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2018 Supreme(Ker) 375

IN THE HIGH COURT OF KERALA AT ERNAKULAM
V. Chitambaresh, Sathish Ninan, JJ.
Radhakrishna Kurup, S/o Krishna Kurup – Petitioner
Versus
Nadakkal Service Co-Operative Bank Ltd. and Ors. – Respondents
W.A.Nos.1170, 1171 & 1212 of 2016
Decided On : 03-07-2018

Advocates Appeared:
For the Petitioner: Sri. T.B. Hood, Smt. M. Isha, Sri. Amal Kasha, Advs.
For the Respondent: Sri. P.C. Sasidharan, Adv., Smt. K.R. Deepa, Senior Government Pleader

Headnote:Kerala Co-operative Societies Act 1969, S. 56A - Constitution of India, Art. 14 - The cooperative bank is regarded as separate section from the commercial banks as the main aim of the former is service and the aim of latter is profit and section 56A of the act is not held violative of Article 14 of Indian constitution.

JUDGMENT :

V. Chitambaresh, J.

1.These writ appeals arise out of the common judgment in the case titled Radhakrishna Kurup v. Nadakkal Service Cooperative Bank Ltd. [2016(4) KLT 82].

2. About 10.12 ares of land in Sy. Nos.278/21 and 278/21-2 of Paripally Village in Kollam Taluk belonging to the appellants (who are husband and wife) were brought to sale by the first respondent co-operative bank. The property was sold on 14.01.2009 for a total sum of Rs. 44,78,130/- in execution of the awards obtained by the bank for realisation of amounts due in two loan accounts. The appellants had filed several writ petitions before and after sale viz, O.P.No.34650/2005, W.P(C).Nos.1219/2007, 1387/2009, 4902/2009 and 26638/2010. The appellants did not comply with the conditional orders passed therein and the writ petitions were either dismissed for default or withdrawn which have become final. The property delivered over is now in the possession of the bank which has applied for a permit to construct a building therein with an intention to house its administrative office.

3. The Government later issued an order dated 27.09.2011 requesting the managing committee of the bank to take a decision resolving to return the property to the appellants on the repayment of the loan. The managing committee by decision dated 11.10.2011 resolved not to accede to the request and accordingly informed its inability to the Government on the same day. The bank took such a decision mainly because of the sentiment of its members who were against parting with the property and also due to a case pending in the Kerala Lok Ayukta. The Government by order dated 22.05.2014 reminded the bank of its earlier direction to return the property on the appellants repaying the loan with interest and expenses. A reference was made to Section 56A of the Kerala Co-operative Societies Act, 1969 ['the Act' for short] by the Government therein which related to disposal of non-banking assets. The statutory provision obliges the bank to sell the immovable property within seven years from the acquisition with prior sanction of the General Body and the Registrar. This was followed by a communication of the Registrar dated 20.06.2014 to abide by the orders of the Government since the Kerala Lok Ayukta had disposed of the pending case.

4. W.P(C).No.2640/2013 (from which W.A.No.1170/2016 arises) was filed by the husband and W.P(C).No.31238/2014 (from which W.A. No.1171/2016 arises) was filed by the wife challenging the sale. The husband sought to set aside the proceedings including the sale certificate and a direction to the bank to re-convey the property in terms of the orders of the Government. The wife sought a direction to the bank to comply with the order of the Kerala Lok Ayukta which merely stated that the disposal of the property could only be as per Section 56A of the Act. W.P(C).No.18030/2014 (from which W.A.No.1212/2016 arises) was filed by the bank challenging the orders of the Government and also the constitutional validity of Section 56A of the Act. The learned single Judge has by the judgment titled (supra) dismissed W.P(C). Nos.2640/2013 and 31238/2014 and allowed W.P(C).No. 18030/2014. The learned single Judge has in so doing declared that Section 56A of the Act applicable to cooperative banks is unconstitutional being violative of Article 14 of the Constitution of India.

5. We heard Mr.T.B. Hood, Advocate for the appellants, Mr.P.C.Sasidharan, Advocate for the bank and also Mrs. K.R.Deepa, Senior Government Pleader.

6.The appellants contend that only such portion of the property as is necessary to satisfy the awards need to have been sold relying on Ambati Narasayya v. M.Subba Rao and another [1989 Supp. (2) SCC 693]. It is not a discretion but an obligation imposed on the bank and the failure to adhere to this course renders the sale liable to be set aside on the ground of irregularity. Our attention was drawn to Rule 85 of the Kerala Co-operative Societies Rules, 1969 ['the Rule














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