Arbitration – Section 84 of Multi State Coop Societies Act
The petitioner society – registered on 29.03.1985 – is a member of the Respondent for more than 30 years. It has been in the business of weaving traditional Banarasi Sarees and dress materials.
Since 2019, the total amount of Rs.1,83,32,731.22/- is due and payable by the respondent no.1 to the petitioner. The Respondent no.1 has withheld the said amount on trivial excuses and grounds.
On 26.5.2023, the petitioner requested the Respondent no.2 Central Registrar to appoint an Arbitrator under Section 84 of the Multi-State Cooperative Societies Act. However, no action was taken.
The petitioner, therefore, filed Section 11(6) AA petition for appointment of arbitrator in terms of Section 84 of the Multi State Cooperative Societies Act, 2002, to adjudicate the dispute between the parties.
The respondent no.1 took objection on the ground that Section 11(6) petition is not maintainable and Section 21 AA notice was not given.
HELD that in case the Central Registrar fails to appoint an Arbitration, the petitioner cannot be left without remedy. In such cases, the Court cannot be held to be power less to refer the matter to the Central Registrar for appointment of an Arbitrator. Therefore, the argument that a petition under Section 11(6) of the AA is not maintainable is rejected.
Except the power conferred on the Central Registrar for appointment of an Arbitrator, the other provisions of the Arbitration and Conciliation Act, 1996, shall remain in operation as is evident from the provisions of Section 84(5) of MSCS Act and Rule 30(2) of the MSCS Rules.
MCSC Act, 2002, is a beneficial piece of legislation. It has been enacted to serve the interest of the members and to facilitate the voluntary formation and democratic functioning of cooperatives as people’s institutions based on self help and mutual aid and to enable them to promote their economic and social betterment and to provide functional autonomy.
Notice of Section 21 of AA is pre-requisite even for initiation of arbitration proceedings under Section 84 of MSC Act. The purpose of Section 21 notice is to put other party on commencement of arbitration proceedings. However, in the absence of any specific proforma, it would be sufficient if the petitioner in case of dispute having been arisen as envisaged under Section 84 of MSCS Act informs the Central Registrar for appointment of an Arbitrator and discloses the disputes. Therefore, the objection of the respondent no.1 that notice of section 21 of AA was not given and as such arbitrator petition is not maintainable is not legal and valid.
Judgment dated 8.5.2024 in ARB.P.75 of 2024 of Purvanchal Hathkargha Sahakari Sangh Ltd Vs. All India Handloom Fabrics Society and Another
