Shantanu Shreedhar Sheorey vs The Cosmos Co-Operative Bank Ltd ...
2017 Latest Caselaw 9630 Bom

ppn                                  1                        12.carbp-322.17.doc


       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
           ORDINARY ORIGINAL CIVIL JURISDICTION

      COMMERCIAL ARBITRATION PETITION NO.322 OF 2017

Shantanu Shreedhar Sheorey                   )
adults of Mumbai, Indian Inhabitant,         )
residing at Tarabai Hall, 97, Shivprasad     )
Building, Marine Drive, Mumbai 400 002. )
Through his Constituted Attorney             )
Mr.Cyrus M. Bhot                             )
Having my address at Tarabai Hall,           )
97, Shivprasad Building, Marine Drive,       )
Mumbai - 400 002.                            )       ..     Petitioner


       Versus

1. The Cosmos Co-operative Bank Ltd.         )
a Multi-State Co-operative Bank,             )
registered under Multi-State Co-operative    )
Societies Act, 2002 having its branch at Dadar)
having address at 36/A, Maruniketan,         )
D.L.Vaidya Road, Dadar West, Mumbai-28 )
Through its Authorised Officer,              )
Mr. S.G.Pujari.                              )


2. Vivekanand Shreedhar Sheorey,             )
Indian Inhabitant, residing at Tarabai Hall, )
97, Shivprasad Building, Marine Drive,       )
Mumbai - 400 002.                            )




      ::: Uploaded on - 20/12/2017                ::: Downloaded on - 23/12/2017 00:46:18 :::
 ppn                                    2                      12.carbp-322.17.doc


3. Waman Sushil Welinkar, Adult of Pune )
Indian Inhabitant, residing at B/17,          )
Garden Estate, B.P.Road, Aundh,               )
Pune 411 009.                                 )


4. Shantanu Sheorey Films Pvt. Ltd.           )
a Private Limited Company, registered under)
the provisions of the Companies Act, 1956, )
having its registered office at 1st floor,    )
Unity House, 8th New Queens Road,             )
Mumbai - 400 004, through its Authorised )
Signatory, Mr.Shantanu S. Sheorey             )


5. Shantanu Sheorey Photography &             )
Design Pvt. Ltd.                              )
a Private Limited Company, registered under)
the provisions of the Companies Act, 1956, )
having its registered office at 1st floor,    )
Unity House, 8th New Queens Road,             )
Mumbai - 400 004, through its Authorised )
Signatory, Mr.Shantanu S. Sheorey             )


6. Shantanu Sheorey Aquacult Ltd.             )
a Limited Company, registered under           )
the provisions of the Companies Act, 1956, )
having its registered office at Tarabai Hall, )
97, Shivprasad Building, Marine Drive,        )




      ::: Uploaded on - 20/12/2017                ::: Downloaded on - 23/12/2017 00:46:18 :::
 ppn                                    3                         12.carbp-322.17.doc


Mumbai - 400 002 and also had their office )
at 3rd floor, Pandey House, 9th August Kranti)
Marg, Mumbai - 400 036.                         )
through its Authorised Signatory                )
Mr.Shantanu S. Sheorey                          )         ..   Respondents
              ---
Mr.M.L. Palan a/w Ms.Devyani Wanjara i/by M/s.B.R. Oza & Co. for
the petitioner.
Mr.Joel Carlos for the respondent no.1.
Mr.Piyush Shah for the respondent nos.2, 3 & 6.
              ---
                         CORAM : R.D. DHANUKA, J.

                         DATE        :  14th December 2017

Judgment :-


.               By this petition filed under Section 34 of the Arbitration and

Conciliation Act, 1996, the petitioner has impugned the arbitral award dated 4th January 2017 passed under Section 84 of the Multi-State Co- operative Societies Act, 2002 (for short "the said Act) allowing the claims made by the respondents and directing the petitioner to recover a sum of Rs.3,11,20,257.22 ps. with interest thereon.

2. The petitioner was a Principal Borrower and was granted a loan of Rs.1,50,00,000/- by the respondent no.1-bank. The respondent nos.2 to 6 are guarantors/sureties. The petitioner was a member of the respondent no.1-bank. In view of the petitioner and the respondent nos.2 to 6 having committed default in making repayment of the loan, the respondent no.1 had initially filed a dispute on 1st December 1998 before the Co-operative Court, Mumbai under Section 91 of the Maharashtra Co-operative Societies Act, 1960. The dispute however was withdrawn

ppn 4 12.carbp-322.17.doc

on 26th February 2002 with liberty to file dispute before proper forum. In view of the liberty already granted by the Co-operative Court to the respondent no.1, the respondent no.1 thereafter issued various notices to the petitioner to hand over possession of the mortgage property and thereafter filed a case before the Assistant Registrar of Co-operative Societies, Mumbai on 30th March 2002 under Section 101 of the said Act. The said application however was withdrawn on 17 th December 2007 by the respondent no.1 and thereafter invoked the provisions of Section 84 of the Multi-State Co-operative Societies Act, 2002.

3. The petitioner as well as the respondent nos.2 to 6 filed written statement before the learned arbitrator appointed by the Central Registrar under Section 84(5) of the said Act. The parties also led oral evidence before the learned arbitrator. Both the parties have also filed their written arguments before the learned arbitrator. The learned arbitrator framed various issues and rendered an award on 4 th January 2017 and directed the petitioner and the respondent nos.2 to 6 to pay a sum of Rs.3,11,20,257.22 ps. with future interest thereon. This award has been impugned by the Principal Borrower i.e. the petitioner only under Section 34 of the Arbitration and Conciliation Act, 1996.

4. Mr.Palan, learned counsel appearing for the petitioner made three submissions before this Court. The first submission of the learned counsel is that the petitioner was not a member of the respondent no.1- bank on the date of the respondent no.1 filing a dispute under Section 84 of the said Act. The second submission of the learned counsel is that the provisions of the Limitation Act, 1963 would be applicable to the

ppn 5 12.carbp-322.17.doc

facts of this case in view of the respondent no.1 not having filed arbitration claim within the time from the date of accrual of the cause of action and the claims made by the respondent no.1 before the learned arbitrator were ex facie barred by law of limitation. The next submission of the learned counsel is that though the petitioner had filed written arguments before the learned arbitrator, none of those arguments are dealt with by the learned arbitrator in the impugned award.

5. With the assistance of the learned counsel for the petitioner, I have perused the written arguments filed by the petitioner and also other documentary evidence produced on record. I have also perused the reasoned award rendered by the learned arbitrator.

6. In so far as the first submission of the learned counsel for the petitioner that the petitioner ceased to be a member and thus no proceedings under Section 84 of the said Act could have been filed against the respondent by the petitioner is concerned, a perusal of Section 84(1)(a) of the said Act clearly indicates that if the dispute is touching the constitution, management or business of a multi-State co- operative society arising among members, past members and persons claiming through members, past members and deceased members, such dispute has to be referred to arbitration. Even if the argument of the learned counsel for the petitioner is accepted that the petitioner ceased to be a member on the date of filing of the dispute of reference by the petitioner under Section 84, in my view, on plain reading of Section 84(1)(a) of the said Act, dispute even against the past members of the multi-state co-operative society can be referred to arbitration. The first

ppn 6 12.carbp-322.17.doc

submission of the learned counsel has thus no merit and is accordingly rejected.

7. In so far as the second submission about limitation is concerned, reliance is placed on Section 84(5) of the said Act and also Section 85(2) to buttress the submission that the provisions of the Limitation Act, 1963 would have been attracted to the facts of this case. It is not in dispute that the petitioner was a member of the multi-state co- operative society and is still alive. Period of limitation prescribed under Section 85(1)(a) thus would be attracted in such a situation. The provisions of Limitation Act, 1963 would have been attracted only if Section 85(1)(a) would not have been attracted. There is thus no merit in this submission of the learned counsel for the petitioner. Be that as it may, issue of limitation as raised by the petitioner has been dealt with by the learned arbitrator in great detail in the impugned award. I do not find any infirmity in the reasons recorded and the conclusions drawn by the learned arbitrator on the issue of limitation.

8. In so far as the last submission of the learned counsel for the petitioner that though the detailed written arguments were filed by the petitioner, learned arbitrator has not dealt with the same is concerned, I have perused the written arguments submitted by the learned counsel for the petitioner and also minutely gone through the impugned award rendered by the learned arbitrator. A perusal of the impugned award clearly indicates that the learned arbitrator has rendered a detailed and reasoned award on each and every issue raised by the petitioner not only by way of oral submission but also on the written arguments. Learned arbitrator has also dealt with the oral and documentary evidence led by

ppn 7 12.carbp-322.17.doc

both the parties. Various admissions were made of liability by the witnesses examined by the petitioner before the learned arbitrator. The learned arbitrator has also considered that there was no dispute about execution of the documents. I do not find any infirmity in the reasons recorded and the conclusions drawn by the learned arbitrator on merit of the claims. There is thus no merit in the submission made by the learned counsel that the submissions placed by the petitioner on record are not dealt with by the learned arbitrator. There is no substance in the submission of the learned counsel for the petitioner that the award is in conflict with the public policy. Learned counsel could not point out as to how the award rendered by the learned arbitrator is in conflict with the public policy. The petition is totally devoid of merit and is accordingly dismissed. No order as to costs.

R.D. DHANUKA, J.