IMPORTANT POINT
The Government's circulars regarding debt relief were quashed as ultra vires the Kerala Co-operative Societies Act, confirming the Registrar's powers must respect contractual agreements.

JUDGMENT :

Amit Rawal, J.

[WA Nos.584/2024, 715/2024, 732/2024, 740/2024, 750/2024, 754/2024, 761/2024, 776/2024, 782/2024, 783/2024, 784/2024, 790/2024, 792/2024, 821/2024, 857/2024, 863/2024, 955/2024, 1113/2024]

1. This order of ours shall dispose of all the 18 (eighteen) writ appeals preferred against the common judgment of Single Bench dated 18.01.2024 in W.P(C).No.33185/2011 and connected writ petitions filed by the Society whereby the action of the Government and order of the Registrar vide Government order dated 06.12.2020, Circular Nos.1/2011 and 12/2011 dated 03.01.2011 and 01.02.2011 respectively, ultra vires of the provision of the Kerala Co-operative Societies Act, 1969, have been quashed.

2. Succinctly, the facts in brief are that Co-operative Banks registered under the Kerala Co-operative Societies Act and Primary Agricultural Credit Societies defined under Section 2(o)(a) of the Act have been extending the facilities of loan and credit by way of mortgage entering into a contract to fishermen. Many fishermen had been obtaining loan as per the terms and conditions of the contract defining the principal, interest and penal interest and consequential action by creating a mortgage and charge over the property.

3. Government had come out with an Act, i.e., No.18/2008 called Kerala Fishermen Debt Relief Commission Act which provide a complete procedure after defining certain expressions like co-operative society, credit, debt, fair rate of interest, fisherman, fishing etc., empowering the commission for achieving the purpose of Act under Sections 5, 10 and 12 of the Act. The aforementioned Act was amended by notification dated 27.12.2018 causing amendment only to Sections 5 and 6, and inserting Section 9A.

4. The aforementioned Commission submitted two reports to the Government providing a comprehensive recommendation for granting debt relief to fishermen who had taken loan from the institutions functioning under the Co-operative Societies Act, 1969, pertaining to waiver of interest, penal interest and pending loans to certain extent. By accepting the aforementioned recommendation, Government came out with an order dated 06.12.2010 by granting debt relief to the borrowers from the Primary Co-operative Societies and Co-operative Banks functioning under the Co-operative Societies Act, 1969, as mentioned in paragraph 4 of the aforementioned order.

5. To achieve the aforementioned purpose, Clause 5 was also inserted where it was mentioned that the general conditions shall be strictly followed while implementing the debt relief as succor to the co-operative societies/banks which were likely to be effected on account of the waiver. Registrar of the co-operative societies was directed to pay the amount to the banks after conducting necessary scrutiny to ensure that there are no fake accounts. If any amount falls short, the balance will be paid and if otherwise, i.e., if amount comes in excess, Registrar shall keep it in the account and report to the Government. Joint Registrar of Co-operative Societies and Deputy Director of Fisheries Department were also directed to associate at the District level.

6. In compliance of the order of the Government dated 06.12.2010, Registrar of Co-operative Societies issued two circulars Nos.1/2011 and 12/2011 dated 03.01.2011 and 01.02.2011 respectively by issuing guidelines for implementation of the scheme in Co-operative Societies/Banks providing certain terms and conditions.

7. Aggrieved of the aforementioned action, Co-operative Societies assailed the aforementioned circulars and the order of the Government through different writ petitions by raising various pleas with regard to violation of contract, Transfer of property Act and against the doctrine of legitimate expectation and also relied upon certain case laws. Learned Single Bench, vide impugned judgments, quashed the orders and circulars. It is in that background, State is in intra court appeals before us.

8. Sri.Gopalakrishna Kurup, learned