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2017 DIGILAW 769 (JK)

Krishan Lal Choudhary v. J&K Special Tribunal

2017-08-31

TASHI RABSTAN

body2017
JUDGMENT : 1. Through the medium of this petition, the petitioner is seeking quashment of award dated 25.03.2014 passed by the Additional Registrar, Cooperative Societies, Jammu, respondent No.2 herein, whereby petitioner and his three guarantors were jointly and severally held liable to restore an amount of Rs.66,58,850.50 inclusive of interest as calculated upto 31.01.2012 as well as future interest w.e.f. 01.02.2012 till the same is liquidated @ 14% per annum. Petitioner is also seeking quashment of order dated 25.08.2014 passed by learned Tribunal, respondent No.1 herein, in a revision filed by the petitioner herein, upholding order dated 25.03.2014 passed by respondent No.2 herein. 2. The facts, as projected in the writ petition, are that the petitioner in order to secure cash credit limit to the tune of Rs.50,00,000/-, obtained financial assistance for his proprietorship concern from Citizens’ Cooperative Bank Limited, Branch Gandhi Nagar, Jammu, respondent No.3 herein, after executing mortgage deed dated 07.12.2009 and completion of other requisite formalities. Further, it is averred that respondent No.3 got insured the stocks lying in the business premises of petitioner after deducting premium from his account. It is averred that during the subsistence of said insurance policy, a devastating fire took place in the business premises of petitioner in the intervening night of 24-25 February, 2010, as a result of which entire business premises gutted in fire and there was total loss to the insured premises of petitioner. Not only this, even two persons also lost their lives in the said fire incident. It is further averred that respondent No.3 instead of cooperating with the petitioner and taking appropriate steps for the purpose of seeking indemnification of loss from the insurance company in respect of insured goods, filed a petition against the petitioner and his three guarantors under Section 70 read with Section 72 of J&K Cooperative Societies Act, 1989, claiming an amount of Rs.68,58,850.50, without arraying the insurance company as party to the said petition. It is further averred that the petitioner brought the factual position before respondent No.2, but respondent No.2 without following established procedure of law for adjudication of rights of the parties as also without assigning any reason of whatsoever kind, allowed the petition and passed an award of Rs.66,58,850.50 inclusive of interest as calculated upto 31.01.2012 as well as future interest w.e.f. 01.02.2012 till the same is liquidated @ 14% per annum, in favour of respondent No.3 and against the petitioner herein. It is averred that against the said award, petitioner preferred a revision petition before J&K Special Tribunal, Jammu, respondent No.1 herein. However, the revision petition too met with the same fate, as without taking into consideration the serious illegalities committed on the part of respondent No.2, the learned Tribunal vide its order dated 25.08.2014 upheld the order passed by the Additional Registrar, Cooperative Societies. 3. Objections have been filed on behalf of respondent No.3., i.e., Citizens’ Cooperative Bank Ltd. averring therein that the petitioner is liable to repay the awarded amount along with interest. It is further averred that the respondent-bank extended all help to the petitioner for getting his case processed for seeking indemnification of loss from the insurance company. 4. I have heard learned counsel for the appearing parties, gone through the award impugned, considered rival contentions of the parties and also perused the writ file. 5. Although the petitioner has not denied his liability to repay the loan amount, his main thrust in filing the present petition is that respondent No.2 while passing the impugned award neither followed the established norms nor took into consideration the legal parameters, rather respondent No.2 passed the award in utter haste, which has even been upheld by the learned Tribunal. 6. A perusal of the award impugned itself reveals that the learned Arbitrator without framing issues or affording any opportunity of whatsoever kind to the petitioner to lead evidence as required under the provisions of Arbitration Act, straightway passed the award impugned without returning any finding, thereby holding the petitioner and his three guarantors liable to repay the outstanding loan amount along with interest at the rate of 14% per annum. While holding the petitioner liable, the arbitrator did not give any reasoning what to talk of following the established norms as required under the provisions of Arbitration Act. While holding the petitioner liable, the arbitrator did not give any reasoning what to talk of following the established norms as required under the provisions of Arbitration Act. The award, therefore, cannot be said to be reasonable, rather the same appears to be bad, as it does not fall within the four corners of judicial decision as per provisions of the Act. Learned arbitrator seems to be ignorant to the law position. 7. Even the learned Tribunal while exercising its revisional jurisdiction had failed to consider all these legal aspects and upheld the award passed by the learned arbitrator. Both the orders impugned are, thus, against the spirit of Article 14 of the Constitution of India. 8. Further, respondent-Bank has not denied getting the stocks insured lying in the business premises of petitioner after deducting premium from his account, and that a devastating fire took place in the business premises of petitioner during the subsistence of insurance policy. However, while filing arbitration petition before the learned arbitrator, respondent-Bank had failed to array the insurance company as one of the parties to the petition. 9. Therefore, in view of what has been discussed above, I deem it proper to allow the petition. Accordingly, the petition is allowed and the award dated 25.03.2014 passed by the Additional Registrar, Cooperative Societies, Jammu is hereby set aside. Consequently, order dated 25.08.2014 passed by learned Tribunal is also set aside. The matter is remanded back to the learned arbitrator with a direction to decide the matter afresh strictly as per the provisions of Arbitration Act by framing issues and affording adequate opportunity to the parties to lead evidence on such issues, besides any addition of necessary and proper parties shall also be made. Connected miscellaneous petitions, accordingly, stands disposed of.