The dispute raised is with respect to the dues in the cash credit loan, availed of by the 4th respondent, from the 5th respondent, for which the petitioner stood as guarantor. Admittedly, the loan was availed, for carrying on a work, awarded by the 3rd respondent to the 4th respondent. The petitioner's contention is that, in fact, the 4th respondent had executed a power-of-attorney in favour of the 5th respondent so as to enable the 5th respondent to collect the award amounts due; in lieu of the work executed, from the Kerala Water Authority (KWA).
2. The petitioner contends that, while the power-of-attorney was in force, the 4th respondent had obtained release of amounts from the 3rd respondent, through the account of the 5th respondent and hence, the respondents have in collusion acted fraudulently. The petitioner seeks interdiction of the recovery steps, initiated by the 5th respondent Bank, till the 3rd respondent has paid up the entire amounts due to the 4th respondent on the strength of the power-of-attorney; directly to the 5th respondent.
3. The learned Standing Counsel, appearing for respondent 1 to 3, submits that, on an earlier occasion, the petitioner was before this Court wherein, the representation filed by the petitioner before the 3rd respondent was directed to be considered by Ext.P3. On many a day, when such consideration was posted, either the petitioner or the 4th respondent, failed to appear. The same is disputed by the learned counsel for the petitioner. In any event, pursuant to Ext.P3, now a consideration has been carried out, and the petitioner himself has produced Ext.P19, being the minutes of the hearing, convened in the chamber of the Executive Engineer on 17.06.2014.
4. Certain broad agreements, have been arrived at, as is seen from Exhibit P19. The 4th respondent has undertaken to remit an amount of Rs.10,00,000/- to the Bank within six months. The Manager, representing the 5th respondent also sought for remittance of the amounts due from the KWA to the 4th respondent; to the loan account of the 4th respondent maintained with the Bank.
5. The learned counsel for the respondent Bank, points out that, the Writ Petition as has been filed, is not maintainable especially since the guarantor cannot dictate, as to how the recovery should be proceeded with. The liability being, joint and several, the Bank has the option to proceed either against the original borrower or the guarantor and the Bank cannot be asked to wait till the awarder of a contract pay up the award amounts.
6. It is to be noticed that, the primary fallacy in the contention raised by the petitioner, regarding disbursal of the amounts by the 3rd respondent to the 4th respondent is that, the 3rd respondent is not bound by any agreement or otherwise to disburse amounts solely to the 5th respondent. It is also to be noticed that the 5th respondent has a specific contention that the 4th respondent had availed of more than one loan; for one of which alone, power-of-attorney was executed, in favour of the 5th respondent Bank. The mere fact that a power-of-attorney was executed in favour of the 5th respondent Bank, by the original borrower, also does not absolve the guarantor from the liability. The Bank, definitely has the option to proceed against the recovery through any of the methods, sanctioned by law, the liability being joint and several, and also the further option to seek recovery of amounts due from the 3rd respondent on the strength of the power-of- attorney. The mere execution of the power-of-attorney in favour of the 5th respondent-Bank, cannot also be found to disentitle the 4th respondent from seeking disbursement of the amounts from the KWA; since there is no restriction as such. The 5th respondent by virtue of the power-of-attorney cannot be said to have more power than its principal.
7. In the context of the discussion above, definitely the writ petition, with the reliefs as sought for, cannot be entertained. However, the petitioner made a fervent plea, that, any outstanding amounts would be satisfied in instalments. The learned counsel appearing for the 5th respondent-Bank also points out that the petitioner herein has stood as guarantor, for another facility availed of by the 4th respondent, which is also a part of the same securitisation proceeding. The attendant circumstance of the contract with the KWA and the amounts due thereon are not relevant to such transactions. In such circumstance, there shall be a direction to the 5th respondent-Bank to issue separate statement of accounts with respect to to both the loan accounts, to both the petitioner and the 4th respondent herein, showing the amounts with interest as on 30.06.2014. The borrower and the guarantor shall be given eleven monthly instalments to settle the entire loan accounts. The 1st instalment shall be paid on or before 31.07.2014 and thereafter; the due date of instalments falling on the last working day of each succeeding month. Any payment made by the KWA during the pendency of the instalment period, shall be credited towards such instalments. On the 11th instalment being paid by the petitioner or the 4th respondent, the Bank shall be entitled to issue a further statement, showing the future interest from 30.06.2014, which shall be satisfied by the petitioner or the 4th respondent, as the 12th instalment. Any two consecutive defaults would entitle the Bank to revive the proceedings and proceed against the property of the petitioner or the 4th respondent, at their option. The KWA shall endeavour to disburse the amounts due to the 4th respondent, to the 5th respondent as expeditiously as possible. Needless to say, the petitioner, if satisfying the amounts due from the 4th respondent, would be entitled to take appropriate proceedings against the 4th respondent for recovery of such amounts. The above directions are issued only in the context of the specific undertaking given by the petitioner herein that he would, without fail, immediately withdraw O.S.No.320 of 2014 pending before the Additional Munsiff's Court, Cherthala. The petitioner also undertakes to withdraw the contempt case, filed as Cont. Case (C).No.209 of 2014, as also the proceedings initiated before the Inquiry Commissioner and Special Judge, Kottayam, numbered as C.M.P.281 of 2014.
The writ petition is disposed of as above. Parties are left to suffer their respective costs.
vku.
Sd/-
K.Vinod Chandran, Judge ( true copy )