w w w . L a w y e r S e r v i c e s . i n

T.V. Maniyappan & Another v/s Pattanakkad Service Co-Operative Bank Ltd., Rep. by Its Secretary & Others

Company & Directors' Information:- B S AND SERVICE PRIVATE LIMITED [Active] CIN = U92419MH1946PTC004912

Company & Directors' Information:- CO-OPERATIVE COMPANY LIMITED [Active] CIN = U51226DL1910PLC299886

Company & Directors' Information:- CO-OPERATIVE COMPANY LIMITED [Active] CIN = U51226UP1910PLC000093

Company & Directors' Information:- OPERATIVE INDIA PRIVATE LIMITED [Active] CIN = U74300KA2008FTC048079

Company & Directors' Information:- N BANK LTD [Strike Off] CIN = U65191WB1924PLC000442

Company & Directors' Information:- N M TV PRIVATE LIMITED [Strike Off] CIN = U92132PY2004PTC001798

Company & Directors' Information:- SERVICE CORPORATION LIMITED [Dissolved] CIN = U93090KL1946PLC001075

Company & Directors' Information:- CORPORATION BANK LIMITED [Strike Off] CIN = U99999KA1972PLC001067

    WA. No. 390 of 2020

    Decided On, 14 August 2020

    At, High Court of Kerala


    For the Appellants: K. Gopalakrishna Kurup, Sr. Advocate, B. Pramod, Namitha Jyothish, Advocates. For the Respondents: R1, T.R. Harikumar, Arjun Raghavan, Advocates.

Judgment Text

Haripal, J.

1. This is an appeal preferred under Section 5 of the Kerala High Court Act, 1958, challenging the correctness of the judgment of the learned single Judge in W.P(C) No.1866 of 2018 dated 24/01/2020. The said writ petition was filed by the 1st respondent Pattanakkad Service Co-operative Bank Ltd. No.1144 and others seeking a writ of certiorari calling for the records leading to the issuance of Ext.P10 order of the Co-operative Arbitration Court and to quash the same; to issue a writ of mandamus or any other appropriate writ or order or direction, directing the 1st respondent, namely the Registrar of Co-operative Societies, to take a decision in ARC No.606 of 2015 in accordance with the provisions of the Kerala Co-operative Societies Act and Rules.

2. The appellants are respondents 2 and 4 in the writ petition. They were the Secretary and Attender respectively of the said Co-operative Bank. An inspection was conducted in the Bank at the instance of the Joint Registrar of Co-operative Societies, by which large scale irregularities were unearthed, including misappropriation of funds. Following it, Ext.P1 interim report was drawn up. In the interim report, Secretary, the 1st appellant, Attender Sajeevan, the 2nd appellant and Senior Clerk B.Aravind were found responsible for misappropriation of funds and other large scale irregularities committed in the Bank. The interim report recommended for their suspension from service. Basing on the report, an F.I.R. was lodged in the Pattanakkad police station registering Crime No.1129/2015 alleging offences punishable under Sections 177, 403, 405, 408, 409, 415, 420, 477, 477A r/w Section 34 IPC. Later, ARC No.606 of 2015 was filed before the Registrar of Co-operative Societies under Sections 69 and 70 of the Cooperative Societies Act against the said three persons seeking a declaration and for recovery of money. The amounts misappropriated and sought to be recovered comes to Rs.14,53,01,708/- with future interest and costs. The defendants contested the suit raising all possible contentions including that of non-joinder of necessary parties. The Arbitrator, Additional Registrar, by Ext.P10 Award, disposed of the Arbitration Case on 17/10/2017. According to the Arbitrator, on verifying the interim report dated 16/11/2015 and the final report dated 12/05/2016, nine employees were responsible for the misappropriation of funds. However, only three persons were arrayed as the defendants, which was improper. Therefore, enabling the plaintiff to institute a fresh Arbitration Case arraying other defendants as well, the ARC was disposed of.

3. In the writ petition, the Bank challenged the correctness of the said decision. The learned single Judge found that Ext.P10 Award is illegal and set aside the same and remitted the matter back to the 1st respondent for continuing with the adjudication of the ARC with the defendants already impleaded in the ARC. The appellants challenge that finding.

4. We have heard Adv.Sri. K. Gopalakrishna Kurup, the learned senior counsel for the appellants and Sri. Arjun Raghavan, learned counsel appearing for the 1st respondent in the appeal.

5. The learned senior counsel for the appellants submitted that even though nine employees of the Bank were held responsible for the alleged misappropriation, the Bank wanted to proceed against the appellants and another alone, and it was purely based on Ext.P1 interim report. But the final report clearly revealed the involvement of other employees as well; however, the stand of the plaintiff in the ARC, not to implead the other delinquent employees as well, was not justifiable. It was under this circumstance that the Arbitrator had decided to close the proceeding, enabling the Bank to institute a fresh proceeding arraying all the persons who were found at fault. The learned counsel relied on the decisions reported in National Spices v. Andhra Bank [1987 (2) KLT 132], P.V. George v. Bank of Madurai Ltd. [1985 KLJ 999]. Relying on Municipal Council, Sujanpur v. Surinder Kumar [(2006) 5 SCC 173] the learned senior counsel pointed out that the jurisdiction of the High Court to issue a writ of certiorari is very limited. He also pressed for a direction to the Arbitrator to complete the proceedings within a period of six months.

6. The learned counsel for the 1st respondent relied on an unreported decision of a Division Bench of this Court in Writ Appeal No.792 of 2016 and contended that since the Arbitration Court is not a civil court, the powers of the Arbitrator are limited to the scope of Section 70 of the Co-operative Societies Act and Rule 67 of the Co-operative Societies Rules.

7. After hearing counsel on both sides, we do not have any doubt in mind that the Arbitrator cannot be justified in closing the proceeding abruptly for the mere reason that the other employees whose names found place in the final report were not impleaded. We cannot lose sight of the fact that the reference was made to the Arbitration Court for the recovery of a whopping amount, nearly Rs.18 crores from the appellants and others, who had defalcated money while working in the employment of the Bank. It is shown that the contesting defendants had contended that the suit is bad for non-joinder of necessary parties. But, from the proceedings, it cannot be inferred whether, in the light of the pleadings, opportunity was afforded to the plaintiff Bank for impleading additional defendants and to amend the plaint. Even though it is a quasi-judicial proceedings, having regard to the scope and ambit of Section 70 of the Co-operative Societies Act, we are of the opinion that the said forum has all the powers and trappings of a civil court and any interpretation restricting the scope and ambit would not be in terms of advancement of justice.

8. Even when we are inclined to uphold the finding of the learned single Judge that Ext.P10 cannot stand judicial scrutiny, we are of the definite opinion that it was open to the Arbitrator to invoke the powers under Rule 10(2) of Order 1 of the Code of Civil Procedure. Though the plaintiff is the dominus litis, and has to decide who are the necessary parties to the suit, if the plaintiff does not implead all the necessary parties, it is open to the Court to add any person as party at any stage of the proceedings, if the person whose presence before the Court is necessary for an effective and complete adjudication of the issues involved in the suit. It is the settled proposition of law that a person may be a necessary party in a suit, namely, (a) if he ought to have been joined as a party to the suit and has not been so joined, and (b) if the suit cannot be decided without his presence. Apex Court has repeatedly held that the theory of dominus litis should not be overstretched in the matter of impleading of parties, because it is the duty of the Court to ensure that, if for deciding the real matter in dispute, a person is a necessary party, the said person is impleaded. In order to do complete justice between the parties the power available under sub-rule (2) of Rule 10 of Order 1 CPC shall be invoked by the Court.

9. Whether a suit is bad for non-joinder of necessary parties is a mixed question of law and facts, which can be decided only by a court or Tribunal considering the issue. A Division Bench of this Court in Radhakrishnan P.S. v. A. Indu [2018 (3) KHC 877] held that whether a person is a necessary party or not is a question of fact depending upon the relief claimed in the suit; but once it is established or the Court is satisfied that he is a necessary party to the suit, it becomes a question of law.

10. As already indicated, sub-rule(2) of Rule 10 of Order 1 CPC enables the Court to consider the question at any stage of the proceedings, either upon or without the application of either party, or on its own motion. Therefore, only the Tribunal which is trying the issue can decide as to whether the other employees of the Bank are also necessary parties, for doing complete justice.

11. It is trite that all powers which are not specifically denied by the statute or the statutory rules should be vouchsafed to a Tribunal that it may effectively exercise its judicial function. In this connection, it is apposite to extract the following paragraph from the decision reported in Ebrahim Ismail Kunju v. Phasila Beevi [1991 (1) KLT 861].

"5. The increasing importance of the Tribunals in the vast changing life of the community cannot be ignored by a modern court. A modern ostrich even in the distant deserts may not make such limited use of its eyes. Many valuable rights of the modern citizen are deeply involved with the adjudicator, processes of the Tribunals. Many areas hitherto occupied by courts, are now the domains of the Tribunals. A liberal approach towards their functioning and a larger view about the powers they need, are the requirements of the times. A Tribunal should be facilitated to do all that a court could do in similar situations; and much more than that. Greater speed and a total liberation from the tentacles of technicalities, give a better look and greater efficiency for effectively manned Tribunals. If there be no statutory prohibition, the Tribunal should therefore normally be in a position to ordain its affairs and modulate its procedures in such a manner as to best subserve the interest of the public, and in particular the litigant public.”

12. In Thankam R. Pillai v. Arbitrator [1996 KHC 49], a Division Bench of this Court has held that an Arbitrator functioning under the Co-operative Societies Act is an adjudicatory body coming within the meaning of the term 'Tribunal'. It is a quasijudicial adjudicatory body. Therefore, the principles laid down by the Hon'ble Supreme Court in Rameshwar Manjhi v. Management of Sangramgarh Colliery [AIR 1994 SC 1176] are equally applicable to a proceeding pending before the Arbitrator.

13. In a slightly different context, a Division Bench of this Court in Velunni v. Vellakutty [1989 (2) KLT 227] held that even though the Tribunal is not a court, it performs the functions similar to a court; the Tribunal is free to follow any procedure which it considers expedient in the interest of justice so long as the procedure is not inconsistent with the rules of natural justice and does not contravene the provisions of the Act or the Rules. It was also added that, in order to do justice for which it has been constituted, the Tribunal would have power to apply the principles underlining the provisions of the Code of Civil Procedure, even though not rendered specifically applicable.

14. We are in agreement with the observations of the learned single Judge in Angadi Service Co-operative Bank Ltd. v. Nissamu Kutty [2016 (2) KLJ 313] that both Section 70 of the Co-operative Societies Act and Rule 67 of the Rules ought to be expansively read. In that case, the learned Judge was considering the correctness of an order passed by the Co-operative Arbitration Court which was trying an Election Petition, appointing an expert commission for examining the election records. Upholding the order, the learned Judge opined that since there is no express exclusion of the application of the Code of Civil Procedure, the learned Arbitrator is eminently empowered, under Rule 7 of Order XXXIX, to exercise his powers for the appointment of an expert as he deems appropriate to render complete justice, that it is sine qua non of any forum, be it quasi-judicial or judicial.

15. As a matter of fact, the purport of establishing a tribunal which is an alternate forum

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is to ease the workload of a superior authority or a court. We are of the opinion that, once the powers of a civil court under the Civil Procedure Code are conferred on a tribunal, it can reasonably be construed that, in the absence of a specific prohibition, it can borrow the provisions of the Code for doing complete justice between the parties. 16. Having considered Sections 70 and 98 of the Cooperative Societies Act, we are of the opinion that even though there are no specific provisions for impleading a necessary party, general provisions of the Code of Civil Procedure are available to the Arbitrator and that there is no reason why such provisions are not invoked. 17. Thus, though the learned single Judge had directed the 1st respondent to continue the proceedings with the defendants already impleaded, we are of the opinion that, in the given circumstances, and if evidence and materials available on record suggest that there are other persons also to be impleaded as additional defendants, it is always open to the Arbitrator to proceed against them as well, in accordance with law. We also deem it appropriate to direct the Arbitrator to try and dispose of the ARC as expeditiously as possible. With these observations, the Writ Appeal is disposed of.