Phuman Singh vs State of Punjab

N.K. Sodi, J.—Chak Dogran Cooperaiive Agricultural Service Society Ltd., Chak Dogran, Tehsil Ajnala, District Amritsar (for short the Society) is a Cooperative Society registered under the Punjab Cooperative Societies Act and it procures fertilizer from Government agencies and distributes the same to its members. Phuman Singh petitioner was working as one of the Salesmen with the Society and Batwinder Singh respondent was the Secretary at the relevant time. It was alleged that a sum of Rs. 64,687.55 was due from Balwinder Singh to the Society which he had not paid. The Society passed a resolution dated 11.1.1995 referring the dispute to the Arbitrator u/s 55 and 56 of the Punjab Cooperative Societies Act. On receipt of the reference both the Society and also Balwinder Singh appeared before the Assistant Registrar, Cooperative Societies who was appointed the Arbitrator. During the pendency of the arbitration proceedings Balwinder Singh moved an application stating that Phuman Singh and Harbans Singh another Salesman of the Society were in fact responsible for the amount due to the Society and they be impleaded as parties to the arbitration proceedings. This application was allowed by the Assistant Registrar and Phuman Singh and Harbans Singh were impleaded as parties. The Arbitrator then by his award dated 30.6.1995 found that the amount was due from Phuman Singh-petitioner and accordingly an award was made against him. Feeling aggrieved by the award, Phuman Singh filed an appeal before the Deputy Registrar, Cooperative Societies which was dismissed on 24.10.1996. Still not satisfied, Phuman Singh filed a revision petition before the Joint Registrar, Cooperative Societies and that too was dismissed on 29.1.1998. It is against these three orders that the present petition has been filed under Article 226 of the Constitution.

The argument of the learned counsel for the petitioner is that the Society referred the dispute to the Arbitrator only against Balwinder Sin|h-respondent and that the Arbitrator had no jurisdiction to implead the petitioner and Harbans Singh as parties thereto, It is contended that since the Arbitrator could not implead the petitioner the award made against him is without jurisdiction. We find considerable force in this contention. The question whether an Arbitrator can implead any person as a party in the proceedings before him came up for consideration before a Division Bench of this Court in Shamsher Singh and others v. State of Haryana, in Civil Writ Petition No. 3653 of 1981 decided on 4.11.1981 and it was held that an Arbitrator has no jurisdiction to implead the parties and that he has to decide the reference qua the parties in regard to whom the reference was made. We have perused the judgment of this Court in Shamsher Singh''s case (supra) and are in respectful agreement with the same. In the case before us, neither Phuman Singh- petitioner nor Harbans Singh-respondent were parties to the reference which was made by the Society to the Arbitrator. It was the Arbitrator who impleaded them as parties and found the petitioner liable for the payment of the amount. Since the Arbitrator had no jurisdiction to implead the petitioner and Harbans Singh respondent, the order impleading them was obviously without jurisdiction. It necessarily follows that if the petitioner and Harbans Singh could not be made parties, in the arbitration proceedings no award could be made against them. In this view of the matter, the impugned orders cannot be sustained.

In the result, the writ petition is allowed and the impugned orders quashed. We, however, make it clear that it will be open to the Society to recover the amount due to it and make a fresh reference in accordance with law if it so chooses. There is no order as to costs.

Petition allowed.