MOHAMMAD FAIZAN Vs. STATE OF BIHAR

JUDGEMENT

(1.) These two writ petitions involving common questions and based on similar facts have been heard together and are being disposed of by this common judgment and order. In both the writ petitions the petitioners, who at the relevant time were the Chairman and the Secretary-cum-manager of the Co-operative Societies concerned, have challenged the award passed by the Assistant Registrar, Co-operative Societies under Section 48 of the Bihar Co-operative Societies Act making the petitioners liable for payment of the dues claimed by Nalanda District Central Co-operative Bank (respondent No. 2 herein). The order of the Assistant Registrar has been upheld in appeal and revision preferred under the Act. The amount awarded to respondent No. 2 Bank is sought to be realised by way of arrears of land revenue and accordingly certificate cases have been initiated against the petitioners. The petitioners have, therefore, impugned the orders passed by the authorities under the Act, which are Annexures 6, 7 and 8 in both the writ petitions. They have also prayed for quashing of the entire proceeding of the certificate cases initiated against them.

(2.) The representative facts are taken from C.W.J.C. No. 1574 of 1997. The facts of the case in so far as they are relevant are as follows : Petitioner Nos. 1 and 2 at the relevant time were the Chairman and the Secretary-cum-Manager respectively of Star Powerloom-cum-Handloom Co-operative Society Ltd. In their capacity as Chairman and Secretary-cum-Manager of the aforesaid Co-operative Society they had requested respondent No. 2 Nalanda District Central Co-operative Bank (hereinafter referred to as the Bank) for grant of cash credit facility with a limit of Rs. 50,000/- in the year 1985. They had requested for grant of such facility on behalf of the Co-operative Society of which they were the office-bearers. The respondent-Bank extended the said facility to the Co-operative Society and necessary documents were executed by the petitioners on behalf of the Co-operative Society. According to the petitioners, the cash credit facility was utilised for the purpose of grant of loans to its weaver members to whom the Co-operative Society supplied yarns. According to the petitioners, the Government of India introduced a scheme known as the Agricultural and Rural Debt Relief Scheme 1990, which was notified under notification dated 18th May, 1990. The Governor of Bihar also issued Memo bearing No. 6248 dated 13th June, 1990 under which the central scheme was adopted and a provision was made for writing off loans advanced to members of the Society not exceeding Rs. 10,000/-. This was reiterated in Memo No. 1548 dated 15th June, 1990. It is the case of the petitioners that the benefit under the said scheme was made available to weavers and artisans of urban area as well, and they rely upon the circular issued by the Reserve Bank of India dated 18-5-1990 (Annexure-4). Petitioner No. 1 as Chairman of the Co-operative Society submitted a detailed report to the respondent-Bank in the prescribed form giving full particulars of the amounts disbursed by way of loan to weaver members individually. Such loans advanced to each member did not exceed Rs. 10,000/- in any case. The respondent-Bank, however, did not take necessary steps to forward its report to the Government or the appropriate authority with a view to write off the loans and neglected in the performance of their duty to get the scheme implemented and the loans waived. According to the petitioners, the loans advanced to its weaver members could not be recovered in view of the scheme adopted by the Government of Bihar, as individual members who had been granted loan up to Rs. 10,000/- were entitled to the benefit of write off.

(3.) The petitioners contend that with a view to absolve himself of the charge of negligence, the Managing Director of the respondent-Bank, who is also empowered to act as certificate officer, got a time-barred claim filed before respondent No. 3, Assistant Registrar, Co-operative Societies, Bihar Sharif Circle, and on the basis of the said time-barred claim Award Case No. 3/94-95 was started claiming a consolidated sum of Rs. 1,04,354.84 from the respondent-Society. In the said Award Case neither the Managing Committee nor the member-loanees were arrayed as opposite parties. Respondent No. 3 passed an award only against the petitioners, who at the relevant time were the Chairman and Secretary-cum-Manager respectively of the Co-operative Society. The Assistant Registrar, Co-operative Societies rejecting the plea of the petitioners held that under the scheme of 1990 only rural Weavers Co-operative Societies could get the benefit of debt relief and not the Societies of urban area. The petitioners then took up the matter before respondent No. 4, Joint Registrar, Co-operative Societies, Bihar, Patna, being dispute No. 175 of 1993. The Joint Registrar dismissed the case of the petitioners on the ground that the claim of write off by the petitioners was barred by limitation, since the scheme itself was wound up on 30th June, 1991. The Co-operative Society then moved the Registrar, Co-operative Societies (respondent No. 5) challenging the award passed by the Assistant Registrar (Annexure-6), and their appeal was numbered as Award Appeal No. 122 of 1996. The said appeal was dismissed by the Registrar by order dated 10-1-97 (Annexure-8). The Registrar held that the cash credit facility extended to the appellant did not fall within the ambit of Agricultural Debt Relief Scheme, 1990 and, therefore, waiver of the loans was not permissible. He also held that the scheme did not apply to loans advanced to Co-operative Societies by way of cash credit facility. He also held that the benefit under the Debt Relief Scheme could only be claimed if the claims were submitted before NABARD by 31-3-1991 and no claim could be entertained thereafter.