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1986 DIGILAW 412 (CAL)

KONNAGAR SAMABAYA BANK LTD v. NILMONI BANERJEE

1986-10-01

A.K.SENGUPTA, MUKHERJEE

body1986
MUKHERJEE, AJIT KUMAR SENGUPTA ( 1 ) THIS application under Article 227 of the Constitution has been filed by the petitioner Bank which is a Society registered under the Bengal Co-operative Societies Act, 1940 which has been since replaced by the West Bengal Co-operative Societies Act, 1970. By the order complained of the learned assistant District judge, 2nd Court. Hooghly such have there written statements filed by the petitioner Bank in Title suits No. 17 of 1984 on the ground that any objection preferred by the Bank under sections 30 and 33 of the Arbitration Act, 1940 would be now barred by imitation. The learned assistant District judge by the same order had fixed a date for passing expiates decree in the suit in terms of secretion 17 of the Arbitration Act, 1940. ( 2 ) THE opposite party no. 1, who is the husband of the opposite party no. 2, was a member of the Konnagar Samabaya Co-operative Bank Ltd. They had a joint Savings Bank Account with the said Bank. A dispute had arisen between the petitioner bank and the opposite parties 1 and 2 as to whether in fact the opposite parties had deposited in their said savings Bank account with the petitioner bank a sum of Rs. 25000/- By consent of parties, the said dispute was purported to be referred to any Enquiry Committee consisting of three persons - two of whom were selected by the opposite parties and one by the Chairman of the Bank. Both the petitioner, bank and the opposite parties agreed to abide by the decision of the said Enquiry committee regarding the dispute as to whether a sum of Rs. 25000/- had been in fact deposited in the joint savings bank account of the opposite parties 1 and 2. ( 3 ) ACCORDINGLY to the petitioner bank, its nominee, Kanai Lal Mukherjee, had allegedly withdrawn himself from the said Enquiry Committee. The two remaining members of the said Enquiry Committee submitted an award in favor of the opposite parties 1 and 2, inter-alias, to the effect that they had really deposited the said sum of Rs. 25000/- in their joint savings bank account with the petitioner bank. The two remaining members of the said Enquiry Committee submitted an award in favor of the opposite parties 1 and 2, inter-alias, to the effect that they had really deposited the said sum of Rs. 25000/- in their joint savings bank account with the petitioner bank. Thereafter, the said Arbitration award was purported to be filed under section 14 of the Arbitration Act, 1940 in the Court of the additional District Judge, Second Court, Hooghly with prayer for passing a decree in terms of section 17 of the Arbitration Act, 1940. ( 4 ) FOR the purpose of deciding the present application it is unnecessary to determine whither after making the said award the said Arbitrators had given notice under sub-section (1) of section 14 of the Arbitration Act and whether the summons / notice given by the court to the plaintiff bank was in due compliance with Sub-section (2) of section 14 of the said Act. We decline to accept the submission of Mr. Mukherjee learned Advocate on behalf of the opposite parties, that the petitioner bank's only remedy in respect of the aforesaid award was by ways of filling objections under sections 30 and 33 of the Arbitration Act, 1940. In the instant case, the petitioner bank is contending that both the submission of the dispute to the Enquiry Committee and the award passed by two of the members of the said Committee were null and void. Unless we subscribe to the view that the said ground of nullity could be only raised by filling objections under sections 30 and 33 of the Arbitration Act, 1963, Article 19 (b) of the Limitation Act would not be relevant. The petitioner bank's contention is that at the subject-matter of the reference to the Enquiry committee appointed by the both parties was fully convered by section 86 of the West Bengal Co-operative Societies Act, 1973 and therefore, the entire arbitration proceeding including the awarded by two members of the Enquiry Committee were void abs initial. It is not the case of the petitioner bank that there was a valid reference and that only the award passed was in excess of the jurisdiction of the Arbitrators. Russell on Arbitration, 12th Eden, at page 389 observed:"it has been held that where the ground of objection to the award was that the whole arbitration was a nullity, since there had been no submission. Russell on Arbitration, 12th Eden, at page 389 observed:"it has been held that where the ground of objection to the award was that the whole arbitration was a nullity, since there had been no submission. A motion to set aside was not the appropriate procedure; for if there was nil submission and no award there was nothing upon which the court's jurisdiction to set aside could operate. "in England previously in such cases the party objecting had to wait until an attempt was made to enforce the award and then resist that attempt or to sue for a declaration that the award was null and void. The said procedure has been described in Russell on Arbitration at a page 389 as 'a most convenient technicality. ' Since a party who waited until the award was sought to be enforced, risks being told waited until the award was sought to be encored, risks being told that he should have applied to set it aside - it being by then too late to do so; In England since the alteration in the Rules of supreme Court, while substance of what must be done in such cases remains the same, all the questions can be raised on motion together. It has been further observed that there is some logical solacism in pursuing the statutory remedy to set aside an award under section 23 of the Act when ex-hypothesis nothing exists which the law regards as an award. In England this has, however, since 1965 been permitted by the laws of Supreme Court, Order 73 Rule 2 (3 ). ( 5 ) THERE observations by Russell on Arbitration may be very cogently applied for upholding they right of the petitioner bank to challenge the aforesaid award obtained against it by he opposite parties on the ground of wants of jurisdiction. At one stage of his submission Mr. Mukherjee submitted that the petitioner bank having allowed its remedy under sections 30 and 33 of the Arbitration Act to become barred, the court was bound to pass a decree under section 17 of the Arbitration Act upon the award in favour of the opposite parties. If and when the opposite parties put the said decree unto execution, the petitioner bank may object, if so, advised on the ground of want of jurisdiction of the Arbitrators to pass the award. If and when the opposite parties put the said decree unto execution, the petitioner bank may object, if so, advised on the ground of want of jurisdiction of the Arbitrators to pass the award. In our view, the same would be an utterly inconvenient technicality as observed in he passage quoted by us from page 389 of Russell on Arbitration. In this case, the petitioner bank's objection is that there was no valid submission, appointment of the Arbitrators were invalid and illegal and the court's jurisdiction to pass a decree under section 17 of the Arbitration Act upon the award had been totally ousted by the provisions of the West Bengal Co-operative Societies Act. Determination of the said point of want of jurisdiction would not involve investigation of facts. In case there is patent lake of jurisdiction on the part of the learned Assistant District Judge to pass any decree upon the award in terms of section 17 of the Arbitration Act, this court ought not to allow the proceeding to further go on leaving the petitioner with opportunity to raise objection to the validity of the award at the time of the execution or by instituting a separate suit for declaration. If we adopt the said course the same would lead to prolonging the proceedings, which may at the end is adjudged as totally void the same under section 14 of the Arbitration Act, 1940 are nullity, it would be an exercise in futility to allow a decree under section 17 of the Act to be passed upon the said award and at the same time grant leave to the petitioner bank to challenge the award and the decree passed there of either at the execution stage or by filing a separate suit. In exercise of powers of superintendence under Article 227 of the Constitution this court possesses enough powders to quash the proceedings whose continuance would be an abuse of the process of law. ( 6 ) IN this connection, we may refer to the case of Hindustan National Glass and Industries Mazdoor Union v. S. N. Singh and Ors. , reported in 86 C. W. N. 9. ( 6 ) IN this connection, we may refer to the case of Hindustan National Glass and Industries Mazdoor Union v. S. N. Singh and Ors. , reported in 86 C. W. N. 9. , In the said reported case the court upheld the order of the City Civil Court at Calcutta rejection as not maintainable an application under Section 30 of the Arbitration Act for setting aside an award/recommendation of the labour Commissioner, West Bengal regarding remunerations of piece-rated workers employed by the contractors of M/s. Hindustan Nationals Glass and Industries Ltd. Hooghly, It was, inter alias held that the civil court had no jurisdiction the adjudicate upon or enforce the rights in respect of the said recommendations of the Labor Commissioner in a conciliation proceeding under Industrial Disputes Act. In order to set aside an award a court must have territorial or pecuniary jurisdiction and be otherwise competent try the subject-matter of reference. ( 7 ) THE dispute between the petitioner bank and the opposite parties as to whether latter had in fact deposited to their savings Bank account a sum of Rs. 25,000/- certainly could be the subject-matter of a civil litigation and is covered by the expression 'dispute' within the meaning of the section 86 of the west Bengal Co-operative Societies Act, 1973. The expression 'dispute' under Section 2 (q) of the west Bengal Co-operative Societies Act, 1973 means 'any matter capable of being the subject matter of civil litigation and includes a claim in respect of any sum payable to or by a co-operative society, whether such claim is admitted of not. ' The other ingredients of sub-section (1) of section 86 of the said Act in the instant case is also fulfilled. The claim of the opposite parties regardeing the said sum of Rs. 25,000/- is related to the affairs of the petitioner bank that is a co-operative society. Thirdly, the opposite party No. 2 alleged to be a member of the petitioner bank and therefore, the dispute in question was among the patties specified in clause (b) of sub-section (1) of section 86 of the West Bengal Co-operative Societies Act. The dispute relating to the said transaction between the petitioner bank and the opposite parties would be also covered by clause (d) of Sub-section (1) of section 86 of the said Act. The dispute relating to the said transaction between the petitioner bank and the opposite parties would be also covered by clause (d) of Sub-section (1) of section 86 of the said Act. Thus, the present dispute between the petitioner bank and the opposite parties was capable of being referred under section 86 of the West Bengal Co-operative Societies Act to the Registrar for decision under section 87 of the said Act no civil or revenue court shall have any jurisdiction in respect of any dispute required under section 86 of the Act to be referred to the Registrar. Thus, civil Court's jurisdiction has been expressly ousted in respect of the disputes covered by different clauses of sub-section (1) of section 86 of the Act. Therefore, the learned Assistant District Judge, Hoogly has no jurisdiction to adjudicate the dispute between the parties relating to the said credit entry in the savings bank account of the opposite parties with the petitioner bank and in respect of which a purported award has been made by some of members of the Enquiry Committee / Arbitrators. ( 8 ) WE understand that at the instance of the petitioner bank the Assistant Registrar, Co-op-erective Societies concerned has already made a reference under section 86 of the west Bengal Co-operative Societies Act in respect of the aforesaid dispute between the petitioner bank and the opposite parties relating to the alleged credit entry in the savings bank account of the opposite parties 1 and 2. By an earlier order the trial court had granted an order of temporary injunction restraining the bank form proceeding with the said dispute case under Section 86 of the said Act. Said temporary injunction order, however, is not the subject matter of the present provisional application. ( 9 ) FOR the foregoing reasons, we allow the revisional application, set aside the order complained of and director the court below to pass appropriate orders. In vies of our decision that the arbitration case in question was not maintainable in civil court and no decree can be passed upon such an awed filled under section 14 of the Arbitration Act. The order which may be made by the Assistant District Judge upon the arbitration award would be however, without prejudice to the rights and contentions of parties in the pending dispute case under section 86 of the West Bengal Co-operative Societies Act, 1973. The order which may be made by the Assistant District Judge upon the arbitration award would be however, without prejudice to the rights and contentions of parties in the pending dispute case under section 86 of the West Bengal Co-operative Societies Act, 1973. We express no opinion on the merits of the claims and contentions of the parties. ( 10 ) THERE will be no order as to costs. ( 11 ) LEFT the operation of this order be stayed for six weeks after the reopening of the court after the long vacation. Certified copy, if applied for, be immediately granted. A. C. Sen. Gupta, J. ,i agree i agree application allowed.