K.N.Singh, J. - (1.) MAHENDRA Lal Jaini bad filed this petition under Article 226 of the Constitution for the issue of a writ of certiorari quashing the award given by the sole arbitrator in Arbitration Case No. 39 of 1964-65 of District Sabaranpur, and also the order of the District Assistant Registrar, Co-operative Societies, Saharanpur, dated 21-5-1975, dismissing the petitioner's appeal and affirming the award of the Arbitrator.
(2.) ON 18 10.1951 one Virendra Goyal entered into an agreement with Mabendra Lal Jaini petitioner for transfer of properties in dispute. In persuance of that agreement Virendra Goyal executed two sale deeds, one on 5.12.1951 and the other on 10.2.1952, in favour of Mahendra Lal Jaini, Virendra Goyal executed a sale deed on 9.2.1965 in favour of Praduman Nagar Housing Co operative Society, respondent 2, transferring his right and interest in the property in dispute. The Pradnman Nagar Housing Co-operative Society, hereinafter referred to as the society, was registered on 9-2-1964 as a society under the provisions of the U. P. Co-operative Societies Act, 1912 After the execution of the saie deed the society requested the petitioner to render accounts and to deliver possession of the property to it. The petitioner asserted that he was not liable to render any account or to deliver possession of the property as he was the real owner of the property in pursuance of the sale deeds executed in his favour by Virendra Goyal. The respondent society thereupon referred to matter to arbitration purporting to act under Rule 115 Co-operative Societies Rules, read with Section 43, U. P. Co-operative Societies Act, 1912. The society asserted that in spite of the sale deed executed in favour of the petitioner, Sri Virendra Goyal continued to be real owner and since he bad transferred the property to the society, it had a right to get back possession and to get the accounts from the petitioner. The society prayed for a decree for possession of the property and also for rendition of accounts. Toe petitioner contested the proceedings on a number of grounds. The petitioner asserted that he was owner of the property and the society bad no right, title or interest in the property He further raised a plea that the dispute between him and the society could not be referred to arbitration as the same was not covered by Rule 115. The dispute was referred to Sri H. K. Govil. C. O. (Banking) as sole arbitrator. He gave his award on 20-6-1965 decreeing the claim of the society. The arbitrator passed a decree for possession of the property and also for recovery of a sum of Rs. 1,81,500 with interest at the rate of 8% per annum pendente lite and future and also for a decree for mesne pro-fits at Rs. 11,000 with interest against the petitioner. Aggrieved, the petitioner filed an appeal before the appellate authority, namely the Assistant Registrar, Co-operative Societies, U. P. Sabaranpur. During the pendency of the appeal the society took execution proceedings as a result of which it obtained possession over the property in dispute The appellate authority by its order dated 21-4-1975 affirmed the judgment and decree of the sole arbitrator. The petitioner's contention that the dispute was not covered by Rule 115 and the same could not be adjudicated by the arbitrator under the provisions of the U P. Co-operative Societies Act and the Rules framed thereunder was repelled by the appellate authority. Aggrieved, the petitioner has approached this Court under Article 226 of the Constitution.
(3.) LEARNED counsel for the petitioner has urged that the dispute between the petitioner and the society cou'd not be adjudicated in arbitration proceedings, and the decree passed by the arbitrator as affirmed by the appellate, authority is wholly without jurisdiction. In order to appreciate this contention, it is necessary to refer to the relevant provisions. Section 43, Co-operative Societies Act, 1912, hereinafter referred as the old Act, conferred power on the State Government to frame rules providing for arbitration in disputes touching the business of society between the members or past members of the society or persons claiming as member or past member or between a member or past member or persons so claiming and the Committee of the society. In pursuance of that provision Rule 115 made which in the following terms; "115. Any dispute touching the business of a registered society (i) between members or past members of a society or persons claiming through a member or past member, (ii) or between a member or a past member or persons so claiming and the society or its committee or any officer of the society, and (iii) between the society or its committee and any officer of the society, (iv) between two or more registered societies shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the Registrar. Explanation 1. A dispute shall include claim for amounts due when a demand for payment is made and is either refused or not complied with whetter such claims are admitted or not by the opposite party. Explanation 2. An officer shall include a person appointed for the supervision of the society. Explanation 3. The business of a society includes all matters relating to the objects of the society mentioned in the bye-laws as also those relating to the election of office-bearers of a society." Similar provisions are contained in Section 70, U. P. Co-operative Societies Act, 1965. The proceedings in the instant case had arisen at a time when the old Act and the Rules were in force Section 70 of the 1965 Act is not applicable, instead Rule 115 was applicable. Under that rule a dispute touching the business of a society between members and the society could be referred to arbitrator for adjudication If the dispute does not arise between the society and its members or if the dispute is between the society and a non-member such a dispute could not be referred to arbitrator under the Act. The dispute between the society and the members must be in relation to the transaction out of which a dispute may have arisen. Section 81 (1), Maharashtra Co-operative Societies Act, contains almost similar provision for referring a dispute touching the business of the society between the society and the member for adjudication to arbitrator In Deccan Merchants Co-operative Bank Ltd. v M/s. Dali Chand Jugraj Jain, [AIR 1969 SC 1320], a member of the society had leased a flat belonging to him to another person. The landlord applied to the Ragistrar for evicting the tenant The question for consideration was whether that dispute fell within the scope of Section 91 of the Act. The Supreme Court held that it did not fall within the scope of Section 91 as before a person can be said to claim through a member, the claim should arise through a transaction or dealing which the member entered into with the society as a member: The Supreme Court further held that where the original owner executed the lease not acting as a member but as a stranger the dispute did not fall within Section 91, Maharashtra Act, and therefore the dispute could not be referred to arbitration In I. R. Hingorani v. Pravinchandra Kantilal Shah [AIR 1972 SC 2l61], the Supreme Court affirmed its earlier decision in Deccan Merchants Co-operative Bank's case and held that unless the transaction was entered into by the member acting as a member, any dispute arising between him and the society could not be referred to arbitration under Section 91 of the Maharashtra Act. These two decisions make it amply clear that a dispute between a member and the society can only be referred if the dispute had arisen out of a transaction entered into by a member in his capacity as such.;