GANTA NOBLE Vs. V PAUL HIMANSU

JUDGEMENT

(1.) THIS application has been moved seeking intervention for constituting the Arbitral tribunal for resolving the disputes that have cropped up between the parties. The 6th applicant is a society, which is registered under the provisions of the Andhra Pradesh societies Registration Act. It is asserted that the 1st applicant was the Secretary-cum-Correspondent of the said society. As per bye-law No. 5 of the 6th respondent society, the Executive Body shall consist of nine members and as per Bye-law No. 6, the general Body of the society shall meet once in every year in the month of June to elect the Executive Body, though the General Body can be convened at any time by the executive Body giving ten days notice therefore. The Executive Body was required to meet once in a month or at such earlier point of time. The quoram for the meeting of the General Body and the Executive Body has been fixed as 2/3rd of members. It is represented that the 6th applicant society has been started with the aim and object of promoting educational institutions for imparting education in English and Telugu media, for securing and promoting high educational standards amongst the religious minority and the weaker sections. The duties and responsibilities of the members of the executive Body have all been spelt out in detail. The affairs of the society were conducted very smoothly and without any hitch or hindrance till the year 2003. The 6th applicant society has been maintaining its bank account with the State Bank of India, surya Bagh Extension counter, visakhapatnam. However, it is alleged that the respondents fabricated a letter of resignation dated 22-5-2003, said to have been submitted by the 2nd applicant herein and that on 22-6-2003, the 1st applicant is said to have submitted his resignation as secretary-cum-Correspondent of the society and in his place the 1st respondent was said to have been elected while his wife the 2nd respondent is said to have been elected as the Treasurer at the meeting of the society held on 29-6-2003 and on the strength and basis of these fabricated documents, the respondents have started operating the bank accounts and started exercising extensive control over the affairs of the 6th applicant society. The applicants apart from disputing that they have ever resigned to the respective elected offices of the Executive body of the society, have also disputed the fact that the meeting was either called or held on 29-6-2003.

(2.) IN those set of circumstances, the 1st applicant filed an Arbitration O. P. No. 426 of 2003 before the District Court, Vizianagaram and initially the District Court has granted an interim injunction restraining the respondents herein from functioning as members of the Executive Body. Another o. P. No. 669 of 2003 has been instituted under Section 11 of the Arbitration and conciliation Act before the District Court, vizianagaram for appointment of an arbitrator. The District Court by its order dated 19-1-2004 appointed Sri J. Janaki Rama rao, advocate as Arbitrator to adjudicate the disputes amongst the parties. The respondents have also instituted Arbitration o. P. No. 668 of 2003 for appointment of a receiver for taking care of the affairs of the society pending the arbitration proceedings. In the said O. P Sri J. Janaki Rama Rao, advocate has been appointed as the receiver for managing the affairs of the society. The matter was then carried in appeal by way of G. M. A. Nos. 564 and 565 of 2004 before this court. It was pointed out by this court that the District Court ought to have appointed two separate persons as a receiver and as an Arbitrator instead of appointing the same person. Hence, the district Court on 26-2-2005 appointed sri D. V. V. Sastry as a Receiver. Initially sri JJanaki Rama Rao, the Arbitrator issued notices to the parties after entering upon the reference. Ultimately, the said Arbitrator has made a request to the District Court to discharge him, as he is not in a position to discharge the duties as an Arbitrator due to his pre-occupation. The District Court after issuing notices to all the parties on 17-1-2005 appointed Sri Suryanarayana, a retired District and Sessions Judge, visakhapatnam as Arbitrator. The said arbitrator entered upon the reference and the 2nd applicant herein has filed a detailed statement of claim before the said Arbitrator. The respondents, without filing their statement of defence filed an application under Section 16 (2) of the Act, which was dismissed by the Arbitrator. The 2nd respondent herein instituted W. P. No. 11678 of 2003 before this court calling in question the order passed on 19-1-2004 in Arbitration o. P. No. 669 of 2003. That writ petition came to be dismissed by this court on 14-11-2005. However, the Arbitrator appointed by the district Court replacing Sri J. Janaki Rama rao had moved out of Visakhapatnam as he has preferred to settle down at Bangalore and hence he requested to be discharged as an Arbitrator. Hence, the District Court, vizianagaram passed an order on 13-7-2006 appointing Sri M. V. S. R. Sarma, Retired district and Sessions Judge, Visakhapatnam as the substitute Arbitrator. That order was called in question by the respondent by instituting C. R. P. No. 4460 of 2006 before this court. The court passed an order on 26-10-2006 declining to interefere with the order passed by the District Court on 13-7-2006 appointing Sri M. V. S. R. Sarma as the Arbitrator. In the mean time, the Arbitrator has issued notices to both sides. On 10-9-2006, the respondents entered their appearance. Memos were filed under sections 19 and 24 of the Act before the arbitrator. The learned Arbitrator directed the respondents to file their statement of defence so as to enable appropriate orders to be passed on the said application. The respondents kept on filing one objection memo or the without filing the detailed statement of defence. At that stage, the respondents have sent up telegraphic notices to the Arbitrator attributing motives for the claimants and the Arbitrator are related to each other and hence the respondents apprehend that no justice would be rendered to their cause at the hands of the Arbitrator. Pained by the baseless allegations leveled against him by the respondents, the learned arbitrator while setting forth the record straight, has expressed his inclination not to continue with the proceedings and hence he returned the records to the District Court seeking to be discharged. Since no substitute Arbitrator has been appointed replacing Sri M. V. S. R. Sarma, the applicants moved this court by instituting A. A. No. 26 of 2007. That application has been dismissed by this court setting out that the District judge dies not have the necessary power to appoint an Arbitrator at the first instance and further the applicants have not complied with the procedure prescribed for appointment or replacement of an Arbitrator. Therefore, the applicants have issued a notice dated 6-3-2008 to the respondents seeking their consent for appointment of Sri K. Sanjeeva rao Naidu, a Retired District and Sessions judge as Arbitrator. Though the said notice has been received, the respondents have not replied. Hence, the present application has been moved.

(3.) THE respondents have filed their counter in the above matter. The respondents have traced out the relationship between the 2nd respondent and the applicant and the others. It was also further pointed out that it is only the 2nd respondent who has established the society in memory of her late mother and it is the 2nd respondent who has acquired all the assets that are needed for running an educational institution and that it is the 2nd respondent who is solely responsible for raising the 1st applicant in life and society and that needless controversies are being created by the 1st applicant out of his selfishness. All the allegations leveled by the applicants are motivated and they are not tenable. In fact there is no arbitration agreement amongst the parties for securing the disputes resolved through the mechanism of arbitration and that the applicants have not produced any material to show hat they are the subsisting members of the society and hence they cannot embark upon any enquiry so far as the affairs of the society are concerned. It is further pointed out that the cause of action having arisen in the year 2003, the present application instituted in 2008 is barred by limitation and hence it cannot be entertained at all. Arbitration O. P. No. 669 of 2003 has been dismissed as withdrawn without obtaining prior permission for instituting the above Arbitration Application and hence this application should be dismissed on that ground also.