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2023 DIGILAW 1030 (AP)

Krishna District Cooperative Central Bank Ltd. , Chinn v. State of Andhra Pradesh

2023-07-10

CHEEKATI MANAVENDRANATH ROY, TARLADA RAJASEKHAR RAO

body2023
ORDER : Cheekati Manavendranath Roy, J. In this batch of writ petitions, the legal validity of the awards passed by the permanent Lok Adalat, are challenged in some writ petitions by the Krishna District Cooperative Central Bank Limited (for brevity “KDCC Bank”) and in other petitions by “Raithu Sadhikarika Samastha”. Therefore, all these writ petitions are heard together and they are being disposed of by this common order. 2. Heard learned counsel for the petitioners, learned Assistant Government Pleader for Finance appearing for 1st respondent, Sri S. Lakshminarayana Reddy, learned Standing Counsel for Andhra Pradesh State Legal Service Authority appearing for 3rd respondent and Sri K. Mohan Rami Reddy, learned counsel appearing for 4th respondent in the writ petitions filed by KDCC Bank and appearing for the writ petitioners filed by “Raithu Sadhikarika Samastha”, learned Government Pleader for Agriculture for 2nd respondent and none appeared for 5th respondent. 3. At the time of hearing, both the learned counsel for petitioners and learned counsel for respondents would submit that these are all covered matters in view of the earlier common order passed by this Court in W.P.No.1252 of 2020 and batch, whereby this Court has dismissed the writ petitions. 4. The claimants in all the pre-litigation cases filed before the permanent Lok Adalat, are farmers and agriculturists by profession and they are eking out their livelihood by doing cultivation. All of them have availed crop loans / gold loans for the purpose of their agriculture from KDCC Bank. 5. While so, the Government has issued G.O.Ms.No.174, Finance (I.F) Department, dated 14.08.2014 waiving all the crop loans and gold loans availed by the farmers. For the purpose of implementing the said G.O. and to enable the farmers to avail the benefit of the said G.O., a Nodal Agency known as “Raithu Sadhikarika Samastha” was created by the State Government of Andhra Pradesh. The said Raithu Sadhikarika Samastha has to collect the data from all the concerned banks in the State and ascertain whether the gold loans and crop loans are availed for agriculture purpose or not and whether they are genuine or not and also to ascertain whether they are entitled for waiver of the said loans or not. 6. The said Raithu Sadhikarika Samastha has to collect the data from all the concerned banks in the State and ascertain whether the gold loans and crop loans are availed for agriculture purpose or not and whether they are genuine or not and also to ascertain whether they are entitled for waiver of the said loans or not. 6. As the said gold loans and crop loans of the farmers are not waived in terms of the aforesaid G.O., the farmers, who felt aggrieved in this regard, have approached the permanent Lok Adalat by way of filing applications for redressal of their grievance seeking direction to the KDCC Bank to implement the said G.O. 7. After complying with the procedure contemplated under law, as the reconciliation efforts made did not fructify, the permanent Lok Adalat proceeded to adjudicate the dispute and eventually passed the impugned orders directing the KDCC Bank to implement the said G.O. and to waive the crop loans and gold loans and further directed the KDCC Bank to refund the amount to the farmers. 8. Aggrieved by the impugned awards that were passed, the KDCC Bank and the Raithu Sadhikarika Samastha have filed separate writ petitions, which are part of this batch, challenging the said awards passed by the permanent Lok Adalat. 9. The legal validity of the awards passed by the permanent Lok Adalat, are challenged chiefly on two grounds. Firstly, it is contended that banking services are not included in the public utility service under Section 22A of the Legal Services Authorities Act, 1987 (for short “the Act”) and as such, the permanent Lok Adalat has no jurisdiction to pass any such awards against the KDCC Bank and it is not competent to pass the said awards under the Act. Secondly, it is contended that it is mandatory on the part of the permanent Lok Adalat under Section 22C (7) and (8) to make an effort for conciliation before proceeding with adjudication of the dispute and as no such effort for conciliation is made which is mandatory in nature, that the awards are vitiated for non-compliance of the said mandatory requirement of making an effort for conciliation before adjudicating the dispute and passing the award. These are the two grounds, on which the petitioners sought to assail the impugned awards. 10. These are the two grounds, on which the petitioners sought to assail the impugned awards. 10. As regards the first ground is concerned, Chapter VIA is included in the Act by way of an amendment. As per Chapter VIA, permanent Lok Adalat has been established with the power of adjudication of disputes relating to public utility service. In contrast to the powers conferred on the Lok Adalat for settlement of dispute by way of compromise and to pass awards, the permanent Lok Adalat established in Chapter VIA, has got power of adjudication. However, the permanent Lok Adalat can adjudicate disputes only in respect of public utility services which are enumerated in Section 22A of the Act. Initially, banking services and financial institutions are not included as public utility services in Section 22A. But, Section 22A itself, has conferred power on the Central Government and also on the State Government as the case may be, to include other services also as public utility service in Section 22A of the Act in public interest by way of issuing notification to that effect. 11. In exercise of the said power conferred on the State Government, the State Government of Andhra Pradesh has issued notification in G.O.Rt.No.1839, Law (LA & J) Home dated 12.12.2006, notifying the banking institutions and financial institutions in the State also as public utility services for the purpose of Section 22A of the Act. Therefore, it is now evident that banking institutions and financial institutions are also the public utility services as contemplated under Section 22A of the Act. So, it is well within the competence of the permanent Lok Adalat to adjudicate the disputes relating to the banking institutions and financial institutions and it has got ample jurisdiction to adjudicate the said disputes. The KDCC Bank, being a banking institution and financial institution, now clearly falls within the ambit of the public utility service as contemplated under Section 22A of the Act. So, the permanent Lok Adalat is competent and got jurisdiction to adjudicate the disputes relating to the said fact. 12. Therefore, the contention of the petitioner bank that the impugned awards are not valid for want of jurisdiction to adjudicate the disputes relating to banking services and permanent Lok Adalat is not competent to pass the impugned awards, is devoid of merit and it is liable to be rejected. 13. 12. Therefore, the contention of the petitioner bank that the impugned awards are not valid for want of jurisdiction to adjudicate the disputes relating to banking services and permanent Lok Adalat is not competent to pass the impugned awards, is devoid of merit and it is liable to be rejected. 13. As regards the second ground on which the awards are challenged, that the mandatory procedure of making an effort for conciliation before adjudicating the dispute is not complied with is concerned, it is the contention of the writ petitioners that making an effort for conciliation before adjudicating the dispute is a condition precedent for proceeding with adjudication of the dispute by permanent Lok Adalat and non-compliance of the said mandatory procedure would vitiate the awards. 14. A perusal of Section 22C (7) and (8) of the Act would clearly shows that the permanent Lok Adalat has to make an effort for conciliation and only when the effort made for conciliation fails, that it can adjudicate the dispute and pass the awards. As per the judgment relied on by the learned counsel for the petitioners of the Apex Court rendered in the case of Canara Bank v. G.S. Jayarama, Civil Appeal No.3872 of 2022 dated 19.05.2022, it is clearly held that making an effort for conciliation before adjudicating the dispute is mandatory before the permanent Lok Adalat can decide the dispute on merits. Therefore, the legal position is now clear from the aforesaid provisions of law and also from the law that is enumerated by the Apex Court in the above referred judgment that making an effort for conciliation in terms of clause (7) and (8) of Section 22C of the Act, is mandatory before adjudicating the dispute by the permanent Lok Adalat on merits. 15. However, as can be seen from the impugned awards, it is evident that the permanent Lok Adalat has initially made an effort for conciliation and as the conciliation failed, that the permanent Lok Adalat has proceeded to adjudicate the dispute on merits and thereafter passed the impugned awards. There is nothing to indicate in the awards that the said mandatory procedure is not followed or complied with. There is nothing to indicate in the awards that the said mandatory procedure is not followed or complied with. Therefore, as it is found that the said procedure prescribed under law is followed and thereafter the awards are passed, it cannot be said that the impugned awards are vitiated for non-compliance of the procedure prescribed for holding conciliation before adjudicating the dispute on merits. 16. Therefore, the petitioners failed to substantiate any of the two grounds urged on which they seek to challenge the impugned awards. So, the awards are perfectly sustainable under law and they warrant no interference in this writ petition and they are not liable to be set aside. 17. Learned counsel for the petitioners would contend that for the purpose of waiving the loans by the bank in terms of the aforesaid G.O., the Government has to release the funds and then the KDCC Bank has to waive the loans and as the Government did not release any funds, that the banks cannot waive the loans. But, as can been seen from the G.O.Ms.No.197 dated 04.10.2014, it is evident from paragraph 13 of it, that a sum of rupees five thousand crores is ordered to be released by the Government to enable the Raithu Sadhikarika Samastha to operationalise the Government’s Farm Sector Debt Redemption Policy. So, when the G.O. was issued to that effect, the bank has to approach the Government to release the funds. On that ground, the validity of the present awards cannot be challenged. It is well settled law that the awards passed by the permanent Lok Adalat attain finality as per Section 22E of the Act. It mandates that every award of the permanent Lok Adalat passed under the Act either on merit or in terms of the settlement agreement shall be final and binding on all the parties thereto and on persons claiming under them. So, every award of permanent Lok Adalat shall be deemed to be a decree of a civil Court. Therefore, in the writs filed challenging the awards, in the usual course, the writs would be entertained only on limited grounds i.e. playing fraud in obtaining awards or when the awards are passed without jurisdiction or competency of law. So, every award of permanent Lok Adalat shall be deemed to be a decree of a civil Court. Therefore, in the writs filed challenging the awards, in the usual course, the writs would be entertained only on limited grounds i.e. playing fraud in obtaining awards or when the awards are passed without jurisdiction or competency of law. As this Court found that the permanent Lok Adalat has got ample jurisdiction to pass the impugned awards and it is competent to adjudicate the dispute relating to the banking services, the petitioners now cannot challenge the said awards on other grounds, which are now urged. 18. Therefore, the Writ Petitions are dismissed. Learned counsel for the petitioners would request the Court to grant liberty to the KDCC Bank to approach the Government to request either to release the funds or to claim reimbursement of the loans that are waived. Liberty as sought for is granted. There shall be no order as to costs. Miscellaneous petitions, if any pending, in the Writ Petition, shall stand closed.