Niwas Dattatraya Lad & Others v/s Punjab and Maharashtra Co-operative Bank Ltd. & Others Writ Petition Noss. 404 of 2012 & 413 of 2012

Niwas Dattatraya Lad & Others v/s Punjab and Maharashtra Co-operative Bank Ltd. & Others
Writ Petition Noss. 404 of 2012 & 413 of 2012
decided on
11-02-2014
at
High Court of Judicature at Bombay
by
THE HONOURABLE JUSTICE ANOOP V. MOHTA & THE HONOURABLE JUSTICE A.A. SAYED
advocates
For the Petitioners: Abhijeet A. Desai, Advocate. For the Respondents: R1, B.H. Prasad Sharma, R2, M.S. Bane, `B’ Panel Counsel, R3, D.A. Dube, Advocates.
Equivalent Citation(s)
2014 (3) BCR 407
2014 (5) ALL MR 647
Judgment
Oral Judgment: (Anoop V. Mohta, J.)
Rule, returnable forthwith.
The learned Counsel for the respective Respondents waive service.
Heard finally by consent of parties.
2. The Petitioners have invoked Articles of the Constitution of India and thereby praying to quash and set aside order dated 07 July 2011 passed by the Central Registrar, Co-operative Societies, whereby an Arbitrator is appointed to settle the disputes between the parties.
3. The submission is revolving around section 84 of the Multi-State Cooperative Societies Act, 2002 (hereinafter referred to as the “MSCS Act 2002”) and rule 30 of the Multi-State Co-operative Societies Rules, 2002 (hereinafter referred to as the “MSCS Rules 2002”). The Apex Court in Greater Bombay Coop. Bank Ltd. v United Yarn Tex (P) Ltd. [(2007) 6 SCC 236] has expressed as under:
“31. The Multi-State Cooperative Societies Act, 1984 was enacted by Parliament and Section 74 thereof deals with various disputes including recovery of debts due to the cooperative banks. Parliament repealed the MultiState Cooperative Societies Act, 1984 by the Multi-State Cooperative Societies Act, 2002 (“the MSCS Act, 2002”).”
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“34. Chapter IV of the Act deals with members of multi-State cooperative societies and their duties, rights and liabilities. Settlement of disputes touching the constitution, management or business of a multi-State cooperative society are to be referred to an arbitration under Section 84 of Chapter IX of the Act.”
The relevant portions of section 84 read as under:
“84. Reference of disputes.–(1) ……………………….
……………………………………………………………………..
(4) Where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar.
(5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996.”
Rule 30 of the 2002 Rules reads thus:
“30. Disputes.—
(1) For the purposes of sub-section (4) of section 84 of the Act, the Central Registrar may appoint and fix the fee of the arbitrators subject to the provisions of Arbitration and Conciliation Act, 1996.
(2) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996.”
4. From a plain reading of the above provisions, it is clear that the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Arbitration Act”) is applicable to disputes once reference is made to settle the disputes between the parties. Respondent no.3 Central Registrar in view of the above provisions is an authority to appoint/nominate an Arbitrator from the panel/list prepared by the concerned Department. Once the Arbitral Tribunal is constituted, in view of the above provisions, the provisions of the Arbitration Act are extended for all the purposes covering every stage of arbitration proceedings till the final Award and even subsequent challenge to the Award. There is no specific provision under the MSCS Act 2002 to deal with such situation once the arbitration proceedings commenced in view of the above provisions.
5. There is no dispute that there arose disputes between the parties as due amount is not paid by the Petitioners to the society/Bank, Respondent no.1. In view of the above provisions, the learned Authority (Respondent no.3) referred the matter/dispute for arbitration. There is nothing on record to show that there was any specific agreement entered into by and between the parties dealing with such disputes. There is nothing on record to show that consent is contemplated in view of the above clear provisions of law as there is no contrary agreement between the parties. It is settled that the arbitration proceedings and/or such proceedings have always foundation of specific agreement between the parties. Therefore, for want of contrary agreement, the above provisions need to be respected in every aspect. The parties having once agreed on the basis of the above provisions which cover the provisions of arbitration proceedings, then the submission that before appointing the Arbitrator, the consent ought to have been sought from the Petitioners and/or other parties is unacceptable. The statutory provisions referred above itself make the position clear that apart from the provisions of the Arbitration Act, where the arbitration proceedings once referred based on the statutory provisions, the procedural aspect of appointment of Arbitrator by consent/mutual consent and by nominating the Arbitrator of their choice as contemplated under the Arbitration Act is impermissible, at least for want of specific provisions and the agreement.
6. The submission revolving around section 11 of the Arbitration Act that opportunity should have been given to appoint the Arbitrator of their choice and/or the parties should have been permitted to file application and/or the procedure ought to have been followed before appointing Arbitrator as contemplated under the Arbitration Act is also unacceptable in view of the above clear provisions of law and even considering the scheme of the Arbitration Act.
7. Section 11 of the Arbitration Act can be invoked mainly in a situation where in spite of requests/demand made by one party, the other party, for whatever may be the reason, failed to appoint/agreed to appoint an Arbitral Tribunal and/or Arbitrator within stipulated time. This provision is not applicable and cannot be extended in view
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of the above statutory provisions in the facts and circumstances of the case. There is no question of requesting for appointment of any Arbitrator of private parties’ choice. Once the dispute is referred for arbitration, the concerned authority is only empowered to appoint an Arbitrator from their panel. There is no say so far as the other side is concerned in such cases. In view of this, the submission that the judgments referred to and relied upon of this Court in Jayant Industrial Packaging Ltd. v. Saraswat Co-operative Bank Ltd., 2011 (4) Mh.L.J. 128, and Abhyudaya Co-op. Bank Ltd. v. Rainproof Exports Pvt. Ltd., 2013 (2) Bankers’ Journal 425, which, according to the Respondents, have considered the similar submissions and granted no reliefs as prayed, in our view, is also acceptable in view of clear provisions/law, including the MSCS Act 2002 and the Arbitration Act itself. There is no lacunae and/or contradiction and/or inconsistency between these two Acts.
8. The Petitioners have relied upon the Orders (Deshbhakta Ratnapanna Kumbhar v. Sau. Rajnitai Vishwanath Magdum & Ors., Writ Petition No. 6941 of 2012 dated 23 November 2012) and Deshbhakta Ratnappanna Kumbhar Panchganga Sahakari Sakhar Karkhana Mydt. v. Shri Ramesh Bhupal Chowgule & Ors., Writ Petition No. 7408 of 2011, dated 26 September 2011), whereby the learned Judges of this Court set aside the appointment so made by the Authority under section 84 of the MSCS Act 2002 basically on the ground of principles of nature justice. Therefore, the Petitioners’ prayer for the same relief, apart from the facts which are distinct and distinguishable in the present case, as the Arbitration proceedings have reached the stage of final hearing/disposal. The Petitioners never filed Application under section 16 of the Arbitration Act and/or raised any dispute prior at any point of time.
9. Therefore, in view of above provisions of law and the reasons so recorded above, including the decisions given by the Apex Court and this Court, we are inclined to dispose of the present Petitions by further observing that once the statutory provisions are clear and as there is no contra agreement and as the statutory arbitration has been initiated and proceeded since long, there is no question of extension of the principles of natural justice, at this stage of the proceedings, in such matter. The remedy is elsewhere. There is no case to interfere with the order so passed.
10. We have read the above provisions and on plain reading of the above provisions, it is very clear that once the matter is referred by the Central Registrar, the arbitration proceedings ought to have been and/or should be commenced and continued and/or ended by following the procedure so prescribed under the Arbitration Act, though the main purpose of extending the provisions of the Arbitration Act is for want of specific provisions under the MSCS Act 2002.
11. There is some force in the submission that normally the party wants to refer the matter to the Arbitrator of both the parties of their choice, but having once agreed to settle their disputes through the above provisions and/or at least there is no contrary agreement on record, the statutory arbitration proceedings so initiated thus cannot be stopped at the instance of the Petitioners. This itself shows that the parties have agreed to follow the above statutory procedure while dealing with their disputes/settlement. Both the parties are therefore bound by the same.
12. The aspect of appointment of Arbitral Tribunal and/or illegality and/or the power of jurisdictional and/or power of Arbitral Tribunal is required to be tested by filing an application before the Arbitral Tribunal, challenging the constitution of the Tribunal as well as its jurisdiction as contemplated under section 16 of the Arbitration Act. But once the application is rejected and the issue of jurisdiction and the power is upheld, the remedy of such aggrieved party is to challenge the main Award by invoking appropriate proceedings under section 34(6) of the Arbitration Act.
13. The invocation of writ jurisdiction on 14 December 2011 as done in the present case is not the remedy available to the Petitioners. The scope of writ jurisdiction for the above reasons is quite limited and, therefore, there is no question of entertaining and/or granting any relief as prayed. No interim relief was granted in favour of the Petitioners at any point of time as prayed. The MSCS Act 2002 is a “special statute” and a “complete code” for all the purposes, including to settle the disputes “between the members” and/or “the societies”. Taking an overall view of the matter, we are inclined to observe that no case is made out by the Petitioners to interfere with the order as passed at this stage of the proceedings, specifically the appointment of the Arbitrator by Respondent no.3. However, liberty is granted to the Petitioners to raise all available challenges at appropriate stage, in accordance with law.
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