VISHAK KUMAR Vs. PATHANAMTHITTA DISTRICT CO-OPERATIVE BANK

JUDGEMENT

(1.) The petitioner in the writ petition is an employee of the first respondent bank and a trade union leader of all Kerala District Co-operative Bank Employees and also has deposits with the bank. The grievance raised by the petitioner is that the first and second respondents decided to grant loan of Rs. 130 crores to the additional 5th respondent namely the Kerala State Road Transport Corporation (KSRTC) on the basis of guarantee contained in Exhibit P1.

(2.) According to the petitioner, the decision taken by the first and second respondents to sanction loan to the additional 5th respondent is illegal for the reason that, as per Section 59 of the Kerala Co-operative Societies Act (hereinafter called, 'the Act 1969'), loans or advances can be issued to members of bank only. Therefore, since the additional 5th respondent is not a member of the first respondent bank, loan cannot be granted. That apart, it is contended that the funds of the Society can be invested as provided in Section 57 of the Act, read with Rule 54 of the Rules and as directed in Exhibit P5 circular of the Registrar of Co-operative Societies. Therefore, additional 5th respondent will not come under the above purview.

(3.) It is also stated that, assuming if the KSRTC failed to pay the amount, no recovery steps can be taken as provided under Section 69 of the KCS Act, as the KSRTC is not a member and a claim will not lie against a non-member. That apart, it is stated that the maximum lending limit of the bank, according to the bye-law, is only Rs. 40 lakhs. So also, it is contended, KSRTC is a sinking public sector undertaking who finds it difficult to pay salary and pension to their employees/retired employees, and therefore, Exhibit P1 order passed by the Government dated 05.06.2017 is illegal and arbitrary.