DISTRICT CO OPERATIVE CENTRAL BANK LTD Vs. DISTRICT CO OPERATIVE CENTRAL BANK LTD
LAWS(APH)-1992-8-5
HIGH COURT OF ANDHRA PRADESH
Decided on August 11,1992

GUNDA NAGESWARA RAO Appellant
VERSUS
GENERAL MANAGER, WEST GODAVARI DISTRICT CO-OPERATIVE CENTRAL BANK LTD., ELURU Respondents

JUDGEMENT

- (1.)The dispute in question is as to whether the crop insurance said to have been collected from the petitioners while disbursing the crop loans will cover the crop loans for the period in question on account of drought. Mr. Chinna Baba, appearing for the petitioners brings to my notice a memo of the Government dt. 10-8-1987 and at Item No.7, Chintalapudi Mandal area has been declared as drought area during the year 1987-88.
(2.)At issue, is the validity of the action of the respondents in seeking to collect the amounts towards loans and that too by applying coercive methods. The first issue to be determined is as to whether the Insurance scheme covers the crop loan in question for the period concerned and as to whether the place where the crop loan was disbursed is a drought affected^rea and as to whether the petitioners had suffered on account of the said drought and that consequently, they are not liable to re-pay the crop loan, but the respondents have to ask the insurer for the repayment of the said crop loan. These are the issues that cannot be settled by me as they need fact finding and the said fact finding is not within my purview and the said fact finding is yet to be made by the proper authority. It is ununderstandable as to how the respondents are entitled to force or coerce the petitioners to pay the amounts even without initiating legal proceedings. As the petitioners dispute their liability to re-pay the loan amount on account of the fact that they are fully insured and that the insurer is liable, it is for the respondents to raise a dispute under Section 61of the Act, so that arbitration proceedings are initiated and are decided u^ Jer Section 62 of the Co-operative Societies Act. Until this procedure is adopted, the respondents are not entitled to pounce upon the petitioners and apply coercive methods like attachments etc., for realising the amounts on account of the arrears of crop loan.
(3.)In view of what is stated supra, I pass the following Order:
1. The respondents, if they so choose, can initiate proceedings for arbitration under the provisions of the Co-operative Societies Act by seeking for reference in that regard against the petitioners claiming realisation of crop loan amounts.

2. Until the said proceedings conclude in favour of respondents, the respondents are restrained from realising any amount towards the said crop loan arrears for tine year 1987-88.

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