Mallian Near Gill Manj Co-Operative Joint Farming Society Limited vs Gurdaspur Central Cooperative Bank Ltd.

S.S. Sodhi, J

On September 10, 1977 an arbitration Award was made against the petitionercooperative society. In the execution proceedings instituted against the petitionercooperative society on a certificate issued by the Registrar, Cooperative Societies, under section 63 of the Punjab Cooperative Societies Act (hereinafter referred to as the Act''), the petitioner raised various objections to the execution of the the award. The executing Court upheld the objection relating to the Award of costs, but dismissed all the other objections raised thereto. It is this order which was sought to be challenged in revision.

Mr. K.S. Thapar, counsel for the petitioner in the first instance sought to contend that there was no power vested in the Arbitrator to award any future interest on the amount awarded. This contention cannot, however, be sustained in view of the judgment of the Full Bench in State of Punjab v. Ajit Singh and others, 1979 P.L.J 334, where it was held that the Arbitrator in a reference under sections 55 and 56 of the Act had jurisdiction to award future interest on the amount awarded until realisatiion on principles underlying the provisions of Section 34 of the Code of Civil Procedure. Confronted with this authorty, counsel for the petitioner then fell back upon the argument that as the proviso to Section 34 of the Code of Civil Procedure raising the rate of interest payable thereunder beyond 6 per cent came into effect in 1976, no future interest could have been awarded by the Arbitrator at a rate exceeding 6 per cent, as the award was based upon a transaction which had taken place prior thereto. There is no merit in the point raised. Future interest awarded here not being based upon any statutory provisions, there was clearly no bar on the power of the Arbitrator to award interest at the rate awarded merely on the plea that the rate beyond 6 per cent came to be incorporated in section 34 of the Code of Civil Procedure only in 1976 and interest could thus only be granted at this rate with effect from a date subsequent thereto. The transaction in the present case being a commercial one and 12 per cent interest being the common market rate of interest no exception can be taken to the grant of future interest at this rate.

Violation of the rules of natural justice was next complained of on the plea that no opportunity of hearing had been granted to the petitioner by the Registrar before the issuance of the certificate under section 63 of the Act. This is indeed an untenable contention. There is specific provision in the Act for an appeal and revision against the award of the Arbitrator. Such being the statutory provisions there is clearly no warrant for imputing any violation of the rules of natural justice in the grant of a certificate under section 63 of the Act without an opportunity of hearing being granted to the party against whom the award had been passed.

Great stress was laid upon the fact that the award in this case had not been made within four months of the reference of the dispute to the Arbitrator. The contention raised being that as no extension of time had been sought, the Award stood barred by limitation and was thus void, in terms of the Arbitratioin Act, 1940. This contention too is equally without merit as it is now well settled that no such provision of the Arbitration Act would apply to an Arbitrator under the Act. In dealing with the provisions of section 55 and 82 of the Act, the Full Bench in Ran Singh v. The Gandhar Agricultural Cooperative Service Society, 1975 P.L.J 162, observed, "A combined reading of these provisions shows that it has been made imperative for either a Society or its member to refer their disputes inter se to the Registrar for decision. Not only has the jurisdiction of ordinary Civil Courts been taken away for entertaining any suit or other proceedings in respect of such a dispute but an express bar has been created against the Civil Courts regarding all types of jurisdiction in respect of disputes required to be referred to the Registrar. The use of the words "in respect of" is pRegulation nt with significance. It perhaps shows that even if the decision of the Registrar or the arbitrator is wholly illegal, an aggrieved party would have to take resort to the remedies provided by the Act itself and a Civil or a Revenue Court will not be competent to adjudicate upon the matter unless there is a specific provisions to the contrary in the Act ..."

Following the decision of the Full Bench in Ran Singh''s case (supra), it was held in Harchand Singh v. The Khiala Kalan Agricultural Cooperative Service Society Limited and others, 1982 P.L.J 408, that "there is no corresponding provision under the Societies Act or Rules framed thereunder which would necessitate any application for making an Award, a rule of the court as under the Arbitration Act. On the other hand, Section 63 in terms provides inter alia that upon the issuance of a certificate, the Award would be deemed to be a decree of the Civil Court and shall be executed in the same manner. It would thus be obvious that the provisions of the Societies Act, which in detail govern the statutory arbitrations thereunder are in principle and details inconsistent with those under the Arbitration Act. Once it is so held, Section 46 of the Arbitration Act would be itself straightway attracted in so far as it provides that the provisions of the Arbitration Act would not be applicable to statutory arbitrations under other statutes which are inconsistent therewith or any rules made thereunder."

These observations leave no scope for imputing any invalidity or illegality to the impugned Award on the ground that it was not rendered within four months of the reference of the dispute to the Arbitrator.

This petition, thus, merits no interference in revision and is consequently hereby dismissed. In the circumstances, however, there will be no order as to costs.