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The Refugee Co-operative Housing Society Ltd. Vs. Harban Singh BhasIn and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberLetter Patent Appeal No. 98 of 1977
Judge
Reported inAIR1982Delhi335; 22(1982)DLT87; 1982(3)DRJ280; ILR1982Delhi1a
ActsBombay Cooperative Societies Act, 1925 - Sections 54
AppellantThe Refugee Co-operative Housing Society Ltd.
RespondentHarban Singh BhasIn and ors.
Excerpt:
.....57 ; when a dispute is determined solely either by the registrar or his nominee, they render a decision. the registrar or his nominees do not undertake any arbitration proceedings. they discharge the statutory duty and perform the function of deciding the referred dispute. their decision is not a contractual arbitration and they are not arbitrators by agreement. - - sub-section (3) says that when the dispute is referred back to arbitration, the arbitrators have to make a fresh award within such time as may be fixed by the tribunal and if the arbitrators fail to make a fresh award within the time so fixed, then the registrar or his nominee has to decide the dispute. a combined reading of the above-noted statutory provisions clearly brings out the intention of the legislature that..........act, 1940 would not be attracted. section 54a(2) empowers the tribunal while referring back the dispute to arbitration to direct that all or any other arbitrator who made the award, shall not act again as arbitrators for deciding the dispute. sub-sections (1) and (2) of section 11 of the arbitration act, 1940 empowers the court to remove an arbitrator or umpire who fails to use all reasonable dispatch in entering on and proceeding with the reference and making an a ward or who has misconducted himself or the proceedings. these provisions would not apply to the arbitrations under the act because the power of removal of the committee of three arbitrators who fail to decide the dispute within two monthis, is given to the registrar and consequently, the court cannot exercise that power......
Judgment:

(1) For a case to be covered under section 54 of the Act, three conditions precedent must be fulfillled before any of the parties could invoke the jurisdiction of the Registrar and call upon him to entertain a complaint. The first condition is that there must be a dispute. Secondly, the dispute must be touching the constitution or business of a society. The term is wide enough and would include the dispute affecting the business of the society or relating to the business of the society. The third condition is that it must arise between members or past members of the society or persons claiming through a member or past member or between members or past members or persons so claiming and any officer, agent or servant of the society past or present or between the society or its committee, and any officer, agent, member or servant of the society past or present. The language of the section indicates that the complaint has to be made by one of the parties to the dispute to the Registrar and has to be referred to the Registrar. Once the complaint is admitted by the Registrar, the dispute can be settled by any of the four forums contemplated by Section 54. The Registrar may keep the matter for decision by himself. The Registrar may in the alternative appoint a nominee for his decision. The jurisdiction of the Registrar is by investment of the statute. The jurisdiction of the nominee arises out of the permissive appointment by the Registrar. The reference of the dispute to the registrar for a decision by himself or by his nominee is a statutory duty and there can be thus no refusal to discharge that function. The power to decide the referred dispute is granted by the statute to the Registrar as also to his nominee.

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(2) The Registrar or his nominee when acting alone has to decide the referred dispute and may be performing the functions substantially of an arbitrator to whom a dispute has been referred for adjudication, but they do not make any award. They both render a decision, whereas the Committee of three arbitrators has to make an award. This is clear from the intrinsic evidence contained in the various provisions of the Act. Section 54A says that in case of any award made by the arbitrators under Section 54, the Tribunal I may, on the application of any of the parties to the award or otherwise for reasons to be recorded in writing, modify the award or set it aside or order that the dispute shall be referred back to the arbitrators in the manner provided under the said section. The proviso, however, provides that no such order can be made after the issue of a certificate under section 59 for the execution of the award and except on any of the specified grounds, namely (i) an objection to the legality of the award is apparent on the face of it, or (ii) the award has been vitiated in consequence of corruption or misconduct on the part of any of the arbitrators, or (iii) the award is in any way perverse. The Tribunal is also empowered to direct that all or any of the arbitrators who made the award shall not act again as arbitrators for deciding the dispute. Sub-section (3) says that when the dispute is referred back to arbitration, the arbitrators have to make a fresh award within such time as may be fixed by the Tribunal and if the arbitrators fail to make a fresh award within the time so fixed, then the Registrar or his nominee has to decide the dispute. Power is again given to the Tribunal to modify the award made under sub-section (3) or pass such order thereon as it deems fit. On the contrary, Section 56 of the Act provides for an appeal against the decision of the Registrar or his nominee whether made under Section 54 or under sub-section (3) of Section 54A. Section 57 further provides that the award of the arbitrators or a decision by the Registrar or his nominee under Section 54 or 54A shall not be liable to be called in question in any civil or revenue court. This section again maintains the distinction between the award of the arbitrators and a decision by the Registrar or his nominee. A combined reading of the above-noted statutory provisions clearly brings out the intention of the legislature that when the dispute is detcrmined solely either by the Registrar or his nominee, they render a decision which is not to be mixed up and has to be contrasted to an award made by the Committee of three arbitrators presided over either by the Registrar or his nominee. The learned Single Judge on a consideration of Section 54 expressed that the proceedings there under are in the nature of an arbitration and this is shown by the heading of the section as 'arbitration'. In our opinion, the headings prefixed to a section or sets of section may be read along with the enacting part of sections while construing them with a view to resolve any doubt they may have as to ambigous words. But the heading cannot be used to give a different effect to the clear words in the section. The heading of a section does not also prevail, where the intention of the legislature can be gathered by reference to other sections. The learned Single Judge has also gone into an error to infer that the word 'arbitration' is the title or heading of the section. It is only a marginal note. Marginal notes are side notes often printed at the side of a section in an Act. In the earlier statutes marginal notes were not inserted by the legislature and hence were not part of the statute. For this reason, they could not be referred to for the purpose of construing the statute. Now they are being enacted by the legislature and can be referred to for the purpose of interpretation. If the word used in the enactment is clear and unambiguous, the marginal note cannot control the meaning. As we have pointed out earlier, the legislature has intended what it said in contrasting the decision of the Registrar or his nominee and by providing an appeal against that decision to that of an award by the Committee of three arbitrators. The Registrar or his nominees do not undertake any arbitration proceedings. They discharge the statutory duty and perform the function of deciding the referred dispute the decision of the dispute by the Registrar or his nominee is not a contractual arbitration or an arbitration by agreement. It is in discharge of an obligation imposed by the statute.

(3) The provisions of the Arbitration Act, 1940 would be attracted in case of arbitration by a committee of three arbitrators either under section 54 of the Act or under section 54A of the Act but if there is any inconsistency with the Act or the Rules, even then the provisions of the Arbitration Act, 1940 would not be attracted. Section 54A(2) empowers the Tribunal while referring back the dispute to arbitration to direct that all or any other arbitrator who made the award, shall not act again as arbitrators for deciding the dispute. Sub-sections (1) and (2) of Section 11 of the Arbitration Act, 1940 empowers the Court to remove an arbitrator or Umpire who fails to use all reasonable dispatch in entering on and proceeding with the reference and making an a ward or who has misconducted himself or the proceedings. These provisions would not apply to the arbitrations under the Act because the power of removal of the committee of three arbitrators who fail to decide the dispute within two monthis, is given to the Registrar and consequently, the Court cannot exercise that power. Under sub-section (2) of Section 54A of the Act, the power is conferred on the Tribunal to remove the arbitrator or arbitrators. The power of the removal of the Registrar is not conferred either under the Act or under the Arbitration Act, 1940. The Registrar occupies a special position under the Act and so would be his nominee except to the extent indicated hereafter. The provisions of Sections 14 to 17 of the Arbitration Act, 1910 are not attracted in .case of awards under the Act as they are enforceable in the manner provided in Section 59 of the Act. The provisions of sections 5 and 11 of the Arbitration Act are excluded by virtue of the provisions of section 54A of the Act and Rule 35. We are unable to pursuade ourselves to agree to contrary observation made by the Division Bench in the ''Government servants Co-operative House Building Society Ltd.' The provisions of Section 30 to 33 would also be excluded as those provisions are inconsistent with the provisions mentioned in section 54A of the Act which provides for the grounds for setting aside the award and reference back to the arbitrators in the manner provided in section 54A.

(4) Section 28 would not be applicable which empowers the court to enlarge the time for making the award, whether the time for making the award has expired or not or whether the award has been made or not.


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