JUDGMENT : Amit Rawal, J. [WA Nos.584/2024, 715/2024, 732/2024, 740/2024, 750/2024, 754/2024, 761/2024, 776/2024, 782/2024, 783/2024, 784/2024, 790/2024, 792/2024, 821/2024, 857/2024, 863/2024, 955/2024, 1113/2024] 1. This order of ours shall dispose of all the 18 (eighteen) writ appeals preferred against the common judgment of Single Bench dated 18.01.2024 in W.P(C).No.33185/2011 and connected writ petitions filed by the Society whereby the action of the Government and order of the Registrar vide Government order dated 06.12.2020, Circular Nos.1/2011 and 12/2011 dated 03.01.2011 and 01.02.2011 respectively, ultra vires of the provision of the Kerala Co-operative Societies Act, 1969, have been quashed. 2. Succinctly, the facts in brief are that Co-operative Banks registered under the Kerala Co-operative Societies Act and Primary Agricultural Credit Societies defined under Section 2(o)(a) of the Act have been extending the facilities of loan and credit by way of mortgage entering into a contract to fishermen. Many fishermen had been obtaining loan as per the terms and conditions of the contract defining the principal, interest and penal interest and consequential action by creating a mortgage and charge over the property. 3. Government had come out with an Act, i.e., No.18/2008 called Kerala Fishermen Debt Relief Commission Act which provide a complete procedure after defining certain expressions like co-operative society, credit, debt, fair rate of interest, fisherman, fishing etc., empowering the commission for achieving the purpose of Act under Sections 5, 10 and 12 of the Act. The aforementioned Act was amended by notification dated 27.12.2018 causing amendment only to Sections 5 and 6, and inserting Section 9A. 4. The aforementioned Commission submitted two reports to the Government providing a comprehensive recommendation for granting debt relief to fishermen who had taken loan from the institutions functioning under the Co-operative Societies Act, 1969, pertaining to waiver of interest, penal interest and pending loans to certain extent. By accepting the aforementioned recommendation, Government came out with an order dated 06.12.2010 by granting debt relief to the borrowers from the Primary Co-operative Societies and Co-operative Banks functioning under the Co-operative Societies Act, 1969, as mentioned in paragraph 4 of the aforementioned order. 5. To achieve the aforementioned purpose, Clause 5 was also inserted where it was mentioned that the general conditions shall be strictly followed while implementing the debt relief as succor to the co-operative societies/banks which were likely to be effected on account of the waiver. 5. To achieve the aforementioned purpose, Clause 5 was also inserted where it was mentioned that the general conditions shall be strictly followed while implementing the debt relief as succor to the co-operative societies/banks which were likely to be effected on account of the waiver. Registrar of the co-operative societies was directed to pay the amount to the banks after conducting necessary scrutiny to ensure that there are no fake accounts. If any amount falls short, the balance will be paid and if otherwise, i.e., if amount comes in excess, Registrar shall keep it in the account and report to the Government. Joint Registrar of Co-operative Societies and Deputy Director of Fisheries Department were also directed to associate at the District level. 6. In compliance of the order of the Government dated 06.12.2010, Registrar of Co-operative Societies issued two circulars Nos.1/2011 and 12/2011 dated 03.01.2011 and 01.02.2011 respectively by issuing guidelines for implementation of the scheme in Co-operative Societies/Banks providing certain terms and conditions. 7. Aggrieved of the aforementioned action, Co-operative Societies assailed the aforementioned circulars and the order of the Government through different writ petitions by raising various pleas with regard to violation of contract, Transfer of property Act and against the doctrine of legitimate expectation and also relied upon certain case laws. Learned Single Bench, vide impugned judgments, quashed the orders and circulars. It is in that background, State is in intra court appeals before us. 8. Sri.Gopalakrishna Kurup, learned Advocate General assisted by learned Government Pleader submitted that learned Single Bench failed to go by the provisions of Section 74F of the Co-operative Societies Act which was inserted in Chapter XB of the Act by virtue of amendment dated 28.04.2010. The aforementioned action was taken note of by the Division Bench of this Court in Abdurahiman Nagar Service Co-operative Bank Ltd. V. State of Kerala [ 2014 (1) KLT 664 ], thus there is an abdication. Section 66A of the Act empowers the Registrar to issue general directions to implement the Government policies. Therefore, the circulars of the Registrar issued in terms of the order of the Government could not have been quashed. The only thing which can be challenged is the exercise of power, either on violation of Article 14 of the Constitution of India or any rights guaranteed under the statute. 9. Therefore, the circulars of the Registrar issued in terms of the order of the Government could not have been quashed. The only thing which can be challenged is the exercise of power, either on violation of Article 14 of the Constitution of India or any rights guaranteed under the statute. 9. The action of the Government is not arbitrary as it does not violate Article 14 of the Constitution of India. Succor has been already provided to the Co-operative Societies by writing off certain liabilities of the co-operative banks. 10. Section 74F conferred the power either on the Government or on the Registrar to write off the loans. It confers a freedom of contract to the Society in the matter of grant of loans subject to certain provisions contained in the statute. Power conferred and its application cannot be interfered with at the drop of the hat. Also relied upon the judgment of the Supreme Court in State of Tamil Nadu v. National South Indian River Interlinking Agriculturist Association [2021 KHC 6737] wherein the order of Government of Tamil Nadu granting waiver of outstanding crop loans, medium term agriculture loans and long term (farm sector) loans issued to small and marginal farmers and guidelines for implementation of the order was upheld. 11. On the other hand, Sri.P.V.Baby, learned counsel representing the writ petitioners submitted that the judgment of Division Bench of this Court in Abdurahiman Nagar (supra) would not apply in view of the decision rendered by Full Bench of this Court in Shanmukha Sundaram Pillai.S. v. Meenachil Rubber Marketing and Processing Co-operative Society Ltd.No.K118 and Others [ 2022 (3) KHC 121 FB] wherein, the Full Bench, after considering the scope of the powers of the Registrar vested under Section 66A of the Societies Act, found that power under the aforementioned Section is to be used sparingly and shall not be used in individual cases or contractual matters between a society and its member or in matters relating to the business, as, the object of the Act contained in the preamble is to provide for orderly development of the co-operative sector in the State in accordance with the Directive Principles of State Policy enunciated in the Constitution of India and to promote scientific and technology development, health care, market intervention and management excellence in the co-operative sector. 12. 12. It was further contended that there was no compliance of paragraph 5 of the Government order dated 06.12.2010 as liability of the Co-operative Bank has been set off only 'in part' leaving them at the peril of the remaining loss. In other words, there is no rehabilitation plan culled out for preventing the Co-operative Societies going into losses. In the absence of such compliance, unilateral action of the Government in providing benefit of waiver of loan or interest cannot be said to be in the interest of the society and financial institutions. 13. Section 36A of the Act introduced vide notification dated 23.06.2004, enables the credit societies/banks to create a charge on movable and immovable properties of the borrower by creating Gehan, thus for upholding the findings of the Single Bench by dismissing the intra court appeals. 14. We have heard the learned counsel for the parties and appraised the paper books. 15. Certain clauses of the Government Order dated 06.12.2010 which resulted into issuance of the circulars are required to be extracted: 4. On examining the recommendations of the Fishermen Debt Relief Commission in detail, the Government hereby orders as follows regarding the provision of debt relief to the fishermen: (i) The recommendations of the Fishermen's Debt Relief Commission in the aforesaid paragraphs 2(i) & 2(ii) are accepted subject to the modifications mentioned elsewhere in the order itself. (ii) The debt relief is granted to the borrowers from primary co-operative societies and co- operative banks functioning under the Co-operative Societies Act, 1969 as follows: (a) Provide Rs.1.3 crore as debt relief for remaining debts after closing the accounts of the fishermen who have repaid at least 50% of the principal amount of the loans with interest taken till 31st December 1995 by the concerned banks. (b) Provide Rs. 11.95 crores as debt relief for remaining debts after closing the accounts of the fishermen, who have repaid at least 75% of the principal amount and interest of the loans taken during the period from January 1st, 1996 to December 31st, 2000, by the concerned banks. (c) Provide Rs.207.90 crores as debt relief to the remaining debts after closing the accounts of the fishermen who have repaid an amount equal to the original principal amount and at least 50% of the same since 1st January, 2000, by the concerned banks. (c) Provide Rs.207.90 crores as debt relief to the remaining debts after closing the accounts of the fishermen who have repaid an amount equal to the original principal amount and at least 50% of the same since 1st January, 2000, by the concerned banks. (d) Deviating from the recommendation mentioned in the previous paragraph 2(i) serial no.7, Rs. 20 crores is allowed to be paid to co-operative banks as interest, which is the amount equal to 25% of the interest remaining of Rs.76.9 crores as on 31-12-09 for debts from 2001 to 2007. (iii) Debt relief is granted as follows on loans given to fishermen by Matsyafed using funds from financial institutions NBCFDC and NMDFC and by the Fishermen Development and Welfare Co-operative Societies using its own funds: (a) After the closure of the accounts of fishermen who have repaid 50% of the total loan amount including loan amount and interest in loans taken for a period up to 31st December 1995, fishermen who have repaid 75% of the total loan amount including loan amount and interest in loans taken during the period from 1st January 1996 to 31st December 2000, and fishermen who have repaid loan amount and half of the principal amount in loans taken from January 2000 onwards, by the concerned Fishermen's Societies, to provide debt relief for outstanding debts not falling under the above category, an amount of Rs. 12.44 crores is allocated to Matsyafed and Fishermen Development and Welfare Co- operative Societies. (iv) Rs. 100 crore as the first instalment of the total amount required to provide the debt relief is allowed. The remaining amount will be paid in 3 instalments. (v) Out of the first instalment of Rs.100 crore for debt relief, Rs.50 crore will be allotted in December 2010 and Rs.50 crores in March 2011. (vi) Immediately after the payment of the first instalment the documents given as guarantee/Title deeds given by the fishermen shall be returned to the concerned persons by the Matsyafed/concerned Fishermen Welfare Societies/Co-operative Societies/Co-operative Banks within one month on Government guarantee. 5. The following general conditions shall be strictly followed while implementing this debt relief Scheme for loans from institutions functioning under the Co-operative Societies Act: (i) The Co-operative Society Registrar shall ensure that the loan relief sanctioned is duly received by each borrower. 5. The following general conditions shall be strictly followed while implementing this debt relief Scheme for loans from institutions functioning under the Co-operative Societies Act: (i) The Co-operative Society Registrar shall ensure that the loan relief sanctioned is duly received by each borrower. (ii) The entire amount sanctioned with principal and interest along with the full balance list shall be added to the account of the Registrar of Co-operative Society. The registrar of the co-operative society shall pay the amount to banks after conducting necessary due scrutiny. The registrar of the co-operative society shall ensure that necessary steps are taken to ensure that there are no fake accounts. If the amount falls short, the balance of the same will be paid. If the amount comes in excess, the registrar shall keep it in the account and report it. It is ordered by directing the Join Registrar of the Co-operative Department and the Deputy Director of the Fisheries Department to check the matter at district level.” 16. Aforementioned paragraphs leave no manner of doubt that interest of the societies running Co-operative Banks was though intended to be protected but in view of Exhibit-P8 in Writ Appeal No.584/2024 in respect of one society it has been found that the society was made to suffer of loss of approximately Rs.26,63,093/-(Rupees twenty six lakhs sixty three thousand ninety three only). Many other societies have also suffered losses, for, rehabilitation as envisaged in the Government order was not implemented in toto. Co-operative Banks have been left in lurch with no remedy to recover the irrecoverable loss. The circular Nos.1/2011 and 12/2011 issuing the guidelines envisaged certain situations with regard to availment of loan only but did not provide any proposal or guidelines for addressing the actual cause and grievance of the Co-operative Banks. The judgment of Division Bench in Abdurahiman Nagar (supra) did not lay down any law except reference to the provisions of the Act. The same reads as under: 1. This appeal is filed against the judgment of the learned single Judge dismissing W.P(C).22669/11 filed by the appellant. In the writ petition, the appellant challenged Ext.P1 circular No.41/11, issued by the first respondent, the Government of Kerala. The same reads as under: 1. This appeal is filed against the judgment of the learned single Judge dismissing W.P(C).22669/11 filed by the appellant. In the writ petition, the appellant challenged Ext.P1 circular No.41/11, issued by the first respondent, the Government of Kerala. By this circular, the Government introduced a One Time Settlement Scheme known as 'Aswas, 2011' giving waiver of the dues of the defaulters to the society for settlement of their liabilities at the rate and in the manner as stated therein. According to the appellant, in the light of the judgment of this Court in Kallettumkara Service Co-operative Bank v. Registrar of Co-operative Societies [ 2005 (3) KLT 483 ], the Government or the Registrar did not have power to issue such circulars. In that premise, the writ petition was filed seeking to invalidate the circular. Learned Judge, relying on the provisions of section 74F of the Kerala Co-operative Societies Act, 1969, hereinafter, the 'Act', for short, repelled the challenge and upheld the circular. It is this judgment, which is under appeal before us. 2. Having heard the learned counsel for the appellant, learned Government Pleader and the counsel appearing for the third respondent, the defaulter concerned, we are inclined to confess our inability to accept the contention raised by the appellant. The judgment of this Court in Kallettumkara Service Co-operative Bank (supra) was rendered at a time when section 66A of the Act was not brought into force. Further, section 66A, as modified by Act 7 of 2010, enables the Registrar to issue general directions and guidelines to any or all of the co-operative societies in furtherance of the purpose of the Act or for implementing Government policies for the benefit of the members and the general public. As the section itself has been introduced subsequent to the judgment mentioned above, that judgment cannot be profitably relied on by the appellant to impugn Ext.P1 circular. Further, section 74F of the Act, which also was introduced subsequent to the judgment mentioned above, reads thus: “74F. As the section itself has been introduced subsequent to the judgment mentioned above, that judgment cannot be profitably relied on by the appellant to impugn Ext.P1 circular. Further, section 74F of the Act, which also was introduced subsequent to the judgment mentioned above, reads thus: “74F. Write off of loans - Notwithstanding anything contained in any Act or Rules, no Authority or Commission, other than the Government or Registrar, shall have the power to write off agricultural or non - agricultural debts of borrowers of any society.” By virtue of this provision, the Government shall have the power to write off agricultural or nonagricultural debts of borrowers of any society. 3. In the light of the aforesaid two provisions of the Act, it is fully within the powers of the Government to issue circular in the nature of the one impugned in the writ petition. 4. We do not find any merit in this appeal. It is accordingly dismissed.” 17. Section 66A of the Co-operative Societies Act empowers the Registrar to issue general directions and guidelines to any or all of the Co-operative Societies in furtherance of the purpose of the Act or of implementation of the Government Policy. The same reads as under: “66A. Powers of Registrar to give directions.- Subject to the provisions of the Act and the Rules made there under, the Registrar may issue general directions and guidelines to any or all of the co-operative societies in furtherance of the purpose of the Act or for implementing Government policies for the benefit of the members and general public.” 18. The powers of the registrar was point of ponderance before the Full Bench of this Court in Shanmukha Sundaram Pillai (supra) on reference with regard to the scope of the aforementioned Act in the light of the preamble. The Full Bench answered the reference in paragraph 28 in the following manner: “28. Is the power under Section 66A, which is to be sparingly used, enable the Registrar to issue directions in individual cases or in contractual matters between a Society and its Members or in matters relating to its business? Can such a direction be stated to be "in furtherance of the purpose of the Act or for implementing Government policies for the benefit of the members and the general"? Can such a direction be stated to be "in furtherance of the purpose of the Act or for implementing Government policies for the benefit of the members and the general"? In our opinion the answer is - 'No' keeping in mind the purpose for which the Act has been enacted. As noticed earlier the object of the Act as contained in the preamble is to provide for the orderly development of the Co-operative sector in the State in accordance with the Directive Principles of State Policy as enunciated in the Constitution of India and to promote scientific and technological development, health care, market intervention and management excellence in the co-operative sector. It is in furtherance of this purpose/object of the Act, the power under Section 66A can be invoked by the Registrar. We hold that the general directions and guidelines that can be issued by the Registrar under Section 66A can only be for the purpose of implementing or enforcing the purpose of the Act or for implementing the policies of the Government for the benefit of the Members of the Society and general public and not in individual cases or in purely contractual matters between the Society or its Members. Only such orders issued by the Registrar under Section 66A which satisfy the above test would be valid.” 19. While answering the aforementioned reference, the judgment in Abdurahiman Nagar (supra) had, in paragraph 23, also been discussed. In Abdurahiman Nagar (supra), there was no reference to Section 66A and therefore, the said judgment cannot be said to be in rem and has to be held in per incuriam in view of the reference/ratio decidendi of Full Bench. It is settled law that contractual matters involving third party cannot be tinkered with or re-laid by according benefit to one party and loss to the other. It will not be akin to the public policy and against the public/directive of State policy. Any order of the Government issued in the interest of the particular sect, like the fisherman in the instant case, has to be weighed on a weighing scale impartially/equitably, but not detrimental to one of the affected parties. It will not be akin to the public policy and against the public/directive of State policy. Any order of the Government issued in the interest of the particular sect, like the fisherman in the instant case, has to be weighed on a weighing scale impartially/equitably, but not detrimental to one of the affected parties. No doubt, Paragraph 5 of the Government Order ibid provided succor to the Co-operative Banks, but was not implemented, thus, defeated the purpose of the Act and therefore, would be an act of aberration and repugnancy, keeping in view the provisions of the Section 36A of the Act. Section 36A of the Act reads as under: "36A. Charge on movable or immovable property of borrower by creating Gehan.-Notwithstanding anything contained in any other provisions of this Act charge on movable or immovable property of a borrower in favour of the State C-operative Bank or a District Co-operative Bank or a Primary Agricultural Credit Society or a Primary Housing Society 42a[or an Urban Co-operative Bank or any Primary Co-operative Societies dealing with credit activities] may be created by Gehan in respect of which the provisions of sections 10 to 15 (both inclusive) of the Kerala State Co-operative Agricultural and Rural Development Banks Act, 1984 (20 of 1984), as amended from time to time, shall apply with the modification of substituting the words “State Co-operative Bank or District Co-operative Banks”, “Primary Agricultural Credit Society or Primary Housing Society” 42[“or an Urban Cooperative Bank or any Primary Co-operative Societies dealing with credit activities”], “Society” and “said Bank or Society”, respectively, for the words “Agricultural and Rural Development Bank”, “primary bank”, “bank” and “said banks” occurring in the said sections. Explanation;- For the purposes of this section, Gehan means a special charge on movable or immovable property, in favour of the State Co-operative Bank or a District Co-operative Bank or a Primary Agricultural Credit Society or a Primary Housing Society 42b[or an Urban Co-operative Bank or any Primary Co-operative Societies dealing with credit activities] by a mere declaration in writing by the borrower, for securing the payment of money advanced or to be advanced by way of loan, which will have all the characteristics of a valid mortgage.” 20. The provisions of the Act referred to above, if read cumulatively, in our considered view, the findings of the Single Bench in quashing the circulars and the order of the High Court do not suffer from any illegality or perversity. There are many instances where most of the Co-operative Banks and Societies suffered huge financial loss either on account of the failure of the Government or agencies like Registrar in re-couping/re-compensating in the absence of any financial assistance. The said loss would have also far-reaching consequences. For example, there may have been cases where the Banks and borrowers had been at litigation which may result into incurring of interest over a lapse of time. The interest incurred on account of the such litigation is always set off for the purpose of satisfying such claims either with or without litigation. The judgment of the Single bench accordingly is upheld, Writ Appeals are dismissed.