Kerala Co-Operative Societies Act | Impleadment Of Legal Representative In Execution Of Arbitral Award Is Not Hit By Limitation: Kerala High Court

Justice M. A. Abdul Hakhim observed:

“Hence, I hold that there is no abatement in case the legal representatives of the deceased judgment-debtor are not impleaded in the execution proceedings to execute the Arbitration Award passed under the Act and there is no impediment to implead the legal representatives in the execution proceedings at any time irrespective of the date of death of the deceased judgment debtor.”

Sri. Velayudhan P. had taken a loan from Keezhmadu Service Co-operative Bank. When he defaulted in re-payment of loan, the bank initiated arbitration proceedings against him under S.69 of the Kerala Cooperative Societies Act. An award was passed against Velayudhan. The Bank instituted execution proceedings of the award through the Assistant Registrar of Co-operative Societies and the Special Sale Officer. Notice of the execution proceedings were given to Velayudhan. He subsequently died.

The petitioners, the wife and children of Velayudhan argued that they were not impleaded in the petition within the period of limitation and therefore the execution proceedings are abated. The Code of Civil Procedure requires that the legal representatives should be impleaded in a proceedings within the limitation period. Section 76(a) of the Kerala Co-operative Societies Act provides that the award of Registrar shall be deemed to be a decree of Civil Court and be executed in the same manner as a decree. The petitioner argued that due to this provision Code of Civil Procedure is applicable to the execution proceedings of the awards passed under this Act and Rules.

Further, they argued that Rule 74(4) of the Kerala Co-operative Society Rules provides that when a defaulter dies before the decree is fully satisfied, an application under Rule 74(1) maybe made against the legal representatives.

The bank argued saying that as per Order XXII Rule 12 of Civil Procedure Code, Rule 3, 4 and 8 of Order XXII would not be applicable to execution proceedings. Therefore, there is no limitation period to implead the petitioners in the proceedings. The proceedings is not abated.

The Court noted that there are three modes of execution provided under Section 76 of the Kerala Co-operative Societies Act. S. 76(a) says about execution through civil court. The Court observed that the order shall be 'deemed to be a decree of civil court' mentioned in S, 76(a) is applicable only in this circumstance. Here, the bank is executing the order by another means, through the Registrar or his subordinates. Section 77 says Registrar is deemed to be a Civil Court. This is but, only for the purpose of Article 136 to the Schedule of Limitation Act. Section 70(3) gives the power of civil courts to Co-operative Arbitration Court, but this is also limited to certain specified matters. As per Rule 122, Code of Civil Procedure and Civil Rules of practice is made applicable only to Kerala Co-Operative Tribunal. In the Act and Rules of Kerala Co-operative Societies has a chapter detailing execution proceedings. If Civil Code of Procedure was applicable to execution proceedings, there need not be specific provisions related to executions in the Act. Therefore, the Court held that Code of Civil Procedure is not applicable for execution of arbitral award under the Kerala Co-operative Societies Act.

The Court further observed that though on strict reading of Rule 74(4), the bank is to file a fresh application against the legal representatives, no prejudice will be caused to them if they are impleaded in the existing application. However, in any case of death, the decree holder is to file a fresh application for execution leaving the stage at which the execution has reached, it would cause serious prejudice to the decree holder. The Court held that the decree holder can implead the legal representatives under Rule 74(4).

The Court noted that the Rules provide for limitation period for impleading legal representatives in proceedings before Kerala Co-operative Tribunal and for setting aside abetment. There is no limitation period fixed for impleading legal representatives in execution proceedings. Therefore, the impleadment of legal representatives to the execution proceedings will not be barred by limitation. Therefore, the execution proceedings are not abated

The Court ordered the bank to only proceed with the execution proceedings after impleading the petitioners.

Counsel for Petitioners: Advocates Ajai John, V. M. Sajan

Counsel for Respondents: Advocates M. P. Ashok Kumar, Bindhu Sreedhar, Asif N.

Case No: WP(C) 28342 of 2021

Case Title: Sali T. v Keezhmadu Service Co-operative Bank

Citation: 2024 LiveLaw (Ker) 397