Case of petitioner, in brief, is as follows:

Petitioner is a retired Govt. L.P. School Headmistress. She retired on 31.3.2005. She had availed a term loan from State Bank of Travancore, Kalpatta Branch. The loan amount obtained was Rs.90,000/= in the year 2003 and the amount was being remitted in the loan account. It is stated that there happened difficulty in repayment of the loan due to financial difficulties. It is stated that the petitioner has to pay off the liabilities of State Bank of Travancore. The amount is demanded. The total DCRG amount of petitioner is Rs.1,05,000/=. According to her, respondents 1 & 2 have no authority to recover any amount from the DCRG due to petitioner towards the Bank’s liability. Second respondent has fixed the liability of petitioner as Rs.87,273/= + 2,550/= Rs.89,823/= vide Ext.P2. Exts.P1 and P2 are challenged and the prayer sought for is to order that petitioner is entitled to get her DCRG amount unaffected of her liability with the third respondent Bank.

2. The second respondent has filed a Counter Affidavit, wherein it is, inter alia, stated as follows:

The Manager of the State Bank of Travancore had requested to recover the outstanding dues from the DCRG of petitioner and produced a copy of the Agreement executed by petitioner. It is stated that the loan was sanctioned solely on the basis of the undertaking given by petitioner and it is authorized by the undertaking to recover the outstanding dues from the DCRG. It is further stated that as per ruling 1 to 3 of Rule 3 Part III KSR, amount due to a Government Company may be recovered from the DCRG of the Government servant after intimating her. It is stated that in this case, petitioner was given notice in due time.

3. The third respondent has filed a Statement. Therein, it is stated as follows:

The share of the State Bank of India in the equity capital of State Bank of Travancore is 75 per cent. This amount to Rs.37.50 Crores. The total share capital of State Bank of Travancore is Rs.50 Crores. The Reserve Bank of India has 59.73 per cent equity share capital in the State Bank of India. Ext.R3(b) is produced as Share holding pattern as on 30.9.2006. The State Bank of Travancore is stated to be a statutory Corporation constituted under the State Bank of India (Subsidiary Banks) Act, 1959. It is stated that the purpose of Ruling No.1 of Rule 3 of Part III KSR is to enable public funds due from Government employees to be recovered from DCRG payable to an employee with his consent in writing. Petitioner is estopped from contending after having given consent and availing the loan, it is contended. Ext.R3(c) is produced along with the Statement dated 29.9.2006. In the said Statement, it is also stated that the petitioner availed the loan on 16.10.2003 with interest payable at 13.50 per cent per annum. The amount was to be repaid in monthly instalments commencing from November, 2003. If she defaulted payment, irrevocable power of attorney was executed by petitioner authorizing to recover Rs.3,100/= per month. Petitioner was the Headmistress of the School and she was self-drawing Officer. She deliberately did not make deduction from salary. Ext.R3(a) is produced as irrevocable letter of authority.

4. In the Reply Affidavit filed by petitioner, it is, inter alia, stated that the loan itself is against collateral security and it is secured debt for the Bank. The Guarantor for the transaction is one Shri C.T. Gangadharan, Meppadi and he has mortgaged his property having 25 cents and the residential building thereon towards the loan transaction and it is worth not less than Rs.15 Lakhs.

5. Learned counsel for petitioner would contend that this is a case where it is open to the Bank to proceed against the property secured and it is a harsh case. He would further contend that the loan amount due to the Bank cannot be recovered from the DCRG, as according to him, Ruling 1 to Rule 3 of Part III KSR, is inapplicable to the State Bank of Travancor