Delhi High Court
H.P.State Co-Operative ... vs Chandra Pal Singh on 27 January, 2014
Author: Valmiki J. Mehta
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO No. 164/2013
% 27th January, 2014
H.P.STATE CO-OPERATIVE DEVELOPMENT FEDERATION
......Appellant
Through: Mr. Sudhanshu Batra, Sr. Adv. with
Mr. Shailendra Singh, Mr. Shakeel
Vali, Mr. Manish Kaushik and Mr.
Anshul Garg, Advocates.
VERSUS
CHANDRA PAL SINGH ...... Respondent
Through: Mr. V.P.Singh, Sr. Adv. with Mr.
Om Prakash and Mr. Sidhant
Kaushik, Advocates for R-1.
Mr. M.I.Choudhary, Adv. for R-2.
CORAM:
HON'BLE MR. JUSTICE VALMIKI J.MEHTA
To be referred to the Reporter or not?
VALMIKI J. MEHTA, J (ORAL)
1. This appeal has been filed by the appellant under Section 37 of the
Arbitration and Conciliation Act, 1996 impugning the order dated 7.2.2013
passed by the court below by which the application filed by the appellant
herein to recall the compromise order passed earlier on 3.10.2012 has been
dismissed.
FAO 164/2013 Page 1 of 6
2. Disputes in the present case pertained to the case of the
appellant-cooperative society, as represented by the respondent no.2 herein,
(the respondent in the proceedings before the court below, and the claimant
in the arbitration proceedings) of dis-entitlement of the respondent no.1
herein, respondent in the arbitration proceedings, and the petitioner in the
court below, to act as the President of the Multi-State Cooperative Society-
National Cooperative Union of India (NCUI). The claimant in the
arbitration proceedings and who is the respondent no.2 herein, and who was
the respondent in the court below, admittedly, acted as a representative of
the present appellant-cooperative society.
3. NCUI is a body having as members various cooperative bodies
which are registered under the various statutes pertaining to cooperative
societies. A body naturally has to act through a human being and therefore
each of the cooperative society nominates on its behalf an individual to
represent that body in the NCUI. This is in accordance with Section 38 of
the Multi-State Cooperative Societies Act, 2002. It is not and could not be
disputed before me that because the respondent no.2 herein did represent the
appellant-cooperative society, therefore, a claim petition was filed by him to
challenge the election of the respondent no.1 herein as President of NCUI.
FAO 164/2013 Page 2 of 6
The appellant through the respondent no.2 herein succeeded in the
arbitration proceedings. Objections to the Award were filed by the
respondent no.1 therein under Section 34 of the Arbitration and Conciliation
Act, 1996. In these proceedings, a compromise was arrived at whereby the
respondent no.2 herein conceded to allowing of the objections and setting
aside of the Award ie respondent no.1 could continue as the President of
NCUI. Appellant-society claims that this action of respondent no.2 of
compromising the matter is illegal.
4. Appellant claims as illegal the action of the respondent no.2 in
arriving at the compromise by agreeing to set aside the Award dated
15.3.2012 of the Arbitrator on two counts. Firstly, it is argued that there was
no power in the respondent no.2 to compromise by setting aside the Award.
Secondly, it is argued that courts cannot give effect to a compromise which
is illegal.
5. So far as the first argument is concerned, once a nominee of a
co-operative society acts on behalf of such cooperative society/body as a
nominee of that body in NCUI, such a person acts for all intents and
purposes for all aspects for the body he is representing for dealing with
NCUI, unless, his original nomination itself is conditioned and constricted.
FAO 164/2013 Page 3 of 6
This position is admittedly not so, and in fact the court below has rightly
relied upon the resolution passed by the appellant herein in favour of the
respondent no.2 herein and which states that the appellant herein had given
complete authority to respondent no.2 herein, to act for and on behalf of the
appellant right till the Supreme Court. Once this is so, and no prior
restriction of any nature before entering of the compromise is shown to this
Court, the respondent no.2 is deemed to have acted for and on behalf of the
appellant herein and whom the respondent no.2 herein was all alone
representing till the compromise order was passed on 3.10.2012. It cannot be
the law and is not the law that for each and every act which is done by a
nominee of a co-operative society with NCUI, prior approval of the co-
operative society is required for the nominee to act. Accordingly, I hold that
the respondent no.2 cannot be said to have in any manner acted illegally in
arriving at the compromise on 3.10.2012 because there was no restriction on
his power to act on all aspects, and in all spheres, for and on behalf of the
appellant herein, and which entitlement includes a power to enter into a
compromise.
6. So far as the second aspect is concerned that the courts below
ought not to have accepted the compromise under Order 23 Rule 3 CPC
FAO 164/2013 Page 4 of 6
inasmuch as the same was illegal and in violation of the rules and
regulations of NCUI, the argument is without any basis because any person
can always waive a legal right which is made for his benefit. Unless a legal
right is with respect to public policy, such a right can always be waived vide
Martin & Harris Ltd. Vs. VIth Additional District Judge & Ors. 1998(1)
SCC 732. Besides the appellant, there are about 200 members of the general
body of NCUI, and none of whom had objected to the appointment of the
respondent no.1as President. Therefore, at best it is a case of one member,
out of about 200, opposing the appointment of the respondent no.1 as
President of NCUI. It may be noted that election of respondent no.1 to the
post was unanimous inasmuch as the two other candidates for the post
withdrew their candidature and the respondent no.1 thus remained the sole
remaining contesting candidate for appointment to the post of President of
NCUI.
7. In view of the above, it is clear that appellant always acted
through the respondent no.2. Respondent no.2 is not shown to have any
restriction on his acting for and on behalf of the appellant herein. The power
to compromise has been exercised with respect to a right which can be
legally waived, and which legal right is not a right of public policy. Also, if
FAO 164/2013 Page 5 of 6
out of about 200 members in a general body only one of the person is
objecting to the appointment of respondent no.1 as a President of NCUI, I
fail to see as to how if there was a legal right such a private legal right could
not have been waived, as the same was waived by the other 200 odd
members.
8. In view of the above, there is no merit in the appeal, and the
same is therefore dismissed, leaving the parties to bear their own costs.
JANUARY 27, 2014 VALMIKI J. MEHTA, J.
ib
