SOUTH KANARA DIST. CO-OP. FISH MARKETING FEDERATION LTD. v. SOUTH CANARA DIST CENTRAL CO-OP. BANK LTD.
1988-06-02
H.G.BALAKRISHNA
body1988
DigiLaw.ai
BALAKRISHNA, J. ( 1 ) THE essential facts of the case may be, briefly, stated as follows : respondent No. 1 filed a dispute befoie respondent No. 3 in claim No. 478/82-83 against the petitioner for recovery of dues under cash credit loan of rs. 5,00,000/- from the petitioner and also for recovery of interest on Rs. 5. 00. 000/- from 17-11-1982 at 18% per annum. The loan had been granted on 28-12-1979 and a notice dated 18-8-1982 was issued by respondent No. 1 to the petitioner demanding payment of a total sum of Rs. 7,28. 694-57 with future interest on Rs. 5,00,000/- from 17-11-1982 at 18% per annum. During the course of the pendency of the dispute, the petitioner made part payments towards the amount due to respondent-1 in a sum of Rs. 6,704-64 and another sum of rs. 8,954-28 and the same came to be adjusted towards interest due to respondent-1. ( 2 ) THOUGH the petitioner represented before the Arbitrator that an Advocate would be engaged, there was no appearance before the Arbitrator except on 17- 9-1983. The case was finally posted for recording evidence on 10-8-1984. On that day, the petitioner filed a memo through a messenger, not being either an advocate or the Secretary of the petitioner federation, seeking adjournment of the case and the same was rejected for the reason that the petitioner was only intending to delay the proceedings. Earlier on 15-9-1983 and subsequently on 6-8-1984, similar memos seeking adjournment of the case had been filed. Those memos were also rejected on those occasions particularly since they had been sent through unauthorised person not being either the party to the dispute or the counsel of the party. On 10-8-1984, after rejecting the memo for adjournment of the case, the Arbitrator proceeded to record the evidence of the claimant. On behalf of the claimant, the witness examined was one Razak being the Superintendent of Administration and Establishment. He was examined and documents exs. P-1 to P-5 were produced by him and marked in evidence. On the basis of the testimony of the said witness and documentary evidence consisting of Exs. P-1 to P-5, order was passed by the Arbitrator decreeing the claim against the petitioner for a sum of Rs 7,11,035-65 with further interest at 18% per annum from 17-11-1982 till realisation, interest to be calculated on Rs.
On the basis of the testimony of the said witness and documentary evidence consisting of Exs. P-1 to P-5, order was passed by the Arbitrator decreeing the claim against the petitioner for a sum of Rs 7,11,035-65 with further interest at 18% per annum from 17-11-1982 till realisation, interest to be calculated on Rs. 5,00,000/-, together with court cost of Rs. 105/ -. It was further ordered that claimant could recover the aforesaid amount by the sale of moveable or immoveable properties belonging to the petitioner. The order was passed on 10-8 1984. On the same day, the award came to be passed by the Arbitrator who is respondent-4 in this writ petition. Under the award passed under Section 71 of the Karnataka Co-operative Societies act, 1959 (hereinafter called 'the Act'), the petitioner Federation became liable to pay to the claimant a sum of Rs. 7,11,035-65 with future interest on Rs. 5,00,000/- at 18% per annum from 17-11-1982 till the date of realisation and a further sum of Rs. 105/- towards costs and in default the claimant being entitled to recover the amount due from the petitioner with further costs by sale of moveable or immoveable or both properties belonging to the petitioner Federation. ( 3 ) THEREAFTER, the petitioner appealed to the Karnataka Appellate Tribunal (Co-op.) (respondent-2) under Section 105 of the Act in Appeal No. 441/84 against the aforesaid judgment and award questioning the jurisdiction and legality of the impugned order of the Arbitrator. In the appeal, the chief grounds of attack were want of jurisdiction, bias and propriety of placing the petitioner exparte. ( 4 ) THIS appeal was disposed of on merits by the Appellate Tribunal on 1-2-1985 rejecting all the contentions of the petitioner except the rate of interest which was reduced from 18% to the agreed rate of interest of 15% per annum. ( 5 ) IN this writ petition, the relief sought by the petitioner is the quashing of the Appellate Tribunal's order dated 1-2-1985 passed in Appeal No. 441/84 (Co-op ) (Annexure-A) and the judgment and award dated 10-8-1984 passed by the arbitrator (Annexure-0) and for a direction to the Arbitrator to return the plaint in dispute No. 478/82-83 to respondent-1 for presentation before the proper forum.
( 6 ) THE main questions for consideration are as follows : (1) Whether Annexure-E which is a notification issued by the State Government dated 6/10-8-1977 confers the powers of the Registrar of Co-operative societies only on the Joint Director of fisheries in regard to the powers exercisable under Sec. 70 of the Act in respect of Fisheries Co-operative Societies and withdraws such powers from the Joint registrar of Co-operative Societies and, consequently, respondent-3 has no jurisdiction to entertain and refer the dispute between the petitioner and respondent-1 to respondent-4 and, therefore, the judgment and award passed by the Arbitrator is without jurisdiction; (2) Whether respondent-4 was biased in favour of respondent-1 by not holding proper enquiry and by not directing the claimant to furnish the documents demanded by the petitioner and by not granting time to the petitioner for filing written statement; (3) Whether respondent-4 erred in placing the petitioner exparte and in denying the petitioner an opportunity to cross-examine P. W-1. ( 7 ) AS regards the first question, it is necessary to set out the provisions of section 70 of the Act which reads as follows:"70. Disputes which may be referred to Registrar for decision :- (1) Not withstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a Cooperative society arises- (a) among members, past members and persons claiming through members, past members and deceased members, or (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society, or (c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs, or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or (d) between the society and any other co-operative society or a credit agency such dispute shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a cooperative society, namely- (a) a claim by the society for any debtor demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not; (b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor whether such debt or demand is admitted or not; (c) any dispute arising in connection with the election of a President, vice-President, Chairman, Vice-Chairman, secretary, Treasurer or Member of Committee of the Society : (d) any dispute between a co-operative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding the terms of employment, working conditions and disciplinary action taken by a co-operative society ; (e) a claim by a co-operative society for any deficiency caused in the assets of the co-operative society by a member, past member deceased member or deceased officer, past agent or deceased agent or by any servant, past servant or deceased servant or by its committee, past or present whether such loss be admitted or not. (3) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a co-operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court. " ( 8 ) IT is also necessary to re-produce the relevant portion of Annexure- E on which the petitioner has placed reliance which is set out below :"so. 2026-In exercise of the powers conferred by sub-section 5 of Section 2a of the Karnataka Co-operative Societies act, 1959 (Karnataka Act 11 of 1959) and in partial modification of govt. Notification No. DPC 73 CEA 74, dt. 13-3-74, 26-8-74 and RDC 33 CEA 76-77 dt. 5-3-76, RDC 18 CLM 76, dt. 10-11-76 and 21-2-77, the Govt. of karnataka hereby confers on the Joint director of Fisheries and Ex.
Notification No. DPC 73 CEA 74, dt. 13-3-74, 26-8-74 and RDC 33 CEA 76-77 dt. 5-3-76, RDC 18 CLM 76, dt. 10-11-76 and 21-2-77, the Govt. of karnataka hereby confers on the Joint director of Fisheries and Ex. Officio joint Registrar of Co-operative Societies, the powers of the Registrar of co-operative Societies under the said act and the Rules of KCS (Rules) 1960, specified in corresponding entries in column 4 in respect of Fisheries Cooperative societies specified in column3 thereof namely: si. No. 1 Category of officers 2 Societies 3 Powers of the Registrar of Cooperative Societies under Act and Rules 41. Joint Director i) of Fisheries and Ex-Officio Joint ii) Registrar of Co-operative Societies, iii) XX XX all Fisheries cooperative societies whose area of opera-tion extends beyond a taluka but does not extend beyond a Dist. XX XX section: 6, 7, 8, 10, 12, 14a, 148, 17, 27, 28 29a, 29c, 63, 64, 65, 67, 68, 72a, 99, 104, 105a, 113 125 and 126 A. Rules: 3, 6, 7 (1) (2), 50, 52, 53 (2) (3) and (4) iv)XXXX and hereby withdraws all such powers vested in the Joint Registrar of co-operative Societies of the Division in respect of the Fisheries Co-operative societies, specified above. " ( 9 ) THE facts of this case disclose that the dispute was raised by respondent-1 which is not at all a Fisheries Co-operative society against its member who is the petitioner in the instant case. The impugned dispute is neither between the Fisheries co-operative Society and its member nor is it a dispute between two Fisheries Cooperative societies. These facts are not disputed. In such a circumstance, I do not see any illegality or irregularity in referring the dispute by respondent-3 to the Arbitrator for adjudication and disposal of the dispute. Annexure E, which is the notification relied upon by the petitioner, has no relevance to the dispute raised by respondent-1 Co-operative society which is not a Fisheries Society as stated earlier. In this factual situation, there can be no doubt that it is only the joint Registrar of Co-operative Societies who is invested with the power and jurisdiction to entertain the dispute and to refer it to the Arbitrator to adjudicate and pass the award. I. therefore, hold that respondent-3 is competent and is invested with the jurisdiction to entertain the dispute and to refer it to the Arbitrator for disposal.
I. therefore, hold that respondent-3 is competent and is invested with the jurisdiction to entertain the dispute and to refer it to the Arbitrator for disposal. I do not see any force in the contention of the petitioner that the impugned orders have been passed without jurisdiction. ( 10 ) AS regards the second contention, it is my opinion that the allegation of bias is without foundation and further to attribute bias to an officer discharging his duties and functions as the Assistant registrar of Co-operative Societies is uncharitable to say the least. The observations of the Supreme Court in International airports Authority of India v. K. D. Bali, (1988) 2 SCC 360 , are relevant in the context :"the party to the proceedings should not have apprehension that the authority is biased and is likely to decide against the party. But there must be a real likelihood of bias and not mere suspicion of bias before the proceed ings can be quashed on the ground that the person conducting the proceedings is disqualified by interest. The apprehension must be judged from a healthy, reasonable and average point of view and not on mere apprehension and vague suspicions of whimsical, capricious and unreasonable people. "in the instant case, the allegation of bias is not supported by facts. I have examined the proceedings held by the a bitrator and also the comprehensive order passed by the Appellate Tribunal apart from looking into the materials on record. I have looked into the original records relating to the dispute. I am satisfied that the enquiry has been held in accordance with law. If the petitioner wanted to look into the ledger extract of the loan account, if could always have done so after obtaining the permission of the Arbitrator. The proper course for the petitioner was to have filed its written statement based on its own defence and later on if fresh materials had been discovered by it by looking into the documents, nothing prevented it from filing an additional written statement. The petitioner obviously has obtained repeated adjournments and played dilatory tactics to procrastinate the proceedings without valid reasons. Though the petitioner had undertaken before the Arbitrator to engage a Counsel, neither the Counsel nor the petitioner appeared before the Arbitrator whenever the case was posted for hearing from time to time.
The petitioner obviously has obtained repeated adjournments and played dilatory tactics to procrastinate the proceedings without valid reasons. Though the petitioner had undertaken before the Arbitrator to engage a Counsel, neither the Counsel nor the petitioner appeared before the Arbitrator whenever the case was posted for hearing from time to time. The refusal of adjournment on 20-8 1984 by the arbitrator is fully justified in the circumstances of the case. Arbitration is one of the methods of speedy disposal of disputes and not intended to be a time consuming, trial of a civil nature as in a civil court. Hence, I reject this contention also. ( 11 ) THE fact that the petitioner did not even choose to appear before the arbitrator on 10-8 1984 and, instead, sent a messenger moving for adjournment, speaks of the callousness of the petitioner. When the stakes involved are heavy, a more responsible attitude is expected of the petitioner who is entrusted with the task of looking after the legitimate interest and well being of a big institution. In the circumstances, the Arbitrator had no other alternative than to place the petitioner exparte and proceed with the recording of evidence and adjudication of the dispute without losing time. Instead of bias, I discern objectivity, promptitude and diligence on the part of the Arbitrator in the discharge of his functions. There is no merit in the contention that the principles of natural justice have been violated. It is indeed strange for the petitioner to advance the plea that it was denied the opportunity of cross-examination of P. W-1, having remained away from the court and not being available even to seek an adjournment. ( 12 ) FOR the reasons stated above, the circumstances and facts of this case, do not warrant interference and, I, therefore, dismiss the writ petition. The rule is discharged. Petitioner shall pay costs of Rs. 1,000/- to respondent-1. Petition dismissed with costs. --- *** --- .