Arun Punjaji KaduversusKanhur Pathar Multi State Co- op. Ltd., Thru. Representative Pradeep Prabhakar Dhakane and Ors.

2026:BHC-AUG:45372


                          IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                     BENCH AT AURANGABAD


                              19 ARBITRATION APPEAL NO. 19 OF 2025


                                        ARUN PUNJAJI KADU
                                               VERSUS
            KANHUR PATHAR MULTI STATE CO-OP. SOC. LTD., THRU. REPRESENTATIVE
                           PRADEEP PRABHAKAR DHAKANE AND OTHERS
                                                  ...
                               Mr. V.D. Salunke, Advocate for appellant
                     Mr. S.V. Suryawanshi, Advocate for respondent Nos.1, 2c and 3
                                                  ...
                                                WITH
                      CIVIL APPLICATION NO. 4600 OF 2025 IN ARBA/19/2025
                                                  ...

                                                  CORAM :     ROHIT W. JOSHI, J.
                                                  DATE :      28th SEPTEMBER, 2026


            ORDER :



            .            Present appeal takes exception to Judgment and order dated

            04.03.2025 passed by learned Principal District Judge, Ahmednagar

            dismissing Arbitration Application No.11/2019 filed by present appellant

            under Section 34 of the Arbitration and Conciliation Act, 1996 in order to

            challenge arbitral award dated 26.07.2019 passed by Mr. B.B. Shelke as sole

            Arbitrator in Arbitration Reference No.1/2018 by which the present appellant
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and respondent Nos.2 and 3 to pay an amount of Rs.11,63,883/- with

interest @ 18% per annum from 25.03.2018 to the present respondent No.1.

Respondent No.1 is a Multi State Co-operative Society registered under the

Multi State Co-operative Societies Act, 1984 (hereinafter referred to as

“MSCS Act” for short). It had advanced a loan of Rs.2,00,000/- to present

appellant.


2            Since the loan amount was not repaid, initially arbitration

proceeding bearing Case No.ARB/KPMSCCS/ANR/60/2012 was initiated

under Section 84 of the M.S.C.S. Act. In the said arbitration proceeding an

Award was passed on 31.03.2013. The arbitral award was challenged by

filing an application under Section 34 of the Arbitration and Conciliation Act,

which came to be registered as Arbitration Application No.2/2013. The said

application filed under Section 34 of the Arbitration and Conciliation Act was

allowed vide judgment and order dated 15.01.2018.         The arbitral award

dated 31.01.2013 was quashed and set aside with liberty to respondent No.1

to make fresh reference to the Arbitrator on the same cause of action.


3            Accordingly,   fresh   reference   vide   Arbitration     Reference

No.1/2018 was made by present respondent No.1. Learned Arbitrator has

passed award dated 26.07.2019, inter alia directed the present appellant and

respondent Nos.2a to 2e and 3 to jointly and severally pay amount of
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Rs.11,63,883/- with interest @ 18% per annum from 25.03.2018. The said

arbitral award dated 26.07.2019 came to be challenged by present appellant

by filing present application under Section 34 of the Arbitration and

Conciliation Act being Arbitration Application No.11/2019, which came to be

dismissed by learned Principal District Judge, Ahmednagar vide Judgment

and order dated 04.03.2025.


4            The contention of Mr. V.D. Salunke, learned Advocate for

appellant is that the present arbitration proceeding has commenced as per

leave granted by learned Principal District Judge, Ahmednagar in the first

round of litigation. It is contended that in the first round of litigation, after

having set aside arbitral award it was not open for the learned Principal

District Judge to remand the matter for fresh consideration and/or to grant

leave to initiate fresh proceeding for arbitration, more so, when the

application under Section 34 of the Arbitration and Conciliation Act was filed

by the present appellant. The contention of the learned Advocate is that

clause 3 and 4 of the operative order in the Judgment and order dated

15.01.2018 is nullity since the learned Principal District Judge does not have

jurisdiction to pass an order of remand under Section 34 of the Arbitration

and Conciliation Act. Apart from this, it is contended that the person who

has filed the second arbitration proceeding on behalf of respondent No.1 was
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not authorized to do so and as such arbitration proceeding at his behest

should not have been entertained. Lastly, it is argued that in the absence of

any arbitration agreement between the parties the Arbitrator did not have

any jurisdiction and as such the award passed is without authority of law.


5           Per contra, learned Advocate Mr. S.V. Suryawanshi argued that in

the first round of litigation learned Principal District Judge has set aside the

arbitral award, not on merits but on procedural infirmities.            Learned

Advocate contends that since adjudication on merits was not done, it was

necessary that the claim was required to be decided on merits.          Learned

Advocate contends that even in the absence of clause 3 and 4 of the operative

order in the Judgment dated 15.01.2018 fresh arbitration proceeding could

always be by respondent No.1. In support of the said contention learned

Advocate has placed reliance on Judgment of Delhi High Court in the case of

Steel Authority of India Limited vs. Indian Council of Arbitration and another

[2015 SCC OnLine Del 13394]. As regards the contention with respect to

authorization, it is argued that the same person was authorized to file

arbitration proceeding. It is argued that in the first round of litigation the

said person has initiated the arbitration proceeding and no objection was

raised with respect to his authority to conduct the arbitration. As regards the

contention with respect to initiation of arbitration in the absence of
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agreement for arbitration, the argument is that the arbitration in the present

case is a statutory arbitration.


6            As regards the first contention that the initial order dated

15.01.2018 passed by learned Principal District Judge in Arbitration

Application under Section 34 of the Arbitration and Conciliation Act being a

nullity and consequently second arbitration proceeding is non est, the said

contention cannot be accepted. Perusal of earlier Judgment would indicate

that the dispute was not be decided on merits. It is only on account of some

procedural defects that the arbitral award was set aside. In such situation,

having regard to the legal principle that it is not open to remand the matter

to Arbitrator the learned Principal District Judge has dismissed the

application and has granted leave to make fresh reference on same cause of

action.


7            Perusal of the Judgment in the case of Steel Authority of India

Limited (supra), on which reliance was placed by respondent No.1, will

indicate that a fresh arbitration in a case where arbitration award was set

aside on technical ground is maintainable. Therefore, the contention that the

arbitration which is commenced after adjudication of the first arbitration

proceeding by the Principal District Judge is a nullity cannot be accepted.
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8           The second contention by the learned Advocate is that the

person who has initiated the arbitration proceeding on behalf of respondent

No.1 was not duly authorized.       The said contention is rejected on two

grounds; firstly, because in the earlier arbitration proceeding the same person

had initiated the arbitration proceeding and the arbitration proceeding is for

the same cause and as such fresh authorization was not required and

secondly, also because this contention is not raised under Section 34

proceeding before learned Principal District Judge.


9           The contention of Mr. V.D. Salunke that an arbitration agreement

is a necessary prerequisite for initiating arbitration proceeding, as a general

provision of law is acceptable, however, in the present case the arbitration

has commenced in view of Section 84 of the MSCS Act and as such the last

contention also cannot be accepted.


10          The contention of learned Advocate Mr. V.D. Salunke that in the

subsequent arbitration proceeding the learned Arbitrator has proceeded as if

the matter was remanded by the learned Principal District Judge and has

decided the case accordingly. It does appear from the reading of the award

that the learned Arbitrator was under such influence. Even if it is assumed

that the learned Arbitrator has decided the case as if the order passed by the

learned Principal District Judge is a remand order that by itself has not
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affected the merits of the matter.     For the reasons stated above, in the

considered opinion of this Court, no case for interference is made out.

Arbitration appeal is, therefore, dismissed with no order as to costs. Pending

Civil Application also stands disposed of.




                                                 ( ROHIT W. JOSHI, J. )




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