KHAN ABDUL NAEEM ABDUL QAYYUM AND OTHERSversusGOADAVARI URBAN MULTI STATE CRDIT CO-OP. SOCIETY LTD. THRU. ITS AUTHORIZED PERSON/ AUDIT MANAGER

2026:BHC-AUG:40004


                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                BENCH AT AURANGABAD


                         933 ARBITRATION APPEAL NO. 92 OF 2026


                     1    Khan Abdul Naeem Abdul Qayyum,
                          Age 35 yrs., Occ. Business,
                          Prop. Star Utsav Events & Promotions,
                          R/o NTC Mill Area, Mil Gate, Nanded,
                          Tq. & Dist. Nanded.

                     2    Bharat Jagdish Jethwani,
                          Age Adult, Occ. Business,
                          R/o Bafna Road, Sindhi Colony,
                          Nanded, Tq. & Dist. Nanded.

                     3    Kharsheed Ahmed Khan,
                          Age Adult, Occ. Business,
                          R/o House No.2-9-392, NTC Mill Area,
                          Nanded, Tq. & Dist. Nanded.

                     4    Kedar Ratnakar Nandedkar,
                          Age Adult, Occ. Business,
                          R/o Pundlik Mahavir Chowk,
                          Nanded, Tq. & Dist. Nanded.

                                                              … Appellants

                                       … Versus …

                          Godavari Urban Multi State Credit
                          Co-operative Society Limited,
                          Head Office : Suryawanshi Complex,
                          in front of MSEB Store, Opp. Taroda Naka,
                          Nanded
                          Through it’s authorized person / Audit Manager.

                                                              … Respondent

                                            ...
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               Mr. Shahed Ali Ansari, Advocate for appellants
                Mr. R.F. Totala, Advocate for sole respondent
                                     ...
                                   WITH
          CIVIL APPLICATION NO. 4972 OF 2026 IN ARBA/92/2026
                                     ...

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


ORDER :



.           Present appeal is filed in order to assail Judgment and order

dated 13.03.2026 passed by learned District Judge-1, Nanded in Civil

Miscellaneous Application No.134/2024 which was filed by the present

appellants in order to challenge Arbitral Award in Case No.ARB/GUMCCS

Ltd. NANDED/CHK/145/2021, dated 08.07.2023. The respondent is a Credit

Co-operative Society registered under the Multi State Co-operative Societies

Act, 2002. It had initiated a proceeding for arbitration against the present

appellants for recovery of amount.    It is the case of respondent that the

appellants had borrowed an amount of Rs.24 lakhs and had failed to repay

the loan amount. The Arbitral Tribunal allowed a claim by Award dated

08.07.2023. The appellant was directed to pay amount of Rs.33,87,408/-

along with interest @ 20% per annum from 01.07.2021 till the date of
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realisation of the amount. The said Arbitral Award was challenged by filing

petition under Section 34 of the Arbitration and Conciliation Act, 1996,

which came to be partly allowed by learned District Judge-1, Nanded vide

Judgment and order dated 13.03.2026. Learned District Judge-1, Nanded

has set aside the Arbitral Award subject to condition that the appellants shall,

jointly and severally, deposit amount of Rs.25,00,000/- within a period of

four weeks from the date of Judgment and order. The said Judgment dated

13.03.2026 is under challenge in the present appeal to the extent of the

condition imposed by Judgment directing the appellants to deposit an

amount of Rs.25 lakhs. The contention of learned Advocate for appellants is

that once the learned District Court has found that the learned Arbitrator has

decided the matter without affording due opportunity to defend to the

appellants, the condition of deposit, imposed by learned District Judge is

beyond jurisdiction.


2           Perusal of paragraph No.8 of the Judgment by the learned

District Judge-1, Nanded will demonstrate that a specific finding is recorded

that despite being served in the arbitration proceedings the appellants have

deliberately failed to cause appearance and, therefore, arbitration proceeding

was required to be decided ex parte. Learned District Judge-1, Nanded has

further held that there is no material on record to indicate that sufficient
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opportunity was not given by the Arbitral Tribunal to the appellants to defend

their case. It is further recorded in paragraph No.11 that the appellants have

failed to take steps to defend themselves.


3           However, having held so in paragraph No.11 of the Judgment

learned District Judge has recorded that it prima facie appears that notice

with respect to appointment of Arbitrator was not served upon the

appellants. The Arbitral Award is set aside only on the ground that notice of

appointment of Arbitrator was not served upon the appellants, although

thereafter the Arbitrator had duly served the notice of arbitration proceeding

so as to enable him to contest the same. The learned District Judge-1 has

further recorded that the principal loan amount borrowed loan of Rs.27 lakh

and a period of other six years has lapsed since the date of disbursement of

the loan amount. Learned District Judge-1 has also recorded that payment of

around 4 to 5 lakhs only was made by the appellants. On recording a prima

facie satisfaction that the outstanding dues were to the tune of Rs.45 lakhs

approximately, while setting aside the Award the learned District Judge-1 has

imposed condition of deposit of Rs.45,00,000/-.


4           Learned Advocate for the appellants relying on Section 34(2)(a)

(iii) contends that since the notice of appointment of Arbitrator was not

served upon the appellants, award is vitiated. I am afraid the said contention
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cannot be accepted with respect to statutory arbitration as provided under

the Multi State Co-operative Societies Act. However, not much can be said

about the said aspect since the respondent society has not challenged the said

order of remand.


5           In the considered opinion of this Court the learned District

Judge-1, Nanded has recorded a categorical finding despite being provided

sufficient opportunity to defend the claim on merits the appellants failed to

avail of the opportunity to defend themselves. The Award is set aside on the

ground that notice while making appointment of the arbitration is not served

on the appellants.    With such observations, in order to balance equities

learned District Judge has directed the appellants to deposit an amount of

Rs.25,00,000/- while setting aside the arbitral award and remanding the

matter to the Arbitral Tribunal for deciding the matter afresh.          Cogent

reasons are recorded for balancing the equities. The principal loan amount is

Rs.27,00,000/-, out of which merely 4 to 5 lakh were repaid and total

outstanding amount was approximately Rs.45,00,000/-, as such this Court

sees no reason to interfere with the said condition imposed by the learned

District Judge-1, Nanded while setting aside the Award and remanding the

matter to the Arbitral Tribunal for deciding the arbitration case afresh,

particularly in view of the fact that a categorical finding is recorded that the
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appellants were provided proper opportunity to defend their case before the

Arbitral Tribunal, which they did not avail. In the result, the appeal stands

dismissed with no order as to costs. Pending civil application also stands

disposed of.




                                                 ( ROHIT W. JOSHI, J. )


agd