The High Court of J&K and Ladakh observed that Section 70 of the J&K Cooperative Societies Registration Act cannot be applied in cases where individuals do not have any prior jural relationship with reference to individuals involved in the affairs of the society.
Brief Facts:
An agreement was executed between both parties through which a shop that was under the management of the respondent was given to the applicant on a lease for a period of 20 years. A dispute regarding rent and interference by the respondent occurred between both parties. As a result, the applicant invoked the arbitration clause in the agreement which was opposed by the respondents.
The counsel argued that it is provided under Clause 11 of the agreement that in case of any disputes between the parties, it is required to be referred to an arbitrator to be appointed with the consent of both parties.
Contentions of the Respondent:
The respondents contended that the shop was registered under the J&K Cooperative Society Registration Act, 1989 and was controlled by the Government and if any dispute arose about its management or business, then it is to be resolved in terms of Section 70 of Chapter 9 of J&K Cooperative Societies Act,1989 under which the Registrar, Cooperative Society, is the competent authority to adjudicate by himself or refer the dispute to a designated person as an arbitrator.
Further reliance was placed on the judgement of University of Jammu & Ors. Vs. Birender Nath & Ors. to argue that the application of the applicant is not maintainable as it had not been arrayed in its appropriate name. It was further contended that the arbitration application was liable to be rejected because of the agreement not being enforceable due to it being unregistered and unstamped. It was further stated that the applicant, being an employee and not a lease did not have any locus standi to seek arbitration of a dispute other than in the manner provided under the Societies Act.
Observations of the Court:
The court observed that where the dispute is related to the constitution, management or business of a cooperative society, Section 70 could be invoked. The court further observed that the dispute in the present case is related to the business of the society and not all disputes relating t it needs to be referred to the Registrar unless there is some pre-existence jural relationship between the parties with reference to the society.
The court further observed that just because the applicant was an employee of the society will not bar him from the scheme of Section 70 on the point of pre-existing jural relationships. It was further stated that the applicant was not referred to as an employee in the agreement and has been mentioned as a second party to the agreement and no evidence has been presented to support the argument of the respondent that the employee of the society cannot be granted lease.
The court conclude that since the agreement was executed between the society and the applicant in the capacity of a lease and not as an employee, the dispute will not be covered under Section 70 of the Co-operative Societies Act.
The decision of the Court:
The court referred the dispute to an arbitrator as per Clause 11 of the agreement and not as per Section 70 of the Co-operative Societies Act.
Case Title: Shukal Singh vs G.M., Jammu Co-Operative Wholesale Ltd. & Anr.
Coram: Hon’ble Mr. Chief Justice Kotiswar Singh
Case No.: AA No. 17/2009
Advocate for the Applicant: Mr. Pranav Kohli and Mr. Vastav Sharma
Advocate for the Respondent: Mr. Rupinder Singh
Read Judgment @LatestLaws.com
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