ULLASA.R v. Kuruvilassery Service Co-operative Bank Ltd and Others

## **`IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V TUESDAY, THE 23[RD] DAY OF JANUARY 2024 / 3RD MAGHA, 1945 WP(C) NO. 23555 OF 2023`** ## **`PETITIONER:`** ``` ULLASA.R AGED51YEARS S/ORAVEENDRAN,AGED51YEARS,ATHIYAARATHHOUSE, - KURUVILASSERY,CHALAKUDI,THRISSUR,PIN680732. BYADVS. DENIZENKOMATH MEREENA.J.JOSEPH ANANTHUARAVIND MARIYAANTONY ``` ## **`RESPONDENTS:`** ``` 1KURUVILASSERYSERVICECO-OPERATIVEBANKLTD.,NO.4185 (NOWMALASERVICECO-OPERATIVEBANKLTDNO.4185) REPRESENTEDBYITSSECRETARY,VALIYAPARAMBU,THRISSUR, - PIN680732. 2ARBITRATOR/SPECIALSALESOFFICER ASSISTANTREGISTRAR(GENERAL),OFFICEOFASSISTANT - REGISTRAR(GENERAL),CHALAKUDY,THRISSUR,PIN680307. 3REGISTRAROFCO-OPERATIVESOCIETIES(GENERAL) OFFICEOFREGISTRAROFCO-OPERATIVESOCIETIES(GENERAL), JAWAHARSAHAKARANABHAVAN,DPIJUNCTION,THYCAUDPOST, - THIRUVANANTHAPURAM,PIN695014. BYADVS. NishaGeorge ANSHINK.K(K/1249/2021) GEORGEPOONTHOTTAM(SR.)(K/000570/1979) ``` ``` THISWRITPETITION(CIVIL)HAVINGCOMEUPFORADMISSIONON 23.01.2024,THECOURTONTHESAMEDAYDELIVEREDTHEFOLLOWING: ``` ``` WP(C)NO.23555OF2023 ``` ``` 2 ``` ## **JUDGMENT** The petitioner is the defendant in ARC No.615/2020 on the files of the 2nd respondent. The aforesaid case was instituted by the 1st respondent seeking to realize a sum of Rs.17.91 lakhs availed by the petitioner by way of a medium-term loan. The mother of the petitioner, a certain Geetha, was the guarantor in the loan application. She has also signed on the Gehan, the loan bond, the sanction order, etc. However, in the plaint filed before the Arbitrator, she was not arrayed as a party. 2. The Arbitrator suo motu impleaded Geetha as the 2nd defendant in the proceeding. Later, finding that the Arbitrator was bereft of powers to implead the guarantor, recalled his order. Thereafter, the Bank filed Ext. P7 application to implead Geetha as an additional defendant. The said application was allowed, rejecting the objection raised by the petitioner. 3. The aforesaid order is under challenge in this petition. 4. Smt. Mereena, the learned counsel, submitted that the arbitrator is bereft of powers to suo motu implead any person as additional ``` WP(C)NO.23555OF2023 ``` ``` 3 ``` defendant in the proceedings. It is stated that prior to impleadment, no notice was issued to the proposed defendant. It was when the maintainability of the petition was challenged by the sole defendant that the Bank proceeded to file an application seeking impleadment. Finally, it is submitted that the application for impleadment is not preceded by a resolution issued by the Bank. 5. The learned Standing Counsel appearing for the respondent submitted that it was in the year 2015 that the loan was availed by the petitioner herein. The loan documents produced before the Arbitrator disclose that the proposed 2nd defendant was the guarantor, and she had signed all the relevant documents on the strength of which the loan was disbursed. It is submitted that he has no quarrel with the fact that the Arbitrator could not have suo motu impleaded the proposed 2nd defendant. However, when this erroneous exercise of jurisdiction was brought to the notice of the Arbitrator, he had recalled the order. Later, the Bank filed an application for impleadment, which was allowed. It is submitted that there is no legal impediment in filing an application for impleadment, nor is there any bar on the Arbitrator in allowing the application. 6. I have considered the submissions advanced and have gone through the records. ``` WP(C)NO.23555OF2023 ``` ``` 4 ``` 7. It is not disputed that a loan was availed by the petitioner from the society, and default was committed. It is also not in dispute that the mother of the petitioner was the guarantor. When the plaint was filed before the Arbitrator by the Bank, the mother of the petitioner was not arrayed as a defendant by oversight. The Arbitrator, noticing the above fact, and without an application from the plaintiff, proceeded to suo motu implead Geetha as an additional defendant. When the Arbitrator noticed that he did not have the power to add a defendant suo motu, he recalled his earlier order. The Bank, however, filed an application to implead the guarantor as 2nd defendant, and the same was allowed. 8. The first contention is that the Arbitrator is bereft of jurisdiction to suo motu implead the guarantor as 2nd defendant. The said question need not be probed into at this stage as the arbitrator, noticing that the said authority has no such powers, has recalled the order passed by him. 9. The next question is whether there is any legal impediment in the Arbitrator allowing the application for impleading the guarantor as an additional defendant in the proceedings. 10. Section 98 of the Kerala Cooperative Society Act says that the Tribunal, Registrar, etc., shall have certain powers of the Civil Court. It says that while exercising the functions conferred on it or him by or under this ``` WP(C)NO.23555OF2023 ``` ``` 5 ``` Act, the Tribunal, the Registrar, the Arbitrator or any other person deciding a dispute and the liquidator of a society shall have all the powers of a Civil Court while trying a suit under the Code of Civil Procedure, 1908 (Central Act 5 of 1908), in respect of the following matters, namely: (a) summoning and enforcing the attendance of any person and examining him on oath; (b) requiring the discovery and production of any document; (c) receiving evidence on affidavits; and (d) issuing commissions for examination of witnesses. 11. In **Jacob Varkey v. Idukki District Co-operative Bank Ltd[1] .** , a contention was taken that the jurisdiction of the Arbitrator is confined only to those powers specified in Section 98 of the ‘Act.’ While rejecting the said contention, the Division Bench went on to hold that the very purpose of dispute redressal contemplated under the ‘Act’ would be defeated if such a narrow interpretation is given to the Section. In the case before the Division Bench, the Arbitrator proceeded to grant permission to the bank to withdraw the case with the liberty to file a fresh case after impleading the proper parties. The Division Bench went on to hold that under Section 100 of the Act, no civil or revenue court shall have any jurisdiction in respect of any matter for which provision has been made under the Act. It was held that the bank is entitled to take recourse 1 [2001 (2) KLT 77] ``` WP(C)NO.23555OF2023 ``` ``` 6 ``` to only that system, and such a mechanism of dispute redressal cannot be defeated by a narrow interpretation regarding the jurisdiction conferred on the Arbitrator. It would be apposite to refer to paragraph 10 of the judgment. 10. S.98 of the Act provides as already seen that the Tribunal, Registrar, Arbitrator or the Liquidator has certain powers of a Civil Court enumerated under sub-s.(a) to (d) while trying a suit under the Code of Civil Procedure. The contention is that only in respect of those enumerated matters the power extends and not beyond. We are unable to accept the above contention. The very purpose of the disputes redressal contemplated under the Act would be defeated if such a narrow interpretation is given to the Section. It is to be noted that under S.100 of the Act "no civil or revenue court shall have any jurisdiction in respect of any matter for which provision is made in this Act". As can be seen from the instant case there is provision under the Act so far as the Bank is concerned for realising the money already advanced to the first appellant and others. The Bank is entitled to take recourse to only that system and that such a mechanism of dispute redressal cannot be defeated by a narrow interpretation regarding the jurisdiction conferred on the system for redressal of the dispute. After all as held by the Apex Court in the decision reported in Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha, AIR 1980 SC 1896, "a Tribunal is merely a seat of justice or a judicial body with jurisdiction to render justice". 12. In **Thankam R. Pillai v. Arbitrator**[2] , this Court had occasion > 2 1996 (1) KLT 225 ``` WP(C)NO.23555OF2023 ``` ``` 7 ``` to consider the contention regarding the jurisdiction of the Arbitrator being limited to the specified powers under S.98 of the Act. In the said case, the question was with regard to the impleadment of the legal representatives of the deceased petitioner in an arbitration case. It was contended that since the impleadment of the legal heirs was not a power specifically conferred, the Arbitrator was incompetent to do so. Relying on the earlier precedents, the contention was repelled, holding that there is no distinction between an Arbitrator functioning under the Act and the Registrar, both being adjudicatory bodies coming within the meaning of the term Tribunal. It was held as follows in paragraph 14 of the judgment. "14. In the light of the above legal position on the point settled by the Supreme Court after resolving the conflict of views regarding the power of the Tribunals / Labour Court in the matter of allowing legal representatives to continue the proceedings, the only question to be considered further is whether the Arbitrator functioning under the Act is an adjudicatory body coming within the meaning of the term "Tribunal." Justice V. R. Krishna Iyer in Gujarat Steel Tubes Ltd. etc. v. Gujarat Steel Tubes Mazdoor Sabha and Others (AIR 1980 SC 1896) has unequivocally held that a "Tribunal in its wider connotation, embraced every adjudicatory organ including an Arbitrator." In Para 86, it was further explained thus: "Then what is the natural meaning of the expression "Tribunal"? A Tribunal literally means a seat of justice. May be, justice is dispensed by a quasi judicial body, an arbitrator, a commission, a court or other adjudicatory organ created by the State. All these are tribunals and naturally, the import of the word embraces an ``` WP(C)NO.23555OF2023 ``` ``` 8 ``` arbitration tribunal." In his own inimitable style, the learned Judge went on to observe that "a caste distinction between Court, Tribunals, Arbitrators, and others is functionally fallacious." In the light of the above exposition of the import of the word 'Tribunal' by the Supreme Court, we have no hesitation in holding that the Arbitrator functioning under the Act is a quasi judicial adjudicatory body falling within the term "Tribunal" and as such, the principles laid down by the Supreme Court in AIR 1994 SC 1176 (Rameshwar Manjhi v. Management of Sangramgarh Colliery) are equally applicable to a proceeding pending before the Arbitrator in the matter of impleading the legal heirs of the deceased party to such proceedings". ## 13. In **Ismail Kunju v. Phasila Beevi[3]** , the question before this Court was whether, in the absence of an enumerated power of the Rent Controller under Section 23 of the Kerala Buildings (Lease and Rent Control) Act, 1965, an application for joint trial could be allowed. Section 23 of the Act did not confer powers on the Rent Control Court to allow an application for a joint trial, though certain other powers vested in the Civil Court under the Code of Civil Procedure were made applicable, as in the case of Section 98 of the Cooperative Societies Act. While repelling the contentions, it was held that a Tribunal should be facilitated to do all that a court could do in similar situations, and much more than that. Greater speed and total liberation from the tentacles of technicalities give a better look and greater efficiency for effectively manned Tribunals. If there are no statutory prohibitions, the Tribunal should be in a position to ordain its > 3 [1991(1) KLT 861] ``` WP(C)NO.23555OF2023 ``` ``` 9 ``` affairs and modulate its procedures in such a manner as to best subserve the interest of the public, and in particular, the litigant public. However, a caution was sounded that the authority concerned shall be circumspect in the invocation of the power and in the issue of an order invoking such jurisdiction. 14. In **Velunni v. Vellakutty[4]** , a Division Bench of this Court had occasion to hold that though the Claims Tribunal is not a court, it performs functions similar to that of the court. It was held that the Tribunal is free to follow any procedure that it considers expedient in the interest of justice so long as the procedure is not inconsistent with the rules of natural justice and is not contrary to the provisions of the Act or the Rules. It was further held that in order to do justice for which it has been constituted, the Tribunal would have the power to apply the principles underlying the provisions of the Code of Civil Procedure, 1908, even though not rendered specifically applicable. Having considered the contentions raised by the petitioner in the light of the precedents above, I am of the view that the order passed by the Arbitrator impleading the mother of the petitioner as 2nd defendant is in order and does not warrant any interference. Furthermore, it cannot be said that any prejudice has been caused to the petitioner by allowing the > 4 [1989 (2) KLT 227] ``` WP(C)NO.23555OF2023 ``` ``` 10 ``` application. This writ petition is dismissed. Sd/- **RAJA VIJAYARAGHAVAN V JUDGE** ``` Sru ``` ``` WP(C)NO.23555OF2023 ``` ``` 11 ``` ## **`APPENDIX OF WP(C) 23555/2023`** |`PETITIONER EXHIBITS`|| |---|---| |`Exhibit-P1`|`TRUE PHOTOCOPY OF THE PLAINT ISSUED TO THE`| ||`PETITIONER FROM THE OFFICE OF THE 1ST`| ||`RESPONDENT CO-OPERATIVE BANK DATED 30.03.2020`| ||`VIDE REFERENCE NUMBER ARC 615/2020.`| |`Exhibit-P2`|`TRUE PHOTOCOPY OF THE SECOND PLAINT COPY ISSUED`| ||`TO THE PETITIONER FROM THE OFFICE OF THE 1ST`| ||`RESPONDENT CO-OPERATIVE BANK DATED 30.03.2020`| ||`VIDE REFERENCE NUMBER ARC 615/2020.`| |`Exhibit-P3`|`TRUE PHOTOCOPY OF THE DIRECTOR BOARD DECISION`| ||`OF THE 1ST RESPONDENT CO-OPERATIVE BANK, VIDE`| ||`RESOLUTION NUMBER XIX DATED, 11.03.2020.`| |`Exhibit-P4`|`TRUE PHOTOCOPY OF THE WRITTEN STATEMENT FILED`| ||`BY THE PETITIONER IN ARC 615/2020 DATED`| ||`25.01.2022.`| |`Exhibit-P5`|`TRUE PHOTOCOPY OF THE WRITTEN STATEMENT FILED`| ||`BY THE PETITIONER IN ARC 615/2020 DATED`| ||`05.06.2023.`| |`Exhibit-P6`|`TRUE PHOTOCOPY OF THE PETITION CHALLENGING`| ||`MAINTAINABILITY OF THE PROCEEDINGS IN ARC`| ||`615/2020 FILED BY THIS PETITIONER'S MOTHER,`| ||`DATED 09.06.2023.`| |`Exhibit-P7`|`TRUE PHOTOCOPY OF THE IMPLEADING PETITION FILED`| ||`BY THE 1ST RESPONDENT IN ARC 615/2020 DATED`| ||`16.06.2023.`| |`Exhibit-P-7(a)`|`TRUE PHOTOCOPY OF THE PETITION FILED BY THE 1ST`| ||`RESPONDENT TO AMEND THE PLAINT, IN ARC NO.`| ||`615/2020.`| ``` WP(C)NO.23555OF2023 ``` ``` 12 ``` |`Exhibit-P8`|`TRUE PHOTOCOPY OF THE COPY OF PROCEEDINGS IN`| |---|---| ||`ARC NO. 615/2020 OF THE 2ND RESPONDENT.`| |`Exhibit-P9`|`TRUE PHOTOCOPY OF THE OBJECTION FILED BY THE`| ||`PETITIONER TO EXHIBIT P-7 IN ARC 615/2020 DATED`| ||`23.06.2023.`| |`Exhibit-P-9(a)`|`TRUE PHOTOCOPY OF THE OBJECTION FILED BY THE`| ||`PETITIONER TO EXHIBIT P-7(A) IN ARC 615/2020`| ||`DATED 27.06.2023.`|