Gopalakrishnan v. Assistant Registrar — 1997 DIGILAW 251 (KER)

Judgment :- J.B. Koshy, J. On the basis of the directions in Ext. P1 order of this Court the election was conducted in Peringode Service Co-operative Bank Ltd. and petitioners were successful in the election. The seventh respondent filed a dispute under S.69 of the Co-operative Societies Act challenging the election. The election was set aside by Ext. P9 order. Apart from the various contentions raised by the petitioners one of the major contention is regarding jurisdiction of the Arbitrator. Petitioners' contention is that the order was passed by the Special Grade Inspector and not by the Registrar, Joint Registrar or Assistant Registrar and that the Arbitrator who is a Special Grade Inspector has no jurisdiction to deal with the dispute. Since the matter relates to jurisdiction of the Arbitrator in passing the award, instructions were taken by Government Pleader for respondents 1 to 6. Advocate Sri. P.C. Sasidharan appeared for the seventh respondent. 2. In the counter affidavit filed by the learned Government Pleader there is no averment regarding jurisdiction of the Arbitrator and that matter is virtually uncontested. It is argued by the seventh respondent that in view of the provisions of S.70(b) and (c) of the Co-operative Societies Act, Registrar can transfer or refer the arbitration disputes received by him under S.69 for arbitration to any person who has been invested by the Government with powers in that behalf. The proviso makes it clear that it shall be to an inferior officer. It was also argued that the above proviso was added in view of the decision of this Court in Antony Varghese v. A & E Inspector (1986 KLT 274) which was subsequently overruled by a Division Bench decision in A & E Inspector, Asst. Registrar Office, Udumbanchola & Ors. v. Antony Varghese (1987 (2) KLT 23 3). In the above case, it was held that Assistant Registrar to whom the power under S.70 of the Act has been conferred can be regarded as Registrar for the purpose of S.70(1)(b) and (c) of the Act, as he answers the definition of Registrar in S.2(p) of the Act. Therefore, it was held by the Division Bench that any of the Registrars as mentioned under S.2(p) of the Act can decide the matter. Therefore, it was held by the Division Bench that any of the Registrars as mentioned under S.2(p) of the Act can decide the matter. It is also stated that there is nothing in the context to take the view that the Registrar contemplated under S.70(1) is only Registrar appointed under S.3(1) of the Act. It was also decided that since it is an appealable order, this Court should not interfere under Arts.226 or 227 of the Constitution of India. 3. The arbitration dispute was filed as provided under S.69 of the Act. It provides that not withstanding ng anything contained in any law for the time being in force, if a dispute arises as mentioned in the Section shall be referred to the Registrar for decision. In explanation it is stated that in this section and in S.70, the term "Registrar" means the Registrar of Co-operative Societies appointed under sub-s.(1) of S.3 and includes any person on whom the powers of the Registrar under this section and S.70 are conferred. Under S.2(p) 'Registrar' means the Registrar of Co-operative Societies appointed under sub-s.(1) of S.3 and includes any person on whom all or any of the powers of the Registrar under this Act are conferred. S.3 provides that the Government may appoint a person to be the Registrar of Co-operative Societies for the State; and the Government may by general or special order confer on any person all or any of the powers of the Registrar under the Act. Therefore, according to me, a dispute under S.69 can be referred and decided only by a Registrar appointed under S.3(1) or a Registrar under S.2(p) of the Act. By the powers of the Government under S.3(1) of the Co-operative Societies Act Government issued notification No. 255/69/Ad dated 28.6.1969 by which Additional Registrar, Joint Registrar, Deputy Registrar and Assistant Registrar are given powers of the Registrar for various matters. Therefore, only those officers will be deemed to be the Registrar for the purpose of S.2(p) and S.3(1) of the Act and others cannot be called as Registrar. It is not argued by any of the parties that Special Grade Inspectors are conferred with powers of Registrar by the Government by any of the circulars under the Act and Rules. 4. S.70 deals with decisions and award on reference of a disputes under S.69. It reads as follows: "1C. It is not argued by any of the parties that Special Grade Inspectors are conferred with powers of Registrar by the Government by any of the circulars under the Act and Rules. 4. S.70 deals with decisions and award on reference of a disputes under S.69. It reads as follows: "1C. Decision and award on disputes: (1) The Registrar may, on receipt of the reference of a dispute under 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) or sub-s.(1) or referred under clause (c) of that sub-section and he may elect to decide the dispute himself or transfer it to say other person under clause (b) of sub-s.(1) or refer it to any other arbitrator under clause (c) of that sub-section. (3) The Registrar or such person shall decide the dispute, or the arbitrator shall pass an award, in accordance with the provisions of this Act and the rules and the bye-laws and such decision or award shall, subject to the provisions of S.82, be final. Pending decision or award, the Registrar, such person or arbitrator as the case may be, may make such interlocutory orders as he may deem necessary in the interests of justice." Therefore, a Registrar who receives the arbitration dispute under S.69 can decide the dispute himself or transfer it for disposal to any person who has been invested by the Government with the powers in that behalf or refer it for disposal to an arbitrator appointed by the Registrar, provided that the transfer under clause (b) or a reference under clause (c) shall not be made to a person equal or superior to him in rank. This provision very clearly shows that Registrar himself can decide the dispute or he can transfer it to any person who has been invested by the Government with power in that behalf. This provision very clearly shows that Registrar himself can decide the dispute or he can transfer it to any person who has been invested by the Government with power in that behalf. No notification or order is shown to me to say that Government has invested powers with the Special Grade Inspector for deciding the dispute under S.69. As per S.70(1)(c) it can be referred for disposal to an Arbitrator appointed by the Registrar. A reading of S.69 and S.70 will clearly show that the dispute raised under S.69 has to be decided by a Registrar or Registrar as defined under Ss.2(p) and 3(1) or a Registrar conferred with powers by the Government under S.3(2). The-. The Inspector under the Co-operative Societies Act are not Registrars under S.3(2) as can be seen from notification No. 255/69/AD. "In exercise of the powers conferred by sub-s.(2) of S.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 in the corresponding entries in Column (2) thereof. He cannot appoint any person he likes as an Arbitrator and refer it to him. If he can transfer or refer the matter to any person whom he likes it is an unfettered discretion given to him. Now I will also deal with Circular No. 42/93. Opening words of the circular is that in circular referred to above, authorisation had been issued to the different cadres of officers of the Co-operative Department to dispose of Arbitration references, under Ss.69 and 70 of the KCS Act 1969 and under Rr. 67 and 68 of the KCS Rules. All non-monetary disputes are to be disposed of by the Registrar if the society has state wide operation or operation is more than one district, Joint Registrar if the society has district wise operation or area of operation extents to more than one Taluk or Assistant Registrar if the area of operation is within a Taluk as per Circular No. 42/93. Here also, there is no authorisation or investing of power to the Special Grade Inspector to decide such matters under S.70(1)(b) or (c). It is not averred in the statement filed by the Government that Inspector is invested with such powers. Here also, there is no authorisation or investing of power to the Special Grade Inspector to decide such matters under S.70(1)(b) or (c). It is not averred in the statement filed by the Government that Inspector is invested with such powers. Transfer or reference of the dispute can only be made by an officer as mentioned in the above circular. Arbitration reference also can be made only by an officer as mentioned in the Circular. The opening part of the Circular states as follows: "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 Ss.69 and 70 of the KCS Act and under Rules 67 and 68 of the KCS Rules. Consequent on the changes of loan policies and increased loan operations by the bigger bigger C6-operatives the number of Arbitration cases have increased considerably and many arbitration cases in respects 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 examination of the position obtaining at present a revision of the limitation prescribed in the above circular is found necessary. In this circumstance, 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 Ss.69 and 70 of the KCS Act 1969 and Rules thereunder". 5. Much emphasis was made by the counsel for the Seventh respondent that the proviso to s.70(1) makes it clear that transfer under clause (b) or reference under clause (c) can be made to any person inferior to or equal to the Registrar as notified. In view of the above proviso if the matter is filed before the Registrar or Deputy Registrar, it may be referred to an Assistant Registrar as he is an inferior, but he must also be a Registrar as provided under S.2(p) or S.3(2) or atleast there should be a specific authorisation by the Government like notification No. 255/697 AD and Circular No. 42/93. It is well settled that proviso cannot control the construction of the main section. It is well settled that proviso cannot control the construction of the main section. It was held by Lord Watson: "I am perfectly clear that if the language of the enacting part of the statute does not contain the provisions which are said to occur in it, you cannot derive those provisions by implication from a proviso." (Jennings v. Kelley ((194Q) A.C. 206)). 6. The section must be read along with the proviso as a whole. It is impossible to read the section as it were contained in watertight compartments. The effect of the proviso is to qualify the words which immediately precede it. Whether a proviso is construed as restricting the main provision or as a substantive clause it cannot be divorced from the provision to which it is attached as a proviso. As held by the Supreme Court In Commissioner of Income-tax v. Ajay Products (AIR 1965 SC 1358) proviso must be construed harmoniously with the main enactment. The proviso should be construed in a manner that the main part of the enactment also remains operative and is not rendered absolutely inefficient and totally ineffective. A proviso to a section is not independent of the section calling for independent consideration or construction detached from the construction to be placed on the main section as it is merely subsidiary to the main section and is to be construed in the light of the section itself. The proviso is subservient to the main provisions as held in South Asia Industries (P) Ltd. v. Samp Singh (AIR 1966 SC 346). On the basis of the proviso it cannot be argued that disputes under S.69 can be transferred or referred to any person without any authorisation or conference of power by the government. In view of the proviso to S.70(1) if the matter is filed before the Registrar or Deputy Registrar it can be referred to the Assistant Registrar also because he is an inferior officer but he must also be a Registrar under S.2(p) or 3(2) or he is authorised to hear such disputes according to law. 7. Ext. P9 order begins with saying that this is an order issued by the Assistant Registrar's Court, Palghat, but it is issued by Special Grade Inspector, Malampuzha Unit, Palghat. This itself is misleading. 7. Ext. P9 order begins with saying that this is an order issued by the Assistant Registrar's Court, Palghat, but it is issued by Special Grade Inspector, Malampuzha Unit, Palghat. This itself is misleading. According to me, the Special Grade Inspector cannot decide the dispute of election under S.69 for the reasons stated in the earlier paragraphs. Therefore, the impugned order passed by the present Arbitrator is without jurisdiction and is liable to be set aside. 8. I also note that as per the Kerala Co-operative Societies Amendment Ordinance 1997 (Ordinance No. 8/97) promulgated by the Government on 2.6.1997 and published in the Kerala Gazette Extra ordinary dated 3.6.1997 S.69 of the Act itself was replaced. In other words, before passing of Ext. P9 order the Ordinance came into effect replacing old S.69. Now the election disputes can be heard and decided only by a Cooperative Arbitration court constituted under S.70A. New S.69 provides that notwithstanding anything contained in any law for the time being in force, if a dispute arises such dispute shall be referred to and decided by the Co-operative Arbitration Court constituted under S.70A and no other court or authority shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. S.70B provides as follows: "On the constitution of a Co-operative Arbitration Court, every dispute pending before the Registrar or any person invested with the power to dispose of the dispute by the Government or the arbitrator appointed by the Registrar, relating to the local area of jurisdiction of the Arbitration Court, shall be transferred to such Arbitration Court and that Court shall dispose of the same as if it were a dispute referred to it under S.69". In view of the above provision transfer of the dispute will take place after the constitution of the Co-operative Arbitration Court. There is no specific provision regarding the existing dispute, before constitution of the Court in view of S.70A. 9. After conducting the election, petitioners were successful. The election is set aside by an authority which has no jurisdiction. Setting aside of an election is a very serious matter. Since the order is passed without jurisdiction, I am of the opinion that this Court is competent to set aside the order in spite of the fact that appeal provisions are provided. The election is set aside by an authority which has no jurisdiction. Setting aside of an election is a very serious matter. Since the order is passed without jurisdiction, I am of the opinion that this Court is competent to set aside the order in spite of the fact that appeal provisions are provided. It was held by the Supreme Court that existence of an alternate remedy is not a ground for refusing relief if it appears on the face of the proceedings, or undisputed facts that inferior officer has acted without jurisdiction or in violation of jurisdiction. (State of V.P. v. Nooh (AIR 1958 SC 86); Shivram v. I.T.O. (AIR 1964 SC 1095) and Venketaswaran v. Ramchand (AIR 1961 SC 1615). There is complete lack of jurisdiction in passing Ext. P9 order resulting in grave injustice. Hence, I set aside Ext. P9 order and consequential Ext. P10 order. The administrator is directed to handover back charge to the Managing 'Committee as Ext. P9 is set aside. The Original Petition is allowed.