KARTHIKEYAN Vs. STATE OF KERALA

JUDGEMENT

(1.) The first petitioner had availed a term loan from the third respondent Bank in the year 1999. The second petitioner was the surety to the said loan. The third respondent Bank is a co-operative society registered under the Kerala Co-operative Societies Act. As per Ext.P6 circular, the Registrar of Co-operative Societies issued guidelines for one-time settlement of the liabilities in the loan accounts of co-operative societies engaged in banking business. In Ext.P6, it is provided that the outstanding in the accounts of loans upto Rs.5 lakhs can be settled by accepting the principal amount outstanding in the loan account and equal amount by way of interest. The grievance of the petitioners concerns the inaction on the part of the third respondent Bank in extending them the benefit of Ext.P6 circular for settlement of their loan liability. The petitioners, therefore, seek directions in that regard in this writ petition.

(2.) A counter affidavit has been filed by the third respondent Bank. The stand taken by the third respondent Bank in the counter affidavit is that they are doing banking business in accordance with the Banking Regulation Act, under the control of the Reserve Bank of India and that they are not bound by the circulars in the nature of Ext P6 issued by the Registrar of cooperative societies. It is, however, stated by the third respondent Bank in the counter affidavit that if the petitioners make a one-time payment of Rs.5,93,258/- (Rupees five lakh ninety three thousand two hundred and fifty eight only), the bank is prepared to settle the loan liability as per the guidelines followed by them.

(3.) Heard the learned counsel for the petitioners, the learned Government Pleader as also the learned counsel for the third respondent Bank.