Chandran vs Ambattu Gopalakrishnan and Others

A.S. Venkatachala Moorthy, J.—Both the above appeals have been filed against the judgment of the learned Single Judge in O.P. No. 10384 of 1997 dated 4th July 1997. While W.A. No. 1534 of 1997 has been filed by the 7th Respondent in the Original Petition, W.A. No. 1711 of 1997 has been filed by Respondents 1 and 2.

For the purpose of discussion we adopt the cause title as given in W.A. No. 1534 of 1997.

Pursuant to the order of this Court dated 10th May 1996 in C.M.P. No. 12757 of 1996 in O.P. No. 8227 of 1996 an election was conducted for constituting the Managing Committee of the Peringode Service Co-operative Bank Limited on 30th June 1996. In the said election Respondents 1 to 7 herein were declared elected and subsequently the said elected members assumed office on 1st July 1996. The Appellant herein who also contested and lost in the said election, being aggrieved of the same, filed a petition u/s 69 of the Kerala Co-operative Societies Act, 1969 read with Rule 67(7) of the Kerala Co-operative Societies Rules before the Assistant Registrar, Co-operation, Palghat and the same was taken on file as A.R.C. No. 1045 of 1996. In the said petition the Appellant contended that the election was conducted in violation of the Acts, Rules and Regulations and further there had been serious irregularities in the conduct of the election and manipulation of records and prayed that the election held on 30th June 1996 may be set aside. The said petition was resisted by Respondents 1 to 7 herein and Ors. on various grounds. The defence is that the said petition has been filed with political motivation and that the Appellant herein did not raise any objection whatsoever at any stage and that there were no irregularities or manipulation as alleged.

The Arbitrator, namely the 9th Respondent herein, who heard and disposed of the said election dispute, framed as many as four issues for consideration on the basis of the pleadings by the respective parties. The said Arbitrator after considering the entire matter, came to the conclusion that there were serious irregularities, in the conduct of the election and that the Respondents 1 to 7 committed malpractice and fraud in the issuance of identity cards and that there are sufficient reasons to set aside the election. Consequently the Arbitrator passed an award to the effect that the election held on 30th June 1996 to the Peringode Service Co-operative Bank Ltd. was not fair and that the Defendants got elected by the manipulation and consequently declared the election as invalid. The gist of the award of the Arbitrator is marked as Ext. P-9 while the award as such is marked as Ext. P-10. On the same day the Joint Registrar of Co-operative Societies, Palghat, namely the 12th Respondent herein, passed an order u/s 33(1) of the Kerala Co-operative Societies Act, 1969 appointing the Inspector of Co-operative Societies, Mundoor Unit as the part-time Administrator of the Peringode Service Co-operative Bank Ltd. No. F. 1552, in order to avoid administrative crisis in the Bank.

Aggrieved by the said award passed by the Arbitrator on 9th June 1997, Respondents 1 to 7 herein filed O.P. No. 10384 of 1997 under Article 226 of the Constitution of India praying this Court to issue a writ of certiorari to quash the orders of the 9th Respondent-Arbitrator marked as Exts. P-9 and P-10 dated 9th June 1997.

In the Original Petition Respondents 1 to 7 herein contended that the factual findings of the Arbitrator, viz., with regard to the irregularities in the conduct of the election as well as the manipulation of records, etc. are all erroneous. We may straight away point out at this stage that it is not necessary to go into each and every allegations made in the Original Petition, in view of the nature of the issue involved and the order that we are inclined to pass in these Writ Appeals.

A counter affidavit has been filed by the first Respondent, namely the Assistant Registrar of Co-operative Societies (General), Palghat in the Writ Petition to the effect that as against the award Exts. P-9 and P-10 there is a right of appeal u/s 84 of the Kerala Co-operative Societies Act and that the said appeal lies to Co-operative Tribunal. According to him, in as much as there is efficacious or alternative remedy, the Original Petition filed under Article 226 of the Constitution of India is not maintainable. In paragraph 5 of the said counter affidavit, the said Respondent has pointed out that Respondents 1 to 7 were declared elected in the election and that they also assumed office and subsequently the Appellant herein filed A.R.C. No. 1045 of 1996 before him and who in turn authorised the 9th Respondent, namely Senior Inspector/Special Grade Inspector, Malampuzha Unit to hear and dispose of the Arbitration Reference Case No. 1045 of 1996. It is the stand of the Assistant Registrar that the Arbitrator after considering the entire documents and also hearing both the parties, passed a reasoned and proper order and that no interference of this Court in the circumstances invoking the powers under Article 226 of the Constitution of India is called for.

The learned Single Judge, who heard and disposed of the matter, took the issue for consideration namely, as to whether the 9th Respondent Arbitrator had power and jurisdiction to deal and decide the Arbitration Reference Case No. 1045 of 1996 as a preliminary issue. After referring to various provisions of the Act as well as the rulings of this Court the learned Single Judge came to the conclusion that a dispute of this nature can be dealt with by apart from Registrar, by Additional Registrar, Joint Registrar, Deputy Registrar and Assistant Registrar as they have been given powers of Registrar by the notification issued by the Government bearing No. 255/69/AD, dated 28th June 1969. The learned Single Judge further pointed out that no notification or order is placed before this Court to show that the Government has invested powers with the Senior Inspector of Co-operative Societies, Malampuzha Unit to decide the dispute in Arbitration Reference Case No. 1045 of 1996. The learned Single Judge also considered the Government Circular No. 42/93, dated 6th July 1993 and pointed out that it does not invest any power to the Special Grade Inspector/Senior Inspector to decide such matters u/s 70(1) (b) or (c). The learned Single Judge has also mentioned in the judgment that nothing is averred in the counter statement filed by the Government that the Senior Inspector namely, the 9th Respondent herein is invested with such powers. In this view of the matter the learned Single Judge held that the Senior Inspector namely, the 9th Respondent herein cannot decide the dispute of election u/s 69 and that being so the impugned order passed by him is without jurisdiction and is liable to be set aside. The learned Single Judge also has observed that as per the Kerala Cooperative Societies Amendment. Ordinance, 1997 promulgated by the Government on 2nd June 1997 and published in the Kerala Gazette Extra-ordinary, dated 3rd June 1997, Section 69 of the Act itself has been replaced and that as the impugned order Ext. P-9 came to be passed after the said Ordinance, the matter should go before the Cooperative Arbitration Court after the same is constituted u/s 70A. The learned Single Judge further observed that there is no specific provision pointing out as to what should happen to the existing disputes now pending before Arbitrators till the constitution of the Arbitration Court.

In this view of the matter the learned Single Judge set aside the impugned orders, namely Exts. P-9 and P-10 and further directed the Administrator to hand over the charges back to the Managing Committee.

Aggrieved by the judgment of the learned Single Judge, dated 4th July 1997 the 7th Respondent in the O.P. has filed W.A. No. 1534 of 1997. Similarly Respondents 1 and 2, namely Assistant Registrar of Co-operative Societies (General), Palakkad and the Arbitrator/Senior Inspector, respectively have filed W.A. No. 1711 of 1997 against the same judgment.

Before we take up the case on hand as such for consideration, we deem it necessary to refer the various provisions of the Act and the relevant decisions of this Court to point out the legal position.

Section 3(1) of the Kerala Co-operative Societies Act, 1969 reads thus:

The Government may appoint a person to be the Registrar of Co-operative Societies for the State.

The term "Registrar" has been defined in Section 2(p) of the Act which reads thus:

''Registrar'' means the Registrar of Co-operative Societies appointed under Sub-section (1) of Section 3 and includes any person on whom all or any of the powers of the Registrar under this Act are conferred.

Then we find that Section 3(2) of the said Act is as follows:

The Government may by general or special order confer on any person all or any of the powers of the Registrar under this Act.

A reading of the above provision would clearly show that apart from the Registrar appointed by the Government u/s 3(1) of the Act, the Government by virtue of Section 3(2) by general or special order can confer on any person all or any of the powers of the Registrar under this Act and once that is done, all such persons nominated would come within the meaning of the term "Registrar" as defined u/s 2(p) of the said Act.

The Government in 1969 itself issued a notification viz. Notification No. 255/69/AD and it is necessary to quote the same in verbatim for the proper understanding and appreciation of the matter.

In exercise of the powers conferred by Sub-section (2) of Section 3 of the Kerala Co-operative Societies Act, 1969(21 of 1969) and in supersession of the existing notifications on the subject, the Government of Kerala hereby confer on the officers specified in column (1) of the Table below, the powers of the Registrar under the said Act specified m the corresponding entries in Column (2) thereof.

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The next relevant sections that we are concerned are Sections 69 and 70 of the Act. Section 69 is to the effect that if the dispute arises in connection with the election of the Board of Management or any officer of the Society, the same shall be referred to the Registrar. The next section, viz. Section 70 deals with as to what the Registrar has to do on receipt of such reference of a dispute u/s 69. It is necessary to quote the relevant portion of Section 70 at this juncture.

Decision and award on disputes.-(1) The Registrar may, oil receipt of the reference of a dispute u/s 69:

(a) elect to decide the dispute himself; or

(b) transfer it for disposal to any person who has been invested by the Government with powers in that behalf; or

(c) refer it for disposal to an arbitrator appointed by the Registrar.

Provided that a transfer under Clause (b) or a reference under Clause (c) shall not be made to a person equal or superior to him in rank.

(2) The Registrar may withdraw any reference transferred under Clause (b) of Sub-section (1) or referred under Clause (c) of that Sub-section and he may elect to decide the dispute himself or transfer it to any other person under Clause (b) of Sub-section (1) or refer it to any other arbitrator under Clause (c) of that Sub-section.

What is the ultimate legal position that would emerge from the reading of the various sections referred to above as well as the Government notification came to be considered in two decisions of the Division Bench of this Court. In the decision reported in A and E Inspector v. Antony Varghese 1987 (2) KLT 233 the Division Bench of this Court observed thus:

We have therefore no hesitation in taking the view that there are no good reasons as to why the Assistant Registrar to whom the power u/s 70 of the Act has been conferred cannot be regarded as a Registrar for the purpose of Section 70(1) (b) and (c) of the Act, as he answers the definition of Registrar in Section 2(p) of the Act. There is nothing in the context to take the view that the Registrar contemplated u/s 70(1) is only a Registrar appointed u/s 3(1) of the Act.

In a subsequent decision reported in Balarama Kurup v. Co-operative Tribunal 1993 (2) KLT 694 the Division Bench observed as follows:

State Government in exercise of the powers u/s 3(2) of the Act conferred powers of ''Registrar'' on various officers in the department as per notification, dated 13th May 1969. As per that notification, the Deputy Registrars are invested with powers of Registrar under the Act except those falling under sections 32, 71 (1) and (3) and 87 of the Act. As far as powers under Sections 29(2) ,30, 63 to 67, 69, 70, 75 and 76 of the Act are concerned, Assistant, Registrars have been invested with the powers of Registrar as per the notification. Therefore Deputy Registrars and Assistant Registrars are competent to exercise the powers of Registrar under Sections 69 and 70 of the Act.

The above provisions as well as the rulings referred supra would clearly establish the following:

The Assistant Registrar is also a Registrar within the meaning of Section 2(p) of the Co-operative Societies Act,

(2) The Assistant Registrar can exercise the powers enumerated in Section 70 of the Act,

(3) The Assistant Registrar can decide the dispute by himself or transfer it for disposal by any person who has been invested by the Government,

(4) By virtue of Section 70(1)(c) of the Act the Assistant Registrar can appoint an Arbitrator and can refer the disputes to him.

Now, let us consider the case on hand. The 9th Respondent in this case, viz. the Senior Inspector/Special Grade Inspector has decided the dispute and passed an award. The question is whether the 9th Respondent had authority and jurisdiction to deal with the matter. The learned Single Judge has proceeded on the basis that none of the parties argued that the 9th Respondent has been conferred with powers of the Registrar by the Government by any notification or order or circulars under the Act or Rules and that the 9th Respondent had no power or jurisdiction to decide the matter and further more the statement filed by the Government does not mention that Senior Inspector (9th Respondent) had been vested with such powers by any order.

However, we find that in the counter affidavit filed by the Assistant Registrar of Co-operative Societies, it is stated in paragraph 5 as under:

I had authorised the 2nd Respondent Special Grade Inspector, Malampuzha Unit to hear and dispose of the said arbitration case.

The learned Government Pleader has produced before us a copy of the proceedings of the Assistant Registrar dated 30th July 1996, which reads as under:

Proceedings of the Assistant Registrar of Co-operative Societies (General), Palakkad

Sub.-Authorisation of Arbitration reference orders issued.

Ref.-Petitioners Letter No. Nil dated 29th July 1996.

Under Section 70(1)(c) of the Kerala Co-operative Societies Act of 1969 and Rule 67 of Kerala Co-operative Societies Rules, 1969 the Senior Inspector of Co-operative Societies, Malampuzha Unit is hereby authorised to dispose of the Arbitration reference No. 1045/96, dated 30th July 1996. He is requested to dispose of the reference early as possible and return the records to this office.

(Sd.) Assistant Registrar of Co-operative Societies (General), Palakkad.

As already pointed out the Assistant Registrar is empowered to invoke the powers u/s 70 of the Act. Section 70 of the Act is clearly to the effect that he can appoint an Arbitrator and refer the dispute to him. But the only limitation is that he cannot refer it to a person equal or superior to him in rank. That being so, we find that there was a valid appointment of an Arbitrator, viz. the 9th Respondent herein, by the Assistant Registrar to decide the dispute in A.R.C. 1045 of 1996.

The learned Single Judge has also referred to Circular No. 42/93 issued by the Registrar of Co-operative Societies and has observed that even as per the Circular only the Assistant Registrar (General) of the Taluk can deal and dispose of all non-monetary disputes in respect of the co-operative institutions whose area of operation is within his Taluk. A careful reading of the said Circular would reveal otherwise. For the purpose of completeness and to point out the correct legal position it is but necessary to quote the entire circular:

CIRCULAR No. 42/93

Sub.-Co-operative Department-Kerala Co-operative Societies Act and Rules-Disposal of disputes under Sections 69 and 70 of the Act-Cases to be decided upon by various officers-Limitation fixing of-Revision-Regarding.

Read.-Registrars Circular No. 49/75 [ADL (3) 17617/75 dated 5th July 1975]

In circular referred to above, authorisation had been issued to the different cadres of officers, of the Co-operative Department to dispose off Arbitration references, under Sections 69 and 70 of the K.C.S. Act, 1969 and under rules 67 and 68 of the K.C.S. Rules.

Consequent on the charges of loan policies and increased loan operations by the bigger Co-operatives the number of Arbitration cases have increased considerably and many arbitration cases in respect of the loan issued by the District Co-operative Banks etc. are filed before the Additional Registrar of Co-operative Societies/Registrar of Co-operative Societies, based on the instructions contained in the said circular. On an examination of the position obtaining at present a revision of the limitation prescribed in the above circular is found necessary. In this circumstances, in supersession of the circular referred to above the following revised limitations/authorisation are prescribed in respect of the arbitration cases to be dealt with under Sections 70 and 70 of the K.C.S. Act, 1969 and Rules thereunder.

The above orders will be in force with immediate effect.

The disputes entertained as per the present procedure, need not be reallotted as per this circular and, they will be disposed of, as he existing procedure. (emphasis supplied)

The orders contained in this circular will apply to the co operative institution coming under the Administrative control o the Department of Co-operation only.

(Sd.) V.S. SENTHIL, Registrar of Co-operative Societies.

In the body of the circular under the heading ''A. Nonmonetary Disputes'', two columns are given. The heading of the first column is ''nature of disputes'' and the second column is ''authority to whom the disputes are to be filed'' Sub-clause 3 therein is to the effect that all non-monetary disputes in respect of co-operative institutions have to be filed before the Assistant Registrar (General) of the Taluk concerned and nothing more. In fact, the last but one paragraph (underlined) of the Circular would clearly indicate that the disputes so entertained need not be reallotted as per that circular and the same will be disposed of as per the existing procedure. That being so it can well be stated that the circular only points out as to before whom the disputes have to be filed and nothing more. The circular is not to the effect that only the Assistant Registrar (General) of the Taluk concerned has to hear and dispose of all non-monetary disputes in the cooperative institutions.

For the reasons stated supra we hold that the Assistant Registrar can by invoking power u/s 70(1)(c) of the Co-operative Societies Act can appoint a person as an Arbitrator subject to the limitation that such person should not be an officer equal or superior to him in rank. The order of the 8th Respondent dated 30th July 1996 authorising the 9th Respondent to dispose of the arbitration reference case No. 1045 of 1996 is valid and proper. Consequently it would further follow that the award passed by the 9th Respondent dated 9th June 1997 cannot be set aside on the ground that there was lack of jurisdiction on the part of the 9th Respondent/Arbitrator.

The learned Single Judge has further observed in his judgment that by virtue of the Co-operative Societies Amended Ordinance 8/97 promulgated on 2nd June 1997 that Section 69 has been replaced and that before passing Ext. P-9 order the ordinance came into effect replacing old Section 69 and in view of that the election dispute can be heard only by a Co-operative Arbitration Court u/s 70A of the Act. According to the learned Single Judge in view of Section 70B of the amended Act transfer of the dispute will take place after the constitution of the Co-operative Arbitration Court and that there is no specific provision regarding the existing dispute before constitution of the Court in view of Section 70A. With regard to this we would like to point out that as per Ordinance 12/97, Sections, 69, 70, 70A and 70B shall come into force on such date as the Government by notification appoint in the Gazette and till such time the old provisions will prevail. The date is yet to be notified. That being so the 9th Respondent Arbitrator had jurisdiction to deal with the dispute referred to him and pass an award in A.R.C. No. 1045 of 1996. Further as against the said award an appeal will lie to the Co-operative Tribunal u/s 82 of the Act.

In the result, the judgment of the learned Single Judge in O.P. No. 10384 of 1997 dated 4th July 1997 is hereby set aside. Both the appeals shall stand allowed.

It is open to Respondents 1 to 7 to file an appeal before the Tribunal within two weeks from today. Once such an appeal is filed within the time specified as above, the Tribunal shall dispose of the same within six weeks therefrom, i.e. from the date of such filing. Till the disposal of the appeal, parties shall maintain status quo. It is made clear that this Court is not expressing any opinion on the merits of the case.