Orissa High Court
Case Details
ORISSA HIGH COURT CUTTACK WP(C) No.9334 of 2005 In the matter of an application under Articles 226 & 227 of the Constitution of India. -------------------- Bikash Kumar Pattnaik & another The Sambalpur District Co-operative Central Bank Limited & others …… Petitioners -Versus- …... Opp. Parties For Petitioners : M/s.R.K.Rath (Senior Advocate) N.R.Rout, P.K. Mishra & S.K. Dash For Opp. Parties : M/s.L. Bhuyan (For O.P.1) -------------------- Date of Judgment: 05.07.2013 -------------------- P R E S E N T: THE HONOURABLE KUMARI JUSTICE SANJU PANDA -------------------------------------------------------------------------------------------------------- The petitioners, in this writ petition, assail the order dated 10.2.2005 S. Panda, J. passed by the Member, Cooperative Tribunal, Orissa, Bhubaneswar in Revision Case
Legal Reasoning
No.6 of 2003 dismissing the revision case and confirming the order dated 6.7.2002 passed by the Registrar, Cooperative Societies, Orissa in Revision Case No.15 of 2002 arising out of Misc. Case No.3 of 2001-2002 of the Deputy Registrar, Cooperative Societies, Sambalpur in Dispute Case No.14 of 1998-99. 2. The facts leading to the present writ petition are as follows: 2 Petitioner no.1 proposed to run a Rice Mill business and on his request, the Orissa State Financial Corporation (in short, “OSFC”) sanctioned a term loan of Rs.55 lakhs in the name of the company M/s.Bikash Agrotech India Pvt. Ltd. The OSFC opted to transact the amount through Sambalpur District Cooperative Central Bank (hereinafter referred to as “SDCC Bank”) where an account was opened in the name of the Unit in question. Opposite Party No.1-Bank agreed to advance a cash credit loan having maximum limit of Rs.65 lakhs by giving authority to the Unit to operate the said account. Accordingly, the Unit started its operation during 1997. From the date of operation of the cash credit account, the Unit was regularly paying the interest chargeable thereon. The Bank expressed its satisfaction as the Unit was paying the amount without any default and the cash credit account was up-to-date. Therefore, the Bank agreed for rephasing the term loan and recommended the OSFC for extending further financial assistance to the Unit. While the matter stood thus, the Bank issued a letter dated 9.5.1998 intimating that the operation of the cash credit account has been stopped following the instruction of the NABARD in view of the internal situation of the Bank pending credit authorization. It was specifically mentioned that there was no omission or commission of the borrower for the said stoppage of operation of the account. Consequent upon stoppage of the cash credit account, petitioner no.1, being the Managing Director of the Unit, requested to rephase the cash credit to term loan and fix the instalments for the purpose of repayment. Accordingly, the Bank in its letter dated 7.10.1998 intimated petitioner no.1 that the cash credit loan had been converted to term loan. It is further stated by the petitioner that though the Bank converted the cash credit loan to term loan, the same was not converted. Therefore, petitioner no.1 requested the Bank to take steps so that he would be able to repay the loan by 3 instalments. The fixed deposit in the name of petitioner no.1 on being matured, was also adjusted by the Bank towards the loan account for rephasement without any intimation to petitioner no.1 and the said adjustment was also not entered in the ledger. While the matter stood thus, the Bank, on the request of petitioner no.1, issued another letter for rephasing the cash credit account and converting the same to the term loan and the petitioner no.1 was called upon to submit several documents for the said purpose. In response to the said letter of the Bank, petitioner no.1 submitted all the papers to the Bank to do the needful. However, cash credit account was not converted to term loan account and the instalments were not fixed. The Bank raised a dispute against petitioner nos.1 and 2 before the Deputy Registrar, Cooperative Societies, Sambalpur in Dispute Case No.14 of 1998-99 under Section 68 of the Orissa Cooperative Societies Act claiming recovery of the principal amount along with interest. On being noticed, they entered appearance and submitted their written statements jointly questioning the maintainability of the dispute case. The dispute case was posted to 16.11.2000 for hearing. Petitioner no.2, who was looking after the case, due to his illness could not appear on the date fixed and he filed an application for adjournment by enclosing a copy of the medical certificate. The Deputy Registrar instead of granting adjournment set them ex parte on the same date and the ex parte order was passed on 2.12.2000. 3.
Legal Reasoning
It is submitted by the learned counsel for the petitioners that without intimating the next adjournment and without affording reasonable opportunity of hearing to them, the ex parte order passed on 2.12.2000 was illegal and the said ex parte order was also not communicated to them except showing it on record that they refused to receive the said order. As such, the order was not properly served on the petitioners according to the procedure prescribed in the statute. He further submitted 4 that there was no prior notice that the case would be taken up for hearing on 16.11.2000. Therefore, rejecting the application for adjournment on medical ground and setting them ex parte was illegal. The Deputy Registrar, Cooperative Societies neither adjourned the case to another date for defence evidence nor for any other purpose thereby deliberately passed the order. While the matter stood thus, on 13.2.2001, opposite party no.1-Bank and the appointed Sale Officer attached the entire Mill premises by locking the gate and prepared the inventories by manipulating the records as if demand notice in Form No.2 was served on the petitioners which was refused to be received. On the date of attachment, the petitioners came to know about the order passed by the Deputy Registrar, Cooperative Societies. Accordingly, they filed Title Appeal No.11 of 2002 before the Cooperative Tribunal under Section 109 of the Orissa Cooperative Societies Act challenging the order of attachment and the demand notice of sale. At the same time, they filed Misc. Case No.3 of 2001-2002 before the Deputy Registrar, Cooperative Societies to set aside the ex parte order. As the order was not communicated prior to the date of attachment, there was delay in filing the application to set aside the ex parte order. Therefore, an application for condonation of delay was filed supported by affidavits. However, Deputy Registrar, Cooperative Societies, without issuing notice to the petitioners, fixed the date of application and disposed of the application on 22.6.2001 after going through the record and by a cryptic order rejected the application to set aside the ex parte order. The Cooperative Tribunal also took up Title Appeal No.11 of 2002 and allowed the appeal and set aside the attachment and sale notice etc. by observing that the order was not communicated to the petitioners and as such the same could not be executed. The petitioners challenged the said order dated 22.6.2001 passed by the Deputy Registrar, Cooperative Societies in Misc. Case No.3 of 2001-2002 rejecting their 5 application to set aside the ex parte order in Revision Case No.15 of 2002 before the Registrar, Cooperative Societies. The Registrar without application of mind and without appreciating the contentions and materials available on record by order dated 6.7.2002 rejected the revision case. Being aggrieved by the said orders passed by the Registrar, Cooperative Societies and Deputy Registrar, Cooperative Societies, the petitioners preferred T.R. No.6 of 2003 before the Cooperative Tribunal. The Tribunal by judgment dated 10.2.2005 dismissed the case which is impugned in the present writ petition. As such, he submitted that this Court should interfere with the impugned orders as the forums below have not taken into consideration the absence of the petitioners due to illness. 4. Learned counsel for the opposite parties submitted that the forums below have taken into account the entire materials on record and discussed the conduct of the petitioners. Petitioner no.1 availed cash credit loan of Rs.65 lakhs in the year 1997 for running the Rice Mill. As per the instruction of the NABARD, the cash credit account was stopped. Therefore, petitioner no.1 made a request to convert the cash credit loan into term loan with the terms and conditions but the same has not been complied with. The cash credit loan which has been granted in favour of petitioner no.1 is continuing. He further submitted that due to non-payment of the outstanding dues, a dispute case was initiated under Section 68 of the Cooperative Societies Act before the Deputy Registrar, Cooperative Societies. The date was fixed for adducing evidence to 16.11.2000. The petitioner, who is defendant no.2, before the forum below was personally present and moved an application for adjournment stating that he is searching the way to repay the loan. Prior to that, petitioners were given several opportunities to participate in the proceeding. Accordingly, the final order was 6 passed on 2.12.2000 and the execution case was filed for realization of the awarded amount. The Cooperative Tribunal on 17.2.2002 in Title Appeal No.11 of 2002 directed the petitioners to hand over the possession of the attached property to the Bank. Challenging the same, petitioner no.1 filed OJC No.3188 of 2002 which was
Decision
disposed of on 16.4.2002 wherein this Court directed that instead of appointing a third party as receiver, it would be expedient if the judgment-debtors are appointed as receivers and they should take care of the commodities in question and might sell the same in the presence of the Deputy Registrar, Cooperative Societies, Sambalpur or any officer authorized by him keeping the sale proceeds in the respective Bank accounts and submit the accounts to the Tribunal. The Tribunal allowed the appeal holding that the operative portion of the award was not communicated locally. For non-observance of the legal procedure, the basic right has been vitiated which affected the decree and consequential execution proceeding. However, the Tribunal was of the view that the award passed has remained effective and is not to be interfered with. The Bank filed WP(C) No.984 of 2002 against the said order which is pending for adjudication. Accordingly, the claim of the Bank has never been negatived by the Forum. As huge public money was involved and there was no sufficient cause for non-appearance of the petitioners, their application was rightly rejected by the forum. He further submitted that the petitioners preferred T.A No.79 of 2002. However, the said appeal was also dismissed for default due to non-compliance of the show cause notice dated 13.9.2002. In view of the conduct of the petitioners, the forums below rightly rejected the application of the petitioners. The only intention of the petitioners, considered by the forum below, was to delay the matter without any payment of money. Therefore, the impugned orders need not be interfered with. 7 5. From the rival submissions of the parties and after going through the record, it appears that petitioner no.1 took loan from the Bank and he did not repay the same. Therefore, the dispute was raised before the Deputy Registrar, Cooperative Societies. Though several adjournments were granted, the petitioners were not ready to proceed with the dispute; rather they took adjournments on one ground or the other. Accordingly, Deputy Registrar, Cooperative Societies rightly set them ex parte. Misc. Case No.3 of 2001-2002 was filed by the petitioners to set aside the said ex parte order. The Deputy Registrar, Cooperative Societies observed that petitioner no.2 was personally present in the court and moved an application by stating that he is searching the way to repay the loan amount. They had also taken the said pleas more than 20 times for adjournments always which were vehemently opposed by opposite party no.1 for not allowing further time since huge public money was involved. Petitioner no.2 filed a medical certificate and remained present in person though it was true that petitioner no.2 was not bed-ridden on the date fixed. Accordingly, the Deputy Registrar, Cooperative Societies, disbelieving the illness of petitioner no.2, rightly rejected the application for adjournment on the ground of illness. In that view, the Revisional Court considering the same did not allow the application filed by the petitioners to set aside the ex parte order. 6. As there is no error apparent on the face of the impugned orders, this Court is not inclined to interfere with the same in exercise of the jurisdiction under Article 227 of the Constitution of India. Accordingly, the writ petition is dismissed. ………..………………… Sanju Panda, J. 8 High Court of Orissa, Cuttack Dated 5th July, 2013/ Pradeep