Prasanth V. Assistant Registrar of Co-operative Societies cum Sale Officer, Paravoor S.N.V., Regional Co-operative Bank Ltd. No.1865, Paravoor, Kollam and Manager SNV Regional Co-operative Bank, Paravoor, Kollam

WP(C)/12138/2018

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The case involves Prasanth, the petitioner, who sought to quash a demand notice issued by the SNV Regional Co-operative Bank for a loan default. The petitioner had taken a loan of Rs. 5,00,000 for house maintenance but defaulted on repayments, leading to arbitration and a final award in favor of the bank. The petitioner challenged the demand for immediate repayment, arguing it was arbitrary and sought to pay in installments. The bank opposed the writ, citing the finality of the arbitration award and ongoing recovery proceedings. The court dismissed the petition, highlighting the petitioner's non-compliance with court conditions and lack of full disclosure of material facts.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 813020 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 18-09-2018
• 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: Revenue
• Court: HIGH COURT
• Department Lawyers: ANUROOPA JAYADEVAN; B KUMAR
• Assessee Lawyers: M RASHEED
• Keywords: Arbitration award; Loan default; Recovery proceedings; Writ of Certiorari; Writ of Mandamus
• Section: 82(1)(e)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE ANIL K.NARENDRAN TUESDAY ,THE 18TH DAY OF SEPTEMBER 2018 / 27TH BHADRA, 1940 WP(C).No. 12138 of 2018 PETITIONER: PRASANTH AGED 35 YEARS S/O.SURENDRAN, KALLINGAL HOUSE,MEENAD, CHATHANNOOR P.O.,KOLLAM, PIN - 691 572. BY ADV. SRI.M.ABDUL RASHEED RESPONDENTS: 1 ASSISTANT REGISTRAR OF CO-OPERATIVE SOCIETIES CUM SALE OFFICER, PARAVOOR S.N.V., REGIONAL CO-OPERATIVE BANK LTD.NO.1865,PARAVOOR, KOLLAM,PIN - 691 301. 2 THE MANAGER SNV REGIONAL CO-OPERTIVE BANK,PARAVOOR, KOLLAM, PIN - 691 301. BY ADVS. SMT. ANUROOPA JAYADEVAN SRI.B.SURESH KUMAR OTHER PRESENT: SMT C.S SHEEJA, SENIOR GOVERNMENT PLEADER THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18.09.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC 12138/18 2 JUDGMENT The petitioner, who availed a loan for Rs.5,00,000/-, as stated in the counter affidavit filed by the 2nd respondent Bank, for house maintenance, vide loan account No.KBL/3653 has filed this writ petition under Article 226 of the Constitution of India, seeking a writ of certiorari to quash Ext.P1 demand notice dated 10.01.2018, issued by the 2nd respondent Bank and seeking a writ of mandamus commanding the respondents to permit him to pay the entire amount in instalments within a time limit to be fixed by this Court. 2. On 06.04.2018, when this writ petition came up for admission, urgent notice on admission by speed post was ordered to respondents 1 and 2. This court granted an interim stay of all recovery proceedings pursuant to Ext.P1 demand notice, on condition that the petitioner deposits a sum of Rs.1,00,000/- with the 2nd respondent WPC 12138/18 3 Bank within two weeks. 3. The relief sought for in this writ petition is opposed by the 2nd respondent Bank, by filing a counter affidavit, wherein it has been stated that, after availing the loan the petitioner defaulted repayment. The arbitration proceedings initiated by the 2nd respondent Bank culminated in an award passed by the Arbitrator in A.R.C.No.1337/2016 dated 28.09.2016, allowing the 2nd respondent bank to recover an amount of Rs.6,83,619/- with 16.5% interest from 23.04.2016 and also other expenses from the petitioner and his assets mortgaged to the Bank. In the absence of an appeal filed by the petitioner, the award has become final and in order to recover the amount due, the Bank filed E.P.No.973/2017 and proceedings were initiated through the 1st respondent Sale Officer. As per the counter affidavit, the total overdues as on 27.04.2018 comes to Rs.8,51,730/-. It has also been stated WPC 12138/18 4 in the counter affidavit that after availing loan for Rs.5,00,000/- on 22.10.2012, the total remittance made by the petitioner is for a total sum of Rs.65,000/-. 4. On 14.09.2018, when this writ petition was taken up for consideration, there was no representation for the petitioner. The learned Counsel for the 2nd respondent Bank submitted that the total dues as on 27.04.2018, in respect of the loan transaction in question comes to Rs.8,51,730/-. 5. Heard the learned Counsel for the petitioner and also the learned Counsel for the 2nd respondent Bank. Despite service of notice, none appears for the 1st respondent Sale Officer. 6. The learned Counsel for the petitioner would submit that the petitioner could not comply with the conditions stipulated in the order of this Court dated 06.04.2018, whereby he was directed to deposit a sum of Rs.1,00,000/- within WPC 12138/18 5 two weeks. The learned Counsel would also submit that the petitioner is not in a position to clear the dues towards the 2nd respondent Bank, even in monthly instalments, within a reasonable time. 7. In this writ petition, one of the grounds raised by the petitioner is that he is ready to pay the entire amount due to the 2nd respondent Bank, within a reasonable time and that, demand for repayment of the entire amount within a short span of time is arbitrary. 8. The recovery steps initiated by the 2nd respondent Bank vide Ext.P1 demand notice is pursuant to the award passed by the Arbitrator in A.R.C.No.1337/2016 dated 28.09.2016, whereby the bank is permitted to recover a sum of Rs.6,83,619/- with 16.5% interest from 23.04.2016. The petitioner, who has not chosen to file an appeal against the award invoking Section 82(1)(e) of the Kerala Co-operative Societies Act, 1969 cannot now contend that the WPC 12138/18 6 recovery proceedings initiated pursuant to Ext.P1 is legally unsustainable. In the absence of a challenge made against the award, the petitioner cannot raise any legal or tenable contentions against Ext.P1 demand notice issued by the 1st respondent Sale Officer. 9. 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 WPC 12138/18 7 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. 10. 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 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: WPC 12138/18 8 “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: WPC 12138/18 9 \"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 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) 11. It is well settled that, a litigant who invokes the extraordinary jurisdiction of this WPC 12138/18 10 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. 12. In K.D. Sharma v. Steel Authority of India Ltd. [(2008) 12 SCC 481], the Apex Court held that the party who invokes the extraordinary jurisdiction of the Apex Court under Article 32 or of a High Court under Article 226 of the Constitution is supposed to be truthful, frank and open. He must disclose all material facts WPC 12138/18 11 without any reservation even if they are against him. He cannot be allowed to play 'hide and seek' or to 'pick and choose' the facts he likes to disclose and to suppress (keep back) or not to disclose (conceal) other facts. The very basis of the writ jurisdiction rests in disclosure of true and complete (correct)facts. If material facts are suppressed or distorted, the very functioning of writ Courts and exercise would become impossible. The petitioner must disclose all the facts having a bearing on the relief sought without any qualification. This is because, \"the Court knows law but not facts\". In the said decision, the Apex Court held further that, if the primary object as highlighted in R. V. Kensington Income Tax Commissioners [(1917) 1 KB 486] is kept in mind, an applicant who does not come with candid facts and 'clean breast' cannot hold a writ of the Court with 'soiled hands'. If the applicant does not disclose all the material WPC 12138/18 12 facts fairly and truly but states them in a distorted manner and misleads the court, the court has inherent power in order to protect itself and to prevent an abuse of its process to discharge the rule nisi and refuse to proceed further with the examination of the case on merits. If the court does not reject the petition on that ground, the court would be failing in its duty. In fact, such an applicant requires to be dealt with for Contempt of Court for abusing the process of the court. 13. The stand now taken by the petitioner, his conduct in not complying with the condition in the order of this Court dated 06.04.2018 and not filing any application seeking extension of time to comply with the said condition would show that the petitioner has filed this writ petition only to protract the recovery steps initiated by respondents 1 and 2. In such circumstances, the petitioner is not WPC 12138/18 13 entitled for any relief, in exercise of the discretionary jurisdiction under Article 226 of the Constitution of India. This writ petition fails, and the same is accordingly dismissed. Sd/- ANIL K.NARENDRAN, JUDGE APPENDIX PETITIONER'S EXHIBITS: EXHIBIT P1 TRUE PHOTOCOPY OF THE DEMAND NOTICE DATED 10/1/2018 BY THE RESPONDENT BANK. EXHIBIT P2 TRUE PHOTOCOPY OF THE REPRESENTATION DATED 2/3/2018 SUBMITTED BY PETITIONER BEFORE THE SECOND RESPONDENT. RESPONDENTS' EXHIBITS: NIL // TRUE COPY// PA TO JUDGE RR "