Nereus V. Halpe Katana Co Operative Stores Society, Ltd.

1956 Present : Basnayake, C.J., and de Silva, J.

S. M. DON NEREUS, Appellant, and HALPE KATANA CO-OPERATIVE
STORES SOCIETY, LTD., Respondent

S. C. 170-D. C. Negombo, 16,683

Co-operative Societies Ordinance-Section 45-Reference of dispute to Registrar- Procedure-Requirement of agreed reference-Award of arbitrator-Appeal therefrom-Parties must be heard-Referability of dispute to arbitration- Crucial date-Validity of Rule 38 (13) made under Section 46 (2) (t).

In an appeal to the Registrar under section 45 (3) of the Co-operative Societies Ordinance, the appellant should be afforded an opportunity of being heard before a decision is made against him. Failure to observe the rule of audi alterant partem would vitiate the decision of the Registrar.

BASNAYAKE, C.J.-(i) The proper way to refer a dispute to the Registrar under section 45 of the Co-operative Societies Ordinance is to send to the Registrar an agreed statement setting out the relevant facts and the matters in dispute signed by both parties to the dispute. An ex parte statement signed by one of the parties alone would not be a proper reference.

(ii) The referability of a dispute to arbitration under section 45 must be determined on the state of the law at the time the dispute arises.

(iii) Rule 38 (13) which provides that an award shall be enforceable as if it were a decree of Court is ultra vires.

APPEAL from a judgment of the District Court, Negombo.

H. W. Jayewardene, Q. C, with S. W. Jayasooriya and A. C. M. Uvais, for Judgment-Debtor-Appellant.

E. R. S. R. Coomaraswamy, with B. A. R. Candappa, for Judgment-Creditor-Respondent.

Cur. adv. vult.

May 16, 1956. BASNAYAKE, C. J.-

The appellant was the Secretary of the Halpe Katana Co-operative Stores Society Ltd from 1944 till 31st January, 1945. In November, 1946, a claim appears to have been made against the appellant for a sum of Rs. 1,492/08 being the value of textiles lost in consequence of the Stores being burgled. He disputed his liability and the dispute was referred to arbitration. In 1948 the arbitrators made an award for Rs. 1,492/08 against the appellant. He appealed to the Registrar and in 1949 the award was set aside on the ground that section 45 of the Co-operative Societies Ordinance, as it then stood, was not applicable to the dispute between the appellant and the Society because the appellant had left the service of the Society at the time the dispute arose and was therefore not an " officer of the Society ". Thereafter the Society at a general

meeting held on 29th April, 1951, unanimously decided to waive the claim. Sometime later Don Stephen Jayakody, a member of the Society, applied to the Registrar to refer the same dispute to arbitration and an award was made on 3rd January, 1952, ordering the appellant to pay a sum of Rs. 700 to the above-mentioned Society. He appealed to the Registrar, and on 5th February, 1952, his appeal was dismissed.

On 29th July, 1952, the Society made application for enforcement of the award as if it were a decree of Court. On 5th May, 1953, the appellant applied for a stay of execution and in the petition he filed he prayed inter alia that the award be declared null and void. On the same day the Society also filed a petition setting out the facts relating to the arbitration with an affidavit from one W. D. Saviel Appuhamy who claimed to be the duly appointed legal representative of the Society. On 12th November, 1953, the appellant filed objections to the Society's petition challenging the procedure adopted and also attacking the award as a nullity on several grounds.

The main points urged at the hearing of this appeal are :-

" (1) that the second reference was bad as the appellant was an ex-officer of the Society and that under the law in force at the time the claim arose a dispute between the Society and an ex-officer could not be referred to arbitratio

Click Here to Read the rest of this document