SHEELA THOMAS Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioners in O.P. No. 4666 of 1991-E are the appellants in this writ appeal. The respondents in the writ appeal are the respondents in the Original Petition State of Kerala and the Kerala Financial Corporation. Appellant No. 1 (first petitioner in the O. P.) is the wife of late V.M. Thomas and appellants 2 to 4 (Petitioners 2 to 4) are the children of late V.M. Thomas. Late V. M. Thomas owned a Small Scale Industrial Unit. He obtained substantial loans from the second respondent Corporation. The petitioners/appellants allege that as per the agreement entered into between late V. M. Thomas and the Corporation, for amounts due the rate of interest was only 5.5% simple interest per annum. The Corporation unilaterally increased the rate of interest to 15%. It is averred that late V.M. Thomas protested against the unilateral action of the Corporation in increasing the rate of interest. However, the deceased paid the entire instalments due from him for avoid unpleasant consequences. The appellants state that by unauthorisedly increasing the rate of interest there has been considerable overpayment to the second respondent. It is stated that the repayment in respect of the loan ranged from 24-8-1976 to 28-4-1988. The loan availed of was in the sum of Rs, 1,88,102/- and the repayment made till 28-4-1988 came to Rs. 6,00,230.90. The amount swelled to a huge figure because of the increased rate of interest. A Bench of this Court in M.F.A. No. 106 / 84 and 110 / 1984, by judgment dated 30-8-1988 (Exts. P1 A and P1 B) held that the Corporation can charge only 5 1/2 interest for loans availed of by Small Scale Industrial Units. The recovery of enhanced rate of interest unilaterally was unauthorised and the excess interest so calculated and realised from late V.M. Thomas is refundable. The appellants/ petitioners filed Ext. P2 representation dated 18-9-1990 before the 2nd respondent Corporation stating the above facts. The Corporation is simply folding its hands. It has not refunded the excess amount realised, so far. The appellants / petitioners have not been favoured with any reply to Ext. P2 representation. It is in these circumstances the appellants, as petitioners, filed the Original Petition praying for the grant of a declaration that any amount collected from late V.M. Thomas in excess of amount calculated at 5.5% interest is absolutely illegal, arbitrary and unreasonable and for a direction to the second respondent to refund the amount so collected in excess with past and future interest at 12% per annum.

(2.) Padmanabhan, J. by judgment dated 25-6-1991, dismissed the Original Petition. A direction was given to the second respondent to dispose of Ext. P2 representation early. The learned single Judge held that for getting refund of the excess amount realised from the predecessor of the appellants, the remedy of the appellants lies before a civil court and not by filing a petition under Article 226 of the Constitution of India. Aggrieved by the judgment of the learned single Judge dated 25-6-1991, the petitioners in the Original Petition have come up in writ appeal.

(3.) We heard counsel for the appellants Mr. Govind K. Bharathan. Counsel forcibly argued that once it is proved that there is excessive or unauthorised collection of amounts from the predecessor of the appellants, the second respondent Corporation was bound to refund the same and in case of inaction or refusal, the appellants can invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution of India. Counsel submitted that the decisions of the Supreme Court point out that against the arbitrary action of the State and its instrumentality, the remedy under Article 226 of the Constitution is available and the fact that the jural relationship between late V. M. Thomas and the Corporation was contractual in nature will not in any way alter the situation.