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EJAZ HAIDER ZAIDI & ORS. vs CA CO-OPERATIVE T/C SOCIETY LTD.

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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 12918/2023
EJAZ HAIDER ZAIDI & ORS. ….. Petitioners
Through: Mr. Haraprasad Sahu and Mr. P.K. Tripathy, Advocates

versus

CA CO-OPERATIVE T/C SOCIETY LTD. ….. Respondent
Through: Mr. S.K. Sharma, Advocate
Mr. Masood Hussain, AR for Respondent

% Date of Decision: 06th May, 2024

CORAM:
HON’BLE THE ACTING CHIEF JUSTICE
HON’BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA
JUDGMENT
W.P.(C) 12918/2023 & CM APPL. 26748/2024
1. The present petition filed under Articles 226 and 227 of the Constitution of India impugns the order dated 18th January, 2023 passed by the Delhi Cooperative Tribunal (‘DCT’) in Appeal No. 85/2021/DCT.
2. The DCT vide impugned order dated 18th January, 2023 declined to condone the delay in filing of the appeal impugning the award dated 31st December, 2019 passed by the Arbitrator appointed by the Registrar Cooperative Societies (‘RCS’).
3. The Petitioners have filed CM APPL. 26748/2024 seeking a stay of the impugned award dated 31st December, 2019 and seeking a direction to the concerned Sub-Divisional Magistrate to not take any coercive action in respect of the assets of the Petitioners for recovery of the arbitral amount.
4. With the consent of the parties, the writ petition is taken on board for final determination.
5. It is an admitted fact that Petitioner No. 1 had availed a loan of Rs. 44 lakhs from Respondent Society which was disbursed in two tranches of Rs. 11 lakhs on 19th August, 2017 and 33 lakhs on 24th August, 2017. The Petitioner No. 1 admits the receipt of the loan. Petitioner Nos. 2 and 3 stood sureties for the said amount. The said amount was admittedly not repaid by Petitioner No. 1 to Respondent Society despite service of notices.
6. In these facts, the Respondent Society filed a petition under Section 70 of Delhi Cooperative Societies Act, 2003 (‘DCS Act’) before the RCS for reference to arbitration which was allowed after issuance of notice to Petitioner No. 1 and considering his reply dated 30th January, 2019. The application under Section 70 of the DCS Act was allowed and the matter was referred to arbitration under Section 71 of the DCS Act.
7. In the proceedings held before the learned Arbitrator on 21st December, 2019, the Petitioner No. 1 duly appeared and marked his appearance. In these admitted facts, the learned Arbitrator passed an award on 31st December, 2019 for an amount of Rs. 74,94,876/- which was inclusive of interest up to 21st December, 2019 and costs of arbitration.
8. The Petitioners elected not to challenge the award and it was after execution proceedings were initiated by the Tehsildar, Gautam Budh Nagar, U.P., the Petitioners filed an appeal before the DCT challenging the award, with an application to condonation of delay of 570 days. The Petitioners contended that they had no notice of the arbitral proceedings and learnt about the impugned arbitral award for the first time on 20th September, 2021 upon receipt of notice from the Tehsildar in execution proceedings.
9. The DCT after perusing the record has returned a finding of fact that the stand taken by the Petitioners as regards no notice of arbitral proceedings is falsified by the record of the RCS and the learned Arbitrator. The participation of the Petitioners before the RCS in the proceedings under Section 70 of the DCS Act and before the learned Arbitrator under Section 71 of the DCS Act has been recorded in the impugned order dated 18th January, 2023; the said facts have been noted in this order hereinabove.
10. The Petitioners in the present writ petition have not disputed the said findings of fact recorded by DCT in the impugned order dated 18th January, 2023 and therefore, there is no infirmity in the order of the DCT dismissing the appeal.
11. Even on merits, Petitioner No. 1 has not disputed the receipt of the loan amount of Rs. 44 lakhs from Respondent Society and the fact that Petitioner Nos. 2 and 3 stood sureties for the said amount. Petitioner No. 1 has also not disputed that the said amount has not been repaid. In these admitted facts, the impugned award dated 31st December, 2019 also does not suffer from any illegality.
12. Petitioner No. 1 has pleaded a defence alleging that the loan was availed by him at the behest of one Mr. Mustafeez Mehdi, who is/was a Director in AMFAH Infrastructure Pvt. Ltd. and the said Mr. Mehdi had undertaken to repay the loan to Respondent Society. In support of this plea, Petitioner No. 1 has relied upon his bank statement to contend that the amount received by him from Respondent Society was substantially transferred to Mr. Mehdi and therefore, the beneficiary of the loan is Mr. Mehdi. In our considered opinion the said plea of the Petitioner No. 1 cannot be considered as a defence against his liability to repay the loan admittedly availed from Respondent Society. In any event, these are disputed facts not admitted by the Respondent Society.
13. There is thus no merit in the present petition challenging the impugned order dated 18th January 2023 passed by the DCT and the impugned award dated 31st December, 2019 passed by the learned Arbitrator.
14. Accordingly, the present petition along with pending applications is dismissed.
15. The next date of hearing i.e., 10th September, 2024 stands cancelled.

ACTING CHIEF JUSTICE

MANMEET PRITAM SINGH ARORA, J
MAY 6, 2024/hp/sk

W.P.(C) 12918/2023 Page 1 of 4