Arbitral Award – Section 84 Multi State Coop Societies Act – Patent Illegality
Judgment dated 16.9.2026 of the High Court of Bombay in Commercial Arbitration Petition (L) No.21174 of 2025 of Mohammed Shrif Hanif Khan Vs. Apna Sahakari Bank Limited
Section 84 of Multi State Coop Societies Act – Arbitral Award
By way of the impugned arbitral award the Arbitrator has allowed the application filed by Respondent No. 1-Bank and directed the Petitioner along with the other opponents in the said arbitration proceedings, i.e., Respondent Nos. 2 to 4 to jointly and severally pay to Respondent No. 1- Bank an amount of Rs. 18,16,562.64/- as on 31st December 2023 along with further interest thereon at the contractual rate of interest at 14% p.a. w.e.f 1st January 2024 till final payment/closure of the account, along with a sum of Rs. 16,995/- towards arbitration fees and Rs. 5510/- towards administrative costs and stamp fees.
a perusal of the Roznama annexed to the impugned arbitral award would show that the entire arbitral proceedings commenced and concluded within a period of 28 days, and the Arbitrator acted hurriedly and did not give a chance to the Petitioner to present his case. It is therefore the Petitioner’s submission that the entire impugned arbitral award is void ab initio, illegal, and not binding.
the entire arbitration proceedings themselves are invalid, inasmuch as the Petitioner is not a member of Respondent No. 1-Bank and hence, the provisions of Section 84 of the MCS Act, under which the present arbitration proceeding have been conducted, would not apply to the Petitioner.
Petitioner’s signature has been forged on the surety form, and on the basis of fabricated documents Respondent No. 2 has availed of the loan/cash-credit facility in Loan Account No. CC/111 (Kurla Branch), wherein he has falsely shown the Petitioner’s mortgaged flat as surety/collateral.
the Petitioner had never stood as a surety, and neither was a co-borrower in respect of the loan/cash-credit facility availed by Respondent No. 2. In such circumstances, attaching the mortgaged flat of the Petitioner to secure the loan/cash-credit facility to Respondent No. 2 was an arbitrary and highly perverse approach adopted by the Arbitrator while passing the impugned arbitral award.
No finding on whether the loan/cash-credit facility was availed by the Petitioner as a co-borrower along with Respondent No. 2 in Loan Account No. CC/111 (Kurla Branch), and further whether the mortgaged flat of the Petitioner was actually mortgaged by the Petitioner v. No finding on whether the documents on which the loan/cash-credit facility was availed by Respondent No. 2 actually bore the Petitioner’s signature, and whether the Petitioner’s signature was forged.
