IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BELA M. TRIVEDI, J.
Vinod Jayrambhai Patel - Petitioner
Versus
Gujarat Industrial Co-op. Bank Ltd., Surat & Ors. - Respondents
Special Civil Application No. 17008 of 2017
Decided On : 21-01-2019
Multi-state Co-operative Societies Act, 2002 – Section 84(4) – Challenging order passed by Arbitrator in direction to permit petitioner to cross-examine witness of respondent – Held, Not permitting petitioner to cross-examine witness of respondent-Bank and by directing petitioner to furnish questionnaire in form of interrogatory, respondent No. 3 has shown utter disregard to provisions of C.P.C., and caused grave injustice to petitioner – Such a course adopted by respondent No. 3 is not only arbitrary and illegal, but would cause great injustice to petitioner – Impugned order quashed and set aside – Petitioner at liberty to cross-examine witness of respondent No. 1-Bank, and directed that entire proceedings may be completed as expeditiously as possible – Petition allowed [Paras 6, 8 and 9]
Facts of the case:
In the Present Petition, Petitioner challenged order passed by the respondent No.3-Arbitrator, and has further sought direction to permit petitioner to cross-examine witness of respondent No.1-Bank.
Findings of the case:
Not permitting petitioner to cross-examine witness of respondent-Bank and by directing petitioner to furnish questionnaire in form of interrogatory, respondent No. 3 has shown utter disregard to provisions of C.P.C., and caused grave injustice to petitioner – Such a course adopted by respondent No. 3 is not only arbitrary and illegal, but would cause great injustice to petitioner – Impugned order quashed and set aside – Petitioner at liberty to cross-examine witness of respondent No. 1-Bank, and directed that entire proceedings may be completed as expeditiously as possible.
Result: Petition allowed
BELA M. TRIVEDI, J.
Rule. Mr. J.B. Dastoor, learned Advocate waives service of Rule on behalf of respondent No.1.
2. The petitioner, by way of present petition, has challenged the order dated 19-8-2017 passed by the respondent No.3-Arbitrator, below Exh. 57 in Arbitration Petition No. 13 of 2010, and has further sought direction to permit the petitioner to cross-examine the witness of the respondent No.1-Bank.
3. As per the case of the petitioner, the respondent No. 1-Bank was initially registered under the Gujarat Co-operative Societies Act, 1961, and subsequently, under the Multi-state Co-operative Societies Act, 2002. The respondent No. 1 had filed an Arbitration Petition being No. 13 of 2010 against the borrower-the respondent No.2 for the recovery of the outstanding amount to the tune of Rs. 3.55 crores before the respondent No.3 appointed under Sec. 84(4) of the Multi-state Co-operative Societies Act, 2002. The petitioner being the Guarantor was also joined as the defendant No.2 in the said proceedings. The respondent No.1 on 1-7-2017 had submitted an affidavit in lieu of the examination-in-chief for its witness Sonal Priteshbhai Desai as per the provisions contained in Order XVIII, Rule 4 of C.P.C. The petitioner, therefore, submitted an application at Exh. 57 requesting the respondent No.3-Arbitrator to direct the witness to remain present for cross-examination. The respondent No.3 in view of the said application, passed the order dated 19-8-2017 directing that the petitioner may give in writing an interrogatory/questionnaire to the witness of the respondent No. 1 and the witness may submit the reply thereof in writing on the next date of hearing.
4. Learned Advocate Mr. Baiju Joshi for the petitioner submits that a very novel and strange procedure has been sought to be adopted by the respondent No.3-Arbitrator, who by the impugned order has not permitted the petitioner to cross-examine the witness and on the contrary directed to submit the questionnaire in the form of interrogation. According to him, such a procedure would be detrimental to the right of the petitioner to cross-examine the witness, and cause great miscarriage of justice. He has relied upon the decision of this Court in the case of N.G. Projects Ltd. v. Backbone Projects Ltd., reported in 2016 (4) GLR 3181 to buttress his submissions.
5. However, learned Advocate Mr. J.B. Dastoor relying upon the decision of the Constitution Bench in the case of M/s. S.B.P. & Co. v. M/s. Patel Engineering Ltd., reported in AIR 2006 SC 450, submitted that once the matter reaches the Arbitral Tribunal, the High Court should not interfere with the orders passed by the said Tribunal during the course of arbitration proceedings.
6. In the instant case, it appears that the respondent No. 1-Bank which is registered under the Multi-state Co-operative Societies Act, has filed the proceedings before the respondent No.3 appointed as the Arbitrator under Sec. 84(4) of the said Act, and therefore, save as otherwise provided under the said Act, the provisions of Arbitration and Conciliation Act, 1996 would apply to the said proceedings in view of Sec. 84(5) thereof. So far as the facts of the present case are concerned, as stated earlier, the respondent No. 3 after permitting the respondent-Bank to file an affidavit in lieu of examination-in-chief for its witness, did not permit the petitioner to cross-examine the said witness but directed the petitioner to furnish the interrogatories/questionnaire. Such a course adopted by the respondent No. 3 is not only arbitrary and illegal, but would cause great injustice to the petitioner.
7. There cannot be any disagreement to the proposition of law laid down by the Supreme Court in the case of M/s. S.B.P. & Co. v. M/s. Patel Engineering Ltd. (supra) relied upon by the learned Advocate Mr. Dastoor for the respondent to the effect that once the matter reaches the Arbitral Tribunal, the High Court should not interfere with the orders passed b
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