Meenachil East Urban Co-Operative Bank Ltd v. P.J. Jose and Co-Operative Arbitration Court, Thiruvananthapuram & Joint Registrar of Co-operative Societies (General), Collectorate, Kottayam-01

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT :** **THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN** **WEDNESDAY, THE 12TH JANUARY 2011 / 22ND POUSHA 1932** ## **WP(C).No. 19 of 2011(B)** **------------------** ## **PETITIONER(S):** **-----------------------** **1. MEENACHIL EAST URBAN CO-OPERATIVE BANK LTD NO.4266, REPRESENTED BY ITS GENERAL MANAGER-IN -CHARGE, POONJAR THEKKEKARA P.O., MEENACHIL TALUK, KOTTAYAM DISTRICT-686582.** **2. CHAIRMAN,** **MEENACHIL EAST URBAN CO-OPERATIVE BANK LTD NO.4266, POONJAR THEKKEKARA P.O., MEENACHIL TALUK, KOTTAYAM DISTRICT-686 582.** **BY ADV. SRI.O.V.RADHAKRISHNAN, SENIOR ADVOCATE SRI.SHAJI THOMAS PORKKATTIL SRI.BINU PAUL SRI.T.V.VINU** **RESPONDENT(S):** **-------------------------** **1. P.J.JOSE, PURAYIDATHIL HOUSE, POONJAR P.O., POONJAR NADUBHAGAM VILLAGE, MEENACHIL TALUK, KOTTAYAM DISTRICT-686581.** **2. CO-OPERATIVE ARBITRATION COURT, VANCHIPOOR FUND ROAD, PAZHAVANANGADI, FORT P.O., THIRUVANANTHAPURAM-23.** **3. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), COLLECTORATE, KOTTAYAM-01.** **R1 BY ADVS. SRI.P.RAVINDRAN, SENIOR ADVOCATE SMT.APARNA RAJAN** **SR. P. DEEPAK** **R2 & R3 BY GOVT. PLEADER SRI. P.M. MANOJ** **THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 12/01/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **Mn** ## **P.N.RAVINDRAN** , **J. --------------------------W.P.(C) No. 19 OF 2011 -------------------------Dated this the 12[th] day of January, 2011** ## **J U D G M E N T** Ext.P9 interim order passed by the Co-operative Arbitration Court, Thiruvananthapuram on an application filed by the first respondent is under challenge in this writ petition. The brief facts of the case are as follows:- 2. The first respondent was the Branch Manager/Chief Accountant of the Erattupetta branch of the first petitioner bank. Pursuant to an inspection conducted by the Joint Manager of the bank on 22.3.2008 which resulted in Ext.R1(c) report, the first respondent and Sri. S.Dilip Kumar, Cashier of the said branch were placed under suspension pending enquiry. Ext.P1 proceedings dated 22.3.2008 is the order passed by the Chairman of the bank placing the first respondent under suspension. Disciplinary action was initiated against the first respondent as well as the Cashier. Ext.P2 is the memo of charges dated 19.5.2008 issued to the first respondent. An enquiry into the charges levelled against the first respondent in Ext.P2 memo was held by an enquiry officer. In Ext.P3 enquiry report dated 24.2.2009, the enquiry officer found the first respondent guilty of all the charges levelled against him. The WPC No.19/2011 2 sub-committee of the bank thereupon issued notice to the first respondent, considered his objections and decided to dismiss him from service with effect from 16.3.2009. Ext.P4 communication was thereupon issued on 18.3.2009 by the convenor of the subcommittee. 3. The first respondent challenged the order dismissing him from service in appeal before the Board of Directors of the bank. The Board that met on 15.6.2009 considered the appeal and resolved to reject it by Ext.P5 resolution. The decision was communicated to the first respondent by Ext.P6 letter dated 24.6.2009. The first respondent thereupon filed ARC No.99 of 2009 in the Co-operative Arbitration Court, Thiruvananthapuram on 10.7.2009. Though in that appeal he had filed an application for interim relief, the application was not numbered for sometime. Later, it was numbered as I.A. No.159 of 2010. The first respondent later filed W.P.(C) No.33445 of 2010 in this Court wherein he prayed for a direction to the Cooperative Arbitration Court to pass expeditious orders on the interlocutory application and in the arbitration case. By Ext.P8 judgment delivered on 15.11.2010, more than one year after the arbitration case was filed, a learned single Judge of this Court WPC No.19/2011 3 directed the Co-operative Arbitration Court to pass orders on the interlocutory application within 10 days from the date of receipt of a copy of the judgment and in the arbitration case within a period of three months thereafter. The Co-operative Arbitration Court thereupon considered the interlocutory application with notice to the first respondent herein and passed Ext.P9 order staying the operation of Ext.P4 order dismissing the first respondent from service till the disposal of the arbitration case. Ext.P9 is under challenge in this writ petition. 4. The petitioners contend that though the Co-operative Arbitration Court has the power to pass interim orders, it erred in passing an order staying the order of dismissal passed on 18.3.2009, which had taken effect that day and was affirmed in appeal by the Board of Directors on 15.6.2009. Relying on the decision of the Apex Court in **State of Rajasthan & Ors. v. Om Prakash Dadhich & Anr.** (2009 (16) SCC 242) it is contended that the Arbitration Court should not have passed an interim order which has the effect of reinstating the first respondent in service at the preliminary stage and that the Arbitration Court could have granted reinstatement in service only in the main case and not by way of interim relief. The petitioners also WPC No.19/2011 4 contended that Ext.P4 order of dismissal has merged with Ext.P5 appeal order of the Board and as the appellate order has not been challenged in the arbitration case, the Arbitration Court erred in passing an order staying the operation of Ext.P4, which has no independent existence after Ext.P5 appellate order. 5. I heard Sri. O.V.Radhakrishnan, learned Senior Advocate appearing for the petitioners, Sri.Sri.P.Ravindran, learned Senior Advocate appearing for the first respondent and Sri.P.M.Manoj, learned Government Pleader appearing for respondents 2 and 3. the learned Senior Advocate appearing for the first respondent contended with reference to the findings in Ext.R1(c) report submitted by the General Manager of the bank, who was examined as MW1 in the enquiry, that the findings and observations in paragraph 35 and 36 of Ext.P3 enquiry report are perverse. The learned Senior Advocate contended that as the Cashier (Sri.S.Dilip Kumar) had admitted that he had misappropriated the money, the finding of the enquiry officer that the statements made by MW1 and MW3 that the first respondent would not have purposefully misappropriated the funds cannot be relied on unless the Cashier admits the liability, is a perverse finding. The learned Senior WPC No.19/2011 5 Advocate also contended that the very enquiry held against the first respondent is bad for the reason that even before the written statement of defence was submitted to Ext.P2 memo of charges and it was considered by the disciplinary authority, the disciplinary authority had delegated its power to the enquiry authority. The learned counsel also contend that further proceedings pursuant to the submission of the enquiry report were held without affording the first respondent an opportunity to object to the findings in the enquiry and therefore, the Co-operative Arbitration Court was perfectly right in passing an interim order staying the operation of the order dismissing the first respondent from service. 6. I have considered the submissions made at the Bar by the learned counsel on either side. It is not in dispute that Ext.P4 order dismissing the first respondent from service took effect on 18.3.2009 when a copy thereof was served on him. Ext.P4 order was upheld by the Managing Committee of the first petitioner bank by Ext.P5 order dated 15.6.2009. Though the first respondent moved the Cooperative Arbitration Court by filing ARC No.99 of 2009 on 10.7.2009, he did not move for interim reliefs immediately thereafter. He did not also move this Court seeking expeditious disposal of the arbitration WPC No.19/2011 6 case or the application for interim relief filed by him in the arbitration case. He moved this Court seeking such a direction only in November, 2010, more than one year and three months after the arbitration case was filed. It was thereafter that the Arbitration Court passed Ext.P9 order on 4.12.2010 staying the operation of Ext.P4 order dismissing the first respondent from service. In my opinion, in view of the fact that more than one year and three months had passed after the dismissal of the first respondent, by the time the application for interim relief was considered, the Arbitration Court ought to have declined to stay the operation of Ext.P4 order. Ex.P9 order passed by the Arbitration Court staying the operation of Ext.P4 order, more than one year and three months after it was passed and it had taken effect, cannot in my opinion be sustained. The Arbitration Court could not have by an interim order granted a relief which could have been granted only in the main case. By Ext.P8 judgment this Court had also directed that the arbitration case itself should be disposed of within three months from the date on which orders are passed on the application for interim relief. The said period of three months will expire on 4.3.2011. Therefore, the Arbitration Court will have to necessarily hear and dispose of the WPC No.19/2011 7 arbitration case by that date. In such circumstances, I allow the writ petition, set aside Ext.P9 and direct the Co-operative Arbitration Court to dispose of the arbitration case, untrammelled by the observations in this judgment and in Ext.P9 order, within the time limit fixed by this Court in Ext.P8 judgment. **P.N.RAVINDRAN, (JUDGE)** vps WPC No.19/2011 8 WPC No.19/2011 9