Full Judgment Text
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CASE NO.:
Appeal (civil) 2732 of 1997
PETITIONER:
GWALIOR DUGDHA SANGH SAHAKARI LTD.
RESPONDENT:
G.M. GOVT. MILK SCHEME, NAGPUR AND ORS.
DATE OF JUDGMENT: 21/08/2003
BENCH:
V.N. KHARE CJ & S.B. SINHA
JUDGMENT:
JUDGMENT
2003 Supp(2) SCR 839
The following Order of the Court was delivered :
The appellant herein is a society registered under the Madhya Pradesh Co-
operative Societies Act, 1960 (hereinafter referred to as "the Act"). On
17.12.1993 and 8.2.1994, the appellant herein entered into agreements with
the General Manager, Government Milk Scheme, Nagpur/Akola for supply of
milk. These agreements were executed at Nagpur. Condition No. 19 of the
said agreements provided that the disputes between the parties shall be
referred to an arbitrator, i.e. the Dairy Development Commissioner, Bombay,
Maharashtra. Subsequently, the appellant-Society moved an application under
Section 33 of the Arbitration Act, 1940 for quashing condition No. 19
whereby the arbitration was to be done by the Dairy Development
Commissioner, Bombay, Maharashtra. The learned District Judge was of the
opinion that in view of Section 64 of the Act, condition No. 19 of the
agreement was erroneous and, therefore, the same was set aside and the
application was allowed. Aggrieved, the respondents filed an appeal before
the High Court. The High Court was, inter alia, of the view that since the
agreements were entered into beyond the territorial jurisdiction of the
appellant, that is outside the State of Madhya Pradesh, Section 64 of the
Act was inapplicable and, therefore, the High Court set aside the order of
the learned District Judge and allowed the appeal. It is against the said
judgment, the appellant is in appeal before us.
Learned counsel appearing for the appellant urged that the view taken by
the High Court was erroneous. We do not find any merit in this contention.
It is not disputed that the agreements were entered into and executed at
Nagpur which is outside the territorial jurisdiction of the State of Madhya
Pradesh Section 1 of the Act provides that the provisions of the Act would
be applicable to the whole of Madhya Pradesh Since the operation of the Act
is intra-State and cannot be applied beyond the territory of the State of
Madhya Pradesh, it must be held that Section 64 of the Act is not
applicable.
In T.K. Sundaram v. The Co-operative, Sugars Ltd., Chittoor, AIR (1988)
Madras 167, it was held thus:
"8. The next question raised on behalf of the appellant is that the suit is
barred under the provisions of the Kerala Co- operative Societies Act, and
as such the suit ought to have been dismissed. This argument is based upon
the arbitration provision contained in the Kerala Co-operative Societies
Act. But the contract has been entered into in Tamil Nadu and the same is
enforceable in Tamil Nadu. As such with reference to the contract entered
into the Tamil Nadu, and enforceable in Tamil Nadu provisions of the Kerala
Co-operative Societies Act cannot be applied. Under the circumstances, both
the courts below are rights in negativing the contention, relating to
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jurisdiction.
Applying the principle laid down above, we find that since the agreements
in the present case were entered into and executed in the State of
Maharashtra, Section 64 of the Act is not applicable and, therefore, the
view taken by the High Court was correct. We find no merit in the appeal.
It is, accordingly, dismissed. No costs.
Learned counsel appearing for the arbitrator (respondent No. 3 herein)
furnished before us a copy of the award in a sealed cover. Since we have
already disposed of the matter, it will be open to the arbitrator to file
the same before the appropriate court.