Usha Venu vs The Registrar of Co-Operative Societies and Others

K. Vinod Chandran, J.—The petitioner is the wife and legal heir of a borrower from the fourth respondent Society. The petitioner''s husband having availed of a housing loan on 31.05.2007, at the age of 58 was obliged to satisfy the same within ten years therefrom. During the loan period, on 29.06.2010, the petitioner''s husband expired. The present writ petition is filed against Ext. P4 order of the Assistant Registrar (General), which declined the grant for relief under the Kerala Risk Fund Scheme, 2008. The petitioner''s claim is that by Ext. P2 circular dated 25.06.2010, it was made mandatory and obligatory for all Co-operative Societies to enroll themselves under the Risk Fund Scheme of 2008 and the default on the part of the Bank in enrolling under the Scheme is what is held against the petitioner by Ext. P4 order. Ext. P4 order of the Assistant Registrar shows that the Bank enrolled under the Scheme only in the year 2011 and hence the loan availed of by the petitioner''s husband would not fall within the provisions of the Scheme, especially since the petitioner''s husband had expired before the enrollment of the Bank under the provisions of the Scheme. Hence, the petitioner contends that the application of the petitioner may be directed to be reconsidered.

The respondent Society, however has filed a counter affidavit in which the Scheme itself has been produced as Ext. R4(d). It is to be specifically noticed that the "Kerala Risk Fund Scheme" was introduced in the year 2008 and the petitioner''s husband had availed of the loan prior to that, that is on 31.05.2007. Even going by Exhibit. R4(d) and Ext. P2, the contributions to the Risk Fund has to be made with respect to each of the loans sanctioned by the Society and such contributions are to be deducted from the loan amount disbursed and remitted to the fund. This visualizes a situation of only loans, which were disbursed after the introduction of the Scheme, being covered under the Scheme.

Be that as it may, the entitlement of the petitioner''s husband as per the Scheme is also doubtful. Looking at the Scheme, specifically clause (5), the entitlement is to those persons, whose loan period has not expired when the death occurred and the term of the loan expires before the borrower attains the age of 65 years. There is no dispute that the death of the petitioner''s husband occurred during the loan period itself. However, going by the specific averments made by the respondent Bank, the expiry of the loan falls only after 10 years, i.e. after the borrower has crossed 65 years of age.

One other factor which assumes significance is the specific contention of the petitioner Bank, that the entitlement would also depend upon clause 4(b) wherein it is categorically stated that those loans in which there is default of more than 6 months would be dis-entitled to get the benefit under the Scheme. Thus even if the entitlement as per clause (5) is proved, the legal heirs of a deceased borrower would not be entitled to claim under the Risk Fund Scheme, if there is continuous default of more than six months as on the date of death of the borrower. The purpose for such restrictive clause seems to be the extension of the provisions under the Risk Fund being granted only to bonafide borrowers who had been diligent in remitting the instalments and the default occurred only due to the unexpected death of the borrower. The risk sought to be covered under the Scheme, is the death of the borrower and not the consistent default committed in repayment while the borrower was alive. The respondent Society has specifically pleaded in paragraph 4 of its counter that in the year 2007 and 2008 the borrower had paid only 5 installments and in the year 2009 only 3 installments. After 08.11.2009, the last installment paid in 2009, there has been continuous and consistent default. In the circumstances of the above stated facts being undisputed, it is clear that the loan account of the petitioner''s husband would not be entitled under the Risk Fund Scheme, 2008. In such circumstance, there would be no purpose served in sending the petitioner''s claim to the Assistant Registrar (General) for reconsideration. The writ petition hence is found to be devoid of any merit, and the same is dismissed. No costs.