Delhi HC Orders RCS To Refer Co-op Society Manager’s Compulsory-Retirement Dispute To Arbitration, Leaving Arbitrability To Arbitrator

In brief

The question

1. Whether the RCS had complied with the Court’s order of 16 August 2023 to consider the petitioner’s representation and pass appropriate orders concerning Section 70 of the Act.

The court held

The Court disposed of the petition by directing the RCS to refer the dispute to arbitration under Section 70 of the Act within one month. The arbitrator is to consider whether the dispute is arbitrable.

It also directed

Pending applications were also disposed of.

01Facts

The petitioner, a Manager (Recovery) with Capital Co-operative Thrift and Credit Society Ltd., challenged the Society’s order compulsorily retiring him with effect from 31 March 2020.

¶ 4

After his representation seeking reconsideration remained unresolved, he filed an earlier writ petition. On 16 August 2023, the Court directed the Registrar of Cooperative Societies (RCS) to consider the representation, examine Section 70(2) of the Delhi Cooperative Societies Act, 2003, and pass appropriate orders within six weeks.

¶ 5–7

The petitioner alleged that the RCS had not complied with that direction despite further representations and reminders.

¶ 8

02Issues

i.1. Whether the RCS had complied with the Court’s order of 16 August 2023 to consider the petitioner’s representation and pass appropriate orders concerning Section 70 of the Act.

¶ 7–8, 12–13

ii.2. Whether the dispute should be referred to arbitration under Section 70 of the Act, with arbitrability determined by the arbitrator.

¶ 9–15

03Law Applied

Section 70(1) of the Delhi Cooperative Societies Act, 2003 provides for reference to the Registrar of specified disputes touching the constitution, management, or business of a co-operative society, while excluding disputes regarding disciplinary action against a paid employee; Section 70(2) assigns the Registrar the question whether a dispute referred under the section touches those matters.

¶ 10

The Court also noted the Supreme Court’s decision in The Maharashtra State Cooperative Housing Finance Corporation Ltd. v. Prabhakar Sitaram Bhadange, Civil Appeal No. 1488/2017, which held, in the context of Section 91 of the Maharashtra Co-operative Societies Act, 1960, that an employment service dispute was not covered by that provision.

¶ 11

The Court did not determine the present dispute’s arbitrability; it directed referral and left that question to the arbitrator.

¶ 15

Provisions in the judgment · 1 · Linked ones open on LawLens

Maharashtra Co-operative Societies Act, 1960 Section 91

04Reasoning

The Court observed that its 2023 order clearly required the RCS to consider the petitioner’s representation and pass appropriate orders within six weeks, but the RCS had not complied despite repeated representations.

¶ 12–13

Although the Court noted the authority addressing the non-arbitrability of an employment dispute under the Maharashtra statute, it did not resolve whether the petitioner’s dispute was arbitrable under Section 70 of the Delhi Act. Instead, it directed the RCS to refer the dispute and left the arbitrability question to the arbitrator.

¶ 11, 14–15