THE RADIANT WOOD WORKERS PRODUCTION-CUM-SALE COOPERATIVE INDUSTRIAL SOCIETY LTD. Vs. THE KANGRA CENTRAL CO-OPERATIVE BANK LTD. AND ORS.

JUDGEMENT

(1.) Both these writ petitions are between the same parties and involved similar questions of facts and law, as such, these are being disposed of by a common judgment. In C.W.P. No. 64 of 1993 the Petitioner society has prayed for quashing the arbitration proceedings which were initiated at the instance of the Respondent bank and are pending before the Assistant Registrar, Co -operative Societies, Dharamshala. In C.W.P. No. 271 of 1994 the Petitioner society has challenged order dated 16.12.1993(Annexure P -5) passed by the Additional Registrar, Co -operative Societies, Dharamshala in a revision petition pending before him against the order dated 30.9.1993 dismissing their appeal as time barred against the exparte award dated 25.3.1990 holding the Respondent bank liable to pay to the Petitioner society an amount of Rs. 51,361.72 on account of loss of goods pledged and further a sum of Rs. 45,000/ - as surcharge besides arbitration cost and interest. The Petitioner society has also prayed for quashing the proceedings of revision pending before the Additional Registrar Co -operative Societies and declaration that award dated 25.3.1990 has become final between the parties and the Respondent bank is liable to pay the award amount in execution thereof.

(2.) The facts in brief emerging from the pleadings are that the Petitioner is a co -operative society. It is a member of the Respondent co -operative bank, which had granted it cash credit limit. A dispute arose in respect of the recovery of amount of cash credit limit, which at the instance of the Petitioner society was referred to the arbitration of Shri L.D. Thakur, the then Inspector, Co -operative Societies. On receiving summons the Respondent bank preferred an appeal to the Registrar, Co -operative Societies for quashing the appointment of Shri L.D. Thakur as Arbitrator on the ground that he was not competent to arbitrate the dispute between the Petitioner society which is a primary co -operative society and the Respondent co -operative bank which is a secondary co -operative society. According to the Respondent bank the competent authority to decide the dispute between it and the Petitioner society is the Assistant Registrar, Co -operative Societies, as provided under Rule 89 of the H.P. Co -operative Societies Rules, 1971(hereinafter called the Rules). Interim orders staying further proceedings before the Arbitrator were not passed, with the result the Arbitrator proceeded with the arbitration, though the Respondent bank had brought to his notice that it had challenged his jurisdiction before the Registrar, Co -operative Societies. The appeal of the Respondent bank was not decided and the Arbitrator held the proceedings and gave the award exparte on 25.3.1990, as the Respondent bank failed to appear before him. By this award, which is on record as Annexure P -3 to C.W.P. No. 64 of 1993, the Respondent bank is liable to pay an amount of Rs. 51,361.72 to the Petitioner society as loss of the pledged goods due to its negligence and also amount of Rs. 45,000/ - as surcharge/compensation besides Rs. 2,000/ - as arbitration cost and interest @ 18% p.a. from the date of award till the date of payment of principal amount of Rs. 51,361.72.

(3.) Thereafter, at the instance of the Respondent bank the dispute regarding recovery of its dues against the Petitioner society was referred to the arbitration of Respondent No. 4 Shri Jai Kishan (Arbitrator), Deputy Registrar, Co -operative Societies(Retd.) by order dated 17.4.1990 passed by the Additional Registrar, Co -operative Societies, Dharamshala. On receipt of summons from the said Arbitrator, the Petitioner society felt aggrieved and has filed C.W.P. No. 64 of 1993 for quashing the arbitration proceedings before him on the ground that the earlier arbitration award dated 25.3.1990 has become final between the parties. When the writ petition came up for admission and orders before this Court on 15.1.1993, further proceedings before Respondent No. 4 Shri Jai Kishan (Arbitrator), Deputy Registrar Co -operative Societies(Retd.), Dharamshala have been stayed.