Ramzan Mohammad and Others Vs the Additional Registrar Cooperative Societies and Another

For the petitioners : Mr. N.K. Sood, Senior Advocate, with Mr. Mukul Sood, Advocate. For the respondents : Mr. Rajat Chauhan, Assistant Advocate General, for respondent No.1.

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Mr. Surinder Kumar Saklani, Advocate, for respondent No.2.

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Ajay Mohan Goel, Judge (Oral )

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By way of this petition, filed under Article 227 of the Constitution of India, the petitioners have, inter alia, prayed for the following relief:-

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“It is, therefore, prayed that this Hon'ble Court may be pleased to send for the records of the case and after

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1 Whether reporters of the local papers may be allowed to see the judgment?

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examining the legality and proprietary of the proceedings may be pleased to quash and set aside the Order dated 25.02.2020 passed by Additional Registrar Co-operative Societies H.P. Dharamshala District Kangra H.P. Annexure P-2 and Award dated 23.08.2018 passed by Ld. Arbitrator Under Sec 73 of Co-operative Societies Act P-1. Such other orders which this Hon'ble court may deem fit and proper in the facts and circumstances of the case may also be passed in favour of the petitioner.”

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The case of the petitioners is that they are rustic

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villagers, who were deceived by the Officials of the respondentSociety. As per them, despite the fact that no loan was availed by them from the respondent-Society, yet loan was shown disbursed in favour of the petitioners, in respect whereof, FIRs were also lodged by the petitioners and others. For the recovery of this loan, which was never taken by the petitioners, arbitration proceedings were initiated against them. The petitioners filed an application seeking leave to take legal assistance to defend their case, which application was never decided by the Arbitrator nor any opportunity was afforded by the Arbitrator to defend them and the matter was decided by

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the Arbitrator in a cursory manner.

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Learned Senior Counsel appearing for the petitioners has drawn the attention of the Court to the Award dated 23.08.2018 (Annexure P-13), passed by the Arbitrator. By referring thereto, learned Senior Counsel submitted that the impugned Award is perverse per se for the reason that rather than deciding the claim in accordance with settled cannons of law i.e. by referring to the pleadings of the parties, their respective contentions and returning findings thereupon, a strange method was adopted by the Arbitrator who decided the arbitration claim on a proforma. Learned Senior Counsel further submitted that the impugned Award was without any basis and on a proforma, which is unknown to law. Learned Senior Counsel further submitted that this extremely important aspect of the matter was ignored by the Appellate Authority also and, therefore, the present petition is merits to be allowed by setting aside the impugned order.

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Though, learned counsel for the respondent-Society tried to justify the order passed by the Arbitrator as well as the Appellate Authority, however, this Court is of the considered

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view that the Award as well as the Appellate Order are not sustainable in the eyes of law. This is for the reason that in a quasi-Judicial proceeding or Arbitral proceeding which is conducted in terms of Sections 72 and 73 of the H.P. Cooperative Societies Act, 1968, well established norms of adjudication have to be adhered to. The respective contentions of the parties are to be reflected in the Award and, thereafter, the decision which the Arbitrator delivers, is to be based on the pleadings as well as his reasonings, which obviously are to be reflected on the basis of the respective pleadings of the parties.

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In this backdrop, if one peruses the impugned Award, by no stretch of imagination, it can be said to be a valid Award in the eyes of law. Perusal thereof demonstrates that the so-called Award has been passed on a one-page proforma, which is titled as "नि�र्ण�य सालसी". Thereafter, certain columns stand carved out in the proforma. One column thereof reflects the names of the parties, the other column the principal amount, the third column the interest, the next column expenses and the next column total amount payable. Thereafter, again, there are certain cyclostyled columns, and

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then there are 9 ½ lines written by the Arbitrator which decide the arbitration claim.

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The Appellate Authority also in Appeal erred is not appreciating that the Award so passed by the Arbitrator was non est in the eyes of law and it would have been in the interest of justice had the Appellate Authority set aside the Award and directed the Arbitrator to decide the same afresh in accordance with the well-settled canons of adjudication.

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Therefore, in light of the above observation, as the impugned Award is not sustainable in the eyes of law, this petition is allowed. Award dated 23.08.2018, passed by the arbitrator (Annexure P-13) and order dated 25.02.2020 (Annexure P-2), passed by the Appellate Authority, are quashed and set aside. The matter is remanded back to the Arbitrator with the direction that the Arbitrator shall decide the same afresh, strictly as per law. The parties are directed to appear before the Arbitrator on 05.01.2026 and Arbitrator shall decide

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the matter within three months thereafter. Legal Assistance shall be provided to the petitioners to defend themselves before the Arbitrator.

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