Vidya Dhar Sharma vs The President's Press

D.K. Mahajan, J.—This is an appeal u/s 39 of the Indian Arbitration Act and is directed against the order of the Sub Judge 1st Class, Delhi dated 9th May, 1963 dismissing the petitioners'' application u/s 33 of the Act for setting aside the award.

The award in this case was made by Mr. N. N. Dewan, a nominee of the Registrar. He awarded a sum of Rs. 8872.34 nP. to the respondent Society against the petitioner. The only contention raised before the Court below was that the matter in dispute could not form the subject matter of a reference u/s 54. The dispute between the parties was whether a sum of Rs. 7,000/- has been embezzled by the honorary Treasurer, namely the petitioner and whether he was liable to make it good to the society. The Court below rejected the contention that such a dispute could not be referred to arbitration u/s 54. The relevant section of the Bombay Co-operative Societies Act, as applicable to Delhi, reads as under:

If any dispute touching the constitution or business of a society arises between members...it shall be referred to the Registrar for decision by himself or his nominee.... A dispute shall include claims by a society for debts or demands due to it from a member...whether such debts or demands be admitted or not.

The remaining part of the section is not relevant for our purposes The argument of the learned counsel for the petitioner is that the words "any dispute touching the constitution or business of a society" do not include the present dispute. He further fortifies his argument by reference to the Second clause of this section, namely, that a dispute must relate to a debt or demand due to the Society. The contention is that the present claim is neither a debt nor a demand. According to the learned counsel, the debt means a contractual obligation and a demand means a statutory demand and not a claim or demand, dehors the statute.

After hearing the learned counsel at length, I am of the view that none of these considerations apply to the facts of the present case. The present claim certainly falls within the word "demand" under second clause of the section, surely it is also a matter relating to the business of the society. Certain moneys were entrusted by the Society to the Treasurer and the treasurer misappropriated those moneys. Surely, the matter could be referred to arbitration because it is a matter touching the business of the Society. I am fortified in this view by a decision of the Lahore High Court in AIR 1939 301 (Lahore) where Mr. Justice Bhide held as follows:

Where a Co-operative Society has considered its treasurer to be responsible for embezzlement of money deposited with it by a person and the treasurer has throughout contended that he was not concerned with the alleged embezzlement there is clearly a dispute between the treasurer and the Society regarding question of embezzlement of money and hence the dispute can be referred to arbitration.

Whether the present dispute touches the constitution or business of the Society came for consideration in a case of the Bombay High Court in G.I.P. Railway Employees Co-operative Bank Ltd. Vs. Bhikhaji Merwanji Karanjia, . Mr. Justice Chagla as he then was while dealing with this phrase observed as follows:

It is not right to give a restricted meaning to the words "touching the. business of a society" used by the Legislature in S. 54 of the Act. The word "business" is a very wide term and certainly it is not synonymous with the objects of a society. The expression "touching the business of a, society would mean affecting the business of a society or relating to the business of a society. Although, it is not one of the objects of the company to employ or dismiss servants it is something which it does in the ordinary course of its; business. And whatever is done in the ordinary course of business certainly relates to or affects the business.

I am in respectful agreement with the aforesaid observation. The learned counsel for the petitioner places his reliance for his contention, that the present dispute would not be covered by the phrase "touching the business of the Society" on the decision of the Madras High Court in The Tanjore Co-operative Marketing Federation Ltd. Vijaypuram by its Secretary v. R. Krithivasan AIR 1951 Mad 352 This decision has not the remotest hearing on the present controversy. The other decision relied upon by him is of the Calcutta High Court in Co-operative Milk Societies Union Ltd. Vs. State of West Bengal and Others,

This decision is subsequent to the Bombay High Court decision and curiously enough does not notice the Bombay decision, Moreover, it was found as, a fact that the dispute before the Calcutta High. Court was not one, which related to the actual business of a Co-operative Society. In any case, the point that requires examination in the present controversy was never determined by the Calcutta High Court. This decision is also of no assistance to the learned counsel for the petitioner.

In regard to the argument that the word "demand" must, be construed as a ''Statutory demand'', the short answer is that the word ''demand'' should be given its ordinary dictionary meaning. The ordinary dictionary meaning would include ''any claim'' irrespective of the fact whether it is backed by a statue or not. Of course, a claim backed by a statute would also be covered. That being so there is no warrant for the assertion that the word ''demand'', should, be limited to purely statutory demands.

For the reasons given above, I see no force in this petition. The same fails and is dismissed with costs.