IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 10681 of 2009(E)
1. IRINJALAKUDA SERVICE CO-OPERATIVE BANK
... Petitioner
Vs
1. STATE OF KERALA, REP. BY
... Respondent
2. REGISTRAR OF CO-OPERATIVE
3. JOINT REGISTRAR OF CO-OPERATIVE
4. ASSISTANT REGISTRAR OF CO-OPERATIVE
5. KATTOOR SERVICE CO-OPERATIVE BANK
For Petitioner :SRI.G.S.REGHUNATH
For Respondent :SRI.D.SOMASUNDARAM
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :10/06/2009
O R D E R
ANTONY DOMINIC,J.
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W.P.(C).Nos.10681 & 13423 OF 2009
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Dated this the 10th day of June, 2009.
JUDGMENT
WP(c).No.10681/09 is filed by the Irinjalakuda Service
Co-operative Bank Ltd. It is stated that on 30.9.2008, the
Bank passed a resolution, resolving to start a clinical lab
within the municipal town of Irinjalakuda, it being the area
of operation of the Society and that the same was sent to
the Joint Registrar for approval. It is stated that, coming to
know that certain other societies were planning to establish
similar units within the area of operation of the petitioner
Society, they had also represented to the authorities against
sanctioning the same. At that stage apprehending that the
Kattoor Service Co-operative Bank Ltd; the petitoner in WP
(c).No.13423/09 was attempting to get the bye laws
amended to extend the area of its operation into the area
of operation of Irinjalakuda Service Co-operative Bank,
WP(c).Nos.10681&13423/09 2
they filed WP(c).No.6537/09 before this court, which was
dismissed by Ext.P9 judgment, on the ground that the said
writ petition was an anticipatory one.
2. It is stated that thereafter the Irinjalakuda Service
Co-operative Bank invoked the provisions of the Right to
Information Act, sought for certain documents, which were
furnished under the cover of Ext.P10. Ext.P10(a) is the
proceedings of the Joint Registrar, granting sanction to the
Kattoor Service Co-operative Bank to establish a clinical lab,
within the Irinjalakuda Municipal area. Similarly, Ext.P10(b) is
another proceedings of the Joint Registrar dated 18.3.2009
granting sanction for establishing another clinical lab within
the Irinjalakuda Municipal area. It is on record that the
clinical labs sanctioned as per Ext.P10(a) was started on
14.12.2008 and as per Ext.P10(b) was started on 23.3.2009.
According to the Irinjalakuda Service Co-operative Bank, on
receipt of Ext.P10(a), they filed Ext.P11 dated 25.3.2009, a
petition under Section 69 of the Kerala Co-operative Societies
WP(c).Nos.10681&13423/09 3
Act before the Arbitration Court, which was numbered as
ARC.No.52/09. Along with ARC.No.52/09, they also filed
Ext.P12, I.A.No.40/09, seeking a direction to the Kattoor
Service Co-operative Bank to stop functioning of the clinical
laboratories which were already functioning.
3. Immediately after filing Exts.P11 and P12, on
31.3.2009 the Irinjalakuda Service Co-operative Bank filed
this writ petition, mainly complainng that despite the urgency
of the matter, without praying for a direction to quash
Exts.P10(a) and (b) referred to above and to issue directions
for stopping the laboratories established by the Kattoor
Service Co-operative Bank. On 1.4.2009 and 74.2009, the writ
petition came up for orders and on 7.4.2009 a counter
affidavit was filed by the 5th respondent, the Kattoor Service
Co-operative Bank. Although interim order for stopping the
clinical labs were sought , no orders were passed by this court,
during the pendency of this writ petition it is stated that on
22.4.2009 an interim order was passed by the Arbitration
WP(c).Nos.10681&13423/09 4
Court on Ext.P12 IA.No.40/2009 directing that both the
clinical labs should be stopped.
4. In so far as WP(c).No.13423/09 is concerned, that
writ petition is filed by the Kattoor Service Co-operative Bank.
According to them Ext.P1 is the certificate of amendment of
clause 3(2)of the bye laws, enabling them to open
establishments within its area of operation and in the
adjacent areas subject to the sanction of the Registrar of Co-
operative Societies. It is stated that prior to Ext.P1, they had
obtained Ext.P2 on 10.10.2008 and Ext.P4 18.3.2009
sanctioning establishment of clinical labs (Exts.P10(a) and
Ext.P10(b) in WP(c)No.10681/09). It is stated that on that
basis, they had opened the labs on 14.12.2008 and
23.3.1999. According to them subsequently, ARC. No.52/09
was filed and in which Ext.P6 ex-parte order dated 22.4.2009
has been passed which is challenged in this writ petition. It is
complained that, by Ext.P6 order passed by the Arbitration
court, Kattoor Service Co-operative Bank was restrained
WP(c).Nos.10681&13423/09 5
from continuing the functioning of the Clinical Laboratories
permitted to be established as per Exts.P2 and P4. Although
Ext.P6 referred to above is an interlocutory order, the writ
petition has been filed without moving the Arbitration Court
for getting the stay order vacated. The justification offered is
that the proceedings in ARC.No.52/09 itself is not
maintainable and therefore, they are entitled to invoke the
extra ordinary jurisdiction of this court under Article 226 of
the Constitution of India. The writ petition was moved on
8.5.2009 and this court passed an order of interim stay of
Ext.P6 order referred to above for a period of one month. That
order was extended subsequently and is in force now.
5. In the facts of these cases as narrated above, in my
view, it is necessary for this court to examine the merits of
the controversy raised by both the petitioners. This is for the
reason that, in so far as WP(c).No.10681/09, filed by
Irinjalakuda Service Co-operative Bank is concerned, they filed
ARC.No.52/99 on 25.3.2009 along with I.A.No.40/09 and the
WP(c).Nos.10681&13423/09 6
IA was posted on 22.4.2009. It was there upon that
complaining that though they moved the statutory authority
for appropriate relief, the same was not attended to with the
urgency that is deserved, the writ petition was filed by them
on 31.3.2009. Though the writ petition came up for orders on
1.4.2009 and 7.4.2009, no interim order was passed. The
Arbitration Court proceeded to deal with the case and the
order dated 22.4.2009 has been passed directing that clinical
labs shall be closed. Therefore at this distance of time in view
of the fact that, the Arbitration Court considered their case
and order has been passed, the WP(c).No.10681/09 has
become infructuous and is liable to be dismissed on that
basis.
6. In so far as WP(c).No.13423/09 is concerned, that is
filed by the Kattoor Service Co-operative Bank. According to
them, the Arbitrator was not justified in passing Ext.P6 order
dated 22.4.2009. First of all, it is stated that the clinical labs in
question were established and commenced functioning as
WP(c).Nos.10681&13423/09 7
early as on 14.12.2008 and 23.3.2009 respectively. It is stated
that an ex-parte interim order, ought not have passed by the
Arbitration Court which has the effect of allowing the ARC
itself and that at any rate an order which has the effect of
closing down the running establishments should not have
been passed. It is also the contention of the petitioner that
because of Ext.P1 amendment to their bye laws and Exts.P2
and P4 (Exts.P10(a) and Ext.P10(b) in WP(c)No.10681/09) and
Ext.P1 circular, they were entitled to establish clinical labs in
question. Yet another contention that is raised is that after the
Irinjalakuda Service Co-operative Bank had filed this writ
petition on 31.3.2009 and when this court had declined to
pass interim orders on 1.4.2009 and 7.4.2009, the
Arbitration Court ought not have passed any interlocutory
order. It is also their contention that the ARC itself is not
maintainable and therefore the order passed by the Arbitrator
is without jurisdiction.
WP(c).Nos.10681&13423/09 8
7. The Irinjalakuda Service Co-operative Bank, which is
impleaded in this writ petition as respondent No.2 challenges
the very maintainability of this writ petition. According to them
if a statutory authority has passed an interim order, the
remedy available to the person aggrieved by such an order, is
not to invoke the extra ordinary jurisdiction of this court
under Art.226 of the Constitution of India, but to invoke the
statutory remedies provided under the Co-operative Societies
Act itself. In support of this contention, the counsel relies on
the judgment of the Apex Court in Seth Chand Ratan V.
Pandit Durga prasad(AIR 2003 SC 2736). In so far as Ext.P11,
the circular issued by the Registrar of Co-operative Societies
relied on by the Kattoor Service Co-operative Bank is
concerned, counsel for the Irinjalakuda Service Co-operative
Bank would contend that the said circular is against the
provisions of the Co-operative Societies Act and therefore is
illegal. Reliance in this context is placed on the decision in
Palliman Ksheerulpadak Co-operative Societies Pvt. Ltd. V.
WP(c).Nos.10681&13423/09 9
Deputy Director, Diary Developmet Office (2002(3) KLT 193).
8. Yet another plea that is raised by the counsel for the
Bank is that, Ext.P11 circular was issued only on 19.5.2009
and therefore that circular will not legitimize Exts.P2 and P4
orders issued on 10.10.2008 and 18.3.2008 respectively. It is
contended that the clinical labs in question are established
within the municipal town Irinjalakuda which is entirely within
the area of operation of Irinjalakuda Society and that the same
is impermissible. It is also their contention that, even if Ext.P1
amendment to the bye-laws, is accepted, that does not entitle
the Kattoor Service Co-operative Bank to trespass into their
area of operation and establish the clinical labs in question.
On these contentions, counsel for the Irinjalakuda Service Co-
operative Bank would pray for the dismissal of WP(c).
No.13423/09.
9. Having heard the contentions raised by the respective
parties, I am inclined to think that it is unnecessary for this
court to enter into the merits of the respective contentions
WP(c).Nos.10681&13423/09 10
raised by both parties. In this writ petition all that is necessary
for this court to consider is the validity of Ext.P6, an interim
order passed by the Arbitration Court in I.A.No.40/09 in ARC.
No.52/09. The said order shows that by this order the
Arbitration Court has directed closure of the two clinical labs
established by the Kattoor Service Co-operative Bank. The
said order has been passed on an ex-parte basis. In my view
such an ex-parte order should not have been passed by the
Bank for the further reason that by the said order, the
Arbitration Court has virtually granted the final relief that
could be granted in the ARC. As already noticed, the Kattoor
Service Co-operative Bank has valid contentions in the matter
and among others the Bank is relying on Ext.P1 amendment
to the Bye laws, Exts.P2 and P4 orders and Exts.P10 and P11
circulars issued by the Registrar of Co-operative Societies. In
my view, the Arbitration Court ought to have given the Bank an
opportunity to file its objections and resist the prayers
sought in the ARC. This has not been done and therefore I am
WP(c).Nos.10681&13423/09 11
inclined to set aside Ext.P6.
10. In so far as the contention raised by the learned
counsel for the petitioner relying on the judgment of the Apex
Court in Seth Chand Ratan V. Pandit Durga prasad & Ors.(AIR
2003 SC 2736) is concerned, it is true that if the statute
provides for a remedy, the aggrieved party is bound to pursue
that statutory remedy. However, in WP(c).No.13423/09, the
case pleaded by the petitioner is that the Arbitration Court has
no jurisdiction to entertain the Arbitration petition itself. The
rule of alternate remedy is a self imposed one. There are
exceptions to this rule and one of the recognized exceptions
is violation of the principles of natural justice and when the
order is without jurisdiction. (See in this connection the Apex
Court judgment in 1998(8)SCC 1) Therefore if the order
passed by the Arbitration Court is without jurisdiction or the
order passed by the Arbitration Court is in violation of the
principles of natural justice, certainly that order can be
challenged in a writ Petition. In this case, it is evident from
WP(c).Nos.10681&13423/09 12
the proceedings that the ARC in question was filed by the
Irinjalakuda Service Co-operative Bank on 25.3.2009 and the
Kattoor Service Co-operative Bank had filed its counter on
7.4.2009. Despite that, without putting them notice or hearing
them Ext.P6 order was passed on 22.4.2009. This is clearly in
violation of the principles of natural justice and if that be so,
the Kattoor Service Co-operative Bank is justified in
approaching this court bye-passing the statutory remedy and
for that reason the writ petition is maintainable and cannot be
dismissed.
In the result WP(c). No.10681/09 filed by the Irinjalakuda
Service Co-operative Bank will stand dismissed and WP(c).
No.13423/09 is disposed of quashing Ext.P6, order passed in
I.A.No.40/09 in ARC.No.52/09. The Arbitration Court is
directed to consider I.A.No.40/09 with notice to the parties as
expeditiously as possible. Considering the urgency pointed
out by the counsel for the Irinjalakuda Service Co-operative
Bank, it is directed that within 4 weeks of production of a copy
WP(c).Nos.10681&13423/09 13
of this judgment, the Arbitration Court shall pass fresh orders
in I.A.No.40/09.
(ANTONY DOMINIC)
JUDGE
vi/
WP(c).Nos.10681&13423/09 14