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HIGH COURT OF KERALA
S.MANIKUMAR, CJ, SHAJI P.CHALY, J
THE MANAGING DIRECTOR, AYIROOPPARA FARMERS SERVICE CO-OPERATIVE BANK LTD.NO.2154, POTHENCODE – Appellant
Versus
MOLLY KUMAR D. – Respondent
WP(C) NO. 2382 OF 2021
Certainly. Based on the provided legal document, here are the key points:
The case involves a dispute over the entitlement to benefits under the Kerala Co-operative Risk Fund Scheme, 2008, following the death of a borrower, late Premkumar, who had taken a loan from the petitioner bank (!) (!) .
The core issue is whether the deceased borrower was a member of the Risk Fund Scheme at the time of his death and whether the bank had complied with the scheme's requirements, including remittance of contributions (!) (!) .
Evidence indicated that the bank did not enroll in the scheme until after the borrower’s death, and the bank's records suggested that the entries purportedly showing contribution by the borrower were fabricated or forged by bank staff (!) (!) .
The court examined whether late Premkumar had remitted the required contributions, notably Rs.250/-, and whether the bank had become a member of the scheme at the relevant time. It was found that the bank only became a member in May 2010, whereas the loan was disbursed in February 2009, and that the contribution record was fabricated (!) (!) .
The court emphasized that the scheme's objective is to provide benefits to the families of borrowers who die during the loan period, but such benefits are contingent upon compliance with procedural requirements, including membership and contribution remittance (!) (!) .
The evidence, including forensic analysis, demonstrated that the entries in the bank’s computer records were manipulated after the fact, and the bank’s failure to deposit the contributions in the required manner was a significant lapse (!) (!) .
The court held that since the bank was not a member of the scheme at the time of the borrower’s death and did not contribute the requisite amount, it was not liable to pay benefits under the scheme (!) (!) .
The court recognized that the bank’s internal staff engaged in fabricating documents, but it also noted that the bank, as an institution, should bear the consequences of such misconduct, especially since the bank itself failed to enroll timely and remit contributions properly (!) (!) .
Ultimately, the court set aside the orders that directed the bank to pay benefits under the scheme, holding that the bank’s non-enrollment and non-contribution at the relevant time absolved it from liability (!) (!) .
The court acknowledged the importance of procedural compliance and the scheme’s purpose but found that the bank’s lapses did not amount to willful negligence justifying liability for benefits, leading to the interference with the orders of the lower authorities (!) (!) .
The decision underscores that benefits under the scheme are conditional upon strict adherence to the scheme’s provisions, including timely enrollment and contribution remittance, and that fabrication of documents undermines entitlement claims (!) (!) .
The court also left open the possibility for the bank to recover any amounts paid under the order if it had already disbursed benefits, emphasizing that the liability was not established due to procedural lapses and misconduct (!) .
These points collectively reflect the legal reasoning, findings, and final decision of the court regarding the scheme’s eligibility criteria, procedural compliance, and the impact of document fabrication on liability.
JUDGMENT
S. Manikumar, CJ
Instant writ petition is filed by the 2nd respondent in Complaint No.551/2013 on the file of the Kerala Lok Ayukta, challenging the orders passed by Upa Lok Ayukta dated 05.11.2020, and 16.12.2020 in R.P. No.2/2020 (Exhibits-P7 & P8 in the Writ Petition).
2. Reliefs sought for in the writ petition are as under:
(i) issue a writ of certiorari or any other appropriate order or direction, calling for the records leading to Exhibits-P7 and P8 and quash the same;
(ii) issue any other appropriate writ, order or direction, declaring that the benefit of Risk Fund Scheme is to be given by the Kerala State Co-operative Development and Welfare Fund Board to its beneficiaries and the direction contained in Exhibit-P7 order directing the petitioner Bank to give the benefit of Risk Fund Scheme to the complainant is illegal and opposed to the concept and object of Exhibit-P3 Risk Fund Scheme;
(iii) issue any other appropriate writ, order or direction, declaring that the Petitioner is not liable to extend the benefit of Risk Fund Benefit Scheme to the complainant, in view of the finding and direction contained in Exhibit-P4 order;
(iv) issue any other appropriate writ, order or direction, directing the 2nd respondent to refund the amount of Rs.1 lakh and its interest paid by the petitioner Bank to close the loan account of the first respondent/complainant by sanctioning the benefit of the Risk Fund Scheme to the complainant.
3. Basic material facts for disposal of the writ petition are as under:
3.1. Husband of the 1st respondent/complainant availed a loan from Ayirooppara Farmers Service Co-operative Bank Ltd., Pothencode, Thiruvananthapuram, and during the loan tenure, he died on 24.11.2010. According to the 1st respondent/complainant, a loan of Rs.5 lakhs was admittedly released to late Premkumar on February 6, 2009, with a stipulation to repay the same in sixty equal monthly installments; the last installment being payable on February 6, 2014.
3.2. It is also the admitted position that late Premkumar was prompt in repayment of equal monthly installments towards the loan account till his death. But the question that arose for consideration in the complaint was as to whether the complainant/1st respondent herein, the widow of late Premkumar, who had availed loan from the petitioner Bank is entitled to the benefit of Kerala Co-operative Risk Fund Scheme , 2008.
3.3. According to the 1st respondent, with a view to settle the loan account, she approached the petitioner in February, 2011, requesting its Branch Manager to provide her the benefit of Risk Fund Scheme, 2008. It was the case of the 1st respondent before the Lok Ayukta that, the then Branch Manager had directed her to remit the sum of Rs.1,59,455/- being the total amount payable, excluding the risk fund of Rs.1 lakh and interest thereto, which she was entitled to get under the scheme.
3.4. It is also the case of the 1st respondent that she had remitted the above sum of Rs.1,59,455/- on 11.02.2011 and requested the Branch Manager to release the title deeds of the property furnished towards security by her late husband. However, the Manager refused to release the documents and directed her to remit the entire balance amount payable to the loan account, which thus means, the Manager was of the view that the 1st respondent was not entitled to get the benefit of the scheme, since her husband while availing the loan did not become a member of the Risk Fund Scheme.
3.5. It was further contended by the 1st respondent that even though she had approached the Managing Director of the petitioner Bank claiming to grant the benefit of Risk Fund Scheme, the Managing director was also of the opinion that her husband being not a member of the Scheme, is not entitled to the benefit of the Scheme.
3.6. The case projected by the 1st respondent before the Lok Ayukta was that under the Scheme, 2008, if the loanee dies before repayment of the loan to the bank during the loan period, a sum to t
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