Supreme Court: Courts Have Sometimes Failed Arbitration, With Interference Curing No Disease  ||  Supreme Court: Co-Heir Cannot Sell Other Heirs' Shares as Karta After Intestate Succession  ||  SC: Casual Labourers With Temporary Status are Eligible For Pension Even Without Regularisation  ||  Supreme Court: High Courts Must Record the Nature of Crime and Allegations While Quashing FIRs  ||  Delhi HC Rejected Pernod Ricard’s Plea Against Denial of Wholesale Liquor License over Excise Case  ||  Gujarat HC: Lalita Kumari Ruling Does Not Permit Deceased’s Kin to Invoke Art 226 For FIR Failure  ||  Ker HC: Denying Disability Pension to Army Personnel Based on Unreasoned Medical Opinion is Invalid  ||  Kerala HC Directs Family Courts to Follow Calcutta HC Custody Guidelines Till State Rules Framed  ||  Allahabad HC Allows LIC Employees to Be Engaged as Census Enumerators and Supervisors For Duties  ||  Supreme Court Unveiled Victim Protection Plan For Trafficking Survivors and Urged Legal Reforms    

Mohammed Kader Hassan Vs. Sree Gokulam Chit & Finance Co. (P) Ltd. - (High Court of Bombay) (18 Jul 2019)

When self-contained machinery for settlement of disputes by means of arbitration is prescribed under provisions of Chit Funds Act, then it could not be varied by a private agreement between parties

MANU/MH/1910/2019

Arbitration

By present petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, the Petitioner has impugned the arbitral awards, thereby allowing claims made by the Respondent. It is the case of the Petitioner that, without giving any opportunity to the Petitioner to cross examine the witness and also to lead evidence, the learned Arbitrator made an award, directing the Petitioner to pay a sum of Rs. 13,38,838 along with interest at the rate of Rs. 18 per cent per annum.

A perusal of the award indicates that, the learned Arbitrator has not even dealt with the issue of jurisdiction raised by the Petitioner in the application filed under Section 16 of Act, 1996 and has taken a casual approach in passing the award.

The Statement of Objects and Reasons of the Chit Funds Act, 1982 indicates that, the said Act has been enacted as a Central legislation, as a step, besides ensuring uniformity in the provisions applicable to chit fund institutions throughout the country to prevent such institutions from taking advantage either of the absence of any law governing chit funds in any State or exploit the benefit of any lacuna or relaxation in any State Law by extending their activities in such States.

The legislative intent is clear that self-contained machinery for the settlement of the disputes between a foreman and the subscribers by means of arbitration is prescribed under the provisions of the said Act, 1982 and thus could not be varied by a private agreement between the parties.

The impugned awards are set aside. Applications filed by the Petitioner under Section 16 of Act, 1996 are allowed. It is declared that, the learned Arbitrator did not have jurisdiction to entertain, try and adjudicate upon the disputes filed by the Respondent.

Tags : DISPUTE   ADJUDICATION   JURISDICTION  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved