Allowed

N. Rajasekaran v. the Director of Handlooms and

Madras HC6 Jun 2023WP(MD)/10959/2014

Case brief

AI extract

What is this about?

The petitioner challenged an order refusing to pay interest dues fixed by a court-monitored arbitration award. The High Court rejected preliminary objections regarding maintainability, holding the petitioner entitled to the award's benefits, and directed the respondent society to pay the outstanding interest immediately.

What did the court decide?

The writ petition was allowed with a direction to the 5th respondent to pay the interest amount as archived by the arbitrator in the award dated 02.05.2005.

N. Rajasekaran Vs the Director of Handlooms and — Cooperative Societies | Madras HC (2023)

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WP(MD)No.10959 of 2014

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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

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DATED: 06.06.2023

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CORAM:

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THE HONOURABLE MR.JUSTICE B.PUGALENDHI

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WP(MD)No.10959 of 2014 and WMP(MD)No.9123 of 2016

N.Rajasekaran

... Petitioner

1.The Director of Handlooms and Textiles, Kuralagam,Chennai – 600 108.

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2.The General Manager,

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The Tamil Nadu Co-Operative Spinning Mills, Federation Limited (KH279),

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Kuralagam, Chennai – 600 108.

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3.The Registrar of Co-Operative Societies, MV.Natarajan Maaligai, Door No.170, Periyar EVR Road, Kilpauk, Chennai.

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4.The Deputy Registrar of Co-Operative Societies cum Managing Director,

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Pudukottai District Co-Operative Spinning Mills Limited,

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TR (H97) Aranthangi – 614616.

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5.The Managing Director /

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Co-operative Sub Registrar, A363, Virudhunagar Agricultural Products, Co-operative Marketing Society Limited, Mallankinaru Road, Virudhunagar – 626 001.

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... Respondents

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.10959 of 2014

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PRAYER: Writ Petition is filed under Article 226 of the Constitution of India for issuance of a writ of certiorarified mandamus calling for the records relating to the impugned order dated 02.06.2014 passed by the 5^th respondent and quash the same and consequently direct the 3^rd respondent to issue suitable directions to the 5^th respondent to pay the sum of Rs.19,91,089/- (Rupees Nineteen Lakhs Ninety One Thousand and Eighty Nine Only) to the petitioner towards interest calculated till April, 2013 as fixed by the arbitrator in arbitration award dated 02.05.2005 in arbitration case number 2 of 2005 confirmed by this Court by order dated 05.01.2007 in OP.No.533 of 2005 and by order dated 12.04.2013 in OSA No.71 of 2007 and OSA No.171 of 2007.

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For petitioner : Mr.J.Bharathan For Respondent : Mr.S.Shaji Bino, Nos.1 to 4 Special Government Pleader For Respondent :Mr.D.Shanmugaraja Sethupathi No.5

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ORDER

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This writ petition has been filed challenging the impugned order dated 02.06.2014 passed by the 5^th respondent and to consequently direct the 3^rd respondent to issue 2/10

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.10959 of 2014

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suitable directions to the 5^th respondent to pay the dues along with interest.

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2.The petitioner is a cotton merchant and he is said to

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have supplied cotton to the 4^th respondent spinning mill through 5^th respondent. However, the 4^th respondent did not make payment for the cotton purchased by them. One Kanniah Raj, an affected person filed a public interest litigation

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before this Court in WP.No.12316 of 1999 for a writ of mandamus to direct the government to take appropriate steps

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to make payment due by the 4^th respondent spinning mill to the cotton merchants with 18% interest per annum from the date of outstanding till the date of realisation. This public interest litigation was entertained by this Court and on 12.10.1999 a Division Bench of this Court has passed

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an order directing the government to make substantial payment. Accordingly partial amount has been paid on installments and thereafter, this Court has also appointed

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an Arbitrator in this issue for settlement of the dues by the Government and the spinning mill to the cotton merchants. The Arbitrator as directed by the Government has

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.10959 of 2014

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conducted arbitration and also passed an award on 02.05.2005, directing the 4^th respondent to pay 40% of the balance amount with interest @ 18% per annum for the cotton supplied by the petitioner and others. The Arbitrator has also fixed the interest payable by the 4^th respondent to the 5^th respondent up to 21.06.2002 @ Rs.9,06,689/- and directed the government to pay the further interest @ 18% per annum under Section 31(7) of the Arbitration and Conciliation Act 1996 till the actual date of payment.

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3.The government and the Co-Operative Spinning Mills

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have challenged the award in OP.No.533 of 2005 before this Court and the said OP was dismissed by order dated 05.01.2007. Challenging the same the appeal preferred by the government in OSA.No.71 of 2007 and the appeal preferred by the 4^th respondent in OSA.No.71 of 2007 was dismissed by the Court.

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4.Though award has been passed by the Arbitrator,

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the 2^nd respondent on behalf of the 4^th respondent has paid the dues to the 5^th respondent on 01.10.2008 towards the

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https://www.mhc.tn.gov.in/judis

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WP(MD)No.10959 of 2014

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interest payable by the 4^th respondent as fixed by the Arbitrator with subsequent interest till the date of

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payment. Though the 5^th respondent has received the amount from the government has failed to pay the same to the petitioner and therefore, this petitioner filed a writ petition before this Court in WP(MD)No.6547 of 2014

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for a writ of mandamus for a direction to the 5^th respondent

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to pay the balance amount together with interest to the petitioner herein as per the award passed by the Arbitrator on 02.05.2005. This Court by order dated 16.04.2014 has disposed of the said writ petition directing the 5^th respondent to consider the representation to the petitioner dated 01.04.2004 in the light of the judgment passed in OSA.No.71 of 2007 within a period of eight weeks from the

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date of receipt of a copy of the order. Thereafter the 5^th respondent has passed the impugned order on 02.06.2014 that there is no due payable by the 5^th respondent to the petitioner.

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5.The learned Counsel for the petitioner by relying on the award passed by the Arbitrator has made his submissions

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WP(MD)No.10959 of 2014

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that the 5^th respondent has received the due amount from the 4^th respondent, but the 5^th respondent has failed to pay the amount to the petitioner.

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6.The learned Counsel appearing for the 5^th respondent submits that the at the outset the writ petition is not maintainable in view of the judgment passed by the Hon'ble Full Bench in Marappan Case. The petitioner is the Member

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of the 5^th respondent society and if he is having any grievance with regard to the transaction, he is having remedy before the Deputy Registrar of Co-Operatives under Section 90 of the Tamil Nadu Co-Operative Societies Act.

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7.The learned Counsel further submits that the sale

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consideration was paid to the petitioner periodically. As per the audit report, the 5^th respondent was liable to

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pay the sum of Rs.1,81,303.36 to the petitioner towards the sale consideration. This respondent has paid a sum of

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Rs.63,206/- vide cheque No.1418 dated 19.02.2001. Subsequently the petitioner was paid a sum of Rs.45,147.71 through the cheque No.1424 dated 09.03.2001. Thereafter,

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WP(MD)No.10959 of 2014

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the petitioner was subsequently paid Rs.71,978.10 by cheque

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No.6166 dated 26.07.2002. All the above cheques were

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encashed and entire amount and as such the entire outstanding was paid to the petitioner as on 26.07.2002 itself. As per the audit report for the financial year 2002

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-2003, the last payment was made to the petitioner in the

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above financial year. In the audit report for the year 2002- 2003 it was not shown any balance to be paid to the petitioner. Therefore, as per the records and audit report, the entire amount was paid to the petitioner in the year 2002 itself.

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8.This Court considered the rival submissions and

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perused the materials placed on record.

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9.The preliminary objections raised by the 5^th

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respondent can be rejected on the ground that the liability

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has been fixed pursuant to the orders of this Court in a public interest litigation in WP(MD)No.12316 of 1999 and further direction was issued by this Court in WP(MD)No. 6547 of 2014. The 5^th respondent has not taken any such

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WP(MD)No.10959 of 2014

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stand in the earlier round of litigation. The petitioner has made claim pursuant to the award passed by the Arbitrator appointed as directed by this court in WP(MD)No. 12316 of 1999. This order was also tested in OP.No.533 of 2005 and also in OSA.No.71 of 2007, wherein this Court has held as against the government and society that the 5^th respondent is liable to pay the amount as directed by the Arbitrator in his award dated 02.05.2005. Though the respondents submit that the payments have been made, they have not paid the subsequent interest amount as directed by the Arbitrator and therefore, this writ petition is allowed with a direction to the 5^th respondent to pay the interest as directed by the Arbitrator in his award dated 02.05.2005. No costs. Consequently connected miscellaneous petition is closed.

06.06.2023

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1.The Director of Handlooms and Textiles, Kuralagam, Chennai – 600 108. 2.The General Manager, The Tamil Nadu Co-Operative Spinning Mills, Federation Limited (KH279), Kuralagam, Chennai – 600 108. 3.The Registrar of Co-Operative Societies, MV.Natarajan Maaligai, Door No.170, Periyar EVR Road, Kilpauk, Chennai.

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4.The Deputy Registrar of Co-Operative Societies cum Managing Director, Pudukottai District Co-Operative Spinning Mills Limited, TR (H97) Aranthangi – 614616. 5.The Managing Director / Co-operative Sub Registrar, A363, Virudhunagar Agricultural Products, Co-operative Marketing Society Limited, Mallankinaru Road, Virudhunagar – 626 001.

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WP(MD)No.10959 of 2014

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B.PUGALENDHI, J.

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dsk

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WP(MD)No.10959 of 2014

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06.06.2023

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N. Rajasekaran v. the Director of Handlooms and

Case brief

What is this about?

What did the court decide?

N. Rajasekaran v. the Director of Handlooms and

Case brief

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What did the court decide?

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