IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF OCTOBER 2017 BEFORE THE HON’BLE MR.JUSTICE S.N.SATYANARAYANA WRIT PETITION No.44157/2016(CS-RES) BETWEEN :
SRI D. NAGESH S/O LATE DASASHETTY, AGED 55 YEARS, OCCUPATION SECURITY, R/AT 1ST MAIN, BEHIND SUJATHA THEATER MYSORE-570 016 ... PETITIONER (BY SRI MANMOHAN P.N, ADVOCATE) AND 1. THE MANAGING DIRECTOR MYSORE CHAMARAJANAGARA DISTRICT CO-OPERATIVE CENTRAL BANK LTD., MYSORE, NEHARU CIRCLE, ASOKA ROAD, MYSORE – 570 001 2. SRI H P SATYANARAYAN S/O LATE PUTTARAMAIAH, AGED ABOUT 51 YEARS, OCCUPATION SECURITY R/AT No.176, MANCHEGOWDANKOPPALU, HINKAL, MYSORE 570 017 3. SRI SHREENIVASAIAH S/O LATE THIMMASETTY AGED ABOUT 53 YEARS, OCCUPATION NOT KNOWN R/AT NO.441, 7TH MAIN, 1ST PHASE, HEBBAL, MYSORE – 570 016 4. THE ASSISTANT REGISTRAR OF CO OPERATIVE SOCIETIES MYSORE SUB DIVISION, MYSORE – 570 001. ... RESPONDENTS (BY SRI LAKSHMINARAYAN, ADDITIONAL GOVERNMENT ADVOCATE FOR RESPONDENT No.4) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO SET ASIDE THE ORDER DATED:25.11.2015 PASSED IN APPEAL No.213/2012 BY THE KARNATAKA APPELLATE TRIBUNAL AT BENGALURU (PRODUCED AS ANNXURE-B) AND ETC.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, THE COURT MADE THE FOLLOWING:
O R D E R Learned Additional Government Advocate takes notice for respondent No.4.
2. Respondent No.1 in Dispute No.676/1996-97 on the file of respondent No.4 – Assistant Registrar of Co- operative Societies, Mysuru sub-division, Mysuru, has come up in this writ petition challenging the judgment dated 25.11.2015 (Annexure ‘B’ to the petition) passed in Appeal No.213/2012 on the file of Karnataka Appellate Tribunal (hereinafter referred to as ‘the Tribunal’), Bengaluru, wherein the appeal filed by respondent No.1 herein has been dismissed and the order dated 05.11.2011 (Annexure ‘A’ to the petition) passed by respondent No.4 in the aforesaid dispute, which is also sought to be quashed in this petition, has been confirmed.
3. The brief facts of the case leading to this writ petition are as under:
3.1 The petitioner herein applied for grant of loan of Rs.25,000/- before the first respondent – Bank on 05.05.1994. The said loan was released in favour of the petitioner on 09.05.1994 and it carried interest at the rate of 22.5% per annum and penal interest at the rate of 2% per annum. Respondent Nos.2 and 3 herein stood as sureties to the said loan.
3.2 Respondent No.1 herein - Bank raised a dispute, which was numbered as 676/1996-97, under Section 70 of the Karnataka Cooperative Societies Act, 1959, against the writ petitioner, respondent Nos.2 and 3 herein before respondent No.4 herein, seeking recovery of a sum of Rs.25,382/- with interest from 30.09.1995 till the date of realization.
3.3 In the said dispute, notice was issued to the parties. It is stated in the order dated 05.11.2011 (Annexure ‘A’ to the petition) that initially, the dispute was settled before the Hon`ble Mediators and the said order recording settlement was subject of matter of appeal in Appeal No.438/2002 before the Tribunal, which had remanded the matter to the fourth respondent herein.
3.4 Respondent No.1 in the said dispute (petitioner herein) filed objections inter alia stating that he was working as an operator in M/s.Jayee Electricals Limited and the said Company was closed in the year 1995-96. The applicant - Bank and M/s. Akshaya Sales Corporation had formulated a scheme through joint venture in providing consumer articles and electronic appliances on loan basis. He contended that though he had not received any electronic item from M/s. Akshaya Sales Corporation or M/s. Rushaba Enterprises, applicant – respondent No.1 herein (hereinafter referred to as ‘Bank’) had deducted a sum of Rs.7,000/- from his salary towards the loan amount.
3.5 In the said dispute, the Managing Director of the Bank filed his affidavit by way of evidence (Ex.P1) inter alia stating that the first respondent (petitioner herein) was an employee of M/s. Jayee Electricals Limited and he made application to the Bank for sanction of loan of Rs.25,000/- towards purchase of consumer goods viz., colour Television and V.C. Player and respondent Nos.2 and 3 stood as sureties
several documents viz., salary certificate of the first respondent (petitioner herein) issued by his employer – M/s. Jayee Electricals Limited (Ex.P4); salary certificates of sureties to the loan transaction i.e., respondent Nos.2 and 3 (Exs.P5 and P6); approval letter of the employer of the first respondent for sanction of the loan (Ex.P7); quotation of M/s. Rushaba Enterprises with regard to value of the said consumer goods, which were sought to be purchased by the first respondent (Ex.P8); statement showing the amount in excess of the loan amount, which was agreed to be sanctioned by the Bank towards value of the said consumer goods, deposited by the first respondent with the Bank (Ex.P9); agreement entered into between the first respondent and salary disbursement officer of his employer in respect of recovery of loan amount on installment basis from the salary of the first respondent (Ex.P10); consent letter given by the first respondent for recovery of loan amount from his account by the Bank (Ex.P11); hypothecation agreement executed by respondent Nos.1 to 3 therein in favour of the Bank (Ex.P13) and certified extract of loan account in respect of the first respondent (Ex.P14). It was alleged by the Bank that since the petitioner herein did not repay the entire loan amount, it had raised the said dispute.
3.6. In the said proceedings, the first respondent (petitioner herein) adduced his evidence reiterating the averments made in his objections statement. He contended that the Bank without verifying as to whether the said consumer goods were supplied to the petitioner herein, had erroneously recovered amount of Rs.7,000/- from him and the dispute raised by the Bank for recovery of loan amount stated therein was illegal.
3.7. It has come on record that respondent Nos.2 and 3 herein did not file any objections to the said dispute. The applicant – Bank has not cross-examined the petitioner herein.
3.8. The fourth respondent herein after considering the evidence available on record, held that the applicant - Bank had successfully established that the petitioner herein had obtained loan from the Bank as stated in the dispute. However, it had failed to verify that the consumer goods were delivered to the first respondent. Accordingly, respondent No.4 herein vide order dated 05.11.2011, partly allowed the dispute raised by the applicant - Bank and directed the Bank to recover a sum of Rs.25,000/- with interest at 18% per annum from the date of release of loan i.e., 09.05.1994 till the date of realization, from the respondents therein jointly and severally. The Bank was directed to review the interest rate that was prevailing from time to time and make appropriate calculation.
3.9 The said award passed by the fourth respondent herein was subject matter of challenge in Appeal No.213/2012 by the petitioner herein before the Tribunal. Since there was delay in filing the said appeal, the appellant - petitioner herein filed I.A. No.1 under Section 5 of the Limitation Act, 1963. The Tribunal after considering the contentions of the learned counsel for the appellant (petitioner herein) and respective learned counsel for respondent Nos.2 and 4 therein and the grounds urged in the appeal, by the impugned judgment dated 25.11.2015, while condoning the delay in filing the appeal, has dismissed the appeal confirming the said award of recovery passed by the fourth respondent herein. Hence, the petitioner has called in question the order passed by the Tribunal as well as the award passed by the fourth respondent herein.
4. Heard the learned counsel for the petitioner and learned Additional Government Advocate appearing for respondent No.4. So far as respondent Nos.2 and 3 are concerned, they are sureties to the aforesaid loan transaction. They have remained unrepresented. Perused the material on record.
5. The petitioner has taken up the contention that he is not liable to pay any loan amount to the Bank as he had never received any electronic appliances or consumer articles either from M/s. Akshaya Sales Corporation or from M/s. Rushaba Enterprises. The first respondent – Bank has not made any verification and has not obtained any acknowledgement from the supplier regarding the delivery of goods to him. He has contended that the Tribunal has failed to note that as per Ex.P2 and Ex.P13 – hypothecation agreement, respondent No.1 was authorized to deduct only a sum of Rs.750/- per moth from his salary towards the loan amount, but the Bank has erroneously recovered a sum of Rs.1,000/- per month i.e., in all Rs.7,000/- from him.
6. It is not in dispute that the petitioner was working as an operator in M/s. Jayee Electricals at the time when the loan was sanctioned to him by the Bank. The said Company was closed in the year 1995-96. Respondent Nos.2 and 3 have stood as sureties for the said loan. Admittedly, the petitioner, respondent No.2 and respondent No.3 have affixed their respective signatures to the application made to the Bank for grant of loan. The fact that amount of Rs.7,000/- was recovered from the salary of the petitioner for the period from 1994 till 2000 towards repayment of loan as per Ex.P14, certified extract of the loan account of the petitioner, is not in dispute. There is nothing on record to show that the petitioner raised any objection when for the first time, a sum of Rs.1,000/- was deducted from his salary on 08.07.1994 towards the loan amount. Though the petitioner contends that he was not supplied the consumer goods, the petitioner has not informed the Bank about non-supply of consumer goods.
7. In this background, respondent No.4 herein before whom the aforesaid dispute was conducted as well as the Karnataka Appellate Tribunal while sitting in judgment over the award passed in the dispute has rightly considered all the defences put forth by the petitioner herein. Accordingly, respondent No.4 herein has passed appropriate order in awarding the claim of the applicant in the dispute (respondent No.1 herein) and the said award has been rightly confirmed by the Tribunal in Appeal No.213/2012.
8. In that view of the matter, this Court find that no justifiable grounds are made out to allow this writ petition. Accordingly, the same is dismissed.
9. Learned Additional Government Advocate is permitted to file memo of appearance within two weeks from today.
Sd/- JUDGE sma