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CASE NO.:

Appeal (civil) 5180 of 2002

PETITIONER:

PRAKASH NARAIN SHARMA

RESPONDENT:

BURMAH SHELL CO-OP. HOUSING SOCIETY LTD.

DATE OF JUDGMENT: 21/08/2002

BENCH:

R.C. LAHOTI & BRIJESH KUMAR

JUDGMENT:

JUDGMENT

2002 Supp(1) SCR 643

The Judgment of the Court was delivered by R.C. LAHOTI J. Leave granted.

The respondent No. 1 is a cooperative Society governed by Dehli Cooperative

Societies Act, 1972 (hereinafter 'the Act' for short). There was a dispute

between one S.N. Sharma and the respondent No. 1. The former claimed to be

a member of the Society entitled to allotment of a plot by the Society and

complained of having been illegally and unjustifiably deprived of the

allotment. The Joint Registrar (Arbitration), vide his order dated

29-7-1988, directed the dispute to be referred for adjudication by one Shri

S.C. Gupta S.N. Sharma expired on 28-12-1988 survived by legal

representatives whose rights are claimed by the appellant to have come to

vest in him.

The appointment of arbitrator was challenged by the Society by filing a

civil suit in the Court of Additional District Judge, Delhi who, by an

interim order dated 4-10-1989, restrained the arbitrator from proceeding

ahead with the arbitration proceeding. There is some controversy whether

the restraint order was communicated or brought to the knowledge of the

arbitrator or not; the fact remains that on the next date of hearing

appointed after 4-10-1989 the Society failed to make appearance before the

arbitrator. The arbitrator proceeded ex-parte and on 26-10-1989 made an

award upholding the claim of the appellant. The Society preferred an appeal

against the award while the appellant sought for its execution. The

executing authority directed a plot of land of the Society to be attached.

A civil writ petition came to be filed by the Society in the High Court of

Delhi which was heard by a learned single judge, who vide order dated

18-8-2000, set aside the ex-parte award dated 26-10-1989 forming an opinion

that in view of the restraint order passed by the civil Court the ex-parte

proceedings and the ex-parte award were vitiated. The learned single Judge

directed bi-parte hearing being restored and an award being made afresh.

The appellant filled an intra-court appeal against the order of learned

single Judge. The Division Bench held that in view of the provisions

contained in Sections 60 and 93 of the Act, a civil Court was not competent

to entertain any civil suit touching a matter which any authority under the

Act was competent to adjudicate upon, and therefore, the restraint order

passed by the civil Court was a nullity and an order by coram non-judice.

The arbitrator, even if communicated with, or apprised of, the contents of

the restraint order of the civil Court, could have ignored it and proceeded

ahead as the order of the civil Court lacking in jurisdiction was a

nullity. In the opinion of the Division Bench the approach of the learned

Single Judge could not be counternanced. However, still the Division Bench

opined :-

"It is also the stand of the first respondent that after the restraint

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order was passed by the civil Court, it stopped appearing before the

arbitrator. The first respondent is quite justified in taking this stand.

Any one in the position of the first respondent would have thought that the

arbitrator will not proceed with the adjudication of the disputes after

passing of the restraint order by the Additional District Judge. In this

view of the matter the first respondent cannot be faulted for not appearing

before the arbitrator after 4th October, 1989. It would be unfair and

unjust to deprive the first respondent from highlighting and arguing its

case before the arbitrator."

The Division Bench noticed the factum of Shri S.C. Gupta, the then

arbitrator having expired in between, and therefore directed the Registrar,

Cooperative Society to appoint another arbitrator in place of late Shri

S.C. Gupta to adjudicate upon the dispute between the parties. It was

ordered accordingly and the writ appeal was disposed of.

Feeling aggrieved by the order of the Division Bench, this appeal has been

filed by special leave.

Having heard the learned counsel for the parties, we are of the opinion

that the appeal is liable to be dismissed. For the purpose of the present

case we do not propose to enter into controversy whether the civil Court,

on the averments made in the plaint, could have entertained a civil suit

and could have passed the restraint order in the terms in which it did. It

would suffice for our purpose to hold that the Society-respondent No. 1,

having successfully obtained interim order from the civil Court restraining

the arbitrator from proceeding ahead with the arbitration proceeding, could

have reasonably acted on the belief that in view of the restraint order of

the civil Court the arbitrator would stay his hands and shall not proceed

ahead. It would have been better if the Society, through its representative

it counsel, would have made appearance before the arbitrator either to

apprise the arbitrator with the order passed by the civil Court, at least

to ascertain whether the order was communicated or brought to the knowledge

of the arbitrator. In spite of such lapse on the part of the Society, it is

not so much a question of legality of availability of jurisdiction with the

civil Court in passing the restraint order as it is the question of finding

out the availability of sufficient cause for non- appearance of the Society

before the arbitrator on the appointed date of hearing. We do not agree

with the reasoning of the Division Bench of the High Court that a civil

Court cannot under any circumstances entertain a civil suit in respect of

proceedings pending before the Registrar, Cooperative Society. Even where

exclusion of jurisdiction of the civil Court is statutorily provided still

on availability of requisite grounds the civil Court can entertain a civil

suit on well defined parameters settled by Constitution Bench of this Court

in Dhulabhai v. State of Madhya Pradesh, AIR (1969) SC 78. In any case we

are not prepared to subscribe to the view of the Division Bench that the

Registrar of Cooperative Society could have ignored the order of the civil

Court as not binding on him in view of the provisions contained in Sections

93 (3), 93 (1) (c) and 60 of the Act. It will be a dangerous proposition to

be laid down as one of law that any individual or authority can ignore the

order of the civil Court by assuming authority upon itself to decide that

the order of civil Court is one by coram non-judice. The appropriate course

in such case is for the person aggrieved first to approach the civil Court

inviting its attention to the relevant provisions of law and call it upon

to adjudicate upon the question of its own jurisdiction and to vacate or

recall its order if it be one which it did not have jurisdiction in law to

make. So long as this is not done, the order of competent court must be

obeyed and respected by all concerned. A judicial order, not invalid on its

face, must be given effect entailing all consequences, till it is declared

void in a duly constituted judicial proceedings.

Subject to the above we agree with the High Court that the ex-parte

proceedings before the arbitrator deserve to be set aside and the parties

heard bi-parte. In view of Shri S.C. Gupta, the then arbitrator having

unfortunately expired, a fresh appointment in his place needs to be made.

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However, we clarify that the newly appointed arbitrator shall resume the

proceedings from the date with which the predecessor arbitrator had

proceeded ex-parte against the respondent No. 1 after 4-10-1989 subject to

the order which may be passed by Civil Court on injunction application

filed by the Society.

For the foregoing reasons but subject to clarification as above the

operative part of the order made by the Division Bench of the High Court is

maintained. The appeal be treated as disposed of accordingly.