THE HON'BLE MR. JUSTICE D. KRISHNAKUMAR 1.C.R.Subramani 2.S.Vijayakumar W.P.No.40136 of 2006 and MP No.2 of 2006 Vs.
..Petitioners
1. The Deputy Registrar of Cooperative Societies, Tirupattur Circle, Tirupattur, Vellore District
2. The General Manager, Vaniyambadi Town Co-operative Bank Limited., Vaniyambadi, Vellore District.
PRAYER:
..Respondents The Writ Petition is filed under Article 226 of the Constitution of India to issue a writ of certiorari calling for records on the file of the second respondent relating to the order passed in CTA.No.20 of 2003 dated 07.01.2005 confirmed by the orders of the first respondent in ARC.963/ 2002-03 dated 29.08.2003 and quash the same.
For Petitioners : Mr.R.N.Amarnath For Respondents : Mrs.T.Girija, Government Advocate for R1 : Mr.M.K.T.Gopu for R2 ORDER:
According to the petitioner, the first and second petitioners running a partnership firm and availed loan from the second respondent Town Cooperative Bank for running coconut business in the name and style of M/s.Vijay Coconut Company. The petitioners approached the second respondent for availing loan to run their business. The petitioners were sanctioned with cash credit account for Rs.5,00,000/- on 22.03.2000 by hyphothicating stock apart from submitting title deeds in respect of the house property by way of security. On 16.05.2000, there was a sudden fire accident in the said mundy, wherein the petitioner kept the coconuts purchased by the loan amount. The entire stock of coconuts were burnt. The said accident was informed to the respondents. On 17.05.2000, the petitioners sent a letter to the second respondent by requesting to take appropriate steps for compensating the loss sustained petitioners' firm on account of fire accident. But the bank has not responded to the request made by the petitioners and two lawyer's notices were issued to the second respondent on 14.07.2001 and 22.03.2002. Thereafter, the second respondent referred the matter to the arbitrator / first respondent under Section 90 of the Tamil Nadu Cooperative Societies Act, 1983. The award has been passed by the arbitrator on 29.08.2003. Assailing the said order, the petitioners have preferred an appeal before the Tamil Nadu Cooperative Tribunal in CTA.No.20 of 2003. The Tribunal has dismissed the appeal and confirmed the order of the first respondent. Hence, the petitioners have filed the present writ petition before this Court.
2. According to the learned counsel for the petitioners the order passed by the first respondent is a non-speaking order. At the time of availing the loan, the petitioners were called upon to accept the insurance policy for the mortgaged goods for which necessary endorsement was made in Column No.8 by the petitioner. Therefore, it is the duty of the second respondent to insure the goods. There is lapse on the part of the second respondent. Therefore, without considering the column 8 of the agreement, the second respondent has passed the impugned order. Hence, the same is liable to be set aside.
3. Per contra, the learned counsel for the second respondent would submit that as per Sections 25 and 20 of the Indian Partnership Act, every parters are liable jointly and severally to repay the amount and it is an unregistered firm. Therefore, the case has been filed against the individuals. It is the duty of the borrower to insure the stock. Under form 5, Para 7 letter of hypothecation, clearly proved, it is the duty caste upon the borrower to insure the securities. Since they have not insured the same and they are not liable to pay the amount. Therefore, the second respondent is not responsible for stock, which was not insured. It is duty of the borrower to insure the stock as per Sections 25 and 28 of the Indian Partnership Act stated about the distinction between partnership and registered company. In that it is stated as follows:
“PARTNERSHIP: A creditor can sue in the name of the firm or in the names of its partners.
REGISTERED COMPANY: A Creditor can sue the company alone and cannot sue its members except in case of certain offences.”
Further, Column No.8 of the page No.25 of the case records is given as follows.
“vdJ epWtdk; ruf;F gdpkid Mfpatw;iw beUg;g[ kw;Wk; jpUl;L nghd;wtw;wpw;fhf fhg;gPL bra;Jbfhs;s rk;kjpf;fpnwd;/”
The petitioners misinterpretated the said column and contended that as per above terms, bank alone should insure the stock. Therefore, the aforesaid contention is liable to be rejected.
4. Considered, the submissions made by the learned counsel for the parties and the materials perused.
5. As per Section 25 and 28, the distinction between the partnership and registered company clearly shows that the petitioners' company is a partnership firm. Therefore, the award passed against the individuals is in accordance with the provisions of the Act. It is rightly pointed out by the learned counsel for the second respondent that Column 8 would clearly shows that the petitioner has to insure the stock and godown, and on reading the form 5 letter of hypothecation, paragraph 7 which states as follows.
“The borrowers shall at all times during the continuance of this agreement and so long as any money shall remain due and owing to the Bank by virtue hereof, insure and keep insured the securities to the full extent of their value from time to time against five risks and in the name of the Bank and shall duly and punctually pay the premia payable in respect thereof atleast and one week before the same shall have become due or payable and shall handover the policy or policies of insurance and the receipts for premia paid in respect thereof to the Bank, and the borrowers agree not to raise at any time any dispute as the amount of insurable interest of the bank, them and in such case it shall be lawful for but not obligatory upon the bank to pay such premia and to keep the securities so insured and the expenses insured by the bank for such purpose shall be charged to and payable by the borrowers with interest as provided for in the 11th Clause hereof”
6. In view of the above, the borrower shall insure the stock, it is the default of the petitioner to insure the goods. Since the goods has not been insured, the petitioner is liable to pay the said amount and not entitled to set off the same. Hence, the order passed by the tribunal is confirmed. Therefore, there is no warrants to interfere with the order passed by the tribunal.
7. In the result, the writ petition is dismissed.
Consequently, the connected miscellaneous petition is closed. No costs.
24.11.2017 Speaking/Non-speaking order Index : Yes/No Internet : Yes/No lok D.KRISHNAKUMAR. J, lok To
1. The Deputy Registrar of Cooperative Societies, Tirupattur Circle, Tirupattur, Vellore District
2. The General Manager, Vaniyambadi Town Co-operative Bank Limited., Vaniyambadi, Vellore District.
Pre-delivery Order in W.P.No.40136 of 2006 and MP No.2 of 2006 24.11.2017