http://www.judis.nic.in This Writ Petition has been filed, seeking to prohibit the second respondent forthwith from continuing or conducting the proceedings pending on the file of the second respondent in ARC No.852/2005-2006 initiated by the first respondent against the petitioners.
2. The learned counsel appearing for the petitioners would submit that the petitioner's minor sons viz., J.Srivardhanaram and J.Aditavardhan and the petitioner's younger brother's minor daughter viz., Swetha and minor son viz., Siddarth, have joined together and entered into a sale agreement dated 14.07.1999 with the first respondent herein, wherein they agreed to sell the land to an extent of about 15.60 acres in Sowripalayam Village, Coimbatore District for a total consideration of Rs.15,60,00,000/-. The first respondent paid a sum of Rs.50,00,000/- an advance to the petitioners and subsequently they have entered into a supplemental agreement dated 04.08.1999 by incorporating certain additional clauses. According to the petitioners, the first respondent has violated the terms of the contract and refused to perform the terms of the agreement dated 14.07.1999. Therefore, the petitioners have refunded the sum of Rs.50,00,000/- to the first respondent through a letter dated 18.11.2004. However, the first respondent has raised a dispute under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983, in ARC. No. 852/2005-2006 and summons have been issued to the petitioners to appear before the second respondent in the aforesaid arbitratory proceedings. Challenging the aforesaid impugned summons, the petitioners have filed the present Writ Petition before this Court, to prohibit second respondent from conducting the arbitrary proceedings on the ground that the present dispute between the petitioners and the first respondent will not come under the purview of the Tamil Nadu Co-operative Societies Act,1983, therefore, the said notice is liable http://www.judis.nic.in to be quashed.
3. The learned counsel for the first respondent society would strongly object the present writ petition by contending that the petitioners, after receipt of a sum of Rs.50 lakhs from the society towards sale advance, have failed and neglected to get necessary permission from the Income Tax Department and other authorities for sale of the landed property in favour of the society. The first respondent has also made several requests to the petitioners to perform their part of the contract and expressed their readiness and willingness to get the sale deed executed in their favour. As the petitioners breached the terms and conditions of the contract, the first respondent has raised the dispute before the Arbitrator as contemplated under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983. The dispute between the petitioners and the first respondent has been raised before the Arbitrator as per the terms and conditions of the contract. Therefore, the present Writ Petition is liable to be dismissed and the petitioners can very well agitate the dispute before the Arbitrator by defending the arbitration proceedings.
4. On the above contention, this Court heard the learned Additional Government Pleader for the second respondent.
5. Heard the rival submission made by both the parties and perused the materials available on record. The point for consideration before this Court is as to whether the arbitration proceedings initiated by the second respondent would come within the purview of section 90 of the Tamil Nadu Co-operative Societies Act 1983. According to the petitioner the aforesaid dispute will not come within the purview of Section 90 of the Tamil Nadu Co-operative Societies Act. Section 90 of the Act http://www.judis.nic.in reads as follows :-
'90. Disputes: - (1) If any dispute touching the constitution of the board or the management or the business of a registered society (other than a dispute regarding disciplinary action taken by the competent authority constituted under sub- section (3) of section 75 or the Registrar or the society or its board against a paid servant of the society) arises-
(a) among members, past members and persons claiming through members, past members and deceased members, or
(b) between a member, past member or person claiming through a member, past member or deceased member and the society, its board or any officer, agent or servant of the society, or
(c) between the society or its board and any past board, any officer, agent or servant, or any past officer, past, agent or past servant, or the nominee, heirs or legal representatives of any deceased officer, deceased agent, or deceased servant of the society, or
(d) between the society and any other registered society, such dispute shall be referred to the Registrar for decision.
6. It is evident from Section 90 of the Act that if there is any dispute between the Co-operative societies with the members, either past or present, the society can very well raise arbitration proceedings before the arbitrator. In the present case, the dispute between the petitioners and the first respondent relates to purchase of the property in question whereby the petitioners paid advance sale consideration of Rs.50,00,000/- to the first respondent. According to the petitioners, after receipt of the amount, inspite of several requests the first respondent failed and neglect to come forward to get the sale deed executed in their favour and therefore, by letter dated 18.11.2004 they have refunded the sum of Rs.50,00,000/- to the first respondent, but the first respondent claims interest for such amount. On the contrary the first respondent would contend that the petitioners did not obtain necessary permission from the Income Tax authorities for sale of the properties in favour of the society as per the conditions of the agreement http://www.judis.nic.in and supplemental agreement entered into between the parties.
7. It is clear that the dispute between the petitioners and the first respondent is purely a dispute with respect to sale/purchase of land in question. Admittedly, the petitioners are not members of the first respondent society. There is no relationship between the petitioners and the first respondent as that of the members of the society. The relationship between the petitioners and the first respondent society is that of seller and purchaser as the case may be. In such view of the matter, I am of the view the the arbitration proceedings initiated by the second respondent under Section 90 of the Act is not legally sustainable. The second respondent has no jurisdiction to initiate such proceedings at the instance of the first respondent against the petitioners. Therefore, the impugned notice of the first respondent is liable to be set aside and accordingly it is set aside. It is needless to mention that it is open to the first respondent to approach the appropriate forum with respect to the dispute relating to sale transaction with the petitioners.
8. In the result, the writ petition is allowed. Consequently, connected Miscellaneous Petition is closed. No costs.
13.09.2017 Index: Yes/ No Speaking order/ Non speaking order rkp http://www.judis.nic.in http://www.judis.nic.in D. KRISHNAKUMAR J.
rkp To
1. Special Officer, P.S.G. Co-operative House Building Society, Peelamedu, Coimbatore 18.
2. Deputy Registrar of Co-operative Society (Housing), Coimbatore Region, Coimbatore.
W.P. No.33226 of 2005 and W.M.P. No.36193 of 2005 13.09.2017 http://www.judis.nic.in