Calcutta High Court
M/S. Ramkrishna Samabay Krishi Unnayan ... vs M/S. Egra Thana Co-Operative ... on 10 September, 1998
Equivalent citations: (1999)1CALLT307(HC)
Author: S.B. Sinha
Bench: Satyabrata Sinha
JUDGMENT S.B. Sinha, J.
1. A question which, inter alia, arises for consideration in this appeal is as to whether a subsequent arbitrator appointed by the Registrar of Co-operative Society can consider the evidences brought by the parties before the previous arbitrator.
2. The basic fact giving rise to the aforementioned question is as follows :--
On or about 14th June, 1995 the appellant filed a dispute case against the respondent No. 1 before the Registrar, Co-operative Society for recovery of certain amount which was registered as Dispute Case No. 54/95-96. The Registrar instead of resolving the said dispute himself appointed one Sri Arun Kumar Das, respondent No. 9 herein as an Arbitrator. Admittedly the said Arbitrator could not pass an award within the prescribed period but the said respondent proceeded with the hearing of the said dispute being Dispute Case No. 54/95-96 between 23rd June. 1995 to 19th May, 1997. Keeping in view the fact that no award could be made within the aforementioned period, the respondent No. 7 returned the said records of the Dispute Case to the said Assistant Registrar of Co-operative Society, Midnapore-III without passing any order. By an order dated 7th October, 1997 Sri S.K. Malty, respondent No. 8 herein was appointed as an Arbitrator by the Registrar. He held the proceedings between 4lh November, 1997 to 16th March, 1998 and passed an award on the said date. The respondents Nos. 1 and 2 filed a writ petition which was registered as W.P. 6285 (W) of 1998, questioning the validity of the said award passed by the respondent No. 8. The learned Judge appears to have heard the matter on 6th April and 16th April, 1998 and keeping in view the question of law Involved in the application; by reason of the Impugned order dated 30th April. 1998 it allowed the said writ petition by setting aside the said order dated 16th March 1998 on the ground that the Arbitrator had passed the award after expiry of the time prescribed under sections 95 and 96 of the Co-operative Societies Act.
3. Mr. K.D. Mukherjee, the learned counsel appearing on behalf of the appellant submitted that as the second arbitrator has passed the award within the period prescribed under sections 95 and 96 of the West Bengal Co-operative Societies Act, the same could not have been quashed. The learned counsel submitted that from a perusal of the records of the proceedings maintained by the Arbitrator it would appear that the respondent No. 8 had summoned the parties and called for a large number of documents which were token in evidence and in that view of the matter, no exception to the said award could be taken.
4. Mr. Milan Bhattacharjee, the learned counsel appearing on behalf of the writ petitioners-respondent Nos. 1 and 2, on the other hand, submitted that the Arbitrator who is a nominee of the Registrar is a court and in that view of the matter, he was bound to initiate a new proceeding. in support of his aforementioned contention reliance has been placed on Registrar, Cooperative Societies v. Krishna Kumar Singhania , a Division Bench decision of this court in which one of us (S.B. Sinha. J) was a member in Krishna Chowdhnry & Ors. v. State of West Bengal and Ors. reported in 1996(2) CLJ 365 and in Re. National Agricultural Cooperative Marketing Federation of India Limited v. M/s. Ram Narayan Tech Chand reported in 1988(1) CHN 441.
5. Before adverting to the question, the relevant provisions of the Cooperative Societies Act, 1983 (hereinafter referred to as the said Act) and the Rules framed thereunder viz. the West Bengal Co-operative Societies Rules, 1987 (hereinafter referred to as the said Rules) may be noticed.
6. in terms of section 96 of the said Act the Registrar subject to the rules may either decide the dispute himself of transfer the same to a person authorised by the State Government to exercise the powers of the Registrar in this behalf or refer the dispute for one or more Arbitrator. Sub-section (6) of section 96 which is material for the purpose of this cose reads thus :--
"Section 96. Settlement of dispute--(i).....
(6) If the Registrar or the person or the arbitrator or arbitrators or the court of Arbitrators falls to decide the dispute within the period specified in sub-section (5), he shall submit a report to his or its appointing authority stating reasons for such failure at least fifteen days before the expiry of the said period and such authority shall allow further time not exceeding six months for disposal of the dispute".
7. Chapter XI of the said Rules relates to settlement of disputes. Rule 171 provides for the reference of a dispute. Rule 173 which provides for appointment of Arbitrators reads thus :--
"Rule 173. Disputes and appointment of arbitrators--(1) when the Registrar decides to refer a dispute to a Board of Arbitrators he shall-
(i) call upon each of the parties to nominate one person as arbitrator within such time as he may direct, and where a party consists of more than one person, such persons shall jointly make only one nomination.
(ii) nominate the third arbitrator who shall act as a Chairman.
(2) If a party fails to make a nomination within the appointed time Registrar may himself make the nomination.
(3) Where the arbitrators are appointed, the opinion of the majority shall prevail."
8. Rule 176 provides for procedure for disposal of disputes. Rule 177 provides for award or decision. Rule 178 provides for withdrawal of reference by the Registrar. Rule 179 provides for execution of decision or award which reads thus :--
"179. Execution of decision or award--In any dispute, the award of the arbitrator or of the Registrar, shall, upon application, be enforceable by any civil court having local jurisdiction in the same manner as a decree of such court as If it were a decree of the court."
9. it is not in dispute that the appellant is a Co-operative Society. it is further not in dispute that the dispute referred to by the writ petitioners-respondent Nos. 1 and 2 comes within the preview of section 95 of the said act as the same concerns the business of a Co-operative Society capable of being the subject of civil litigation. The said Act is a self-contained code. it provides for not only the scope and ambit of such disputes but also provides for such limitation, the authorities who are entitled to resolve the said dispute are also named therein.
10. The question as to whether section 96(b) of the said Act is mandatory or directory is no longer res integra.
11. in Registrar Co-operattve Societies v. Krishna Kumar Singhania , the apex court held :--
"It would thus be clear that the Act is a complete code in deciding the disputes by the arbitrator or board of arbitrators appointed by the Registrar under sections 95 and 96 of the Act. The arbitration proceeding does not get abated after the expiry of one year from the date of the appointment of arbitrator under section 95. The Registrar, on an application by either party to the proceedings, may withdraw the proceedings before himself and may decide the dispute or appoint another arbitrator or board of arbitrators, as the case may be.
Arbitration agreement signed by the parties is the foundation for reference under the Arbitration Act to an arbitrator appointed by the court to decide dispute arising under the contract as per its terms. in case of failure of arbitration under any other enactment, section 46 of the Arbitration Act seeks to step in and effectuates arbitration of the dispute referred under the statute. However. it would be subject to the provisions of the special law and the exceptions envisaged in section 46 Itself. Section 46 clearly shows that when a statutory arbitration has become unworkable, (sic it) Introduces a fiction that the arbitration under the statute stands substituted by a deeming agreement between the parties, as if it is a bilateral agreement for reference under the Arbitration Act. The provisions of the Arbitration Act would then apply, except those excluded by section 46 itself. One of the excluded sections is section 12 of the Arbitration Act, which gives power to the court, after removal of the arbitrators, to appoint an arbitrator or umpire. The condition precedent for applying section 46 is that there should not exist any inconsistency between the special law and the Arbitration Act. it would thus be seen that for revocation of the appointment of an arbitrator made by the Registrar under section 95 of the Act, there must exist conditions like misconduct etc. as required by section 11 of the Arbitration Act and on proof thereof only the court gets power to remove the arbitrator and exercising power under section 12 of the Arbitration Act, the court would appoint another arbitrator."
12. Having thus, opined the apex court held:--
"Thus, considered, the scheme of the Act is inconsistent with the provisions of the Arbitration Act, section 46 of the Arbitration Act does not get attracted to the disputes arising under the Act. The registrar under the Act, therefore, did not become functus officio nor is he denuded of the power to withdraw the dispute from the arbitrator and to decide himself or to appoint another arbitrator to decide the dispute between the pjtrtles. The High Court therefore, was clearly in erros in revoking the appointment of the third respondent as arbitrator and appoint a fresh arbitrator. However, since the third respondent had not made the award within one year and since the limitation of one year prescribed under section 96 had expired by efflux of time, he ceased to have power to proceed with the adjudication of the dispute and to make an award.
Under the aforesaid circumstances, it would be open to the first respondent to make an application to the Registrar afresh either to decide the dispute himself or to appoint another arbitrator".
(underlining is mine for emphasis)
13. The said decision was considered by a Division Bench of this court in Krishna Chowdhwy & Ors. v. State of West Bengal & Ors. reported in 1996(2) CLJ 365 = 101 CWN 197, wherein it was held that the power of the Registrar is a plenary one whereas the arbitrator is required to exercise the power to settle the disputes subject to the conditions laid down under the said Act. it was held that the power to extend the time to make award is only year and thus, the same cannot be extended by the Registrar beyond the said period. This court distinguishing an earlier Division Bench decision of this court in Bhaglrathl Co-operative Joint Farming Society v. Howrah Ztlla Parishad reported in 87 CWN 981 held :--
"In the said decision, it appears that no argument to the effect that the arbitrator is merely a delegatee and thus he exercised his power subject to the statutory delegation as well as limitation prescribed thereunder was neither argued nor considered. The arbitrator, one Mr. Bhattacharjee's own showing, is a high powered body and his award is enforceable in Civil Court. it is now well settled that If statute confers a power to be exercised on certain condition, the conditions prescribed are normally held to be mandatory. it is also well known that the word 'may' also be used in the sense of 'shall' or 'must' by the legislature while conferlng the power on a high dlsnltary. Reference in this connection may be made to the case ."
14. This court further referred to Krishna Kumar Singhanta (supra) and came to the conclusion that in view of the said decision that despite such term the Registrar is not denuded with power and Rule 178 fills the gap and thus, evidently in a case where the award is not made within the time prescribed, the said rules come into play and such a scheme is consistent with the right of appeal provided against the award of the arbitrator in terms of the section 136 of the Act read with 1st schedule appended thereto. it was observed :--
It is now well known that where a rule framed by a State is placed before the Legislature, the Rule forms a part of the Act unless it is contrary to or Inconsistent with the provisions of the statute. As Indicated hereinbefore, the Registrar in terms of sub-section (2) of section 96 is entitled to withdraw any dispute transferred or referred under subsection (1) and may decide it himself or transfer or refer it to any other person or arbitrator or court of Arbitrators for disposal. in our opinion, the provision of sub-section (2) of section 96 read with Rule 178 of the Rules as interpreted by the apex,court would come into play and would amount to the Arbitrator's becoming functus officloif a report within the period of six months is not submitted by him. Such report, requires to be supported by reasons. His right to continue as an arbitrator is dependent on him submission of a report and consequent extension of time for making the award by the Registrar. Even in the matter of grant of extension of time, the jurisdiction of the Registrar is limited. it Is, therefore, not correct to contend that no consequence is provided for. The statutory authority, as is well known, while exercising his power must keep in view good sense and Justice. A report together with reasons only confer a power upon the Registrar to extend the time in terms of sub-section (6) of section 95 of the Act and thus in a case where no report has been submitted by the arbitrator, the Registrar by necessary implication will also have no jurisdiction to extend the time. it is now well known that a law laid down by the apex court being a law within the meaning of Article 14 of the Constitution of India must be read in its entirety and reasonably. The question which came up for consideration before the Supreme Court was as to whether the arbitrator becomes functus officio on the expiry of one year although the time for making award was extended by the Registrar. The apex court held that in such a situation the arbitrator does become functus officio, despite extension of time granted by him, and, thus, in our opinion, it must be held that in a case where no extension has been granted, the arbitrator would become functus of offlclo and thus the ratio of the Division Bench of this court in Bhaglratht Co-operative's case (supra) as regard interpretation of section 95(6) must be held to be contrary to or Inconsistent with the latest decision of the apex court."
15. in Karnal Improvement Trust v. Parkash Want! , it was, inter alia, held that a quasi Judicial tribunal exercises its statutory function and its award becomes a decree of the court. The time limit set down by the statute is mandatory.
16. The court keeping in view the Supreme Court Judgment in Krishna Kumar Singhanla observed :--
"However, it would be open to the Registrar to appoint another Arbitrator for exercise his power in any other manner laid down under section 96(2) of the Act read with Rule 178 of the Rules."
17. The learned trial Judge has relied upon said decision and has held that an arbitrator became functus officio and thus, the award passed by him is a nullity. But in view of the aforementioned decisions themselves, the Registrar has the power to withdraw the reference and appoint another arbitrator. For the said purpose it is not necessary that an application must be filed.
18. The submission of Mr. Bhattacharyya to the effect that as the Supreme Court has observed in paragraph 18 in Krishna. KitmarStnghania's case that an application has to be made before the Registrar afresh, the suo moto reference to another arbitrator is wholly illegal, cannot be accepted inasmuch as assuming in his favour, the appellants-writ petitioners having submitted themselves to the jurisdiction of the said arbitrator without any demur whatsoever cannot now turn rond the question his Jurisdiction. Although an arbitrator appointed under the said Act cannot be equated with an arbitrator appointed under Arbitration Act but the fact remains that even in such a case the principles of estoppel will apply.
19. in Sohan Singh v. General Manager. Ordinance Factory, Khamarla, Jabalpur , the aapex court has dearly held that a question of jurisdiction had not been raised by the parties before the concerned court, such a jurisdictlonal question cannot be raised for the first time in the writ petition.
20. it may be true as it appears from the records that before the respondent No. 9 some witnesses were examined. However. it also appears that the respondent No. 8 Issued fresh summons upon the parties on 6.11.97 and from various order sheets it appears that he had called for various documents before passing the award impugned in the writ application. it is not clear from the records and the award as to whether in passing the said award the learned Arbitrator considered the evidences adduced by the parties before the respondent No. 8 but for the purpose the disposal of this case we would assume that the respondent No. 9 is a court and he had taken into consideration the pleadings and the evidences adduced by the parties before the respondent No. 9.
21. A party may have a legal right to adduce fresh evidence or file fresh pleadings. The writ petitioners themselves were the claimants. They filed the aforementioned Dispute case. Had it been their contention that the second reference was bad in law and in any event, the respondent No. 9 was only entitled to take fresh evidence, they should have raised such a contention before the Arbitrator himself. They cannot, in our opinion, be permitted to keep mum before the Arbitrator, sit on the fence and question the award when it goes against them. See Af/s. Hindustan Tea Co. v. K. Sashlkant & Co. , Prasum Roy v. The Calcutta Metropolitan Development Authority and N. Challappan v. The Secretary. Kerala State Electricity Board .
22. in view of the aforementioned authoritative pronouncement we are of the opinion that the award filed by the respondent No. 9 the petitioner could not be permitted to question in a writ petition on the aforementioned grounds as the writ petition is barred under the doctrine of estoppel waiver and acquiescence. Unfortunately, this aspect of the matter had neither been raised nor considered by the learned trial Judge.
23. Francis Bennlon in the Statutory Interpretation (1984 Edition) has said:
"A person entitled to the performance of a statutory duty, where the case is within the principle qutllibet petest renunttare juri pro se introducto (a person may renounce a right introduced for his benefit), can effectively waive performance of the duty by the person bound: and that person can effectively contract out of performing the duly."
24. in the case of (5) Lachoo Malv. Radhye Shy am it was pointed out :
"The general principle is that every one has a right to waive and to agree to waive the advantage of a law or rule made solely for the benefit and protection of the individual in his private capacity which may be dispensed with without infringing any public right or public policy. Thus the maxim which sanctions the non-observance of the statutory provision is quttlbet potest renunttare juri pro se introducto. [See Maxwell on Interpretation of Status, Eleventh Edition, pages 375 & 376). If there is any express prohibition against contracting out of a statute in it then no question can arise of any one entering into a contract which is so prohibited but where there is no such prohibition it will have to be see whether an Act is intended to have a more extensive operation as a matter of public policy."
25. in Halsbury's Laws of England. Volume 8. Third Edition, it is stated in paragraph 248 at page 1143:
"As a general rule, any person can enter into a binding contract to waive the benefits conferred upon him by an Act of Parliament, or. as it is said, can contract himself out of the Act, unless it can be shown that such an agreement is in the circumstances of the particular case contrary to public policy. Statutory conditions may. however, be Imposed in such terms that they cannot be waived by agreement, and. in certain circumstances, the legislature has expressly provided that any such agreement shall be void."
26. in the case of (14) Bashashar Nath v. Commissioner of Income-Tax, Delhi and Rajasthan and Another it has been said:
"Waiver is a troublesome term in the law. The generally accepted connotation is that to constitute "waiver' there must be an Intentional rellnqulshment of a known right or the voluntary refinqulshment or abandonment of a known existing legal right, or conduct such as warrants as inference of the relinquishmenl of a known right or privilege."
27. it has been said in the Halsbury's Laws of England (Fourth Edition), Vol. 9 paragraph 574:
"Waiver may be expressed or Implied from conduct, but in either case it must amount to an unambiguous representation arising as the result of a positive and Intentional act done by the party granting the concession with knowledge of all the material circumstances. Furthermore, it seems that for a waiver to operate effectively the party to whom the concession is granted must act in reliance of the concession,"
28. In Ram/1 Dayaioala and Sons (P) Ltd. v. incest Import , it has been held :--
"In the facts of a given case acceptance of a suggestion may be sub sllentio reinforced by the subsequent conduct. True it is that the general rule is that an offer is not accepted by mere silence on the part of the offeree. There may, however, be further facts which taken together with the offeree's silence constitute an acceptance. One such case fs where a part of the offer was disputed at the negotiation stage and the original offeree communicated that fact to the offerer showing that he understood the offer in a particular sense. This communication probably will amount to a counter offer in which case it may be that mere silence of the original offerer will constitute his acceptance (see Halsbury's Laws of England. 4th Edn., Vol. 9, para 251). Where there is a mistake as to terms of a document as in this case, amendment to the draft was suggested and a counter offer was made, the signatory to the original contract is not estopped by his signature from denying that he Intended to make an offer in the terms set out in the document, to wit, the letter and the cable (ibid., para 295). it can, therefore, be stated that where the contract is in a number of parts it is essential to the validity of the contract that the contracting party should either have assented to or taken to have assented to the same thing in the same sense or as it is sometimes put, there should be consensus ad Idem. And from this it follows that a party may be taken to have assented if he has so conducted himself as to be estopped from denying that he has so assented (ibid., para 288). Even apart from this, it would still be open to the party contending novatlo to prove that he had not accepted a part of the original agreement though it has signed the agreement containing that part. it would in this connection be advantageous to refer to R. v. Fittham, Hammersmith and Kensington Rent Tribunal; ex parte : Zerek [1951(1) All ER 4821 wherein an oral agreement was entered into between the landlord and a tenant for lease of unfurnished premises at a weekly rent of 35s. The landlord subsequently refused to grant the tenant possession unless he agreed to hire his furniture to the landlord for one year at a rental of £12 and to execute a document certifying, inter alia, that the letting was a furnished letting at a rent of 35s. a week. The tenant signed the document and entered into possession. Later the tenant applied to a rent tribunal to fix a reasonable rent for the premises as an unfurnished dwelling house under the Landlord and Tenant (Rent Control) Act, 1949. The tribunal accepted the tenant's evidence that the premises were originally let unfurnished and came to the conclusion that the document signed by the tenant did not constitute a valid agreement and did not modify or replace the earlier oral agreement and that the premises were not bona fide let furnished. The tribunal reduced the rent to 15s. a week. On an application by the landlord for an order of certiorarl, motion for certlorarl was refused and in so doing the subsequent written agreement was Ignored and the previous oral agreement was accepted as genuine and binding. H would, therefore, be in appropriate to say that because the appellant has signed the sub-contract, every part of it is accepted by him even though there is convincing evidence pointing to the contrary. it was, however, said that a subsequent negotiation or a repudiation of part of the contract cannot in any manner affect the concluded agreement. Reliance was placed on Dautes v. Sweet [1962 (2) WLR 525], the pertinent observation at page 529 being as under;
"If there was originally a concluded bargain between the parties, this could only be got rid of by either (a) a mutual agreement to call off the sale, or (b) an agreement for a variation of the terms of the original contract. The mere fact that there have been negotiations which prove to be abortive and do not result in an enforceable agreement does not destroy the original contract : See Perry v. Sufflelas Ltd. (1916(2) Ch. 187 (CA) )."
29. in Union of India and Ors. v. Bhola Dutta Pandey . it has been held :--
"The respondent was employed after retirement from military service in the service of Indo-Tibetan Border Police (ITBP) by order dated 3-11-1979. Under the terms and conditions of the said employment officer, it was expressly stipulated that his service will be governed by Rule 16 of the CRPF Rules and that other conditions of service will be governed under the provisions of the Central Reserve Police Force Act and Rules. It is also stated in the order of employment in para 5 as follows:
"If Ex-Army Nn/Sub-Clerk Bhola Dutt is prepared to accept the post of Jem/-Clerk in ITB Police on the terms and conditions mentioned above, he should report for duty to the Commandant ETC. ITB Police, Kulu (Sabeli), H.P. on or before 1-12-1979 (1st December, 1979). If he fails to report for duty by that date this offer will be treated as cancelled."
30. Accepting the terms and conditions, the respondent joined the ITBP Service.
31. Notwithstanding such express terms in the contract of employment, the respondent approached the High Court claiming that he should be superannuated only at 58 by placing reliance on certain Standing Orders Issued by the Ministry of Home Affairs, in particular the Standing Orders dated 1-9-1965 and 1-11-1975. The High Court accepting the case of the respondent that those Standing Orders support his claim, found that the superannuation age of the respondent must be fixed at 58 instead of 55 which is the age fixed under Rule 43 of the Central Reserve Police Force Rules, 1955.
32. The appellant is aggrieved by the view taken by the High Court fixing the superannuation age of the respondent, who was re-employed, after retirement from the Army, at 58, overlooking the terms and conditions of the order of employment.
33. We heard learned counsel on both sides and we have gone through the Judgment of the High Court as well as the relevant Rules.
34. We are of the view that the High Court was not right in holding that the Standing Orders referred to and relied on by the respondent will apply to the facts of this case. As we have noticed, the contract of employment specifically refers to CRPF Rules, 1955 which covers the retirement age as well.
For the reasons aforementioned the appeal is allowed. The Judgment and order passed by the learned trial Judge is set aside but in the facts and circumstances of this case there will be no order as to costs.
D. B. Dutta, J.
35. agree
36. Appeal allowed