KONNAGAR SAMABAYA BANK LTD Vs. NILMONI BANERJEE

JUDGEMENT

(1.) THE application under article 227 of the Constitution has been filed by the petitioner bank which is a society registered under the Bengal Co-operative Societies Act, 1940, which has since been replaced by the West Bengal Co-operative Societies Act, 1970. By the order complained of, the learned Assistant District Judge, Second Court, Hoogly, struck off the written statement filed by the petitioner-bank in Title Suit No. 17 of 1984, on the ground that any objection preferred by the bank under sections 30 and 33 of .the Arbitration Act, 1940, would now be barred by limitation. THE learned Assistant District Judge by the same order had fixed a date for passing an ex parte decree in the suit in terms of Section 17 of the Arbitration Act, 1940.

(2.) OPPOSITE party No. 1, who is the husband of opposite party No. 2, was a member of the Konnagar Samabaya Co-operative Bank Ltd. They had a joint savings account with the said bank. A dispute has arisen between the petitioner bank and opposite parties Nos. 1 and 2 as to whether in fact the opposite parties had deposited in their said savings bank account with the petitioner bank a sum of Rs. 25,000. By consent of parties, the said dispute was purported to be referred to an enquiry committee consisting of three persons, two of whom were selected by the opposite parties and one by the chairman of the bank. Both the petitioner-bank and the opposite parties agreed to abide by the decision of the enquiry committee regarding the dispute as to whether a sum of Rs. 25,000 had been in fact deposited in the savings bank account of opposite parties Nos. 1 and 2. According to the petitioner-bank, its nominee, Kanai Lal Mukherjee, had allegedly withdrawn himself from the said enquiry committee. The two remaining members of the said enquiry committee submitted an award in favour of opposite parties Nos. 1 and 2, inter alia, to the effect that they had really deposited the said sum of Rs. 25,000 in their joint savings bank account with the petitioner-bank. Therefore, the said award was purported to be filed under Section 14 of the Arbitration Act, 1940, in the Court of the Additional District Judge, Second Court, Hoogly, with a prayer for passing a decree in terms of Section 17 of the Arbitration Act, 1940.

(3.) IN England previously in such cases, the party objecting had to wait until an attempt was made to enforce the award and then to attempt or to sue for a declaration that the award was null and void. The said procedure has been described in Russel on Arbitration, at page 389a, as "a most convenient technicality". Since a party who waited until the award was sought to be enforced, risks being told that he should have applied to have it set aside, it being too late by then to do so. IN England since the alteration of the rules of the Supreme Court while the substance of what must be done in such cases remains the same, all the questions can be raised on motion together, vide Russel on Arbitration, twelfth edition, at page 390. It has further been observed that there is some logical solecism in pursuing the statutory remedy to set aside an award under Section 23 of the Act, when ex-hypothesi, nothing exists which the law regards as an award. IN England, this has, however, since 1965, been permitted by the Laws of the Supreme Court, Order 73, Rule 2(3). These observations by Russel on Arbitration may be very cogently applied for upholding the right of the petitioner-bank to challenge the aforesaid award obtained against it by the opposite parties on the ground of want of jurisdiction. At one stage of his submission, Mr. Mukherjee submitted that the petitioner bank having allowed its remedy under sections 30 and 33 of the Arbitration Act to become barred, the court was bound to pass a decree under Section 17 of the Arbitration Act upon the award in favour of the opposite parties. If and when the opposite parties put the decree into execution, the petitioner-bank may object, if .so advised, on the ground of want of jurisdiction of the arbitrators to pass the award. IN our view, the same would be an utterly inconvenient technicality as observed in the passage quoted by us from page 389 of Russel on Arbitration. IN this case, the petitioner-bank's objection is that there is no valid submission, the appointment of the arbitrators was invalid and illegal and the court's jurisdiction to pass a decree under Section 17 of the Arbitration Act upon the award had been totally ousted by the provisions of the West Bengal Co-operative Societies Act. Determination of the said point of want of jurisdiction could involve investigation of facts. IN case there is patent lack of jurisdiction on the part of the learned Assistant District Judge to pass any decree upon the award in terms of Section 17 of the Arbitration Act, this court ought not to allow the proceeding to go on further leaving the petitioner with an opportunity to raise an objection to the validity of the award at the time of the execution or by instituting a separate suit for declaration. If we adopt the said course, the same would lead to prolonging the proceedings which at the end may be adjudged as totally void. If we find that the impugned award and the proceedings of the same under Section 14 of the Arbitration Act are a nullity, it would be an exercise in futility to allow a decree under Section 17 of the Act to be passed upon the said award and at the same time grant leave to the petitioner-bank to challenge the award and the decree passed thereon either at the execution stage or by filing a separate suit. IN exercise of the power under article 227 of the Constitution, this court possesses enough powers to quash proceedings the continuance of which would be an abuse of the process oi Jaw. IN this connection, we may refer to.the case of Hindusthan National Glass and INdustries Mazdoor Union v. S.N. Singh [1982] 86 CWN 9. IN the said reported case, the court upheld the order of the City Civil Court at Calcutta rejecting as not maintainable an application under Section 30 of the Arbitration Act for setting aside an award/recommendation of the Labour Commissioner, West Bengal, regarding remuneration of the piece-rated workers employed by the contractors of M/s. Hindusthan National Glass and INdustries Ltd., Hoogly. It was, inter alia, held that the civil court had no jurisdiction to adjudicate upon or enforce the rights in respect of the said recommendations of the Labour Commissioner in conciliation proceedings under the INdustrial Disputes Act. IN order to set aside the award, a Court must have territorial or pecuniary jurisdiction and be otherwise competent to try the subject-matter of reference. The dispute between the petitioner bank and the opposite parties as to whether the latter had in fact deposited into their savings bank account a sum of Rs. 25,000 certainly would be the subject-matter of a civil litigation and is covered by the expression " dispute " within the meaning of Section 86 of the West Bengal Co-operative Societies' Act, 1973. The expression " dispute " under Section 2(q) of the West Bengal Co-operative Societies Act, 1973, means " any matter capable of being the subject-matter of civil litigation and includes a claim in respect of any sum payable to or by a co-operative society, whether such claim is admitted or not " . The other ingredients of Sub-section (1) of Section 86 of the said Act in the instant case are also fulfilled. The claim of the opposite parties regarding the said sum of Rs. 25,000 is related to the affairs of the petitioner bank which is a co-operative society. Thirdly, opposite party No. 2 was alleged to be a member of the;petitioner-bank and, therefore, the dispute in question was among the parties specified in Clause (b) of Sub-section (1) of Section 86 of the West Bengal Co-operative Societies Act. The dispute relating to the said transaction between the petitioner-bank and the opposite parties would also be covered by Clause (d) of Sub-section (1) of Section 86 of the said Act. Thus, the present dispute between the petitioner-bank and the opposite parties was capable of being referred under Section 86 of the West Bengal Co-operative Societies Act to the Registrar for decision under Section 87 of the said Act. Under Clause (d) of Sub-section (2) of Section 132 of the said Act, no civil or revenue court shall have any jurisdiction in respect of any dispute required under Section 86 of the Act to be referred to the Registrar. Thus, the civil court's jurisdiction has been expressly ousted in respect of the disputes covered by different clauses of Sub-section (1) of Section 86 of the Act. Therefore, learned Additional District Judge, Hopgly, has no jurisdiction to adjudicate the dispute between the parties relating to the said credit entry in the savings bank account of the opposite parties with the petitioner-bank and in respect of which a purported award has been made by some of the members of the enquiry committee/arbitrators.