Dharam Pal vs State of Haryana

I.S. Tiwana, J. (Oral)

As a result of a dispute having been raised by respondent No.4 Cooperative Society, the Assistant Registrar, Cooperative Societies, Yamunanagar (exercising the powers of the Registrar), acting as an arbitrator, passed an award (Annexure P.4) against the petitioner to the tune of Rs. 37840.48. This award of the Arbitrator was challenged by the petitioner before the Government (Deputy Secretary, Cooperation) inter alia on the ground that the Assistant Registrar being an exofficio Director of Respondent No. 4, could not and should not have decided the arbitration case. In a nutshell, the plea was that this arbitrator could not be a judge in his own cause. The Government, however, was not impressed with this contention of the petitioner and vide its order dated May 26, 1975 (Annexure P.5) dismissed the appeal of the petitioner. Now the award Annexure P.4 and the appellate order Annexure P. 5 are again impugned on the same very ground that the arbitrator should not have acted as such on account of his apparent interest in the affairs of respondent No. 4 being exofficio Director of the Society. The sole contention on behalf of the respondents is that the Assistant Registrar, Yamunanagar, had no financial interest in the matter and he was only one of the Directors of the Cooperative Society, respondent No. 4. I do not see any merit in the contention raised on behalf of the respondents. By now it is well laid down that in these matters where the arbitrator or any other authority is supposed to act as a judicial or quasijudicial authority, justice has not only to be done but it must appear to have been done. The Assistant Registrar admittedly being one of the Directors of respondent No. 4, is interested in the affairs of the Society and this fact cannot possibly be ignored. To my mind, he should not have acted as a judge in his own cause. This principle had even been accepted by the Government as early as the year 1965 when instructions to the effect that in cases where the Assistant Registrar happens to be one of the Directors of a Cooperative Society should not act as arbitrator in a dispute between that Society and any other individual, had been issued. In spite of these instructions, the Assistant Registrar, for the reasons best known to him, chose to act as the arbitrator and passed the impugned order.

For the reasons recorded above I quash Annexure P.4 the award as well as the appellate order, Annexure P.5. As a consequence of this I send the case back to the Registrar, Cooperative Societies, Haryana for either deciding it himself or making a reference in terms of Section 56 of the Cooperative Societies Act to a person who is not at least a Director of respondent No. 4. At this stage I am informed that the petitioner has already deposited Rs. 20,000/ and furnished a bank guarantee for Rs. 10,000/ towards the payment of the impugned award, Annexure P.4. In this situation I direct the petitioner not to withdraw the amount of Rs. 20,000/ already deposited by him till the matter is finally decided by the authorities concerned as a result of this order. He, however, is at liberty to withdraw the bank guarantee. I do not pass any order as to costs. The parties through their counsel are directed to appear before the Registrar on December 20, 1982. It is expected that the Registrar or the person to whom he chooses to refer the matter would dispose it of finally within a period of six months from today.