The court emphasized the scope and ambit of Sec. 34 of the Arbitration Act, the arbitrability of the dispute under Sec. 84 of the MCS Act, and the public policy of India.

JUDGMENT

1. Heard Mr Dharmanand Vernekar for the appellants and Mr Rama Rivankar for the respondents.

2. The appellants challenge the Judgment and Order dtd. 26/6/2018 made by the learned District Judge, South Goa at Margao, dismissing Arbitration Application No.12/2015, objecting to the Arbitral Tribunal's award dtd. 9/3/2015.

3. The respondent no.1 in this appeal is the Goa State Cooperative Bank Limited (GSCB). The GSCB is a society under the Multi-State Cooperative Societies Act, 2002 (MCS Act). The GSCB advanced a loan to respondent No. 2, Marmugao Dock Labour Board Employees Cooperative Credit Society Limited (MDLB Society). At the relevant time, the appellants were the directors of the MDLB Society.

4. As the MDLB Society defaulted on the loan payment to GSCB, a dispute was raised, which was referred to arbitration as provided under Sec. 84 of the MCS Act. The appellants objected to their impleadment/involvement in such a dispute because they were not members of GSCB. Some respondents also claimed that the then Chairman of the Society, Shri Jaikrishna Bhagwant Naik, was solely responsible for the repayment of the loan and admitted this fact in an affidavit.

5. The Arbitrator Shri M. M. Bhartiya, after considering the material on record and rejecting the appellants' defences and objections, made an award dtd. 9/3/2015 requiring the MDLB Society and other respondents, including the present appellants, to jointly and severally repay the entire loan amount of Rs.44,52,933.00 shown outstanding as on 18/6/2013 with interest @ 11% p.a.

6. The present appellants challenged the above award dtd. 9/3/2015 by applying Sec. 34 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). However, this application under Sec. 34 of the Arbitration Act was considered and dismissed by the learned Principal District Judge, South Goa, at Margao vide the impugned Judgment and Order dtd. 26/6/2018. Hence the present appeal under Sec. 37 of the Arbitration Act.

7. Mr Vernekar, learned counsel for the appellants, submitted that the impugned award was contrary to public policy and suffered from jurisdictional errors. He offered that the appellants were not members of GSCB and, therefore, the dispute between the GSCB and the appellants was not arbitrable under Sec. 84 of the MCS Act. He relies on this Court's order dtd. 11/3/2019 in Writ Petition No.481/2011 (Goa State Cooperative Bank Ltd. v/s. Ponda Consumers Cooperative Society Ltd. and 13 Ors.).

8. Mr Vernekar submitted that only the MDLB Society, which had taken the loan from GSCB, could be held responsible for the repayment of the loan and not the appellants, who were only the directors of the MDLB Society. He submitted that there were no proper pleadings about the appellants being involved in the dayto- day administration of the MDLB Society or the appellants having any control over the functioning of the MDLB Society when the loan was taken and possibly not repaid.

9. Mr Vernekar submitted that the Chairman of the MDLB Society had already filed an affidavit assuming full responsibility for the repayment of the loan. Therefore, only the MDLB Society and the said Chairman could have been held responsible for the loan repayment, not other directors like the present appellants. He submits that interference is warranted since the Arbitrator and the Appeal Court have not considered this crucial issue.

10. Mr Vernekar submitted that the GSCB claim was ex-facie barred by limitation. He presents that the Arbitrator or the Appeal Court has not considered this crucial issue. He pointed out that the loan was sanctioned in 2005-2006, but the dispute was raised after six years, i.e. beyond the prescribed limitation period. Mr Vernekar submits that this is a legal plea; therefore, there was no bar to considering such a plea, even though such a plea may not have been raised before the Arbitrator. He relied on Lion Engineering Consultants v/s. State of M.P. - 2018 ALL SCR 2373. Mr Vernekar submitted that this