Sonu Garg vs The Registrar, H.P. State Cooperative Societies & Ors.

Jyotsna Rewal Dua, J

The Arbitrator, Cooperative Societies, District Solan, adjudicated the reference under Section 72 of the Himachal Pradesh Cooperative Societies Act, in the matter of ‘Subathu Urban Cooperative Non-Agricultural Thrift and Credit Cooperative Society Ltd. vs. Sonu Garg’, on 28.12.2023 modified on 31.12.2023. The award was passed against the petitioner.

Petitioner’s appeal under Section 93 of the Himachal Pradesh Cooperative Societies Act, 1968 (hereinafter referred to as ‘the Act’) against the aforesaid award, was dismissed by the Deputy Registrar (Consumer) Cooperative Societies on 20.04.2024.

In terms of the award dated 28.12.2023/ 31.12.2023 and order dated 20.04.2024, the writ of demand was issued against the petitioner on 14.05.2024.

Heard learned counsel on both sides and considered the case file.

4(i). The petitioner has assailed the award passed by the Arbitrator under Section 72 of the Act on 28.12.2023/ 31.12.2023, the order dated 20.04.2024 passed by the Appellate Authority and the writ of demands issued against him on the basis of aforesaid orders.

4(ii). The challenge to the aforesaid award/order/writ of demand is primarily on the ground that principles of natural justice were thrown to the wind by the Arbitrator while conducting the proceedings under Section 72 of the Act. It is the specific case of the petitioner that he had not been supplied a copy of the statement of claim made by respondent No.3-Society, despite repeated requests made by him in that regard. That in absence of statement of claim, the petitioner could not conduct his case properly before the Arbitrator, which has caused serious prejudice to him.

4(iii). During hearing of the case learned Deputy Advocate General conceded the above factual submission of the petitioner. She stated that it was a fact that statement of claim had not been supplied to the petitioner by the Arbitrator. Learned Deputy Advocate General though submitted that the petitioner also had not requested for supply of the statement of claim.

4(iv). Merely because the petitioner allegedly did not pray for supplying him a copy of statement of claim, would not mean that the Arbitrator will be discharged from his liability to act and proceed in accordance with law. The statement of claim is the basic document on which the entire case is built up. Once the statement of claim admittedly has not been made available to the petitioner, certainly serious prejudice has been caused to him. In absence of statement of claim, petitioner would not be in a position to defend his case properly. The award/order passed in violation of the principles of natural justice is vitiated. In view of the admitted position that the statement of claim made by respondent No.3 had not been made available to the petitioner, the entire edifice for passing the award against the petitioner goes. The impugned orders therefore cannot be sustained.

For the foregoing reasons, this writ petition is allowed, impugned award/order dated 28.12.2023/ 31.12.2023, order dated 20.04.2024 and writ of demand issued vide notice dated 14.05.2024, are quashed and set aside.

Parties through their learned counsel are directed to appear before the Arbitrator on 28.06.2024. The Arbitrator shall proceed in the matter afresh after giving copy of complete statement of claim along with documents to the petitioner. Fresh arbitration proceedings be completed as expeditiously as possible not later than six months from today, i.e. by or before 28.12.2024.

Learned counsel appearing for the parties have assured that all cooperation on part of parties shall be rendered to the Arbitrator and no unnecessary adjournment shall be taken, to ensure that proceedings are taken to their logical conclusion within the aforesaid period.

Accordingly, the writ petition is disposed of, so also the pending applications, if any.