The interpretation of the relevant legal provisions by the learned Arbitrator was wholly perverse and had to be set aside. The requirement of obtaining authorization from the Board of the cooperative society was only binding on the individual persons who were members of the Board thereof, and not holders of office i.e. Chairperson, President or Chief Executive. The interpretation of Section 43(1) of the MSCS Act was that it determined the eligibility of the member society.

JUDGMENT :

REKHA PALLI, J.

1. The present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Arbitration Act’) assails the order dated 31.07.2020 passed by the learned Single Judge rejecting the appellant’s challenge under Section 34 of the Arbitration Act to the arbitral award dated 06.02.2020. Under the said award, the appellant’s election to the Board of Directors of respondent no.2/society was set aside.

2. The appellant is a member of the Sonepat District Cooperative Labour & Construction Federation (hereinafter referred to as the ‘Sonepat Society’) whereas the respondent No. 2/National Labour Cooperative Federation of India Limited (NLCFIL) is a multi-State cooperative society governed by the provisions of the Multi-State Cooperative Society Act, 2002 (hereinafter referred to as the ‘MSCS Act’). The Sonepat Society is a member of the NLCFIL.

3. On 29.05.2019, the respondent no. 3, who was appointed as the Returning Officer by the NLCFIL for conducting elections to its board of directors, issued a notice under Section 19 of the MSCS Act notifying the election program for conducting the said elections. The notice also directed eligible cooperative/multi-state cooperative societies, who were a part of the NLCFIL, to send in the names of the delegates whom they had nominated to represent them in the election, which was slated to be held on 12.07.2019. Subsequently, on 21.06.2019, NLCFIL released another list bearing the names of all its members under the Forest Labour Constituency and the Labour Contract/Constructions Constituency. The respondent no.1, who is the Chairperson of a cooperative society named Shree Sai Labour Contract Cooperative Society Limited - which is also a member of NLCFIL, raised various objections on 05.07.2019 and 11.07.2019 to the: (i) inclusion of certain societies in the member list of Forest Labour Constituency, and; (ii) the nomination of certain candidates/societies, including the appellant, for the election on the ground of ineligibility by virtue of Section 43(1)(m) and (n) of the MSCS Act. Although the objections of the respondent no.1 were received by the Ministry of Agriculture, Department of Agriculture & Cooperative Societies on 12.07.2019, i.e., the date on which the election was scheduled to be held, in which the appellant was duly elected, these objections were disposed of by the respondent no.2 Returning Officer on 12.07.2019 itself. As a result, the election was permitted to carry on as per the program.

4. On 18.07.2019, in the light of its objections being dismissed, the respondent no.1 moved NLCFIL seeking inter alia a copy of the resolution passed by the Sonepat Society condoning the absence of the appellant in the Annual General Body meeting of NLCFIL held during the years 2015-2016, 2016-2017 and 2017-2018, in response whereto NLCFIL categorically stated that no such resolution had ever been passed. In the meanwhile, considering that the clock was running out on the period of limitation to challenge the election, the respondent no.1 invoked arbitration on 05.08.2019 before the Central Registrar of Cooperative Societies by way of a claim petition under Section 84, MSCS Act whereby it challenged the participation of a few of the member-societies in NLCFIL election held on 12.07.2019. Pertinently, in the original claim petition, the respondent no.1 did not challenge the appellant’s election; rather, his election was impugned subsequently in the amended claim petition filed on 25.09.2019, after obtaining the permission of the learned sole Arbitrator.

5. For the purpose of this decision, only the facts pertaining to the case of the appellant have been recorded. The primary contention of respondent no.1 before the learned Arbitrator was that the appellant was disqualified from contesting/participating in the election for the Board of Directors of NLCFIL, on account of being ineligible under Sections 38(3), 43(1)(m) & 43(1)(n) of the MCSC Ac