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1973 DIGILAW 197 (KER)

P. C. POULOSE v. E. P. SUKUMARAN NAIR

1973-08-01

M.U.ISAAC

body1973
Judgment :- 1. The third respondent, the Pindimana Service Co-operative Bank Ltd., No. E-25, which is herein represented by its President, the second respondent, made a claim against the petitioner for a sum of about Rs. 25,000/- on the basis of a promissory note executed by him in favour of the Bank. The claim was referred for arbitration under S.69 of the Kerala Co-operative Societies Act, 1969 to the first respondent, the Circle Officer of Co-operative Societies. The case stood posted to 31-1-1972. When it was taken up for hearing on that date, the second respondent, who was representing the Bank was not present; and there was also no application for adjournment. The petitioner's counsel, who was present, urged for a dismissal of the claim. Accordingly the first respondent dismissed the claim, and passed an award, Ext. P1 dated 31-1-1972, under S.70 (3) of the Act. The second respondent on behalf of the Bank made an application to the first respondent to set aside the exparte award. The application was allowed by the first respondent by its order Ext. P3 dated 7-3-1972. This petition has been filed to quash the above order. 2. The only contention urged by the petitioner in support of the relief claimed by him is that the first respondent became functus officio after making the award, Ext. P1, and that he had thereafter no power under the Act or the Rules made thereunder to entertain an application to set aside the award. Counsel for respondents 2 and 3 submitted that the arbitrator has no power to dismiss a claim for default; he is bound to decide the claim on the merits, even if the parties are absent. It was also submitted that if an arbitrator has no power to restore a claim dismissed for default of appearance, it must follow that he has no jurisdiction to dismiss it for default. In support of the second submission, counsel relied on the following passage appearing in the judgment of Velu Pillai, J. in the Full Bench decision of this Court in Kalyani Amma Bhargavi Amma v. Ouseph Varkey (1967 KLT. In support of the second submission, counsel relied on the following passage appearing in the judgment of Velu Pillai, J. in the Full Bench decision of this Court in Kalyani Amma Bhargavi Amma v. Ouseph Varkey (1967 KLT. 317.) While dealing with the question whether the Land Tribunal has got the power to set aside an ex parte order dismissing an application for fixation of fair rent under the Kerala Land Reforms Act, 1963, and restore the same for hearing, the learned judge stated: "If we hold; that there is no jurisdiction for the Land Tribunal to restore, logically it must also be held that it has no jurisdiction to dismiss for default either, and that such dismissal is void and must be treated as non est." The learned judge, however, added that it was not necessary to rest the decision of the case on the above ground; and the case was decided on the application of R.99 of the Kerala Land Reforms (Tenancy) Rules, 1964 which, as pointed out by the learned judge, fully applied to the case. The above observation is only an obiter; and with great respect I am unable to follow it. If a person has a power to demolish a thing, it does not follow from that, he has also the power to restore it. Both are different powers; and the process of exercise of those powers would also be different. 3. In support of his contention that, in the absence of any statutory power the arbitrator has no jurisdiction to decide a case ex parte, counsel cited a Full Bench decision of the Madras High Court in Chinnappan v. I T. Commr., (AIR. 1965 Madras 62). That case related to the jurisdiction of the Appellate Tribunal under the Indian Income-tax Act 1922 to dismiss an appeal for default of appearance of the appellant. The learned Chief Justice, who delivered the judgment of the Full Bench stated: "To sum up the position, the Appellate Tribunal is the appointed machinery under the Act for finally deciding questions of fact in relation to assessment of Income-tax. Its composition consisting as it does of qualified persons in law and accountancy, makes it peculiarly qualified to deal with all questions raised in a case, whether there be assistance from the party or his counsel or not. Its composition consisting as it does of qualified persons in law and accountancy, makes it peculiarly qualified to deal with all questions raised in a case, whether there be assistance from the party or his counsel or not. S.33 (4) obliges it to decide an appeal after giving an opportunity to the parties to put forward their case. The giving of the opportunity only emphasises the character of the the quasi judicial function performed by the Appellate Tribunal. The fact that that opportunity is not availed of in a particular case, will not entitle the Tribunal not, to decide the case. There can be no decision of the case on its merits if the matter is to be disposed of for default of appearance of the parties. Further, an adjudication on the merits of the case is essential to enable the High Court to perform its statutory duty and for the Supreme Court to hear an appeal filed under S.66 A. S.33(4) itself indicates by the use of the word "thereon" that the decision should relate to the subject matter of the appeal". With respect, I agree with the above statement of law. But it has no application to the case of a parly who fails to adduce evidence to prove his claim. In the case of an arbitration, if the claimant fails to appear before the arbitrator on a day to which the case is posted for hearing, and he has not produced any evidence, the arbitrator can only dismiss the claim, unless he is inclined to adjourn the case and give a further opportunity to the claimant to establish his claim. This is what the first respondent has done in the instant case. Though be dismissed the claim, stating that the claimant failed to appear, he purported to act under S.70 (3) of the Act; and Ext. P1 is styled an award under the said Section. 4. Counsel for the petitioner submitted that the third respondent's only remedy against the award was to file an appeal under S.82 of the Act to the Tribunal constituted under S.81 of the Act. He also relied on sub-rule (4) of R.67 of the Co-operative Societies R.1969. P1 is styled an award under the said Section. 4. Counsel for the petitioner submitted that the third respondent's only remedy against the award was to file an appeal under S.82 of the Act to the Tribunal constituted under S.81 of the Act. He also relied on sub-rule (4) of R.67 of the Co-operative Societies R.1969. Clause (b) of the said sub-rule provides that in the absence of any party to the dispute duly summoned to attend, the dispute may be decided ex parte; and counsel contended that the said provision em powered the arbitrator to decide ex parte. Reliance was also placed on sub-rule (5) of R.67, which provides that the award or any order passed by the arbitrator under subs. (3) of S.70 of the Act shall be forwarded to the Registrar in duplicate along with all the papers and proceedings of the dispute. It was submitted on the basis of the above provision that the arbitrator became functus officio, after be passed the award; and it made no difference whether the award was legally good or not. I find considerable force in the above contention of the petitioner's counsel. In my view, an arbitrator has no jurisdiction to entertain an application to set aside an ex parte award, and restore the case for hearing. 5. The first respondent has entertained the application of the Bank and set aside the award, Est. P1, on the basis of a decision of Gopalan Nambiyar, J. in O. P. 2641 of 1969 rendered on 26-8-1970. Dealing with a similar case arising under the Madras Co-operative Societies Act, the learned judge stated as follows: "This is objected to on the ground that the arbitrator bad no inherent power to restore the matter dismissed for default akia to the power of a court under 0.9 R.9 CPC. and that the limited power conferred on him by R.15 (4) of the Rules under the Madras Co-operative Societies Act, is only to decide ex parte in the absence of the parties, and no more. I am inclined to think that the power to restore a case dismissed for default is implied or implicit in the power granted. However I am not expressing a final opinion. I am inclined to think that the power to restore a case dismissed for default is implied or implicit in the power granted. However I am not expressing a final opinion. The Arbitrator has only allowed the parties an opportunity of prosecuting and contesting the case on the merits; and his order, even if technically without jurisdiction does not warrant interference under Art.226". I respectfully agree with the last sentence in his Lordship's judgment. The petitioner is trying to get away with the ex parte dismissal of the claim and escape the liability under the promissory note which be executed in favour of the Bank without an adjudication on that question, for (be mere accident that the President of the Bank who represented it in the proceeding happened to be not present, when the case was called for bearing. All that the arbitrator has done by the impugned order is to give an opportunity to the claimant to prove the claim against the petitioner. This is a fit case, where the Tribunal would have set aside the ex parte award, and remitted the case for disposal on the merits, if the Bank filed an appeal in the matter. I can, therefore, find no justice in favour of the petitioner in his seeking to quash the impugned order. The extra-ordinary jurisdiction vested in this Court under Art.226 of the Constitution cannot be invoked in favour of such a party. This original petition is, therefore, dismissed. No costs.