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2022 Supreme(Online)(KER) 19959

HIGH COURT OF KERALA
V. G. Arun, J
KALLETUMKARA SERVICE CO-OPERATIVE BANK LTD.NO141, – Appellant
Versus
JOSE P.L – Respondent
WP(C)/19118/2022



Advocates:
GEORGE POONTHOTTAM (SR.), NISHA GEORGE, REGINALD VALSALAN, GOVERNMENT PLEADER, K.S.MADHUSOODANAN, M.M.VINOD KUMAR, P.K.RAKESH KUMAR, K.S.MIZVER, M.J.KIRANKUMAR

Execution proceedings are not stayed by the mere pendency of an appeal if the appellant has suppressed facts regarding their knowledge of the award.

Headnote:

Loan - Agricultural Credit - Kerala Co-operative Societies Act, 1969 - Section 74 - The court emphasized that the pendency of an appeal does not impede the execution of an award; fraudulent suppression of facts by a borrower can lead to the dismissal of their appeal.

Fact of the Case:

The petitioner, a Primary Agricultural Credit Society, sanctioned a loan to the first respondent who defaulted on repayment, leading to recovery proceedings. The first respondent claimed ignorance of the award and filed an appeal, resulting in a stay of execution.

Issues: Whether the pendency of an appeal before the Tribunal can impede execution proceedings and whether the first respondent's claim of ignorance regarding the award is legitimate.

Ratio Decidendi: The court held that mere pendency of an appeal cannot halt execution proceedings and that suppressing material facts to obtain a favorable order is unacceptable.

Final Decision: The writ petition is disposed of, allowing the execution proceedings to continue despite the pending appeal.

JUDGMENT

Dated this the 10th day of August, 2022 The petitioner is a Primary Agricultural Credit Society registered under the Kerala Co- operative Societies Act, 1969 and the Rules thereunder. The first respondent was sanctioned a loan of Rs.10,00,000/- based on Ext.P1 loan application dated 18.05.2011. The loan was sanctioned on the security of 15.14 Ares of land in Mukundapuram Taluk and Ext.P2 Gahan. The first respondent remitted an amount of Rs.47,060/- initially and defaulted repayment thereafter. The bank initiated recovery proceedings by filing ARC No.4729/2012 before the second respondent. Surprisingly, the ARC files went missing from the office of the second respondent, which the managing committee of the petitioner suspects to be the handiwork of the first respondent. Ext.P3 is the letter issued in this regard by the then President of the Society. Thereafter, at the request of the second respondent, the records were recreated and the ARC numbered as 3411/2015. Despite service of notice in the ARC, the first respondent failed to appear before the second respondent, resulting in Ext.P4 award being passed on 28.06.2016. The Society sought to execute the award by filing Ext.P5 execution petition dated 19.10.2016. After accepting the execution petition on file, there was inordinate delay on the part of the second respondent in issuing notice to the first respondent. After the petitioner made repeated requests, Ext.P6 Form No.2 notice under Rule 74 of KCS Rules was issued on 24.11.2017, followed by Ext.P7 Form No.6 notice dated 12.06.2018. The first respondent accepted the notices and did nothing. When the execution proceedings reached its final stage, the first respondent submitted Ext.P8 appeal before the Kerala Co-operative Tribunal, stating that he came to know about Ext.P4 award only when served with notice in execution proceedings on 21.03.2022. It was alleged that even though the ex parte award was passed on 28.06.2016, a copy of the award was not communicated to the first respondent. After accepting the appeal to its files, the Co- operative Tribunal passed Ext.P9 order staying execution of the award till 06.06.2022.

2. On receipt of notice in the appeal, the petitioner filed Ext.P10 counter affidavit along with a petition to vacate the interim order. By that time, the tenure of the judicial officer appointed as Tribunal was over. In the absence of an officer, the functioning of the Tribunal came to a standstill. Faced with such a situation, the writ petition is filed. According to the petitioner, although Tribunal's order is only up to 06.06.2022, execution proceedings is not being continued on the premise that the appeal is pending.

3. Learned Senior Counsel appearing for the petitioner raised the following contentions;

This is a fit case where this Court should interfere in exercise of the extraordinary jurisdiction under Article 226, since the first respondent had committed fraud, by filing the appeal and obtaining an interim order, feigning ignorance about the award and execution proceedings. It is pointed out that, notices in the ARC as well as the execution proceedings were repeatedly served on the first respondent, but he had deliberately chosen to keep away, with the nefarious intention of protracting the proceedings to the maximum. Suppressing these material facts, the appeal was filed with an averment that the first respondent came to know about the ARC and the execution proceedings for the first time on 21.03.2022. After availing a loan of Rs.10 lakhs in the year 2011, the first respondent has successfully managed to evade payment for more than ten years. The amount in arrears as on 21.03.2022 is Rs.24,48,669/- and the Society is being put to immense loss by reason of the delay in effecting recovery of the amount. As the Tribunal is not functioning at the moment, the petitioner is disabled from getting the appeal dismissed.

4. Learned Counsel for the first respondent contended that the writ petition is liab

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