The Secretary, Perinthalmanna Taluk vs The Kerala Co-operative Tribunal and Others

K.T. Sankaran, J—The Perinthalmanna Taluk Rural Housing Co-operative Society Limited (hereinafter referred to as ''the Society'') granted a housing loan to the tune of Rs. 2,60,000/- to K.P. Abdul Hameed, the predecessor-in-interest of respondents 2 and 3. Amounts were due to the Society. Arbitration proceedings were initiated under Section 69 of the Kerala Co-operative Societies Act against Abdul Hameed. During the pendency of the arbitration proceedings, Abdul Hameed died. On the death of Abdul Hameed, the Life Insurance Corporation of India released a sum of Rs. 2,16,680/- towards the group insurance benefit. The Society received the said sum of Rs. 2,16,680/-. The Arbitration Reference Case was withdrawn by the Society and, thereafter, the present Arbitration Case, namely, ARC. 1536/02-03 was filed before the Assistant Registrar of Co-operative Societies (General), Perinthalmanna, against the legal representatives of Abdul Hameed. The legal representatives of Abdul Hameed remained absent and an ex parte decree was passed by the Arbitrator for a sum of Rs. 2,25,864.60 in favour of the Society. The decree in ARC. No. 1536/02-03 was challenged by the legal representatives of Abdul Hameed in R.P. No. 453 of 2003 before the Kerala Co-operative Tribunal, Thiruvananthapuram. The Tribunal, as per Ext. P7 order dated 28.5.2010, set aside the award. The Tribunal held that before withdrawing the Arbitration Reference Case by the Society no permission was granted and, therefore, the Society was not justified in filing another Arbitration Reference Case. The Tribunal also held that in view of Rule 106(1) of the Kerala Cooperative Societies Rules fresh proceedings are barred. The Society should have impleaded the legal representatives of Abdul Hameed in the proceedings and that course having not been adopted, the Society was not justified in initiating another Arbitration Reference Case. The Tribunal also found that the sum of Rs. 2,16,680/- received from the Life Insurance Corporation should have been adjusted towards the principal sum of Rs. 3,05,753/- as on that day and if so, the balance amount would be only Rs. 89,073/- plus costs, which would come to Rs. 93,685.40. The Society was not justified in filing the Arbitration Reference Case claiming a sum of Rs. 1,96,792/-.

The Tribunal was not justified in holding that Rule 106 will apply. Rules 104 to 106 occur in Chapter XII of the Rules, which deals with appeals, revision and review. Rules 104 to 106 provides the procedure for impleading, setting aside abatement etc. which are akin to the provisions of Rules 2 to 4 of Order XXII and Section 5 of the Limitation Act. But Rules 104 to 106 do not apply to proceedings before the Arbitrator. Learned counsel for the petitioner submitted that Rule 74 will apply. Sub-rule (4) of Rule 74 provides that where a defaulter dies before the decree has been fully satisfied, an application under sub-rule (1) may be made against the legal representatives of the deceased and thereupon all the provisions of Rule 74 shall apply, as if such legal representatives were defaulters. But Rule 74 as such may not apply to proceedings other than execution of the award.

A Division Bench of this Court in Thankam R. Pillai v. Arbitrator (1996 (1) KLT 225) held that the Arbitrator has power to implead the legal representatives of a deceased party in a proceeding pending before him. The contrary view taken in Bhaskaran Nair v. Co-operative Tribunal, Trivandrum (1976 KLT 18 ) was overruled by the Division Bench. The Division Bench relied on the decisions in Gwalior Rayons Vs. Labour Court and Others, (1978) 2 LLJ 188 , Cheru Ouseph Vs. Kunjipathumma, AIR 1981 Ker 266 : (1981) 2 ILR (Ker) 371 , Ebrahim Ismail Kunju and Another Vs. Phasila Beevi, AIR 1991 Ker 385 , Rameshwar Manjhi (Deceased) through his son Lakhiram Manjhi Vs. Managemenmt of Sangramgarh Colliery and others, AIR 1994 SC 1176 : (1994) 68 FLR 60 : (1993) 6 JT 337 : (1994) 1 LLJ 376 : (1993) 4 SCALE 407 : (1994) 1 SCC 292 : (1993) 3 SCR 668 Supp : (1994) 1 SLJ 173 : (1994) 1 UJ 13 and Gujarat Steel Tubes Ltd. and Others Vs. Gujarat Steel Tubes Mazdoor Sabha and Others, AIR 1980 SC 1896 : (1980) 1 LLJ 137 : (1980) 2 SCC 593 : (1980) 2 SCR 146 .

In view of the settled legal position, the Society should have taken steps to implead the legal representatives in the first proceedings before the Arbitrator. Instead, the Society withdrew that proceedings without the permission of the Arbitrator and thereby the Society is precluded from initiating fresh arbitration proceedings. The Tribunal was justified in setting aside the award passed by the Arbitrator. There is no ground to interfere in this Original Petition.

The learned counsel appearing for respondents 2 and 3 submitted that various amounts were paid by them to the Society and, therefore, there will be no balance due to the Society. The learned counsel for the petitioner submitted that even if the view taken by the Tribunal is accepted, some more amount will be still due to the Society. The learned counsel appearing for respondents 2 and 3 submitted that, as per their faith, as legal representatives they should discharge whatever was due from their predecessor and they would not hesitate to pay any amount legally due to the Society. This submission is recorded.

The Original Petition is disposed of as above.