IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
&
THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
WEDNESDAY, THE 10TH DAY OF AUGUST 2022 / 19TH SRAVANA, 1944
WP(C) NO. 2382 OF 2021
PETITIONER:
THE MANAGING DIRECTOR,
AYIROOPPARA FARMERS SERVICE CO-OPERATIVE BANK LTD.NO.2154,
POTHENCODE (P.O),
THIRUVANANTHAPURAM-695584.
BY ADVS. SRI. G. BIJU
SRI.V.A.VINOD
RESPONDENTS:
1 MOLLY KUMAR D.,
W/O. LATE A.PREM KUMAR,
PARAYIL VEEDU, NETAJIPURAM (PO), POTHENCODE,
THIRUVANANTHAPURAM-695584.
2 THE JOINT REGISTRAR/SECRETARY (FUND MANAGER),
KERALA STATE CO-OPERATIVE DEVELOPMENT AND WELFARE FUND BOARD,
T.C.25/357(4), MARIAMMAN KOVIL,
STATUE, THIRUVANANTHAPURAM-695014.
3 THE ASST. REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL),
CIRCLE CO-OPERATIVE UNION BUILDING, CHENGAL CHOOLA,
THIRUVANANTHAPURAM-695001.
4 S.VIJAYAN, S/O.SOMAN,
FORMER BRANCH MANAGER, VAVARAMBALAM BRANCH,
AYIROOPPARA FARMERS SERVICE CO-OPERATIVE BANK LTD.NO.2154,
POTHENCODE (P.O), THIRUVANANTHAPURAM-695584,
RESIDING AT PRANAVAM, MATAVOORPPARA,
KATTAYIKKONAM (P.O),
THIRUVANANTHAPURAM-695584.
WP(C): 2382/2021 -:2:-
R1 BY ADVS. SRI. S. SADASIVAN
SRI. K. J. SAJI ISAAC
DR. ELIZABETH VARKEY
SRI. JITHIN SAJI ISAAC
R2 BY ADV. SRI. P.C.SASIDHARAN
R3 BY SENIOR GOVT. PLEADER SRI. K.P.HARISH
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 10.08.2022,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C): 2382/2021 -:3:-
JUDGMENT
S. Manikumar, CJ Instant writ petition is filed by the 2nd respondent in Complaint No.551/2013 on the file of the Kerala Lok Ayukta, challenging the orders passed by Upa Lok Ayukta dated 05.11.2020, and 16.12.2020 in R.P. No.2/2020 (Exhibits-P7 & P8 in the Writ Petition).
2. Reliefs sought for in the writ petition are as under:
(i) issue a writ of certiorari or any other appropriate order or direction, calling for the records leading to Exhibits-P7 and P8 and quash the same;
(ii) issue any other appropriate writ, order or direction, declaring that the benefit of Risk Fund Scheme is to be given by the Kerala State Co-operative Development and Welfare Fund Board to its beneficiaries and the direction contained in Exhibit-P7 order directing the petitioner Bank to give the benefit of Risk Fund Scheme to the complainant is illegal and opposed to the concept and object of Exhibit-P3 Risk Fund Scheme;
(iii) issue any other appropriate writ, order or direction, declaring that the Petitioner is not liable to extend the benefit of Risk Fund Benefit Scheme to the complainant, in view of the finding and direction contained in Exhibit-P4 order;
(iv) issue any other appropriate writ, order or direction, directing the 2nd respondent to refund the amount of Rs.1 lakh and its interest paid by the petitioner Bank to close the loan account of the first respondent/complainant by sanctioning the benefit of the Risk Fund Scheme to the complainant.
3. Basic material facts for disposal of the writ petition are as under: 3.1. Husband of the 1st respondent/complainant availed a loan from Ayirooppara Farmers Service Co-operative Bank Ltd., Pothencode, WP(C): 2382/2021 -:4:- Thiruvananthapuram, and during the loan tenure, he died on 24.11.2010. According to the 1st respondent/complainant, a loan of Rs.5 lakhs was admittedly released to late Premkumar on February 6, 2009, with a stipulation to repay the same in sixty equal monthly installments; the last installment being payable on February 6, 2014.
3.2. It is also the admitted position that late Premkumar was prompt in repayment of equal monthly installments towards the loan account till his death. But the question that arose for consideration in the complaint was as to whether the complainant/1 st respondent herein, the widow of late Premkumar, who had availed loan from the petitioner Bank is entitled to the benefit of Kerala Co-operative Risk Fund Scheme, 2008.
3.3. According to the 1st respondent, with a view to settle the loan account, she approached the petitioner in February, 2011, requesting its Branch Manager to provide her the benefit of Risk Fund Scheme, 2008. It was the case of the 1st respondent before the Lok Ayukta that, the then Branch Manager had directed her to remit the sum of Rs.1,59,455/- being the total amount payable, excluding the risk fund of Rs.1 lakh and interest thereto, which she was entitled to get under the scheme.
3.4. It is also the case of the 1st respondent that she had remitted the above sum of Rs.1,59,455/- on 11.02.2011 and requested the Branch WP(C): 2382/2021 -:5:- Manager to release the title deeds of the property furnished towards security by her late husband. However, the Manager refused to release the documents and directed her to remit the entire balance amount payable to the loan account, which thus means, the Manager was of the view that the 1st respondent was not entitled to get the benefit of the scheme, since her husband while availing the loan did not become a member of the Risk Fund Scheme.
3.5. It was further contended by the 1 st respondent that even though she had approached the Managing Director of the petitioner Bank claiming to grant the benefit of Risk Fund Scheme, the Managing director was also of the opinion that her husband being not a member of the Scheme, is not entitled to the benefit of the Scheme.
3.6. The case projected by the 1 st respondent before the Lok Ayukta was that under the Scheme, 2008, if the loanee dies before repayment of the loan to the bank during the loan period, a sum to the extent of Rs.1 lakh towards the amount payable, with interest thereto, will be paid out of the risk fund to the credit of the loan account. It was also the contention that the legal heirs of the loanee would be entitled to the benefit of Rs. 1 lakh with interest to be credited to the loan account in the Bank. The 1st respondent has produced Exhibit-P2, relevant extract of the WP(C): 2382/2021 -:6:- Risk Fund register maintained by the Branch Manager of Ayirooppara Farmers Co-operative Bank Ltd., respondent No.4 herein, which would clearly reveal that her husband late Premkumar had remitted a sum of Rs.250/- being the contribution or membership fee payable to the Risk Fund and thus, become eligible to get the benefit of the Scheme.
3.7. It was further contended that in view of the adamant stand taken by the petitioner and Branch Manager, the complainant/1 st respondent submitted Exhibit-P5 written representation to the Managing Director of Ayirooppara Farmers Service Co-op. Bank, on 25.01.2013. Along with the said representation, she has enclosed the Death Certificate and Legal Heirship Certificate of her late husband, in support of the claim. However, the said representation was not considered by the Bank. These are the background facts which prevailed upon the 1 st respondent to file a complaint before the Lok Ayukta.
3.8. The Joint Registrar/Secretary (Fund Manager) of the Kerala State Co-operative Development and Welfare Fund Board constituted under the Scheme, the 2nd respondent herein (1st respondent in the complainant), has filed a written statement, wherein it was contended that the Bank, which was advanced the loan, had not remitted the Risk Fund premium of Rs.250/- in respect of late Premkumar, to the Board, in WP(C): 2382/2021 -:7:- order to get the benefit of the Scheme, and therefore, the Board is not in a position to extend the benefit of the Scheme to the legal heirs of the loanee. That apart, it was contended that the complainant has not produced any evidence regarding compliance of Clause 11 of the Scheme, i.e. the remittance of contribution by the loanee to the corpus fund.
3.9. Sum and substance of the contention advanced by the Joint Registrar was that Exhibit-P2 and alleged extract of the loan register, will not be sufficient to extend the benefit of the Risk Fund Scheme to the complainant.
4. Petitioner had filed a written statement before the Lok Ayukta, contending that late Premkumar was not a member of the Scheme, and therefore, he is not entitled to get the benefit of the Scheme. It was also contended that in February, 2009, when the loan was sanctioned and released to late Premkumar, the Bank was not a member of the Scheme. The Bank became a member of the Scheme only with effect from 5.5.2020, as could be seen from Exhibit-R2(b) document produced before the Lok Ayukta. It was also contended that even though the Scheme was published on 18.11.2008 and brought into force with retrospective effect from 1.4.2008, it did not become operative, in the absence of relevant rules for its implementation.
WP(C): 2382/2021 -:8:-
5. That apart, it was contended that the Kerala Co-operative Societies Act, 1969, was suitably amended by inserting Section 57D with effect from 28.04.2010 only. It was also the contention of the Bank that after its enrollment as a member, the Bank had remitted a sum of Rs.1 lakh towards contribution in May, 2010 to that fund, as could be seen from Exhibit-R2(b).
6. It was further contended that the records in the 4 th respondent Branch of the Bank would reveal that late Premkumar had received the loan amount of Rs. 5 lakhs on February 6, 2009 and at the time of release of the loan, he remitted a sum of Rs.5,000/- towards additional share required for grant of the loan. He had also remitted Rs.250/- towards Gahan's Scheme, Rs.2,500/- towards service charges and Rs.500/- towards charges for property valuation and expenses for registration of security bond. Petitioner herein has also produced Exhibits-R2(c) and R2(d) documents before the Lok Ayukta, evidencing the payments made by late Premkumar at the time of availing of the loan.
7. It was further asserted that the Bank records, including the cash book, day book etc., did not contain any entry of payment of contribution to the scheme.
8. The Assistant Registrar of Co-operative Societies (General), WP(C): 2382/2021 -:9:- Thiruvananthapuram, respondent No.3 herein, has filed a written statement in the complaint stating that the loan in question was sanctioned by his predecessor, in February, 2009. He took charge in the 4 th respondent Branch as Manager on 19.04.2012 and he continued there only till December 20, 2013. According to the 4th respondent, the 1st respondent along with some of her relatives had approached him on 23.04.2012, i.e., three days after assumption of charge in the Branch, and demanded for grant of benefits of the scheme. However, he requested the 1 st respondent to approach the President and Managing Director of the Bank and secure an appropriate order in that regard. But, the 1 st respondent/complainant came back on the next day and submitted an application to provide a copy of the relevant page of Risk Fund Register. According to the 4 th respondent, the said application was returned to the complainant with instructions to submit it through the Managing Director. Consequently, the application was resubmitted with the endorsement "Director Board Members", instead of 'Managing Director', who according to the complainant was out of Station.
9. Anyhow, it is the admitted position that Exhibit-P2 extract of the Risk Fund Register was provided to the complainant by respondent No.4 Mr. Vijayan. It was also contended by the 4 th respondent in the written WP(C): 2382/2021 -:10:- statement that the complainant and her relatives had forcefully obtained his signature and seal of the Bank in Exhibit-P2. According to the 4 th respondent, Exhibit-P2 was a computer generated document taken out by him from the system in the Branch. But, he admitted in his statement that a perusal of the records revealed that the Bank was not enrolled in the Risk Fund Scheme at the time when the loan was sanctioned to late Premkumar.
10. Before the Upa Lok Ayukta, 1st respondent was examined as PW1 and Exhibits-P1 to P6 documents were marked on her side. The Managing Director of the Bank was examined as RW1 and Exhibits-R2(a) to R2(k) series were marked on his side. Respondent No. 4 was examined as RW2 and Exhibit-R4 was marked on his side. One member of the then Board of Directors was also examined in the case as RW3.
11. After closure of the oral evidence, I.A. No.1743/2016 was filed by the 1st respondent/complainant with a prayer to issue appropriate direction to respondents 2 and 4 i.e., Managing Director and Branch Manager, to produce the Computer Hard Disc and further order to verify through any computer expert such as Cyber Cell, to recover the true and original recording entered into the computer with respect to the loan transaction, and more specifically, the particular page of the Register WP(C): 2382/2021 -:11:- maintained by the Bank, giving details of the Risk Fund recovered from the husband of the complainant (Exhibit-P2) as it was originally recorded. Likewise, I.A. No.1839/2016 has been filed by respondent No.4 seeking similar directions.
12. Records further reveal that, after considering the submissions, an order was passed by Upa Lok Ayukta on 19.10.2017 directing the Director, C-DAC, Thiruvananthapuram, to depute a competent senior officer under him to examine the hard disc maintained by the 4 th respondent branch and also in the head office for the relevant period i.e., February 1, 2009 till December 31, 2010 and file a report before the forum. Accordingly, a Cyber Forensics Analysis Report was filed by C-DAC on 11.01.2018 and along with the same, a DVD was produced in a sealed cover. After analysing the rival submissions and evidence on record, Lok Ayukta has arrived at certain findings as per its interim order dated 26.03.2019, relevant portion of which reads as under:
"25. It has been noticed already that though the scheme came into force with retrospective effect from April 1, 2008 pursuant to issuance of Ext.P6/R1(a), respondent no.2 Bank had failed to become a member under the scheme. Though respondent no.2 admittedly started collecting membership fee from the loanees from October, 2009 and applied for membership in the same month, respondent no.2 was admitted to the scheme only in May, 2010. Unfortunately the fact might have been that late Premkumar was not aware of the Scheme at the time when he availed of the loan in February, 2009. His legal representative WP(C): 2382/2021 -:12:- (complainant) would have been the beneficiary if only he had been told by the Bank about the Scheme at that time since naturally late Premkumar might not have grudged or refused to pay membership fee of Rs.250/- also at that time. It is on record that he had remitted Rs.3250/- at that time as directed by respondent no.4 Branch of the Bank under various heads. Why I have referred to the above aspect is only on consideration of the entire oral and documentary evidence adduced by the parties on record and more so because of the following observation made in the written statement filed by respondent no.1, the Fund Manager. Interestingly this written statement was filed by the Joint Registrar/Secretary herself in the form of an affidavit. The crucial sentence reads thus-
"However since the second respondent has committed serious lapse in effectively subscribing the corpus fund, the said Bank is liable to compensate the petitioner for the loss sustained by her in view of the stipulations in Ext.P3 circular."
The above crucial/significant observation made by respondent No.1 in my view, will give a different dimension to the case on hand. A perusal of the various clauses in the scheme will show that it is the Managing Committee of the Risk Fund Board which has to release or sanction the benefit under the Scheme to the legal heirs of the loanee, of course through the Society which has advanced the loan. Clause (12) further provides that if the society fails to take action on the request for grant of the benefit under the scheme by itself, the Board is empowered to take a decision in the matter at the instance of the applicant. More importantly sub clause (6) of clause (2) of Ext.P6 scheme stipulates or provides that it will be open to the Registrar of Cooperative Societies to give concession to the legal heirs of the loanee in respect of any of the clauses of the Scheme in appropriate cases subject to the recommendation to be made by the Managing Committee of the Risk Fund Board. In my view this is a fit case in which the Managing Committee of the Risk Fund Board (respondent no.1) has to necessarily consider the entire aspects of the issue involved in this case and make a suitable recommendation, if so advised, to the Registrar of Cooperative Societies.
26. While doing so the Board shall ensure that the Risk Fund Register and all other related documents maintained in respondent no.2 Bank as well as at its Branch (respondent no.4) are scrutinized and examined to see whether Ext.P2 was fabricated or forged as alleged by respondent no.3. Reference has WP(C): 2382/2021 -:13:- been made to the above aspect only in the light of the categorical assertion made by Sri. Vijayan while he was in the witness box as RW-2, he had personally verified the Risk Fund Register and found the relevant entry of remittance of the entrance fee of Rs.2501- made by late Premkumar. Significantly respondent no.2 has produced only two Risk Fund Registers - 1) From 3.4.2010 to 31.8.2010 2) From 29.1.2010 till 7.5.2014. The Register relating to the year 2009 has not been produced though admittedly entrance fee was collected from loanees in 2009 itself.
27. Anyhow, the Board shall take a well-considered decision after looking into the entire documents and materials available on record in the Bank and after hearing an authorised representative of the Bank. Needless to mention that the report filed by CDAC and the Hard Disk produced by it shall also be considered appropriately.
28. In this context, it may not be justified if I fail to take note of the observations and conclusions made by CDAC in its Cyber Forensics Analysis Report CSG No.2017-02 HC. But, I am constrained to observe that none of the parties did bother to give assistance to this Forum in either understanding or appreciating the so-called conclusions arrived at by CDAC. In my view respondents 1 and 2 ought to have taken a keener interest and active role in bringing to light the actual result of the Forensics Analysis Report. I refrain from making any further observations at this juncture. However the analysis results and following conclusions in the report are extracted hereunder:- "Analysis results (Evidence Number:01 (WDC WD1600AAJS- 22WAA0, Capacity: 160 GB-office of the Ayirooppara farmers service cooperative Bank, Vavarambalam Branch]. • All the available contents created/accessed/Modified between Feb 1, 2009 and December 31, 2010 were extracted from the Hard Disk (Evidence Number: 01).
• 301 'db' database files were found. During the analysis the keyword "risk fund" were found in these. Db files from the hard disk.
• These database files are in a proprietary format developed for the bank by a software company. For decoding these database files in viewable/readable format software support from the company is required.
• No specific information relating to the case could be obtained due to non availability of decryption key for the database.WP(C): 2382/2021 -:14:-
• All the extracted files are stored to a DVD (labeled as DVD01) at the following location.
DVD01/Evd01/Harddisk/Q1/"
29. Thus, while holding that the complainant has failed to establish that her husband late Premkumar had become a member of the Scheme, 2008, it is held that this is a fit case in which family of late Premkumar shall not be denied the benefit of the scheme for default, particularly in view of the noble object that was sought to be achieved while introducing the Scheme in 2008.
30. Therefore, I deem it just and proper to issue an interim direction to respondent no.1 Board to take a decision in the matter as directed above and file an Action Taken Report along with the decision that may be taken by the Board in this regard. Ordered accordingly.
For A.T.R, call on 28.05.2019.
Communicate the order to respondent no.1"
13. Presumably, on the basis of the directions issued by Upa Lok Ayukta, the Joint Registrar of Co-operative Societies (Risk Fund Board) has filed an Action Taken Report dated 19.07.2019.
14. Taking into account all the above aspects, Upa Lok Ayukta has passed a final order dated 05.11.2020, which is apparently made as a sequel to the interim order passed by the forum on 26.03.2019. Relevant portion of the said order reads as under:
"3. It is not necessary to refer to or deal with the various contentions raised by the parties in support of their rival contentions since in the elaborate order passed by this Forum after due consideration of the oral and documentary evidence adduced by the parties it was held:-
"This is a fit case in which the family of late Premkumar shall WP(C): 2382/2021 -:15:- not be denied the benefit of the Scheme for default particularly in view of the noble object that was sought to be achieved while introducing the Scheme in 2008." The above conclusion was made after an elaborate discussion of the material facts and circumstances in the case, in paragraphs 24 to 28 of the order. This Forum directed that the Board (respondent no.1) shall take a well considered decision after looking into the entire documents and materials available on record in the Bank and after hearing an authorised representative of the Bank. Accordingly, respondent no.1 Board was directed to file an Action Taken Report along with the decision that may be taken by it in this regard.
4. But curiously on May 25, 2019 the Joint Registrar / Secretary of the Board (respondent no.1) forwarded a copy of the decision taken by the Board on May 14, 2019 (Decision No.7) to the Additional Registrar of this Forum. According to the Joint Registrar, the Board had considered the direction issued by this Forum and taken the above decision. By the said decision, the Board held that since the Bank had not deposited the Risk Fund Contribution paid by the loanee to the Board, the Bank alone was liable and the Board was totally exonerated from the liability. The decision further categorically held that if the family of the loanee lost the benefit of the Risk Fund, the Bank was solely responsible to make good the loss to the family.
5. But since the Board had not filed an Action Taken Report along with the copy of the Resolution, this Forum by its order dated June 24, 2019 directed the Joint Registrar who was in fact personally present to comply with the order dated March 26, 2019 passed by this Forum in letter and spirit.
6. Thereafter the Joint Registrar/Secretary of the Board has filed an ATR on November 12, 2019. The Board after referring to the materials available in the Bank held that the complainant had not produced any evidence regarding compliance of Clause 11 of the Scheme in the matter of remittance of the contribution of the loanee to the corpus fund. Respondent no.1 also took the view that "the alleged recovery of an amount of Rs.250/- from the loanee as evidenced by Ext.P2 is not sufficient to extend the benefit WP(C): 2382/2021 -:16:- under the Risk Fund Scheme whereas the amount so recovered should have been deposited in the District Co- operative Bank and a statement to that effect should have been made available to the 1" respondent. In the absence of compliance of the aforesaid two conditions as envisaged under Clause 11(B) (3) and (4) of the Scheme, no liability can be caused to the 1st respondent."
7. Still further, the Board took the view that there was serious lapse on the part of respondents 2 and 4 to become a member of the Risk Fund Scheme that came into force with effect from April 1, 2008. The Board further took the view that respondent no.2 ought to have joined the scheme in time and collected the amount of premium and remitted the same to the corpus fund maintained by the Board. This observation was made since admittedly respondent no.2 had become a member of the Scheme only in September 2009. Curiously, after coming to the above conclusion and making the above observations, respondent no.1 in its ATR stated that the complaint was liable to be closed, reserving the right of the petitioner to proceed against respondents 2 and 4 as provided in Exhibit P3 Circular.
8. Statement of objection has been filed by the complainant as well as respondent no.2- the Bank, to the Action Taken Report. I have carefully considered the above statements. In its statement of objection respondent no.2 has harped on the alleged "forgery" or "fabrication" of Ext P2 receipt by Its Branch Manager and contended that the Bank was not liable to extend the benefit of the Scheme to the complainant and the family of the deceased loanee for the said sole reason. will revert to this aspect a little late.
9. After filing of the ATR by respondent no.1, the complainant had filed LA.No.128/2020 with a prayer to pass an order directing the respondents to write off the outstanding loan and to release the title deeds furnished by the loanee at the time of release of the loan amount. Respondent no.2 has filed a detailed objection to the above Interlocutory Application repeating or reiterating the earlier contention that Ext.P2 was fabricated by the Branch Manager(respondent no.4) in collusion with the complainant and her relatives and therefore no liability can be fastened on respondents 2 and 4.WP(C): 2382/2021 -:17:-
It is further contended that fake entries as regards payment of the Risk Fund Contribution was made by the members of the staff on November 26, 2010, i.e. two days after the death of the complainant's husband.
10. It is pertinent to note that the case of respondent no.2 is that disciplinary action has been initiated against the Manager of the 4th respondent Manager of the Branch for the alleged forgery or fabrication. Copy of the show cause notice issued to the then Manager and the decision of the Director Board taken thereafter as regards institution of disciplinary proceeding have already been produced by respondent no.2 along with the version filed by it [Ext.R2(g) and (h)]. It is the further case of respondent no.2 that appropriate action will be taken against the members of the staff who were involved in this foul play for creating or fabricating documents to support the claim of the complainant. I do not propose to deal with the above issue any further since it is a matter pertaining to the internal affairs of the Bank and its employees. It will be open to the Director Board of the Bank (respondent no.2) to take an appropriate decision in the matter, if so advised.
11. But as regards the claim of the complainant I have no hesitation to hold that the complainant and her family cannot be made to suffer because of the alleged foul play of the employees of the Bank. It cannot be believed that a widow would have gone to the Branch of the Bank on the second day of the death of her husband and colluded with the Manager to fabricate Ext.P2 document as contended by respondent no.2. The subsequent conduct of the complainant as revealed from the documents produced by her and while making the claim for benefit of the Scheme will reveal that she is not adept in such unholy or illegal means. More importantly, since respondent no.2 has conceded that its employees in its Branch (respondent no.4) had committed foul play, the principal employer viz., Respondent no.2 Bank has to necessarily bear the brunt.
12. Interestingly this view has been taken by respondent no.1 Board in Ext.P7 Resolution dated 14.5.2019 also. The said Resolution has not yet been revoked and it still stands. The ATR is only as regards the various procedures followed in the WP(C): 2382/2021 -:18:- matter for examination of the records. Therefore the suggestion or observation made by the Joint Registrar (respondent no.1) in the ATR to close the complaint reserving the right of the complainant to proceed against respondents 2 and 4 is rejected.
13. In this context attention of respondent no.1 Joint Registrar is specifically drawn to Ext.P3 Circular dated June 25, 2010 Issued by the Registrar of Co operative Societies alerting and directing all Joint Registrars in the Department to ensure that all Co-operative Societies / Banks did become members of the Scheme which had come into force with effect from April 1, 2008, and that they had remitted the contributions collected from the loanees as stipulated in the Scheme. They were further directed to file the district-wise list as regards the number of members in the Scheme, the number of loans sanctioned by the Banks etc as well as monthly progress reports. Therefore in the case on hand, it is obvious, the Joint Registrar of the District concerned had failed to discharge his/her duties in the case of respondent no.2 Bank. According to respondent no.2 the Bank had become a member of the Scheme only in September 2019, more than 1 ½ years after the Scheme came into force. Therefore do not propose to elaborate further because the duties and responsibilities of the officials in the Department are clear from the various clauses in the Scheme and particularly Ext.P3 Circular. Curiously in the version filed by respondent no.1 in the complaint an attempt was made to get itself absolved from the liability by stating that since respondent no.2 had "committed serious lapse in effectively subscribing to the corpus fund the said Bank is liable to compensate the petitioner for the loss sustained by her in view of the stipulations in Ext.P3 Circular." Apparently the above contention is to cover up the administrative failure of respondent no.1 in taking effective steps to get respondent no.2 Bank enrolled under the Scheme. In that view of the matter, the so-called "advice" given by respondent no.1 to instruct the complainant to proceed against respondent no.2 and 4 is totally uncalled for, to say the least.
14. Thus having considered the Action Taken Report and other relevant materials on record, respondent no.2 and/or respondent no.4 are directed to give the benefit of the WP(C): 2382/2021 -:19:- Scheme to the complainant forthwith. In the peculiar facts and circumstances of the case the complainant is entitled to claim interest at the rate of 6% from the date of death of her husband. The amount shall be released within 15 days from the date of receipt of a copy of this order, failing which it will be open to the complainant to initiate action in contempt against respondents 2 and 4. It is made clear that the above payment shall be without prejudice to the right of respondent no.2 to initiate appropriate disciplinary or administrative action against the so called culprits in the foul play in forging or fabricating documents and such other illegal activities."
15. Therefore, it could be deduced that Upa Lok Ayukta has entered into a finding that since the Bank has not become a member of the Risk Fund Scheme, in accordance with the circular and other stipulations contained therein, though late Premkumar-the loanee has not paid any contribution to the Risk Fund Scheme, the Bank is liable to compensate the complainant. Various other directions were also issued, in view of the fabrication of documents made etc.
16. The petitioner Bank being aggrieved by the order dated 05.11.2020, has filed Review Petition No.2/2020, which was dismissed as per Exhibit-P8 order dated 16.12.2020 holding that the issues raised by the petitioner Bank were considered by the Lok Ayukta in the orders and there is no error apparent on the face of record to interfere with the orders in a review petition. It is thus Challenging the legality and WP(C): 2382/2021 -:20:- correctness of Exhibits-P7 and P8 orders passed by the Upa Lok Ayukta, instant writ petition is filed for the reliefs stated supra.
17. The paramount contention raised by the Bank in the writ petition is that the Bank has filed an Action Taken Report stating that the complainant/1st respondent is not entitled to get the benefit of the scheme since the petitioner Bank did not join the scheme at the time of disbursal of loan amount. However, the Upa Lok Ayukta directed the petitioner to provide the 1st respondent the benefit of the scheme along with 6% interest.
18. That apart, it is contended that the direction contained in Exhibit-P7 order, directing the petitioner Bank to provide the benefit of Risk Fund Scheme, 2008 to the 1st respondent is opposed to the object of the scheme itself and the same is liable to be interfered with by this Court. It is also contended that though in Exhibit-P4 order dated 26.03.2019, the Upa Lok Ayukta has found that there is no direct evidence much less any clinching document to substantiate the contention of the complainant/1 st respondent that her late husband has become a member, in order to avail the benefit of the scheme, the Upa Lok Ayukta had directed the Bank to pay the amount since the Bank has failed to become a member of the Risk Fund Scheme at the relevant point of time.
WP(C): 2382/2021 -:21:-
19. It is further contended that the stipulations contained in the scheme enable the Registrar of Co-operative Societies to give concession to the legal heirs of the loanee in respect of any of the clauses contained in the scheme in appropriate cases, upon the recommendation of the Risk Fund Board. It is also contended that the complainant/1 st respondent had colluded with the 4th respondent Branch Manager, to secure Exhibit-P2, a fabricated document, in order to non-suit the pleadings in the complaint, and therefore, she was not entitled to the benefit of the scheme.
20. Refuting the averments in the writ petition, 1 st respondent/ complainant has filed a counter affidavit, wherein it is contended that after the death of her husband on 24.11.2010, she approached the petitioner Bank in February, 2011 and requested for settling the benefit of Kerala Risk Fund Scheme, 2008. However, the then 4 th respondent Bank Manager asked the 1st respondent to pay an amount of Rs.1,59,455/-, being the rest of total repayment, excluding the risk fund of Rs.1 lakhs and interest thereto. Pursuant to the same, 1st respondent deposited the said amount on 11.02.2011 with the 4th respondent Branch. After depositing the said amount, she approached the Branch Manager for release of the title deeds deposited with the Branch. However, the 4 th respondent refused to release the documents and demanded the complainant to WP(C): 2382/2021 -:22:- further remit the balance risk fund amount of Rs.1 lakh with interest thereto.
21. It is her further contention that the statement of the Board in its Action Taken Report (ATR) that the complainant had not produced any evidence regarding compliance of clause (11) of the scheme in the matter of remittance of contribution of the loanee to the corpus fund is contrary to their own finding dated 14.05.2019 in the enquiry conducted by them as per the direction of Lok Ayukta through an interim order dated 26.03.2019 (Exhibit-P4) to file the ATR. The finding on 14.05.2019 by the Board is to the effect that the receipt affixed as Exhibit-P2 in the complaint, by the 1st respondent as proof of risk fund contribution is true. She would also contend that the further observations by the Board quoted in paragraph 12 in the writ petition culminating in the sentence; "in the absence of compliance of the aforesaid two conditions as envisaged under clauses 11(B)(3) and (4) of the scheme, no liability can be caused to the 1 st respondent", cannot be faulted because the default was solely by the petitioner, Managing Director of the Bank, in not remitting the collected contributions with the District Co-operative Bank and not enrolling as a member as per the mandate of the Scheme, 2008 in time.
22. It is also the contention of the 1st respondent that it is evident WP(C): 2382/2021 -:23:- on record that as per the admission of the petitioner himself that the Bank has become a member only on 5.5.2010 (inter-alia as per their own admission at para (7) of their reply statement before the Lok Ayukta annexed at page 55 of this writ petition), whereas, the receipts issued for collections of subscriptions produced by the petitioner herein as Exhibit- R2(k) 8(1) to 8(50) evidence that collections were made from 01.10.2009, i.e., much before becoming a member of the scheme on 5.5.2010.
23. Respondent No.1 has also contended that the collected amounts ought to have been deposited in the District Co-operative Bank by the petitioner in the very next month, as per the mandate as explained by the Board in its ATR, as well as Exhibit-P7 report dated 14.5.2019, submitted to the Lok Ayukta as per interim order dated 26.03.2019. This deposit is not so done by the petitioner, but mismanaged the funds, without accounting anywhere.
24. Added to above, it was contended that the Bank has never maintained a special register showing the deposit of subscription amount to the Risk Fund by the loanees, as mandated by clause 13(1) of the Scheme, 2008. In place of producing the said register, the petitioner and respondent Nos.2 to 4 produced other documents of the bank accounts to show that the husband of respondent No.1 has not paid the subscription. WP(C): 2382/2021 -:24:- So also, the petitioner has evidently collected the contribution from her husband and perhaps many others, in the beginning, and did not even issue receipts by false reasons and mismanaged those funds too. Under such circumstances, as per the mandates of the Scheme, 2008 and Circular No.33 of 2010, the liability and responsibility squarely fall on the petitioner, and therefore, the Board is within their right and power to make the captioned observation as per law.
25. Apart from the above, various other contentions were raised by the 1st respondent in the counter affidavit.
26. Respondent No.4 has also filed a counter affidavit, inter alia, contending as under:
"A. The 4th respondent had assumed charge as the Branch Manager of the Vavarambalam Branch, petitioner Bank on 19.04.2012. The loan was released to the husband of the 1 st respondent, Premkumar, on 06.02.2009 by the predecessor of the petitioner herein. The 4th respondent did not have any role in the remittances made by the husband of the 1 st respondent. The petitioner and some of her relatives approached the 4 th respondent on 23.04.2012 and demanded to grant benefits of the scheme. Since the 4th respondent had taken charge only three days prior, the 4th respondent requested the 1 st respondent to approach the Managing Director and President of the petitioner herein. The 1st respondent then submitted an application for the relevant page of the risk fund register, which was returned by the 4 th respondent for submitting it through the Managing Director. The application was resubmitted along with the endorsement of two director board members, as the Managing Director was out of station, according to the petitioner.WP(C): 2382/2021 -:25:-
5. Since the Board members of the petitioner Bank directed the 4th respondent to issue the certificate of risk fund, the 4 th respondent obtained a print out of the extract of the risk fund register from the computer maintained in the Branch. Though the 4th respondent was a bit hesitant to issue the extract, the 1st respondent and her relatives insisted on the 4th respondent signing and affixing a seal of the Bank on the said extract. The 4th respondent was constrained to do so as the Board Members of the petitioner Bank had directed to give the extract to the 1st respondent. Other than taking a print out as directed in Exhibit R4(a), the 4th respondent did not have any role and was only discharging his official functions.
6. Though the 4th respondent did not have any role and had only given a print out from the computer of the petitioner in the Branch, the petitioner Bank had made the 4 th respondent to remit an amount of Rs.1,00,000/-, by denying the pension and other benefits of the 4th respondent after his retirement on 31.05.2020. Even now, the leave benefits of the 4 th respondent have not been given.
27. Heard Mr. G. Biju, learned counsel for the petitioner, Mr. S.
Sadasivan, learned counsel for the 1st respondent/complainant, Mr. P.C. Sasidharan, learned counsel for the 2 nd respondent - Joint Registrar of Co- operative Societies, Mr. Saji Isaac K.J., learned counsel for the 4 th respondent, and perused the material on record.
28. Before adverting to the submissions, let us consider the object of the Kerala Risk Fund Scheme, 2008.
29. Kerala Co-operative Debt Relief Scheme/Kerala co-operative Risk fund Scheme, 2008 is a scheme introduced mainly relating to those borrowers who availed agricultural loan and loan other than for WP(C): 2382/2021 -:26:- agricultural purposes (but excludes gold loan and loan taken from fixed deposits) and dies before completion of the loan period, the outstanding loan amount as on the date of their demise will be written off to help them from the liability.
30. Member is defined under clause (3) of the scheme to mean Member Societies which represents each borrower and joins the scheme of Kerala Co-operative Debt Relief Scheme, 2008.
31. Clause (4) - object of the scheme, inter alia, states that if a member, who has availed loan and dies during the completion of the loan, an amount upto Rs.1,00,000/- which is outstanding in the principal amount and its interest will be given from the fund. Clause (4) would also state that if the borrower, after availing the loan, had defaulted remittances of the loan installments for more than six months even if the borrower dies during the loan period, he shall not be entitled for the benefits of this scheme. In those cases, which the borrower was promptly remitting the loan installments without any default and due to some serious illness of the borrower or due to some unforeseen circumstances, the borrower could not repay the further installments and loan amount is outstanding and if the borrower happen to die within 90 days from the last date stipulated for repayment, the outstanding liability shall be met WP(C): 2382/2021 -:27:- from the Risk Fund.
32. Clause (5) of the scheme deals with eligibility and it states that eligibility to get the benefit of the scheme will be available only to those loans in which the loan availed was in the name of the deceased and the loan period has not expired and the loan period will expire before the borrower attains the age of 65 years. The benefit of this scheme will not be applicable to those borrowers who got the benefit of OTS and have closed the same and those loan amounts that have already been paid before the approval and notification of this Scheme. The maximum amount that is permissible under this scheme shall be Rs.1,00,000/- and its interest.
33. Clause 6 of the scheme states that without considering the limit of the borrowed amount, all those loans can be included in the scheme. But, the eligibility shall be limited for a maximum amount of Rs.1,00,000/- on the principal loan amount. It further states that those cases in which the borrowers suffer from serious illness and due to that reason could not repay the loan amount also can be included in this scheme.
34. Clause 7 states that to get the protection of this scheme to those existing loans on the date of commencement of this scheme, an application has to be submitted along with an amount equivalent to 0.2% WP(C): 2382/2021 -:28:- and not more than Rs.200/- of the loan amount as on 1 st April, 2008, within three months from the date of notification of the scheme. The borrower concerned has to pay an amount equivalent to the rate of 0.2% for availing a loan amount upto Rs.1,00,000/- after the commencement of this scheme and at the rate of 0.2% and not more than Rs.250/- in the society to those loan amount which exceeds an amount of Rs.1,00,000/- before accepting the loan amount. The said clause further states that irrespective of the fact that the amount borrowed by the borrower is less or higher, when the amount calculated as per the proportionate percentage comes to less than Rs.50/- a minimum amount of Rs.50/- has to be paid. The amount to be paid has been fixed as per the rate upto Rs.1,00,000/- as Rs.200/- and amount exceeding Rs.1,00,000/- as Rs.250/-. The amount accumulated as described above and also the amount received as grant from the Government or other institutions or contributions together constitutes the fund for the scheme.
35. Clause 12 of the scheme deals with Authorised Authority for sanctioning the financial benefit and it states that the Managing Committee of the Welfare Development Fund Board shall be the authority to sanction the financial benefit after verifying the applications. After sanctioning the loan, the amount covered under the benefit scheme has to WP(C): 2382/2021 -:29:- be transferred to the society concerned. It was also stated that if the society fails to consider the application and take steps submitted for the financial benefit covered under the scheme, the application can be submitted directly to the Fund Manager and he shall consider the same and take necessary steps in the matter.
36. Clause 13 deals with Miscellaneous and it reads as under: "1) The Co-Operative Society has to keep a separate register and enter the details of the contribution of the borrower to the Risk Fund and deposit it in the Corpus Fund of the Bank and keep it safe. The details of the deposit of the contribution, and further deposit in the Corpus Fund of the Bank etc., also has to be entered in the statement of the loan installment. Monthly statements relating to the contribution of the Risk Fund, details of the deposit in the Corpus Fund of the Bank etc., have to be forwarded to the Secretary of the Board and all General Managers of the District Co- Operative Banks.
2). If the borrower dies, the balance loan amount due from the deceased along with interest as on the date of his death shall be paid to the Society from the Corpus Fund. Along with this the Society has to take necessary steps to write off the penal interest and other expenses with the sanction of the General Body and approval of the Registrar.
3). The details with respect to the contribution from the Societies, contribution from the Government, financial help received from other sources, financial help received from funds shall be entered in a separate register and kept safe by the Welfare Development Fund Board. The accounts relating to the deposits have to be ascertained each month by the board.
4). The Director of Co -Operative Audit has to audit the accounts relating to the Risk Fund.
5). The detail Statement / Report of the progress relating to the Fund Amount, Balance Amount, the amount deposited in WP(C): 2382/2021 -:30:- the fund of that particular month, amount sanctioned from the fund of that particular month, balance amount, societies for which financial help was sanctioned to each district has to be submitted by the Registrar, the following month.
6). The Registrar of Co-operative Society shall have the power to relax any of the conditions stipulated in the Risk Fund Scheme subject to the recommendation of the Managing Committee of the Board. None of the conditions stipulated in the scheme shall be altered or amended without the prior permission of the Government."
37. The Action Taken Report filed by the Joint Registrar/Secretary, Kerala Co-operative Development and Welfare Fund Board, Thiruvananthapuram, as per the interim direction of the Upa Lok Ayukta in Exhibit-P4 order dated 26.03.2019 is reproduced hereunder:
"1. As per the directions of the Hon'ble Upa Lok Ayukta, the managing committee of the Risk Fund Board (1 st respondent) has to examine and scrutinize the Risk Fund Register and all other related documents maintained by the 2nd and 4th respondents dated 30.09.2019. No receipt of Risk Fund Premium has been seen in the records maintained by the 2 nd and 4th respondent's Bank. It is on record that the deceased Premkumar had remitted Rs.5000/- as share capital, Rs.2500/- as service charges, Rs.500/- as Valuation Fee and Rs.250/- as Gehan charges and above said various heads of amount was entered in Cash Book, Subsidiary Day Book and main Day Book kept by the 4th respondent Bank also. At the time of examining the records, no receipts of premium amount have been recovered from the 4th Respondent Bank and its 2nd respondent Bank. After examining and scrutinizing the records kept by the 2nd and 4th respondents, the 1st respondent Board have came to know that Ext.P2 was fabricated and forged documents made by the staff of the 4th respondent Bank. Ext. P2 is a computer printout copy and it was installed on 22.01 2010 onwards by the 4th respondent Bank in the option of Installing Risk Fund premium amount.WP(C): 2382/2021 -:31:-
The Installation of computerization in the 4 th respondent Bank made by Cochin Computing Studio & Research Centre Pvt. Ltd. as per Ext. R1(a). As per entries in the computer shows that Membership No.16299 is deceased Premkumar as Scroll No.932 dated 06.02.2009 was entered in the computer, but its option is installed in computer shows that it is not tallied in the aforesaid premium fund Installation in the computer and the above entered risk fund premium amount was not enrolled in the Cash Book and Audit kept by the 4th respondent's record. So the above entries shown in the computer scroll 26-18-2010 are fake entries made by the staff on 26.10.2011 purposefully for proving receipt of risk fund premium. No entries were seen in the Cash Book. Subsidiary Day and Audit Report in the 4th respondent Bank at the time of examining the records by the 1st Respondent Board.
2. As per Ext.P5, 2nd respondent refused to release the title deeds of the complainant even after she deposited the demanded amount of Rs.1,59,455/- on 11.02.2011. After the rejection of the request of the complainant submitted before the 2nd respondent, she did not file any further complaint before the Government Authorities concerning the matter. There is no original application for risk fund and other documents are not produced before the 1st respondent bank by the 4th respondent. Forum A statement included documents like death certificate, legal heirship certificate, original application of risk fund and receipt of risk fund premium should be submitted before the 1st Respondent Board after the verification of the concerned Assistant Registrar office by the 4th respondent. In this case, above said records are not to be submitted by the 4th respondent bank and 2nd respondent before the Board. On 20.03.2012, the petitioner filed a request before the 2nd respondent for getting Risk Fund, but the said request was rejected by the 4th respondent Bank for the reason of this Bank did not Join Risk Fund Scheme. The Managing Director ie, 2nd respondent rejected as Ext. R1(b) letter.
3. The Kerala Co-operative Risk Fund Scheme, 2008 came into existence with effect from 01.04.2008 as per G.O. No.248/2008 dated 18.11.2008. The duty of the 1 st respondent is to implement the above said scheme as per provision laid down in the Rules. The scheme is to provide assistance to loans availed by the loanees from Co-operative Societies, who expire WP(C): 2382/2021 -:32:- before the period of loan. The Co-operative Societies issuing loans should collect a specified amount from the loanee towards the Risk Fund premium and to remit the same to the corpus fund of the Board within the stipulated time.
4. The assistance as per this scheme is against the outstanding loan amount at the time of the death of the loanee subject to a maximum of one lakh prior to the amendment made on 30.03.2012. The Registrar of Co-operative Societies as per Ext.P3 circular dated 25.06.2010 instructed all Credit Co- operative Societies to join the scheme, collect the Risk Fund premium from the loanees at the time of disbursement of the loan and remit to the corpus fund of the Board in time.
5. It is submitted that if any risk fund premium is deducted from the loanee Sri. A.Padmakumar at the time of disbursement of loan on 6.2.2009, the 2 nd respondent bank ought to have remitted the amount to the Board by the 5 th March, 2009. The 2nd respondent bank has not remitted any amount pertaining to the loan in question. It is submitted that the Scheme is running as an insurance Scheme and hence in the absence of premium remittance, the Board is not in a position to provide assistance to the loan of Sri.A.Padmakumar. The Registrar of Co-operative Societies has issued Ext.P3 prescribing the manner in which such cases are to be dealt with.
6. In the instant case, the petitioner has not produced any evidence regarding compliance of Clause 11 of the scheme in the matter of remittance of the contribution of the loanee to the corpus fund. The petitioner also has not produced any documents in proof of remittance of the contribution to the corpus fund by the 2nd respondent in the account maintained by the 1st respondent in the District Co-operative Bank. The alleged recovery of an amount of Rs.250/- from the loanee as evidenced by Ext. P2 is not sufficient to extend the benefit under the Risk Fund scheme whereas the amount so recovered should have been deposited in the District Co-operative Bank and a statement to that effect should have been made available to the 1st respondent. In the absence of compliance of the aforesaid two conditions as envisaged under Clause 11(B) (3)and (4) of the scheme, no liability can be caused to the 1st respondent. However, since the 2nd and 4th respondents have WP(C): 2382/2021 -:33:- committed seriously to become a member of the Risk Fund Scheme came into force w.e.f. 01.04.2008, the bank have applied for membership in September, 2009 only. The bank ought to have to join the scheme in time and to collect the amount of premium and to remit the same in the corpus fund maintained by the Board.
7. Since the Risk Fund Board has not yet received any application from the 4th respondent bank in the prescribed form with necessary documents, the board is not in a position to grant assistance to the complainant.
8. In the above circumstances it is respectfully submitted that the Complaint is liable to be closed reserving the right of the petitioner to proceed against the 2 nd and 4th respondents Bank as provided in Ext.P3 Circular.
After verification of all the relevant records there is no piece of evidence for the remittance of any amount as the Risk Fund Premium by the 4th respondent in the name of the complainant and hence the 1st respondent has no liability to pay any amount as claimed in this complaint. In these the 1st respondent is unable to pay anything to the complainant from the Risk Fund Scheme."
38. Exhibit-P8 is the order dated 16.12.2020 in R.P. No.2 of 2020 passed by the Upa Lok Ayukta, wherein it was observed as under:
"Significantly, it is the admitted position that the Bank conceded that the then Secretary and certain other employees were responsible for the mischief and it was these officials who had created or fabricated documents and also issued a receipt for Rs.25/- towards contribution to the Risk fund Scheme. The Department had also adverted to this aspect and held that the Bank should proceed against these employees. All these aspects were taken note of by this Forum while passing two orders, especially the last order dated November 5, 2020. It was after considering all these circumstances and looking into the gamut of the issue that this Forum had ordered that the complainant who is a widow (her late husband was the loanee) was entitled to get 6% interest on the sum of Rs.1 lakh from the date of death WP(C): 2382/2021 -:34:- of her husband. I do not find any error apparent on the fact of the record. There is no merit in any of the contentions raised by the review petitioner.
Accordingly, the Review Petition is dismissed."
39. The sole question to be considered in this writ petition is as to whether any interference is required to the orders of the Upa Lok Ayuka.
40. Apparently, Exhibit-P4 order dated 26.03.2019 was passed by the Upa Lok Ayukta after taking evidence and finding that Exhibit-P2 computer extract produced is a fabricated document to appear that the loanee, late Mr. Premkumar, has contributed Rs.250/- towards the Risk Fund Benefit Scheme. It was also found that the Bank became a member of the scheme only on May 5th, 2010, whereas the loan was released to late Premkumar on 6.2.2009. It was also found by the Upa Lok Ayukta that late Premkumar had not contributed Rs.250/- towards the scheme. It was accordingly after realising the situation that the Bank was not a member of the Risk Fund Scheme, directions were issued as per the interim order dated 26.03.2019, which is extracted above.
41. Going through the Action Taken Report filed by the Joint Registrar/Secretary (Fund Manager) of the Risk Fund Scheme, it is clear that Exhibit-P2 computer extract produced by the 1 st respondent before the Upa Lok Ayukta was a fabricated and forged document made by the WP(C): 2382/2021 -:35:- staff of the branch of the Bank. It is clearly stated in the said report that the option of installing risk fund premium amount was made only on 22.01.2010 onwards, and therefore, when late Premkumar availed the loan, on 6.2.2009, there was no option for entering the risk fund contribution in the system available with the branch.
42. The Action Taken Report (ATR) submitted by the Joint Registrar further makes it clear that entries in the computer show that Membership No.16299 is deceased Premkumar, and it was entered as Scroll No.932 dated 6.2.2009 in the computer, but its option installed in the computer shows that it is not tallied in the aforesaid premium fund installation in the computer. It was also pointed out that the risk fund premium amount was not incorporated in the cash book and audit records kept by the 4 th respondent, and therefore, the entries shown in the computer scroll are fake entries made by the staff later , purposefully for proving receipt of risk fund premium.
43. It was taking into account the said statements contained in Exhibit-P5 Action Taken Report, Lok Ayukta has arrived at the finding that the Risk Fund Board is not liable to pay any amount to the Bank since the Bank has not enrolled late Premkumar as a member of the Risk fund Scheme and since the Bank itself had become a member, much later in the WP(C): 2382/2021 -:36:- year 2009, which was accepted by the Risk Fund Board in May, 2010.
44. Anyhow, the Managing Director of the Bank has filed a writ petition basically contending that late Premkumar was not entitled to the benefit of the scheme since he was not enrolled as a member.There is no much deliberation required to the said aspect because even though Exhibit-P2 document was produced by the 1st respondent/complainant before the Lok Ayukta, it was found to be a fabricated one, done at the behest of the 4th respondent, who was the Branch Manager of the Bank in the year 2012.
45. It is an admitted fact that even though late Premkumar died on 24.11.2010, the 1st respondent/complainant has approached the Branch Manager only on 23.04.2012, after assumption of charge as Branch Manager by the 4th respondent. On a perusal of Exhibit-R1 scheme, it is clear that in order to get the benefits of Risk Fund Scheme, the Bank has to enroll itself in the scheme. According to the petitioner, the Bank did not enroll because, no rule was in force at that point of time, as to the manner in which the enrollment is to be made and further that there was no provision in the Co-operative Societies Act providing the Bank to enroll and only after amendment of the Act, incorporating Section 57D, that the Bank has taken steps to enroll itself.
WP(C): 2382/2021 -:37:-
46. Now, the question remains to be considered is whether since the Bank was not a member of the Risk Fund Board and since late Premkumar has not made any contribution for being enrolled as a member, can any liability be fastened on the Bank.
47. It is true that the objective of the Risk Fund Scheme, 2008 is to protect the interest of the family of loanees, that is to say, if during the loan period the loanee dies, the Risk fund Board shall provide an amount upto Rs.1 lakh, which is outstanding in the principal amount and its interest will be given from the Fund. However, Clause (7) of the Scheme makes it clear that the Risk Fund Board fund is constituted by contribution of Rs.1 lakh by the Bank and the contribution made by the loanee at the rate of 0.25% of the loan amount and upto a maximum of Rs.250/-. Admittedly, after its enrollment as a member, the Bank has made a contribution of Rs. 1 lakh towards Risk Fund only in November, 2009 and the said membership was accepted by the Risk Fund Board in May, 2010 only.
48. As of now, it stands undisputed and clear from the evidence let in before the Upa Lok Ayukta and the findings rendered in its orders that contribution of Rs.250/- was not made by late Premkumar at the time of availing of the loan. Therefore, totality of the facts and circumstances WP(C): 2382/2021 -:38:- would show that at the time of release of loan amount to late Premkumar, Bank was not a member of the Risk Fund Board and late Premkumar has not made the contribution of Rs.250/-, which form the fund of the Risk Fund Board to avail the benefits of the scheme.
49. From the above, it could be deduced that the Risk fund Board was not at all liable to pay the amount. However, the deliberations made above would show that there was no willful negligence or laches on the part of the responsible officer of the Bank, in order to enroll itself as a member of the Risk Fund Board. If at all there was any laches to collect Rs.250/- from the loanee, it was negligence on the part of the Manager/Office of the Bank, who handled the loan transaction with late Premkumar. It is also significant to note that without the bank being allowed to be a member of the scheme by the board, the bank could not have made its contribution to the scheme. Therefore since the bank was not a member when late Premkumar availed the loan, it cannot be said that there was any maladministration on the part of the bank to extend the benefits of the scheme to the first respondent.
50. Considering the peculiar facts and circumstances, and the materials on record, we are of the view that the liability of payment of the amount under the Risk Fund Scheme could not have been attributed by WP(C): 2382/2021 -:39:- the Upa Lok Ayukta on the petitioner Bank. In that view of the matter, we have no hesitation to hold that interference is required to Exhibit-P7 order of the Upa Lok Ayukta dated 05.11.2020 passed in Complaint No.551/2013. Accordingly, we set aside the said order directing the petitioner Bank to provide the benefit of the scheme to the 1 st respondent/complainant, and consequently Exhibit P8 order in review. In the circumstances, if the Bank had made any payment towards the loan in question as per the directions of the Upa Lok Ayukta, liberty of the Bank is left open to recover the same.
Writ petition will stand allowed to the above extent.
Sd/-
S. MANIKUMAR CHIEF JUSTICE Sd/-
SHAJI P.CHALY JUDGE krj WP(C): 2382/2021 -:40:- APPENDIX PETITIONER'S EXHIBITS:-
P1 COPY OF THE COMPLAINT NO.551/2013 DATED 14.12.2012 FILED BEFORE THE KERALA LOK AYUKTA, THIRUVANANTHAPURAM ALONG WITH TRUE ENGLISH TRANSLATION OF THE MALAYALAM PORTION IN EXHIBIT P1. P2 COPY OF THE WRITTEN STATEMENT DATED 18.2.2014 FILED BY THE PETITIONER BANK IN COMPLAINT NO.551/2013 ALONG WITH TRUE ENGLISH TRANSLATION OF THE MALAYALAM PORTION IN EXHIBIT P2. P3 COPY OF THE RISK FUND SCHEME, 2008 ALONG WITH ITS TRUE ENGLISH TRANSLATION.
P4 COPY OF THE ORDER DATED 26.03.2019 IN COMPLAINT NO.551/2013 PASSED BY THE HON'BLE UPA LOK AYUKTA.
P5 COPY OF THE ACTION TAKEN REPORT SUBMITTED BY 2ND RESPONDENT DATED 11.10.2019.
P6 COPY OF THE OBJECTION TO THE ACTION TAKEN REPORT DATED 19.07.2019.
P7 COPY OF ORDER DATED 05.11.2020 PASSED BY THE UPA LOK AYUKTA. P8 COPY OF THE ORDER DATED 16.12.2020 IN R.P.NO.2/2020 IN COMPLAINT NO.551/2013.
RESPONDENTS' EXHIBITS:-
R1(A):- COPY OF THE REJOINDER IN COMPLAINT NO.551/2013 DATED 9-1-2015 FILED BY THE RESPONDENT NO.1 BTO THE REPLY BY THE PETITIONER BEFORE THE HPN'BLE LOK AYUKTA.
R1(B):- COPY OF THE WRITTEN STATEMENT IN COMPLAINT NO.551/2013 DATED 09-10-2013 FILED BY THE 4TH RESPONDENT BEFORE THE LOK AYUKTA. R1(C):- COPY OF THE REPLY STATEMENT IN COMPLAINT NO.551/2013 DATED 18.02.2014 FILED BY THE 1ST RESPONDENT HEREIN BEFORE THE HON'BLE LOK AYUKTA WITH ENGLISH TRANSLATION.
R1(D):- COPY OF REPLY STATEMENT IN COMPLAINT NO.551/2013 DATED 3-4-2014 FILED BY RESPONDENT NO.3 BEFORE THE HON'BLE LOK AYUKTA WITH ENGLISH TRANSLATION.
WP(C): 2382/2021 -:41:-R1(E):- COPY OF THE REJOINDER IN COMPLAINT NO.551/2013 FILED BY TYHE COMPLAINANT TO THE REPLY STATEMENT OF THE RESPONDENT NOS.1, 3 AND 4 BEFORE THE LOK AYUKTA.
R1(F):- COPY OF THE DATE OF EVENTS AND FACTS OF THE CASE SUBMITTED BEFORE THE LOK AYUKTA IN COMPLAINT NO.551/2013 ON 18.07.2017 AND 24.05.2018.
R1(G):- COPY OF I.A. NO.128/2020 IN COMPLAINT NO.551/2013 FILED BEFORE THE HON'BLE LOK AYUKTA ANNEXING THE DECISION OF THE BOARD DATED 14-5-2019 WITH ENGLISH TRANSLATION.
R1(H):- COPY OF THE R.P. NO.2/2020 IN COMPLAINT NO.551/2013 FILED BY THE PETITIONER BEFORE THE HON'BLE LOK AYUKTA DATED 14.12.2020.
R1(I):- COPY OF THE OBJECTIONS FILED BY THE 1ST RESPONDENT/COMPLAINANT TO R.P. NO.2/2020 IN COMPLAINT NO.551/2013 FILED BY THE PETITIONER BEFORE THE LOK AYUKTA DATED 14.12.2020.
R1(J):- COPY OF THE COUNTER AFFIDAVIT BY 2ND RESPONDENT IN COMPLAINT NO.551/2013 ALONG WITH THE RECEIPTS OF CONTRIBUTIONS TO THE RISK FUND SCHEME, 2008 FILED BY THE PETITIONER/RESPONDENT NO.2 BEFORE THE HON'BLE LOK AYUKTA WITH ENGLISH TRANSLATION. R1(K):- COPY OF THIS COURT'S ORDER DATED 6-8-2021. R1(L):- COPY OF THE HON'BLE SUPREME COURT'S ORDER DATED 15-10-2020. R1(M):- COPY OF THE HON'BLE LOK AYUKTA'S ORDER DATED 28-10-2021. R4(A):- COPY OFTHE APPLICATION SUBMITTED BY THE 1ST RESPONDENT DATED 20.04.2012 TO THE 4TH RESPONDENT.
R4(B):- COPY OF THE RECEIPT DATED 19.03.2021 ISSUED BY THE PETITIONER.
//TRUE COPY// P.A. TO CJ