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Rajdhari Devi Vs. Deputy Registrar, Co-operative Societies, U.P., Gorakhpur and ors. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Arbitration
CourtAllahabad High Court
Decided On
Case NumberCivil Misc. Writ Nos. 359 and 362 of 1962
Judge
Reported inAIR1963All113
ActsConstitution of India - Article 226; Uttar Pradesh Co-operative Societies Rules, 1936 - Rules 115 to 138; Co-operative Societies Act, 1912 - Sections 43; Arbitration Act, 1940 - Sections 30 and 46; Code of Civil Procedure (CPC) , 1908 - Sections 151
AppellantRajdhari Devi
RespondentDeputy Registrar, Co-operative Societies, U.P., Gorakhpur and ors.
Appellant AdvocateS.C. Khare, Adv.
Respondent AdvocateStanding Counsel
DispositionPetitions dismissed
Excerpt:
arbitration - inherent power of high court - article 226 of constitution of india , u.p. co-operative societies rules,1936 and section 46 of arbitration act, 1940 - whether writ can be issued to private persons - arbitrator appointed on private agreements - jurisdiction of courts to interfere with arbitrations is statutory - no court has ever interfered with a private award except under these statutory provisions. - - by these petitions the petitioner wants the -awards of sri virendra singh as well as the appellate decisions of the assistant registrar and the deputy registrar to be quashed by a writ of cer-tiorari. the chief contention of the petitioner in these petitions, in other words, is that the reference to arbitration was bad and incompetent. the whole scheme shows clearly that..........in arbitration.8. it was also urged that as the scheme contemplated by ch. xiv of the co-operative societiesrules was inconsistent with the provisions of the indian arbitration act, the provisions of that act could not apply and section 46 of that act was on that account excluded. reference was made in this connection to nand kishore v. bally co-operative credit society ltd. : air1943cal255 , balreddy v. joint registrar, co-operative society, (s) air 1955 hyd 238, ranganathan v. krishnayya : air1946mad504 and south india co-operative insurance society ltd. v. bapi raju : air1955mad694 .9. section 46 of the indian arbitration act is of general application and was intended to make the provisions of the indian arbitration act with the exception of the three sections mentioned in section 46.....
Judgment:
ORDER

A.P. Srivastava, J.

1. These two petitions are connected with each other and can, therefore, be disposed of together. A co-operative housing society, known as the Co-operative Housing Society Limited, Bindbasni Nagar, Bank Road, Gorakhpur, was registered in 1946 with the purpose of acquiring land and allotting plots out of it to its various members for building houses. Land was acquired in pursuance of the scheme and divided into plots. A blue print was prepared with the approval of the Town Planner and plots according to that blue print were allotted to the various members. According to that blue print a plot situated in between plots Nos. 28 and 29B was to be converted into a park. When allotments were made in accordance with the blue print and the scheme then prepared plot No. 42 was allotted to Sri Shiv Shanker Lal Srivastava, the husband of the petitioner. Plot No. 40, which was adjacent to plot No. 42, was allotted to Sri H. C. Mukherji respondent No. 4 of petition No. 362 of 1962, and plot No. 28C was allotted to Sri Mahendra Misra, respondent No. 4 of petition No. 359 of 1962. All this was done in 1957.

Subsequently the managing committee of the society by a resolution dated the 4th January, 1959 decided to shift the park from its origins! place to plots Nos. 38 and 40 of the old blue print and to convert the old plot No. 40 into residential plots. By the time this change in the plan was made plot No. 42 which had originally been allotted in the name of the petitioner's husband was permitted to be transferred to her name and she had built a house on that plot. In the expectation that there would be a park on plots Nos. 40 and 38 she had opened windows towards that side. Some of the members of the society were, however, opposed to the, shifting of the park from its original place to plots Nos. 38 and 40 and wanted it to be kept at its original place according to the 1957 blue print. When the petitioner came to know of this move she made an application under Rule 115 of the Cooperative Societies Rules requesting that the question whether the park could be shifted back from plots Nos. 38 and 40 to its original place in between plots Nos. 29B and 28 should be referred to arbitration. The only person impleaded in that arbitration case was the society itself. An award was given in favour of the petitioner and that award was upheld in appeal.

Subsequently two more applications were made for arbitration under Rule 115 of the Co-operative Societies Rules. One was made by Sri Mahendra Misra who had been allotted plot No: 28C which was close to the plot where the park was originally intended to be located and the other was moved by Sri H. C. Mukherji to whom plot No. 40 had been allotted which was by the subsequent resolution of the managing committee to be converted into apark. Sri Mahendra Misra contended that the society had no justification for removing the park from its original place to a new place. He also questioned the transter of plot No. 42 FROm the name of the petitioner's husband to her name. Sri H. C. Mukherji in his application also questioned the right of the managing committee to convert plot No. 40 which had been allotted to him into a park and to give him another plot instead, in both these arbitration cases the petitioner was impleaded as a party in addition to the co-operative society itself.

Sri Virendra Singh, respondent No. 3 in both the petitions, was appointed the sole arbitrator to decide the questions raised. He gave his awards against the petitioner and in favour ol in Mahendra Misra and Sri H. C. Mukerji. According to his awards the park was to be located at its original place and was not to be shifted to plots Nos. 40 and 38. Against these awards appeals were riled under the Co-operative Societies Rules to the Assitant Registrar but were rejected with this modification that the transfer of piot No. 42 from the name of the petitioner's husband to her own name was to remain unaffected. Further appeals were preferred to the Deputy Registrar but shared the same fate.

By these petitions the petitioner wants the -awards of Sri Virendra Singh as well as the appellate decisions of the Assistant Registrar and the Deputy Registrar to be quashed by a writ of cer-tiorari. The awards are sought to be questioned on merits. But the main ground urged is that there was no dispute relating to the business of the society for which a reference to arbitration should have been made under Rule 115 of the Co-operative Societies Rules. It is also urged that Sri Mahendra Misra and Sri H. C. Mukerji had no right to apply for reference to arbitration. The chief contention of the petitioner in these petitions, in other words, is that the reference to arbitration was bad and incompetent.

2. When the learned counsel argued these petitions I felt very doubtful whether the question of the validity of the reference could be raised in writ proceedings and a writ of certiorari should issue to quash the references or the awards made on their basis. I, therefore, heard learned counsel on this point at length. He has not been able to satisfy me about the maintainability of these petitions.

3. Ordinarily the Court has no power to interfere with arbitrations based on agreements and a writ of certiorari or prohibition cannot be issued in respect of such agreements or arbitration awards. Thus in R. v. Disputes Committee of the National Joint Council, (1953) 1 All ER 327, Lord Goddard, C. J. laid down:

'That is simply a reference to an arbitrator, and I have never heard of certiorari or prohibition going to an arbitrator. Arbitration is a very old remedy in English law, but in all the centuries that have passed since the decisions of English courts first began there is no trace of an arbitrator being controlled by this Court by writ of either prohibition or certiorari.'

The learned chief Justice, however, made an exception in THe case of what can oe descrbed as a statutory arbitration in when the arbitrator is acting under the powers conferred by statute andsaid:

'The bodies to which in modern times the remedies of these prerogative writs have been applied are all statutory bodies on whom Parliament has conferred statutory powers and duties the exercise of which may lead to the detriment of subjects as, for instance, wnere a statute gives a certain body, power for me compulsory acquisition of land and an arbitrator is set up by Parliament to assess the compensation, and it is essential that the courts should be able to control the exercise of the statutory jurisdiction within the limits imposed by Parliament. There is no instance of which I know in the books where certiorari or prohibition has gone to any arbitrator except a statutory arbitrator, and a statutory arbitrator is a person to whom, by statute, the parties must resort. It would be an erroneous departure from the law relating to prerogative writs if we were to apply these remedies to an ordinary arbitrator, whether he be a single arbitrator or a body of gentlemen called a committee or council............'

4. Realising this position learned counsel for the petitioner tried to argue that the present was a case of statutory arbitration and a writ of certiorari could, therefore, issue. He referred in this connection to the Co-operative Societies Act, 1912 and the Rules framed thereunder. In the Act itself there is no provision for arbitration but under Section 43(2)(1) rules may be framed by the State Government for reference to arbitration in respect of certain matters. That rule reads:

'43. (2) In particular and without prejudice to the generality of the foregoing power, such rulesmay:

XX XX XX XX (1) provide that any dispute touching the business of a society between members or past members of the society or persons claiming through a member or past member or between a member or past member or persons so claiming and the committee or any officer shall be referred to the Registrar for decision or, if he so directs, to arbitration, and to prescribe the mode of appointing an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar or such arbitrator or arbitrators, and the enforcement of the decisions of the Registrar or the awards of arbitrators'.

5. Rules 115 to 138 of the Co-operative Societies Rules 1936, have been framed in the exercise of powers conferred by Section 43(2)(1) of the Act, Ch. XIV of the Rules which contains Rules 115 to 138 is headed as 'Arbitration'. These rules provide for a reference to arbitration of the kinds of disputes mentioned therein for the appointment of Arbitrators for the procedure to be followed by the arbitrators, for appeals against the awards made and for the enforcement of the awards. Rule 134 of these rules provides:

'A decision of an arbitrator or arbitrators under these rules if not appealed against within the said period and an order of the Registrar shall,as between the parties to the dispute, not be liable to be called in question in any civil or revenue courts and shall in all respects be final and conclusive.'

6. The argument of the learned counsel tor she petitioner is that on account of these provisionsin the rules the arbitration under the rules becomes an arbitration by statutory bodies on whom the statute has conferred statutory powers and duties and these arbitrations, therefore, fall within the exception contemplated by Lord Goddard. Thisargument, however, appears to overlook the provisions of Section 46 of the Indian Arbitration Actwhich says

'The provisions of this Act except Sub-section (1) of Section 6 and Sections 7, 12 and 37, shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an arbitration agreement and as if that other enactment were an arbitration agreement, except in so far as this Act is inconsistent with that other enactment or with any rules made thereunder.'

If an arbitration under the Co-operative Societies Rules is an arbitration under an enactment, viz. the Co-operative Societies Act, the provisions of the Indian Arbitration Act apply as if the arbitration was in pursuance of an arbitration agreement. The enactment itself is to be treated as an arbitration agreement. On account of this deeming clause, therefore, the arbitration under the Co-operative Societies Rules is put on the same level as an arbitration under an agreement. If arbitration under an agreement cannot Be controlled by writs the same disability must be applicable to arbitration under these rules. The only difference between an ordinary arbitration under an agreement and an arbitration under the Co-operative Societies Rules appears to be that while the former is actually based on an agreement the latter is deemed to be based on an agreement. It cannot, therefore, be said that though ordinary arbitrators are not amenable to writ jurisdiction arbitrators under the Cooperative Societies Rules can be controlled by writs.

7. Learned counsel then contended that the arbitrators deciding disputes under Rules 115 to 138 of the Co-operative Societies Rules were not really arbitrators. This contention cannot be accepted even for a moment. Chapter XIV of the Rules is headed as 'Arbitration'. The persons appointed to decide the disputes are referred to as arbitrators. Their decisions are described as awards and are subject to appeals provided to be treated as final. Representation by legal practitioners before the arbitrators is not permitted. The whole scheme shows clearly that the persons appointed to decide the disputes are to act as arbitrators. The fact that against an award given by the arbitrator under the rules an appeal is provided will not make a difference because, as held by the Supreme Court in Hans Kumar Kishan Chand v. Union of India : [1959]1SCR1177 and by this Court in State v. Ram Swarup : AIR1961All509 , the appellate decision is also in such cases to be considered as an award given in arbitration.

8. It was also urged that as the scheme contemplated by Ch. XIV of the Co-operative SocietiesRules was inconsistent with the provisions of the Indian Arbitration Act, the provisions of that Act could not apply and Section 46 of that Act was on that account excluded. Reference was made in this connection to Nand Kishore v. Bally Co-operative Credit Society Ltd. : AIR1943Cal255 , Balreddy v. Joint Registrar, Co-operative Society, (S) AIR 1955 Hyd 238, Ranganathan v. Krishnayya : AIR1946Mad504 and South India Co-operative Insurance Society Ltd. v. Bapi Raju : AIR1955Mad694 .

9. Section 46 of the Indian Arbitration Act is of general application and was intended to make the provisions of the Indian Arbitration Act with the exception of the three sections mentioned in Section 46 itself applicable to all statutory arbitrations. Prima facie, therefore, Section 46 applies to arbitration under the Co-operative Societies Rules also. The extent of the application of the provisions of the Indian Arbitration Act has, however, been cut down by Section 46 itself as it provides that the provisions of the Arbitration Act shall . apply to statutory arbitrations only to the extent that they are not inconsistent with the provisions of the statute itself. If, therefore, there is anything in the Co-operative Societies Rules which is inconsistent with the provisions of the Indian Arbitration Act the provisions of the Rules must be preferred and to that extent the provisions of the Arbitration Act will become inapplicable. From this, however, it does not follow that all the provisions of the Indian Arbitration Act including Sec- 46 are not applicable to the arbitration under the Co-operative Societies Rules. Those provisions of the Act which are not inconsistent with the provisions of the rules apply even to arbitrations under the Rules.

10. The cases relied upon do not support the contention that the provisions of the Arbitration Act do not apply to arbitrations under the Co-operative Societies Rules. They only lay down that the provisions of the Act which are inconsistent with the provisions of the Rules must give way to the Rules. Thus in Nand Kishore's case : AIR1943Cal255 (supra) the contention raised was that as the award under the Co-operative Societies Rules had not been given within four months as was necessary under para 3 of Schedule I of the Arbitration Act the award was bad. It was held that para 3 of Schedule I of the Arbitration Act did not apply because it was inconsistent with the provisions of the Rules. The case of Ranganathan : AIR1946Mad504 (supra) related to the Madras Town Planning Act. As it was doubtful whether the proceedings under the Town Planning Act were arbitration proceedings the application of Section 46 of the Arbitration Act was held to be open to doubt. It was further held that as Section 29 of the Town Planning Act itself provided for appeals even if Arbitration Act applied Section 30 of the Act being inconsistent with Section 29 of the Town Planning Act could not override its provisions.

The case of Balreddy, (S) AIR 1955 Hyd 238, (supra) related to the Hyderabad Co-operative Societies Act. In that case an attempt was made to make Section 5 of the Arbitration Act applicable but the section was held to be inapplicable because there were provisions in the Hyderabad Co-operative Societies Act which were inconsistent with Section 5.The case of South Indian Co-operative Insurance Society (supra) arose with reference to the Madras Co-operative Societies Act of 1932. Two appeals against an award under the Act had been provided by the Act itself. It was, however, urged that on account of Section 39 of the Indian Arbitration Act a second appeal could not be filed. The contention was rejected because it was found that the provisions in the Madras Co-operative Societies Act were on that point inconsistent with the provisions of Section 39 of the Arbitration Act.

None of these cases relied upon can, therefore, be of any help to the petitioner in this connection. It does not follow from any of these cases that in spite of Section 46 of the Indian Arbitration Act the provisions of the Arbitration Act are wholly inapplicable to proceedings for arbitration under enactment like the Co-operative Societies Rules. The only thing laid down in these cases is that the provisions of the Rules themselves must be preferred to the provisions of the Arbitration Act in case there is inconsistency between the two.

11. It is noticeable in this connection that section 33 of the Indian Arbitration Act provides for an application for challenging the existence or validity of an arbitration agreement. Under Sub-section (2) of Section 31, notwithstanding anything contained in any other law for the time being in force, all questions regarding the validity or existence of an arbitration agreement shall be decided by the Court in which the award under the agreement may be filed and by no other Court. There appears to be no provision in Ch. XIV of the Co-operative Societies Rules for challenging the existence or validity of the agreement of reference, As has already been said, the main ground on which the present petitions are based is that the dispute of the kind which had arisen between the parties could not have been referred to arbitration under Rule 115. As the provisions for making a reference to arbitration contained in the Rules are to be deemed to amount to an agreement of reference in view of Section 46 of the Arbitration Act the real question that is being raised is about the validity or existence of an agreement of a reference. There being no provision in the Rules for questioning the validity or existence of the agreement the provisions of the Arbitration Act can be availed of and the dispute that is being raised in these petitions can be raised under those provisions. For challenging the awards on merits two successive appeals have been provided in the Rules themselves and the petitioner has already availed of that remedy. Thus effective alternative remedies being available to the petitioner, there is no reason why the petitioner should be permitted to invoke the special jurisdiction of this Court under Article 226 of the Constitution.

12. The case of Chela Narayan v. Joint Registrar of the Hyderabad Co-operative Societies, (S) AIR 1955 Hyd 33 furnishes another ground for the rejection of these writ petitions. In that case a reference had been made under the Hyderabad Cooperative Societies Act to an arbitrator. The petitioner had submitted to the jurisdiction of the arbitrator but the award had gone against him. He had challenged it in revision under the provisions of the Act but without success. He, therefore, filed awrit petition for having the award quashed on the ground that the arbitrator had no jurisdiction. He was, however, not permitted to invoke the jurisdiction under Article 226 of the Constitution and it was observed:

'There is, however, another reason why the petitioner should not be heard to urge the present grounds of want of jurisdiction. It is well known that in the matter of issue of a writ by way of certiorari the High Court's powers are discretionary, and where the applicant armed with the point which would oust jurisdiction of the subordinate tribunal has elected to argue the case on its merits before that Court, he must be taken to have submitted to its jurisdiction. He cannot be allowed to repudiate that decision in a petition for a writ of certiorari.'

13. In the end learned counsel urged that this Court has inherent jurisdiction to set aside aa award of an arbitrator for an error of law apparent on the face of it and relied in this connection on a passage in Halsbury's Laws of England, Vol. II, para 127, p. 60 and also on some observations in Racecourse Betting Control Board v. Secy. of State for Air, (1944) 1 All ER 60. Though as was held by the appellate Court the case in Racecourse Betting Control Board, (1944) 1 All ER 60 (supra) related not to an arbitrator but to a subordinate tribunal it does appear that in England the High Courts have exercised a sort of inherent jurisdiction to set aside awards of arbitrators if an error of law was apparent on the face. It was considered that the jurisdiction existed at common law independently of statute. No such jurisdiction has, however, been ever exercised in India.

In this country from the very start jurisdiction of Courts to interfere with arbitrations has always been statutory. Originally there were provisions in the Civil Procedure Code which were applicable to all Courts and there was the Arbitration Act which was applicable to particular portions of the country. Then the Indian Arbitration Act, 1940 was enacted which was of universal application. No instance has been brought to my notice in which the Courts in Indian have interfered with a private award except under these statutory provisions. The rule of English Law relied on by the learned counsel does not, therefore, appear to be applicable here and cannot be invoked by the petitioner.

14. The petitions cannot, in my opinion, succeed. They are rejected.


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