Dwarka Society Members Declared Defaulters Can Pursue Election Challenge In Arbitration, Delhi HC Sets Aside Tribunal’s Rejection Of Their Dispute

The Petitioners, members of Vijay CGHS Ltd., challenged the Society’s 2 February 2025 managing-committee election, alleging irregularities and that they had been wrongly declared defaulters and excluded from participating

They filed a petition under Section 70 of the Delhi Cooperative Societies Act, 2003, which the Registrar admitted and referred to an arbitrator under Section 71

On the Society’s appeal, the Delhi Cooperative Tribunal found that no genuine dispute requiring arbitration had been shown and set aside the reference

The Petitioners challenged that order in the High Court

Section 70 of the Delhi Cooperative Societies Act, 2003, permits the Registrar to consider disputes touching the constitution, management or business of a cooperative society; under Section 71, once such a dispute is admitted, the Registrar may decide it or refer it to an arbitrator

At the stage of deciding whether to refer a claim, the Registrar’s role is primarily to verify the claimants’ membership and the society’s existence, rather than to determine the merits of the dispute

The merits of an admitted dispute are for adjudication in the proceedings under Section 71

The claim petition alleged that the election was conducted unlawfully, that the Petitioners were wrongly treated as defaulters, and that other members were improperly permitted to vote

Although the reliefs sought were not clearly worded, the High Court considered the substance of the grievance sufficient to raise issues concerning the Society’s election and management

Whether the Petitioners were in fact defaulters was a matter for adjudication in arbitration; the Tribunal therefore erred by resolving the merits and finding no genuine dispute at the reference stage

It directed the parties to participate in the proceedings, permitted the Petitioners to seek amendment of their prayers in accordance with law, and left all parties’ rights and objections open.

The Court expressed no view on the merits.