IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN MONDAY, THE 29TH AUGUST 2011 / 7TH BHADRA 1933 WP(C).No. 23188 of 2011(W) ----------------------- PETITIONER(S): ----------------------- 1. THE PRESIDENT, NADUVANNUR REGIONAL CO-OPERATIVE BANK LTD., NO.F.1269. 2. THE SECRETARY, NADUVANNUR REGIONAL CO-OPERATIVE BANK LTD., NO.F.1269. BY ADVS. SRI.SANTHARAM.P SMT.REKHA ARAVIND RESPONDENT(S): ------------------------- 1. THE REGISTRAR, OFFICE OF THE REGISTRAR OF CO-OPERATIVE SOCIETIES, STATUE, THIRUVANANTHAPURAM-1. 2. JOINT REGISTRAR OF CO-OPERATIVE SOCIETIES (GENERAL), SAHAKARANA BHAVAN, PUTHIYARA P.O., KOZHIKODE - 4. 3. JUNIOR CO-OPERATIVE INSPECTOR/ SPECIAL SALE OFFICER, KOZHIKODE DISTRICT CO-OP. BANK, KOZHIKODE-673 002. 4. THE GENERAL MANAGER, KOZHIKODE DISTRICT CO-OPERATIVE BANK LTD., NO.F.1635, PIN-673 002. R1 TO R3 BY GOVT. PLEADER SRI. HANIL KUMAR R4 BY ADV. SRI. P.V. K. KUNHIKRISHNAN THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 29/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- APPENDIX PETITIONER'S EXHIBITS: EXT.P1 : COPY OF THE DISPUTE FILED BEFORE THE 2ND RESPONDENT. EXT.P2 : COPY OF THE CIRCULAR NO. 30/07 DATED 03.05.07. EXT.P3 : COPY OF THE CIRCULAR NO. 55/2000 DATED 30.12.2000 ISSUED BY THE 1ST RESPONDENT. EXT.P4 : COPY OF THE CIRCULAR NO. 29/01 DATED 24.07.01. EXT.P5 : COPY OF THE AWARD DATED 28.09.07 PASSED BY THE 3RD RESPONDENT. EXT.P6 : COPY OF THE JUDGMENT DATED 04.04.08. EXT.P7 : COPY OF THE MEMORANDUM OF APPEAL FILED BEFORE THE TRIBUNAL. EXT.P8 : COPY OF THE JUDGMENT DATED 29.10.2010, BY THE KERALA CO- OPERATIVE TRIBUNAL. EXT.P9 : COPY OF THE COVER RECEIVED FROM THE OFFICE OF THE KERALA STATE CO-OPERATIVE TRIBUNAL. RESPONDENT'S EXHIBITS - NIL //TRUE COPY// P.A. TO JUDGE Mn P.N.RAVINDRAN, J. --------------------------- W.P.(C) No. 23188 OF 2011 -------------------------- Dated this the 29th day of August, 2011 J U D G M E N T Ext.P5 award passed by the Arbitrator appointed by the Joint Registrar of Co-operative Societies, Kozhikode on 28.9.2007 and Ext.P8 judgment of the Kerala Co-operative Tribunal dated 29.10.2010 dismissing the appeal filed by the petitioners from Ext.P5 award are under challenge in this writ petition. The brief facts of the case are as follows: - 2. The fourth respondent herein filed a petition under section 69 of the Kerala Co-operative Societies Act, 1969 (hereinafter referred to as ‘the Act’ for short) for a decree enabling him to recover the sum of Rs.47,95,449.63 from the petitioners herein who were joined as respondents in the said petition. The petitioners resisted the claim contending inter alia that rate of interest charged on short term gold loan is exorbitant, that they had made sincere attempts to have the dispute settled out of court and that the Arbitrator has no jurisdiction to entertain the dispute. In the alternative, it was contended that they should be given the benefit of one time WPC No.23188/2011 2 settlement scheme. Over ruling the said contention, the Arbitrator passed Ext.P5 award and held the petitioners liable to pay the sum of Rs.47,95,449.63 with future interest with effect from 1.4.2006. Aggrieved thereby, the petitioners filed Ext.P7 appeal before the Kerala Co-operative Tribunal. In the said appeal also a contention was raised to the effect that the Junior Inspector of Co-operative societies, who passed the award, was not competent to entertain the dispute or to dispose it of for the reason that he had jurisdiction to entertain monetary disputes up to Rs.5,00,000/- only. By Ext.P8 judgment delivered on 29.10.2010 the Tribunal dismissed the appeal but modified the award by reducing the rate of interest directed to be paid and also permitted the petitioners to pay the amount due in monthly instalments of Rs.2,50,000/-. Hence this writ petition challenging Ext.P5 award and Ext.P8 judgment. 2. Apart from challenging the findings on merits, the learned counsel appearing for the petitioners also canvassed the correctness of the finding in the award and judgment of the Tribunal regarding the jurisdiction of the Junior Inspector of Co- WPC No.23188/2011 3 operative Societies to entertain the dispute and to dispose it of. Relying on Circular No.55 of 2000 dated 30.12.2000 issued by the Registrar of Co-operative Societies (Ext.P3) as modified by Ext.P4 Circular No.20 of 2001 dated 24.7.2001, it is contended that monetary disputes beyond Rs.10,00,000/- in respect of co- operative institutions having one Taluk as its area of operation can be entertained and disposed of only by the Joint Registrar of Co-operative Societies and therefore subordinate officers like the Junior Inspector are not competent to entertain such disputes. The issue raised by the petitioners is no longer res integra and is covered against them by a Division Bench judgment of this Court in Chandran v. Gopalakrishnan (1998 (1) KLT 539). In that case relying on a similar circular No.42 of 1993 dated 6.7.1993 it was contended that awards in any monetary disputes can be passed only by officers named therein. Repelling the said contention, the Division Bench held that the circular only nominates the officers before whom the arbitration case can be filed and does not authorise the officers to entertain the dispute or to dispose it of. All that Circular No.55 of 2000 provides is WPC No.23188/2011 4 that monetary disputes in respect of co-operative institutions involving Rs.10,00,000/- and above shall be filed before the Joint Registrar of Co-operative Societies if the co-operative institution has an area of operation in a Taluk. The circular states that the arbitration cases in monetary disputes are filed before the Assistant Registrar of Co-operative Societies and Joint Registrar of Co-operative Societies and that consequent on the liberalisation of loan policies business of co-operative societies has increased abundantly thereby leading to an increase in the number of arbitration cases. It is stated that this has caused administrative difficulty. That apart as noticed by the Division Bench in Chandran v. Gopalakrishnan (supra) the circular only designates the authority before whom disputes are to be filed and not the authority who are to dispose it of. That apart in the instant case, it is evident from Ext.P5 award itself that arbitration case was filed before the Joint Registrar of C-operative societies. In page 2 of Ext.P5 award it is stated that when the respondents in the arbitration case failed to repay the loan, the plaintiff bank filed a petition before the Court of the Joint Registrar of Co- WPC No.23188/2011 5 operative Societies (General) Kozhikode and it was transferred to the Arbitrator (Junior Co-operative Inspector) for disposal. Therefore from the award itself it can be seen that it was properly filed. That apart section 70 of the Act empowers the Joint Registrar of Co-operative Societies to either elect to decide the dispute himself or transfer it for disposal to any person who has been invested by the Government with powers in that behalf or refer it for disposal to an Arbitrator appointed by the Registrar. The only restriction on the power of the Registrar in acting in terms of sub section (4) of section 70 is that when he does not elect to decide a dispute himself, he cannot transfer it or refer it to any person equal or superior to him in rank. In the instant case, the Joint Registrar of Co-operative Societies before whom arbitration case was filed referred it for disposal to the Junior Inspector of Co-operative Societies who was appointed by him as Arbitrator for disposal of the case. The institution of the arbitration case and its disposal was therefore perfectly in order. I accordingly over rule the contention of the petitioners that the Arbitrator who passed Ext.P5 award did not have the WPC No.23188/2011 6 jurisdiction to entertain claims above Rs.5,00,000/-. On the merits also I am of the opinion that the petitioners are not entitled to succeed. Apart from contending that the rate of interest claimed is exorbitant and that as the defendant bank is running at a loss they should have been given the benefit of the one time settlement scheme, no other contention was raised either before the Arbitrator or before the Kerala Co-operative Tribunal. In other words, the petitioners do not dispute their liability or the fact that they had availed loan. The Kerala Co- operative Tribunal has taken note of the request made by the petitioners to reduce the liability to pay interest and limited it to 12% per annum They were also permitted to discharge the liability in monthly instalments of Rs.2,50,000/- I therefore find no grounds to entertain the writ petition. The writ petition fails and is accordingly dismissed. P.N.RAVINDRAN, (JUDGE) vps