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2011 DIGILAW 590 (JK)

Rajinder Sharma v. Citizens Cooperative Bank Ltd.

2011-10-31

Sanjay Gupta

body2011
1. This revision petition is directed against the order of Registrar Co-Operative Society J&K dated 23.05.2009 by virtue of which, he has accepted appeal of respondents filed against the order dated 11.04.2004 of Addl. Registrar J&K Cooperative Society jammu. 2. Brief facts which leads to present litigation are that, Petitioner No. 1 herein availed loan of Rs. 9900/- in 1990 for purchase of TV from the respondent-bank after completing all necessary requirements. Petitioner No. 2 stood as guarantor. 3. Petitioner No. 1 herein became defaulter and did not pay installment regularly, which forced Bank to file arbitration petition u/s 70 read with Section 72 of the J&K Cooperative Societies Act on 13th Feb. 2001 before Registrar Cooperative Society for Rs.60,400/-. Subsequently, this arbitration petition was transferred to Addl. Registrar Cooperative Society, Jammu. 4. On 17th April, 2004, Addl. Registrar dismissed the petition as time barred. He observed that last installment of Rs. 500/- was paid on 02.12.1992 and so petition was hopelessly time barred. 5. An appeal was filed before Registrar by the respondent-bank where it was argued by the bank, that no provision of law has been cited by the court below while dismissing the arbitration petition. It was further argued by bank that rules cannot override the Act. That main Act does not contain provision of limitation for filing arbitration case. As main Act does not provide limitation period, so limitation provided in rule 39 of the Act is not applicable. 6. The Registrar Cooperative Society Jammu on 23.05.2009 disposed of the appeal with a direction to the bank to workout the outstanding amount against the petitioners herein afresh. Interest on the outstanding amount shall be calculated as per NPA norms made applicable to Cooperative Banks from the year 1996-97. It was further held that interest on loaned amount shall be calculated from the date of advancement up to 31/3/1996 and thereafter as per NPA. 7. I have given my thought full consideration to whole aspect of matter. Counsel for petitioner argued that court has not properly applied the law. Finding of court below is against spirit of limitation act. 8. Where as counsel for respondent has supported order and stated that limitation act is not applicable to arbitration petitions. 7. I have given my thought full consideration to whole aspect of matter. Counsel for petitioner argued that court has not properly applied the law. Finding of court below is against spirit of limitation act. 8. Where as counsel for respondent has supported order and stated that limitation act is not applicable to arbitration petitions. He has referred 1957 Bombay 178 case titled savitra khandu v/s nagar agricultural in which it is held as under:- (a) Limitation act 1908 Preamble and section 3 and 28 - applicability of act to arbitration proceedings -- arbitration under Bombay co-operative society act -- arbitrator if bound to apply law of limitation-failure, if objection to legality of award on face of it, The limitation act primarily apples to suits, appeals and application and it has no direct application to arbitration proceedings 9. So in present situation, only question required to be determined is, as to whether J&K Limitation Act as per rule 39 of act is applicable to arbitration petition under filled under section 70/72 of Act or not. Rule 39 of Act reads as under: (1) Reference of Disputes to Arbitration. (2) Procedure for Arbitraton. (3) The period of limitation for referring a dispute touching the constitution, management for business of a co,-operative society under sub section (1)of section70, under sub section (1)of section71 and, under sub section (1)of section72 of the act, shall be regulated by the provisions of the J&K LIMITATION ACT, samvat 1995 (IX of 1995)as if the dispute were a suit and the Registrar/authority/arbitrator a civil court. 10. Bare perusal of relevant extract of rules, it is evident that all dispute mentioned in Section 70(1), 71(1), 72 (1) of Act shall be considered as suit and shall be regulated by provision of J&K LIMITATION Act Samvat 1995. 11. Section 176 of Act empowers Govt. to frame rules for carrying out purpose of act. 12. Rules are always considered to be part and parcel of main Act unless declared ultra virus being against public policy by court, Purpose of rules is to give effect to certain provision of main Act. Rules provide procedure for giving effect to aim of principal Act. 13. Rule 39 clearly provides that all arbitration petition shall be treated as suit and law of Limitation Act shall be applicable. Where a special act does not expressly bar applicability of limitation act, then certainly it does apply. Rules provide procedure for giving effect to aim of principal Act. 13. Rule 39 clearly provides that all arbitration petition shall be treated as suit and law of Limitation Act shall be applicable. Where a special act does not expressly bar applicability of limitation act, then certainly it does apply. So in my considered opinion limitation act will apply in present case. 14. Section 3 of limitation act states that every suit instituted after the period of limitation shall be dismissed. 15. In the present it is admitted fact that loan was obtained 14.5.1990 and last installment was deposited on 2nd Dec.1992 and time will run from 2nd Dec.1992. As per limitation act suit foe recovery is 6 years. Present litigation has started on 13/2/2001, so it is time barred. 16. I have carefully gone through judgment cited by counsel for respondent. There is no dispute with regard to law laid down in said citation, but this authority is not applicable in present case, because arbitration petition under J&K State Cooperative Societies Act is to be treated as suit as per rule 39 of act. 17. In view of above discussion this revision is allowed, order of court below is set aside.Order of Addl. Registrar J&K Cooperative Society is restored. Arbitration petition /Suit is held to be time barred.File of court below is sent back along with this order. Present file be cosigned to record.