IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 17TH DECEMBER 2009 / 26TH AGRAHAYANA 1931 WP(C).No. 20597 of 2009(T) ----------------------------------------- PETITIONER(S): ------------------------- THE PARAPPANANGADI CO-OPERATIVE SERVICE BANK LTD.NO.F.2302,PARAPPANANGADI, MALAPPURAM DISTIRCT,REPRESENTED BY ITS SECRETARY, P.HAMZA,AGED 45 YEARS,S/O.BEERANKUTTY. BY ADVS. MR.K.P.SUDHEER, MR.T.P.RAMACHANDRAN (THACHETH). RESPONDENT(S): --------------------------- 1. STATE OF KERALA, REPRESENTED BY ITS SECRETARY, CO-OPERATION (C) DEPARTMENT,THIRUVANANTHAPURAM. 2. ASSISTANT REGISTRAR (GENERAL), CO-OPERATIVE SOCIETIES, TIRUR,MALAPPURAM DISTRICT. 3. N.K.HAMZA,S/O.MOIDEENKUTTY HAJI, NAMBANKUNNATH,ULLANAM,PALATHINGAL, MALAPPURAM DISTRICT,PIN-676 303. 4. MUBASHIR KUNDANATH,S/O.UMMERBHAVA, KUNDANATH,ULLANAM,MALAPPURAM DISTRICT. 5. AYOOB,S/O.MUHAMMED, KUNDANATH,PALATHINGAL, PARAPPANANGADI,MALAPPURAM DISTRICT. R1 & R2 BY SR.GOVERNMENT PLEADER MR. K.S. MOHAMED HASHIM R3,R4 & R5 BY ADV. MR.K.K.MOHAMED RAVUF THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17/12/2009,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.20597/2009 T APPENDIX PETITIONER'S EXHIBITS: P1: COPY OF AWARD DTD. 19/11/2005 IN CLAIM NO.1754OF 2004-05 PASSED BY THE 2ND RESPONDENT. P2: COPY OF AWARD DTD. 19/11/2005 IN CLAIM NO.1753 OF 2004-05 PASSED BY THE 2ND RESPONDENT. P3: COPY OF AWARD DTD. 25/07/2007 IN CLAIM NO.2704 OF 2006 PASSED BY THE 2ND RESPONDENT. P4: COPY OF E.P.NO.128/06 DTD. 1/11/2006 FILED BY THE PETITIONER BEFORE THE SUB COURT, TIRUR IN ARC NO.1754/2004-05. P5: COPY OF E.P.NO.118/06 DTD. 1/11/2006 FILED BY THE PETITIONER BEFORE THE SUB COURT, TIRUR IN ARC NO.1753/2004-05. P6: COPY OF E.P.NO.118/07 DTD.1/11/2007 FILED BY THE PETITIONER BEFORE THE SUB COURT, TIRUR IN ARC NO.2704/2006. P7: COPY OF CIRCULAR NO.75/2007 DTD. 22/12/2007 ISSUED BY REGISTRAR OF CO-OPERATIVE SOCIETIES. P8: COPY OF CIRCULAR NO.3/2008 DTD. 15/1/2008 ISSUED BY REGISTRAR OF CO-OPERATIVE SOCIETIES. P9: COPY OF ORDER NO.A/38/2008 DTD. 22/02/2008 ISSUED BY THE 2ND RESPONDENT IN THE CASE OF THE 3RD RESPONDENT. P10: COPY OF ORDER NO.A/38/2008 DTD. 22/02/2008 ISSUED BY THE 2ND RESPONDENT IN THE CASE OF THE 4TH RESPONDENT. P11: COPY OF ORDER NO.A/38/2008 DTD. 22/02/2008 ISSUED BY THE 2ND RESPONDENT IN THE CASE OF THE 5TH RESPONDENT. P12: COPY OF APPEAL MEMORANDUM DTD. 25/03/2008 FILED BY THE 3RD RESPONDENT BEFORE THE 1ST RESPONDENT WITH NOTICE ISSUED BY THE 1ST RESPONDENT. Kss ..2/- ..2... WPC.NO.20597/2009 T P13: COPY OF APPEAL MEMORANDUM DTD. 25/03/2008 FILED BY THE 4TH RESPONDENT BEFORE THE 1ST RESPONDENT WITH NOTICE ISSUED BY THE 1ST RESPONDENT. P14: COPY OF APPEAL MEMORANDUM DTD. 25/03/2008 FILED BY THE 5TH RESPONDENT BEFORE THE 1ST RESPONDENT WITH NOTICE ISSUED BY THE 1ST RESPONDENT. P15: COPY OF OBJECTION DTD. JUNE/2008 FILED BY THE PETITIONER IN APPEAL FILED BY THE 3RD RESPONDENT BEFORE THE 1ST RESPONDENT. P16: COPY OF OBJECTION DTD. JUNE/2008 FILED BY THE PETITIONER IN APPEAL FILED BY THE 4TH RESPONDENT BEFORE THE 1ST RESPONDENT. P17: COPY OF OBJECTION DTD. JUNE/2008 FILED BY THE PETITIONER IN APPEAL FILED BY THE 5TH RESPONDENT BEFORE THE 1ST RESPONDENT. P18: COPY OF ORDER NO.165/09/CO-OP. DTD. 26/03/2009 ISSUED BY GOVT. OF KERALA, CO-OPERATIVE (C)DEPARTMENT. RESPONDENT'S EXHIBITS: N I L /TRUE COPY/ P.A.TO JUDGE Kss S. SIRI JAGAN, J ................................................ W.P(C) No. 20597 of 2009 ................................................. Dated this the 17th day of December, 2009 J U D G M E N T The petitioner is a Co-operative bank. Respondents 3 to 5 availed cash credit facilities from a branch of the bank at Palathingal. Respondents 3 to 5 defaulted repayment of amounts due under the cash credit facility. The petitioner bank initiated proceedings under Section 69 of the Kerala Co-operative Societies Act. Exts.P1 to P3 awards were passed by the 2nd respondent in the said proceedings. The petitioner filed Exts. P4 to P6 execution petition before the Sub Court, Tirur for execution of Exts.P1 to P3 awards. While execution proceedings were pending, Exts.P7 and P8 circulars were issued by the Registrar of Co-operative Societies for settlement of the dispute by Adalat to be conducted in terms of Exts.P7 and P8 circulars. The 2nd respondent passed Exts.P9 to P11 orders in the Adalath. As per the terms of those orders, which according to the petitioner, are settlements entered into between the parties in terms of Exts.P7 and P8 circulars, the amounts were to be paid by respondents 3 to 5 before 29.2.2008, failing which, the petitioner is entitled to execute the award themselves. W.P(C) No. 20597 of 2009 -2- Respondents 3 to 5 did not comply with the terms of settlements and did not pay any amount to the petitioner in repayment of the amounts due. Instead they filed a petition styling the same as an appeal before the 1st respondent challenging Ext.P9 to P11 orders. Exts.P12 to P14 are appeal memoranda and notices issued by 1st respondent in this regard. The petitioner filed Exts.P15 to P17 objections contending that no appeal is maintainable against Exts.P9 to P11 orders. However, by Ext.P18 order, the 1st respondent entertained the appeals and granted the respondents 3 to 5, five months' time to pay the amount covered by Exts.P9 to P11 orders. The petitioner is challenging Exts.P18 order in this writ petition. According to the petitioner, the 1st respondent Government of Kerala has absolutely no jurisdiction in the matter. The petitioner would submit that loan transaction is a contract between the parties which have been reduced into writing. The law of contract is applicable to the same. The respondents 3 to 5 are bound by the contract. They are liable to pay amounts due under the contract as per the demand and the awards passed by the statutory authority constituted under Section 69 of the Kerala Co-operative Societies Act for the purpose. Their only remedy, if they are aggrieved by any recovery proceedings, is to approach the W.P(C) No. 20597 of 2009 -3- appropriate authorities by challenging the orders passed by the arbitrator in the petitions filed by the petitioner under Section 69 of the Co-operative Societies Act. The proceedings before the Adalat is only a settlement proceedings, wherein the petitioner agreed to settle the loan accounts on certain conditions. Exts.P9 to P11 are such agreed settlements. Respondents 3 to 5 are bound by the same. In any event, the 1st respondent has absolutely no jurisdiction to interfere with the same. Both the learned Government Pleader and counsel for respondents 3 to 5 oppose the contention of the petitioner. According to them, in view of Sections 66 and 66A of the Kerala Co-operative Societies Act, the Registrar has supervisory powers on actions of the petitioner and consequently the 1st respondent Government of Kerala has ample powers to interfere in the matter. 2. I have considered the rival contentions in detail. 3. I do not think that Sections 66 and 66A has any application in the matter. Ext.P18 does not hold that the petitioner has violated any provisions of the Act or Rules. The transaction between the petitioner and respondents 3 to 5 is purely a bilateral contract between the petitioner and respondents 3 to 5. The terms of the contract have been reduced to writing. Both parties are W.P(C) No. 20597 of 2009 -4- bound by the same. Section 69 of the Kerala Co-operative Societies Act provides for a machinery for deciding disputes between the petitioner and the respondents 3 to 5 quasi judicially. The petitioner resorted to that remedy and obtain awards. Respondents 3 to 5 have not chosen to challenge the same before the appellate authority provided under the Act, and they have become final. The petitioner is seeking to execute those orders. But in the meanwhile in accordance with the circulars issued by the Registrar, although the petitioner is not strictly bound by those circulars under law, they submitted to the jurisdiction of the Adalat in the matter and agreed to settle the matter by accepting the amounts as fixed in Exts.P9 to P11 orders subject to the conditions therein. That is only a concession extended by the petitioner to Respondents 3 to 5. That concession is subject to the conditions mentioned in Exts.P9 to P11. Those conditions are binding on respondents 3 to 5 if they want the benefit of the concessions granted by those orders. Exts.P9 to P11 specifically stipulates that the amounts covered by Exts.P9 to P11 shall be paid before 29.2.2008, failing which the petitioner is entitled to execute the award. It is not disputed before me that respondents 3 to 5 have not paid any amounts in accordance with Exts.P9 to P11. After W.P(C) No. 20597 of 2009 -5- unilaterally violating the conditions of Exts.P9 to P11 the respondents 3 to 5 cannot challenge the same before the 1st respondent invoking a non-existent jurisdiction. In such circumstances, the 1st respondent has absolutely no jurisdiction to entertain Exts.P12 to P14, so called appeals filed by respondents 3 to 5. No provision in the Kerala Co-operative Societies Act and Rules vest the 1st respondent with any powers in that regard. Therefore Ext.P18 order is totally without jurisdiction. Accordingly the same is quashed. It would be open to the petitioner to get the award executed in accordance with law. The writ petition is allowed as above. sd/- S. SIRI JAGAN, JUDGE rhs // True copy // PA to Judge