IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOTTATHIL B.RADHAKRISHNAN FRIDAY, THE 22ND AUGUST 2008 / 31ST SRAVANA 1930 WP(C).No. 19529 of 2008(Y) ---------------------------------------- PETITIONERS: ---------------------- 1. P.PADMANABHAN, S/O GOVINDAN,PADMA NIVAS, URUVACHAL P.O.,MATTANNUR VIA, KANNUR DISTRICT. 2. N.SINGDHA,W/O NAVEEN, VIJAYA NIVAS, NEAR S.K.TEMPLE, KOZHIKODE, REP: BY POWER OF ATTORNEY HOLDER,P.PADMANABHAN, RESIDING PADMA NIVAS, URUVACHAL P.O., MATTANNUR VIA,KANNUR. 3. E.A.NEETHA,W/O..PADMANABHAN, PADMA NIVAS, URUVACHAL P.O., MATTANNUR VIA,KANNUR. 4. A.P.SANDEP, S/O .PADMANABHAN, PADMA NIVAS, URUVACHAL P.O., MATTANNUR VIA,KANNUR DISTRICT, REP; BY POWER OF ATTORNEY HOLDER, P.PADMANABHAN,PADMA NIVAS, URUVACHAL P.O., MATTANNUR VIA,KANNUR. BY ADV. SRI.T.G.RAJENDRAN RESPONDENTS: ------------------------- 1. THALASSERY TALUK REBBER & AGRICULTURAL MARKETING CO-OPERATIVE SOCIETY LTD., IRITTY P.O., KANNUR DISTRICT, REPRESENTED BY ITS SECRETARY. 2. JOINT REGISTRAR (GENERAL) OF CO-OPERATIVE SOCIETIES, KANNUR. BY ADV. SRI.C.P.PEETHAMBARAN - R1 BY SR. GOVERNMENT PLEADER SMT. ANU SIVARAMAN - R2 THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 22/08/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.19529/2008 Y APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF THE FD RECEIPT NO.2030 DTD. 4/05/06. EXT.P1(A): COPY OF THE FD RECEIPT NO.1694 DTD. 13/05/05. EXT.P1(B): COPY OF THE FD RECEIPT NO.2369 DTD. 30/06/07. EXT.P2: COPY OF THE FD RECEIPT NO.1065DTD. 8/04/03. EXT.P3: COPY OF THE FD RECEIPT NO.2031 DTD. 4/05/06. EXT.P3(A): COPY OF THE FD RECEIPT NO.1514 DTD. 12/07/04. EXT.P3(B): COPY OF THE FD RECEIPT NO.1540 DTD. 14/09/04. EXT.P4: COPY OF THE FD RECEIPT NO.1281 DTD. 13/11/03. EXT.P4(A): COPY OF THE FD RECEIPT NO.1693 DTD. 13/05/05. EXT.P4(B): COPY OF THE FD RECEIPT NO.2467 DTD. 15/09/07. EXT.P5: COPY OF THE LETTER SENT BY THE 1ST RESPONDENT TO THE 1ST PETITIONER DTD. 23/05/08. EXT.P5(A): COPY OF THE LETTER SENT BY THE 1ST RESPONDENT. EXT.P5(B): COPY OF THE LETTER SENT BY THE 1ST RESPONDENT TO THE 3RD PETITIONER DTD. 28/05/08. EXT.P5(C): COPY OF THE LETTER SENT BY THE 1ST RESPONDENT TO THE 4TH PETITIONER DTD. 28/05/2007. EXT.P5(D): COPY OF THE LETTER SENT BY THE 1ST RESPONDENT. EXT.P6: COPY OF THE PLAINT FILED BY THE 4TH RESPONDENT IN ARC NO.292/08 BEFORE THE JOINT REGISTRAR. EXT.P7: COPY OF THE COMPLAINT IN CR.NO.361/08 BEFORE THE JUDICIAL 1ST CLASS MAGISTRATE, MATTANNUR. EXT.P8: COPY OF THE PETITION FILED BY THE 3RD PETITIONER DTD. 4/06/2008. EXT.P9: COPY OF THE ORDER OF THE 2ND RESPONDENT DTD. 20/06/08. Kss ..2/- .....2..... WPC.NO.19529/2008 Y RESPONDENT'S EXHIBITS: EXT.R1(A): COPY OF THE JUDGMENT DTD. 3/12/2007 IN WP(C) NO. 24975/2007 OF THIS HON'BLE COURT. EXT.R1(B): OCPY OF THE COMBINED TRADING AND MANUFACTURING ACCOUNT, PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AS ON 31/3/2008 OF THE SOCIETY. EXT.R1(C): COPY OF THE ENCUMBRANCE CERTIFICATE. EXT.R1(D): COPY OF THE RESOLUTION DTD. 2/06/2008. /TRUE COPY/ P.S.TO JUDGE Kss THOTTATHIL B. RADHAKRISHNAN, J. = = = = = = = = = = = = = = = = = = = = = = = = W.P.(C).19529 of 2008-Y & I.A.10801 of 2008 = = = = = = = = = = = = = = = = = = = = = = = = Dated this the 22nd day of August, 2008. JUDGMENT 1.Petitioners allege that they are creditors of the first respondent, a registered rubber and agricultural marketing co-operative society. They filed different arbitration cases before the competent arbitrator seeking awards totalling to around Rs.25 lakhs. However, when an application for an order of attachment before judgment or in the alternative, for security was filed, the learned Arbitrator, by the impugned order, refused to grant such order. Instead, it was ordered that any disposal of the properties of the debtor society will be subject to the result of the arbitration cases. This writ petition is filed challenging that order. 2.In the circumstances noticed above, an interim order was issued at the time of admission ex WP(C)19529/2008 -: 2 :- parte to the effect that the first respondent society shall not transfer any of its assets. 3.The first respondent has filed a counter affidavit placing vivid details of its assets and liabilities and stating that the arbitration cases which form the foundation of this writ petition are nothing but instances of certain collective exercise by some persons to show that the society is in financial doldrums and such an exercise is allegedly taken immediately in connection with the electoral process which was the subject matter of certain writ petitions before this Court that led to Ext.R1(a) judgment. 4.Having heard learned counsel for parties, I am satisfied that the learned arbitrator was not wholly unjustified in passing the impugned order in as much as he had stated the reasons in that order, that a co-operative society cannot encumber its assets without prior permission of the statutory authorities and therefore, it would not WP(C)19529/2008 -: 3 :- be appropriate to assume that a society would dispose of its assets to deprive the fruit of any award that may be passed in the arbitration proceedings pending before him. However, the materials on record show that the property covered by Ext.R1(c) supported by the averments in paragraph 7 of the counter affidavit shows that it is a piece of land having an extent of nearly 2 acres with a factory building thereon. The first respondent has stated in paragraph 7 that the worth of that property will be around Rs.5 crores. If it is assumed that the estimation of the first respondent regarding the value of the property is on the high side, it needs to be noticed that there can be no controversy that the total outstandings that could be claimed by the petitioners, as of now, would be less than Rs.25 lakhs. The financial situation of the bank has generated a requirement for it to consider an item of property and Ext.R1(a) resolution has accordingly been drawn up to be placed for consideration and appropriate decision by the WP(C)19529/2008 -: 4 :- competent authority in that regard. Under the aforesaid circumstances, vacating the interim orders already passed, for which purpose I.A.No.10801/2008 is filed by the first respondent along with its counter affidavit, this writ petition is ordered directing that the first respondent society shall not transfer the property referred to in paragraph 7 of its counter affidavit and covered by Ext.R1(c) encumbrance certificate until the arbitation cases referred to in this case are finally disposed of by the learned arbitrator. It would also be open to the first respondent to liquidate its debts, if any, due to the petitioners by any other process. The learned Arbitrator will make an endeavour to expedite proceedings and dispose of the matters. The writ petition and the I.A. are ordered accordingly. THOTTATHIL B. RADHAKRISHNAN, JUDGE. Sha/260808