Disputes related to the business of a co-operative society, including claims for loss caused by an employee, fall within the ambit of Section 70 of the U. P. Co-operative Societies Act, 1965, and can be referred to arbitration.

( 1 ) IN the purported exercise of powers under Section 71 of the U. P. Co-operative Societies Act, 1965 (hereinafter referred to as the act) the arbitrator on 21st April, 1980, passed an award whereby he held that the petitioner was liable to pay sum of Rs. 9,279. 45 P. to the Bhaldawa sadhan Sahkari Samiti Limited, the respondent No. 2 (hereinafter referred to as the Samiti ). The petitioner having failed to pay up the said amount, steps were taken by the Samiti to realise the said sum from him as arrears of land revenue on 3rd February, 1982, the Tehsildar concerned issued a citation calling upon the petitioner to appear before him and pay up a sum of rs. 11,771. 30 P. The recovery proceedings are being impugned in the present petition.

( 2 ) A counter-affidavit has been filed on behalf of the Samiti. A rejoinder-affidavit has been filed by the petitioner. From the exchange of the affidavit between the parties the material facts, which have emerge are these the Samiti had a shop in which it was carrying on the business of sale of foodgrains and other items. The petitioner was employed as a salesman in the said shop. According to the Samiti, the petitioner, in his capacity as a salesman, misappropriated the sale amount, and also committed a criminal breach of trust in respect of sale money and other items entrusted to him. Thus, the petitioner caused loss to the Samiti. After audit inspections, a notice was given by and oa behalf of the Samiti to the petitioner to pay up a certain amount. The petitioner refused to do so. Thereupon the Samiti invoked the provisions of Section 70 of the Act and that is how the matter reached the arbitrator. In spite of due notice given by the arbitrator, the petitioner failed to appear. Eventually, the arbitrator gave his award on 21st april, 1980.

( 3 ) IT is not in dispute that the petitioner did not, at any stage of the proceedings before the arbitrator, challenge the jurisdiction of that officer and the petitioner did not avail the statutory right of appeal as given by the Act.

( 4 ) SRI K P. Agarwal, the learned Senior Advocate, appearing on behalf of the petitioner, has urged that since the Samiti could not invoke Section 70 the entire proceedings as initiated by it as well as the award of the arbitrator were void and, therefore, the petitioner was under no obligation to exhaust the remedy of appeal. He has also urged that since the question of jurisdiction goes to the root of the matter, he is entitled to raise it even for the first time in this Court by means of this petition. In view of our decision on the merits of the contention to be given immediately, we do not consider it necessary to give our decision on the aforemention preliminary objections raised by the learned counsel for the Samiti.

( 5 ) SUB-SECTION (1) of Section 70 of the Act, in so far as material to the present controversy, provides that notwithstanding anything contained in any law for the time being in force, if any dispute relating to the constitution, management or the business of a cooperative society other than a dispute regard ing disciplinary action taken against a paid servant of a society arises between the society or its committee and any past committee, any officer, agent or employee or any past officer past agent or past employee such dispute shall be referred to the Registrar for action in accordance with the provisions of the act and the rules and no court shall have jurisdiction no entertain any suit or other proceeding in respect of any such dispute. Sub-section (2) (c) of section 70 is relevant and may be extracted : (2) For the purpose of sub-section (1) the following shall be deemed to be included in dispute relating to the constitution, management or the business of a co-operative society, namely (c) a claim by a society for any loss caused to it by a member, officer, agent or employee including past or deceased member, officer, agent, or employee, whether individually or collecti