The Andhra Pradesh High Court has held that Assistant Registrar being described as an 'Arbitrator' and decision rendered by him termed as 'Award' doesn't make the proceedings before him, Arbitration Proceedings.

The Court was considering an Appeal against the decision of the Principal District Judge whereby it declared Petition under Section 34 of the Arbitration and Conciliation Act, 1996 against award passed by Assistant Registrar in terms of A.P. Cooperative Societies Act, 1964 as non-maintainable.

The Division Bench of Justice R. Raghunandan Rao and Justice Maheswara Rao Kuncheam held, "In the present case, the Assistant Registrar had decided the dispute by passing an award. As pointed out by the Principal District Judge, Rajahmundry, in her order dated 20.11.2015, the mere fact that the Assistant Registrar was described as Assistant Registrar or Arbitrator and the decision of was titled “award” cannot mean that the proceedings were arbitration proceedings initiated under the provisions of the APCS Act, 1964. This would also mean that the provisions of the Arbitration Act, including Section 34 of the Arbitration Act would not be applicable."

The Appellant was represented by Advocate Mallavolu Nikitha while the Respondent was represented by Advocate T V S Prabhakara Rao.

Facts of the Case

Proceedings were initiated against the Appellants under the provisions of the A.P. Cooperative Societies Act, 1964 on failure to repay a loan, resulting in an award being passed against them under Section 62 of the Act. Aggrieved by this award, the Appellants had initially filed an Appeal before the A.P. Cooperative Tribunal. However, the said Appeal was withdrawn and a Writ Petition was filed. After some time, that was also withdrawn and a Petition under Section 34 of the Arbitration and Conciliation Act, 1996 was filed for setting aside the award. The same was dismissed as not maintainable.

Counsel for the Respondent contended that the Petition before the Principal District Judge under Section 34 of the Arbitration Act, as well as the present Appeal are not maintainable

Standing Counsel submitted that Section 76 of the APCS Act, 1964 provides for an Appeal against any order passed under Section 62 of the APCS Act, 1964. In the present case, then Award came to be passed under Section 62 of the APCS Act, 1964. In such circumstances, the only remedy available to the Appellants was to move the A.P. Cooperative Tribunal, under Section 76 of the APCS Act, 1964.

Reasoning By Court

The Court, after looking into Section 62 of the APCS Act, 1964, observed that under this provision, the Registrar, upon reference of any dispute under Section 61, has three options. Under the first option, he may decide the dispute himself; under the second option, he may transfer it for disposal by any other person who has been invested by the Government to decide such disputes; or under the third option, he can refer it to an arbitrator for disposal.

"The fact that Section 76 of the APCS Act, 1964 itself provides a remedy of appeal, against the order under Section 62 of the APCS Act, 1964, would make it amply clear that the order passed by the Assistant Registrar cannot be treated to be an award in an arbitration proceedings. The judgment of the Hon‟ble Supreme Court, in the case of Greater Bombay Cooperative Bank Ltd., vs. M/s. United Yarn Tex. Pvt. Ltd., and Ors., also strengthens this view of the matter. Once it is held that the proceedings of the Assistant Registrar are not arbitration proceedings, no provision of the Arbitration and Conciliation Act, 1996 including Section 34 would be applicable, and consequently, a petition under Section 34 would not be maintainable," the Court observed.

The Appeal was accordingly dismissed.

Cause Title: Lakshmi Agencies, Rjy, E.g.dist & Others vs. Aryapuram Coop Urban Bank Ltd Rjy and Others (Neutral Citation: APHC010073932016)

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Andhra Pradesh High CourtJustice R. Raghunandan RaoJustice Maheswara Rao Kuncheam

Sheetal Joon