Vaniamkulam Panchayath Vanitha Sahakarana Sangham Ltd. v. Kerala Co-operative Tribunal and Others
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- V. Chitambaresh
- Sathish Ninan
- Judgment Date
- 2018-07-19
- Court Decision / Holding
- The writ appeal is dismissed. No costs.
- Final Disposition
- The writ appeal is dismissed. No costs.
Parties to the Case
Appellants / Petitioners
- Shibi K.N.
- Sankaranarayanan
Respondents
- Vaniyamkulam Panchayath Vanitha Sahakarana Sangham Ltd.
- Kerala Co-operative Tribunal
- Arbitrator/Joint Registrar of Co-operative Societies(G)
Legal Representation & Advocates
Counsels for Petitioners
- • P. P. Jacob
Counsels for Respondents
- • C. E. Unnikrishnan
- • K. R. Deepa
Case Synopsis & Summary
This writ appeal arises from a monetary dispute wherein the Vaniyamkulam Panchayath Vanitha Sahakarana Sangham Ltd. sought recovery from Shibi K.N. and Sankaranarayanan for Rs. 56,66,343/- with interest on account of alleged defalcation by the first appellant during audit. The first appellant challenges the audit reports and argues that the matter should be pursued within the department’s hierarchy rather than under Section 69 arbitration. A preliminary objection contended that the second appellant, who executed Ext.P1 indemnity bond, was not an employee, raising maintainability concerns about arbitrability. The Joint Registrar’s Ext.P6 order was upheld by the Writ Court in Ext.P7; that order was challenged in this appeal. The parties contend over whether a monetary dispute between a society and its agent falls under Section 69(1)(c) and whether the arbitration route is appropriate for pursuing recovery against the indemnifier with co-extensive liability. The court confirms that the monetary claim touches the society’s business and that Section 69(1)(h) jurisdiction lies with the Kerala Co-operative Tribunal; it concurs with the Vaniamkulam dictum and overrules Hyrunnisa v. Koothali Service Co-operative Bank Ltd. and P.V. John’s case. Ultimately, the writ appeal is dismissed with no costs, and the arbitration route is not found to be a suitable remedy in this context.
Provisions of Law Cited
Legal Doctrines & Maxims
- Object of Section 69 of the Act is to curtail lengthy procedures
- Indemnifier’s liability is co-extensive with the agent under Section 69; arbitration against co-obligants is contemplated in certain contexts
- Arbitration lies for disputes touching the business of the society under Section 69; the remedy should not be used to circumvent recovery in civil court
Submissions & Arguments
Contentions of Appellants / Petitioners
The appellants contend that the audit reports forming the basis of the monetary claim are flawed, and the matter should be pursued within the department’s hierarchy rather than via arbitration under Section 69. They challenge the maintainability of arbitration against the second appellant, who is alleged to have signed an Ext.P1 indemnity bond. They argue that Ext.P1 seeks to bind the second appellant as co-obligant, and that the arbitration mechanism is not appropriate for a solitary indemnifier’s liability. The preliminary objections and the relationship between the indemnity bond and the alleged defalcation are argued to require scrutiny in civil fora rather than in arbitration, and the scope of Section 69 must be narrowly construed to avoid multiplicity of actions.
Contentions of Respondents
Respondents argue that the dispute is monetary and touches the business of the society, falling within Section 69(1)(c) with the Kerala Co-operative Tribunal’s jurisdiction under Section 69(1)(h). They submit that the indemnifier’s liability is co-extensive with the agent and that the arbitration route can bind the indemnifier as well, given the co-obligant status. They rely on the object of Section 69 to streamline disputes and avoid prolonged litigation, and contend that the relief sought aligns with the Act’s arbitration framework. They also invoke the precedents supporting a broader application of Section 69 to require arbitration rather than civil action in such statutory contexts.
Cited Precedents (4)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Vaniamkulam Panchayath Vanitha Sahakarana Sangham Ltd. v. Kerala Co-operative Tribunal and Others | 2016(2) KHC 741 | Positive | The court concurs with the dictum in this case, using its reasoning to support the conclusion that the monetary dispute falls under Section 69 and that the indemnifier’s liability is to be considered within the limits established by that decision. |
| Hyrunnisa v. Koothali Service Co-operative Bank Ltd. | 2016(3) KLT 255 | Overruled | The present judgment overrules the position taken in Hyrunnisa’s case on the point under discussion. |
| P.V. John’s case | 1991 (1) KLT 7 | Overruled | The judgment overrules the stance held in PV John’s case on the same point. |
| D.M.Co-op. Bank v. Dalichand | AIR 1969 SC 1320 | Positive | Cited to support the proposition that the term ‘touches the business’ can be read to include monetary disputes arising from misappropriation within a cooperative society. |
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