Disputes over the validity of sale deeds executed by a cooperative society cannot be arbitrated under Section 70 of the Uttar Pradesh Co-operative Societies Act; such matters must be addressed in civil court.

JUDGMENT :

(Per: Arindam Sinha, J.)

1. Petitioners are a cooperative society. Respondent no. 4 is member thereof. Said respondent has sought reference to arbitration under section 70 in Uttar Pradesh Co-operative Societies Act, 1965. English translation of the claim statement filed by respondent no. 4 before the Registrar was handed over by Mr. H.R. Mishra. From it we see, the purchasers were made party by respondent no. 4 in seeking the reference. Prayers made in the claim statement are reproduced below.

" 5. Reliefs sought

1. That the Plaintiffs most respectfully pray that the sale deed executed by Respondent No. 1, which was registered in the office of the Sub-Registrar- I, Agra Sadar, on 29/08/2024, bearing Deed No. 1, Volume No. 12414, Pages 213 to 230, Serial No. 7662, be declared null and void.

2. Any other relief which the Hon'ble Arbitration Court deems fit and proper in the facts and circumstances of the case may also be granted to the applicant.

3. That the respondents may also be directed to pay the litigation expenses to the applicant; failing which the applicant will suffer financial loss."

The society (petitioners) have come up against the reference, seeking quashing of it.

2. Mr. H.R. Mishra, learned senior advocate appears on behalf of petitioners (the society). He submits, his client, for its purposes, sold away some lands. The sale deeds executed by his client, which conveyed the lands were duly registered. Prayer of respondent no. 4 in the reference seeking that the sale deeds be declared null and void is beyond scope of reference provided in section 70. He relies on judgment of the Supreme Court in Delhi Dayalbagh Cooperative House Building Society Limited v. Registrar, Cooperative Societies reported in (2019) 3 SCC 745 , paragraph 48. Last sentence in the paragraph is reproduced below.

"48.....In the given facts and circumstances, if the allotment has been made by the society as a freehold land to its members who have further transferred/sold the subject land/plot by registered sale deed to its successors/purchasers, their rights to become member of the society are indeed saved under Section 91 of the Act, 2003 that in no manner could be eluded by the byelaws and that apart if anyone has any objection regarding the registered instrument(sale deed) pursuant to which right has been created, at least it is not open to examine its validity within the domain and ambit of Section 70 of the cooperative societies Act and any person, if felt aggrieved, the remedy lies only before the civil Court having jurisdiction questioning the registered instrument within the parameters available under the law. "

(emphasis supplied)

3. Mr. Krishna Mohan Mishra, learned advocate Additional Chief Standing Counsel appears on behalf of State. Mr. Arun Kumar, learned advocate appears on behalf of respondent no. 4. He submits, the reference is well within scope provided under section 70. He relies on view taken by a learned single Judge of this Court in Yaduraj Singh vs. District Assistant Registrar, Cooperative Societies and Others , reported in 2013 (1) AWC 427. He relies on paragraph 35 (Supreme Today Print), reproduced below.

"35. I therefore have no hesitation in rejecting the contention of petitioner(s) that respondents 1 and 2 have no jurisdiction to entertain dispute in question with respect to violation of conditions of sale-deed, bye laws and the Rules of Co-operative Society and to consider the consequences thereof on the sale deed(s) executed between the petitioner(s) and respondent no. 3 and to pass consequential order accordingly. The jurisdiction of respondents 1 and 2 to arbitrate in these matters is thus upheld."

Mr. Krishna Mohan Mishra draws attention to para