The Court confirmed the legality of recovering loan amounts from DCRG payable to a deceased borrower's legal heirs under specific regulatory conditions.

JUDGMENT

The petitioner is a Co-operative Society registered under the Kerala Co-operative Societies Act , 1969. The petitioner extended a loan to one Binoy Raj T in the year 2020. Ext.P1 is the loan application, and Ext.P2 is a copy of the loan ledger. The aforesaid Binoy Raj, expired on 19- 05-2022. The petitioner, therefore, sought for recovery of the amounts from the Death-cum-Retirement Gratuity (DCRG) payable to the legal heirs of the deceased Binoy Raj. The petitioner has approached this Court apprehending that, notwithstanding the demand made by the petitioner, the DCRG will be disbursed to the 4^th respondent, namely the wife of late Binoy Raj, without deducting the amounts due to the petitioner.

2. The learned counsel appearing for the petitioner submits that, in the light of the judgment of this Court in Idukki District Police Co-operative Society Ltd. v. State of Kerala , 2026 KHC OnLine 96., the amendment to Ruling No.1 under Rule 3 of Part III of the KSR w.e.f 01.02.2025 will not apply to the loan sanctioned to late Binoy Raj, and therefore, even without any further consent from late Binoy Raj or his legal heirs, the amount can be recovered from the DCRG payable to him/his legal heirs.

3. Heard the learned Government Pleader appearing for the official respondents also.

4. Despite service of notice, there is no appearance for the 4^th respondent.

5. Having heard the learned counsel appearing for the petitioner and the learned Government Pleader appearing for the official respondents and having regard to the view taken by this Court in Idukki District Police Co-operative Society Ltd. (supra), I am of the view that the learned counsel for the petitioner is right in contending that in the facts of this case, since the agreement executed by late Binoy Raj permitting recovery of any liability on account of the loan from his DCRG was prior to

01.02.2025, the amendment to Ruling No.1 under Rule 3 of Part III of the KSR will not apply.

6. Accordingly, it is directed that any amount due on account of the loan availed by late Binoy Raj (from the petitioner) shall be recovered from the DCRG payable to his legal heirs (represented by the 4^th respondent) and the balance alone shall be disbursed to the legal heirs of the late Binoy Raj.

The writ petition is ordered accordingly.

Sd/-