Gyan Vigyan Sansthan, Mathura v. Cooperative Tribunal Uttar Pradesh Lucknow
2022-09-29
PANKAJ BHATIA
body2022
DigiLaw.ai
JUDGMENT : 1. Heard Shri Sanjay Kumar, learned counsel for the petitioners, learned Standing Counsel for respondent no.1 and Shri Abhay Kumar Ojha, learned counsel for respondent no.3. No one has appeared for respondent no.4 despite notice. 2. Present petition has been filed challenging the award dated 8.5.2009 passed in Arbitration Case No.56W/2008 (Om Prakash Tarkar v. Govind Nagar Grah Niram Sahkari Samiti Ltd. & Ors.) whereby the Arbitrator in exercise of powers under Section 70 of the U.P. Co-operative Societies Act has declared the registered lease deed executed in favour of petitioner no.1 on 21.08.2004 as void and has cancelled the said registered lease deed, as well as the order dated 24.11.2009 passed in Appeal No.103 of 2009 (Gyan Vigyan Sansthan, Mathura & Ors. v. Arbitrator/Assistant Housing Commissioner, Uttar Pradesh Avas Evam Vikas Parishad, Lucknow) whereby the appeal preferred against the said award has been rejected by the Tribunal. 3. Contention of learned counsel for the petitioners is that respondent no.3 filed an application invoking the powers of the Arbitrator under Section 70 of the U.P. Co-operative Societies Act (hereinafter referred to as ‘the Act’) alleging that the society namely respondent no.4 has executed a registered lease deed in favour of petitioner no.1, which is not permissible under the bye-laws; he also alleged that petitioner no.1 is not a member of the society and as such, the society could not have executed the lease deed in favour of petitioner no.1. 4. During the course of hearing before the Arbitrator who was exercising the powers under Section 70 of the Act, the stand taken by petitioner no.1 was that petitioner no.1 was a member of the society and there was no error in the execution of the lease deed in favour of the petitioner no.1 by the society. Several other arguments were also raised. The Arbitrator by means of the impugned award dated 8.5.2009 came to the conclusion that as per the bye-laws of the society, petitioner no.1 could not be made a member of the society and also held that petitioner no.1 was actually not a member of the society and further held that in the bye-laws of the society, there is no provision for execution of the lease deed in favour of a new member, as such, he proceeded to declare the lease deed as void and cancelled the registered lease deed dated 21.08.2004.
The said award was challenged in an appeal, which too has been dismissed. 5. Shri Sanjay Kumar, learned counsel for the petitioners argues that Section 70 of the Act confers power of arbitration of a dispute in relation to the constitution, management of the business of a co-operative society other than a dispute regarding disciplinary action; he further argues that such a dispute should arise in between members, past members and persons claiming through the members. Section 70 of the Act is quoted hereinbelow : “70. Disputes which may be referred to arbitration.
Section 70 of the Act is quoted hereinbelow : “70. Disputes which may be referred to arbitration. -(1) Notwithstanding anything contained in any law for the time being in force, if any dispute relating to the constitution, management of the business of a co-operative society other than a dispute regarding disciplinary action taken against a paid servant of a society arises- (a) among members, past members and persons claiming through members, past members and deceased members; or (b) between a member, past member or any person claiming through, a member, past member or deceased member, and the society, its committee or management of any officer, agent or employee of the society, including any past officer, agent or employee; (c) between the society or its committee and any past committee, any officer, agent or employee or any past officer, past agent or past employee or the nominee, heir or legal representative of any deceased officer, deceased agent, or deceased employee of the society; or (d) between a co-operative society and any other co-operative society or societies: such dispute shall be referred to the Registrar for action in accordance with the provisions of this Act and the rules and no court shall have jurisdiction to entertain any suit or other proceeding in respect of any such dispute: Provided that a dispute relating to an election under the provisions of this Act or rules made thereunder shall not be referred to the Registrar until after the declaration of the result of such election (2) For the purpose of sub-section (1), the following shall be deemed to be included in dispute relating to the constitution, management or the business of a cooperative society, namely - (a) claims for amounts due when demand for payment is made is either refused or not complied with whether such claims are admitted or not by the opposite party; (b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not; (c) a claim by a society for any loss caused to it by a member, officer, agent, or employee including past or deceased member, officer, agent, or employee, whether individually or collectively and whether such loss be admitted or not; and (d) all matters relating to the objects of the society mentioned in the bye-laws as also those relating to the election of office-bearers.
(3) If any question arises whether a dispute referred to the Registrar under this section is a dispute relating to the constitution, management or the business of co-operative society, decision thereon of the Registrar shall be final and shall not be called in question in any court.” 6. In the light of the said, learned counsel for the petitioners argues that once as per the allegations of respondent no.3, petitioner no.1 was not a member of the society nor can he be made a member of the society, the Arbitrator did not have the power to arbitrate the dispute under Section 70 of the Act. He further argues that in any event of the matter despite the petitioner no.1 claiming himself to be a member of the society, the Arbitrator has formed an opinion that petitioner no.1 could neither become a member nor was it a member of the society; he argues that once the said finding is written, clearly the Arbitrator could not have entered into the dispute. 7. He further argues that in any event, the registered instrument cannot be cancelled in exercise of powers under Section 70 of the Act in view of there being specific provision as contained in Section 31 of the Specific Relief Act, which confers the power on the Court alone. He argues that although the ‘Court’ is not defined under the Specific Relief Act, the definition of the ‘Court’ as included in the General Clauses Act is to be referred. He further argues that the power conferred upon the Courts by virtue of Section 31(2) of the Specific Relief Act cannot be exercised by the Arbitrator while exercising the power under Section 70 of the Act. 8. He lastly argues that today respondent no.3 has filed an affidavit that he under mistaken belief moved an application for quashing of the lease deed executed in favour of petitioner no.1 by respondent no.4 – society; he argues that in the light of the said affidavit, the writ petition deserves to be allowed, including on all other grounds as argued by the petitioners. 9. Respondent no.3 has filed affidavit stating that he had filed a complaint under a mistaken belief and he does not want to press his complaint/application, which was filed for cancellation of the lease deed. 10.
9. Respondent no.3 has filed affidavit stating that he had filed a complaint under a mistaken belief and he does not want to press his complaint/application, which was filed for cancellation of the lease deed. 10. During the course of argument my attention has been drawn to the judgment of this Court in the case of Yaduraj Singh v. District Assistant Registrar Co-operative Society & Ors.; 2012 (8) ADJ 691 as well as the judgment of the Hon’ble Supreme Court in the case of Delhi Dayalbagh Co-operative House Building Society Ltd. v. Registrar, Co-operative Societies and Ors.; (2019) 3 SCC 745 . 11. In the light of the said argument raised at the Bar, this Court is to decide as to whether the Arbitrator could have cancelled the lease deed executed in favour of petitioner no.1 in exercise of powers under Section 70 of the Act ? 12. It is necessary to note that the allegation as made in respect of the execution of the lease deed refer to the lease deed executed by means of a registered instrument whereby the society had executed a lease deed for a period of 30 years w.e.f. 21.08.1984; in the said lease deed the society was the first party and the petitioners were the second party. The said lease deed was for use for educational purposes. 13. From the perusal of the record it appears that the respondent initially moved an application alleging that the execution of the lease deed by the society in favour of the petitioners was contrary to the bye-laws of the society inasmuch as the petitioners were not the members of the society and no lease deed could be executed in their favour. It is also relevant to state that the respondent alongwith the application seeking invocation of the arbitration filed an inquiry report dated 05.09.2005 conducted by Deputy Housing Commissioner, U.P. Awas Evam Vikas Parishad, which was done after issuance of a show-cause notice to the society. It was also alleged that the execution of the lease deed by the society was contrary to Rule 200 of the U.P. Co-operative Societies Rules, 1968, which requires prior approval from the Registrar, which was not done.
It was also alleged that the execution of the lease deed by the society was contrary to Rule 200 of the U.P. Co-operative Societies Rules, 1968, which requires prior approval from the Registrar, which was not done. The lease deed in question was executed under the Transfer of Property Act and was for a term of 30 years and was also duly registered as is required under Section 107 of the Transfer of Property Act. Admittedly, the lessor of the property never determined the lease by issuing a notice under Section 106 of the Transfer of Property Act. Even before the Arbitrator there were no dispute in between the society i.e. the lessor or the petitioners, who were the lessee. The complaint in question was made by the third party (although a member of the society) on which an inquiry was conducted and the said third person moved an application before the Arbitrator for settlement of the dispute. Section 70 of the Act as quoted above, prescribes the disputes, which can be adjudicated by the Arbitrator insofar as they relate to or arise among members, past members and persons claiming through members, past members and deceased members. 14. The question as agitated by learned counsel for the petitioners need not to be gone into as a third person although entitled to make a complain under Section 68 of the Act would not be entitled to initiate proceedings under Section 70 of the Act inasmuch as no steps that are required for determination of the lease were ever taken against the lessor, the society in the present case. The only allegation was that the society has executed a lease deed contrary to the bye-laws in favour of the person who was not the member of the society. The said action could have been initiated but only under Section 68 of the Act which empowers the Registrar under Section 68 & 69 of the Act to remedy the defect and to pass such orders as may be found to be appropriate and within the scope of Section 68 & 69 of the Act. 15.
The said action could have been initiated but only under Section 68 of the Act which empowers the Registrar under Section 68 & 69 of the Act to remedy the defect and to pass such orders as may be found to be appropriate and within the scope of Section 68 & 69 of the Act. 15. I am not going into the other arguments raised in the present case as the deed for which the complaint has been made, is a registered lease deed and not a sale deed and in view of my finding that the dispute could not have been decided by the Arbitrator and it was only the Registrar who could have taken a decision on the complaint made by a third party by exercising his powers under Section 68 & 69 of the Act. In the present case, even otherwise respondent no.3 has moved an application that he had filed the application under mistake and does not want to pursue his complaint. 16. I have already held that the dispute of the nature initiated by respondent no.3 could not be decided by the Arbitrator and the only recourse available was to the Registrar before whom the complaint was made and inquiry was conducted, thus, I have no hesitation in holding that the impugned award dated 8.5.2009 (Annexure – 2) as well as the appellate order dated 24.11.2009 (Annexure – 1) are bad in law and are liable to the set aside. The said orders are accordingly set aside. As such, the writ petition is allowed. 17. It will, however, be open to the Registrar to take action in furtherance of the inquiry report by exercising his power under Section 68 & 69 of the Act.