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Himachal Pradesh High Court · body

2025 DAILYLAW 3498 (HP)

H. P. State Cooperative Bank Limited v. Nirmla Devi

2025-09-23

Ajay Mohan Goel

body2025
JUDGMENT : AJAY MOHAN GOEL, J. By way of this petition, the petitioner has, inter alia, prayed for the following relief:- “It is, therefore, prayed that this petition may kindly be allowed and impugned Order Annexure P-5 passed by the Ld. Arbitrator Deputy Registrar, Cooperative Societies (Central Division) Mandi District Mandi, Himachal Pradesh and Order Annexure P-6 by the Ld. Jt. Registrar, Cooperative Societies may kindly be ordered to be quashed and set aside and petition Annexure P-3 filed by the respondent may kindly order dismissed in the interest of justice and fair play.” 2. Brief facts necessary for the adjudication of the present petition are that as per the respondent, a Lease Agreement was entered into between the respondent and the petitioner to lease out the property at Kallari on National Highway to the petitioner-Bank. This was on account of the District Manager of the Bank in the month of June, 2016, contacting the respondent and showing his willingness to take on lease the premises in issue for opening/shifting the branch of the Bank in the premises in issue. As per the respondent, after consulting her family members the proposal was agreed to. The respondent acted thereupon and spent about Rs.4,00,000/-to make the premises ready for the occupation of the Bank. A Lease Agreement was also entered into. Monthly rent of Rs.10,000/- was fixed w.e.f. 12.07.2017, i.e. the date of the Agreement. In terms of the Lease Agreement, the lease was for a period was 15 years and the rent was to be enhanced in terms of the contents of the agreement. As per the respondent, after the execution of the Lease Deed, the Bank Authorities remained silent till January, 2019, when she received a notice regarding the termination of the lease. Feeling aggrieved, she filed a petition under Section 72 of the Co-operative Societies Act, which was allowed vide Annexure P-5, by the Deputy Registrar, Co-operative Society, Central Division. Feeling aggrieved by this Award, an appeal was preferred by the Bank, which was dismissed on 25.08.2021. Thereafter, a revision was preferred, which was dismissed as not maintainable on 25.08.2022 and thereafter, this petition has been filed. 3. Learned Counsel for the petitioner-Bank argued that the impugned orders are not sustainable in the eyes of law, for the reason that the petition filed by the respondent under Section 72 of the Co-operative Societies Act was not maintainable. Thereafter, a revision was preferred, which was dismissed as not maintainable on 25.08.2022 and thereafter, this petition has been filed. 3. Learned Counsel for the petitioner-Bank argued that the impugned orders are not sustainable in the eyes of law, for the reason that the petition filed by the respondent under Section 72 of the Co-operative Societies Act was not maintainable. He submitted that the dispute between the petitioner and the respondent was not one envisaged under Section 72 of the Co-operative Societies Act and on this count, the impugned orders were liable to be set aside. 4. On the other hand, learned Counsel for the respondent argued that there was no infirmity in the orders passed under Section 72 of the Co-operative Societies Act or in appeal. He further argued that the proceedings filed under Section 72 of the Co- operative Societies Act were maintainable and therefore, as there was not merit in the petition, the same be dismissed. 5. I have heard learned Counsel for the parties and have also gone through the impugned orders as well as documents appended with the petition. 6. Before referring to the documents appended with the petition, I will refer to the provisions under Section 72 of the Co- operative Societies Act. Section 72 is a part of Chapter-IX of the H.P. Co-operative Societies Act, 1968, which Chapter deals with settlement of disputes. 7. Section 72 of the Co-operative Societies Act refers to the disputes which may be referred to Arbitration. Relevant partition whereof is quoted hereinbelow:- “ 72. Section 72 is a part of Chapter-IX of the H.P. Co-operative Societies Act, 1968, which Chapter deals with settlement of disputes. 7. Section 72 of the Co-operative Societies Act refers to the disputes which may be referred to Arbitration. Relevant partition whereof is quoted hereinbelow:- “ 72. Disputes which may be referred to arbitration.- (1)  Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a  co-operative society arises- (a)  among members, past members and persons claiming through members, past members and deceased members; or (b)  between a member, past member or person calming through a member, past member, or deceased member and the society, its committee or any officer, agent or employee of the society or liquidator, past or present; or (c)  between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent or deceased employee of the society; or (d)  between the society and any other co-operative society, between a society and liquidator of another society or between the liquidator of one society and the liquidator of another society; or (e)  a surety of a member, past member or a deceased member or a person other than a member who has been granted a loan by the society under section 58 whether such surety is or is not a member of the society; such disputes shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. (2)  For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management, or the business of a co- operative  society, namely:- [(a) a claim by the society for any debt or demand due to it from a member or an employee, or the nominee, heir or legal representative of a deceased member or an employee, whether such debt or demand be admitted or not;] (b) a claim by a surety against the principal debtor where the society has recovered from a surety any amount in respect of any debt or demand due to it from the principal debtor as a result of 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 the society. (3)  If any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, management or the business of a co- operative society, decision, thereon, of the Registrar shall be final and shall not be called in question in any court.” 8. A perusal of this Section, therefore, demonstrates that the disputes which can be referred to arbitration, inter alia, are (a) disputes touching the Constitution, management or the business of Co-operative Society among members, passed members claiming through a member, passed member or deceased and the Society, its Committee or any Officer etc. of the Society, (b) between a member, passed member or person claiming through a member, passed member or deceased member and the Society, its Committee or any Officer etc., (c) between the Society or its Committee and any passed Committee or any Officer, Agent or employee etc., (d) between the Society and any other Co-operative Society, between a Society and liquidator of another Society or between liquidator of one Society and Liquidator of another Society and (e) a surety of a member, passed member of a deceased member or a person other than a member who has been granted a loan by the Society under Section 58, whether such surety is or is not a member of the Society. 9. 9. In the present case, admittedly, the dispute which was referred by the respondent herein under Section 72 of the Co- operative Societies Act did not fall under any of the above mentioned categories contemplated in Section 72 of the Co-operative Societies Act. The dispute which was referred for arbitration was a dispute between a lessor and the Bank, in terms whereof, the lessor was aggrieved by the fact that the lease entered into was not being honoured by the Bank. This dispute by no stretch of imagination could have been said to be a dispute which is envisaged in Section 72 of the Co-operative Societies Act. Therefore, remedy of the respondent herein in the backdrop of the dispute between her and the respondent-Bank was obviously not by way of arbitration under Section 72 of the Co-operative Societies Act. In fact, by entertaining the dispute under Section 72 of the Co-operative Societies Act, the Authority which passed the order committed a jurisdictional error and this was despite the fact that a preliminary objection was taken by the petitioner-Bank herein before the said Authority with regard to maintainability of the petition. In fact, a perusal of the impugned order demonstrates that the issue of maintainability was not entered into at all by the said Authority. The Authority did not even frame an issue with regard to maintainability of the arbitration proceedings. 10. The Authority erred in not appreciating that if an objection is taken with regard to maintainability of the proceedings, then before deciding the issue of justiciability, the issue of maintainability has to be redressed first. 11. Similarly, the Appellate Authority also did not correctly deal with this aspect of the matter and it erred in coming to the conclusion that the dispute which was referred to the Arbitrator was touching  the  Constitution,  Management  or  business  of  a Co-operative Society, which in order to fall within Section 72 of the Co-operative Societies Act, has to be between the persons or the entities mentioned under Section 72 of the Act. 12. Herein, admittedly, the dispute which was raised by the respondent was not in her capacity as a member or past member of the Society with the Society. 12. Herein, admittedly, the dispute which was raised by the respondent was not in her capacity as a member or past member of the Society with the Society. Though, during the hearing of this petition learned Counsel for the respondent submitted that the respondent happened to be an ex member of the Society, because at one stage she had obtained loan from the Bank for which she had become a member, but thereafter, she had seized to be a member, but even this, in the considered view of this Court did not confer any right upon the petitioner to invoke Section 72 of the Co-operative Societies Act. This is for the reason that the leasing out of the building by the respondent to the petitioner-Bank was not in her capacity either as a member or an ex member of the Society. Therefore, it was not a dispute which was touching the Constitution or business of the Society vis-à-vis the petitioner in her capacity as a member or an ex member. At the cost of repetition, it is stated that herein the dispute was simply between a lessor and a lessee and obviously, the same could not have been referred or decided under the provisions of Sections 72 and 73 of the Co-operative Societies Act. 13. Therefore, in the backdrop of the above discussion, the petition is allowed. Impugned orders passed by the Authority, i.e. impugned Order Annexure P-5, passed by the Ld. Arbitrator Deputy Registrar, Cooperative Societies (Central Division) Mandi District Mandi, Himachal Pradesh and Order Annexure P-6, passed by the Ld. Jt. Registrar, Co-operative Societies are accordingly, quashed and set aside. This petition is, therefore, allowed by quashing the impugned orders. 14. The petition stands disposed of. Pending miscellaneous application(s), if any also stand disposed of accordingly.