Back
1988 Supreme(Del) 311
High Court Of Delhi
R.SANGITHA RAO - Appellant
Versus
KRISHI CO-OPERATIVE GROUP HOUSING SOCIETY LIMITED - Respondent
Civil 984 of 1988
Decided On : 10/14/1988
Jagdish Parshad, M.L.VARMA, Munjal, O.N.Vohra, RAKESH AGRWAL
The Tribunal had jurisdiction to remand the case to the Registrar for fresh disposal by another arbitrator, as the arbitrator had not disposed of the matter on a preliminary point and a re-trial was considered necessary.
Headnote:
CO-OPERATIVE SOCIETIES - DISPUTE - ARBITRATION - REMAND - JURISDICTION - Delhi Co-operative Societies Act, 1972 - Section 61(2) - Civil Procedure Code, 1908 - Order 41 Rule 23, 23-A - Whether the Tribunal had jurisdiction to remand the case to the Registrar for fresh disposal by another arbitrator.
Fact of the Case:
The petitioner, a member of a cooperative society, challenged the order of the Tribunal remanding the case to the Registrar for fresh disposal by another arbitrator. The dispute arose from the society's decision to construct flats and the additional payments claimed by the contractor. The petitioner alleged that the resolutions authorizing the additional payments were not passed in accordance with the rules and that the contractor had not done any additional work. The arbitrator found that the additional payments were worked out using surreptitious methods and that the extension of the agreement should not materially alter the essence of the original agreement. The Tribunal allowed the appeal and remanded the case, finding that the arbitrator had proceeded with the decision despite the society's application for withdrawal of the case on the ground of bias.
Finding of the Court:
The court held that the Tribunal had jurisdiction to remand the case under Order 41 Rule 23-A of the Civil Procedure Code, as the arbitrator had not disposed of the matter on a preliminary point and a re-trial was considered necessary. The court also held that the arbitrator was within his powers to proceed with the case and make the award, as the Registrar had not made any stay order on the receipt of the society's application for transfer. The court further held that the Tribunal was justified in allowing the appeal and remanding the case, given the facts that the society had made an application for withdrawal of the case from the arbitrator on the ground of bias and had not taken part in the proceedings before the arbitrator.
Issues: 1. Whether the Tribunal had jurisdiction to remand the case to the Registrar for fresh disposal by another arbitrator. 2. Whether the arbitrator was competent to direct the Registrar of Co-operative Societies for disposal of the dispute by another arbitrator of competent jurisdiction.
Ratio Decidendi: 1. The Tribunal had jurisdiction to remand the case under Order 41 Rule 23-A of the Civil Procedure Code, as the arbitrator had not disposed of the matter on a preliminary point and a re-trial was considered necessary. 2. The arbitrator was within his powers to proceed with the case and make the award, as the Registrar had not made any stay order on the receipt of the society's application for transfer. 3. The Tribunal was justified in allowing the appeal and remanding the case, given the facts that the society had made an application for withdrawal of the case from the arbitrator on the ground of bias and had not taken part in the proceedings before the arbitrator.
Final Decision: The petition was dismissed, and the parties were left to bear their own costs.
( 1 ) THE petitioner, Shri R. Sangeetha Rao, has filed this petition for quashing the order dated 28th April, 1988 passed by the Delhi Co-operative Tribunal, Delhi Administration, respondent No. 5.
( 2 ) THE petitioner is a member of the Krishi Co-operative Group Housing Society, respondent No. 1. The Society decided to construct multistoreyed and four storeyed flats of various types for its members at Bodella. The work for constructing these flats was awarded to Bharat Construction Corporation, New Delhi on fixed rate of Rs. 156. 00per sq. ft. for multistoreyed flats and Rs. 128. 00 per sq. ft. for four storeyed flats. The contractor thereafter raised additional bill claiming a sum of Rs. 124. 00 lakhs, namely, Rs. 52. 00 lakhs for additionalities, Rs. 50. 00 lakhs for escalation at 20% on the remaining work, Rs. 12. 00 lakhs for additional area and Rs. 10. 00 lakhs for earth filling. A meeting of the general body of the Society was called on 10th August, 1986 to decided) payment of additionalities of Rs. 1. 15 crores to the contractor (2) increase in the turn-key tender rate to Rs, 199 from Rs. 156. 00 and (3) sanctioning extension of time upto 15th August, 1987. The three resolutions were put to vote and purported to have been passed by the general body.
( 3 ) THE petitioner moved an application before the Joint Registrar (Arbitration) (copy annexure B) alleging that these resolutions were not passed by the general body. It was prayed that the resolutions claimed to have been passed by the general body on the above items of agenda may be stayed and the managing committee may be directed not to pay any additionalities of Rs. 1. 15 crores and not to renew or give extension to the present agreement with the contractor. It was further prayed that an administrator may be appointed to go into the financial fraud committed by the members of the managing committee in collusion with the contractor and the architects. It was averred, inter alia, that the forgery had been committed in the contract entered with the contractor.
( 4 ) ON behalf of the Society, its President, Hony. Secretary and Treasurer filed a reply denying the averments of the petitioner. It was stated that the resolutions had been duly passed. They also justified the payment of Rs. 1. 15 crores to the contractor.
( 5 ) THE Joint Registrar (Arbitration) by his order dated 7th November, 1986 observed, "it is a matter of evidence whether the Resolutions authorising the Managing Committee to pay additional amount of Rs. 50. 00 lakhs to the Contractor were passed in accordance with the Rules of Delhi Cooperative Societies Rules 1973 as well as it is in conformity with the clauses of the agreement entered with the contractor. It is also subject matter of evidence to see whether the Contractor has actually done or is to do any work which is in addition to what- has already been agreed upon by him. " With these observations, he came to the conclusion that there was a dispute between the applicant and the Society as per the provisions of Section 60 of the Delhi Co-operative Societies Act, 1972 and consequently referred the disputes to the arbitrator for arbitration.
( 6 ) SHRI N. R. Narayanan, Arbitrator made an award on 31st July, 1987. It was noted that the Society had filed an application under Section 11 of the Arbitration Act before the Joint Registrar (Arbitration) in which it was stated that the Managing Committee of the Society had no faith in the impartiality of the arbitrator and the proceedings of the hearing were requested to be stayed till the decision on the said application which application was pending disposal. He, however, found no justification for staying the proceedings in the absence of a specific order in this behalf by the Joint Registrar (Arbitration ). The learned arbitrator in his award came to the conclusion that the additional payments intended to be made to the contractor were worked out using surreptitious methods of altering the origi
