O.M.P. 2/2022 Page 1 of 10

$~30 (Original)

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IN THE HIGH COURT OF DELHI AT NEW DELHI

+

O.M.P. 2/2022

NATIONAL LABOUR COOPERATIVE FEDERATION OF

INDIA LIMITED

..... Petitioner

Through:

Mr. Ankur Arora, Adv.

versus

N SATYANARAYANA

..... Respondent

Through:

Mr. Vasantha Kumar K. and

Mr. Apurv, Advs.

CORAM:

HON'BLE MR. JUSTICE C.HARI SHANKAR

%

11.03.2022

JUDGEMENT (ORAL)

O.M.P. 2/2022 and I.A.3988/2022 (stay), I.A.3989/2022 (Section

151 CPC for exemption), I.A.3990/2022 (Section 151 CPC for

exemption) and I.A.4023/2022 (Section 151 CPC for exemption)

1.

The 141^st meeting of the Board of Directors of the National

Labour Cooperative Federation of India Limited (NLCF, hereinafter),

convened pursuant to an agenda notice dated 20^th November, 2021,

was called into question by the respondent in arbitral proceedings, as

the respondent’s services were discontinued pursuant to a decision

taken at the said meeting. The impugned award holds the 141^st board

meeting dated 3^rd December, 2021 not to have been convened in

accordance with law and, consequently, declares the business

transacted at the said meeting, including the decision to discontinue

the services of the respondent as null and void. The respondent has,

therefore, been held to be continuing as Managing Director of the

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/001089

O.M.P. 2/2022 Page 2 of 10

petitioner society, and has also been awarded arrears of salary.

2.

The NLCF, aggrieved thereby, has sought to challenge the

award under Section 34 of the Arbitration and Conciliation Act, 1996

(“the 1996 Act”).

3.

The respondent was appointed Managing Director of the NLCF

on 10^th

April, 2021. It is not in dispute that the Managing Director of

the NLCF is its Chief Executive.

4.

On 1^st December, 2021, the respondent came to know that an

agenda notice dated 20^th November, 2021 had been issued by the Vice

Chairman of the NLCF (“the VC”, hereinafter), for conducting a

meeting of the Board of the NLCF on 3^rd December, 2021. The

respondent

objected

to

this

proposed

board

meeting

representation dated 2^nd December, 2021, in which it was pointed out,

inter alia, that the VC did not have any authority to convene a board

meeting. On 4^th December, 2021, the respondent was informed by the

Chairman (I-C) of the NLCF that his services stood discontinued

w.e.f. 4^th

December, 2021.

5.

The respondent, in the circumstances, sought reference of the

disputes to arbitration under Section 84(1) of the Multi-State

Cooperative Societies Act, 2002 (“the MSCS Act”). Arbitral

proceedings that ensued have culminated in the award impugned in the

present petition.

This is a digitally signed Judgement.

NEUTRAL CITATION NO: 2022/DHC/001089

O.M.P. 2/2022 Page 3 of 10

6.

A preliminary objection was taken by NLCF, before the learned

arbitrator, regarding the arbitrability of the dispute. Placing reliance

on Section 84(1) of the MSCS Act, it was contended that the dispute,

being between the NLCF and one of its employees, was not arbitrable.

This contention has also been advanced, before me, by Mr. Ankur

Arora, learned counsel for the petitioner-NLCF, who relied, for the

said purpose, on the judgment of the Supreme Court in The

Maharashtra State Cooperative Housing Finance Corporation Ltd.

v. Prabhakar Sitaram Bhadange¹

7.

The objection thus raised was rejected by the learned arbitrator

and, in my opinion, rightly. Section 84(1) excludes disputes between a

multi state cooperative society and its paid employee “regarding

disciplinary action taken by” the society against the employee.

Disciplinary action, it