PRESIDENT, DRL (C)NO 80, SATHYAMANGALAM PRIMARY AGRICULTURAL AND RURAL DEVELOPMENT BANK, Vs. T RAVIRAJ; T GUNASEKARAN; ANNAPOORANI

JUDGEMENT

(1.) The petitioners submit that the first petitioner is the President of the Sathyamangalam Primary Agricultural and Rural Development Bank and the second petitioner is the Secretary of the Sathyamangalam Primary Agricultural and Rural Development Bank. The petitioners submit that the first and second respondent's father A.D.Thimmana Gounder has availed the loan of Rs.8,99,058/- from the petitioner Bank in the year 1997 as a Non-Farm Sector Loan (NFS) for the purpose of running the jelli crusher unit. As per the terms of the loan, the loan has to be repaid in installments with interest at the rate of 17.5%. In the event of any default in payment, the respondents are liable to pay penal interest at the rate of 3%, which is presently modified as 1.5%. The interest for payment is being fixed by the petitioner-Bank based on the instructions given by the Financing Bank, viz., Tamil Nadu State Co-operative Agricultural and Rural Development Bank. Therefore, the petitioner's Bank is availing money from the Financing Department on interest and the same is being given by way of loan to the members which have to be repaid with interest fixed by the Financing Bank. The loan given as secured loan through Deed of Mortgage executed by the borrower and his brother Chinnaraj will contain the terms of payment of loan which cannot be deviated.

(2.) The petitioners further submit that in so far as the respondents are concerned, he has not repaid the loan amount to the petitioner Bank. He has deviated in repayment of the loan amount. Therefore, the petitioner Bank was constrained to issue notice to the respondents on 05.05.2010 to settle the outstanding dues. Even thereafter the respondent has not paid the amount. The petitioners further submit that since the respondents have not paid the loan amount for several years, the total loan outstanding in the year 2010 is Rs.44,03,331/- and therefore, the petitioner has taken appropriate steps for recovery of money from the respondents herein. The arrears of loan is liable to be recovered by the petitioner Bank by initiating appropriate proceedings under the provisions of Tamil Nadu Revenue Recovery Act, 1864 invoking powers under Section 120 of Tamil Nadu Co-operative Societies Act, 1983. Since the first petitioner being delegated with powers to initiate appropriate recovery proceedings by invoking the provisions of Revenue Recovery Act, 1864 as per the order of the Deputy Registrar, Co-operative Societies dated 16.11.2007, based on the application made by the second petitioner, the first petitioner has issued Form No.II under RRA and subsequently Form No.VII, attaching the mortgaged property belonging to the respondents for the purpose of sale of mortgaged property.

(3.) The petitioners further submit that as against the sale of mortgaged property issued by the first petitioner in Form No.VII, dated 03.09.2010, the respondents herein have filed an appeal before the Principal District and Sessions Judge, Erode in C.M.A.(CS)No.62 of 2010 and the same was ordered on 29.10.2012 by allowing the same and the appellants were directed to pay the principal amount with interest at the rate of 6% per annum from the date of suit till the date of realization. The penal interest is to also to be waived. The parties are directed to bear their respective costs. The petitioners further submit that the order of Principal District Judge, Erode came to be passed by placing reliance on the earlier orders passed by this Court reported in 2010-1 MLJ 295 in as much as order 34 of CPC as applicable in a claim or mortgage to the proceedings of Tamil Nadu Co-operative Societies Act, either under Section 90 or to an appeal under Section 152 of the Act. The petitioners further submit that the orders passed by the Principal District Judge is against the law and illegal and further contrary to the provisions of Tamil Nadu Co-operative Bank Act Rules made therein and further the judgment of this Court as stated above cannot be relied upon since it is open to the Rural Development Bank to invoke the provisions of Revenue Recovery Act for recovering the arrears of amount. Hence, the petitioners entreat the Court to allow the above writ petition.