Himachal Pradesh High Court
Parkash Singh vs State Of Himachal Pradesh And Ors. on 30 December, 1986
Equivalent citations: AIR1987HP54
JUDGMENT P.D. Desai, C.J.
1. The petitioner, who is a member of the respondent-Co-operative Bank, was allowed the facility of a Cash Credit Over Draft Account to the extent of Rs. 30,000/- by the respondent-Co-operative Bank. The petitioner availed of the facility and failed to make payment of the sum due at the foot of the Over Draft Account. The dispute between the parties was referred to arbitration under Section 72 of the Himachal Pradesh Co-operative Societies Act, 1968 (hereinafter referred to as "the Act").
2. On July 5, 1985, the Arbitrator made the impugned award, Annexure-P-4, which reads as follows :
"That the respondent Shri Parkash Singh son of Shri Arjun Singh owner of General Store, School Bazar, Mandi, H. P. will have to pay Rs. 57,188.50 principal and Rs. 2,000.00 costs of arbitration, total Rs. 59,199.50, to the applicant before 15-8-1985 with interest on the principal at the rate of 15% p.a. till date of payment.
If the respondent fails to pay the amount by 15-8-1985, the applicant will have a right to get the movable and immovable property of the respondent attached by civil Court under Section 87(i)(b) of the Himachal Pradesh Co-operative Societies Act as arrears of land revenue.
If still some amount remains due, then, the sureties (1) Shri Kasturi Lal s/o Shri Yog Raj, Book Sellers, School Bazar, Mandi, H. P. (2) Shri Shyam Lal, s/o Shri Dharm Pal, owner of Provision Store, School Bazar, Mandi, H. P. will be liable and their immovable and movable property will be liable to attachment in equal shares and thus remaining amount will be realised by the applicant as arrears of land revenue. Announced ex parte."
3. The petitioner, feeling aggrieved by the award preferred an appeal before the Registrar, Co-operative Societies, under Section 93 of the Act, on Sept. 3, 1985. The appeal was heard and dismissed by an order dated March 3, 1986, passed by the Assistant Registrar, Co-operative Societies Mandi, Annexure-P7, which reads as follows :--
"The applicant, Parkash Singh has appealed against the decision of the Arbitrator dated 5-7-1985. In view of the reply of the respondent and the record of the case this Court is of the view that the decision of the Arbitrator dated 5-7-1985 is maintained.
The appeal filed by the Applicant side, Shri Parkash Singh son of Shri Arjun Singh, Proprietor Messers Parkash General Store, School Bazar, Mandi is dismissed."
4. Hence the present Writ Petition.
5. It is strange to find the authorities performing quasi-judicial functions under the Act making an award and disposing of an appeal by such laconic orders. The reference of a dispute to an Arbitrator under Section 72 of the Act is in substitution of the ordinary remedy by way of a suit. The Arbitrator, therefore, substitutes a civil Court while entertaining and deciding a dispute referred to him under the aforesaid statutory provision.
The Appellate Authority likewise substitutes a Court of appeal and performs the same functions which a civil Court exercising powers of an appellate Court does. It is the bounden duty of the Arbitrator and of the Appellate Authority constituted under the Act to provide to the parties interested in the dispute an opportunity to present their case on questions of law and fact, to ascertain facts from the materials on record after disclosing the same to the party against whom it is intended to use them and to record their adjudication by a reasoned order in the course of which findings must be reached on facts in controversy and law must be applied to the facts found.
6. It is a cardinal principle of rule of law which governs our polity that every judicial or quasi-judicial authority must, while adjudicating disputed claims, make speaking orders, that is to say, orders which deal with all the contentions raised and in which the conclusions drawn and findings recorded are supported by reasons which can be tested by reference to the material on the record of the case, including oral and documentary evidence. This is imperative so that the litigants and, more particularly, the aggrieved party know the grounds which weighed in the mind of such authority in determining the questions of facts and law arising for its determination. This is imperative also for the fair and equitable administration of justice since it ensures that the decision on a disputed claim is reached according to law and is not the result of caprice or whim or fancy or extraneous factors. When there is a statutory provisions for appeal, the fulfilment of the requirement is all the more essential in order to enable the appellate authority to know or be apprised of the reasons which impelled the adjudicating authority of the first instance to pass the order under appeal. Even the appellate authority must record a reasoned decision so that the revisional authority, if, any, or the High Court in the exercise of its writ jurisdiction, is able to test the validity of the decision. The recording of reasons in deciding cases affecting the rights of parties is now held to be a mandatory requirement of the rules of natural justice See : Madhya Pradesh Industries Ltd. v. Union of India, AIR 1966 SC 671, Mahabir Prasad v. State of U.P., AIR 1970 SC 1302, Mahabir Jute Mills v. Shibban Lal, AIR 1975 SC 2057, Ranganath v. Daulat Rao, AIR 1975 SC 2146, Siemen Engineering and Mfg. Co. v. Union of India, AIR 1976 SC 1785, Bachan Singh v. State of Punjab, AIR 1980 SC 1355 and Vasudeo Vishwanath Saraf v. New Education Institute, AIR 1986 SC 2105. These well-settled principles apply to the orders made by the authorities constituted under the Act to perform quasi-judicial functions.
7. In the instant case, the award of the Arbitrator and the decision of the Appellate Authority which have been extracted verbatim hereinabove, show that these cardinal principles have been followed more in breach than in observance. The award and the appellate decision, both suffer from the vice of the lack of a reasoned decision and do not satisfy our judicial conscience that the decisions were arrived at in accordance with law. This legal infirmity is sufficient to vitiate both the award and the decision of the Appellate Authority.
8. For the foregoing reasons, the writ petition succeeds and it is allowed. The impugned award, Annexure P-4, and the decision of the Appellate Authority, Annexure P-7, are both quashed and set aside. The case is remanded to the Arbitrator who will decide the same afresh in accordance with law and in light of the observations made in the course of this judgment.
9. Rule made absolute accordingly. The second respondent will pay the costs of this petition to the petitioner which are quantified at Rs. 250/-.
10. Let a copy of this judgment be sent to the Secretary (Co-operation) and the Registrar, Co-operative Societies, Himachal Pradesh, under the sea! of this Court and hand of the Registrar, with a direction to them to circulate the judgment to all the quasi-judicial authorities constituted under the Act.