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Ran Singh Vs. the Gandhar Agricultural Co-operative Service Society, Gandhar - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Civil
CourtPunjab and Haryana High Court
Decided On
Case NumberLetters Patent Appeal No. 238 of 1974
Judge
Reported inAIR1976P& H94
ActsPunjab Co-operative Societies Act, 1961 - Sections 54, 56 and 63; Punjab Co-operative Societies Rules, 1963 - Rules 51, 53 and 55; Code of Civil Procedure (CPC), 1908 - Sections 47
AppellantRan Singh
RespondentThe Gandhar Agricultural Co-operative Service Society, Gandhar
Appellant Advocate S.P. Goyal, Adv.
Respondent Advocate R.P. Jagga, Adv.
DispositionAppeal succeeds
Cases ReferredSmt. Kaushalya Devi v. K. L. Bansal.
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....m.r. sharma, j.1. the gandhar agricultural co-operative service society. gandhar (hereinafter referred to as the respondent-society), filed a petition for execution of the award given by an arbitrator under the punjab co-operative societies act, 1961 (hereinafter referred to as the act), in the court of the learned subordinate -tudge. l st class. muktsar. the appellant filed objections that the execution of the award was barred by time and the award having been given without notice to him was a nullity and as such incapable of being executed. on april 25 1972. the learned subordinate judge framed the following issues:--(1) whether the notice of the proceedings of the arbitration, was not served on ran singh. if so. its effect. o. p. o.(2) whether such an objection is not maintainable in.....
Judgment:

M.R. Sharma, J.

1. The Gandhar Agricultural Co-operative Service Society. Gandhar (hereinafter referred to as the respondent-Society), filed a petition for execution of the award given by an Arbitrator under the Punjab Co-operative Societies Act, 1961 (hereinafter referred to as the Act), in the Court of the learned Subordinate -Tudge. l st Class. Muktsar. The appellant filed objections that the execution of the award was barred by time and the award having been given without notice to him was a nullity and as such incapable of being executed. On April 25 1972. the learned Subordinate Judge framed the following issues:--

(1) Whether the notice of the proceedings of the arbitration, was not served on Ran Singh. If so. its effect. O. P. O.

(2) Whether such an objection is not maintainable in these proceedings O. P. D. H.

On June 19. 1971 the following additional issues were framed: --

(3) Whether Section 22 of the Cooperative Societies Act is applicable to the execution of the award 1 O. P. O.

(4) Whether the execution proceedings of the decree-holder is time-barred in view of Section 22 of the Co-operative Societies Act O. F O.

(5) Relief.

The learned Executing Court held that notice for the service of Ran Singh appellant had been sent by registered post by the arbitrator and the presumption was that the same had reached the destination and had been delivered to the addressee. On Issue No. 2. it was held that such an objection was entertainable in execution proceeding:. Issues Nos. (3) and (4) were found against the appellant and the execution proceedings were ordered to proceed The appellant filed an appeal before this Court against the order dated March 9. 1972. passed by the learned Subordinate Judge. 1st Class. Muktsar. This appeal came up for hearing before a learned Judge of this Court sitting in Chambers before whom it was argued that the appellant had not been served regarding the arbitration proceedings and that the award given by the arbitrator, being opposed to the principles of natural justice, was a nullity and incapable of being executed. The learned Judge held that the arbitrator had fixed the arbitration proceedings for May 9. 1966. and had sent a notice per registered post about this date to the appellant; subsequently the arbitrator changed the date of hearing fromMtw 9. 1966 to MAY 7. 1966 and sent another notice in this behalf, but the latter notice was not served on the appellant because he was not available; and in spite of the fact that the apoellant had not been served to appear before the arbitrator on 7-5-66 the latter took uo the case and passed an award against him burdening him with a liability to pay Rs 15.262.29 P. On the question whether the award, which had been passed in contravention of the principles of natural justice the learned Judge relied upon Sunder Singh v. The Central Cooperative Bank. 1973-75 Pun LR 678 = (AIR 1973 Puni 417). decided by a Division Bench of which he himself was also a member, and held that the award was not a nullity Consequently, he dismissed the appeal of the appellant but left the parties to bear their own costs.

2. The Letters Patent Appeal filed by the appellant came up before a Bench consisting of my Lord the Chief Justice and myself on May 20. 1974. It was brought to our notice that there was an apparent conflict between the Division Bench judgment in Sunder Singh's case, AIR 1973 Punj 417 (supra) and another Division Bench judgment in The Lok Sewak Co-operative Marketing-cum-Processing Society, Faridkot v. Janga Singh, 1974 Pun LJ 5. In order to resolve the conflict between the two Division Bench judgments, the case was admitted for hearing by a Full Bench and it is for this reason that this case has come up for hearing before us.

3. At the very outset. I would like to notice some of the relevant provisions of the Act and the rules framed there-under Section 55 of the Act lays down that notwithstanding anything contained in any law for the time being in force, a dispute touching the business of a co-operative society arising between a member and the society shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceedings in respect of such a dispute Section 56 lays down that the Registrar on receipt of the reference of the dispute under Section 55. may either decide the dispute himself or transfer it for disposal to any person who has been invested with powers in that behalf or refer it for disposal to an arbitrator. In exercise of powers conferred under Section 85 of the Act, the State Government have framed the Punjab Co-operative Societies Rules. 1963 (hereinafter referred to as the Rules). Chapter VII of the Rules consists of rules 51 to 57 relating to the settlement of disputes. Rule 51 lays down that a party desiring to have the dispute determined in accordance with Section 55 of the Act shall apply to the Registrar in writing stating the substance of the dispute and the names and addresses of the other party in such form asthe Registrar may lay down from time to time. Rules 53 and 55, which are Particularly noteworthy, read as tinder:--

'53. Communication of date, time and place of hearing. In, an arbitration proceeding, the Registrar, or the arbitrator, as the case may be, shall communicate the date, time and place of hearing the dispute to all the parties concerned.'

'55. Hearing of Disputes.--The Registrar or the arbitrator, as the case may be. shall hear the parties and witnesses who attend. On the basis of such evidence and after consideration of any documentary evidence that may be produced by either party, he shall give a decision or award, as the case may be, in accordance with justice. equity and good conscience. The decision or award shall be reduced to writing, announced to the parties and filed in the office of the Registrar. In the absence of any party duly summoned to attend, the dispute may be decided ex parte.'

A combined reading of these rules shows that the rule-making authority has provided for a definite procedure to be adopted in arbitration proceedings. A party desirous of having the dispute settled has to apply to the Registrar stating the substance of the dispute and other particulars in a prescribed form. If the Registrar himself chooses to act as an arbitrator or appoint an arbitrator, he or the arbitrator, as the case may be. is required to communicate the date, time and the place of hearing of the dispute to the parties concerned. The parties to the dispute have been invested with a right to be heard and to examine witnesses in support of their respective claims. The Registrar or the arbitrator has to Rive a decision or an award on the basis of evidence, both oral and documentary, in accordance with justice. equity and good conscience. The award has to be reduced to writing and announced to the parties. The important words in Rule 55 are 'In the absence of any party duly summoned to attend, the dispute may be decided ex parte'. In short, there is a clear mandate of the Subordinate Legislature that the dispute may be decided in the absence of a party only if it fails to appear before the Registrar or the arbitrator after being duly summoned to attend. Rule 57 lavs down that the record of the arbitration proceedings shall be preserved under the direction of the Registrar and any of the parties to the case shall be entitled to obtain copy of the decision or award on payment of prescribed fees.

4. In other words, the lengthy and the cumbersome procedure which the Civil Courts have to follow in deciding disputes has been done away with in the case of disputes between the Co-op. Societies and its members. In its place, a simpler procedure has been provided by giving a place of prominence to the principles of natural justice But. once an award is given either by the Registrar or by the arbitrator, the same shall be deemed to be a decree of a Civil Court and shall be executed in the same manner as the decree of such a Court according to Section 63 (a) of the Act.

5. I had purposely refrained from setting out the relevant provisions of Section 55 in the earlier part of this judgment because I thought it would be proper to consider this provision along with Section 82 of the Act The relevant portions of these section? read as under:--

'55. Disputes which may be referred to arbitration,

(1) Notwithstanding any thing contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a Co-operative Society arises--

(a) x x x

(b) x x x

(c) between the society or its committee and any past committee, anv officer, agent or employee, or any past officer, past agent or Past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society; or

(d) x x xsuch disputes shall be referred to theRegistrar for decision and no Court shallhave jurisdiction to entertain any suit orother proceeding in respect of such dispute.'

'82. Bar of jurisdiction of Courts. --(1) Save as provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of--

(a) x x x

(b) x x x

(c) any dispute required under Section 55 to be referred to the Registrar; and

(d) x x x'

A combined reading of these provisions shows that it has been made imperative for either a Society or its member to refer their disputes inter se to the Registrar for decision. Not only has the jurisdiction of ordinary Civil Courts been taken away for entertaining any suit or other proceeding in respect of such a dispute but an express bar has been created against the Civil Courts regarding all types of jurisdictions in respect of disputes required to be referred to the Registrar. The use of the words 'In respect of' is pregnant with significance. It perhaps shows that even if the decision of the Registrar or the arbitrator is wholly illegal, an aggrieved parly would have to take resort to the remedies provided by the Act itselfand a Civil or a Revenue Court will not be competent to adjudicate upon the matter unless there is a specific provision to the contrary in the Act. Would the same considerations apply even if the award rendered by the Registrar or the arbitrator was opposed to the principles of natural justice Do the Registrar and the arbitrator act outside the provisions of the statute when they give an award in contravention of the principles of natural justice as incorporated in the statutory rules And lastly, can it be spelt out of the provisions of the Act that a Civil Court would be entitled to treat such an award as a nullity These are some of the important questions which have to be answered in this case.

6. It is needless to point out that Civil Courts view with strong disfavour a tendency to oust their jurisdiction to entertain civil disputes. At the same time, if there are clear indications in an act of the Legislature, which either expressly or impliedly bar the jurisdiction of a Civil Court, such a Court will decline to overstep the limits set by law. Again, the jurisdiction of a Civil Court may be excluded for the purpose of the initial determination of the dispute but the same may be kept intact for the purpose of execution. Section 63 of the Act provides that every decision or award duly passed under Sections 54, 56. 62. 68 or 69 shall, if not carried out. on a certificate signed by the Registrar, be deemed to be a decree of a Civil Court and shall be executed in the same manner. When the bar of jurisdiction of the Civil Courts created by Section 82 of the Act is seen in the light of this provision, it becomes obvious that the jurisdiction regarding the initial determination of the liability has been vested in the Registrar or the arbitrator, but the subsequent matter regarding recovery and enforcement of the award, which is equally important by the process of execution has been specifically left within the jurisdiction of a Civil Court.

7. When the award given by an Arbitrator comes before a Civil Court for execution, it possesses the same powers which it exercises in respect of execution of decrees passed by itself. Normally speaking, a Court which executes the decree cannot go behind it. It is based on the principle that proceedings to enforce a judgment ere consequential to the judgment itself and therefore, no enquiry into its regularity or correctness can be permitted in such proceedings. It is a settled principle of law that lack of inherent jurisdiction will render all acts of Courts and Tribunals null and void and any decree passed by them would be regarded as a nullity. Consent of the parties cannot cure such a defect and the objection as to want of such a jurisdiction cannot be waived. For instance a suit against adead man would be a nullity and the determination cannot be validated by consent or waiver of objection. In Kiran Singh v. Chaman Paswan, AIR 1954 SC 340, it was held:--

'It is a fundamental principle well-established that a decree passed by a Court without jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was 'coram non judice', and that its judgment and decree would be nullities.'

8. The Legislature, while saving the jurisdiction of the Civil Courts to execute the award given by the Registrar or the arbitrator as the decree of a Civil Court by making a provision to that effect in Section 63 of the Act, was aware of these principles. This implies that the award does not stand on a higher footing than a decree when it is sought to be executed in a Civil Court. To that extent, the jurisdiction of the Civil Courts has been kept intact by the use of the words 'save as provided in this Act' appearing in the beginning of Section 82 of the Act.

9. Further, it would be no argument to say that a decree is a compact and a selfcontained document in the sense that it must bind all the parties, which appear to have been arrayed before the Court that passed the decree. A decree may be valid against one and void against another. Take for instance, a claim being decreed against a major judgment debtor and a minor sued in the absence of a next friend. The decree would be valid as far as the principal debtor is concerned but the same would be a nullity against the minor. The minor could object even at the execution stage that the decree being a nullity was incapable of being executed against him. Again, a decree may be passed against some who are alive and some who are dead. It would be valid and enforceable against those who are alive and a nullity against the dead persons. The Court may have jurisdiction to entertain the suit but when it passes a decree against a dead person or an unrepresented minor, its action is regarded as procedurally ultra vires.

10. In a dispute between a co-operative society on the one side and its member on the other, the Registrar or the arbitrator does have inherent jurisdiction to decide the same, Does a procedural defect in the natureof violation of a statutory provision incorporating the principles of natural justice also render the determination as being without jurisdiction? In Rex v. Boltan, (1841) I QB 66, it was held that whether a Tribunal had jurisdiction or not does not depend upon the truth or falsehood of the facts into which it has to enquire, or upon the correctness of its findings of those facts, but upon their nature and is determinable 'at the commencement, pot at the conclusion of the inquiry.' If the proceedings are properly initiated, the determination would not be regarded as without jurisdiction on account of any procedural defect in the course of the enquiry because a Tribunal has jurisdiction to decide rightly as well as wrongly. On the other hand, if a matter is not entertainable by a Tribunal acting under a statute its decision would be regarded as non est Similarly, if a Tribunal fans to observe the conditions precedent for the exercise of its jurisdiction, its findings would be regarded as a nullity. In Smt, Ujjam Bai v. State of Uttar Pradesh, AIR 1962 SC 1621, while considering the scope of certiorari jurisdiction, the Supreme Court observed as under:--

'A tribunal may lack jurisdiction if it is improperly constituted, or if it fails to observe certain essential preliminaries to the ra-quiry. But it does not exceed its jurisdiction by basing its decision upon an incorrect determination of any question that it is empowered or required (i. e., has jurisdiction) to determine. The strength of this theory of jurisdiction lies in its logical consistency'.

11. The intimation of the date, time and place of hearing the dispute to the parties is an essential preliminary to the arbitrator assuming jurisdiction to decide the dispute and has to be observed by the arbitrator. Should he fail to perform this duty, this action is not only to be regarded as procedurally ultra vires, but also without jurisdiction,

12. In Ram Swarup v. Shikar Chand AIR 1966 SC 893, it was held--

'Likewise, in the absence of such a statutory provision, if it is held that the proceedings before the appropriate authorities contemplated by Section 3 are in the nature of quasi judicial proceedings and they must be tried in accordance with the principles of natural justice, and it is shown that in a given case, an order has been passed without notice to the party affected by such order, it would be open to the said party to can-tend that an order passed in violation of the principles of natural Justice is a nullity and its existence should be ignored by the civil Court. Such a plea cannot, in our opinion, be excluded by reason of the provisions contained in Section 3 (4) and Section 16 of the Act.'

In Antsminic Ltd. v. The Foreign Compensation Commission, (1967) 2 All ER 986, Dip-lock Lord Justice, observed--

The determination mast be preceded by inquiry, The nature of the inquiry, anyconditions precedent to the inquiry, and the procedure to be adopted in the inquiry, may be laid down expressly in the statute. In the absence of express provision to the- contrary, the presumed intention of Parliament is that the inquiry shall be conducted in accordance with the rules of natural justice. A convenient summary of the relevant rules is to be found in the speech of Lord Loreburn, L. C., in Board of Education v. Bice, (1911-13) AM ER Sep. 36.'

13. In the instant case; the principles of natural justice are not being imported necessary implication. They- have to be followed on account of the express word of law.

14. The matter is not res integra and this Court had to consider the application of the principles of natural justice to the awards given by an arbitrator under the Co-operative Societies Act on many occasions. In Sayed Mahbub Hussam Shah v. Anjuman Imdad Qarza, AIR 1942 Lah 129 it was held that there a person is not served with a notice of the arbitration proceedings, the award passed therein against him is a (sic) and not capable of execution. Din Mohammad J., who was member of the Bench, observed--

'It is true that in his previous decision Addison, J., had remarked that in the case of an award under tie Co-operative Societies Act, all that the executing Court has to do is to execute the award as if it was its own decree. But even if this is so, tike executing Court is in no wise precluded from exercising all those powers which it can exercise in respect of me execution of its own decree. In other words, if ft is empowered to determine the question whether a decree sought to be executed is a nullity, it is not robbed of that power when the decree happens to be an award under the Co-operative Societies Act, which is to be enforced1 and executed as 2 decree.'

Again, in Abdul Ghani v. Anjuman-Imdad Qarza Bahami, AIR 1942 Lah 237 decided by Tek Chand and Beckett, JJ., it was held that where a liquidator acting under Section 42 (2) of the Co-operative Societies Act proceeds to assess the contribution of the insolvent as a member of the Society, the assessment made by him is without jurisdiction. Speaking for the Court. Tek Chand J, observed--

'An order by the liquidater under the Co-operative Societies Act iff on no higher foating and the civil Court executing it is, therefore, competent to inquire if the order had been passed within, the limits of his jurisdiction.

Sayed Mahbub Hussain Shah's case (supra) and Abdul Chants case (supra) were fellow-ed with approval by a Division Bench of this Court in the Lok Sewak Co-operative Marketing-cum Processing Society, Faridkot v. Janga Singh, 1974 Pun LJ 5 and, it was held that when the arbitrator failed to comply with the provisions of Rule 58 of the Punjab Co-operative Societies Rules, the award given by him would be a 'nullity and could be objected to in execution proceedings

15. It would thus be seen that there is preponderance of authorities in support of die proposition that if the determination by a tribunal depends upon following the principles of natural justice the decision given by it would be treated as a nullity in case ft tad failed to follow these principles. An aggrieved party would in that case be not under an obligation to have the decision set aside in appeal. It would be open to it to rchallenge its validity at the stage of execution and even in collateral proceedings, as held by their Lordships of the Supreme Court in Kiran Singh's case AIR 1954 SC 340 (supra). The Courts, when they talk of 'error of jurisdiction', they do not deal with absolutes but with the opinions of human beings. Laws are framed for the common man and they should be so interpreted as to foster the faith and respect of the common man in the laws of the land. I have no doubt in my mind that the denial of right to a litigant to question the validity of an order, given in contravention of the principles of natural justice, in collateral proceedings like execution would be viewed with serious apprehensions even by a man in the street. In A.K. Kriapak v. Union of India, AIR 1970 SC 150. it was bold:

'In a welfare State like ours it is inevitable that the organ of the State under our 'Constitution is regulated and controlled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of law would lose its validity if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner.

These observations apply with full vigour to the instant case,

16. Section 63 of the Act, so far as it relates to this case, reads as under:

'Every decision, award or order duly passed under Sections 54, 56, 62, 68 and 69, shall, if not carried out--

(a) on a certificate signed by the Registrar, or any person authorised by him in this behalf be deemed to be a decree of a Civil Court and shall be executed in the same manner as decree of such Court; or

(b) be executed by the Registrar or any other person subordinate to him empowered by the Registrar in this behalf, by the attachment and sale or by sale without attachment of any property of the person or of the co-operative society against whom the order, decision or award has been obtained or passed; or

(c) be executed according to the law for

the time being in force for the recovery of arrears of land revenue:

Provided that an application for the recovery of any sum in the last aforesaid manner shall be made to the Collector and shall be accompanied by a certificate signed by the Registrar or any person authorised by him in this behalf.'

It lays down that an award or order duly passed under Sections 54 and 56 shall be executed as a decree of a Civil Court. A reference has already been made to rules 51 and 53 which have been framed under Section 85 (2) (xviii) of the Act which reads as under:

'the procedure to be followed in proceedings before the Registrar, arbitrator or other persons deciding disputes including the appointment of a guardian for a party to the dispute who is a minor or who, by reason of unsoundness of mind or mental infirmity is incapable of protecting his interests, and the levy of the expenses relating to such proceedings.' Both these rules fall squarely within the rule-making jurisdiction or the Government and have to be regarded as enacted in the Act itself. Any decision rendered in contravention of these rules will be a decision not duly passed under Sections 54 and 56 of the Act, from which it follows that the same cannot be executed as a decree of a Civil Court. An objection to the executability of such a decree can validly be raised by an aggrieved party at the stage of execution. In the Bombay Gas Co. Ltd. v. Copal Bhiva, AIR 1964 SC 752, this principle was extended even to the proceedings under Section 33 of the Industrial Disputes Act. It was observed-- 'The proceedings contemplated by Section 33C(2) are, in many cases, analogous to execution proceedings, and the Labour Court which is called upon to compute in terms of money the benefit claimed by an industrial employee is, in such cases, in the position of an executing Court; like the executing Court in execution proceedings governed by the Code of Civil Procedure, the Labour Court under Section 33C(2) would be competent to interpret the award on which the claim is based, and it would also be open to it to consider the plea that tie award sought to be enforced is a nullity. There is no doubt that if a decree put in execution is shown to be a nullity, the executing Court can refuse to execute it. The same principle would apply to proceedings taken under Section 33C(2) and the jurisdiction of the Labour Court before which the said proceedings are commenced. Industrial Tribunals which deal with industrial disputes referred to them under Section 10(1)(d) of the Act are in a sense, Tribunals with limited Jurisdiction. They are entitled to deal with the disputes referred to them, but they cannot travel outside the terms of reference and deal with matters not included in the reference, subject of course, to incidental matters which fall within their jurisdiction. Therefore, on principle, Mr. Kolah is right when he contends that the Labour Court would have been justified inrefusing to implement the award, if it was satisfied that the direction in the award on which the respondents' claim is based is without jurisdiction,'

Another instance, where the determination by a Tribunal was held to be a nullity, is provided by a decision of the Supreme Court in Smt. Kaushalya Devi v. K. L. Bansal. AIR 1970 SC 838, which case arose out of the Delhi and Aimer Rent Control Act. Section 13 of the said Act enjoined upon the Court to satisfy itself about the existence of the grounds of eviction. The parties entered into a compromise in terms of which a decree was passed in favour of the plaintiff by the Court without satisfying itself about the existence of the grounds of eviction, The Court held--

'In Bahadur Singh's case, Civil Appeals Nos- 2464 and 2468 of 1966, D/-16-10-1968 (reported in (1969) 1 SCWR 51), this Court held that the decree passed on the basis of an award was in contravention of Section 13(1) of the Act because the Court had passed the decree in terms of the award without satisfying itself that the grounds of eviction existed. Bachawat, J., speaking for the Court, observed that 'on the plain wording of Section 13 (1) the Court was forbidden to pass the decree. The decree is a nullity and cannot be enforced in execution'. This Court, accordingly, declared inter alia that 'the decree' in so far as it directs delivery of possession of the premises to the landlord is a nullity and cannot be executed'. A decision rendered by a Tribunal in disregard of its statutory duty was regarded as a nullity. On the plain language of Section 63 of the Act and rules 51 and 53 of the Rules framed thereunder, the same result should follow when the award of an arbitrator is sought to be executed as the decree of a Civil Court.

17. In Sunder Singh's case (AIR 1973 Punj 417) (supra), the facts were as under. A Co-operative Society obtained loan from the Central Co-operative Bank, Karnal. The Society executed a registered hypothecation deed through its President Piara Singh. The said document was also signed by two other sureties. According to Clause (iv) of the deed, if the Society avoided to make payment, the Bank was entitled to recover the amount with interest etc. from the two sureties, At the time when the dispute was referred to the arbitrator, the sureties had ceased to remain the members of the Society. No notice was given to them by the arbitrator before rendering his award, At the stage of execution it was contended by the sureties that the award, having been given without notice to them, was a nullity and incapable of being executed against them. The Bench observed--

'I have already said, the dispute was one and indivisible and it could not split up and it would lead to anomalous results ifthe interpretation put on the hypothecation deed and the award by the appellants were to be accepted. In that case, it would mean that the Arbitrator could, admittedly, decide the dispute between the Bank and the Society whereas the Civil Court would decide the so-called dispute between the Bank and the appellants-sureties, who had signed the hypothecation deed. '

With utmost respect to the learned Judges, I may observe that they had been unduly swayed by the fact that the dispute was one and indivisible. What deserved to he considered was whether the award given in violation of the provisions of a statutory rule and the principles of natural justice could he regarded as a nullity at the execution stage or not against the sureties who had not been given notice of the proceedings by the arbitrator before making them liable for the amount.

18. The Bench relied upon Dhaun-kal v. Man Kauri, ILR (1970) 2 Punj and Har 220 = (AIR 1970 Punj and Har 431) (FB) in which it was held that the determination of surplus area of a landowner under the Punjab Security of Land Tenures Act, 1953, hereinafter referred to as the Tenures Act, without notice to a tenant cultivating a part of his land, was only voidable and not void. It had to be avoided by the tenant in accordance with the provisions of the said Act and could not be treated as non est. so that the tenant could ignore it. The facts of that case were that Dhaunkal was a tenant of land owned by Man Kauri, She selected her permissible area under Sec, 5-B (1) of the said Act wherein was included the area under the tenancy of Dhaunkal. No notice of the proceedings for the determination of the permissible area of the landowner or her surplus area was given to Dhaunkal, although it was required to be given under Rule 6 of the Rules framed under the said Act. Dhaunkal made an application under Section 18 of the said Act For the purchase of that land on the ground that he fulfilled all conditions laid down in that section. A plea was taken by Smt. Man Kauri that since the land sought to be purchased by Dhaunkal formed part of her reserved area, the purchase application was not competent. Dhaunkal countered that objection by saying that the order determining the reserved area of Smt. Man Kauri having been passed without notice to him was non est and he could ignore it. The Assistant Collector trying the purchase application gave effect to the plea of Dhaunkal and made an order in his favour. On appeal the Collector held that the land in dispute had already been selected by the Collector. Surplus Area, and the Assistant Collector First Grade had no jurisdiction to go over and above his order. The order of the Collector, Surplus Area, could only be questioned by filing an appeal before the Commissioner, as was clear from the provisions of Section 25 of the Act, according to which the validity of any proceedings ororders taken or made under the Act could not be called in question in any Court or authority except in accordance with the provisions of the Act. Dhaunkal then tiled an application to the Collector for setting aside the order by which the reserved urea of Smt. Man Kauri was determined. Ultimately the Financial Commissioner decided bom the cases in favour of Dhaunkal and allowed his application for the purchase of the land. Against those orders, writ petitions were filed in this Court which were allowed by a learned Single Judge and an appeal under Clause 10 of the Letters Patent was for decision before the Full Bench. The Full Bench held that the original order determining the reserved area of Smt. Man Kauri and her surplus area having been made without notice to Dhaunkal, was voidable at his instance and not void or non est and he could not ignore it altogether. Being voidable, the order could be got rid of by the aggrieved party in accordance with law. It is abundantly clear that in view of the provisions of section 25 of the said Act, the validity of the order passed by the Collector, Surplus Area, could not be decided by the Assistant Collector, First Grade dealing with application for purchase of the land under Section 18 of the said Act and the original order had to be got set aside by taking appropriate proceedings under that Act. Even, according to that decision, the award in the present case made by the Assistant Collector could be termed as voidable which the appellant could avoid in accordance with law- Under Section 63 of the Co-operative Societies Act, the award had to be enforced in various ways one of them being by execution through a Civil Court. When an application for execution was tiled in the Civil Court, it had to be decided as if the award was a decree passed by that Court itself and thus the provisions of Sec. 47 and order 21 of the Code of Civil Procedure applied. In reply to the execution application, the appellant could legitimately urge that there was no award in the eye of law as it had not been passed in accordance with the provisions of the Cooperative Societies Act and the Rules framed thereunder and he was not bound by the same. Consequently, no amount under that award could be recovered from him by execution, It is not necessary that the appellant should have filed an appeal against the impugned award, when he became aware of it; he could avoid it by filing objections to its enforcement by execution in a Civil Court. A voidable contract can be avoided either by filing a suit or taking a plea in defence to an action in which its performance or its enforcement is sought or any relief on its basis is claimed. The plea in defence is permissible to be taken under the law to avoid liability. The objection as to invalidity or the non-binding nature of a contract or a decree can be wielded both as a sword and as a shield. Section 47 of the Code of Civil Procedure allows the judgment-debtor to raiseobjections with regard to the execution, discharge or satisfaction of the decree and under that section, the appellant could challenge the executability of the decree on the ground that the award sought to be enforced through execution proceedings was not binding on him and he was not liable to pay any amount thereunder. The provisions of the Co-operative Societies Act, not being in pari materia with the provisions of the Punjab Security of Land Tenures Act, the ratio de-cidendi of Dhaunkal's case (AIR 1970 Punj and Har 431) (FB) cannot be applied to the present case, particularly because there is no provision in the Punjab Security of Land Tenures Act with regard to the powers of an executing Court under the Code of Civil Procedure.

19. While deciding Lok Sewak Cooperative Marketing-cum-Processing Society's case 1974 Pun LJ 5 (supra), the Division Bench distinguished the judgment passed in Dhaunkal's case (AIR 1970 Punj 431) (FB) (supra) by observing:--

'There is no doubt that the contention of the learned counsel is supported by the observations made in the Fun Bench decision, but that does not solve the problem. The question is what remedies has a person against whom an award has been delivered in contravention of Rule 53 of the Rules.'

20. I may also observe that a decision can be regarded as an authority only for the proposition which is before the Court. The principles settled by it cannot be applied indiscriminately to other cases. With utmost respect to the learned Judges who decided Sunder Singh's case (AIR 1973 Punj 417) (supra), it may be said that the view taken by them is incorrect.

21. The laws of procedure are proverbially said to be the handmaids of justice. A Court of law should, as far as possible simplify the rules of procedure so that the parties arrayed before it can be administered speedy and effective justice instead of being forced to knock at the doors of the Court again and again. Even if the objection regarding the violation of the statutory rules based on the rules of natural justice were to be held to be unentertainable in the execution proceedings, the executing Court could have invoked the provisions of Section 47 of the Civil Procedure Code by converting the proceedings into a suit. In Saved Mahbub Hussain Shah's case AIR 1942 Lah 129 (supra), Dalip Singh, J. observed as under:--

'Similarly, if a decree is held to be without pecuniary or territorial jurisdiction, there must be some evidence apart from the decree as to whether the Court that passed the decree had or had not pecuniary or territorial jurisdiction to pass the decree. Such questions cannot as a rule be solved merely by looking at the decree as it stands. Some kind of enquiry however limited in scope is obviously necessary. I fail to see why a possibly more extended enquiry, namely, asto whether a minor was a minor or not and whether he was properly represented or not, should be beyond the powers of the executing, Court, it is conceded that a separate suit would certainly Be. If so, it would, under the provisions of Section 47, Clause (2), Civil Procedure Code, merely become a matter of court-fees as to whether the question was treated as one arising in execution OF was treated as arising in a suit framed for that porpose. Be that as it may, it seems to me impossible to hold that the executing Court has no jurisdiction, to decide whether there is or is not a decree which it is called upon to execute for this is all that is really meant by saying that the executing Court can enquire whether there was lack of inherent jurisdiction in the Court which passed the decree. This being so, I am unable to see that the executing Court cannot go into the short question of fact arising to determine whether the Court had or had not inherent jurisdiction to puss the decree or the arbitrator had or had not the inherent jurisdiction to make the award which he did so. This being so, it seems to me that the decision of the learned Judge in Single Bench with all respect is not correct.'

I am in respectful agreement with these observations- Under Section 47 of the Code of Civil Procedure, a Court has the Jurisdiction to decide all questions relating to execution, discharge or satisfaction of the decree. I fail to understand why an executing Court should be preeluded from determining whether an award was 'duly passed or not', within the meaning of Section 63 of the Act.

22. On the finding arrived at in this case that the award was given by the arbitrator without prior notice to the appellant, it would have been declared a nullity even in proceedings converted into a suit under Section 47(2) of the Code of Civil Procedure.

23. Far the reasons mentioned above, this appeal deserves, to succeed and I order accordingly. The judgment under appeal and that of the executing Court are set aside, the objection petition filed by the objector-appellant is allowed and it is held that the award in dispute, having been given in contravention of the statutory rules incorporating principles of natural justice, is a nullity qua the appellant and is incapable of being executed as a decree of the Civil Court against him.

24. In the circumstances, however, there will be no order as to costs,

E.S. Nakula, C.J.

I agree and have nothing to add.

Bal Raj Tuli, J.

I also agree.


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