Allahbad High Court
JAGDISHSAHAI,W.BROOME
Dist. Co-operative Federation Ltd., Meerut - Appellant
Versus
Registrar, Co-operative Societies. U. P., - Respondent
Decided On : 09/07/1965
CO-OPERATIVE SOCIETIES - ARBITRATION - AWARD - BASED ON AFFIDAVIT - WITHOUT JURISDICTION - CO-OPERATIVE SOCIETIES ACT, 1912 - RULES 118 AND 123.
Fact of the Case:
The petitioner, a District Co-operative Federation, challenged an arbitration award and subsequent orders passed by the Assistant Registrar and Deputy Registrar, Co-operative Societies, Meerut. The award was based on an affidavit filed by one B.B. Rajvanshi, who represented a primary society that was a member of the federation. The petitioner contended that the reference to arbitration was incompetent as it was made by a private person and not by the society itself, and that the award was without jurisdiction as it was based on an affidavit and not on evidence recorded in accordance with the rules.
Finding of the Court:
The court held that the award was without jurisdiction as it was based on an affidavit, which was not permitted by the rules. The court also found that the arbitrator had not followed the procedure provided by law and that he had no jurisdiction to base his award on the affidavit of Rajvanshi. The court further found that the proceedings had not been closed on the date the arbitrator claimed they were, and that the adjournment applications were still pending before him.
Issues: 1. Whether the reference to arbitration was incompetent as it was made by a private person and not by the society itself? 2. Whether the award was without jurisdiction as it was based on an affidavit and not on evidence recorded in accordance with the rules?
Ratio Decidendi: 1. The court held that the reference to arbitration was not incompetent as it was made by a private person, as the rules did not require the reference to be made by the society itself. 2. The court held that the award was without jurisdiction as it was based on an affidavit, which was not permitted by the rules. The court also found that the arbitrator had not followed the procedure provided by law and that he had no jurisdiction to base his award on the affidavit of Rajvanshi.
Final Decision: The court allowed the writ petition, quashed the award of the arbitrator and the orders passed by the Assistant Registrar and Deputy Registrar, Co-operative Societies, Meerut.
JAGDISH SAHAI, J. :- In this writ petition the petitioners are the District Co-operative Federation Ltd., Meerut (hereinafter referred to as the federation) and one Sri Radhey Shyam Jaiswal, while the respondents are (1) the Registrar, Co-operative Societies, Meerut, (2) the Deputy Registrar, Co-operative Societies, Meerut, (3) the Assistant Registrar, Co-operative Societies, Meerut, (4) the Additional District Co-operative Officer, Meerut, Sri J.D. Gaiha, (5) the Consumers Co-operative Stores Ltd., Sub-Area V. Meerut and (6) Shri B.B. Rajvanshi.
2. The allegations made in the writ petition, in short, are as follows :-
The federation (petitioner No. 1) is a society registered under the Co-operative Societies Act (hereinafter referred to as the Act) while Sri Radhey Shyam Jaiswal is a member of the Modern Industrial Co-operative Society Ltd. which is a member of the federation (petitioner No. 1). The Ganga Khader Consumers Co-operative Stores Ltd., Hastinapur and the Consumers Co-operative Stores Ltd., Sub-Area V, Meerut are primary societies registered under the Act. Both these societies are also members of the federation. Under the bye-laws of the federation, the Board of Directors is to consist of 12 directors elected by the delegates from amongst themselves. A meeting to elect the Board of Directors of the federation was held on the 27th April, 1963, wherein Sri Hukum Chand represented the Ganga Khader Consumers Co-operative Stores Ltd., Hastinapur, and Sri B.B. Rajvanshi represented the Consumers Co-operative Stores Ltd., Sub-Area V, Meerut. In that meeting the Directors were elected. Dissatisfied with the election, Sri Hukum Chand, representing the Ganga Khader Consumers Cooperative Stores Ltd., but without any authority from it, filed under R. 115 of the rules framed under the Co-operative Societies Act (hereinafter referred to as the rules) an application for reference to arbitration, before the Assistant Registrar, Co-operative Societies. The Assistant Registrar appointed Sri J.D. Gaiha, the Additional District Co-operative Officer (respondent No. 4) as the sole arbitrator. In the reference proceedings the 12 persons who had been elected to the Board of Directors were arrayed as defendants or opposite-parties.
3. During the reference proceedings an objection was raised on behalf of Sri Kalyan Singh and Sri R.S. Jaiswal, who were amongst those elected as Directors, to the effect that Sri J.D. Gaiha had been wrongly appointed as the sole arbitrator and was not competent to act as such. This application was dismissed. The validity of the reference was also challenged on the ground that the reference had been made at the instance of a member of a society and not by the society itself; and inasmuch as the federation was composed of societies and not of individual persons the reference was incompetent. In order to meet this objection a resolution was passed by the Ganga Khader Consumers Co-operative Stores Ltd. on the 20th October, 1963, authorising Sri Hukum Chand to file the arbitration reference; and thereupon the Deputy Registrar substituted the Ganga Khader Consumers Cooperative Stores Ltd. as plaintiff or applicant in place of Hukum Chand. On 29-1-1964 the Ganga Khader Co-operative Stores Ltd. passed another resolution to the effect that they did not want to continue the arbitration proceedings and authorised one Sri Rani Lal Gumbar to withdraw the reference. On 12-2-1964 Sri Ram Lal Gumbar made an application to the sole arbitrator, praying that the case (Suit No. 3883 of 1962-63) be allowed to be withdrawn, in view of the resolution of the Ganga Khader Cooperative Stores Ltd., dated 29-1-1964. In the meantime Sri B.B. Rajvanshi, who had represented the Consumers Co-operative Stores Ltd., Sub-Area V, Meerut in the general meeting held on 27-4-1963 to elect the Board of Directors, on the authority of a resolution dated 19-2-1964 passed by the Consumers Co-operative Stores. Sub-Area V, Meerut (hereinafter referred
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