Bombay HC – Arbitral Award Section 84 of the Multi State Cooperative Societies Act 2002

The appellant / society raised a dispute under Section 84 of the Multi State Cooperative Societies Act, 2002 read with Secfton 23 of the Arbitration Act for Rs.1,29,34,497/-.

Section 34 Court held that the arbitral reference against borrowers who are not admitted as members of the society is not legal.

In the present case, in my opinion, not deciding the issue whether the respondent Nos.1 and 2 are members of the society or not is the patent illegality committed by the Arbitrator. It is not established by the appellant/society even before this Court that they are members of the society, consequently, the jurisdiction exercised under Section 84 of the Act of 2002 automatically goes and consequently proceeding decided by Arbitrator are vitiated.

in the present case, as the Arbitrator has recorded his finding without having any concrete evidence before him and take into account the ledger book only to reach to the conclusion that respondent Nos. 1 and 2 are the members of the society is perse illegal and same is indirect violation of Section 25 of the Act of 2002.

Judgment of the High Court of Bombay, Bench at Nagpur, in Arbitration Appeal No.116 of 2025 of Rajlaxmi Multistate Credit Cooperative Society  vs.  Smt. Ashwini Anand Anchatwar and others