PRASEETHA v. KARASSERY SERVICE CO-OPERATIVE BANK LIMITED

The 1st respondent resisted the writ petition filing counter affidavit. The 1st respondent submitted that the petitioners defaulted in paying the loan amount and hence the 1st respondent was forced to initiate recovery proceeding filing ARC No.4284/2018. Summons was duly served on the petitioners. The petitioners opted to remain absent and W.P.(C) No.31665/2023 : 4 : hence they were set ex-parte. Thereafter, the ARC was heard and Ext.P1 Award was passed on 24.10.2018. The petitioners did not file any appeal within a reasonable time. It is only when notice of EP No.675/2022 was served, the petitioners filed an objection in the EP.

5. The Arbitrator has considered the applications of the petitioners for setting aside ex-parte Award. There is no specific power conferred by the statute on the Arbitrator to set aside his own Award. There is no bona fide in the contentions of the petitioners. The writ petition is therefore liable to be dismissed.

6. The contention of the petitioners is that they have availed only ₹25 lakhs as loan from the Bank during the period of 2015. The staff of the Co-operative Bank obtained signatures of the 1st petitioner on several papers and have created fabricated documents. Therefore, unless the Arbitrator sets aside the ex-parte Award, the petitioners will be put to irrecoverable loss. W.P.(C) No.31665/2023 : 5 :

7. The Arbitrator has rejected the application to set aside ex-parte Award holding that he has already issued Form-12 for execution of the Award and hence he has no power.

8. This Court has considered the power of an Arbitrator under Section 70 of the Kerala Co-operative Societies Act to set aside ex-parte Award. In the judgment in Rema Devi and others v. Joint Registrar (General) of Co-operative Societies, Ernakulam and another [2016 (3) KLT 50], this Court held that if the power is vested to decide a more serious issue, then the power to decide an issue to set aside an Award or to restore an application dismissed for default, is an axiomatic power that is implied and deemed under Section 70 of the statute itself. This Court held that the Arbitrator has power to set aside an ex-parte Award.

9. In view of the law laid down by this Court in Rema Devi and others (supra), Ext.P7 decision of the 2nd respondent is unsustainable. Ext.P7 is therefore set aside. The 2nd respondent is directed to consider Exts.P2 and P3 in W.P.(C) No.31665/2023 : 6 : accordance with law and take appropriate decision thereon within a period of two months. Till a decision is taken on Ext.P2, coercive proceedings in EP No.675/2022 in ARC No.4284/2018 pending before the 1st Additional Sub Court, Kozhikode shall stand stayed. Writ petition is disposed of as above. aks/04.01.2024 Sd/- N. NAGARESH, JUDGE W.P.(C) No.31665/2023 : 7 : APPENDIX OF WP(C) 31665/2023 PETITIONER'S EXHIBITS Exhibit P1 Exhibit P2 Exhibit P3 Exhibit P4 Exhibit P5 Exhibit P6 Exhibit P7 TRUE COPY OF THE AWARD IN A.R.C. NO.4284 OF 2018 ON THE FILE OF THE ARBITRATOR, SENIOR INSPECTOR/SPECIAL SALE OFFICER, KODENCHERY SCB GROUP DATED 24.10.2018 TRUE COPY OF THE APPLICATION TO SET ASIDE THE EXPARTE AWARD IN A.R.C. NO. 4284 OF 2018 BEFORE THE ASSISTANT REGISTRAR (GENERAL), KOZHIKODE DATED 10.7.2023 TRUE COPY OF THE APPLICATION SUBMITTED BY THE PETITIONER TO CONDONE THE DELAY OF 1676 DAYS FOR FILING THE APPLICATION TO SET ASIDE THE EXPARTE AWARD IN A.R.C. NO. 4284 OF 2018 BEFORE THE ASSISTANT REGISTRAR (GENERAL), KOZHIKODE DATED 10.7.2023 TRUE COPY OF THE COMPLAINT SUBMITTED BY THE PETITIONER'S COUNSEL BEFORE THE 2ND RESPONDENT THROUGH E-MAIL DATED 13.7.2023 TRUE COPY OF THE STATEMENT SUBMITTED BY THE PETITIONER'S COUNSEL BEFORE THE 2ND RESPONDENT TRUE COPY OF THE ACKNOWLEDGEMENT OF THE 2ND RESPONDENT DATED 14.7.2023 SHOWING THE RECEIPT OF THE EXHIBIT P2 AND P3 TRUE COPY OF THE LETTER ISSUED BY THE 2ND RESPONDENT TO THE 2ND PETITIONER DATED 1.8.2023