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2006 Supreme(Del) 951
High Court Of Delhi
SHANTI KIRAN INDIA PVT.LTD - Appellant
Versus
INDRAPRASTHA SEHAKARI BANK LTD - Respondent
Decided On : 05/24/2006
The Court's decision highlighted the authority of the Court to appoint an arbitrator under the Arbitration and Conciliation Act, 1996 in the event of the Registrar's failure to exercise powers under the Co-operative Societies Act.
Headnote:
Arbitration - Dispute Reference - The Delhi Co-operative Societies Act, 2003 - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Sections 70 and 71 of the Co-operative Societies Act
Fact of the Case:
The petitioner filed a petition seeking reference of disputes to arbitration under Section 11(6) of the Arbitration and Conciliation Act, 1996. The reply referred to the provisions of The Delhi Co- operative Societies Act, 1972, but it was clarified that the relevant enactment is The Delhi Co-operative Societies Act, 2003. The dispute reference mechanism and the power to appoint an arbitrator were discussed.
Finding of the Court:
The court found that the failure of the Registrar to exercise powers under Sections 70 and 71 of the Co-operative Societies Act empowered the Court to appoint the arbitrator.
Issues: The issues revolved around the reference of disputes to arbitration, the power to appoint an arbitrator, and the application of relevant provisions under the Co-operative Societies Act and the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court held that the provisions of sub-section (4) of Section 11 of the Arbitration and Conciliation Act, 1996 empowered the Court to appoint the arbitrator due to the failure of the Registrar to exercise powers under the Co-operative Societies Act.
Final Decision: Mr. Amit Bansal was appointed as the sole arbitrator to adjudicate upon the disputes between the parties, with the fee of the arbitrator set at Rs. 30,000/- to be borne equally by the petitioner and the respondent.
( 1 ) THE petition has been filed under Section 11 (6) of the Arbitration and conciliation Act, 1996 (hereinafter to be referred to as, the said Act ) seeking reference of the disputes to arbitration. The reply has been filed by the respondent. However, the reply refers to the provisions of The Delhi Co- operative Societies Act, 1972 and the learned counsel states that the same were inadvertently referred to and the relevant enactment is The Delhi Co-operative societies Act, 2003 (hereinafter to be referred to as, the Co-operative societies Act ) in terms whereof the power is vested with the Registrar, Co- operative Societies alone to appoint an arbitrator.
( 2 ) CHAPTER VIII of the Co-operative Societies Act deals with the settlement of disputes. Sections 70 and 71 of the Co-operative Societies Act prescribe the mechanism for reference of disputes to arbitration and are as under:"disputes which may be referred for arbitration.- (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society other than a dispute regarding disciplinary action taken by the co-operative society or its committee against a paid employee of the co-operative society arises:- (a) among members, past members or person claiming through members, past members and deceased members; or (b) between a member, past member or person claiming through a member, past member or deceased member and the co-operative society, its committee or any officer, agent or employee of the co-operative society or liquidator, past or present; or (c) between the co-operative society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the co-operative society; or (d) between the co-operative society and any other co-operative society, between a co-operative society and liquidator of another co-operative society or between the liquidator of one co-operative society and the liquidator of another co-operative society; such disputes shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceedings in respect of such disputes. (2) If any question arises whether a dispute referred to the Registrar under this Section is or is not a dispute touching the constitution, management or the business of a co-operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court. (3) The Registrar shall decide the aforesaid question within a period of ninety days and in case the aforesaid question, as enumerated under sub-section (2) is not decided within the stipulated period of ninety days, the dispute shall be deemed to have been admitted under Section 70 of this Act and the same shall be referred for decision under Section 71. (5) Save as otherwise provided under this Act, the provisions of the arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitrations under this Act, as if proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation act, 1996.
( 3 ) REFERENCE of disputes to arbitration.- (1) The Registrar may, on receipt of the reference of dispute under Section 70:- (a) decide the dispute himself, or (b) transfer it for disposal to any person who has been invested by the government with powers in that behalf, or (c) refer it for disposal to an arbitrator. (2) The method, manner of selection, appointment of arbitrators, their qualifications, terms and conditions of appointment and fees payable to them shall be as prescribed under the rules. (3) (a) For selecting persons for appointment as arbitrators, the government shall constitute a selection committee which shall consist of the f
