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2013 DIGILAW 866 (BOM)

Mohammed Amin Haroon Solkar v. Asgar Mohammed Dabir

2013-04-18

ANOOP V.MOHTA

body2013
Judgment : Heard finally by consent of parties at the admission stage in view of urgency shown. 2. The Petitioner, who is a member of Respondent No.4Kokan Mercantile Co-operative Bank Limited (The Bank) has challenged Award dated 18 March 2013 passed by a sole Arbitrator (Respondent No.2), appointed by the Central Registrar of Co-operative Society under the Multi-State Co-operative societies Act, 2002 (for short, Act of 2002). 3. The operative part of the Award is as under: “The Application allowed. The acceptance of nomination of Adv. Amin Solkar is set aside with no order as to costs.” 4. The Petitioner is a Member of Respondent No.4-Bank. Respondent No.1 is a sitting Director. Respondent No.2 is the Arbitrator. Respondent No.3 was the Returning Officer. 5. On 27 September 2012, Dr. Dalvi Ali Abdul Quadar and Yusufkhan Fakhrookhan Tadvi members and Ex-Directors of the Bank were removed by a common decision by the present Board of Directors. On 30 October, 2012, they (The Disputants) filed Dispute Application Nos. 383 of 2012 and 383 of 2012, respectively, before the Arbitrator and challenged their illegal removal. Adv. Dr. Shah Alam, filed his vakalatnama and appeared for them. 6. On 5 January, 2013, both the Disputants wanted to notorize their affidavit-in-evidence and, therefore, had approached a Notary by name Adv. Gregory W. D'Souza who insisted for identification from an Advocate. The Petitioner identified them before the Notary. On 22 January 2013, both Dispute Application Nos. 383 of 2012 and 384 of 2012, came to be disposed of. 7. On 15 March 2013, the term of the present Board of Directors of the Bank was to expire. Respondent No.3 was appointed as the Returning Officer for conducting Elections for the term 2013-2018. On 8 March 2013, the Petitioner challenged election in Civil Writ Petition No.2560 of 2013. The matter was reserved for judgment. On 11 March 2013, the Petitioner filed his nomination papers before Respondent No.3 (the returning officer) for the Election to the Board of Directors of the Bank. On 12 March 2013, during scrutiny of the nomination papers, the Disputant raised objection on the ground that Petitioner had appeared against the Bank as an Advocate on behalf of Dr. A.Q. Dalvi and Yusufkhan Tadvi before the same Arbitrator. On obtaining an undertaking, the returning officer accepted the nomination paper of Petitioner. On 12 March 2013, during scrutiny of the nomination papers, the Disputant raised objection on the ground that Petitioner had appeared against the Bank as an Advocate on behalf of Dr. A.Q. Dalvi and Yusufkhan Tadvi before the same Arbitrator. On obtaining an undertaking, the returning officer accepted the nomination paper of Petitioner. The Arbitrator issued a certificate, under his signature, on asking by Respondent No.1, stating that the Petitioner has appeared before him as Counsel in both Dispute Applications. On the strength of the certificate, the Disputant addressed a letter to the returning officer for rejecting the nomination papers of the Petitioner. Respondent No.3 refused to review his own order of accepting the nomination papers of the Petitioner. The Disputant filed an Arbitration proceedings No.RCJ/388/2013. It was made returnable on the very next day. No notice of the hearing of the Arbitral Proceedings, in the usual format signed by the Arbitrator, was issued and/or served upon the Petitioner. On 16 March 2013, surprisingly, an unsworn affidavit of service was filed by one Mr. Khalil Dabir, the brother of the Disputant. On 18 March, 2013, without hearing the Petitioner, the Arbitrator allowed the application and set aside the acceptance of the nomination papers of the Petitioner on the ground of disqualification of Bye-laws No.36 (1) (i) and Section 43 (1)(i) of the Act of 2002. 8. This being statutory arbitration, the Arbitrator is required to issue appropriate notices to serve the other side/Respondent in case any such Application filed by a Disputant. The private notice, even if any, is always the additional process to serve the Respondents to avoid further delay in the matter. That in any way can not be stated to be a permissible mode and/or sufficient to dispense with the statutory notice. Under the Act of 2002, there is a form/procedure prescribed whereby the Arbitrator is required to give notice of preliminary meeting/hearing. The notice be with the true copy of statement of claims and should be signed by the learned Arbitrator. Admittedly, in the present matter, no such notices were issued to the contesting Respondents. 9. On 15 March 2013, as there was urgency in view of the declared schedule of election, permitted the Disputant/claimants to serve the Respondents with annexures. However, it is specifically observed “Applicant to arrange for the service of the application on the Respondents at his risk.”. Admittedly, in the present matter, no such notices were issued to the contesting Respondents. 9. On 15 March 2013, as there was urgency in view of the declared schedule of election, permitted the Disputant/claimants to serve the Respondents with annexures. However, it is specifically observed “Applicant to arrange for the service of the application on the Respondents at his risk.”. The matter was accordingly adjourned for 16 March 2013 at 2 pm. The Respondent/Disputant took the risk and proceeded with the matter, based upon alleged service. The Disputant/Respondent No.1 filed an affidavit of service dated 16 March 2013 of one Khalil Dabir, who is stated to be the brother of Respondent No.1. The learned Arbitrator accepted the same and taken on record. There is nothing to show that the affidavit was duly affirmed as required under the law. An acknowledgment with the alleged endorsement of receipt and signature on behalf of the Petitioner annexed with it. The Bank supported the Disputant. The learned Arbitrator on 18 March 2013, passed final order/award in absence of the Petitioner and accordingly closed the proceeding. The Petitioner has no option, but to invoke the provisions of Section 34 of Arbitration and Conciliation Act, 1996 (for short, the Arbitration Act) in view of specific provision of Section 84 of Act of 2002. There is no serious dispute with regard to the maintainability and jurisdiction of this Court to entertain this Petition. 10. Admittedly, the Award so passed against the Petitioner is exparte. The statutory Arbitral Tribunal, in my view, is under obligation to see that the notice of hearing of such matter/Dispute Application, should be served upon the Respondents. The private service, which was admittedly at the risk of the claimant/Disputant cannot be substituted to mean binding service in every such matter specifically when the Disputant admittedly not filed affidavit of service. The un-sworned affidavit by his brother should not have been the foundation to proceed with the matter. This, in my view, is basically against the principle of fair play, equal opportunity as contemplated under the Arbitration Act, apart from the principle of natural justice. 11. The presence of Petitioner was necessary in this matter as nomination which was duly accepted by the Returning Officer/Respondent No.3 was set aside at the instance of the Disputant in the above circumstances. 11. The presence of Petitioner was necessary in this matter as nomination which was duly accepted by the Returning Officer/Respondent No.3 was set aside at the instance of the Disputant in the above circumstances. The learned Arbitrator accepted the averments so made along with the document so placed by the Disputant and as supported by the Bank that “Mr. Solkar Mohammed Amin Haroon hereby give undertaking that I have never been retained or employed as a Legal Practitioner on behalf of or against the Multi State Co-operative Society, or on behalf of or against any other Multi State Co-operative Society which is a member of the former Society. …. Further there is declaration by Respondent No.3 dt. 11.3.2013 made alongwith the nomination form that he suffers not from any disqualification under the Act, Rules or Bye laws of MSCS. …... Now from the documentary evidence produced by the Applicant and substantiated by Respondent No.1 it is abundantly clear that Respondent No.3 did appear against Respondent No.1 in Arbitration proceeding No.383 and 384 of 2012 as advocate for the Petitioner / Disputant and therefore clearly disqualified to contest the election of the Board of Directors.”. 12. Based upon above, the learned Arbitrator accepted the Disputant's case and set aside the nomination of the Petitioner. The learned Arbitrator further noted that these documents were never placed before the Returning Officer, otherwise, it would have helped him to decide. This is another aspect which the learned Arbitrator, in my view, has failed to consider that the documents which were not placed before the Returning Officer just cannot be relied upon by the learned Arbitrator for the first time, without giving opportunity to the concerned person, against whom the complaint was filed. 13. This material and the averments so made by the Disputant was never admitted and/or accepted by the Petitioner at any point of time. The power of Arbitrator to accept and/or take on record the documents for the first time which were not placed before the Returning Officer itself, in my view, is the area which requires consideration. 14. Assuming for a moment that those documents are a part of the record, including the certificate dated 15 March 2013 issued by respondent No.2-Arbitrator himself to say that “This is to certify that Mr. Amin H. Solkar has appeared as Advocate for Dr. A.Q. Dalvi in arbitration proceeding no.383/2012 and 384/2012 for Mr. 14. Assuming for a moment that those documents are a part of the record, including the certificate dated 15 March 2013 issued by respondent No.2-Arbitrator himself to say that “This is to certify that Mr. Amin H. Solkar has appeared as Advocate for Dr. A.Q. Dalvi in arbitration proceeding no.383/2012 and 384/2012 for Mr. Yusuf Khan Tadvi in arbitral proceedings held before the Arbitral Tribunal of Kokan Mercantile Co-op Bank Limited. This certificate is issued as per party's request.” It is unacceptable that the learned Arbitrator has relied upon his own certificate which was issued at the instance of Disputant, to support that the Petitioner appeared as an Advocate, for Dr. A. Q. Dalvi and Mr. Yusuf Khan Tadvi, against the Respondent-Bank. Two other documents were the affidavit of evidence of the Disputants dated 5 January 2013, in Dispute Application No.384/2012 and Dispute Application No.383/2012 signed by the Petitioner as an Advocate for the Disputant. 15. There is nothing on record and/or even observation by the learned Arbitrator before recording the above finding that the Petitioner had filed vakalatnama on record as required under the law to appear on and on behalf of the party. The Disputant also unable to place on record such document and/or such averment to that effect. The endorsement at the end of two affidavits “Advocate for the Disputant” were treated to be the foundation to accept the case of the Disputant that the Petitioner appeared on behalf of those Disputants against the Respondent-Bank, which, in my view, is wrong approach. 16. The alleged disqualification for being a member of the Board has the foundation of Section 43 of the Act of 2002. 16. The alleged disqualification for being a member of the Board has the foundation of Section 43 of the Act of 2002. The relevant portion reads as under: “43 Disqualification for being a member of board.- (1) No member of any multi-State Co-operative society or nominee of a member, society or a national Co-operative society shall be eligible for being chosen as, or for being a ember of the board of such multi-State co-operative society or a national cooperative society, or of any other co-operative society to which the multi-state cooperative society is affiliated, if such member - (a) [….........] (b) is concerned or participates in the profits of any contract with the society; (i) is retained or employed as a legal practitioner on behalf of or against the multi-State Co-operative society, or on behalf of or against any other multi-State co-operative society which is a member of the former society. Explanation.- For the purposes of this clause, “legal practitioner” has the same meaning as in clause (i) of sub-section (1) of section 2 of the Advocates Act, 1961 (25 of 1961).” 17. Therefore, crucial issue is, apart from the reasons so referred above, whether the Petitioner fall within the prohibition and/or “disqualification” as contemplated under Section 43. The words “is retained or employed as a legal practitioner on behalf of or against the multi-State co-operative society” need to be considered in the facts and circumstances of the case. The plain reading of these words show that the legal practitioner, the member one who is a legal practitioner and/or is retained or employed as a legal practitioner on behalf of or against the society is disqualified to contest the election of member of Board. Therefore, on the relevant date or at least on the date of filing of nomination such disqualification should be in existence. There is nothing to interpret and/or accept the case of Respondent No.1 that a member, who had earlier appeared and/or retained and/or employed as a legal practitioner on behalf of or against the society is, debarred permanently from contesting such election and/or permanently debarred to be a member of such board. Every member of such society has a right to participate in the election in accordance with law. Every member of such society has a right to participate in the election in accordance with law. Therefore, merely because the member, prior to filing of nomination paper was retained or acted as a legal practitioner, that itself, in my view, as contended, cannot be treated as a permanent bar to contest any such election. The requirement is that on the date of filing of nomination he should not have retained and/or employed as a legal practitioner. The facts are not supported by any proved documents in the present case. The identification by the Advocate cannot be treated as “appeared” or “retained” or “employed” as contemplated under the law. 18. The Petitioner appearing in person contended that the words “retained and/or employed” means one who is engaged permanently and/or retained by the society to represent their case and/or against the Bank. At this stage of the proceeding, that discussion is not necessary for the simple reason that in the present matter, the Petitioner was admittedly not appeared as legal practitioner on the date of nomination/election on behalf of or against the society. The alleged matter was disposed of on 22 January 2013. Therefore, the finding that the Petitioner was disqualified as he had appeared in the matter against the society prior to the date of nomination, is contrary to law and impermissible. There is nothing on record to show and recorded by the learned Arbitrator that the Petitioner has been appearing on behalf of and/or against the society on the date of nomination and/or election in question. 19. The Petitioner has disputed every aspect of which were the foundation for the learned Arbitrator to declare him disqualified. Those grounds/averments are also placed on record by the Petitioner, for the first time, before this Court, in view of the admitted position on record that the Award was exparte. Those averments/grounds are as under: “2 […......] The Petitioner states that at no point of time during the entire proceedings of both the disputes did he ever appear for or on behalf of both the said Disputants in their said Dispute Applications. At no point of time did the Petitioner file his vakalatnama as an Advocate for both the Disputants. The Petitioner craves leave to refer and to rely upon the copies of both the said entire Dispute Proceedings, when produced. 3. At no point of time did the Petitioner file his vakalatnama as an Advocate for both the Disputants. The Petitioner craves leave to refer and to rely upon the copies of both the said entire Dispute Proceedings, when produced. 3. The Petitioner states that on 5.1.2013 both the said Disputants wanted to notorized their affidavit-in-evidence to be tendered in their disputes and therefore, had approached a Notary by name Adv. Gregory W.D'Souza at the Sessions Court, Mumbai. Since the said Notary was not acquainted with both the Disputants, he insisted upon them to get an Advocate for identifying them and only then he would notorize their Affidavit-in-evidence. At the relevant time their Adv. Shah Alam was not available and as the Petitioner was present in Sessions Court, both the said Disputants approached him with a request to identify them before the said Notary. The Petitioner then obliged them by identifying them before the said Notary but inadvertently the Petitioner did not mention above his signature that he was only identifying both the Disputants before the Notary. …... 5. The Petitioner states that in the meantime, since the election process had already started, he filed his nomination papers before Respondent No.3 on 11.3.2013 for the said Election to the Board of Directors of the Respondent No.4 Bank. During the scrutiny of the nomination papers which was held on 12.3.2013, a written objection was raised by Respondent No.1 protesting therein on the ground that the Petitioner has appeared against the Respondent No.4 Bank as a Counsel on behalf of the said Dr. A. Q. Dalvi and the said Mr. Yusfkhan Tadvi before Respondent No.2. The Petitioner states that he contested the said objection to which Respondent No.3 sought an undertaking to that effect from the Petitioner which was submitted and, accordingly the nomination paper of the Petitioner was accepted by Respondent No.3.” 20. A. Q. Dalvi and the said Mr. Yusfkhan Tadvi before Respondent No.2. The Petitioner states that he contested the said objection to which Respondent No.3 sought an undertaking to that effect from the Petitioner which was submitted and, accordingly the nomination paper of the Petitioner was accepted by Respondent No.3.” 20. The Petitioner has strongly relied upon the observations made by the Hon'ble Supreme Court in SakhawantAli v. State of Orissa (A.I.R. 1955 SC 166)itself as under:- “11 The right of the Appellant to practice the profession of law guaranteed by Article 19 (1)(g) cannot be said to have been violated, because in laying down the disqualification in Section 16(1)(ix) of the Act the Legislature does not prevent him from practising his profession of law but it only lays down that if he wants to stand as a candidate for election he shall not either be employed as a paid legal practitioner on behalf of the municipality or act as a legal practitioner against the municipality. There is no fundamental right in any person to stand as a candidate for election to the municipality. The only fundamental right which is guaranteed is that of practising any profession or carrying on any occupation, trade or business. There is no violation of the latter right in prescribing the disqualification of the type enacted in Section 16(1)(ix) of the Act. If he wants to stand as a candidate for election it is but proper that he should divest himself of his paid brief on behalf of the municipality or the brief against the municipality in which event there will be certainly no bar to his candidature. Even if it be taken as a restriction on his right to practice his profession of law, such restriction would be a reasonable one and well within the ambit of Article 19 Clause 5. Such restriction would be a reasonable one to impose in the interests of the general public for the preservation of purity in public life. We therefore see no substance in this contention of the Appellant also.” 21. The learned counsel appearing for Respondent No.4-Bank relied upon the same judgment to show that the purpose is the purity of public life which object was certainly be thwarted if there arose a situation where there was a conflict of interest and duty. We therefore see no substance in this contention of the Appellant also.” 21. The learned counsel appearing for Respondent No.4-Bank relied upon the same judgment to show that the purpose is the purity of public life which object was certainly be thwarted if there arose a situation where there was a conflict of interest and duty. The relevant portion reads as under: “The classification here is of the legal practitioners whoa re employed on payment on behalf of the Municipality or act against the Municipality and those legal practitioners are disqualified from standing as candidates for election. The object or purpose to be achieved is the purity of public life, which object wo0uld certainly be thwarted if there arose a situation where there was a conflict between interest and duty. The possibility of such a conflict can be easily visualised, because if a municipal councillor is employed as a paid legal practitioner on behalf the municipality there is a likelihood of his misusing his position for the purposes of obtaining municipal briefs for himself and persuading the municipality to sanction unreasonable fees.” 22. In view of the above reasoning and merely because the Petitioner has signed an affidavit of a litigant for the purposes of identification cannot be termed as appearing in the capacity as an Advocate in any dispute against the Bank, apart from the fact that on the date of commencement of election/nomination, he was not appearing against the Bank. The learned Arbitrator, however, without giving hearing and opportunity to the Petitioner, declared him disqualified permanently to contest any election of Respondent No.4-Bank in future. 23. The submission is made that the election in question, is now quashed and set aside in view of the 97th Constitution amendment. Any way, the fact remains that the impugned order so passed which disqualified and disentitling the Petitioner to contest any election of Respondent No.4-Bank. Therefore, in the interest of justice and in view of the above, I am inclined to quash and set aside the impugned order dated 18 March 2013 passed by the sole Arbitrator and all actions arising out of the same. However, all points are kept open for the parties to consider as and when occasion arises. 24. Therefore, in the interest of justice and in view of the above, I am inclined to quash and set aside the impugned order dated 18 March 2013 passed by the sole Arbitrator and all actions arising out of the same. However, all points are kept open for the parties to consider as and when occasion arises. 24. In the result, the Petition is allowed in terms of prayer (a) which reads thus: “(a) this Honourable Court may be pleased to call for the record and proceeding of the impugned order, dated 18.3.2013, and after examining its legality, validity and propriety be pleased to set aside and quash the said impugned order, dated 18.3.2013, passed by the Respondent No.2 in Arbitarial proceedings No.RCJ/388/2013.” 25. All points are kept open. 26. There shall be no order as to costs.