- (1.) A loan of Rs. 20,000/- taken by the petitioner has become too huge for him for repayment. He is now saddled with the liability of nearly Rs. 7.00 lacs, No doubt, there is some delay on the part of the petitioner to discharge the liability but requiring him to pay approximately Rs. 7.00 lacs for loan of Rs. 20,000/-, which the petitioner took, would sound unfair and unreasonable. President of the Society accordingly was asked to consider the proposal to settle this liability with some reasonable term. Despite efforts, no agreed solution has been possible in this case. The perusal of the facts in this case would, in fact, reveal that the employees of the Bank have constituted a society, which, in routine used to collect money from the members. This money thereafter was used for disbursing the loan by charging exorbitant rate of interest. In this background, the court entertained a doubt whether such a course would be permissible for employees of the Bank to run a parallel banking institution. It was also required to be ascertained as to how the amount earned as a profit is used, which was not clearly made out from the facts of the case. The counsel appearing for the parties conceded before the court that formation of such a society and to carry out such functioning by the society so formed would be permissible. Plea was that number of such societies are functioning in this manner. The court still found it to be a parallel banking system being run and the effect thereof was on the petitioner, who took loan of Rs. 20,000/- but now was required to pay sum of approximately Rs. 7.00 lacs, which ultimately would be shared by the members constituting the committee as a personal profit.
(2.) In order to appreciate this part of the legal issue, Senior counsel Mr. Rajiv Atma Ram, who was present in the Court, was requested to assist the court. He was gracious enough to accept the request and has made reference in detail to the provisions; of various enactments ultimately to urge that the course as adopted by the respondents would appear to be permissible under law. Learned Senior counsel appearing as Amicus has made reference to various enactment, like Reserve Bank of India Act, Money Laundering Act, Punjab State Cooperative Societies Act and by making reference to various provisions of these enactments, the counsel has made submission that the cooperative society, if legally and validly formed, can run a banking system. Since there is no objection raised by the petitioner on this count and it was only on account of a doubt arising in the mind of the court that the Amicus was asked to assist in this regard, I need not express any opinion on this count, but would consider the plea raised in the petition dehors this issue.
(3.) Briefly noticing the facts in this; case are that the petitioner has challenged the arbitration award passed against him under Sections 55 and 56 of the Punjab Cooperative Societies Act, 1961 (for short "the Act"). As per the petitioner, this award is made in blatant violation of the provisions of the Act and in violation of principles of natural justice. The petitioner pleads that no opportunity of hearing was ever afforded to him by the authorities to defend a time barred debt. As per the petitioner, the arbitration reference for claiming the defaulted amount of loan was raised after five years, whereas the prescribed period of limitation for raising the arbitration proceedings under Article 137 of the Limitation Act is three years. In this regard, the petitioner has placed reliance on Kerala State Electricity Board, Trivandrum v. T.P. Kunhaliumma, 1977 AIR(SC) 282 where Article 137 of the Limitation Act has been considered and it is held that application filed under the Act where no period of limitation prescribed would be 3 years.;