petitioner bank like land mortgage bank is aimed at ensuring that the loan is advanced to agriculturists for facilitating agricultural operations and helping in growing more food. The rational and the public policy at the back of the grant of loans transcends the legal relationship of lender and borrower in its pure form. On account of the fact that numerous obligations have been placed on the petitioner bank which are required to be fulfilled by it, before it could be concluded that the loan was actually advanced to a borrower and he is liable to repay, the petitioner bank, as already observed above, has failed to fulfil those obligations which are part of our socio-legal endeavour as envisaged by Article 38 read with Article 8 of the Directive Principles of State Policy. Therefore, the petitioner bank cannot take shelter of pure principles governing the relationship of lender and borrower which govern a commercial transaction. Therefore, I do not find any substance in the aforementioned submission made by the learned counsel.
For the reasons recorded above, this petition fails and the same is dismissed.