Introduction:

The constitutional validity of Section 56A of the Kerala Co-operative Societies Act, 1969, falls for consideration in these writ petitions.

2. In W.P.(C)No.18030/2014, the petitioners are the Co-operative Bank and one of its members; respondents 4 and 5 are the borrowers, the latter of whom mortgaged her property as security for the loans. Apart from being husband and wife, the fourth and fifth respondents are the petitioners in W.P.(C)No.2640/2014 and W.P.(C)No. 18030/2014 respectively.

3. While the Bank has raised the issue of vires of Section 56A of the Kerala Co-operative Societies Act, the borrowers, on the other hand, seek the enforcement of Exhibits P7 and P8 orders passed by the authorities drawing their power from the impugned provision.

4. Since the writ petitions have similar issues involving the same parties, this Court has proposed to dispose of the writ petitions through a common judgment. For ease of reference and convenience, the facts as pleaded and the parties as have been arrayed in W.P.(C)No. 18030/2014 are taken as the basis.

The Facts in Brief:

5. The fourth and fifth respondents, incidentally husband and wife, secured two business loans in 2001 for Rs. 10,00,000/- each by mortgaging, as security for both the loans, the property of the fifth respondent, the wife.

6. Later, when respondents 4 and 5 committed default in repaying the loan amounts, the Bank initiated recovery proceedings by filing A.R.C.Nos.689/2002 and 691/2002 against them. Though the respondents initially entered their appearance, later they remained ex-parte; it has resulted in the Arbitration Court's passing a common award against the borrowers.

7. On the strength of the arbitration award, the Bank issued a demand notice calling upon respondents 4 and 5 to satisfy the award. Aggrieved, the fifth respondent filed W.P. (C)No.34650/2005 before this Court and obtained an interim stay on the condition of her depositing 3,00,000/-. She did not, however, comply with the said direction. At any rate, this Court disposed of W.P.(C)No.34650/2005 permitting the fifth respondent to clear the entire loan amount by 17.04.2006, failing which the Bank was free to proceed further.

8. But the fifth respondent, even within the extended time, has not availed herself of the indulgence shown by this Court in W.P.(C)No.34650/2005. It compelled the Bank to issue a sale notice on 28.11.2008. The sale, in fact, took place on 14.01.2009. Among all the bidders present, the very Bank offered the highest and purchased the property for a consideration of 44,78,130/-.

9. As gathered from the record and the submissions of the learned counsel for the parties, the fourth respondent, in the meantime, filed W.P.(C)Nos.12199/2007 and 1387/2009 assailing the sale notice. Though there was an interim direction in one of these writ petitions; this time, the fourth respondent failed to comply with it. Initially, W.P. (C)No.12199/2007 was dismissed as it had been reported to have become infructuous. And later even W.P.(C)No. 1387/2009 was dismissed.

10. The issue had no quietus, though. This time, the fifth respondent filed W.P.(C)No. 4902/2009 in which, once again, she obtained an interim order staying the confirmation of sale subject to her depositing a part of the loan amount. In tune with the previous practice, rather failure, the fifth respondent, predictably, violated the direction, because of which, this Court dismissed W.P.(C) No.4902/2009. At any rate, through Exhibits P1 and P1(a), on 24.03.2010, the petitioner had the sale confirmed in its favour; and on 27.03.2010, it took possession of the property.

11. The fourth respondent filed W.P.(C)No. 26638/2010 impugning the auction sale. But he withdrew the said writ petition on 10.03.2011. This time he approached the Government challenging both the award and the auction sale. The Government, the first respondent, however, through Exhibit P3 order dated 28.07.2010, rejected the fourth respondents' claim. Next came