IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P.s No. 2146, 2896, 2904, 2906, 2913, 2917, 2921, 2931, 2933, 2934, 3352, 3386 and 3393 of 2008 DATE OF DECISION : 30.10.2008 Om Parkash .... PETITIONER Versus Joint Registrar (Farming), Cooperative Societies, Punjab, Chandigarh and others ..... RESPONDENTS CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE JASWANT SINGH Present: Mr. Amit Sharma and Mr. H.S. Bedi, Advocates, for the petitioner. Mr. M.S. Sindhu, Addl. A.G., Punjab, for respondents No.1 to 3. Mr. R.K. Sharma, Advocate, for respondent No.4. Mr. S.K. Sharma, Advocate, for respondent No.5 – Avtar Singh (in CWPs No.2146,2904,2906,2913,2917,2931 & 2933 of 2008) Mr. M.S. Bedi, Advocate, for respondent No.5 – HOUSEFED (in CWPs No. 3352, 3386 and 3393 of 2008) * * * SATISH KUMAR MITTAL , J. This order shall dispose of 13 petitions (C.W.P.s No. 2146, 2896, 2904, 2906, 2913, 2917, 2921, 2931, 2933, 2934, 3352, 3386 and CWP No. 2146 of 2008 -2- 3393 of 2008), filed by petitioner Om Parkash against 13 separate Awards and the orders passed in appeal and revision, which were arising from 13 separate cases of arbitration references sought by respondent No.4 - Shri Guru Teg Bahadur Cooperative House Building Society Limited, Mohali (hereinafter referred to as `the respondent Society'). The brief facts of the case are that the petitioner was serving with the Cooperative Department, Punjab, as Junior Assistant and was on deputation to the Punjab State Federation of Cooperative House Building Societies Limited, Mohali (hereinafter referred to as `the HOUSEFED'). At the relevant time, while on deputation with the HOUSEFED, he was given the additional charge of Manager of the respondent Society, as the respondent Society was a member of the HOUSEFED. While functioning and discharging his duties as Manager of the respondent Society, the petitioner embezzled a huge amount by making illegal and frivolous payments to certain persons on account of refund of the earnest money, whereas those persons were not entitled to get any refund of the earnest money from the respondent Society. When the matter was detected during the course of special audit, the respondent Society sought 13 separate arbitration references against the petitioner and Avtar Singh, President of the respondent Society, under Section 55 of the Punjab Cooperative Societies Act, 1961 (hereinafter referred to as `the Act'). The petitioner was summoned by the Arbitrator. In spite of the CWP No. 2146 of 2008 -3- notices issued to the petitioner and said Avtar Singh, they did not appear before the Arbitrator, therefore, they were proceeded against ex-parte and subsequently, on the basis of the evidence produced by the respondent Society, ex-parte Awards dated 1.7.1995 were passed. After a long time, vide order dated 19.3.2004, on appeals filed by the petitioner, the ex-parte Awards dated 1.7.195 were set aside and the matter was remanded back to the Arbitrator for fresh hearing. The respondent Society challenged the above said orders by filing separate revision petitions, which were dismissed on 8.11.2004 and both the parties, who were present before the Revisional Authority, were directed to appear before the Arbitrator (Assistant Registrar, Cooperative Societies, Mohali) on 22.11.2004. In spite of having the knowledge of the remand order, the petitioner and said Avtar Singh did not appear before the Arbitrator. Consequently, the Arbitrator issued notice to the petitioner and said Avtar Singh, but they did not appear. Thereafter, a notice was published in the daily news paper Punjabi Tribune. In spite of that, when the petitioner and said Avtar Singh did not appear, they were proceeded against ex-parte. Finally, the Arbitrator, after hearing the counsel for the respondent Society and taking into consideration the evidence led by the respondent Society, passed the separate Awards dated 11.3.2005, in all the 13 references. On the basis of the evidence, a finding was recorded that the petitioner made the payment to various members/non-members in cash as refund of earnest CWP No. 2146 of 2008 -4- money, though those members/non-members were not entitled to get the refund of earnest money and the petitioner had actually embezzled the said amount. Against the said Awards, the petitioner filed separate appeals before the Deputy Registrar, Cooperative Societies, Fatehgarh Sahib, which was dismissed vide separate orders dated 22.9.2006. Against the said orders, the petitioner filed 13 separate revision petitions before the Joint Registrar (Farming) Cooperative Societies, Punjab, Chandigarh, which have also been dismissed vide orders dated 15.11.2007. Hence, these 13 separate writ petitions have been filed by the petitioner. Learned counsel for the petitioner submits that the arbitration references, raised by the respondent Society against the petitioner under Section 55 of the Act were not maintainable, because under Section 55 of the Act, reference of dispute can only be raised between the Society and its members, any officer, agent or employee or past employee, whereas in the instant cases, the petitioner was not an employee of the respondent Society. He was an employee of the HOUSEFED, though he was having the additional charge of Manager of the respondent Society. In support of his submission, learned counsel has relied upon a decision of this Court in Har Kishan Dalal v. State of Haryana and others, 2004 (4) RSJ 582. Secondly, learned counsel submits that the petitioner was wrongly proceeded against ex-parte by the Arbitrator. While passing the ex-parte Awards, the Arbitrator did not strictly adhere to the provision of Rule 74 of the Punjab CWP No. 2146 of 2008 -5- Cooperative Societies Rules, 1963. In those Rules, there is no provision for publication of notice in the news paper and on the basis of the publication of notice, the petitioner was wrongly proceeded against ex-parte. Thirdly, learned counsel has submitted that the Arbitrator has wrongly passed the Awards only against the petitioner, whereas Avtar Singh, the President of the respondent Society, was also equally liable for the alleged payments. On the other hand, learned counsel for the respondent Society submits that at the relevant time, the petitioner was working as Manager and was discharging duties and functions of the Manager of the respondent Society. As a Manager of the respondent Society, he made frivolous payments to certain members/non-members, who were not entitled to be paid any amount and the said amounts were misappropriated by him. He further submits that in spite of the notices issued, the petitioner did not appear before the Arbitrator and therefore, the ex-parte Awards were passed. On the appeals, filed by the petitioner, the said ex-parte Awards were set aside and the matter was remanded to the Arbitrator with a direction to both the parties to appear before the Arbitrator. But even thereafter, the petitioner did not appear before the Arbitrator and after publication he was proceeded against ex-parte. Thereafter, on the basis of the evidence, produced by the respondent Society, the ex-parte Awards were passed, which have been rightly upheld by the Appellate as well as the Revisional authorities. Learned counsel for the respondent Society has further submitted that as per the findings recorded by the authorities below, CWP No. 2146 of 2008 -6- the money was embezzled by the petitioner by making frivolous payments to various members/non-members/fictitious persons. After hearing counsel for the parties, we do not find any merit in these petitions. Undisputedly, at the relevant time, the petitioner was discharging the duties and functions of Manager of the respondent Society. Though he was working with the HOUSEFED on deputation, but he was given additional charge of Manager of the respondent Society, because the respondent Society is a member society of the HOUSEFED. Once the petitioner was discharging the functions of Manager of the respondent Society, he was taken to be an employee of the respondent Society. Therefore, in our opinion, the respondent Society was very much competent to raise the arbitration dispute under Section 55 of the Act, which provides that if any dispute touching the constitution, management or the business of a cooperative society arises between the Society and its employee or any past employee, such dispute shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute. The dispute between the petitioner and the respondent Society was a dispute touching the management and constitution of the Society. In our opinion, if a dispute arose between a Cooperative Society and a person, who was acting and discharging his duties as Manager of that Society, such dispute is to be referred to the Registrar under Section 55 of the Act and no court shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute. The CWP No. 2146 of 2008 -7- decision of this Court in Hari Kishan Dalal's case (supra) is not applicable to the facts and circumstances of this case, as in that case, it was held that the person against whom reference was sought was a nominee member. In that case, a finding was recorded that there was no material to assume that the said person was a nominee member. As far as the second contention of learned counsel for the petitioner is concerned, we are satisfied that in spite of the due service and in spite of having the knowledge of the pendency of arbitration proceedings, the petitioner deliberately did not appear before the Arbitrator. When, on appeal filed by the petitioner, the matter was remanded and even after the remand order, the petitioner did not appear, no such inference can be drawn that the petitioner was having no knowledge of the arbitration proceedings. In this case, the respondent Society filed revision petitions challenging the orders of remand passed by the appellate authority and when those revision petitions were dismissed, both the parties were directed to appear before the Arbitrator on 22.11.2004. However, the petitioner, in spite of having the knowledge of that date, deliberately did not appear before the Arbitrator. Thereafter, fresh notices were issued and in spite of service, when the petitioner did not appear, notice was got published in the daily news paper, but in spite of that, when the petitioner did not appear, he was proceeded against ex-parte. Merely because there is no provision for publication of notice in the news paper and if that extra caution was taken, it cannot be said that the petitioner was wrongly proceeded against ex-parte. Thus, we CWP No. 2146 of 2008 -8- do not find any substance in this contention of learned counsel for the petitioner. Regarding the third submission, we are of the opinion that a finding of fact has been recorded by the authorities below to the effect that the petitioner, while working as Manager of the respondent Society, had made payments to various members/non-members, who were not entitled to get any refund from the respondent Society. The said finding has been recorded on the basis of the evidence produced by the respondent Society before the Arbitrator. We do not find any ground to interfere in the said finding of fact, in exercise of the writ jurisdiction of this Court. In view of the above, there is no merit in these petitions and the same are, hereby, dismissed. ( SATISH KUMAR MITTAL ) JUDGE October 30, 2008 ( JASWANT SINGH ) ndj JUDGE