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2018 Supreme(Cal) 472
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
Sabyasachi Bhattacharyya, J.
The Bengal Secretariat Co-operative Land Mortgage Bank & Housing Society Ltd. and another - Petitioners
Vs.
Sri Aloke Kumar - Respondent
C.O. No. 2714 of 2014
Decided On : 08-08-2018
Advocate Appeared:
For the Petitioners: Mr. Saptangshu Basu, Mr. D.K. Sengupta, Ms. Jaya Datta, Ms. Sweta Saha
For the Respondent: Party In Person, Mr. Aloke Kumar
The central legal point established in the judgment is the violation of the arbitral award by the petitioner society, emphasizing the limitations on delegation of construction work to third-party developers with commercial interests, as per the West Bengal Co-operative Societies Act, 2006 and relevant rules.
Headnote:
Arbitral Award - Co-operative Society - West Bengal Co-operative Societies Act, 2006, Rule 149(11) of W.B.C.S. Rules, 1987, Rule 21(2) of the West Bengal Co-operative Societies Rules, 2011, Rule 145(2) of the West Bengal Co-operative Societies Rules, 2011 - The court discussed the violation of the arbitral award by the petitioner society in a joint venture with a private promoter, the non-compliance with the special general meeting, and the misleading submission to the Registrar of Co-operative Societies. The court highlighted the provisions of the West Bengal Co-operative Societies Act, 2006 and relevant rules, emphasizing the spirit of the co-operative movement and the limitations on delegation of construction work to third-party developers with commercial interests.
Fact of the Case:
The opposite party filed a dispute case against the petitioner society, alleging illegal actions in a joint venture with a private promoter. The case culminated in an arbitral award, which the petitioner contested, leading to an execution case. The petitioner sought relief under Article 227 of the Constitution of India, arguing satisfaction of the award components.
Finding of the Court:
The court found that the petitioner society violated the arbitral award by proceeding with the joint venture, failing to comply with the special general meeting, and misleading the Registrar of Co-operative Societies. The court dismissed the petitioner's application under Article 227 of the Constitution of India, upholding the validity of the impugned order.
Issues: Violation of arbitral award, compliance with special general meeting, misleading submission to Registrar of Co-operative Societies, satisfaction of award components, and scope of interference under Article 227 of the Constitution of India.
Ratio Decidendi: The court held that the petitioner's actions violated the spirit of the co-operative movement and the provisions of the West Bengal Co-operative Societies Act, 2006 and relevant rules. The court emphasized the limitations on delegation of construction work to third-party developers with commercial interests.
Final Decision: The court dismissed the petitioner's application under Article 227 of the Constitution of India, upholding the validity of the impugned order.
Sabyasachi Bhattacharyya, J.
The opposite party, a member/Director of the petitioner society, instituted a dispute case, bearing Dispute Case No. 47 of 2002-2003, for the following reliefs:
a. Declaring that all actions of the member right from the publication of the notice inviting bids, float of bid documents, the proceedings and resolution in the adjourned Annual General Meeting of the aforesaid Society held on May 5, 2002 accepting the offer of M/s Hi-Rise Apartment Makers Private Limited and acceptance of earnest money and security deposit of Rs. 10 lakhs from them and thereafter, were illegal and void; and
b. Permanently restraining the defendants and their men and agents from proceeding further and taking any steps further on the basis of the said illegal resolution; and
c. Costs of the case.
2. Such case was filed before the Registrar, Co-operative Societies and was referred to an arbitrator. The said proceeding culminated in a contested award dated December 21, 2004. The operative portion of the award stood as follows:
“AWARD
1. That the society shall restrain itself from taking any step towards demolishing the existing constructions of the Administrative Building of the society as part of a joint venture with a Private promoter/developer, M/s. Hi Rise Apartment Makers Pvt. Ltd.
2. That special general meeting be called with clear one month’s notice ensuring receipts by all the members-discussing the issue in every detail with transparency at every stage being observed to the full, and any resolution taken thereof in favour of the BOD’s proposal of this nature be sent to the Registrar of Cooperative Societies, West Bengal for his approval as required under Rule 149 (11) of W.B.C.S. Rules, 1987.”
The petitioner preferred against the aforesaid award an appeal, bearing no. 7 of 2005, before the West Bengal Cooperative Tribunal, which was dismissed for default on March 24, 2006 in the presence of the present opposite party. The award-holder/opposite party put the said award into execution by filing an application under Section 151, read with Order XXI Rule 32 (5) of the Code of Civil Procedure, thereby giving rise to Arbitration Execution Case No. 19 of 2009 before the Civil Judge (Senior Division), Ninth Court at Alipore, District: South 24-Parganas. The award-debtor/petitioner contested the same by filing a written objection thereto. The award-debtor also filed a petition for putting up the execution petition to decide maintainability of the same. An order of attachment was passed in the execution case.
3. The Civil Judge (Senior Division), took up all pending applications, including the application challenging maintainability of the execution case and, vide order dated April 17, 2014, held that the execution case was still maintainable in law since the award was yet to be satisfied at the instance of the award debtor/Society.
4. The order of attachment, passed in the meantime, was also vacated.
5. Being dissatisfied with the said order dated April 17, 2014, the petitioner Society and its Secretary have preferred the instant application under Article 227 of the Constitution of India.
6. Learned Senior Advocate appearing for the petitioners argues that both the components of the arbitral award have been satisfied in the meantime. The Society cancelled its agreement with M/s Hi-Rise Apartment Makers Private Limited and has entered into a new agreement regarding construction of the administrative building of the Society. It was further argued that, in any event, a special general meeting had been called in the meantime on January 15, 2006 in terms of the second component of the award. It is argued that satisfaction of the second component of the award automatically rendered academic the first component thereof, since, according to him, nothing remained in the first component after alleged satisfaction of the second.
7. Apart from holding a special general meeting, it is submitted, the petitioner/Society also took steps for sen
