Nadia Co-operative Agriculture and Rural Development Bank Ltd. vs The Union of India and Others

Biswanath Somadder, J.—Affidavit of service filed today in Court be taken on record. In spite of service none appears on behalf of the respondents, even at the time of second call. After considering the submissions made by the learned advocate for the petitioner and upon perusing the instant application, it appears that the subject matter of challenge in the present writ proceeding is a letter dated 8th November, 2012 addressed to the Chief Executive Officer of the writ petitioner Bank by the respondent No. 4, being the Assistant Director of Postal Services (Accounts). The impugned letter quotes Rule 73 of CCS Pension Rules 1972 and states that Co-operative Societies are not Government Organizations and any dues to them cannot be treated as dues to Government.

The issue in the instant writ application is centered around recovery of dues of the petitioner, which is a Co-operative Bank, from the private respondent No. 6, who is a supervisor in the Department of Posts and employed in one of its offices situated within the State of West Bengal.

The private respondent No. 6 while serving at Krishnagar Head Post Office, had obtained a loan to the tune of Rs. 50,000/- from Nadia Co-operative Agriculture and Rural Development Bank Ltd., being the writ petitioner. At the time of obtaining such loan, he had entered into an agreement for recovery of loan u/s 58 of the West Bengal Co-operative Societies Act, 1983 with the writ petitioner Bank. The agreement clearly states that in case of default, recovery can be made by the Co-operative Bank from the retiring gratuity of the private respondent No. 6.

The provisions of West Bengal Co-operative Societies Act, 1983 have been repealed and replaced by the West Bengal Co-operative Societies Act, 2006. Section 59 of the West Bengal Co-operative Societies Act, 2006 reads as follows:--

Deduction of dues to Co-operative Societies from members and sureties. -- (1) A member of a Co-operative society may execute an agreement in favour of the Co-operative society providing that his employer or the drawing and disbursing officer where applicable shall be competent to deduct from the salaries or wages and retiring gratuity or death gratuity payable to him by such employer or the drawing and disbursing officer where applicable such amount as may be specified in the agreement and to pay the amount to the Co-operative society in satisfaction of any debt or other demands of the Co-operative society against the member. A copy of such agreement shall be furnished to the employer or the drawing and disbursing officer where applicable.

(2) Upon the execution of the agreement under sub-section (1), the employer or the drawing and disbursing officer where applicable shall on the requisition of the Co-operative society in writing and for so long as the Co-operative society does not intimate that the debt or demand has been fully paid, make the deduction in accordance with the agreement and pay the amount to the Co-operative society within fifteen days from the date of such deduction as if it were part of the wages payable by him under the Payment of Wages Act, 1936 (4 of 1936) on the date on which he makes the payment.

(3) If the employer or the drawing and disbursing officer fails to make the deduction under sub-section (2) or defaults in making payment to the Co-operative society, he shall be liable to make the payment to the Co-operative society together with interest at twelve per cent per annum and the entire amount shall be recoverable from the employer or drawing and disbursing officer by the Co-operative society as an arrear of land revenue and such amount shall rank in priority in respect of the liability of the employer or drawing and disbursing officer as wages in arrear.

It is clear from a plain reading of the provisions of law, quoted above, that a Cooperative Society is entitled to recover any loan amount outstanding from its member from the salary or wages or retiring gratuity or death gratuity payable to that member by his employer, provided the member enters into an agreement to that effect with the concerned Co-operative Society.

In the instant case, the private respondent No. 6 had entered into such an agreement with the writ petitioner Co-operative Bank. The impugned letter dated 8th November, 2012 does not at all take into consideration the specific provisions of Section 59 of the West Bengal Co-operative Societies Act, 2006, which would be squarely attracted in the facts and circumstances of the instant case, since the private respondent No. 6 had obtained a loan from a Co-operative Bank operating in the State of West Bengal, while in employment within the State of West Bengal. Even if the private respondent No. 6 is a Central Government employee, his place of employment being within the State of West Bengal and having availed a loan as a member from a Co-operative Bank operating in the State of West Bengal, the recovery provisions as envisaged u/s 59 of the West Bengal Co-operative Societies Act, 2006, cannot be fettered by the provision of Rule 73 of the CCS Pension Rules, 1972, as quoted in the impugned letter dated 8th November, 2012 and are very much applicable for the purpose of recovering the outstanding loan amount from the private respondent No. 6.

In such circumstances, there shall be a stay of the impugned letter dated 8th November, 2012 issued by the Assistant Director of Postal Services (Accounts) till disposal of the instant writ petition.

The Assistant Director of Postal Services (Accounts) being the respondent No. 4 is directed to take immediate steps to recover the outstanding loan amount of the writ petitioner in accordance with the provisions of Section 59 of the West Bengal Co-operative Societies Act, 2006, from the private respondent No. 6 and report compliance. Let this matter appear for further consideration under the same heading a fortnight hence.