Maintainability of Writ Petition against a Co-operative Society [Case Law]

Constitution of India - Article 226 - Cooperative Societies Act, 1969 (Kerala) - S. 69 - A writ will lie against a co-operative society where the duty owed by the society is of a public nature or when there is infringement of any statutory provision by the society.

Writ petition was filed for issuing a direction to the Society to pay the amount covered by the fixed deposit receipt to the petitioner bank with future interest. Writ petitioners have no case that the appellants have violated any statutory provisions or that they have not acted in accordance with the provisions of the statute or that they have acted in total violation of the principles of natural justice. The writ petitioners have no case that the remedies provided under the Kerala Co-operative Societies Act are entirely ill - suited to redress their grievances. In view of the efficacious remedy available to the writ petitioners under Section 69 of the Act, the learned single Judge should not have allowed the writ petitions. Consequently, we allow the writ appeals and set aside the impugned judgments and dismiss the writ petitions. No costs.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

P.N.RAVINDRAN, J. & R.NARAYANA PISHARADI, J.

W.A.Nos.1977 of 2017 & 2351 of 2017

Dated this the 12th day of March, 2018 

(AGAINST THE JUDGMENT IN WP(C) 18243/2015 OF HIGH COURT OF KERALA, DATED 05-07-2017) 

APPELLANTS/RESPONDENTS 1 & 2

1 MEENACHIL RUBBER MARKETING & PROCESSING CO-OPERATIVE SOCIETY LTD. NO.K 118, REPRESENTED BY MANAGING DIRECTOR, PALA-686 575, KOTTAYAM.

2 MANAGING COMMITTEE OF THE MEENACHIL RUBBER MARKETING & PROCESSING CO-OPERATIVE SOCIETY LTD.NO.K.118, REPRESENTED BY PRESIDENT, PALA-686 575, KOTTAYAM.

BY ADVS.SRI.SHAJI THOMAS SRI.MOHAN PULIKKAL SMT.RAHANA JOSE SRI.JEN JAISON 

RESPONDENTS/PETITIONER & 3RD RESPONDENT

1. THE CHOONDACHERY SERVICE CO-OPERATIVE BANK LTD.NO.167, REPRESENTED BY ITS SECRETARY, CHOONDACHERRY .P.O, KOTTAYAM-686 579.

2. JOINT REGISTRAR OF CO-OPERATIVE SOCIETY(GENERAL), KOTTAYAM-686 001.

3. THE REGISTRAR OF CO-OPERATIVE SOCIETIES, THIRUVANANTHAPURAM.

R1 BY SRI.P.N.MOHANAN R2 & R3 BY SMT. K.R. DEEPA, GOVERNMENT PLEADER

JUDGMENT

R. Narayana Pisharadi, J

These writ appeals are directed against the judgment rendered by a learned single Judge of this court in W.P. (C)No.18243 of 2015 and W.P.(C)No.39498 of 2015.

Writ Appeal No.1977 of 2017 

2. This appeal arises out of the judgment in W.P. (C)No.18243 of 2015. The brief facts of this case are as follows: Choondacherry Service Co-operative Bank Limited, the writ petitioner, had deposited Rs.90,00,000/- in the Meenachil Rubber Marketing and Processing Co-operative Society. The amount was deposited for a period of 13 months. The fixed deposit made has attained maturity on 14.04.2015. But, the Society refused to refund the amount covered by the fixed deposit receipt to the petitioner bank. The writ petition was filed for issuing a direction to the Society to pay the amount covered by the fixed deposit receipt to the petitioner bank with future interest.

3. The Society filed counter affidavit in the writ petition admitting the liability to pay the amount to the bank. But, the Society contended that no writ petition is maintainable against a cooperative society. The Society also contended that the writ jurisdiction of the court cannot be exercised to grant the relief prayed for by the bank when alternative statutory remedy is available to the bank. The Society pleaded that it could not pay the amount due to the bank within time due to financial crunch.

4. The learned single Judge held that since the Society has admitted the liability to the bank there is no dispute to be decided by invoking the remedy provided under Section 69 of the Kerala Cooperative Societies Act, 1969 (hereinafter referred to as the 'Act'). The learned single Judge repelled the contention that no writ petition would lie against a co-operative society. The learned single Judge allowed the writ petition and directed the Society to pay the entire amount due to the bank with interest within a period of four months from the date of receipt of a copy of the judgment. The learned single Judge also directed that the Society will be liable to pay additional interest at the rate of 9%, if it failed to pay the amount within the stipulated time. Aggrieved by the judgment of the learned single Judge, the Society has filed W.A.No.1977 of 2017.

Writ Appeal No.2351 of 2017 

5. This appeal arises from the judgment in W.P. (C)No.39498 of 2015. The brief facts of this case are as follows: Muthalappuram Service Co-operative Bank Limited, the writ petitioner, deposited a total amount of Rs.50,65,046/- in the Kerala State Co-operative Rubber Marketing Federation Limited, otherwise known as Rubber Mark. As on 31.03.2005, the total amount outstanding as deposit, including interest, is Rs.64,77,246.87. Rubber Mark has admitted this fact in Ext.P13 letter given to the bank. On attaining maturity of the deposits made, the bank demanded the aforesaid amount from Rubber Mark. But, the Rubber Mark refused to pay the amount due to the bank. The writ petition was filed to issue direction to the Rubber Mark to pay the amount due to the bank with interest.

6. Rubber Mark filed a counter affidavit in the writ petition contending that the bank has got effective alternative remedy under Section 69 of the Act. Rubber Mark also contended that the plea of the bank that the deposits have attained maturity is not correct.

7. The learned single Judge held that Rubber Mark has admitted deposit of an amount of Rs.30,00,000/- by the bank and it has also admitted that an amount of Rs.64,77,246.87 is due from it to the bank. The learned single Judge directed Rubber Mark to repay the amount covered by the fixed deposit to the bank within a period of six months from the date of receipt of a copy of the judgment. Rubber Mark has filed W.A.No.2351 of 2017 challenging the judgment of the learned single Judge.

8. We have heard the learned counsel for the appellants and also the respondents/ writ petitioners.

9. Learned counsel for the appellants contended that no writ petition is maintainable against a co-operative society. Learned counsel for the appellants also contended that the writ petitioners have got an alternative statutory remedy available under Section 69 of the Act and therefore the learned single Judge went wrong in exercising the jurisdiction under Article 226 of the Constitution by allowing the writ petitions and directing the appellants to repay the amounts due to the writ petitioners.

10. Per contra, learned counsel for the respondents/writ petitioners contended that the appellants have admitted the liability to pay amount to the writ petitioners and therefore, there is no dispute to be referred to arbitration as provided under Section 69 of the Act. Learned counsel for the respondents also contended that the appellants have the obligation and duty to repay the amount due to the writ petitioners and therefore, the writ petitions are maintainable.

11. On a consideration of the rival contentions raised by the parties, we are of the view that it is really not necessary to decide whether a writ petition is maintainable or not against a co-operative society. A Full Bench of this court has held in John v. Liquidator (2006(1) KLT 11) that a writ will lie against a co-operative society where the duty owed by the society is of a public nature or when there is infringement of any statutory provision by the society. The decision of the Full Bench in John's case (supra) has been confirmed by a Larger Bench of this court in Association of Milma Officer's Ksheera Bhavan v. State of Kerala (2015(1) KLT 849). There is no pleadings in the writ petitions regarding violation of any statutory provisions by the appellants or breach of any public duty by them. In the absence of such pleadings, we do not think it proper or necessary to enter on a finding on the issue regarding maintainability of writ petition against a co-operative society. The appeals can be disposed of by considering the question whether the writ jurisdiction of the court should have been exercised by the learned single Judge when alternative statutory remedy under Section 69 of the Act was available to the writ petitioners.

12. Section 69 of the Act states the disputes which are required to be decided by the Arbitration court and the Registrar under the Act. Clause (d) of Section 69(1) provides that notwithstanding anything contained in any law for the time being in force, if a dispute arises between the society and any other society, such dispute shall be referred to the Co - operative Arbitration Court constituted under Section 70A, in the case of non - monetary disputes and to the Registrar, in the case of monetary disputes and the Arbitration Court, or the Registrar, as the case may be, shall decide such dispute and no other Court or other authority shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute.

13. Learned counsel for the writ petitioners would contend that the appellants admitted the liability to pay the amount covered by the fixed deposits and therefore, there is no dispute to be referred to arbitration under Section 69 of the Act.

14. The expression 'dispute' is defined in Section 2(i) of the Act. Section 2(i) reads thus: "dispute" means any matter touching the business, constitution, establishment or management of a society capable of being the subject of litigation and includes a claim in respect of any sum payable to or by a society, whether such claim be admitted or not. A bare perusal of this definition would show that a claim in respect of any sum payable to or by a society is dispute whether the claim is admitted or not.

15. A Division Bench of this Court has held in the judgment dated 24.05.2007 in W.A.No.1202 of 2007 (Managing Director, Kerala State Co-operative Rubber Marketing Federation v. Kallumala Agricultural Co-operatve Bank Ltd) as follows: 

“It is the admitted fact that the appellant and the contesting respondent are the societies registered under the provisions of the Kerala Co-operative Societies Act and that the contesting respondent had made certain deposit with the appellant's society. If, for any reason, the appellant's society did not refund any amount deposited, there would be a dispute between the appellant's society and the contesting respondent and that dispute requires to be resolved as provided under section 69 of the Kerala Cooperative Societies Act. Without filing any dispute, the contesting respondent had rushed to this court by filing the Writ Petition for certain directions to the appellant's society. In our opinion, the first and foremost, the learned single Judge could not have entertained the Writ Petition when alternative and efficacious remedies are available for the contesting respondent. Apart from that, Section 69 of the Act provides itself that the dispute between the parties has to be resolved by filing appropriate dispute before the Registrar of the Co-operative Societies. Without doing so, the contesting respondent had rushed to this Court. The learned single Judge could not have entertained the Writ Petition and could not have issued any direction”.

What is stated above by the Division Bench of this Court is complete answer to the contention raised by the writ petitioners that there is no dispute to be referred to the authority concerned under Section 69 of the Act.

16. Does alternative and efficacious statutory remedy bar exercise of writ jurisdiction by the High Court? Answer to the question has been given by the Hon'ble Supreme Court in various decisions.

17. In Thansingh Nathmal v. Superintendent of Taxes: AIR 1964 SC 1419, the Hon'ble Supreme Court has held as follows: 

“The jurisdiction of the High Court under Art.226 of the Constitution is couched in wide terms and the exercise thereof is not subject to any restrictions except the territorial restrictions which are expressly provided in the Articles. But the exercise of the jurisdiction is discretionary: it is not exercised merely because it is lawful to do so. The very amplitude of the jurisdiction demands that it will ordinarily be exercised subject to certain self imposed limitations. Resort to that jurisdiction is not intended as an alternative remedy for relief which may be obtained in a suit or other mode prescribed by statute. Ordinarily the Court will not entertain a petition for a writ under Art.226, where the petitioner has an alternative remedy, which without being unduly onerous, provides an equally efficacious remedy. Again the High Court does not generally enter upon a determination of questions which demand an elaborate examination of evidence to establish the right to enforce which the writ is claimed. The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Art.226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Art.226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up”.

18. In United Bank of India v. Satyawati Tondon: AIR 2010 SC 3413, the Apex Court has reiterated the position as follows: 

“We are conscious that the powers conferred upon the High Court under Art.226 of the Constitution to issue to any person or authority, including in appropriate cases, any Government, directions, orders or writs including the five prerogative writs for the enforcement of any of the rights conferred by Part III or for any other purpose are very wide and there is no express limitation on exercise of that power but, at the same time, we cannot be oblivious of the rules of self - imposed restraint evolved by this Court, which every High Court is bound to keep in view while exercising power under Art.226 of the Constitution. It is true that the rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion, but it is difficult to fathom any reason why the High Court should entertain a petition filed under Art.226 of the Constitution and pass interim order ignoring the fact that the petitioner can avail effective alternative remedy by filing application, appeal, revision, etc. and the particular legislation contains a detailed mechanism for redressal of his grievance”.

19. In Assistant Collector of Central Excise, Chandan Nagar, West Bengal v. Dunlop India Ltd : AIR 1985 SC 330, it has been held as follows: 

"Art.226 is not meant to short - circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill - suited to meet the demands of extraordinary situations, as for instance where the very vires of the statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Art.226 of the Constitution. But then the Court must have good and sufficient reason to bypass the alternative remedy provided by statute.” 

20. In U. P. State Co operative Land Development Bank Ltd. v. Chandra Bhan Dubey: AIR 1999 SC 753, it has been held as follows: 

“When any citizen or person is wronged, the High Court will step in to protect him, be that wrong be done by the State, an instrumentality of the State, a company or a cooperative society or association or body of individuals whether incorporated or not, or even an individual. Right that is infringed may be under Part III of the Constitution or any other right which the law validly made might confer upon him. But then the power conferred upon the High Courts under Art.226 of the Constitution is so vast, this Court has laid down certain guidelines and self imposed limitations have been put there subject to which High Courts would exercise jurisdiction, but those guidelines cannot be mandatory in all circumstances. High Court does not interfere when an equally efficacious alternative remedy is available or when there is established procedure to remedy a wrong or enforce a right. A party may not be allowed to bypass the normal channel of civil and criminal litigation. High Court does not act like a proverbial 'bull in china shop' in the exercise of its jurisdiction under Art.226”.

21. A Full Bench of this Court followed the decision in U. P. State Co operative Land Development Bank's case (supra) and held in John v. Liquidator: 2006 (1) KLT 11 as follows: 

“Admittedly, the petitioner is a member of the second respondent primary Cooperative society, which is a member of the third respondent Apex Society. S.69 of the Kerala Cooperative Societies Act provides for resolution of a dispute between a person and a Cooperative Society and that includes a dispute between a member of the Primary Society and the Apex Society to which the Primary Society is a member as per Clause(e) of S.69(1) of the Act. This is a fair and efficacious remedy available to the petitioners, where the rights and liabilities of the parties will be decided at length by an arbitrator invested with certain powers of the civil court”.

22. As noticed earlier, the decision in John v. Liquidator (supra) has been approved by a Larger Bench of this Court in Association of Milma Officers' Ksheera Bhavan v. State of Kerala (2015 (1) KLT 849).

23. The decisions referred to above show that when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory remedies available to the aggrieved person. The discretionary jurisdiction under Article 226 of the Constitution is not absolute but has to be exercised judiciously in the given facts of a case and in accordance with law. If alternative statutory remedies are available, a writ petition under Article 226 of the Constitution shall not be entertained. This is the normal rule. But, there are exceptions to this rule. Where the statutory authority has not acted in accordance with the provisions of the enactment in question, the writ jurisdiction of the Court shall be exercised. Where the statutory authority acts in defiance of the fundamental principles of judicial procedure or when it acts in total violation of the principles of natural justice, the High Court will entertain a petition under Article 226 of the Constitution. Where statutory remedies are entirely ill - suited to meet the demands of extraordinary situations, then also the High Court would be justified in invoking the writ jurisdiction. The rule of exhaustion of alternative remedy is a rule of discretion and not one of compulsion.

24. In the instant cases, the writ petitions do not satisfy any of the conditions for invoking the jurisdiction of the Court under Article 226 of the Constitution. The pleadings in the writ petitions contain no statement that the grievances fall within any of the welldefined exceptions. The writ petitioners have no case that the appellants have violated any statutory provisions or that they have not acted in accordance with the provisions of the statute or that they have acted in total violation of the principles of natural justice. The writ petitioners have no case that the remedies provided under the Kerala Co-operative Societies Act are entirely ill - suited to redress their grievances. In these circumstances, we are of the opinion that in view of the efficacious remedy available to the writ petitioners under Section 69 of the Act, the learned single Judge should not have allowed the writ petitions.

Consequently, we allow the writ appeals and set aside the impugned judgments and dismiss the writ petitions. No costs.