HIGH COURT OF HIMACHAL PRADESH, SHIMLA. CWP No. 1192/2007 Reserved on: March 12, 2009 Date of Decision: April 28, 2009 H.P. State Civil Supplies Corpn. ……. Petitioner Versus State of H.P. & Ors. …….. Respondents. Coram: The Hon’ble Mr. Justice Sanjay Karol, Judge. Whether approved for reporting? Yes For the petitioner : Mr. Tarlok Chauhan, Advocate. For respondents 1 to 3 : Mr. R. K. Sharma, Sr. Addl.A.G. with Mr. Anil Jaswal, Dy. A. G.. For respondent No.4: Mr. Neeraj Gupta, Advocate Sanjay Karol, J. Petitioner, a company registered under the Companies Act has assailed the award dated 30.4.2002 passed by the Deputy Registrar Coop. Societies, Shimla in Arbitration Dispute No. 178/92 titled as The H.P. State Cooperative vs. Managing Director, Food & Supplies Corpn. as also the appellate order dated 14.11.2005 passed by the Additional Secretary (Coop.) to the Govt. of Himachal Pradesh in Case No. 48/2002 titled as H.P. State Civil Supplies Corpn. vs. H.P. State Marketing and Consumer Cooperative Federation Ltd. upholding the aforesaid award. Petitioner and M/s. H.P. State Marketing and Consumer Cooperative Federation Ltd. (hereinafter referred to as ‘Himfed’) entered into an agreement dated 6.6.1989. 2 Under the said agreement, all disputes or differences arising out of the contract were to be referred to the Arbitration of Commissioner- cum-Secretary (Food & Supplies), Govt. of Himachal Pradesh. Certain disputes having arisen between the parties, the respondent-Himfed approached the Registrar, Cooperative Societies for adjudication of the same under the provisions of the Himachal Pradesh Cooperative Societies Act, 1968 ((hereinafter referred to as ‘Societies Act’). Himfed is a Cooperative Society under the Societies Act and the petitioner is a company incorporated under the Companies Act. The dispute was adjudicated by the Registrar (Cooperative Societies) and in terms of impugned award dated 30.4.2002, a sum of Rs.68,635.60 paise was awarded in favour of respondent-Himfed. Petitioner preferred an appeal under Section 93 of the Societies Act, inter alia on the ground that the dispute could not have been adjudicated under the provisions of the Societies Act and hence, the Arbitrator had no jurisdiction to adjudicate the same. Vide orders dated 14.11.2005, the Additional Secretary (Coop.), while rejecting the petitioner’s contention on the issue of maintainability of the claims on the ground of jurisdiction modified the award and awarded a sum of Rs.22,212.60 paise along with interest @ 12% in favour of Himfed. I have heard the learned counsel for the parties and also perused the record. It is true, as it appears from the record that before the Arbitrator the petitioner did not raise the objection with regard to the jurisdiction. But however, if it is found that the dispute could not have been adjudicated under the provisions of the Societies Act, then it cannot be said that the 3 petitioner could have acquiesced and submitted to the jurisdiction of the Arbitrator appointed under the Societies Act. It would be open to take up the issue of lack of inherent jurisdiction even in the present proceedings. Even in collateral proceedings or at the time of execution the issue can be raised. Sections 72 & 73 of the Societies Act are reproduced as under:- “72. Dispute which may be referred to arbitration:- (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a co-operative society arises:- (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, heirs or legal representatives of any deceased officer, deceased agent, or deceased employee of the society; (2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management, or the business of a co-operative society, namely; (c) any dispute arising in connection with the election of any officer of the society. 73. Reference of disputes to arbitration:- (1) The Registrar may, on receipt of the reference of a dispute under Section 72: a) decide the dispute himself; or b) transfer it for disposal to any person who has been invested by the State Government with powers in that behalf; or c) refer it for disposal to an arbitrator. (4) The Registrar or the arbitrator to whom the dispute is referred, after giving the parties a reasonable opportunity of 4 being heard, shall give the decision or award as the case may be. “ Petitioner is neither a member of Himfed nor a Cooperative Society. Nature of dispute which can be referred to arbitration arises inter se amongst members and the society, its employees, agents or office bearers. It is not a dispute which touches the constitution, management, or the business of a co-operative society as referred to in Section 72 of the Societies Act. It is not a claim by the Society for a debt or payment due to it from a member/ employee/ nominee/ surety. In the present case, only such of those disputes which are contemplated under the provisions of Section 72 of the Societies Act can be referred to and adjudicated by the Arbitrator appointed under the Societies Act. Therefore, the dispute not falling in the specified category, the arbitrator appointed under the Societies Act had no jurisdiction to decide the same at all. It is not a case where the jurisdictional issue is raised on pecuniary or territorial basis. The Apex Court in Supreme Cooperative Group Housing Society v. H.S. Nag & Associates (P) Ltd. (1996) 9 SCC 492 was dealing with a case where the contractor who had been awarded a construction contract by a Cooperative Society was seeking reference of dispute by invoking Clause 32 of the agreement containing an arbitration Clause, under the Arbitration Act, 1940. The Cooperative Society registered under the Delhi Cooperative Societies Act, 1972, opposed the same on the ground that the dispute was arbitral only under Section 60 of the Societies Act and that the Civil Court had no jurisdiction to decide the same keeping in view the provisions of Section 93 of the said Act and that the suit was not 5 maintainable. The Apex Court repelled the contention on the ground that Section 60 of the Societies Act, which is akin to the provisions of the Act in question, would apply to a dispute among members, past members or persons claiming through them or between them and the Society or the members of the Committee or officers or agents etc. as envisaged in Clauses (a) to (d) of sub Section (1) of Section 60 of the Societies Act. Relying upon its earlier decisions rendered in O.N. Bhatnagar v. Rukibai Narsindas & Ors. (1982) 2 SCC 244 and Deccan Merchants Co-operative Bank Ltd., v. Dalichand Jugraj Jain & Ors. AIR 1969 SC 1320, the Apex Court in Mori nda Coop. Sugar Mills Ltd., v. Morinda Coop. Sugar Mills Workers’ Union (2006) 6 SCC 80, after considering the provisions of Section 55 of the Punjab Cooperative Societies Act, 1961, which is also akin to Section 72 in question, held that the dispute relating to conditions of service of employees of Society cannot be held to be a dispute touching the business of the Society. The Appellate Authority decided the jurisdictional issue by simply stating that “the appellant should have agitated the point of maintainability before lower court in the first instance or at a later stage as well whereas it failed to do so. The appellant always sought time to reconcile the accounts which was granted in ample measure in the lower court but never raised the question of jurisdiction.” The Apex Court in Harshad Chaman Lal Modi vs. DLF Universal Ltd. & Ors. (2005) 7 SCC 791 and Hasham Abbas Sayyed vs. Usman Abbas Sayyed & Ors. (2007) 2 SCC 355 has held that a decree passed by the Court without jurisdiction is nullity and its invalidity could be set-up whenever and wherever it is sought to be withdrawn or relied upon even at the stage of execution and in collateral proceedings. Defect of jurisdiction 6 strikes at the very authority of the Court to pass any decree and the defect cannot be cured even by consent of parties. For the aforesaid reasons, the impugned orders dated 30.4.2002 (Annexure P-3) and dated 14.11.2005 (Annexure P-5) are set-aside. The writ petition is allowed. ( Sanjay Karol ), Judge. April 28, 2009 (rana)