INDIRA.N V. CALICUT CITY SERVICE CO-OPERATIVE BANK LTD,NO.D 2777

WP(C)/38074/2018

AI Insights

The case involves Indira N., the petitioner, who availed a business loan of Rs.40 lakhs from the Calicut City Service Co-operative Bank Ltd. in 2014 but failed to make any repayments. The petitioner filed a writ petition under Article 226 of the Constitution of India, seeking to quash a sale notice and extend the repayment period, claiming benefits under a government order meant for agriculturists. However, it was revealed that the loan was for business purposes, not agriculture, and the petitioner had not made any repayments nor disclosed her true circumstances in the writ petition. The court dismissed the petition due to the suppression of material facts and misrepresentation.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 746252 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 10-01-2019
• Assessment Year: misc
• Other Referred Cases: Prestige Lights Limited v. State Bank of India [(2007) 8 SCC 449]
• Laws Referred To: Article 226 of the Constitution of India, Kerala Co-operative Societies Act, 1969
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: B S KUMAR; ANITHA RAVINDRAN; C S SHEEJA
• Assessee Lawyers: T G RAJENDRAN; T R TARIN
• Keywords: Extraordinary jurisdiction; Loan default; Material facts suppression; Writ of Certiorari; Writ of Mandamus
• Section: 226

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN THURSDAY, THE 10TH DAY OF JANUARY 2019 / 20TH POUSHA, 1940 WP(C).No. 38074 of 2018 PETITIONER: INDIRA.N., AGED 52 YEARS, D/O.DAMODARAN, PULLANIPARAMBATH HOUSE, PANNIYANKARA, KALLAI P.O., KOZHIKODE-673 003. BY ADVS. SRI.T.G.RAJENDRAN SRI.T.R.TARIN RESPONDENTS: 1 CALICUT CITY SERVICE CO-OPERATIVE BANK LTD. NO.D 2777, HEAD OFFICE, CITY BANK JUNCTION, CHALAPPURAM P.O., KOZHIKODE-673002, REPRESENTED BY ITS AUTHORISED OFFICER. 2 THE SPECIAL SALE OFFICER, CALICUT CITY SERVICE CO-OPERATIVE BANK LTD., NO. D 2777, OFFICE OF THE ASSISTANT REGISTRAR, CO-OPERATIVE SOCIETIES (GENERAL), KOZHIKODE-673 002. 3 GOVERNMENT OF KERALA, REPRESENTED BY ITS SECRETARY , REVENUE DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM-695001. BY ADVS. SRI.B.S.SWATHY KUMAR SMT.ANITHA RAVINDRAN SMT C.S.SHEEJA, SENIOR GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.01.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C)38074 OF 2018 2 JUDGMENT The petitioner, who availed a loan from the 1st respondent Co-operative Bank to the tune of Rs.40 lakhs in the year 2014, vide loan account No.ML 256, has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P1 sale notice dated 12.10.2018 issued by the 2nd respondent Special Sale Officer and seeking a writ of mandamus commanding respondents 1 and 2 to grant time till May, 2019 for repayment of loan, taking into consideration Ext.P2 Government Order. 2. On 23.11.2018, when this writ petition came up for admission, the learned counsel for the 1st respondent Bank sought time to get instructions. 3. Thereafter, on 28.11.2018, when this writ petition came up for consideration, the learned counsel for the 1st respondent Bank, which is a Society registered under the Kerala Co-operative Societies Act, 1969 and the Rules made thereunder, on instructions, submitted that, the total liability of the petitioner as on that date, in respect of the loan transaction comes to Rs.70,12,412/-. 4. On 04.12.2018, when this writ petition came up for WP(C)38074 OF 2018 3 further consideration, the learned counsel for the 1st respondent Bank, on instructions, submitted that after availing a loan for Rs.40,00,000/- in the year 2014, the petitioner has not chosen to make even a single remittance and therefore, the averments in para 1 of the writ petition that the petitioner has repaid the initial instalments without any default is factually incorrect. The learned counsel for the petitioner sought adjournment. 5. This Court by order dated 04.12.2018 directed the petitioner to file an affidavit explaining the facts and circumstances. Pursuant to the said order, the petitioner has filed an additional affidavit dated 07.12.2018, which is placed on record on 12.12.2018. 6. Heard the learned counsel for the petitioner, the learned counsel for the 1st respondent Bank and also the learned Senior Government Pleader appearing for the 3rd respondent. 7. In paragraph 1 of the writ petition, the petitioner has averred that she is an agriculturist, who availed a loan from the 1st respondent Bank to the tune of Rs.40 lakhs as per loan account No.ML 256 in the year 2014. It is also averred that the petitioner has repaid initial instalments without any WP(C)38074 OF 2018 4 default. Paragraph 1 of the writ petition reads thus; “The petitioner, who is an agriculturist by profession had availed a loan from the 1st respondent Society to the tune of Rs.40,00,000/- as per loan Account No.ML 256 in the year 2014. The petitioner has repaid initial instalments without any default.” (underline supplied) 8. Pursuant to the order of this Court dated 04.12.2018, the petitioner has filed an affidavit dated 07.12.2018, wherein she has stated that she has availed loan No.ML 256 for the business purpose of her husband, who was running a super market. She has also availed another loan from the very same Bank and was paying instalments. She was confused about the repayment of the loan. she was under the impression that instalments were paid in loan account No.MC 250 as well. It was in that circumstances, she has instructed the counsel, who drafted the present writ petition, that she has paid some instalments towards the loan account. 9. Based on the instructions received, the learned counsel for the 1st respondent Bank would submit that the petitioner is having seven loan transactions with the Bank, out of which, she is the loanee in four loan accounts, and she is the guarantor in the remaining three loan accounts. None of the aforesaid loan transactions are agricultural loans. As in the WP(C)38074 OF 2018 5 case of loan account No.ML 256, on account of a default committed by the petitioner in effecting repayment in other loan accounts, the 1st respondent Bank initiated arbitration proceedings in those loan accounts as well, which have culminated in the awards passed by the Arbitrator in the respective ARCs. Now, execution petitions are pending consideration before the 2nd respondent Special Sale Officer. The learned counsel for the 1st respondent Bank would also point out that, in loan account No.ML 256, the 1st respondent Bank obtained an award in ARC No.916 of 2016 and thereafter, filed EP No.897 of 2017. Now, the total amount due, as on date, from the petitioner in terms of the said award comes to Rs.70,91,996/-. 10. As already notice, the petitioner has moved this writ petition styling herself as an agriculturist, who availed a loan for Rs.40 lakhs as per loan account No.ML 256, in the year 2014. The said loan is a business loan, and not an agricultural loan and the said fact is admitted in the affidavit filed by the petitioner dated 07.12.2018. In the said affidavit, the petitioner has no case that she is an agriculturist. On a specific query made by this Court, the learned counsel for the petitioner would submit that the petitioner is a housewife and WP(C)38074 OF 2018 6 not an agriculturist. The pleadings and materials on record would show that, the attempt made by the petitioner in filing this writ petition was to get the benefit of moratorium granted by the Government to agriculturists, vide Ext.P2 Government Order dated 12.10.2018. In terms of the said Government Order, the Registrar of Co-operative Societies has issued a circular whereby, the benefit of moratorium is extended to agriculturists, who availed loan from the Co-operative Societies. 11. After availing a business loan for Rs.40 lakhs from the 1st respondent Bank in the year 2014, the petitioner has not made even a single repayment. She has also not chosen to make any repayment despite the award passed by the Arbitrator in ARC No.916 of 2016 and the filing of E.P. No.897 of 2017. The learned counsel for the 1st respondent Bank would point out that in EP No.897 of 2017, the petitioner was issued with a notice, which was acknowledged on her behalf by her husband, on 06.02.2018. Without disclosing the said facts, the petitioner has filed this writ petition, styling herself as an agriculturist, with an averment that she has repaid initial instalments without any default. In the affidavit dated 07.12.2018, the petitioner could not offer any explanation WP(C)38074 OF 2018 7 whatsoever for her conduct in filing this writ petition, suppressing the material facts from the notice of this Court. 12. In Prestige Lights Limited v. State Bank of India [(2007) 8 SCC 449] the Apex Court reiterated that a prerogative remedy is not a matter of course. Therefore, in exercising extraordinary power, a writ court will indeed bear in mind the conduct of the party who is invoking such jurisdiction. If the applicant does not disclose full facts or suppresses relevant materials or is otherwise guilty of misleading the court, the court may dismiss the action without adjudicating the matter. The rule has been evolved in larger public interest to deter unscrupulous litigants from abusing the process of court by deceiving it. The very basis of the writ jurisdiction rests in disclosure of true, complete and correct facts. If the material facts are not candidly stated or are suppressed or are distorted, the very functioning of the writ courts would become impossible. 13. In Prestige Lights' case (supra) the Apex Court held further that, under Article 226 of the Constitution of India, the High Court is exercising discretionary and extraordinary jurisdiction. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party WP(C)38074 OF 2018 8 approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the court, the writ court may refuse to entertain the petition and dismiss it without entering into merits of the matter. Paragraphs 33 and 34 of the said judgment read thus: “33. It is thus clear that though the appellant-Company had approached the High Court under Article 226 of the Constitution, it had not candidly stated all the facts to the Court. The High Court is exercising discretionary and extraordinary jurisdiction under Article 226 of the Constitution. Over and above, a Court of Law is also a Court of Equity. It is, therefore, of utmost necessity that when a party approaches a High Court, he must place all the facts before the Court without any reservation. If there is suppression of material facts on the part of the applicant or twisted facts have been placed before the Court, the Writ Court may refuse to entertain the petition and dismiss it without entering into merits of the matter. 34. The object underlying the above principle has been succinctly stated by Scrutton, L.J., in R v. Kensington Income Tax Commissioners, [(1917) 1 KB 486 : 86 LJ KB 257 : 116 LT 136 (CA)], in the following words: \"It has been for many years the rule of the Court, and one which it is of the greatest importance to maintain, that when an applicant comes to the Court to obtain relief on an ex WP(C)38074 OF 2018 9 parte statement he should made a full and fair disclosure of all the material facts - facts, not law. He must not misstate the law if he can help it - the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the Court enforces that obligation is that if it finds out that the facts have not been fully and fairly stated to it, the Court will set aside, any action which it has taken on the faith of the imperfect statement.\" (Emphasis supplied) 14. It is well settled that, a litigant who invokes the extraordinary jurisdiction of this Court under Article 226 of the Constitution must come with clean hands and clean objects. The judicial proceedings are sacrosanct, and no person would be allowed to abuse the judicial process, particularly, in public law remedy. In writ proceedings, the court places implicit faith on the parties and their pleadings, as it does not indulge in any fact finding or roving enquiry of what has been asserted. Since Article 226 of the Constitution of India espouses equity jurisprudence, a litigant who has approached the Court with unclean hands, without disclosing full facts, is not entitled for any reliefs. 15. Viewed in the light of the law laid down in the WP(C)38074 OF 2018 10 decisions referred to supra, conclusion is irresistible that this writ petition is nothing but an attempt made by the petitioner to secure orders, suppressing material facts from the notice of this Court. The petitioner, who availed a business loan for a sum of Rs.40 lakhs from the 1st respondent Bank for the business purposes of her husband, who was running a super market, as stated in paragraph 3 of the affidavit dated 07.12.2018, has filed this writ petition with false averments. Such conduct of the petitioner can only be deprecated at strongest terms and I do so. Therefore, the petitioner is not entitled for any discretionary reliefs, invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India. Though, this is a fit case in which proceedings will have to be initiated against the petitioner for contempt of Court, taking a lenient view, this writ petition is dismissed imposing a cost of Rs.25,000/- on the petitioner, payable to the 1st respondent Bank, within one month from the date of receipt of a certified copy of this judgment. Sd/- ANIL K. NARENDRAN JUDGE yd WP(C)38074 OF 2018 11 APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE NOTICE ISSUED FROM THE OFFICE OF THE 2ND RESPONDENT DATED 12.10.2018 TO THE PETITIONER EXHIBIT P2 TRUE COPY OF THE CIRCULAR NO. G.O. (MS) NO. 367/2018/REVENUE DATED 12.10.2018 EXHIBIT P3 TRUE COPY OF THE REPRESENTATION PREFERRED BY THE PETITIONER BEFORE THE 1ST RESPONDENT DATED 19.11.2018 RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A. TO JUDGE "