NALUNNAKKAL SERVICE COOP BANK LTD Vs. JOHN

JUDGEMENT

(1.) Petitioner is a Cooperative Bank (for short 'the Bank'). A claim was made by the Bank against respondents 1 to 3, principally against 1st respondent, for a certain sum of money. An award was passed by the Deputy Registrar (Audit) who was appointed as the arbitrator to decide the dispute raised under S.69 of the Kerala Cooperative Societies Act, 1969 (for short 'the Act'), allowing the Bank to realise the sum claimed with interest at 12% per annum. Respondents filed a revision before the Kerala Cooperative Tribunal (for short 'the Tribunal') under S.84 of the Act, challenging the award. The Tribunal set aside the award by Ext. P1 order which is challenged by the Bank in this Original Petition filed under Art.226 of the Constitution.

(2.) The 1st respondent was holding the post of attender in the Bank. He was placed in charge of sales section for a while. When stock verification was made, deficit to the tune of Rs.83,293.87 was detected. The secretary of the Bank called upon the 1st respondent to explain the deficit which was specifically noted in the audit report. According to the Bank, 1st respondent gave a written undertaking owning responsibility for the entire stock and agreeing to indemnify the deficit. The 2nd respondent, who is first respondent's father, executed a written guarantee for replenishment of the deficit attributed to the malfunctioning of his son. Third respondent is the brother of first respondent. According to the Bank, respondents two and three were beneficiaries of the misappropriation committed by the first respondent and hence they too are responsible to make the amount good to the Bank. As the undertaking was not honoured by the respondents, a case was filed before the Joint Registrar of Cooperative Societies, Kottayam, who referred the dispute to the arbitrator appointed by him. An award was passed by the arbitrator on 18-3-1986 after considering the oral and documentary evidence adduced in this case, allowing the bank to realise the sum of Rs.83,293.87 jointly or severally from respondents 1 to 3 with interest at 12% per annum.

(3.) The Tribunal, instead of considering merits of the case and without adverting to the evidence, disallowed the claim on account of two shortcomings. The first is that respondents two and three were made parties to the case only as beneficiaries and hence a dispute involving them would not fall within the ambit of S.69 of the Act. The second is that failure of the Bank to produce a certified copy of the resolution of the Board of Directors of the Bank deciding to proceed against the respondents in violation of the mandatory requirement envisaged in R.67(1) of the Kerala Cooperative Societies Rules, 1969 (for short 'the Rules').