Delhi High Court
Union Of India (Uoi) vs West Bengal State Coop. ... on 9 May, 2006
Equivalent citations: 2006 (2) ARBLR 389 Delhi, 134 (2006) DLT 470
Author: M Goel
Bench: M Goel
JUDGMENT
Manju Goel, J.
1. The Union of India filed the CS(OS) No. 251A/99 under Sections 14 and 17 of the Arbitration Act, 1940 praying for a direction to defendant No. 2 Mr. S.B. Sharan - to file his award in the dispute between Union of India and the defendant No. 1 M/s. West Bengal State Coop. Consumer's Federation Ltd. Notice was issued to the Arbitrator on which the Arbitrator filed his award on which CS(OS) No. 1594A/99 was registered. Both the matters are being taken up together. While the Union of India prays for making the award a rule of the court, the defendant M/s. West Bengal State Coop. Consumer's Federation Ltd. - objects to the award. The objections under Sections 30 and 33 of the Arbitration Act is registered as IA No. 11639/99 in CS(OS) 1594A/99. This judgment will dispose of all these matters.
2. The Union of India alleges that the plaintiff and defendant No. 1 entered into an agreement No. I-13028/1/81/88 Pur-III dated 28.3.1988 for supply of 1600 MT Maswur Whole to defense service. The contract contained an arbitration clause. On account of certain disputes arising between the parties, the same were referred to the sole arbitration of defendant No. 2- Shri S.B.Sharan - who has given the award dated 21.12.1998. The defendant No. 1 has raised an objection to the validity of the arbitration agreement in view of the provisions of The West Bengal Co-operative Societies Act, 1983. It is contended that the objector is a cooperative society governed by the The West Bengal Co-operative Societies Act and that the said Act provides a complete machinery for settlement of disputes involving the cooperative societies. The Act extends to the whole of West Bengal. The relevant provisions, Sections 95 and 134, are reproduced as under:
95. Disputes to be referred to Registrar.- (1) Any dispute concerning the business of a cooperative society capable of being the subject of civil litigation or any dispute relating to the affairs of a cooperative society (other than a dispute relating to the disciplinary action taken by a cooperative society against the paid employees of the cooperative society or the terms and conditions of service of the paid employee of the cooperative society) shall be referred in the prescribed manner to the Registrar, if the parties thereto are among the following:
(a)
(b)
(c)
(d) any other cooperative society or any person including any financing Bank having transaction with a cooperative society or any liquidator of a cooperative society.
134. Indemnity and bar to jurisdiction of Courts.- (1) No suit, prosecution or other legal proceedings shall lie against the Registrar or any person authorised by him or against a Trustee in respect of any thing done or purported to be done in good faith under this Act.
(2). Save as provided in this Act no Civil Court or Revenue Courts shall have jurisdiction in regard to anything done or any action taken or any order passed under this Act and, in particular, in regard to-
(a)
(b)
(c)
(d) any dispute required to be referred to the Registrar under Section 95; or.
3. It is contended in the reply that the provisions of The West Bengal Co- operative Societies Act have no application to the present case because defendant No. 1 agreed to the special conditions of the contract which included Clause 13 relating to arbitration. Defendant No. 1 had entered into the contract outside the state of West Bengal where The West Bengal Co-operative Societies Act had no application.
4. It is not alleged by the objector that the contract was entered within the territory of West Bengal. Nor is it in dispute that the agreement as alleged by the plaintiff was duly entered into. The Supreme Court dealt with a similar situation in the case of Gwalior Dugdha Sangh Sahakari Ltd. v. G.M., Govt. Milk Scheme, Nagpur and Ors. reported as . The appellant therein was a registered society registered under the Madhya Pradesh Cooperative Societies Act, 1960. The agreement entered into with the General Manager, Govt. Milk Scheme, Nagpur at Nagpur which provided, inter alia, an arbitration clause providing the Arbitrator, namely, Dairy Development Commissioner, Bombay, Maharashtra. In the objection petition under Section 33 of the Arbitration Act this condition was sought to be quashed on the ground that Section 64 of the M.P. Cooperative Societies Act provided for a machinery in respect of resolution of disputes. The disputes under that Act were to be referred to the Registrar of Cooperative Societies. The Supreme Court held that since the agreement was entered into and executed in the state of Maharashtra Section 64 had no application and, therefore, the arbitration clause could not be quashed. The present case is similar. The agreement between the parties was entered into at Delhi, outside the territorial jurisdiction of West Bengal. Accordingly, the provisions of Sections 95 and 134 cannot have any application to the case in hand. No other objection to the award has been raised. Accordingly the objections under Section 30 and 33 of the Arbitration Act are rejected.
5. In view of the rejection of the objections, the petition under Section 14 of the Arbitration Act 1940 succeeds. The award mentioned above is made a rule of the court. CS (OS) No. 251A/99 and CS (OS) 1594A/99 are allowed and IA No. 11639/99 is dismissed.
