Mukesh Kumar vs The Administrator (Nzre)
2015 Latest Caselaw 5065 Del

         THE HIGH COURT OF DELHI AT NEW DELHI
%                                      Judgment delivered on: 16.07.2015

+       FAO(OS) 318/2015 and CM No. 11218/2015

MUKESH KUMAR                                                   ... Appellant

                                         versus

THE ADMINISTRATOR (NZRE)                                       ... Respondent

Advocates who appeared in this case:
For the Appellant            : Mr Milind M. Bhardwaj and Mr S.R. Singh
For the Respondent           : Mr Avinash Sharma

CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE RAJIV SHAKDHER

                                   JUDGMENT

BADAR DURREZ AHMED, J (ORAL)

1. This appeal is directed against the judgment dated 21.05.2015 passed

by a learned Single Judge of this court in OMP(I) 211/2015 which was a

petition under Section 9 of the Arbitration and Conciliation Act, 1996

(hereinafter referred to as "the said Act"). The appellant / petitioner had

sought a restraint order against the Administrator / respondent from

enforcing the second part of clause (VIII) of the notice dated 06.04.2015 as

amended by the notice dated 13.04.2015 which was published for the

scheduled election to the Smaller Representative General Body of the

Society. The second part of the clause (VIII) prohibited a Member from

contesting the election if his remaining membership in the society was less

than five years. A further direction had been sought in the Section 9

petition that the respondent ought to allow the appellant / petitioner to file

his nomination.

2. It is the case of the appellant that the constitution of the society does

not provide for any such restriction as indicated in the second part of clause

VIII of the notice. Therefore, that part was ultra vires the constitution of

the society and the rules as also the Multi-State Co-operative Societies Act,

2002. The argument given by the learned counsel for the respondent for

introduction of the second part of clause VIII in the said notice was that

bye-law 28(e) stipulated that "the term of the delegate shall be five years

from the date of election". From this, it was inferred that a person who

contemplates on contesting the election must have at least five years of

membership remaining and that is why the said condition was put in the

second part of clause (VIII) of the election notice. We are not going into

this controversy inasmuch as this has not been addressed by the learned

Single Judge. This is so because the learned Single Judge rejected the

Section 9 petition filed by the appellant / petitioner on the ground of

maintainability. This was done on the basis of an interpretation of Section

84 of the Multi-State Co-operative Societies Act, 2002 (hereinafter referred

to as "the 2002 Act"). Section 84 of the 2002 Act reads as under:-

"84. Reference of disputes.--

(1) Notwithstanding anything contained in any other law for the time being in force, if any dispute [other than a dispute regarding disciplinary action taken by a multi-State co- operative society against its paid employee or an industrial dispute as defined in clause (k) of section 2 of the Industrial Disputes Act, 1947 (14 of 1947)] touching the constitution, management or business of a multi-State co-operative society arises--

(a) among members, past members and persons claiming through members, past members and deceased members, or

(b) between a member, past member and persons claiming through a member, past member or deceased member and the multi-State co- operative society, its board or any officer, agent or employee of the multi-State co-operative society or liquidator, past or present, or

(c) between the multi-State co-operative society or its board and any past board, any officer, agent or employee, or any past officer, past agent or past employee, heirs or legal representatives of any deceased officer, deceased agent or

deceased employee of the multi-State co- operative society, or

(d) between the multi-State co-operative society and any other multi-State co-operative society, between a multi-State co-operative society and liquidator of another multi-State co-operative society or between the liquidator of one multi-

State co-operative society and the liquidator of another multi-State co-operative society,

such dispute shall be referred to arbitration.

(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or business of a multi-State co-operative society, namely:--

(a) a claim by the multi-State co-operative society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;

(b) a claim by a surety against the principal debtor where the multi-State co-operative society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not;

(c) any dispute arising in connection with the election of any officer of a multi-State co- operative society.

(3) If any question arises whether a dispute referred to arbitration under this section is or is not a dispute touching the constitution, management or business of a multi-State co-operative society, the decision thereon of the arbitrator shall be final and shall not be called in question in any court.

(4) Where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar.

(5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996."

While dealing with the said provision, we find that the learned Single Judge

failed to take notice of Section 84(1)(c). The learned Single Judge only

concentrated on Section 84(1)(b). The present appellant is admittedly a

past officer of the society. As such, in the description of parties given in

Section 84(1)(c), the appellant would be included. The appellant is raising

a dispute with the Multi-State Co-operative Society or its Board and the

appellant / petitioner is a past officer. Therefore, the appellant / petitioner's

case would be covered under Section 84(1)(c). The learned Single Judge

failed to examine this aspect of the matter.

3. Furthermore, Section 84(1) clearly stipulates that notwithstanding

anything contained in any other law for the time being in force, if any

dispute touches upon the constitution, management or business of a multi-

State co-operative society, the same can be referred to arbitration. Sub-

Section (2) of Section 84 is a deeming provision which indicates certain

instances which are deemed to be disputes touching upon the constitution,

management or business of a multi-State co-operative society. It does not

mean that a dispute which would otherwise touch upon the constitution,

management or business of a multi-State Co-operative society but does not

find mention in the clauses (a), (b) or (c) of sub-section 2 would not be a

dispute referable to arbitration. In any event, the learned counsel for the

appellant submitted that the dispute that he seeks to raise would be covered

under Section 84(2)(c) inasmuch as it is a dispute in connection with the

election of any officer of a multi-state co-operative society. His argument

is that in the first place the delegates have to be elected and it is from the

delegates that officers would be elected. If a person is shut out from being

elected as a delegate, it is obvious that he would be shut out from being

elected as an officer and, therefore, if there is a dispute with regard to

election of an delegate, it would be covered under the expression given in

Section 84(2)(c).

4. We may also point out sub-section (3) of Section 84 which clearly

stipulates that if any question arises whether a dispute referred to arbitration

under this Section is or is not a dispute touching the constitution,

management or business of a multi-State co-operative society, the decision

thereon of the arbitrator shall be final and shall not be called in question in

any court. In other words, whether a dispute is arbitrable or not in the sense

as to whether it is covered by the expression 'dispute' touching upon the

constitution, management or business of a multi-State co-operative society,

is also to be decided by the arbitrator.

5. It is then obvious that the matter in any event has to be determined

by the arbitrator. If that be the case, then a petition under Section 9 would,

in our view, be maintainable. We may also point out sub-section (5) of

Section 84 which we have extracted above, which clearly stipulates that

save as otherwise provided in the Act of 2002, the provisions of the

Arbitration and Conciliation Act, 1996 will apply to all arbitrations under

the 2002 Act as if the proceedings for arbitration were referred for

settlement or decision under the provisions of the Arbitration and

Conciliation Act, 1996. This is one more reason as to why we find that the

petition under Section 9 was maintainable before the learned Single Judge.

6. For all these reasons, we feel that the impugned order cannot be

sustained and the same is set aside. As a result, the matter is remitted to the

learned Single Judge to decide the application under Section 9 on merits.

The appeal is allowed as above. The petition may be listed before the

learned Single Judge on 22.07.2015 in the first instance for directions.

BADAR DURREZ AHMED, J

RAJIV SHAKDHER, J JULY 16, 2015 SU