The bank is obligated to issue a Non Liability Certificate upon fulfillment of debt settlement conditions, regardless of pending government payments.

JUDGMENT

The petitioner availed two separate loans from the respondent bank. According to the petitioner, while one loan was a non-agricultural loan, the other loan was an agricultural loan. According to the petitioner, the petitioner settled the liability in respect of non-agricultural loan under the 'നവക(cid:4)രള(cid:7)യ(cid:9) കട(cid:12)ശ(cid:12)(cid:4) ന(cid:12)വ(cid:14)രണ പദത(cid:12) ' It is submitted that, in respect of the agricultural loan, the petitioner was given relief by the Kerala State Farmers' Debt Relief Commission, Thiruvananthapuram. It is submitted that, by the document marked as Ext.R2(b) award along with counter affidavit of the 2^nd respondent bank, the petitioner was required to pay only a sum of Rs.1,06,000/- to settle the liability under the agricultural loan and that amount was also paid by the petitioner within the time specified in Ext.R2(b). It is submitted that, though the bank has returned the documents of title deposited by the petitioner for securing repayment of both the loans, the bank has not issued a Non Liability Certificate on account of which the encumbrance under the gehan executed by the petitioner is shown in the Encumbrance Certificate.

2. The learned counsel appearing for the respondent bank submits that while it is true that the petitioner has settled the liability in respect of the non-agricultural loan under the 'നവക(cid:4)രള(cid:7)യ(cid:9) കട(cid:12)ശ(cid:12)(cid:4) ന(cid:12)വ(cid:14)രണ പദത(cid:12) ' the bank is not in a position to issue Non Liability Certificate on account of the fact that the amount to be paid by the Government to the bank in terms of Ext.R2(b) has not been paid by the Government. It is submitted that if the Non Liability Certificate is issued, the respondent bank will not be in a position to recover any amount from the petitioner, if the Government does not sanction the amount directed to be paid through Ext.R2(b) order. In other words, it is submitted that, if the Government pays a sum of Rs.1,06,000/- in terms of Ext.R2(b) order, the bank is willing to issue Non Liability Certificate.

3. Having heard the learned counsel for the petitioner and the learned counsel appearing for the respondent bank, I am of the view that the petitioner is entitled to succeed. It is not disputed that non-agricultural loan was settled by the petitioner under the 'നവക(cid:4)രള(cid:7)യ(cid:9) കട(cid:12)ശ(cid:12)(cid:4) ന(cid:12)വ(cid:14)രണ പദത(cid:12) '. Insofar as the agricultural loan is concerned, it is clear from a reading of Ext.R2(b) order that the Debt Relief Commission had allowed the petitioner to pay a sum of Rs.1,06,000/- in full and final settlement of his liability. The balance amount of Rs.1,06,000/- payable to the 2^nd respondent bank was directed to be paid by the Government. It is also clear that even without waiting for the release of the amount by the Government, the bank was supposed to release the documents and close the loan account of the petitioner. The bank has not challenged Ext.R2(b) order. Therefore, the bank cannot take refuge under the fact that the Government has not paid the amount payable in terms of Ext.R2(b) order and the bank is liable to issue Non Liability Certificate.

Accordingly, this writ petition is disposed of directing the 2^nd respondent bank to issue Non Liability Certificate to the petitioner in respect of both the loans availed by the petitioner from the 2^nd respondent bank. This order will not prevent the 2^nd respondent bank from seeking the release of any amount payable to it in terms of Ext.R2(b) order of the Debt Relief Commission, by the Government.

The writ petition is ordered accordingly.