ANIL JETLI vs SUPERINTENDING ENGINEER CIVIL CIRCLE PWD HARIDWAR

Sudhanshu Dhulia, J

The petitioner before this Court stood guarantor to a loan taken by her husband and two other persons, namely, Chander Singh Kanyal and Smt.

Indira Deopa, respondent nos. 6 & 7 respectively. The loan amount was admittedly not paid and thereafter the bank being a cooperative bank initiated

recovery proceedings under the provisions of Sections 70 and 71 of the Uttaranchal Cooperative Societies Act, 2003.Â

Sections 70 and 71 of the Uttaranchal Cooperative Societies Act, 2003 read as under.Â

Dispute which may be referred to arbitration - (1) Notwithstanding anything contained in any law for the time being I force, if any dispute relating

to the constitution, management or the business of a co -operative society other than a dispute regarding disciplinary action taken against a paid

servant of a society arises â€"Â

(a) among members, past members and person claiming through members, past members and deceased members; orÂ

(b) between a member, past member or any person claiming through a member, past member or deceased member, and the society, its Committee of

Management or any officer, agent or employee of the society, including any past officer, agent or employee; orÂ

(c) between the society or its committee and any past committee, any officer, agent or employee or any past officer, past agent or past employee or

the nominee, heir or legal representative of any deceased office, deceased agent or deceased employee of the society; orÂ

(d) between aco -operative society and any other co -operative society or societies:Â

Such dispute shall be referred to the Registrar for action in accordance with the provisions of this Act and the rules and no court shall have jurisdiction

to entertain any suit or other proceeding in respect of any such dispute:Â

Provided that a dispute relating to an election under the provisions of this Act or rules made thereunder shall not be referred to the Registrar until after

the declaration of the result of such election.Â

(2) For the purpose of sub -section (1), the following shall be deemed to be included in dispute relating to the constitution, management or the business

of a co -operative society, namely

(a) claims for amounts due when a demand for payment is made and is either refused or not complied with whether such claims are admitted or not

by the opposite party;Â

(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due

to it from the principal debtor as a result of the default of the principal debtor or whether such debt or demand is admitted or not;Â

(c) a claim by a society for any loss caused to it by a member, officer, agent, or employee including past or deceased member, officer, agent, or

employee, whether individually or collectively and whether such loss be admitted or not; andÂ

(d) all matters relating to the objects of the society mentioned in the bye-laws as also those relating to the election of office bearers.Â

(3) If any question arises whether a dispute referred to the Registrar under this section is a dispute relating to the constitution, management or the

business of a co -operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court.""Â

Reference of dispute to arbitration :- (1) On receipt of a reference under sub-section (1) of Section 70, the Registrar may, subject to the provisions

of the rules, if any â€

(a) decide the dispute himself, or

(b) refer it for decision to an arbitrator appointed by him; or

(c) refer it, if the parties so request in writing, for decision to a board of arbitrators consisting of the persons to be appointed in the prescribed manner.

(2) The Registrar, for reasons to be recorded, withdraw any reference made under clause (b) or (c) of sub-section (1) and refer it to another

arbitrator or board of arbitrators or decide it himself.

(3) The Registrar, the arbitrator or the board of arbitrators, to whom a dispute is referred for decision under this section may, pending the decision of

the dispute make such interlocutory order including attachment of property as he or they may deem necessary in the interest of justice.

(4) The decision given by the Registrar, the arbitrator or the board of arbitrators under this Section shall hereinafter be termed as award.

(5) The procedure to be followed by the Registrar, the arbitrator or the board of arbitrators in deciding and making an award under this section shall be

as may be prescribed.

(6) The Registrar, arbitrator, or the Board of Arbitrators shall have power to summon & enforce attendance of witnesses including the parties

interested or any of them & to compel them to give evidence on oath, affirmation or affidavit & to compel the production of documents by the same

means & as far as possible in the same manner as is provided in the case of a civil court by the code of civil procedure 1908.

Provided that the officer who has been directly involved in the matter, shall not be appointed as arbitrator or a member of the board of arbitrators.â€​

Under the said provisions, the award was given by the Registrar, Cooperative Societies, Uttarakhand in favour of the bank for recovery of Rs.

29,73,713.65 (Rupees Twenty Nine Lakh Seventy Three Thousand Seven Hundred and Thirteen and Paise Sixty Five only) from the borrower.

However, it was clearly stated that first the efforts be made by the bank to recover the amount from principal borrowers, failing which the same can

be recovered from the guarantor.Â

It is again an admitted case that the property which has been mortgaged is a residential house of the guarantor.Â

Earlier a writ petition was filed by the petitioner being Writ Petition (M/S) No. 2809 of 2015 praying that the directions as given in the Award dated

10.02.2015 to first make efforts to recover the loan from the principal borrowers have not been followed and straightway the recovery is being made

from the guarantor. The writ petition was disposed by this Court vide its order dated 06.11.2015 with the following directions:

“In my considered opinion, Bank cannot go behind the award and is bound to make recovery as per the direction issued in the Award. Therefore,

present petition stands disposed of with the direction that Bank shall recover the amount from the borrowers at the first stage and if, after recovering

the amount from the borrowers any amount remains outstanding, that outstanding balance amount can be recovered from the guarantor.â€​

Now all efforts have been made by the bank to recover the amount from the principal borrowers, inasmuch one of the principal borrowers i.e.

husband of the petitioner was also sent to jail for 15 days, but despite this the amount could not be recovered. Now the only option left with the bank is

to auction the property mortgaged by the petitioner and if this is done, this Court finds no illegality in that.

In view therefore, writ petition fails and is hereby dismissed.Â