High Court of Judicature at Madras
THE HONOURABLE MRS. JUSTICE PRABHA SRIDEVAN
Mankanner Jain Social Welfare Society, By Its Secretary - Appellant
Versus
Anilkumar J. Doshi - Respondents
CRP NO. 3589 OF 2000
Decided On : 21 March 2001
This revision deals with the maintainability of a suit, when there is a provision for arbitration between the parties. The respondent became a member of the petitioner/Society, the objective of the petitioner was to create and cultivate the habit of thrift and saving among the members of the society. The society also receives deposits from its members and grants loans to them against their deposits, which is secured by the other members. In or about 1996, the respondent sent a circular to other members regarding some irregularities in the functioning of the petitioner/society. Subsequent to that, one of the members of the petitioner/society lodged a complaint against the respondent on the ground that the respondent was acting against the interest of the petitioner. The complaint is dated 25.2.1997, whereunder, expulsion of the respondent is sought for. The respondent sent his reply on 7.5.1997 and 16.5.1997. The petitioner directed the respondent to appear before the Managing Committee on 21.8.1997, failing which, the respondent was informed that the question of expulsion would be decided ex parte. The respondent sent a reply, but the petitioner passed a resolution on 21.8.1997, expelling the respondent from primary membership. Thereupon, the respondent sent a lawyer's notice in 8.12.1997 calling upon the petitioner to revoke the expulsion. The petitioner sent a reply on 29.12.1997 advising the respondent to address his grievance by resorting to arbitration. To this the respondent sent a rejoinder stating that after he was expelled, he cannot be compelled to seek arbitration, since the bye-laws would bind the members alone. On 7.3.1998, the respondent received a copy of the letter addressed by the petitioner to the Arbitrator, appointing the Arbitrator with the terms of reference. According to the respondent, this unilateral appointment was not binding on him. The respondent therefore has filed the suit for a declaration that the expulsion dated 21.8.1997 is illegal and not in accordance with the bye-laws of the society. This suit was filed before the XIII Assistant City Civil Court on 16.4.1998. Pending suit, he filed I.A. No. 6927 of 1998 for injunction restraining the petitioner from giving effect to the order of expulsionAt this stage, a chronological narration of the dates and events subsequent to 7.3.1998 may be useful to appreciate the case. Just prior to the filing of the suit, the Arbitrator addressed a letter to the petitioner and the respondent directing them to appear before him on 19.4.1998. The first hearing was on 19.4.1998. On 24.4.1998, the Arbitrator forwarded a copy of the proceedings of the first meeting to both the parties. On 4.5.1998, the petitioner submitted his statement of case. The injunction petition which is I.A. No. 6927 of 1998 had come up before the Court by then and notice was ordered, though injunction was not granted and the petitioner received a notice in the said I.A. on 6.5.1998. On 7.5.1998, the second hearing was held by the Arbitrator. The petitioner did not appear in person or through counsel. The letter dated 4.5.1998 from the respondent's counsel was received by the Arbitrator and it was placed on record. On 8.6.1998, the Award of the Arbitrator was passed, but it must be remembered, the suit had already been filed and was pending. On 9.6.1998, which was the first date of hearing in I.A. No. 6927 of 1998 the petitioner filed his counter stating that since the bye-laws of the petitioner/society provided for arbitration, and since arbitration had also been duly conducted, the suit itself was not maintainable. On 30.3.1999, the petitioner filed I.A. No. 5653 of 1999 under Section 9 and/or Order 7, Rule 11(d), C.P.C. This was dismissed, hence the revision has been filed.
Mr. Ashok Viswanath, learned counsel for the petitioner referred to the provisions of Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the Act) and also Section 9 C.P.C. reads as follows:
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