IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA CMPMO No. 487 of 2009 Date of decision: 16th November, 2010 Smt. Beasa Sharma Petitioner. Versus State of H.P. and others Respondent. Coram The Hon’ble Mr. Justice Deepak Gupta, J. Whether approved for reporting?1 No. For the petitioners: Mr. S.C. Sharma, Advocate. For the Respondents No: Mr. Vivek Thakur, Additional 1, 2 and 4. Advocate General. For the Respondent No. : Mr. R.S. Gautam, Advocate. 3. Deepak Gupta, J. (oral) This petition is directed against the order dated 6th May, 2006 passed by the Arbitrator under Section 72 of the H.P. Co-operative Societies Act, whereby the petitioner has been directed to pay an amount of Rs. 88,128/- alongwith costs of Rs. 4,406/- . 2. The undisputed facts are that the petitioner had raised a loan of Rs. 1,00,000/- from the Mandi Urban Co- operative Bank and she was liable to repay the same alongwith interest. It is also not disputed that the petitioner was given 1 Whether the reporters of the local papers may be allowed to see the Judgment? Yes. 2 benefit of one time settlement scheme and she paid the principal sum of Rs. 1,00,018/- and interest of Rs. 19,982/- i.e. total amount of Rs. 1,20,000/- on 1.9.2003. Admittedly this amount was paid in full and final settlement in the year, 2003. 3. The case of the bank is that the Manager of the Bank had no authority to enter into the one time settlement and such settlement could only have been made with the prior approval of the Board of Directors, as per the terms of the Scheme. On this basis a further amount of Rs. 88,128/- as interest was claimed from the petitioner and arbitration proceedings were initiated. On 27.12.2005 the Arbitrator after making reference to the facts observed as follows:- “Since, as per record of the bank there is no amount recoverable from the Respondent, the case is not to be decided under arbitration. The bank authorities are directed to re-work their case and if the case has been wrongly decided under OTS, responsibility of the concerned be fixed and arbitration reference withdrawn. The next date for hearing is fixed for 30.1.2006. Respondent not to be summoned. Announced Sd/- 27/12/05” A bare perusal of the aforesaid order shows that the Arbitrator had virtually rejected the case of the bank, in so far as the petitioner is concerned and had come to the conclusion that if the bank had to recover any further amount if shoulf fix the 3 responsibility of the concerned official and the arbitration reference was to be withdrawn. 4. The case was fixed on 30.1.2006 and it was specifically ordered that the respondent was not to be summoned for the said date. Thereafter as per the order sheet, the case was taken up on 3.2.2006, when it was noted that the respondent had failed to appear and next date of 8.3.2006 was fixed. The petitioner did not appear and on 6.5.2006 an exparte order was passed directing the petitioner to pay Rs. 88,128/- plus Rs. 4,406/- as costs. 5. The moot question which arising is that once the order dated 27.12.2005 had been passed, whether the arbitrator had any jurisdiction to again pass any order against the petitioner in the arbitration proceedings? In my view vide order dated 27.12.2005, the Arbitrator had decided the arbitration proceedings in favour of the petitioner and had clearly held that arbitration proceedings were to be withdrawn as far as the petitioner was concerned. Thereafter without there being any application for review or any specific prayer in this behalf, I can not understand on what basis the arbitration proceedings qua the petitioner were reopened. 6. It has been urged by Sh. R.S. Gautam, learned counsel for the bank that the impugned award was passed in the year, 2006, the petition is highly belated and further that the 4 petitioner has an alternative remedy of appeal. As far as limitation is concerned, in a case of an ex parte order, that too, where the Arbitrator had first ordered that the respondent (petitioner herein) was not required to be present in future, limitation would start only from the date of knowledge and not from the date of order. As far as the second plea is concerned, in my considered opinion, the second order of the Arbitrator is totally without jurisdiction, since he had become functus officio once he held that the arbitration proceedings against the respondent were to be withdrawn and liability fixed on someone else. The award being without jurisdiction, this Court is bound to interfere in the proceedings under Article 227 of the Constitution of India. 4. In view of the aforesaid discussion, the petition is allowed and the award dated 6.5.2006 is quashed and set aside. No orders as to costs. (Deepak Gupta) Judge November, 16, 2010 (KRS)