Ms. Usha Mehra, J. ( 1 ) IN this petition, the petitioner has assailed the impugned order dated 10th November,l 989 passed by the Registrar primarily on theground that the dispute having once referred to the sole arbitration of Additionalregistrar thereafter the Registrar could not have withdrawn the reference from thesaid Arbitrator without the content of the parties. Secondly, time for making andpublishing the award had already expired and, therefore, without the consent ofparties arbitration proceedings could not continue. ( 2 ) IN order to appreciate the contentions of the Counsel for the parties, brieffacts have to be understood. The petitioner vide its application dated 1/11/1985 approached the Registrar to settle his dispute with the Society. Thisrequest was made in accordance with the provisions of the arbitration agreemententered into between the petitioner and the Society. The Registrar pursuance tothe request made by the petitioner appointed his Additional Registrar as thearbitrator. Question arose as to under what provision of law the proceedingswould be governed. Parties admitted that Arbitration Act would govern theproceedings before the Arbitrator. The matter kept on proceeding before the saidarbitrator. In the meantime, the statutory period of four months for making andpublishing the award expired. The Arbitrator neither made nor published hisaward, nor the parties extended the said period. However, the Registrar withoutthe consent of the petitioner and without getting the time extended, withdraw thearbitration proceedings from the Additional Registrar and assigned the same tohimself. He started proceedings with the reference. It was at this stage that thepetitioner raised objections which were raised vide his application dated January,1988 Annexure-14. The authority of the Registrar was challenged and also thatthe time for making and publishing the Award has already expired, therefore, theregistrar could not proceed with the reference any further, without first getting thetime extended. These legal objections were contested by the respondent when ittook the plea for the first time that the proceedings before the Registrar were underthe Societies Act and not under the Indian Arbitration Act. Petitioner reiterated hisearlier stand that the proceedings had to be conducted under the Indian Arbitrationact, because the reference was under the arbitration clause of the agreement. Therefore, the provisions of the Societies Act did not apply. Since the period of fourmonths had elapsed, therefore, the Registrar could not proceed with the reference. Petitioner reiterated hisearlier stand that the proceedings had to be conducted under the Indian Arbitrationact, because the reference was under the arbitration clause of the agreement. Therefore, the provisions of the Societies Act did not apply. Since the period of fourmonths had elapsed, therefore, the Registrar could not proceed with the reference. ( 3 ) THIS petition has been contested by the respondent, inter alia, on thegrounds that the Registrar could not have acted in any other manner thanprescribed under Section 64 of the Act When the authority of the Registrar wasinvoked, the petitioner knew that he was approaching the Registrar under Section64 of the Act and not under the terms of the agreement. Agreement was interse theparties i. e. petitioner and the Society, therefore, there was no question of petitionerinvoking jurisdiction of the Registrar under the terms of the arbitration agreement. Since the disputes were referred under Section 64 of the Act, hence the provisionsof Sections 5,11,12 and 33 of the Arbitration Act are not applicable. Having invokedthe jurisdiction of the Registrar under the Act, the petitioner now cannot urge thatthe proceedings before the Registrar were to be governed under the Arbitrationact. Registrar had the power and authority to withdraw the dispute and decidethose himself. Moreover, period of limitation for making and publishing the awardare not applicable to a dispute referred under the Societies Act. ( 4 ) I have heard Counsel for the parties and perused the record. I have alsogone through carefully the impugned order dated 10/11/1989 and theorder of the Additional Registrar, dated 17/11/1987. Perusal of the replyfiled by the respondent before the Additional Registrar, Annexure-12, shows thatthe respondent admitted in no uncertain words that the proceedings as drawnwere to be conducted as per the provisions of the Indian Arbitration Act. This orderwas passed after both the parties admitted this position. The request made by thepetitioner vide his application dated 1/11/1985 also shows that it wasmade not under Section 64 of the Act but as per the agreement entered into betweenthe parties which contained arbitration clause. Why the petitioner approached theregistrar at the first place for settling the dispute with Society is not known. However, it was explained by the Counsel for the petitioner from record as well asorally that the petitioner was under the impression that the Registrar being a manin authority may be able to settle his dispute with the Society. Why the petitioner approached theregistrar at the first place for settling the dispute with Society is not known. However, it was explained by the Counsel for the petitioner from record as well asorally that the petitioner was under the impression that the Registrar being a manin authority may be able to settle his dispute with the Society. The said request, byno stretch of imagination, can be said to have been made under the Act nor amountto centering of power on the Registrar as stipulated under Section 64 of the Act. Reasoning given by the Registrar that since the petitioner approached him,therefore, the provision of Section 64 of the Act would automatically apply appearsto be without merits because he has not considered that fact whether petitioner wasmember of the Society or not and whether his case falls under Sections 36,37 and38 of the Act. Once having delegated his power to Additional Registrar to act asarbitrator, to my mind, the Registrar thereafter had no authority to withdraw thereference from the said Arbitrator and start the proceedings himself as if he wasappointed under the provisions of Section 64 of the Act. By transfering theproceedings to himself without the consent of the petitioner, the Registrar not onlyacted contrary to law but also violated the principle of natural justice. ( 5 ) THE petitioner vide his application dated January,1988, Annexure-14 tookthe plea that the time for making and publishing the Award had already expired. The Arbitrator could not proceed with the reference without first getting the timeextended. On the other hand, the contention of learned Counsel for the respondentis that the parties could not contract out of the statute, to my mind, this argumenthas no force. Bare reading of various provisions of the Act shows that it is therespondent Society which is covered by the Act. The petitioner who is not amember of the Society and had no financial dealing, his dispute could not have beencovered by the provisions of the Act. Petitioner had an agreement for the executionof the work with the Society and the said agreement contained an arbitrationclause. Parties were to be governed by the said agreement and not by the Act. Therefore, there was no question of parties contracting out of the statute. Petitioner had an agreement for the executionof the work with the Society and the said agreement contained an arbitrationclause. Parties were to be governed by the said agreement and not by the Act. Therefore, there was no question of parties contracting out of the statute. Arbitration clause contained in the agreement reads as follows:- "all disputes and differences which may arise between the first party and thesecond party whether duirng the pendency of the agreement or after the completion of the same, and whether in relation to the interpretation of this or anyother document or any Act or omission of either party to dispute, ordifferences, or to any Act which ought to be done by the parties in dispute oreither of them in relation to any matter whatsoever touching or concerningthis agreement, it shall be referred to arbitration in terms of the Arbitrationact,1940. However, in respect of any matter touching or concerning thisagreement, the jurisdiction shall be of the Court in the city of New Delhi. " ( 6 ) PERUSAL of this clause shows that any dispute or difference which had arisenbetween the parties to the agreement, the same were to be referred to the Arbitratorin terms of the arbitration agreement. Therefore, in terms of this clause, thepetitioner approached the Registrar to settle his disputes with the Society. Theadditional Registrar rightly concluded vide his order dated 17/11/1987that proceedings were to be governed by the provisions of Arbitration Act. Theimpugned order of the Registrar, therefore, is in violation of the terms of theagreement entered into between the parties. Registrar in fact had no authorityunder law to review the order passed by the Additional Registrar who wasappointed as the Arbitrator. Power to review is not envisaged either under theterms of the arbitration clause or under the Arbitration Act. If the society had anygrievance the remedy was by way of filing objections against the same, but theregistrar had no authority to sua moto revoke the power of the appointedarbitrator and vest the same to himself without the consent of the petitioner. Toarrive at this conclusion, reference can be had to Section 64 of the Act which readsas under:- "64. If the society had anygrievance the remedy was by way of filing objections against the same, but theregistrar had no authority to sua moto revoke the power of the appointedarbitrator and vest the same to himself without the consent of the petitioner. Toarrive at this conclusion, reference can be had to Section 64 of the Act which readsas under:- "64. Disputes- (1) Notwithstanding anything contained in any other law forthe time being in force any dispute touching the Constitution, management orbusiness of a Society or the liquidation of a Society shall be referred to theregistrar by any of the parties to the dispute if the parties thereto are amongthe following:- (a) a Society its committee, any past committee, any past or present officerany past or present servant or a nominee, heirs or legal representativesof any deceased officer, deceased agent or deceased servant of thesociety or the liquidator of the Society; (b) a member, past member or a person claiming through a member, pastmember or deceased member of a Society or of a Society which is amember of the Society; (c) a person other than a member of the Society who has been granted aloan by the Society or with whom the Society has or had businesstransactions and any person claiming through such a person; (d) a surety of a member, past member or deceased member or a personother than a member, who has been granted a loan by the Society,whether such a surety is or is not a member of the Society; (e) any other Society or the liquidator of such a society and (f) a creditor of a Society. (2) For the prupsoes of Sub-section (1), a dispute shall include:- (i) a claim by a Society for any debt or demand due to it from amember, past member, or the nominee, heir or legal representative of a deceased member, whether such debt or demand beadmitted or not; (ii) a claim by a surety against the principal debtor where the Societyhas recovered from the surety any amount in respect of any debtor demand due to it from the principal debtoras a result of defaultof principal debtor, whether such debt or demand be admitted ornot; (iii) a claim by a Society for any loss caused to it by a member, pastmember or deceased member, any officer, past officer or deceased officer, any agent, past agent or deceased agent, or anyservant, past servant, or deceased servant, or its committee, pastor present, whether such loss be admitted or not; (iv) a question regarding rights, etc. including tenancy rights betweena housing Society and its tenants or members; and (v) any dispute arising inconnection with the election of any officerof the Society or representative of the Society or of compositesociety;provided that the Registrar shall not entertain any dispute under this clauseduring the period conmmencing from the announcement of the election programme till the declaration of the results. (3) If any question arises whether a dispute referred to the Registrar is adispute, the decision thereon of the Registrar shall befinal and shall notbe called in question in any Court. ( 7 ) READING of this Section shows that the case of the plaintiff does not fall eitherunder Clause (a) (b) (d) (e) and (f ). Clause (e), however, indicates that a non membercan be covered under the provisions of Section 64, provided he had taken loan fromthe Society or had business transaction. It is an admitted case of the parties that thepetitioner had not taken any loan from the Society. Therefore, we have to knowwhat does "business transaction" mean. Can the construction activity of thepetitioner be called business transaction. The word "business Transaction has notbeen defined. However, Section 36 and 37 deals with restrictions on borrowing andloans. The said Sections are reproduced as under:-Section 36: RESTRICTION on borrowings-A society shall receive deposits and loans undersuch conditions as the Registrar may, for such Society or aclass of Societiesprescribe or as may be specified in the bye-laws of such society. "section37:. The word "business Transaction has notbeen defined. However, Section 36 and 37 deals with restrictions on borrowing andloans. The said Sections are reproduced as under:-Section 36: RESTRICTION on borrowings-A society shall receive deposits and loans undersuch conditions as the Registrar may, for such Society or aclass of Societiesprescribe or as may be specified in the bye-laws of such society. "section37:. RESTRICTION on loans- (1) No society shall make a loan to: (a) any person who is not a member; (b) any member on the security of its own shares? (e) any member on the security of a non-member ( 8 ) READING of these Sections show that business transaction mentioned undersection 64 of the Act in fact means financial dealing. Construction of the flats by thepetitioner for the Society, by no stretch of imagination can be called businesstransaction, because as pointed out above if the construction of flat was to beconsidered a businesstransaction, then there was no need to put an arbitrationclause in the agreement. The parties on that case would have mentioned in theagreement that in case of dispute they would be governed by the provisions ofsection 64 of the Act. Fact remains that both the parties were aware that in the eventof any dispute they were to begoverned by the arbitration clause of the agreement. In arriving at this conclusion support can also be had of Rule 29 of the M. P. Cooperative Societies Rules,1967 which prescribes that no Society shall enter into anytransaction with a person other than a member, except those referred to in Sections36 and 37 of the Act, unless:- (i) the bye-laws of the Society permit it to enter intosuch transaction; and (ii) previous sanction of the Registrar has been obtained bythe Society. ( 9 ) IN this view of the matter the construction activities of the petitioner cannotbe called a business transaction as referred to in Sections 36 and 37 of the Act, norunder Rule 29. Moreover, the bye-laws of the Society do not permit such atransaction to be covered by the Act, nor previous sanction of the Registrar hadbeen obtained in this case. ( 10 ) FOR the reasons stated above I find that the impugned order is withoutmerits. Hence, liable to be set aside. Decision of the Additional Registrar dated 17/11/1987 to whom the matter was referred for adjudication thatproceedings shall be governed by Arbitration Act is a valid order. ( 10 ) FOR the reasons stated above I find that the impugned order is withoutmerits. Hence, liable to be set aside. Decision of the Additional Registrar dated 17/11/1987 to whom the matter was referred for adjudication thatproceedings shall be governed by Arbitration Act is a valid order. Proceedingsbefore the Arbitrator are to be governed by the provision of the Indian Arbitrationact. ( 11 ) HAVING held so, the next question which arises as to whether the matter bereferred to the said Additional Registrar or a new Arbitrator is to be appointed?counsel for the petitioner contended that new Arbitrator be appointed becausethat Additional Registrar is not available any more. Moreover, as per the arbitration clause Delhi Court alone has the jurisdiction, therefore, this Court shouldappoint an Arbitration. Both the parties were asked to suggest name of thearbitrator. Some names were suggested. I appoint Justice H. L. Anand (retiredjudge of this Court) as the sole Arbitrator to adjudicate the disputes between theparties. He shall be paid Rs. 5,000. 00 per effective hearing and Rs. 2,500. 00 for noneffective hearing.