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2009 Supreme(Online)(KER) 11134
HIGH COURT OF KERALA
ANTONY DOMINIC, J
P.A.CHERIYAN – Appellant
Versus
THE KEERAMPARA SERVICE CO-OP.BANK LTD. – Respondent
WP(C)/32969/2008
SRI.C.DILIP, SRI.K.C.KIRAN,OP.BANK LTD. Advocate:SRI.P.V.BABYAdvocate: SRI.R.KIRAN2) THE JOINT REGISTRAR GENERAL
Unilateral loan renewal by a bank does not negate the borrower’s eligibility for debt relief under statutory schemes if the original terms are still valid.
Headnote:
Agricultural - Agricultural Debt Waiver - Ext.P3, Ext.P5, Ext.P6 - The court ruled that the unilateral renewal of a loan does not disqualify a borrower from the benefits of the Agricultural Debt Waiver Scheme, emphasizing the eligibility criteria set forth in the scheme.
Fact of the Case:
The petitioner applied for the Agricultural Debt Waiver after defaulting on a loan taken out in 2006 under the Kissan Credit Card Scheme. The bank denied the application citing a renewal of the loan as the reason.
Finding of the Court:
The court found that the bank's unilateral renewal of the loan did not affect the petitioner's eligibility for the debt relief scheme, as the original loan agreement was valid until 2009 and the renewal was not requested by the petitioner.
Issues: Whether the bank's unilateral renewal of the petitioner’s loan precludes him from availing the benefits under the Agricultural Debt Waiver and Debt Relief Scheme, 2008.
Ratio Decidendi: The court concluded that a loan renewal that was not initiated by the borrower cannot be used as a justification to deny eligibility under the scheme, as per its stipulations.
Final Decision: The court set aside the bank's decision and directed reconsideration of the application for benefits under the scheme.
J U D G M E N T
The challenge is against Exts.P5 and P6, by which the benefit of Agricultural Debt Waiver and Debt Relief Scheme, 2008 extended by Ext.P3 circular in respect of loans availed of from Co-
operative Bank has been declined to the petitioner.
2. On facts, it is seen that in 2006, the petitioner had availed of a loan under the Kissan Credit Card Scheme from the 1st respondent. Ext.P1 is the loan agreement which shows that the loan was sanctioned specifying the repayment period as 36 months, which expired only in 2009. Petitioner's case is that the loan was availed of and that in the matter of repayments, default was committed. It is stated that while so, by Ext.P3 circular issued, as per which, Agricultural Debt Waiver and Debt Relief Scheme, 2008 was introduced and that thereupon, he made an application for the benefit of the said scheme. It is stated that by Ext.P5, the Bank declined the request made for the benefit of the scheme on the ground that in the Managing Committee meeting held on 27/3/2007 vide resolution No.524, the loan granted to the WPC 32969/08 :2 :
petitioner was renewed for the period from 01/04/2007 to 31/3/2008. The application made by the petitioner to the 2nd respondent complaining of Ext.P5 also has been rejected by Ext.P6 assigning the very same reason. It is in these circumstances, the writ petition has been filed.
3. Counter affidavit has been filed by the 1st respondent where the 1st respondent justifies Ext.P5 on the ground that the loan was renewed. It is further stated that if the NABARD, the nodal agency, concedes the eligibility of the petitioner, they have no objection in extending the benefit to the petitioner.
4. Ext.P3 is the circular issued extending the scheme.
Clause 4 of Ext.P3 shows that the loan availed of under the Kissan Credit Card is also eligible for the coverage of Ext.P3. It is also seen from Ext.P3 that the loans availed of upto 31/3/2007 are also covered by the said scheme. If that be the case, the petitioner's loan availed of in 2006 should prima facie get coverage of Ext.P3 and it is an issue to be considered by the 1st respondent.
5. Then, the only question is whether the alleged renewal of loan granted by the Bank as mentioned in Ext.P5 could deprive the petitioner of the benefit of Ext.P3. Bank has no case that the WPC 32969/08 :3 :
renewal was on an application made by the petitioner. Further, it is also seen from Ext.P1, the loan agreement, that the period of the loan was three years. If that be the case, the period of the loan expired only in 2009, in which case, there was no reason or necessity for the Bank to have renewed the loan in 2007. If so, the fact that the loan has been unilaterally renewed as stated by the Bank can be no reason to deny the petitioner the benefit of Ext.P3. For that reason, I am not in a position to upheld Exts.P5 and P6 where the only reason stated for denying the benefit of Ext.P3 is the alleged renewal of the loan.
6. Therefore, Exts.P5 and P6 referred to above will stand set aside and the 1st respondent is directed to reconsider the application made by the petitioner for the benefit of Ext.P3 ignoring the alleged renewal of the loan for the period commencing from 01/04/2007. This shall be done, as expeditiously as possible, at any rate within 4 weeks of production of a copy of this judgment.
Writ petition is disposed of as above.
ANTONY DOMINIC, JUDGE Rp
