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2011 DIGILAW 271 (JK)

Jakfed & Anr. v. Union of India & Ors.

2011-05-20

SUNIL HALI

body2011
1. The dispute in this petition relates to recovery of an amount determined on the basis of an award passed by the statutory authority. The contention raised is in respect of the mode and manner in which the award is to be enforced. 2. In order to understand the controversy involved, certain facts are required to be noticed. 3. Petitioner, a Society registered by the Government of J&K, under the provisions of Societies Registration Act, deals with the supply of fertilizers to its member societies at block level. It became a shareholder of respondent No. 2, for procurement and supply of fertilizer to different societies in the State of J&K. On account of the supplies made by respondent No. 2, an amount of Rs. 2.91 crores became due to the petitioner. Having failed to obtain the said amount from the petitioner, a dispute was raised by the respondent No. 2, under Section 74 (2)(a) of the Multi State Co-operative Societies Act, 1984 (here-in-after referred to as the Old Act), before the Central Registrar. Respondent No. 2, claimed a total amount of Rs. 7.44 crore, which included interest also. The proceedings culminated into passing of an award dt. 6th of Aug'89, whereby the claimant respondent No. 2, was to recover an amount of Rs.2.91 crores from the petitioner. So far as interest accrued on the said amount is concerned, that was directed to be waived. 4. In the meantime, the Old Act was replaced by the Multi-State Cooperative Societies Act, 2002 (here-in-after called the new Act. In order to enforce the award, recovery certificate was obtained by respondent No. 2 from the Central Registrar under the Old Act. The said recovery certificate was issued in favour of respondent No. 2, under the new Act for an amount of Rs.2,55,08,167.40, as the remaining amount out of the awarded amount of Rs. 2.91 crores had been realized from the petitioner. The said recovery certificate issued by respondent No. 3, was questioned by the petitioner in OWP No. 362/05. On the request made by the respondents, the aforementioned writ petition was disposed of vide order dt. 27th of Feb'06, with the observation that the respondents would be at liberty to seek appropriate remedy available to them under law for recovery of the awarded amount. Resultantly, the recovery certificate issued by the respondent No. 3, in favour of the respondent No. 2, was quashed. 5. 27th of Feb'06, with the observation that the respondents would be at liberty to seek appropriate remedy available to them under law for recovery of the awarded amount. Resultantly, the recovery certificate issued by the respondent No. 3, in favour of the respondent No. 2, was quashed. 5. It is important to mention that a review petition was filed seeking review of order dt. 27th of Feb'06, passed in the aforementioned writ petition. The review petition was disposed of with the direction that no interference is called for as the order passed in the writ petition aforementioned is clear and ca tegoric. In pursuance to the above, the respondents approached the Central Registrar, who issued a fresh recovery certificate dt. 10th of Feb'06, in terms of the old Act, in favour of respondent No. 2. It is this recovery certificate, which is subject matter of challenge in the present petition. 6. The contention raised by the learned counsel for the petitioner is that the execution of award as ordered vide recovery certificate cannot be done under the Old Act, which provides for recovery of the amount in terms of the recovery certificate issued by the Registrar, by an application to the Collector under the Land Revenue Act. It is further contended that after coming into force of the new Act, if any dispute arises, the matter is to be referred to the arbitrator in terms of Section 84 of the said Act, and under these circumstances, the provisions of Arbitration and Conciliation Act, 1996 (here-in-after called the Act of 1996), would apply to all arbitrations under the Act. What is being contended is that any award passed by the Arbitrator assumes the character of a decree and it can be executed by the civil court under the Code of Civil Procedure. 7. On.the other hand, stand of the respondents is that the award is required to be executed in terms of Section 85 of the Old Act. Reference in this respect has been made to Section 126 of the new Act, which is a Repeal and Saving clause, which contemplates that any notification, rule, order, decision etc., made or issued, given or done under the Old Act, shall, if in force at the commencement of new Act, continue to be in force and have effect as if made under the corresponding provis­ions of the new Act. What is being contended is that the dispute between the parties was settled by an order passed under the Old Act and the same is required to be executed by taking recourse to Section 85 of the aforementioned Act. 8. While comparing the provisions of Section 74 of the Old Act and 84 of the new Act, it clearly emerges that in terms of the Old Act, the dispute if any, is to be settled by reference to the Central Registrar, and in terms of the new Act, the dispute raised between the parties is to be referred to the Arbitrator and the same is required to be decided under the provisions of Act of 1996. The execution of award under the new Act cannot be enforced except while taking recourse to the Act of 1996. A clear distinction is that under the Old Act, there is a resolution of the dispute by the Central Registrar and under the new Act, the dispute is required to be decided by the arbitrator. If any award is passed under Section 84 of the Act, no procedure is provided to execute such an award. Even though, both the provisions of the Old Act and the new Act provide for settlement of the dispute, but the methodology of award and that of settlement is different. Whether in terms of the provisions of Section 126 of the new Act, any award or order passed is required to be executed in terms of the Old Act, is in nutshell the controversy involved in the present petition. 9. It is not in dispute that the award in the present case was passed in the year 1999, under the Old Act by invoking statutory provisions of Section 74 of the said Act. The execution proceedings were initiated by issuance of a certificate by the Central Registrar which was referred to the Collector for execution under the new Act. The said certificate was called in question in a writ petition, referred to above. The same was quashed by a co-ordinate Bench of this court on the ground that the award passed under the new Act is liable to be executed as a decree of a civil court and not by way of issuance of a certificate by the Central Registrar and its reference to the Collector. The same was quashed by a co-ordinate Bench of this court on the ground that the award passed under the new Act is liable to be executed as a decree of a civil court and not by way of issuance of a certificate by the Central Registrar and its reference to the Collector. As a result of this quashment of the earlier certificate, option was left open to the respondents to seek appropriate remedy for enforcement of the award. This matter was clarified in a review petition filed by the respondents in this court. 10. After having obtained the clarification from this court, the respondents have resorted to Section 85 of the Old Act in seeking execution of the award. It is this act of the respondents, which is subject matter of challenge in the present petition. 11. The main thrust of the petitioners is that for seeking enforcement of the award, recourse to Section 85 of the Old Act is not permissible. In order to buttress their claim, it is stated that there were no recovery proceedings pending under Old Act at the time of coming into force of the new Act. Reference is made to Section 126(1) of the new Act which is a saving clause. It is stated that the same would cover the cases in respect of which proceedings were pending at the time of coming into force of the new Act. According to the petitioners, the award is required to be executed as a decree. 12. While examining the import of this argument, it is necessary to reproduce Section 126 of the new Act in scalar as relevant. "126. Repeal and saving.- (1...................................................................... (2) Without prejudice to the provisions contained in the General Clauses Act, 1897(10 of 1897) with respect to repeals, any notification, rule, order, requirement, registration, certificate, notice, decision, direction, approval, authorization, consent, application, request of thing made, issued, given or done under the Multi-State Cooperative Societies Act, 1984 (51 of 1984) shall, if in force at the commencement of this Act, continue to be in force and have effect as it made, issued, given or done under the corresponding provisions of this Act; (3)......................................................................... (4)......................................................................... (5)....................................................................... (4)......................................................................... (5)....................................................................... (6) Save as otherwise provided in this Act, any legal proceeding pending in any court or before the Central Registrar or any other authority at the commencement of this Act shall be continued to be in that court or before the Central Registrar or that authority as if this Act had not been passed." 13. Clause (2) of the repealing clause noticed above, contemplates that any certificate, notice, decision, direction, authorization etc., done under the old Act shall, if in force at the commencement of new Act, continue to be in force and have the effect as if made under the corresponding provisions of the said Act. Clause (6) contemplates that any legal proceeding pending in any court or before the Central Registrar or any authority at the commencement of the new Act shall be continued to be in that court or before the Central Registrar or the authority concerned as if this Act had not been passed. 14. Both the provisions contemplate two situations:- (i) Clause (2) contemplates that all orders, directions, notices, decisions etc., done under the old Act "if in force" at the commencement of the new Act, shall continue to be in force and have effect as if made or done under the corresponding provisions of the Act; and (ii) in terms of clause (6), any proceeding pending before any court or authority at the commencement of the new Act shall continue to be in that court or before that authority as if the new Act had not been passed. 15. Application of sub rule (2) will depend upon the similarity of the provisions in the new Act with the one which existed under the Old act. It is in the light of this aspect, Section 76 and 84 of the old Act and the new Act are required to be examined. 16. Section 76 of the old Act contemplates that on arising of a dispute, the matter is referred to the Central Registrar for settlement while, under Section 84, the dispute, if any, is to be settled by reference to the arbitrator. The mode of execution under the old Act is to be done under Section 85 in terms of which, the certificate is to be issued by the Central Registrar and an application to be made to the Collector along with the said certificate. The mode of execution under the old Act is to be done under Section 85 in terms of which, the certificate is to be issued by the Central Registrar and an application to be made to the Collector along with the said certificate. Correspondingly, in terms of Section 84 of the new Act, there is no provision of execution of decree or award in this respect. The award as passed under the new Act will be governed by the Act of 1996 for which remedy of execution of award is by reference to Section 36. 17. Section 94 of the new Act provides for execution of a decree in respect of issues covered therein except an award passed under Section 84 of the said Act. What clearly emerges is that Section 74 of the Old Act and Section 84 of the new Act are not pari materia with each other. Both differ in the matter of settlement of the dispute and the methodology adopted in the exectition of the award. As already discussed here-in supra, under the Old Act, there is a statutory reference to the Central Registrar whereas under the new Act, reference is to be made to the arbitrator. So the award passed under the Old Act cannot be enforced under the Act of 1996, as admittedly, no reference of the settlement of the dispute has been made under the Act of 1996 but by taking recourse to Section 74 of the old Act. The contention of the petitioners that the award cannot be executed by taking recourse to Section 85 of the old Act, is not sustainable. 18. After having said so, it be noted that the repealing clause of the new Act contemplates that any decision, notice etc., given under the old Act shall continue to be in force as if made under this Act. For the purpose of executing an award, there is no provision under the new Act which contemplates as to how a decision, decree, order etc., passed under the old Act can be executed. In this behalf, one has to revert to Section 24 of the General Clauses Act, which provides that any order, direction or notification issued under the repealed Act or Regulation shall, continue to be in force, if it is not inconsistent with the provisions of re-enacted Act. In this behalf, one has to revert to Section 24 of the General Clauses Act, which provides that any order, direction or notification issued under the repealed Act or Regulation shall, continue to be in force, if it is not inconsistent with the provisions of re-enacted Act. Execution of decree as contemplated under the new Act has to be done by reference to Act of 1996. As already discussed supra, the present decision sought to be executed has to be done by taking recourse to Section 85 which talks about the statutory arbitration. Execution of this decree is not in any way in-consistent with any of the provisions of the new Act, as such, the decree passed under the Old Act would be deemed to have been issued under the re-enacted Act. So, the course adopted by the respon­dents in seeking execution of the decree under the Old Act is in conformity with the provisions of the Act. 19. For the reasons mentioned above, this petition is found to be without merit and is dismissed.