SWARAN LAL Vs. STATE OF PUNJAB

JUDGEMENT

(1.) Petitioner had been working as Salesman with the Chogawan Cooperative Agriculture Service Society Ltd. Chogawan Tehsil Ajnala, District Amritsar (for short the society). In February 1986 the stocks of fertilizer and pesticides of the society were physically verified and it was found that the stocks valuing Rs. 1,87,865/- were short. A criminal case was registered against the petitioner and Palwinder Singh respondent under Sections 406/408 read with Section 120-B of the Indian Penal Code. They were both tried.by the Sub Divisional Judicial Magistrate, Ajnala who by his judgment dated 24.12.1993 found both of them guilty of the offence under Section 408 of the Indian Penal Code. However, when the loss was detected, the society by its resolution dated 14.2.1986 prepared an arbitration case against the petitioner under Section 55 of the Punjab Cooperative Societies Act (hereinafter called the Act) and referred the same for adjudication to an Arbitrator. The Deputy Registrar, Cooperative Societies, Amritsar was appointed the Arbitrator. Petitioner moved an application before the Arbitrator for impleading Palwinder Singh respondent as a party to the reference on the ground that he (Palwinder Singh) was responsible for the loss as he was the Secretary of the society at the relevant time. The application was rejected by the Arbitrator and the society filed an appeal against the order before the Joint Registrar, Cooperative Societies, Jalandhar. The case was remanded to the Arbitrator with a direction that if Palwinder Singh was a necessary party he should be impleaded as a party to the reference. Thereafter, Palwinder Singh was impleaded as a party. In the meantime, the society passed a resolution dated 13.9.1990 resolving to impiead Palwinder Singh as a party to the reference. It was observed in the resolution that a criminal case pending in which both the petitioner and Palwinder Singh were parties and, therefore, it was necessary that Palwinder Singh should also be impleaded as party to the reference. On a consideration of the oral and documentary evidence led by the parties, the Arbitrator as per his award dated 2.7.1993 found both the petitioner and Pahvinder Singh equally responsible for the loss caused to the society. They were directed to pay the principal amount of Rs. 1,87,865/- together with interest and costs thereon. It was further ordered that if the amount was not paid within one month from the date of award the society would be entitled to claim interest at the rate of 17%. Feeling aggrieved by this award both Palwinder Singh and the petitioner filed appeals under Section 68 of the Act which were heard together by the Joint Registrar, Cooperative Societies, Jalandhar who by his order dated 30.12.1994 reversed the award and held that Palwinder Singh alone was responsible for the loss caused to the society and that he alone had to make good the same. Pawinder Singh then filed a revision petition under Section 69 of the Act against the order of the Joint Registrar which was heard by the Joint Secretary Cooperative (Appeals), Punjab, Chandigarh exercising the powers of the State Government. The revision petition was allowed on 13.3.1997 and the orders impugned therein including the award of the Arbitrator were set aside and it was held that Palwinder Singh could not be impleaded as a party by the Arbitrator and, therefore, his liability could be determined in the present proceedings. The arbitration award was also set aside. The petitioner was held liable for the loss suffered by the society and Palwinder Singh respondent was exonerated. It is against this order that the present petition has been filed under Article 226 of the Constitution.

(2.) A perusal of the impugned order passed by the Joint Secretary, Cooperative reveals that the only ground on which Palwinder Singh has been exonerated is that he could not be impleaded as a party by the Arbitrator and, therefore, his liability could not be determined in the present proceedings. It is true that an Arbitrator himself has no power to implead parties to the reference but in the instant case the society had passed a resolution on 13.9.1990 raising a dispute against the petitioner and Palwinder Singh and it was specifically observed therein that Palwinder Singh respondent be impleaded as a party in the reference which" was then pending before the Deputy Registrar. Palwinder Singh was, therefore, made a party to the reference by the society which power the society admittedly had. In this view to the matter the impugned order of the State Government cannot be sustained. We have also perused the order dated 30.12.1994 passed by the Joint Registrar, Cooperative Societies, Jalandhar whereby Palwinder Singh respondent who was Secretary of the society at the relevant time has been solely held responsible for the loss caused to the society. We are unable to uphold this order either because the petitioner admittedly was the Salesman at the relevant time when the stocks of fertilizer and pesticides were found to be missing. The Deputy Registrar in his award has given cogent reasons for holding both the petitioner and Palwinder Singh equally responsible for the loss. We therefore, set aside the order dated 30.12.1994 passed by the Joint Registrar and uphold the award dated 2.7.1993 passed by the Arbitrator.

(3.) In the result the writ petition is allowed and the orders dated 13.3.1997 and 30.12.1994 (Annexure P-6 and P-5 respectively with the writ petition) quashed and the award of the Arbitrator dated 2.7.1993 holding both of them responsible upheld.