Central Registrar Not Divested Of Its Authority To Appoint Arbitrator Under S. 84 of MSCS Act: Delhi High Court

The Delhi High Court has held that the Central Registrar is not divested of its authority and jurisdiction to appoint an Arbitral Tribunal in terms of Section 84 (4) of the Multi-State Cooperative Societies Act, 2002 (MSCS Act), when a dispute pertaining to a multi-state cooperative society is sought to be referred to arbitration under Section 84 of the Act. The bench of Justice Yashwant Varma remarked that as per the direction issued by the Central Government under the Notification dated 24th February, 2003, the Registrar of Co-operative Societies of States is contemporaneously empowered to refer matters to arbitration, however, the same does not denude the jurisdiction of the Central Registrar. Thus, the Court concluded that initiation of proceedings for constitution of an Arbitral Tribunal by the petitioner, by issuing a notice to the Central Registrar, did not suffer from a manifest illegality. Seeking to refer the dispute relating to the election held in respect of the respondent Multi-State Cooperative Society, Revanta Multi State CGHS Ltd, to arbitration, as contemplated under Section 84 of the MSCS Act, the petitioner, D Narasimha Rao, issued a notice to the Central Registrar. After the said authority failed to appoint the Arbitral Tribunal, the petitioner filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 (A&C Act) before the Delhi High Court. The Central Registry submitted before the Court that in view of the notification dated 24th February, 2003 issued by the Ministry of Agriculture, the petitioner should have approached the Registrar of Co-operative Societies of the State for appointment of the Arbitral Tribunal. Perusing Section 84 of the MSCS Act, the Court took note that the dispute, as specified, pertaining to the constitution, management or business of a multi-state cooperative society, shall be referred to arbitration. Also, as per Section 84 (4) of the MSCS Act, where a dispute has been referred to arbitration under Section 84, the same shall be settled or decided by the arbitrator to be appointed by the Central Registrar. The bench further observed that as per the direction issued by the Central Government under Notification dated 24th February, 2003, the powers exercisable by the Central Registrar under Section 84 of the MSCS Act shall also be exercisable by the Registrar of Co-operative Societies of the States/UTs. The Court concluded that all that the Union Government has provided in the Notification dated 24th February, 2003, is that the powers which are exercisable by the Central Registrar under Section 84 could also be exercised by the Registrar of the Co-operative Societies of the States. Thus, holding that there was no manifest illegality in the proceedings initiated by the petitioner for constitution of an Arbitral Tribunal, the Court remarked, “Viewed in that light, it is evident that the Central Registrar did not stand divested of authority to initiate the appointment process nor does it stand denuded of jurisdiction to act in terms of Section 84. All that the notification purports to achieve is to contemporaneously empower the Registrar of Co-operative Societies of States to refer matters to arbitration. The Court thus finds itself unable to hold that the initiation of proceedings for constitution of an Arbitral Tribunal suffered from a manifest illegality.” The respondent multi-state cooperative society, argued before the Court that the claim relating to the dispute in respect of an election of an officer of a multi-state cooperative society, was barred by limitation in view of Section 85 of the MSCS Act. Ruling that the issue as to whether the claim was barred by limitation or not, can clearly be decided by the arbitrator, the Court allowed the petition. “The aforesaid dispute, raised by the petitioner, is referred to the Delhi International Arbitration Centre, who would proceed to appoint a suitable Arbitrator to arbitrate on the dispute/disputes,” the Court ruled. Case Title: D Narasimha Rao & Ors versus Revanta Multi State CGHS Ltd & Anr. Citation: 2023 LiveLaw (Del) 171 Counsel for the Petitioner: Mr. Davesh Bhatia, Adv. Counsel for the Respondent: Mr. Mukesh Kumar, Mr. Nilofar Khan, Advs. for Revanta Society. Ms. Anjum Parvez, Adv. for Registar Mr. Kirtiman Singh, Ms. Kunjala Bhardwaj, Ms. Vidhi Jain, Mr. Madhav Bajaj, Ms. Shreya Mehra, Mr. Yash Upadhyay, Adv. for R-2. Click Here To Read/Download Order

Central Registrar Not Divested Of Its Authority To Appoint Arbitrator Under S. 84 of MSCS Act: Delhi High Court

Parina Katyal

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