Oral judgment:
1. By consent of parties as the facts and the issues involved in all the above three matters are identical were heard together finally and are being disposed of by a common order.
2. By these petitions filed under section 37 of the Arbitration and Conciliation Act, 1996 (for short âArbitration Act, 1996) the petitioner seeks to challenge orders dated 9th May, 2011 allowing application filed by the respondents under section 16 of the Arbitration Act, 1996 and directing the petitioner to withdraw the proceedings filed by the petitioner under section 84 of the Multi State Co-operative Societies Act, 2002 (for short âMulti State Act) and for referring them to the Divisional Joint Registrar Co-operative Societies, Bombay.
3. I shall deal with the facts in Arbitration Petition No. 935 of 2012. Some of the relevant facts for the purpose of deciding these petitions are setout as under:-
4. The petitioner was originally registered under the Maharashtra Cooperative Societies Act, 1960 and is carrying on banking business inter-alia of accepting of deposits and lending of monies to their members by way of loans, cash credit etc. as per banking rules and regulations.
5. By an application dated 17th October, 2000, the 1st respondent applied for sanction of loan of Rs.1,95,00,000/- for the purpose of reschedulement of term loan. Respondent nos. 2 to 4 agreed to stand sureties for the said loan. Respondent nos. 5 and 6 who were directors of the 1st respondent gave personal guarantee for securing the repayment of the said loan. It is the case of the petitioner that the respondents committed default in making repayment of the loan. It is the case of the petitioner that on 1st August, 2003 and 18th December, 2003, the 1st respondent acknowledged the debt due to the petitioner. The respondent nos. 2 to 6 agreed that any acknowledgment of debt made by the borrower shall also be binding upon them.
6. Sometimes in the year 2005, the petitioner filed Recovery Application No.Asstt/R/7123 of 2005 under section 101 of the Maharashtra Co-operative Societies Act, 1960 against respondents for recovery of dues in respect of the said loan account in all the three matters. By a common recovery certificate dated 20th December, 2006, Assistant Registrar, Co-operative Societies issued recovery certificate only in respect of part of the claim made by the petitioner. Being aggrieved by the said recovery certificate dated 20th December, 2006, the petitioner filed three separate Writ Petitions bearing Nos. 558 of 2007, 559 of 2007 and 560 of 2007 in this court challenging the said recovery certificate. By an order dated 25th April, 2007, this court directed the petitioner to move the Revisional authority under the provisions of Maharashtra Co-operative Societies Act, 1960 within a period of four weeks and directed the Revisional authority to dispose of the revision application within a period of four months. By an order dated 10th September, 2007, the Divisional Joint Registrar disposed of the revision application and quashed and set aside the recovery certificate issued by the Assistant Registrar and directed the Assistant Registrar to decide the recovery application separately afresh, in accordance with law and on their respective merits.
7. In the meanwhile, by conversion w.e.f. 11th January, 2007, the bank came to be registered under the Multi State Co-operative Societies Act, 2002 (for short âMulti State Act, 2002). The petitioner is a co-operative bank within the meaning of section 3(f) of the Multi State Act, 2002. As a result of such conversion, the petitioner ceased to be a co-operative society under the provisions of Maharashtra Co-operative Societies Act and its registration there under was cancelled.
8. On 25th November, 2008, the petitioner filed three separate applications before the Assistant Registrar Co-operative Societies, Mumbai seeking withdrawal of the application filed under Section 101 of the Maharashtra Cooperative Societies Act, 1960. On 28th November, 2008, the petitioner bank passed a resolution to file a dispute application under section 84 of the Multi State Act for the recovery of the standing dues against the respondents. On 15th December, 2008, the petitioner preferred three separate applications under section 84 of the Multi State Act before the learned arbitrator appointed under the orders of the Central Registrar. It is the case of the petitioner that the said application was filed within a period of limitation prescribed under the said Act i.e. within six years from the execution of loan documents.
9. On 30th December, 2008 the learned arbitrator passed an award for issuance of notice of summons to the respondents and made it returnable on 23rd January, 2009. By an order dated 12th January, 2009, the Assistant Registrar rejected application of the petitioner for withdrawal of application filed under section 101.
10. On 25th March, 2009, the bank filed another application for withdrawal of the proceedings before the Assistant Registrar in view of the fact that the petitioner had already initiated proceedings under section 84 of the Multi State Act before the learned arbitrator. On 23rd March, 2009 the 4th respondent participated in the proceedings before the learned arbitrator and filed application challenging the jurisdiction of the learned arbitrator and maintainability of the arbitration proceedings. On 26th March, 2009, the Assistant Registrar, Co-operative Societies, Mumbai allowed the application for withdrawal of the application filed by the petitioner under section 101 of the Maharashtra Co-operative Societies Act which reads as under:-
The Applicant has moved an Application dated 25/03/2009 stating the Applicant is now converted into Multi-State Co-operative Bank w.e.f. 11/01/2007 and prayed to allow them to withdraw the above recovery case with liberty to continue the recovery dispute filed before the Honble Arbitrator, appointed by the Central Registrar, Cooperative Societies, New Delhi.
Being satisfied that the Applicant Bank is now a Multi-State Co-operative Bank, the application of the Applicant needs to be allowed. Hence, I pass the following Order:
                                         ORDER
The Applicant Bank is permitted to withdraw the Recovery Application and granted liberty to continue recovery dispute filed before the Honble Arbitrator appointed by the Central Registrar, Co-operative Societies.
11. The 4th respondent thereafter filed written statement before the learned arbitrator on 14th December, 2009. On 19th December, 2009, respondents filed application under section 16 before the learned arbitrator raising plea of jurisdiction.
12. Sometimes in the year 2010, the respondents filed three separate writ petitions bearing nos. 926 of 2010, 927 of 2010 and 928 of 2010 in this court challenging the order dated 26th March, 2012 passed by the Assistant Registrar allowing application of the petitioner permitting withdrawal of application filed under section 101 of the Maharashtra Co-operative Societies Act, 1960. By a common order passed by this court on 24th February, 2010, it was observed that a party can withdraw whatever proceedings it files. The opposite party is required to be heard, if any order prejudicial to that party is passed. This court held that against the order passed by the Assistant Registrar Cooperative Societies, the aggrieved party could challenge the said order in revision under section 154 of the Maharashtra Co-operative Societies Act, 1960 before the Additional Joint Registrar which alternate remedy has not been resorted to by the respondents (petitioners in writ petition). This court observed that application for withdrawal of recovery proceedings by the bank came to be filed because the arbitration proceedings had been filed by the bank prior thereto under section 84 of the Multi State Act upon it having become a multi State Bank. It is held that the arbitration proceedings had been commenced on 23rd January, 2009 and since that remedy was available to the bank, under the Multi State Bank Act, the bank cannot pursue the remedy resorted by them under the provisions of Maharashtra Co-operative Societies Act. This court observed that the arbitration proceedings had continued and the notice had been issued upon the petitioners in the said writ petition who had also filed their written statement in such arbitration proceedings. Paragraphs 7 and 8 of the said order passed by this court reads thus:-
â7. The learned Arbitrator is entitled to consider all aspects including the aspect of lack of his own jurisdiction under Section 16 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). The Petitioner has not pursued his application for determination of the issue relating to jurisdiction. The Arbitration Proceedings have continued. The Arbitrator has placed the matter for trial. The Petitioner may take up whatever contention he/it requires before the Arbitrator. Since the Arbitration proceedings are also pending the Writ jurisdiction cannot be invoked. The Petitioners are seen to have resorted to the Petition only to bind time.
8. The Writ Petitions are dismissed.â
13. The respondents impugned the said order dated 24th February, 2010 passed by this court in writ petition by filing Letters Patent Appeal Nos. 100, 101 and 102 of 2010 before Division Bench of this court. By a common order dated 18th June, 2010, the Division Bench found that there was no infirmity in the order passed by the learned single judge. Paragraph nos. 3 and 4 of the said order dated 18th June, 2010 passed by the Division Bench read thus:-
â3. The learned Single Judge did not find that the impugned orders suffer from any error illegality and dismissed the petitions filed by the appellants.
4. We find that there is nothing wrong in the order. The appellants can very well contest the issues and contentions before the Arbitrator to be appointed by the Central Registrar. Therefore, no prejudice is caused. We are dismissing the appeals as devoid of merits.â
14. On 28th February, 2011 the petitioner bank filed reply to the application filed by the respondents under section 16 of the Arbitration Act, 1996 and opposed the said application on the ground of maintainability and on merits. By an order dated 9th May, 2011, the learned arbitrator accepted the plea of the respondents under section 16 of the Arbitration Act, 1996 and directed the petitioner to withdraw the arbitration case and to refer to the Divisional Joint Co-operative Societies, Bombay and to take further necessary action only after obtaining orders from the said authoritiets. The said order which is impugned in the present proceedings reads thus:-
By consent of both the sides I am passing common order in all the above cases. There is absolutely no controversy as to the facts of these cases. The only issue involved is jurisdiction of this Authority. Regarding which there is caterina of litigations at various level, that too Honble High Court of Judicature at Bombay.
It is the contention of Ld. Counsel Mr. Thatte for Applicant Opponent that in view of the order dated 4.4.2009 passed by Honble Justice Mr.Vajifdar in respect of the Disputant Bank Vs. State of Maharashtra and Ors. Reported in 2009-4 MLJ 929. As per Head Note No.1.
(a) Multi-State Co-operative Societies Act, (39 of 2002), S. 22 and Maharashtra Co-operative Societies Act, (24 of 1961), KLS. 154 - Conversion of Co-operative Society into Multi â State Co-operative Society during pendency of revision application under section 154 of the Maharashtra Co-operative Societies Act â Courts and authorities under the Maharashtra Co-operative Societies Act would continue to have jurisdiction to decide matters validly filed before them prior to the conversion â Order of the Divisional Joint Registrar refusing to decide petitioners application for revision for want of jurisdiction set aside and the revision application is restored to his file to decide on merits.â
Which is further supported by Honble MS.J.Roshan Dalvi under Order dt.24.2.2010 and subsequently confirmed by Honble JJ.S. Mr.J.N.Pael acting C.J. and Mr. Justice Dharmadhikari. The application requires to be granted. Ld.Counsel Ms.Merlyne Monterio for the Disputant Bank expressed no controversy so far all the three orders of the Honble High Court are concerned. In view of the above facts following order is passed.
                                    ORDER
Application by opponents allowed in honour and respect to the Honble Justice Mr.Vazifdar. The Disputant Bank is directed to withdraw these present cases for referring them to the Divisional Joint Registrar Cooperative Societies, Bombay and only after obtaining orders from the said Authority take further necessary action.
No order as to costs.
15. Mr.Jain, the learned counsel appearing for some of the respondents raises a preliminary objection about maintainability of this appeal and submits that even if the application filed by the respondents before the learned arbitrator was decided under section 16 of the Arbitration and Conciliation Act, 1996, in view of section 84(3), decision taken by the arbitrator is final and cannot be called in question in any court. On the other hand, the learned counsel appearing for the petitioner submits that it is not in dispute that application was filed by the respondents raising issue of jurisdiction under section 16 of the Arbitration and Conciliation Act, 1996. It is submitted that in view of section 84(5) of the Multi State Act, 2002 since there is no bar prohibiting challenge to the order passed by the learned arbitrator or no other specific remedy is provided for impugning such order under the provisions of Multi State Act, 2002, all provisions of the Arbitration and Conciliation Act, 1996 shall apply to all arbitrations under Multi State Act, 2002. Relevant portion of Section 84 of the Multi State Act reads thus:-
âSection 84 in The Multi- State Co- Operative Societies Act, 2002
84. Reference of disputes.-
(2)For the purposes of sub- section (1), the following shall be deemed to be disputes touching the constitution, management or business of a multi- State co- operative society, namely:-
(a) a claim by the multi- State co- operative society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the multi- State co- operative society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debt r, whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of any officer of a multi- State co- operative society.
(3)If any question arises whether a dispute referred to arbitration under this section is or is not a dispute touching the constitution, management or business of a multi- State co- operative society, the decision thereon of the arbitrator shall be final nd shall not be called in question in any court.
(4) Wherea dispute has been referred to arbitration under sub- section (1), the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar.
(5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996).â
16. On conjoint reading of the aforesaid provisions with section 37 of the Arbitration and Conciliation Act, 1996 and the application filed by the respondents, it is clear that the application filed by the respondents challenging the jurisdiction of the learned arbitrator was not an application under section 84(3) of the Multi State Act, 2002 but was an application under section 16 of the Arbitration and Conciliation Act, 1996. As the learned arbitrator has accepted the plea of the respondents that he had no jurisdiction, an appeal is maintainable under section 37 (2) (a) of the Arbitration and Conciliation Act, 1996. I am not inclined to accept the submission of Mr.Jain, the learned counsel appearing for the respondents that order passed by the learned arbitrator accepting the plea of the respondents that he had no jurisdiction is not an appealable order in view of section 84(3) of the Multi State Cooperative Societies Act, 2002. If argument of the respondents is accepted, then a party who wants to challenge an award made under section 84 by the learned arbitrator would also be without a remedy. I am not inclined to accept this interpretation of the learned counsel canvassed before this court which is on the face of it untenable. In my view, there is no substance in the argument of the respondents that appeal is not maintainable under section 37 of the Arbitration and Conciliation Act, 1996.
17. The next preliminary objection of Mr.Jain, the learned counsel appearing for the respondent is that this appeal is even otherwise not maintainable on the ground that the order passed by the learned arbitrator on 9th May, 2011 is based on the consent of both parties. In support of this submission, the learned counsel laid emphasis on the first line of the order which reads âby consent of both the side, I am passing common order in all the above casesâ. Mr.Jain submitted that the petitioner bank did not express any controversy as far as three orders of this court referred in the first two paragraphs of the impugned orders are concerned. It is submitted that thus the impugned order dated 9th May, 2011 was a consent order and is thus not appealable.
18. On perusal of the impugned order, it is clear that the learned arbitrator had passed a common order in three matters by consent of both the sides. Question that now arises is whether the remaining part of the impugned order was also by consent of the parties. On perusal of the said order, it is clear that the opponents before the learned arbitrator and who are respondents in the present proceedings placed reliance upon the judgment and order dated 4th April, 2009 delivered by Shri Justice S.J.Vazifdar (2009) 4 Mah L J 929, order and judgment delivered by Mrs.Justice R.S.Dalvi on 24th February, 2010 and order passed by the Division Bench. The learned counsel appearing for the bank in that context expressed no controversy so far as three orders of he Honble High Court are concerned. The learned counsel appearing for the petitioner submits that no such concession was made by the learned counsel appearing for the bank that application filed by the opponent shall be allowed or that the arbitrator has no jurisdiction to entertain the dispute filed by the petitioner. In my view, the order does not record any consent of the learned counsel appearing for the bank to allow the application of the respondent (opponent) but only records that there was no controversy about the order passed by this court as recorded in the earlier part of the impugned order. On the contrary, record indicates that the petitioner bank had filed detailed affidavit opposing such application filed by the respondent (opponent) before the learned arbitrator on the ground of maintainability as well as on merits. In any event, any concession of law even if made by the learned counsel if is contrary to law is not binding on his client. I am, therefore, not inclined to accept the arguments of the learned counsel appearing for the respondents that the impugned order was a consent order and the bank had agreed to allow the application of the respondents or that the bank had conceded that the learned arbitrator had no jurisdiction to entertain the claim filed by the bank and the same shall be referred to the Divisional Joint Registrar Co-operative Societies, Bombay.
19. I will separately deal with the effect and relevancy of the order and judgment delivered by this court reported in (2009) 4 Mah L J 929, order passed by Mrs.Justice R.S.Dalvi on 24th February, 2010 and order passed by the Division Bench upholding the view taken by Mrs.Justice R.S.Dalvi in the later part of the judgment.
20. The learned counsel appearing for the petitioner submits that the petitioner was converted as Multi State Bank w.e.f. 11th January, 2007. The application was filed by the petitioner bank under section 101 of Maharashtra Co-operative Societies Act, when the bank was registered under the provisions of the said Act. However, by conversion, under the provisions of Multi State Act, 2002, petitioner became a co-operative bank within the meaning of section 3(f) of the Multi State Act. The learned counsel submits that the learned Assistant Registrar was right in permitting the petitioner to withdraw application filed under Section 101 of the Maharashtra Co-operative Societies Act in view of the petitioner having been converted as co-operative bank within the meaning of section 3(f) of the Multi State Act and in view of the petitioner already having filed dispute under section 84 of the said Act before the learned arbitrator. It is submitted that even without such liberty by the Assistant Registrar, petitioner was bound to invoke only the provisions of section 84 under the provisions of the said Multi State Act for the purpose of reference of such disputes between the parties for adjudication. Dispute under Section 84 was already filed by the petitioner and was pending on the date of the order. The learned counsel submits that whether liberty was granted by the Assistant Registrar by exercising any power under the provisions of Maharashtra Societies Act or not is of no significance. The learned counsel submits that while dismissing the writ petitions (926 to 928 of 2010) filed by the respondents in this court, it has been held that the order passed by the Assistant Registrar granting permission to withdraw application filed under section 101 could be challenged in revision under section 154 of the Maharashtra Co-operative Societies Act, 1960 and the said remedy had not been resorted to. It is submitted that even after dismissal of writ petition and appeal, the respondents did not file revision under section 154 of the Maharashtra Co-operative Societies Act. The learned counsel submits that if the present appeal is rejected, the petitioner would be without any remedy in view of the petitioner already having withdrawn its earlier application filed under section 101 of the Maharashtra Co-operative Societies Act. The learned counsel submits that the respondents having already filed written statement before the learned arbitrator have waived their right to challenge the issue of jurisdiction. The learned counsel submits that the judgment delivered by Shri Justice S.J.Vazifdar reported in (2009) 4 MLJ 929 is not applicable to the facts of this case.
21. Mr.Jain, the learned counsel appearing on behalf of the respondents on the other hand submits that the Multi State Co-operative Societies Act, 2002 came into force w.e.f. 19th August, 2002 and under section 22(5) (a) of the said Act once the amendment of bye law has been registered by the Central Registrar, the co-operative society shall as from the date of registration of amendment becomes a multi state co-operative society. It is thus submitted that the date on which the petitioner filed application under section 101 of the Maharashtra Co-operative Societies Act, the petitioner was governed by the provisions of the Maharashtra Co-operative Societies Act and thus in view of section 126(6) of the Multi State Act, the proceedings already filed by the petitioner under section 101 of the Maharashtra Co-operative Societies Act on the date of applicability of the provisions of the Multi State Societies Act, 2002 to the petitioner, such proceedings were bound to be pursued only before the authority before whom such application was filed and pending as if the Multi State Co-operative Societies Act, 2002 had not been enacted. The learned counsel submits that cause of action arose before 11th January, 2007. It is submitted that unless the provisions of Multi State Societies Act, 2002 curtails the right expressly no retrospective effect could be given. It is submitted that the respondents had substantial rights under the provisions of Maharashtra Cooperative Societies Act. Rights of the respondents under the provisions of Multi State Co-operative Societies Act, 2002 are limited. There is no provision of transfer of proceedings under Maharashtra Co-operative Societies Act or under Multi State Act. It is submitted that respondents had not given any consent that respondents would be bound by the provisions of the Multi State Act and more particularly that the dispute be resolved by arbitration. It is submitted that there is no arbitration agreement between the parties and thus entire proceedings were without jurisdiction. The learned counsel submits that the powers of the Assistant Registrar are circumscribed by the provisions of section 101 of the Maharashtra Co-operative Societies Act, he had no power to grant liberty to file proceedings under section 84 of the Multi State Cooperative Societies Act, 2002. It is submitted that liberty granted by the Assistant Registrar to file proceedings under Multi State Co-operative is nullity and without jurisdiction. The learned Assistant Registrar ought to have performed in the manner prescribed under the Maharashtra Co-operative Societies Act and in any other manner adopted by such authority is illegal and would amount to exceeding his authority.
22. It is submitted that though the petitioner had filed statement of claim before the learned arbitrator on 15th December, 2008, application under section 101 was not withdrawn on the date of filing statement of claim. It is submitted that though one application was already rejected by the Assistant Registrar, the petitioner filed second application which itself was not maintainable. It is submitted that the petitioner bank did not represent the correct facts before the Assistant Registrar. It is submitted that the proceedings were filed by the petitioner under section 84 not pursuant to the liberty but the same was already filed before the order granting liberty to withdraw came to be passed. The learned counsel placed reliance upon the judgment of the Supreme Court in case of ChiranjilalShrilal Goenka vs. Jasjit Singh and Ors.((1993) 2 SCC 507) and more particularly paragraph 17 which reads thus:-
â17. We agree with Mr. Chidambaram that the applicant had consented to refer the dispute for arbitration of dispute in the pending probate proceedings, but consent cannot confer jurisdiction nor an estoppel against statute. The other legatees in the will were not parties to it. In A.R. Antulay v. R.S. Naik MANU/SC/0002/1988:1988CriLJ1661 when a Constitution Bench directed the High Court Judge to try the offences under the Prevention of Corruption Act with which the petitioner therein was charged and the trial was being proceeded with, he questioned by way of writ petition the jurisdiction of this Court to give such a direction. A Bench of seven judges per majority construed meaning of the word 'jurisdiction', Mukherjee, J. as he then was, speaking per himself. Oza and Natarajan, JJ. held that the power to create or enlarge jurisdiction is legislative in character. So also the power to confer a right of appeal or to take away a right of appeal. The Parliament alone can do it by law and no Court, whether superior or inferior or both combine, can enlarge the jurisdiction of a Court and divest a person of his rights of appeal or revision. Ranganath Misra, J. as he then was, held that jurisdiction comes solely from the law of the land and cannot be exercised otherwise, in this country, jurisdiction can be exercised only when provided for either in the Constitution or in the laws made by the Legislature. Jurisdiction is thus the authority or power of the Court to deal with a matter and make an order carrying binding force in the facts. Oza, J. supplementing the question held that the jurisdiction to try a case could only be conferred by law enacted by the legislature. The Supreme Court could not confer jurisdiction if it does not exist in law. Ray, J. held that the Court cannot confer a jurisdiction on itself which is not provided in the law. In the dissenting opinion Venkatachaliah (sic) he then was to lay down that the expression jurisdiction or prior to determination is a "verb; I coal of many colours". In the case of a Tribunal, an error of law might become not merely an error in jurisdiction but might partake of the character of an error of jurisdiction. But, otherwise, jurisdiction is a 'legal shelter' and a power to bind despite a possible error in the decision. The existence of jurisdiction does not depend on the correctness of its exercise. The authority to decide embodies a privilege to bind despite error, a privilege which is inherent in and indispensable to every judicial function. The characteristic attribute of a judicial act is that it binds whether it be right or it be wrong. Thus this Court laid down as an authoritative proposition of law that the jurisdiction could be conferred by statute and this Court cannot confer jurisdiction or an authority on a tribunal. In that case this Court held that Constitution Bench has no power to give direction contrary to Criminal Law Amendment Act, 1952. The direction per majority was held to be void.â
23. The learned counsel for the respondents also placed reliance upon the judgment of Supreme Court in case of DalipSingh vs. State of Uttar Pradesh ((2010) 2 SCC 114). The learned counsel for the respondents also placed reliance upon the judgment in case of S.P.ChengalvarayaNaidu vs. Jagannath (SCC (1994) 1 SCC). The respondents also placed reliance upon the judgment of this court in case of AbhyudayaCo-op. Bank Ltd. vs. State of Maharashtra (2009 (4) MLJ 929) delivered by Shri Justice S.J.Vazifdar, J and more particularly paragraphs 10, 11, 12, 13, 19, 20, 24 and 25 which reads thus:-
â10. The next question then is whether either the MCS Act or the Multi - State Act either expressly or by necessary intendment make Section 154 ofthe MCS Act inapplicable qua proceedings instituted by societies which were subsequently converted into Multi - State Cooperative Societies. I think not. The proceedings were admittedly filed before a court of competent jurisdiction. There is nothing in either of the Acts which expressly bars the jurisdiction of the court upon the conversion of the petitioner as a Multi-State Cooperative Society. Nor is there anything which leads to that conclusion by necessary intendment. The provisions of the said Act in fact indicate that the courts and authorities under the MCS Act continued to have jurisdiction to decide matters which were validly filed before them prior to the 2 conversion of the societies registered under the Multi-State Act. Further neither of the Acts has abolished the courts or authorities under the MCS Act.
11. The Multi-State Act and the MCS Act do not contain any provisions for the transfer of pending proceedings under the MCS Act to the authorities constituted under the Multi - State Act. When the legislature intends transferring pending proceedings pursuant to the enactment of a new law it provides for the same expressly. This has for instance been done in the case of the Family Courts Act and the Recovery of Debts Due to Banks and Financial Institutes Act, 1993 Section 8 of the Family Courts Act 1984 reads as under:
8. Exclusion of jurisdiction and pending proceedings.- Where a Family Court has been established for any area,:
(a) no district court or any subordinate civil court referred to in Sub-section (1) of Section 7 shall, in relation to such area, have or exercise any jurisdiction in respect of any suit or proceeding of the nature referred to in the Explanation to that subsection;
(b) no magistrate shall, in relation to such area, have or exercise any jurisdiction or powers under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974);
(c) every suit or proceeding of the nature referred to in the Explanation to Sub-section (1) of Section 7 and every proceeding under Chapter IX of the Code of Criminal Procedure, 1973 (2 of 1974),:
(i) which is pending immediately before the establishment of such Family Court before any district court or subordinate court referred to in that subsection or, as the case may be, before any magistrate under the said Code; and
(ii) which would have been required to be instituted or taken before or by such Family Court if, before the date on which such suit or proceeding was instituted or taken, this Act had come into force and such Family Court had been established, shall stand transferred to such Family Court on the date on which it is established.
Section 31 of the Recovery of Debts Due to Banks and Financial Institutes Act, 1993 reads as under:
31. Transfer of pending cases.- (1) Every suit or other proceeding pending before any court immediately before the date of establishment of a Tribunal under this Act, being a suit or proceeding the cause of action whereon it is based is such that it would have been, if it had arisen after such establishment, within the jurisdiction of such Tribunal, shall stand transferred on that date to such Tribunal:
Provided that nothing in this subsection shall apply to any appeal pending as aforesaid before any court.
(2) Where any suit or other proceeding stands transferred from any court to a Tribunal under Sub-section (1),:
(a) the court shall, as soon as may be after such transfer, forward the records of such suit or other proceeding to the Tribunal; and (b) the Tribunal may, on receipt of such records, proceed to deal with such suit or other proceeding, so far as may be, in the same manner as in the case of an application made under Section 19 from the stage which was reached before such transfer or from any earlier stage as the Tribunal may deem fit.
12. There is no provision in the MCS Act or the Multi-State Act similar to Section 8 of the Family Courts Act and Section 31 of the Recovery of Deaths Due to Banks and Financial Institutions Act. This is a strong indication that the legislature did not intend affecting pending proceedings upon the conversion of a society into a multi State cooperative society.
13. There is yet another aspect which militates against a view to the contrary. In this case it is the society that has filed an application for review. The application however may have been filed against a society. If the respondents contentions are to be accepted even in such cases the application for review would be without jurisdiction upon the society being converted into a multi State cooperative society. Thus the right of a party would be affected not by any act on its part or the effect of any law upon it but by an act of the opposite party with which it had nothing to do. I see nothing in the scheme of either of these Acts which warrants an interpretation leading to such a conclusion.
19. Faced with this it was contended that the petitioner has a remedy under Section 84 of the Multi-State Act which reads as under:
84. Reference of disputes.- (1) Notwithstanding anything contained in any other law for the time being in force, if any dispute [other than a dispute regarding disciplinary action taken by a multi-State cooperative society against its paid employee or an industrial dispute as defined in Clause (k) of Section 2 of the Industrial Disputes Act, 1947 (14 of 1947)] touching the constitution, management or business of a multi-State cooperative society arises:
(a) among members, past members and persons claiming through members, past members and deceased members, or (b) between a member, past members and persons claiming through a member, past member or deceased member and the multi-State cooperative society, its board or any officer, agent or employee of the multi- State cooperative society or liquidator, past or present, or
(c) between the multi-State cooperative society or its board and any past board, any officer, agent or employee, or any past officer, past agent or past employee, heirs or legal representatives of any deceased officer, deceased agent or deceased employee of the multi-State cooperative society, or
(d) between the multi-State cooperative society and any other multi-State cooperative society, between a multi-State cooperative society and liquidator of another multi-State cooperative society or between the liquidator of one multi-State cooperative society and the liquidator of another multi-State cooperative society, such dispute shall be referred to arbitration.
(2) For the purposes of Sub-section (1), the following shall be deemed to be disputes touching the constitution, management or business of a multi-State cooperative society, namely:
(a) a claim by the multi-State cooperative society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the multi-State cooperative society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of any officer of a multi-State cooperative society.
(3) If any question arises whether a dispute referred to arbitration under this section is or is not a dispute touching the constitution, management or business of a multi-State cooperative society, the decision thereon of the arbitrator shall be final and shall not be called in question in any court.
(4) Where a dispute has been referred to arbitration under Sub-section (1), the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar.
(5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act, 1996.
It was submitted that the petitioner ought therefore to follow the procedure under the Arbitration and Conciliation Act, 1996. The submission is not well founded.
20. Section 84 of the Multi-State Act would apply to cases which are to be instituted under the said Act. It does not apply to cases which have already been instituted another Act including the MCS Act. The section does not even provide for a transfer of cases filed under the MCS Act to the authorities/arbitration provided for therein. If the legislature intended annulling all proceedings under the MCS Act and the representation/ filing thereof under Section 84 of the Multi-State Act the same would have been provided for expressly. As it is there is not even a suggestion to this effect in either enactment. To accept the respondents submission would be reading into the enactments consequences of a wide and crucial nature which cannot be done.
24. It was submitted on behalf of the petitioner that the revision application before respondent No. 3 is also saved by Section 126 and in particular Sub-section (6) thereof. Section 126 reads as under:
126. Repeal and saving .- (1) The Multi-State Cooperative Societies Act, 1984 (51 of 1984) is hereby repealed.
(2) Without prejudice to the provisions contained in the General Clauses Act, 1897 (10 of 1897) with respect to repeals, any notification, rule, order, requirement, registration, certificate, notice, decision, direction, approval, authorisation, consent, application, request or thing made, issued, given or done under the Multi-State Cooperative Societies Act, 1984 (51 of 1984) shall, if in force at the commencement of this Act, continue to be in force and have effect as if made, issued, given or done under the corresponding provisions of this Act.
(3) Every multi-State cooperative society, existing immediately before the commencement of this Act which has been registered under the Cooperative Societies Act, 1912 (2 of 1912) or under any other Act relating to cooperative societies in force, in any State or in pursuance of the provisions of the Multi-Unit Cooperative Societies Act, 1942 (6 of 1942) or the Multi-State Cooperative Societies Act, 1984 (51 of 1984), shall be deemed to be registered under the corresponding provisions of this Act, and the bye-laws of such society shall, insofar as they are not inconsistent with the provisions of this Act, or the rules, continue to be in force until altered or rescinded.
(4) All appointments, rule and orders made, all notifications and notices issued and all suits and other proceedings instituted under any of the Acts referred to in Sub-section (1) shall, insofar as they are not inconsistent with the provisions of this Act, be deemed to have been respectively made, issued and instituted under this Act, save that an order made cancelling the registration of a multi- State cooperative society shall be deemed, unless the society has already been finally liquidated, to be an order made under Section 86 for it being wound up.
(5) The provisions of this Act shall apply to:
(a) any application for registration of a multi-State cooperative society;
(b) any application for registration of amendment of bye-laws of a multi-State cooperative society, pending at the commencement of this Act and to the proceedings consequent thereon and to any registration granted in pursuance thereof.
(6) Save as otherwise provided in this Act, any legal proceeding pending in any court or before the Central Registrar or any other authority at the commencement of this Act shall be continued to be in that court or before the Central Registrar or that authority as if this Act had not been passed.
The submission was that the words " ...pending in any court or before the Central Registrar or any other authority ..." in Sub-section (6) ought to be construed to include proceedings which were pending at the time of conversion of a society registered under the MCS Act into a multi â State cooperative society and the cancellation of the registration of such a society under the MCS Act and the registration thereof under the Multi â State Act.
25. If my answer to the question that falls for consideration is correct this submission is not well founded. It would follow in that event that the proceedings under the MCS Act remaining unaffected could not fall within the ambit of Section 126. The submission also involves rewriting by adding words to the provision of Section 126(6)which is not permissible.â
24. It is not in dispute that w.e.f. 11th January, 2007, the petitioner was converted into a multi state bank and has been governed under the provisions of Multi State Act. It is not in dispute that certificate to that effect has been issued by the Central Registrar under Section 22 of the Multi State Act, 2002 in favour of the petitioner. In view of section 22(5) (a), from the date of amendment, the petitioner has become a multi state co-operative society. Under section 2 of the Act, it is provided that the said Act shall apply to all multi state co-operative societies. It is not in dispute that the registration of the petitioner society as co-operative society came to be cancelled on the petitioner becoming a multi state co-operative society w.e.f. 11th January, 2007.
25. It is clear that by the order passed by the Assistant Registrar, the petitioner bank has been already permitted to withdraw the said application filed under section 101 of the Maharashtra Co-operative Societies Act in view of the petitioner having been converted as multi state co-operative society. In my view, merely because the order records of liberty granted by the learned Assistant Registrar to file arbitration proceedings, such liberty in my view is of no significance. The petitioner had already filed arbitration proceedings under section 84 before the said order came to be passed by the Assistant Registrar. In any event the petitioner being a multi state society was not required to obtain any leave from the Assistant Registrar to file arbitration proceedings under section 84, thus merely because such liberty is granted, no part of the order can be considered as without jurisdiction. The petitioner being a multi state society is governed by the provisions of the Multi State Act. The remedy of arbitration provided under section 84 is a statutory and is binding on all parties mentioned therein. In my view, there is no substance in the argument of the respondents that there is no arbitration agreement between the parties or that the proceedings are without jurisdiction.
26. From the perusal of the order passed by this court on 24th February, 2010 in Writ Petition No. 926 of 2010 and other two connected matters, it is clear that the order passed by the Assistant Registrar which was impugned by the respondents in those three petitions has been upheld. This court rejected the contention of the respondent herein that the respondent was not heard by the Assistant Registrar while granting leave to withdraw application filed under section 101 of the Co-operative Societies Act. This court also observed that though the respondents had alternate remedy of filing revision application section 154 of the Maharashtra Co-operative Societies Act, 1960 before the Additional Joint Registrar, the respondents did not resort to such proceedings. This court held that the application was allowed to be withdrawn because the arbitration proceedings had been filed by the bank prior thereto under section 84 of the Multi State Co-operative Societies Act upon it having become a multi state bank. This court held that the arbitration proceedings were commenced on 23rd January, 2009 and since that remedy was available to the petitioner bank under the Multi State Bank, they could not pursue the remedy resorted by them. This court also observed that the arbitration proceedings have already continued and the respondents have already filed written statement in the arbitration proceedings. This court rejected the writ petition by recording elaborate reasons. The Letters Patent Appeal filed by the respondents challenging the orders and judgment delivered by this court on 24th February, 2010 came to be dismissed. The Division Bench held that there was nothing wrong with the order passed by the Learned Single Judge and the appeal was devoid of merits. It was however, made clear that the respondents can contest the issue and contest before the arbitrator to be appointed by the Central Registrar.
27. In case of AbhyudayaCo-op. Bank Ltd. vs. State of Maharashtra (supra) this court was considering the situation where the proceedings filed under section 101 of the Maharashtra Co-operative Societies Act against the borrowers was rejected by the Assistant Registrar. Revision application under section 154 of that Act was pending before the Divisional Authority. In the meanwhile the petitioner bank stood registered under the Multi State Act on 11th January, 2007. The Revisional Authority in view of such registration of the petitioner under the Multi State Co-operative Societies Act rejected the revision application on the ground that the authority under the Maharashtra Co-operative Societies Act did not have jurisdiction to decide the proceedings in respect of the society registered under the Multi State Act. The petitioner bank impugned the order of Revisional Authority by filing a writ petition. In the facts of that case, this court took a view that the proceedings under Maharashtra Co-operative Societies Act remaining un-affected could not fall within the ambit of Section 126 of the Multi State Co-operative Act. This court considering those facts quashed the order passed by the Revisional Authority and remanded the matter back to the revisional authority for disposal of the application. In my view, the view taken by this court that section 84 of the Multi State Act would apply to the case which are to be instituted under the said Act and would not apply to the case which had already instituted under another Act including Maharashtra Co-operative Societies Act is in that context and considering the peculiar facts of that case. In the facts of this case, the petitioner has already withdrawn application filed under section 101 of the Act in view of the petitioner having become Multi State Co-operative Society. The proceedings filed by the respondents impugning the order of the Assistant Registrar are already dismissed. The arbitration proceedings have already commenced. The respondents have already filed their written statement before the learned arbitrator. The petitioner bank had filed second application for withdrawal of proceedings before the Assistant Registrar after initiating proceedings under section 84 of the Multi State Act. The petitioner would not have proceeded with two parallel proceedings in respect of the same cause of action, one before the Assistant Registrar and another before the arbitrator. The petitioner being a Multi State Co-operative Society w.e.f. 11th January, 2007 have been governed by the provisions of the Multi State Co-operative Act. In view of the remedy provided under section 84 of the Multi State Act for resolution of dispute by the arbitration is provided under the statute and once such proceedings having been already filed under section 84, the petitioner could not have proceeded with application filed under section 101 of the Maharashtra Co-operative Societies Act. In my view, the learned Assistant Registrar was thus right in allowing the petitioner to withdraw the said application filed under section 101 of the Maharashtra Co-operative Societies Act in view of the subsequent development. In my view, the judgment of this court in case of AbhyudayaCo-op. Bank Ltd. vs. State of Maharashtra (supra) thus is of no assistance to the respondents.
28. In my view, the reliance placed by the respondents on the judgment in case of ChiranjilalShrilal Goenka vs. Jasjit Singh and Ors. (supra) and the proposition that jurisdiction could be conferred by the statute and court could not confer jurisdiction or on any authority or the Tribunal would not apply to the facts of this case. The learned Assistant Registrar though while permitting the petitioner to withdraw application under section 101 granted liberty to file dispute under section 84 of the Multi State Co-operative Societies Act, such proceedings were already filed on the date of such liberty granted by the Assistant Registrar. In my view no such liberty was necessitated for filing such proceedings. In my view this judgment of the Supreme Court thus is of no assistance to the respondents.
29. Reliance placed by the respondents on the judgment in case of DalipSingh vs. State of Uttar Pradesh (supra) in support of the submission that the petitioner bank has suppressed certain facts before the Assistant Registrar and thus were guilty of misleading the court and thus present writ petition filed by the petitioner shall be dismissed at the threshold without considering the merits of the claim. In my view, there is no suppression or any misleading statement made by the bank in the present proceedings or before the authorities or that the such statement is of such nature which would debar the petitioner from hearing of the present matter on merits by this court. In my view, the judgment of the Supreme Court in case of DalipSingh vs. State of Uttar Pradesh (supra) relied upon by the respondents is of no assistance to the respondents. Similarly the judgment of the Supreme Court in case of S.P.ChengalvarayaNaidu vs. Jagannath (supra) is also of no assistance to the respondents.
30. I am therefore of the view that the learned arbitrator has jurisdiction to entertain, try and dispose of the dispute filed by the petitioner bank. The learned Assistant Registrar has rightly permitted the petitioner bank to withdraw the application filed under section 101 of the Co-operative Societies Act, 1960 which order has already upheld by this court in two proceedings filed by the respondents.
31. In my view, once application under section 101 of the Maharashtra Cooperative Societies Act filed by the petitioner was allowed to be withdrawn, the effect of the withdrawal was as if such application was never filed. I am not inclined to accept the submission made by Mr.Jain, the learned counsel appearing for the respondents that there is no arbitration agreement between the parties or that the respondents not having given consent to appoint any arbitrator, the matter could not be referred to the arbitration under section 84 of the Multi State Act. In my view, remedy of the arbitration provided for under section 84 is statutory and no consent of the parties is required for referring the dispute to arbitration once condition under section 84 are satisfied.
32. From the perusal of the record, it is clear that the petitioners had filed application for withdrawal of the application under section 101 of the Cooperative Societies Act in view of the subsequent development. The application dated 25th November, 2008 was the first application filed by the petitioner for seeking liberty to withdraw the application filed under section 101 of the Maharashtra Co-operative Societies Act. During the pendency of the said application, the petitioner filed application under section 84 of the Multi State Act before the learned arbitrator for seeking resolution of dispute. By an order dated 12th January, 2009 the Assistant Registrar rejected the first application for seeking withdrawal. In these circumstances, the petitioner bank filed another application on 25th March, 2009 for seeking withdrawal of application filed under section 101 in favour of the petitioner already having filed dispute under section 84 of the Multi State Act. In my view, application dated 25th March, 2009 filed by the petitioner was in order and was not barred by res judicata.
33. I, therefore, pass the following order:-
(a) The impugned orders passed by the learned arbitrator on 9th May, 2011 in all three Arbitration Petition Nos. 935/2012, 936/2012 and 937/2012 are set aside.
(b) The learned arbitrator is directed to proceed with the arbitration proceedings. The learned arbitrator shall make an endevour to decide the matter on merits expeditiously.
(c) All the aforesaid petitions are allowed in the aforesaid terms.
(d) No order as to costs.