Kerala High Court
Attingal Municipal Town Service ... vs The Kerala Co-Operative Ombudsman
Author: Shaji P. Chaly
Bench: Shaji P.Chaly
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
FRIDAY, THE 24TH DAY OF NOVEMBER 2017/3RD AGRAHAYANA, 1939
WP(C).No. 13274 of 2015 (H)
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PETITIONER:
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ATTINGAL MUNICIPAL TOWN SERVICE CO-OPERATIVE
BANK LTD.NO.T-437,
KUZHIYILMUKKU, ATTINGAL, THIRUVANANTHAPURAM,
REPRESENTED BY ITS SECRETARY.
BY ADVS.SRI.K.SIJU
SRI.S.ABHILASH
RESPONDENT(S):
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1. THE KERALA CO-OPERATIVE OMBUDSMAN,
FORT PO, THIRUVANANTHAPURAM 695023
REPRESENTED BY ITS SECRETARY
2. THE KERALA CO OPERATIVE DEVELOPMENT AND WELFARE FUND
BOARD GANDHARI AMMAN KOVIL ROAD,
THIRUVANANTHAPURAM 695001 REPRESENTED BY ITS SECRETARY
3. REGISTRAR OF CO OPERATIVE SOCIETIES,
THIRUVANANTHAPURAM 695001
4. CHANDRAN PILLAI N,
PARANKIMAMVILA VEEDU, THACHOORKUNNU, AVANANCHERRY PO,
ATTINGAL, THIRUVANANTHAPURAM 695101
R2 BY ADVS. SRI.P.C.SASIDHARAN, SC,
SRI.BRIJESH MOHAN, SC,
R3 BY GOVERNMENT PLEADER SMT MABLE C KURIAN
R4 BY ADVS. SRI.B.KRISHNA MANI
SMT.N.V.SANDHYA
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 24-11-2017, ALONG WITH WPC. 22053/2017, THE COURT ON
THE SAME DAY DELIVERED THE FOLLOWING:
K.V.
WP(C).No. 13274 of 2015 (H)
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APPENDIX
PETITIONER(S)' EXHIBITS
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P1: THE COPY OF THE ORDER PASSED BY THE CO OPERATIVE OMBUSMAN,
THIRUVANANTHAPURAM DATED 25.08.2014 IN COMPLAINT NO.20/2014
P2: THE COPY OF THE LETTER FORWARDING EXT P1 ORDER
P3: THE TRUE COPY OF THE KERALA CO OPERATIVE RISK FUND IN THE YEAR
2008 AS AMENDED IN 2012
P4: THE COPY OF EXTRACT OF THE DECISION NO.1 DATED 26.07.2010 OF
THE DIRECTOR BOARD OF PETITIONER SOCIETY
P5: THE TRUE COPY OF THE CIRCULAR NO.28/2013 DATED 20.04.2013
RESPONDENT(S)' EXHIBITS NIL
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/TRUE COPY/
K.V. P.S.TO JUDGE
SHAJI P. CHALY, J.
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W.P.(C) Nos.13274 of 2015 & 22053 of 2017
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Dated this the 24th day of November, 2017
JUDGMENT
Both the writ petitions are materially connected, relating to the benefit sought for by the petitioner in W.P.(C) No.22053 of 2017 before the Kerala Co-operative Ombudsman [for short, 'the Ombudsman'] under the Risk Fund Scheme. The Ombudsman has passed an order directing the Bank to grant maximum benefit to the petitioner therein under the Risk Fund Scheme. Therefore, I heard them together and propose to deliver a common judgment. Facts discernible from W.P.(C) No.13274 of 2015 are recited for the disposal of the writ petitions, and the fate of the other writ petition will dependent upon the decision taken in this writ petition.
2. Petitioner is a Co-operative Bank registered under the Kerala Co-operative Societies Act and Rules, 1969. Petitioner is aggrieved by Ext.P1 order passed by the Ombudsman, directing to write off the entire loan arrears of the deceased wife of the 4th respondent under the Kerala Co- operative Risk Fund Scheme, 2008.
W.P.(C) Nos.13274/15 & 22053/17 2
3. Wife of the 4th respondent availed a loan of Rs.1,50,000/- from the bank on 06.11.2009, repayable in 60 monthly installments of Rs.2,500/- each. According to the petitioner, she defaulted to make repayment and had only remitted Rs.13,270/- as on 04.11.2010, instead of Rs.30,000/- payable at that point of time. While so, she died on 27.11.2010.
4. The Government promulgated Kerala Co-operative Risk Fund Scheme, 2008, but according to the petitioner, the same was compulsory with effect from 14.02.2013, after the amendment of Sec.57(d)(3) of the Kerala Co-operative Societies Act, and Ext.P5 circular. Though the scheme was introduced in 2008, the Bank Director Board resolved to join the scheme on 26.07.2010 only. Therefore, no contribution from the deceased loanee was collected for her membership in the Risk Fund Scheme. The loan in question is not covered under the scheme, but the Ombudsman by erroneous appreciation of law, had directed to write off the loan amount. It is thus seeking to quash Ext.P1 order passed by the Ombudsman in Com.No.20/2014 dated 25.08.2014, the said writ petition is filed.
W.P.(C) Nos.13274/15 & 22053/17 3
5. A detailed counter affidavit is filed by the 4th respondent, who is the beneficiary of Ext.P1 order, refuting the allegations and claims and demands raised by the petitioner. According to the 4th respondent, the contentions raised in the writ petition that, the implementation of Risk Fund Scheme is in accordance with the decision taken by the Board of Management is not a correct proposition of law, since the Risk Fund Scheme was introduced in the year 2008, and therefore, when the loan was availed by 4th respondent's wife in the year 2009, the Bank ought to have cautious and ought to have collected necessary fee from the loanee against the Risk Fund Scheme. Having not done so, the Bank has every liability to consider the case of the loanee in accordance with the terms of the Risk Fund Scheme. Therefore, the 4th respondent submits that the order passed by the Ombudsman is in accordance with law, and seeks dismissal of the writ petition.
6. W.P.(C) No.22053 of 2017 is filed by the 4th respondent in the other writ petition seeking to quash Ext.P6 proceedings before the arbitrator, seeking to recover the loan amount allegedly due from wife of the 4th respondent. W.P.(C) Nos.13274/15 & 22053/17 4
7. Perused the pleadings and the documents on record in both the writ petitions. Heard learned counsel for the petitioner in W.P.(C) No.22053 of 2017, learned Senior Government Pleader and the learned counsel appearing for the Kerala Co-operative Development and Welfare Fund Board.
8. The fact discussion made above would make it clear that, the issue to be decided is, whether any manner of interference is required to Ext.P1 order passed by the Co- operative Ombudsman. One thing is admitted, that the Board of Management of the petitioner bank in W.P.(C) No.13274 of 2015 has decided to join in the Co-operative Risk Fund Scheme on 26.07.2010. The loan is availed by the wife of the 4th respondent in the year 2009. The Co-operative Risk Fund Scheme was introduced during the year 2008. By any stretch of imagination, there was a decision taken by the Board of Management of the petitioner bank on 26.07.2010. The 4th respondent's wife died only on 27.11.2010. If the Board of Management was diligent enough to make necessary contribution to the Risk Fund Scheme, the loanee would have been eligible to secure the benefit of the said scheme. W.P.(C) Nos.13274/15 & 22053/17 5
9. It was appreciating the said circumstances, Ext.P1 order is passed by the Co-operative Ombudsman, stating that there is negligence on the part of the petitioner bank in enrolling the loanee in the Risk Fund Scheme. Moreover, I am of the considered opinion that, when the Risk Fund Scheme was introduced in the year 2008, to have operation from the issuance of the scheme and the notification, merely because the rule is not amended, it cannot be said that the provisions of the scheme will not apply to the beneficiaries.
10. On a totality of the circumstances, it can be seen that the Ombudsman has borne in mind all these aspects, and has passed Ext.P1 order, directing the Bank to give maximum benefit to the loan account by considering the risk fund benefit, and the loan account shall be closed as per the above direction. It is also directed that, after adjusting the amount equivalent to risk fund, any balance left, is to be remitted by the complainant.
11. Having regard to the facts and circumstances of the case, I am of the considered opinion that, taking into account the responsibility the bank had to undertake on the basis of the risk fund scheme, and has not enrolled the loanee in the W.P.(C) Nos.13274/15 & 22053/17 6 risk fund scheme, the bank has a duty to consider the directives contained in Ext.P1 order, and do the necessary in order to provide the benefit of the risk fund scheme to the 4th respondent. That being the situation, I do not find any reason to interfere with Ext.P1 order. A decision shall be taken in accordance with the directives contained in Ext.P1 order, within two months from the date of receipt of a copy of this judgment. Till such time, the proceedings pertaining to Ext.P6 in W.P.(C) No.22053 of 2017 shall be kept in abeyance. The proceedings in Ext.P6 will be guided by the orders passed by the petitioner bank in accordance with the directives issued by the Ombudsman in Ext.P1 order.
12. Needless to say, if the risk fund scheme is applied by the bank, and the petitioner gets the necessary benefit, and if there is any balance remaining due from the petitioner to the bank, either the petitioner can settle the issue with the Bank or contest the proceedings contained under Ext.P6.
The writ petition is disposed of accordingly.
Sd/-
SHAJI P. CHALY JUDGE St/-
24.11.2017