IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No. 18803 of 2006 DATE OF DECISION : 04.11.2008 Rashpal Singh .... PETITIONER Versus The Joint Registrar, Cooperative Societies, Jalandhar Division, Jalandhar and others ..... RESPONDENTS CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE JASWANT SINGH Present: Mr. D.V. Sharma, Senior Advocate, with Mr. Harit Sharma, Advocate, for the petitioner. Mr. N.D.S. Mann, Addl. A.G., Punjab, for respondents No.1 to 3. Respondents No.4 to 8 and 10 already proceeded ex-parte vide order dated 2.7.2007. Respondent No.9 deleted vide order dated 22.1.2008. * * * SATISH KUMAR MITTAL , J. The petitioner, who was working as Secretary of the Lakhan Kalan Cooperative Agricultural Service Society Limited, Lakhan Kalan, Tehsil and District Kapurthala – respondent No.4 (hereinafter referred to as `the respondent Society') has filed this petition under Articles 226/227 of the Constitution of India for quashing the award dated 29.7.2004 (Annexure CWP No. 18803 of 2006 -2- P-1) passed by the Arbitrator (Inspector, Co-operative Societies, Kheeranwali), whereby the claim of the respondent Society for recovery of an amount of Rs. 30,645/- was accepted to the extent of Rs. 28,105/- (Rs.9,500/- as principal, Rs. 18,335/- as interest upto 28.2.2001 and Rs.250/- as costs) and accordingly, the Award was passed with pendente lite and future interest at the rate of 17% per annum. In the Award, it was further ordered that if the arbitral amount is not recovered from the petitioner, then the said amount be recovered from the other ex-committee members of the Managing Committee in equal shares; the order dated 8.7.2005 (Annexure P-2), passed by the Assistant Registrar, Cooperative Societies, Kapurthala (exercising the powers of the Registrar), whereby the appeal filed by the petitioner and one Surinder Pal Singh, Ex-Vice President of the respondent Society, under Section 68 of the Punjab Cooperative Societies Act, 1961 (hereinafter referred to as `the Act') was dismissed and the aforesaid Award was upheld; as well as the order dated 7.6.2006 (Annexure P-5), passed by the Joint registrar, Cooperative Societies, Jalandhar Division, Jalandhar, whereby the revision under Section 69 of the Act, filed by the petitioner only, has been held to be not maintainable, as the same was to be filed before the Government. We have the learned counsel for the parties. Learned counsel for the petitioner submits that the revision petition filed by the petitioner before the Joint Registrar, Cooperative Societies, against the order passed by the Assistant Registrar, Cooperative CWP No. 18803 of 2006 -3- Societies in appeal under Section 68 (2) (e) of the Act, was maintainable and the Joint Registrar has committed illegality, while dismissing the revision petition being not maintainable, on the ground that against the order passed by the Assistant Registrar, exercising the powers of the Registrar, the revision petition is maintainable before the Government. In support of his submission, learned counsel for the petitioner has relied upon a decision of this Court in Kamal Pal v. The Additional Registrar (I) Cooperative Societies, Punjab and others, 2001 (2) PLJ 454, wherein it has been held that if against the Award, an appeal has been heard and decided by the Assistant Registrar, then the revision before the Registrar/Additional Registrar is maintainable and not before the Government. Without going into this controversy, with the consent of learned counsel for the petitioner, we have heard the counsel for the parties on the merits of the case, as in our opinion, if the matter is remanded either to the Joint Registrar or to the Government to decide the revision, it will un-necessary delay the matter. Learned counsel for the petitioner submits that the respondent Society sought the arbitration reference for the aforesaid amount after 12 years, therefore, the same should not have been accepted. He further submits that the petitioner had withdrawn Rs. 9,500/- on three different occasions to make payment of salary to the employees of the respondent Society and also to incur the expenses of the counsel fee etc., but this fact was not considered by the Arbitrator and the Appellate Authority and both the authorities accepted the claim of the respondent Society, while CWP No. 18803 of 2006 -4- observing that while withdrawing the said amount, the petitioner did not obtain approval from the competent authority and the expenditure of the said amount was incurred without any authority. In the last, learned counsel for the petitioner submits that the pendente lite and future interest awarded at the rate of 17% per annum is highly excessive and arbitrary, therefore, the impugned Award, which has been affirmed in appeal, is liable to be set aside. After hearing learned counsel for the parties, we do not find any merit in the aforesaid submissions, except the submission with regard to the pendente lite and future interest. It is undisputed fact that on 3 different occasions, the petitioner had withdrawn an amount of Rs. 9,500/- from the State Bank account of the respondent Society. In the record of the respondent Society, there is no detail that under what authority the above said amount had been withdrawn and where it was spent. The petitioner did not give any account of the said amount. Notices were duly served upon the petitioner and the other members, but only Surinder Pal Singh and Piara Singh came present. In spite of several opportunities, they did not plead their case and led no evidence. As far as the petitioner is concerned, in spite of having been duly served, he did not appear. Accordingly, the Arbitrator passed the Award dated 29.7.2004, while observing as under : “As per the record of the Society, Sh. Rachhpal Singh son of Ladha Singh withdrew Rs. 6000/-on 3.10.89, Rs. 1,050/- CWP No. 18803 of 2006 -5- on 9.11.1989 and Rs. 2,450/- on 24.11.1989 from the State Bank account of the Society which was with the C.B. Wadala Kalan. All the above mentioned amounts are outstanding against Rachhpal Singh son of Ladha Singh as advance in the record of the Society. There is no detail in the record of the Society that under what authority, the above noted amount had been withdrawn, what is the aim behind it, and where this amount was to be spent and to whom the Society has given the authority to withdraw the amount. As per the available record the above said amount, which was withdrawn on different dates from the account of the Society, there is no record that why this amount was withdrawn and where this amount was to be spent. Sh. Rachhpal Singh had withdrawn this amount in an illegal manner and used for his personal use and thus embezzled the same. As per the statement of the present Secretary of the Society, because of groupism in the Society Sh. Rachhpal Singh withdrew this amount in illegal manner from the Bank and the authority to withdraw the amount and the aim where this amount was to be spent, no record is available in the Society. Sh. Nirmal Singh, Secretary of the Society stated that when this fact came to his knowledge that Sh. Rachhpal Singh has withdrawn the amount then the Secretary of the Society showed the amount withdrawn by Rachhpal Singh from the Bank against his name as advance. There is no record in the Society about the authority and aim to withdraw this amount. Sh. Rachhpal Singh intentionally did not present in the court nor he produced any evidence. From this it is clear that he does not want to say any thing in this connection. Therefore, after considering the complete case, I came to the conclusion that the respondents have withdrawn this CWP No. 18803 of 2006 -6- amount. There should be some proof regarding the authority to withdraw and spend the amount. It is clear from this that all these office bearers collectively or Sh. Rachhpal Singh severally withdrew the amount and used for their personal use and embezzled the same. After issuing repeated notices they are not ready to say any thing and do not want to make any statement. Thus it is clear that Sh. Rachhpal Singh has embezzled this amount. Sh. Rachhpal Singh was not even a member of the Managing Committee at that time.” Even before the Appellate Authority, the petitioner could not show any proof that the aforesaid amount was withdrawn by him with prior approval from the competent authority for spending the said amount and the amount was actually spent for the cause of the respondent Society. Before this Court also, except the oral statement of the petitioner that he had withdrawn the said amount for payment of salary to the employees and to incur the expenses of the counsel fee etc., there is no proof that the said amount was withdrawn for that purpose with the prior approval of the competent authority and was actually spent for the cause of the respondent Society. Therefore, in view of this, we do not find any ground to interfere in the finding of fact, recorded by the Arbitrator, as confirmed by the Appellate Authority. As far as the pendente lite and future interest is concerned, we are of the opinion that in the facts and circumstances of the case and in view of the provision of section 34 of the Civil Procedure Code, the awarding of interest at the rate of 17% per annum on the awarded amount is excessive CWP No. 18803 of 2006 -7- and it should have been 6% per annum. In view of the above, with the modification in the Award dated 29.7.2004 (Annexure P-1) to the extent that on the arbitral amount, the petitioner shall pay pendente lite and future interest at the rate of 6% per annum, instead of 17% per annum, the instant writ petition is dismissed. ( SATISH KUMAR MITTAL ) JUDGE November 04, 2008 ( JASWANT SINGH ) ndj JUDGE