R. SANGITHA RAO v. KRISHI CO-OPERATIVE GROUP HOUSING SOCIETY LIMITED
1988-10-14
G.C.JAIN, R.N.PYNE
body1988
DigiLaw.ai
G. C. Jain ( 1 ) THE petitioner, Shri R. Sangeetha Rao, has filed this petition for quashing the order dated 28th April, 1988 passed by the Delhi Co-operative Tribunal, Delhi Administration, respondent No. 5. ( 2 ) THE petitioner is a member of the Krishi Co-operative Group Housing Society, respondent No. 1. The Society decided to construct multistoreyed and four storeyed flats of various types for its members at Bodella. The work for constructing these flats was awarded to Bharat Construction Corporation, New Delhi on fixed rate of Rs. 156. 00per sq. ft. for multistoreyed flats and Rs. 128. 00 per sq. ft. for four storeyed flats. The contractor thereafter raised additional bill claiming a sum of Rs. 124. 00 lakhs, namely, Rs. 52. 00 lakhs for additionalities, Rs. 50. 00 lakhs for escalation at 20% on the remaining work, Rs. 12. 00 lakhs for additional area and Rs. 10. 00 lakhs for earth filling. A meeting of the general body of the Society was called on 10th August, 1986 to decided) payment of additionalities of Rs. 1. 15 crores to the contractor (2) increase in the turn-key tender rate to Rs, 199 from Rs. 156. 00 and (3) sanctioning extension of time upto 15th August, 1987. The three resolutions were put to vote and purported to have been passed by the general body. ( 3 ) THE petitioner moved an application before the Joint Registrar (Arbitration) (copy annexure B) alleging that these resolutions were not passed by the general body. It was prayed that the resolutions claimed to have been passed by the general body on the above items of agenda may be stayed and the managing committee may be directed not to pay any additionalities of Rs. 1. 15 crores and not to renew or give extension to the present agreement with the contractor. It was further prayed that an administrator may be appointed to go into the financial fraud committed by the members of the managing committee in collusion with the contractor and the architects. It was averred, inter alia, that the forgery had been committed in the contract entered with the contractor. ( 4 ) ON behalf of the Society, its President, Hony. Secretary and Treasurer filed a reply denying the averments of the petitioner. It was stated that the resolutions had been duly passed. They also justified the payment of Rs. 1.
It was averred, inter alia, that the forgery had been committed in the contract entered with the contractor. ( 4 ) ON behalf of the Society, its President, Hony. Secretary and Treasurer filed a reply denying the averments of the petitioner. It was stated that the resolutions had been duly passed. They also justified the payment of Rs. 1. 15 crores to the contractor. ( 5 ) THE Joint Registrar (Arbitration) by his order dated 7th November, 1986 observed, "it is a matter of evidence whether the Resolutions authorising the Managing Committee to pay additional amount of Rs. 50. 00 lakhs to the Contractor were passed in accordance with the Rules of Delhi Cooperative Societies Rules 1973 as well as it is in conformity with the clauses of the agreement entered with the contractor. It is also subject matter of evidence to see whether the Contractor has actually done or is to do any work which is in addition to what- has already been agreed upon by him. " With these observations, he came to the conclusion that there was a dispute between the applicant and the Society as per the provisions of Section 60 of the Delhi Co-operative Societies Act, 1972 and consequently referred the disputes to the arbitrator for arbitration. ( 6 ) SHRI N. R. Narayanan, Arbitrator made an award on 31st July, 1987. It was noted that the Society had filed an application under Section 11 of the Arbitration Act before the Joint Registrar (Arbitration) in which it was stated that the Managing Committee of the Society had no faith in the impartiality of the arbitrator and the proceedings of the hearing were requested to be stayed till the decision on the said application which application was pending disposal. He, however, found no justification for staying the proceedings in the absence of a specific order in this behalf by the Joint Registrar (Arbitration ). The learned arbitrator in his award came to the conclusion that the additional payments intended to be made to the contractor were worked out using surreptitious methods of altering the original documents like agreement, mtinute book etc. so as to ensure a legal cover to the resolutions. He further concluded that any extension of agreement cannot and should not materially alter the essence of the original agreement.
so as to ensure a legal cover to the resolutions. He further concluded that any extension of agreement cannot and should not materially alter the essence of the original agreement. As observed by the learned arbitrator, the respondents had not participated in the proceedings because of the application made by them for withdrawal of the reference and simply observed the proceedings. ( 7 ) FEELING aggrieved, the President, Hony. Secretary and Treasurer of the Society filed an appeal before the Delhi Co-operative Tribunal, Delhi. The learned Tribunal by the impugned order dated 28th April 1988 observed, "it is an admitted fact that the appellants had sought the transfer of the case from the Arbitrator and the latter had full knowledge about the pendency of the transfer application. In my view, it would not have been proper for him to proceed ahead with the decision of the issue since the appellant had raised an issue of biased attitude of the Arbitrator in the conduct of the proceedings. Admittedly, the application had reached the Arbitrator on 24-7-1987. Why then had he been in haste to deliver his award on 31-7-1987? During the course of arguments, the learned counsel for the respondent submitted that since the application under Section 11 of the Arbitration Act was not maintainable, as such, the award reached at by the Arbitrator cannot be said to be delivered in a biased manner. This is unfounded. It is not the Arbitrator who had to look into the ultra vires and intra vires of the application but it is within the competence of the Registrar or any other officer exercising such powers to decide upon such an issue. This ground is sufficient to up-set the award. The case deserves to be decided upon afresh. "he consequently allowed the appeal, reversed the award and remanded the case to the Registrar, Cooperative Societies for fresh disposal by any other arbitrator of competent jurisdiction. ( 8 ) SHRI M. L. Verma, learned counsel for the petitioner, contended that the order of the Tribunal was illegal and it had no jurisdiction to remand the case. It was pointed out that under Section 94 of the Delhi Cooperative Societies Act, 1972 theTribunal had all the powers of a civil court under the Civil Procedure Code, 1908.
( 8 ) SHRI M. L. Verma, learned counsel for the petitioner, contended that the order of the Tribunal was illegal and it had no jurisdiction to remand the case. It was pointed out that under Section 94 of the Delhi Cooperative Societies Act, 1972 theTribunal had all the powers of a civil court under the Civil Procedure Code, 1908. Under Order 41 Rule 23 of the Civil Procedure Code, the appellate court can remand a case where the court from whose decree an appeal is preferred, has disposed of the suit upon a preliminary point and the decree is reversed in appeal. In the present case, the learned arbitrator had not disposed of the matter upon a preliminary point and, therefore, the case could not be remanded and the order of the Tribunal was, therefore, without jurisdiction. This contention, in our view, cannot be sustained because under Rule 23-A of Order 41 of the Code of Civil Procedure, the appellate court is competent to remand the case where the court from whose decree an appeal is preferred, has disposed of the case otherwise than on a preliminary point and the decree is reversed in appeal and a re-trial is considered necessary. The learned Tribunal in the facts and circumstances of the case considered the re-trial necessary and was, therefore, competent to remand the case. ( 9 ) UNDER Section 61 (2) of the Delhi Cooperative Societies Act, 1972, the Registrar may withdraw any reference transferred under clause (b) of sub-section (1) or referred under clause (c) of that sub-section and decide it himself or refer the same to another arbitrator for decision. Under sub-section (3), the Registrar or any other person to whom a dispute is referred for decision, may pending the decision of the dispute, make such interlocutory orders as be may deem necessary in the interest of justice. Relying on these provisions, the learned counsel for the petitioner urged that the Registrar was competent to stay the proceedings before the arbitrator on receipt of an application for transfer from the Society. No such stay order was, however, made. In these circumstances, the learned arbitrator was within his powers to proceed with the case and make the award. The Tribunal was not justified to find fault in this behalf.
No such stay order was, however, made. In these circumstances, the learned arbitrator was within his powers to proceed with the case and make the award. The Tribunal was not justified to find fault in this behalf. ( 10 ) IT is well settled principle that howsoever extensive a jurisdiction under Article 226 of the Constitution of India may be, it is not so wide or large as to enable the High Court to convert itself into a court of appeal and to examine for itself the correctness of the decision impugned. In this case, two facts are clear from the award itself, namely, (1) the Society had made an application for withdrawal of the case from the Arbitrator on the ground that it had no faith in the impartiality of the arbitrator, and (2) the Society had not taken part in the proceedings before the arbitrator in view of the pendency of that application. If on these facts the learned Tribunal allowed the appeal and remanded the case, it cannot be said that there way any miscarriage or justice or flagrant violation of law. We find no justification for interference in exercise of extraordinary powers under Article 226 of the Constitution in such a matter. ( 11 ) IT was then contended that the learned Arbitrator in any case was not competent to direct the Registrar of Co-operative Societies for disposal of the dispute by another arbitrator of competent jurisdiction. It was contended that in this way the learned Tribunal had allowed the application of the respondents for transfer of the case for which there was no justification. ( 12 ) SHRI N. R. Narayanan, the arbitrator as is clear from the award, had expressed his opinion about the genuineness of the documents, namely, agreement, minute book, etc. In these circumstances the disposal of the dispute by some other arbitrator was, in our opinion, in the interest of justice. In any case, it cannot be said that there was any miscarriage of justice or flagrant violation of law. No interference under Article 226 of the Constitution of India is, therefore, called for. ( 13 ) IN conclusion we find no merit in the petition and dismiss the same. The parties are left to bear their own costs.