Case Note & Summary
The Petitioner, Mohammed Amin Haroon Solkar, a member of Kokan Mercantile Cooperative Bank Ltd. (Respondent No.4), challenged an arbitral award dated 18 March 2013 passed by a sole Arbitrator (Respondent No.2) appointed under the Multi-State Cooperative Societies Act, 2002. The award set aside the acceptance of the Petitioner's nomination for election to the Board of Directors. The background involves the removal of two ex-directors on 27 September 2012, who filed dispute applications before the Arbitrator. The Petitioner identified those ex-directors before a Notary on 5 January 2013. The dispute applications were disposed of on 22 January 2013. Subsequently, elections were scheduled for the term 2013-2018, and the Petitioner filed his nomination. On 15 March 2013, Respondent No.1, a sitting director, filed an application before the Arbitrator challenging the Petitioner's nomination, alleging that the Petitioner had acted against the Bank's interest by identifying the ex-directors. The Arbitrator, without issuing any notice to the Petitioner, allowed the application and set aside the acceptance of the Petitioner's nomination. The Petitioner challenged this award before the High Court. The Court noted that the Arbitrator did not give any notice or opportunity of hearing to the Petitioner before passing the ex-parte order, which is a clear violation of the principles of natural justice. The Court held that the award was liable to be set aside under Section 30 of the Arbitration Act, 1940, as it amounted to legal misconduct. The Court set aside the award and restored the Petitioner's nomination, directing the Returning Officer to proceed with the election in accordance with law.
Headnote
A) Cooperative Law - Natural Justice - Ex-Parte Award - Multi-State Cooperative Societies Act, 2002, Section 84 - The Arbitrator passed an award setting aside the acceptance of the Petitioner's nomination without issuing any notice to the Petitioner or giving him an opportunity of being heard. The Court held that such an order violates the principles of natural justice and is liable to be set aside. (Paras 8-10) B) Arbitration - Setting Aside Award - Violation of Natural Justice - Arbitration Act, 1940, Section 30, Section 33 - The Court held that an award passed in violation of natural justice is a legal misconduct and can be set aside under Section 30 of the Arbitration Act, 1940. The Court set aside the award and restored the nomination of the Petitioner. (Paras 8-10)
Issue of Consideration
Whether the Arbitrator's award setting aside the acceptance of the Petitioner's nomination without giving him notice or an opportunity of being heard is valid and sustainable in law.
Final Decision
The Court allowed the petition, set aside the impugned award dated 18 March 2013, and restored the Petitioner's nomination. The Returning Officer was directed to proceed with the election in accordance with law.
Law Points
- Natural justice
- audi alteram partem
- ex-parte order without notice
- setting aside nomination
- Multi-State Cooperative Societies Act
- 2002
- Section 84
- Arbitration Act
- 1940
- Section 30
- Section 33
