Shri Gurbax Singh vs The Shimla Urban Cooperative Bank and Another

Rajiv Sharma, J.—The petitioner was advanced a loan of Rs. 25,000/- by the respondent-bank. He failed to repay the loan amount. The notices were issued to him and his sureties on 11.02.1994, 26.04.1995 and 08.07.1995. A sum of Rs. 56,409.70/- was outstanding against him as on 30.09.1998. The respondent-bank instituted arbitration proceedings against the petitioner. Shri K.N. Saihjpal was appointed as Arbitrator by the Assistant Registrar Co-operative Societies, Shimla on 13.11.1998. An award for recovery of Rs. 77,703.70 was passed by the learned arbitrator on 24.03.1999 against the petitioner. Petitioner filed an appeal against the award, dated 24.03.1999 before the learned Assistant Registrar, Cooperative Societies, Shimla, Distt. Shimla. The same was dismissed on 27.07.2000. A certificate u/s 87 of the H.P. Cooperative Societies Act 1968 was issued for the recovery of outstanding award amount from the petitioner. However, the fact of the matter is that the recovery officer has settled the matter for a sum of Rs. 68810/- on 13.11.2002 vide Annexure P-2. The petitioner was legitimately expecting that once the matter has been settled under the Settlement Scheme, the proceedings were closed. However, a fresh certificate has been issued u/s 87 for recovery of Rs. 52,817.70/- vide Annexure R-3 by the Assistant Registrar, Cooperative Societies, Shimla, District Shimla. The petitioner is aggrieved by the issuance of Annexure R-3. It is not in dispute that the petitioner has raised a loan of Rs. 25,000/- from the respondent-bank. The arbitration proceedings were initiated against him and an award for recovery of Rs. 77,703.70/- was passed against the petitioner on 24.03.1999. The appeal preferred by the petitioner against the award, dated 24.03.1999, was dismissed by the learned Registrar, Cooperative Societies, Shimla, exercising the powers of the Registrar, Cooperative Societies, H.P. on 27.07.2000. Thereafter, the matter was sent to the Tehsildar for recovery. The Registrar, Co-operative Societies, Himachal Pradesh has issued draft guidelines for One Time Settlement (OTS) of Non Performing Assets (NPAs) by Urban Cooperative Banks on 18th January, 2002. A copy of the same was also sent to the Management of the respondent No. 1. According to the Draft Scheme, the competent authority to take final decision in all cases of O.T.S. was the Board of Directors. The Manager was required to place all applications for O.T.S. Committee, i.e. Settlement Advisory Committee constituted by the Board of Directors for settlement/recommendation. Thereafter, all the cases were to be placed before the Board of Directors for final decision. The OTS Scheme was operative up to June 30, 2002. Thereafter, the applications were to be processed and the decision was to be taken at the earliest, but not later than September 30, 2002. The Tehsildar (Recovery), H.P. State Cooperative Bank Ltd. sent a communication to the respondent-bank on 19.06.2002. The same was replied by the respondent-bank on 21.06.2002. The Tehsildar (Recovery), H.P. State Co-operative Bank Ltd. was informed that One Time Settlement Scheme has been approved by the Registrar Cooperative Societies, H.P. The Scheme was operative up to 30.06.2002. The lonees, who were defaulters on or before 31.03.1998, were intimated to settle their cases under the scheme. It was further intimated to the Tehsildar (Recovery) that the bank has received some applications from the defaulters, whose applications were pending for execution. The Tehsildar (Recovery) was specifically intimated that in case these defaulters come for settlement, their cases may be settled as per the scheme/direction of the Reserve Bank of India. A copy of the draft scheme was also enclosed for ready reference of the Tehsildar (Recovery). The Tehsildar (Recovery), H.P. State Cooperative Bank Ltd. on the basis of Annexure P-3, dated 21.06.2002, settled the matter and the petitioner repaid a sum of Rs. 68810/- on 13.11.2002 vide Annexure P-2. Mr. Javed Khan, learned counsel for the petitioner submitted that this amount was credited with the Bank.

According to the Draft Scheme, the Board of Directors were the final authority to take a final decision on the basis of the recommendations made by the Settlement Advisory Committee. However, as noticed above, the bank, in its own wisdom, has permitted the executing agency, i.e. Tehsildar (Recovery) to settle the matter as per the Draft Scheme. He has settled the matter under the scheme and recovered a sum of Rs. 68810/- on 13.11.2002 vide Annexure P-2. Though the matter was settled finally vide Annexure P-2 on 13.11.2002, however, a fresh certificate has been issued by the Assistant Registrar, Cooperative Societies, Shimla u/s 87 of the H.P. Cooperative Societies Act, 1968 for recovery of Rs. 52,817.70 from the petitioner. The reason for issuance of certificate u/s 87 of the H.P. Cooperative Societies Act, 1968 is that the Tehsildar (Recovery) has only recovered the decretal amount as per the award and has not recovered up-to-date interest allowed by the Arbitrator. The Tehsildar (Recovery) has been given authority to settle the matter and he has settled the same in accordance with the Scheme. The respondent-bank was estopped from obtaining fresh certificate u/s 87 of the H.P. Cooperative Societies Act, 1968 for recovery of Rs. 52,817.70. The respondent-bank has not taken any action from 13.11.2002 on wards.

The matter has been taken up by the Registrar, Cooperative Societies, H.P. with the Assistant Registrar, Cooperative Societies for the issuance of certificate u/s 87 of the H.P. Cooperative Societies Act, 1968 in favour of the decree holder on 09.06.2004 and 08.02.2005. The purpose of One Time Settlement Scheme was to make recoveries of dues relating to Non-Performing Assets of Primary Urban Cooperative Banks. According to the Scheme approved by the Registrar, Cooperative Societies, Himachal Pradesh, the amount of settlement was to be recovered preferably in lump sum. The petitioner has paid the lump sum amount as per Annexure P-2.

Mr. Ramakant Sharma, learned counsel for respondent No. 1 has argued that the matter was to be processed not later than September 30, 2002. However, the Tehsildar (Recovery) has settled the matter on 13.11.2002. He has settled the matter on the basis of Annexure P-3, dated 21.06.2002, whereby he has been authorized to settle the matter on the basis of One Time Settlement Scheme. There is no inordinate delay in settling the matter. The copies of the Scheme approved by the Registrar, Cooperative Societies, Himachal Pradesh and sent to the Bank, and communication, Annexure -3 have been placed on record by the respondent-bank by way of supplementary affidavit. Accordingly, the writ petition is allowed. Annexure P-3 is quashed and set aside. The pending application(s), if any, also stands disposed of. No costs.