Mukesh Kumar vs The Administrator
2015 Latest Caselaw 4067 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI
                                       Judgment reserved on May 18, 2015
                                      Judgment delivered on May 21, 2015
+                          OMP (I) 211/2015
MUKESH KUMAR                                          ..... Petitioner
                           Through:     Mr.Milind M. Bhardwaj,
                                        Adv. with Ms.Deepali
                                        Dwivedi, Adv.

                           versus

THE ADMINISTRATOR                                  ..... Respondent
                 Through:               Mr.Avinash Sharma, Adv.

CORAM:
HON'BLE MR. JUSTICE V.KAMESWAR RAO
V.KAMESWAR RAO, J.

1. In this petition under Section 9 of the Arbitration and Conciliation

Act, 1996 („Act‟, in short), the petitioner has sought a restraint order

against the respondent from enforcing second part of clause (VIII) of the

notice dated April 6, 2015 as amended vide notice dated April 13, 2015

published for scheduled election to Smaller Representative General

Body of the Society („SRGB‟, in short) prohibiting a „member‟ to

contest the election if his remaining membership in the society is less

than five years with a further direction to the respondent to allow the

petitioner to file nomination.

2. The brief facts are, on January 29, 2012, elections were held to

SRGB and Board of Directors. The election of Board of Directors was

challenged on the ground that the elections of delegates to the General

Body has not been held. In a writ petition i.e. W.P. (C) 571/2012, this

Court vide its order dated January 30, 2012 had stayed the declaration

and giving effect to the election results. The case of the respondent

therein was that the election result had been declared on January 29,

2012 itself and the new Board of Directors have taken over on the same

date. Subsequently in another writ petition, election of delegates was

stayed on the ground that electoral roll was not proper. As a

consequence, two parallel organizations are claiming to run the Northern

Zone Railway Employees Cooperative Thrift and Credit Society Ltd.

This effected the working of the society. This Court with the consent of

the parties, had appointed Justice S.N.Dhingra, a Retd. Judge of this

Court as the learned Administrator to administer the affairs of the

society. The Court has also empowered the learned Administrator, within

two months to declare schedule of elections and appoint a Returning

„Officer‟ to conduct the elections for all the constituencies of the society.

3. The learned Administrator was also empowered to determine the

number of constituencies of the society on the basis of the society

membership as on the date of appointment. The Court had also observed

that the learned Administrator shall endeavour to complete the elections

within six months from the date of communication of the order.

4. Pursuant thereto, the Administrator has issued the notice dated

April 6, 2015, whereby, the Administrator has fixed a schedule which

includes, (1) issue and filing of nomination paper till May 11, 2015 (5

PM); (2) scrutiny of nomination paper-May 14, 2014 to May 15, 2015;

(3) displaying the list of eligible candidates on the notice board-May 19,

2015; (4) date of withdrawal of nomination papers-May 20, 2015 to May

22, 2015; (5) display on the notice board of the society and on the

website of the society the final list of candidates-May 26, 2015.

5. It is noted that representations dated April 16, 2015 were made by

four members of the society who were ex-delegates against the condition

imposed in the election notification that the „member‟ contesting should

have remaining membership of at least 5 years, as not fair and should be

waived. The said representations were considered by the Administrator

and rejected vide order dated April 23, 2015, on a reasoning that in case

the members elected, do not have full tenure, the work of society is

likely to become standstill in the event of delegates having one or two

years of their membership left being elected. There is no guarantee that

in the General Body elections, the candidates returned/elected shall have

tenure of five years and not one or two years, if this condition is

removed. According to the Administrator, if all the delegates elected

have only partial term after the expiry of their partial term, which may be

even six months, there will be no general body in the society, after say

two years or three years. Similar would be the position with regard to

the Directors elected by the delegates so also the Chairman elected by

the Directors.

6. The respondent has filed a short reply in the Court on May 11,

2015 and the same has been taken on record. In the reply, it is the case

of the respondent that the scope of the election of delegates is beyond the

scope of arbitration as envisaged under Section 84 of the Multi-State

Cooperative Societies Act, 2002. According to the respondent, it is only

a dispute touching the constitution, management of a business of a Multi

State Cooperative Society shall be referred to arbitration. In support of

this contention, it is the case that Section 84(2)(c) of Multi-State

Cooperative Societies Act, 2002 contemplates any dispute arising in

connection with the election of an „officer‟ of a Multi State Cooperative

Society is only referable to the arbitration which is not the case here. In

fact, according to the respondent, a delegate is not an „officer‟ as

envisaged under Section 3(t) of the Act. That apart, it is their case that

the learned Administrator was appointed by this Court on November 19,

2014 with the clear mandate to conduct the elections within six months

and in order to comply with the directions of the Court that the election

notice dated April 6, 2015 (and April 13, 2015) has been issued.

According to the respondent, the General Body of the Society shall

consist of 120 delegates to be elected for five years, for which, electorate

comprising of approximately 70,000 voters requiring substantial

preparation viz. finalization and issuance of election notification and

publication of the same, publication of voter list to receive objection on

the voter list/constituencies etc. Elaborate arrangements have to be made

at 10 different locations in 4 different States for the aforesaid elections.

The respondent would justify the underlying rationale for having the

stipulation debarring members having remaining membership of less

than five years on the date of nomination i.e. his retirement from

Railways should be after April, 2020, by referring to clause 28(e) of the

Bye-laws of the respondent society, which inter alia state, that the term

of delegate shall be five years from the date of elections. In other words,

the said bye-law clearly envisage that the delegates are going to have

fixed tenure of five years unlike the Directors, Chairman, etc. which can

be of a lesser duration. The respondent would justify the said stipulation

on the ground that the delegates were required to meet every year for

consideration of audited statement of accounts, audit report and annual

report and if the tenure is not of five years, then the work of the society

is bound to suffer and the functioning of the society would become

standstill if the tenure of the delegate is less than five years. It is also

their stand that once election process has been set in motion, the Court

must adopt hands off approach in the election process.

7. Mr.Milind M. Bhardwaj, learned counsel for the petitioner would

draw my attention to Section 84(1)(c) and 84(2)(c) of Multi-State

Cooperative Societies Act, 2002 („Act of 2002‟, in short) to submit that

the dispute in question is referable to the arbitration in view of Section

84(1)(c). According to him, the election of a delegate to SRGB would

touch upon the constitution and the management of the society. He

would state that the petitioner herein was a past delegate and as such, the

dispute is referable. He would also state that any dispute arising in

connection with the election of any „officer‟ of Multi-State Cooperative

Society shall also be referred to arbitration. That apart, he has drawn my

attention to Section 45(5) to submit that even if a „member‟ retires

before completing the five years‟ tenural period, the elected „member‟

shall continue to hold office till their successor are elected or nominated

under the provisions of the Act or rules or bye-laws and assume charge

of their office. He would state that the coram of SRGB would still be

achieved even if some of the delegates retire. According to him, when

there is a power to expel a delegate, then, retirement before the expiry of

tenure cannot be a justifiable ground for debarring a „member‟ from

contesting the election.

8. On the other hand, Mr.Avinash Sharma, learned counsel for the

respondent would reiterate the stand taken by the respondent in their

reply and would state that the past statistics shows that on an average

1500 employees retire from service. In five years, around 6000

employees retire. If the SRGB constitutes, delegates who would retire

before the completion of five years‟ tenure, the very purpose of election

would be defeated. That apart, he would highlight the large scale

preparations being made for the conduct of elections in the month of

June 2015. He would rely upon the following judgments in support of

his submissions:

"1. Ashok Kumar & Anr. Vs. SBI Officers Association (Delhi Circle) & Anr., 201 (2013) DLT 433

2. O.A. No. 461 of 2010 , decided on 28th April, 2010 (Madras High Court)

3. Javed Rahat & Others Vs. Bar Council of India & Ors., 129 (2006) DLT 104 (DB)

4. Shri Sant Sadguru Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha & Anr. Vs. State of Maharashtra & Others, (2001) 8 SCC 506

5. Umesh Shivappa Ambi and Others Vs. Angadi Shekara Basappa and Others, (1998) 4 SCC 529

9. Having considered the submissions of the learned counsel for the

parties, the first and foremost question which arises for consideration in

this petition under Section 9 of the Act is whether the dispute is an

arbitrable one. If it is not, the petition per-se would not be maintainable.

10. In this regard, as noted above, Section 84, which forms part of

Chapter (IX) of the Act of 2002 relating to settlement of disputes Sub-

section 1(c) and 2(c) thereof 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--

(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 XXX XXX XXX

84. Reference of disputes.--

(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:--

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

11. A perusal of the aforesaid provisions of the Act would show that

dispute touching the constitution, management or business of a Multi-

State Cooperative Society must be between the society or its board on

one hand, 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 Cooperative Society. The word „member‟ or „past delegate‟ are not

referred to. Assuming the dispute between „member‟ and the multi state

co-operative society is covered under Section 84(1)(b) of the Act of

2002, then also, in terms of Section 84(2)(c) of the Act of 2002, a dispute

should be in connection with election of an „officer‟ of a Multi-State

Cooperative Society. Further Section 3(t) defines „officer‟ to means a

President, Vice-President, Chairperson, Vice Chairperson, Managing

Director, Secretary, Manager, Member of a Board, Treasurer, Liquidator,

an Administrator appointed under section 123 and includes any other

person empowered under this Act or the rules or the bye-laws to give

directions in regard to the business of a multi-state cooperative society.

12. It is noted, an „officer‟ does not include a „member‟ or a „past

delegate‟ and also from a reading of Section 84(2)(c) of the Act of 2002,

it is clear that only dispute relating to "election of an officer", which is a

position after election, which can be referred to arbitration, and not any

process undertaken before actual election takes place. The dispute raised

is not arbitrable. The impugned notice cannot be a subject matter of a

petition under Section 9 of the Act and the same per-se is not

maintainable. I note, for benefit the judgment of the Supreme Court in

the case of Firm Ashok Traders Vs. Gurumukh Das Saluja & Ors.,

(2004) 3 SCC 155.

"Section 9 of the Arbitration and Conciliation Act, 1996 provides that a party may file an application for interim measures before or during arbitral proceedings, or at any time after the making of the arbitral award, but before it is enforced under Section 36. The application to initiate civil proceedings can be made only by a party, as defined in clause (h) of sub-section (1) of Section 2 i.e. a party to the arbitration agreement. The right is conferred on a party to the arbitration agreement, within the time-frame as indicated by the Section. A person who is not a party to an arbitration agreement, cannot invoke Section 9 for measures of interim protection."

13. In view of my conclusion above on maintainability, the other

submissions need not be gone into.

14. The petition is accordingly dismissed.

(V.KAMESWAR RAO) JUDGE MAY 21, 2015 akb