Jayashree Patnaik and Another vs Urban Cooperative Bank and Others

P.K. Balasubramanyan, C.J.—Defendants 2 and 3 in an arbitration proceeding before the Arbitrator-cum-Assistant Registrar under the Orissa Co-operative Societies Act (hereinafter referred to as the ''Act'') are the petitioners in this writ petition. The Arbitration proceeding arose out of a claim filed by the first opposite party, a co-operative bank, against defendant No. 1, the borrower and against defendants 2 and 3 presumably on the basis that they were guarantors of the advances made to defendant No. 1. Defendants 2 and 3 filed written statement in answer to the claim disputing the maintainability of the claim as against them. They also contended that the claim did not disclose any cause of action as against defendants 2 and 3. Presumably in view of this pleading, the claimant sought an amendment of the plaint or claim, by incorporating the details regarding the transaction with defendants 2 and 3 and supporting the prayer earlier made in the claim with reference to those facts. This application was resisted by defendants 2 and 3 by contending that in a proceeding under the Orissa Cooperative Societies Act, the Arbitrator did not have the jurisdiction or power to allow an amendment of the claim, that the amendment sought for would introduce pleas which were never raised before; that the claim as against defendants 2 and 3 was barred by limitation and hence, the amendment should not be allowed. The Arbitrator took the view that while adjudicating a claim like the present one, he had jurisdiction to allow an amendment. Even though Order 6, Rule 17 of the CPC was not specifically made applicable, the principle of justice, equity and good conscience would apply and would enable the Arbitrator to allow an amendment of the pleadings. He further held that there was nothing to show prima facie that the claim was barred by limitation. On the facts, the Arbitrator held that the facts sought to be introduced were merely an approach in support of the cause of action already set out in the claim and even if it is treated as an additional approach, such an amendment could be allowed and in the face of what is sought to be introduced, it could not be said that defendants 2 and 3 would in any manner be prejudiced by the allowing of such an amendment. Thus, the amendment was allowed. This writ petition is filed challenging that order.

After all, what has been done by the Arbitrator is only to allow the claimant to plead the guarantee offered by defendants 2 and 3 against whom a claim had already been made on the basis that they are also liable for the amounts due mainly from defendant No. 1. According to the claimant, relevant documents have been executed by defendants 2 and 3. In such a situation, any interference by this Court with the order of the Arbitrator in exercise of its jurisdiction under Articles 226 and 227 of the Constitution of India would not be in furtherance of justice. On the other hand, it would tend to defeat justice in the face of the claim by the claimant that substantial amounts were advanced to defendant No. 1 for repayment of which transactions have been entered into by defendants 2 and 3 to guarantee the repayment. We are therefore of the view that interests of justice do not justify interference in this case.

Learned counsel for the petitioner argued that the Arbitrator acting under the Co-operative Societies Act, did not have the jurisdiction or power to allow the amendment, Counsel referred: to Section 120 of the Act to point out that the powers enumerated therein available under the CPC do not include the power to allow an amendment. No doubt that is true. But, it appears to us that when an Arbitrator under the Co-operative Societies, Act is entrusted with the task of adjudicating on a claim for repayment of a debt made by a Co-operative Society against a debtor, or debtors, he should have the power to make a proper enquiry into the claim and in that process he has the power to permit corrections, to be made, pleadings to be amended and for impleading the legal representatives and the like. In other words, powers ancillary to the power to adjudicate on a claim involving civil consequences, are normally to be vouchsafed to a Tribunal unless the statute specifically excludes recognition of such a power, as queried by. C. Thanka and Others Vs. Narayani, :

"A new system of dispensation of justice has thus been growing up, even over shadowing the ordinary courts in its reach and range; and in such a situation, is it wise or useful to still adhere to the theory that tribunals are little bodies with only some of the powers of a court, if at all granted by the legislature ? If they are equally important as the courts of the land by reason of their discharging the same functions though in their respective specialised fields, why should they be denied the powers ordinarily available to courts, so long as such powers are not specifically denied to, them by the statute, in the matter of administering justice ?"

With respect, we are inclined to agree that so long as there is no specific exclusion, while conferring jurisdiction on an a judicatory body like an Arbitrator, it would normally have the power to allow an amendment of pleadings. Of course, this aspect has been dealt with in various cases arising under Rent Control legislations and the like. We do not think it necessary to multiply authorities on that question. We, therefore, overrule the argument of learned counsel for the petitioner that the Arbitrator did not have jurisdiction to allow the amendment.

4 . As regards the plea that the claim is barred by limitation, we see no reason to accept the same at this stage. If such a plea is available to defendants 2 and 3, it is always open to them to raise it in answer to the amended claim by way of an additional statement of defence.

As regards the plea that a new cause of action is being substituted, we find no merit in it. After all, the claimant had made a claim against defendants 2 and 3 in respect of the main transaction between itself and defendant No. 1. The facts now pleaded are only clarificatory and set out in detail the nature of the claim in the context of the plea raised by defendants 2 and 3 in the written statement. It cannot be said that such a claim would introduce a new cause of action as against defendants 2 and 3 on the, facts and in the circumstances. We are also not satisfied that defendants 2 and 3 would in any manner be prejudiced since what are relied on are transactions entered into by them.

We, thus find ho reason to interfere. We dismiss the writ petition.

Pradip Mohanty, J.

I agree.