Key Ruling: Only Parties to Arbitration Agreement Can Challenge Award

The court held that only parties to the arbitration agreement, as defined under Section 2(1)(h) of the Arbitration and Conciliation Act, 1996, can file a petition under Section 34. As the petitioners were not parties to the arbitration agreement, their petition to challenge the arbitral award was dismissed for lack of locus standi. The court emphasized that the rights of members in a cooperative society are subservient to the society's decisions, and only those directly involved in the arbitration agreement can avail of remedies under the Act. The petition was deemed not maintainable, and no costs were awarded.

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Issues Involved:
1. Maintainability of the Petition under Section 34 of the Arbitration and Conciliation Act, 1996.
2. Definition and Scope of 'Party' under Section 2(1)(h) of the Arbitration and Conciliation Act, 1996.
3. Rights of Members of a Cooperative Society to Challenge an Arbitral Award.
4. Applicability of Judgments and Legal Precedents.

Detailed Analysis:

1. Maintainability of the Petition under Section 34 of the Arbitration and Conciliation Act, 1996:
The petitioners filed under Section 34 of the Arbitration and Conciliation Act, 1996, to quash the arbitral award dated 19th March 2013. The respondent raised a preliminary objection regarding the maintainability of the petition, arguing that the petitioners were not parties to the arbitration agreement and thus could not challenge the award under Section 34. The court held that only a party to the arbitration agreement, as defined under Section 2(1)(h) of the Act, can file a petition under Section 34. The court emphasized that the arbitral tribunal is a private forum with jurisdiction limited to parties to the arbitration agreement, and proceedings under Section 34 are not appellate but a specific statutory remedy available only to parties to the arbitration agreement.

2. Definition and Scope of 'Party' under Section 2(1)(h) of the Arbitration and Conciliation Act, 1996:
The court examined the definition of 'party' under Section 2(1)(h) of the Act, which means a party to an arbitration agreement. The court noted that the term 'party' is used throughout the Act, indicating that various rights and mechanisms under the Act are available only to parties to the arbitration agreement. The court rejected the petitioners' argument that they, as members of the society, could be considered parties to the arbitration agreement. The court cited precedents, including the Supreme Court's rulings in *Firm Ashok Traders vs. Gurmukhdas Saluja* and *S.N. Prasad vs. Monnet Finance Ltd.*, which affirmed that only parties to the arbitration agreement could invoke the Act's provisions.

3. Rights of Members of a Cooperative Society to Challenge an Arbitral Award:
The petitioners, as members of Apsara Coop. Hsg. Soc. Ltd., argued that they had the right to challenge the arbitral award since it affected their rights. The court referred to the Division Bench judgment in *Girish Mulchand Mehta vs. Mahesh S. Mehta*, which held that members of a society speak through the society and have no independent rights qua the society. The court also noted that the society had accepted the arbitral award, and the petitioners, as members, could not independently challenge it. The court distinguished the petitioners' reliance on *Ramesh Himmatlal Shah vs. Harsukh Jadhavji Joshi*, stating that the rights of members in a cooperative society are subservient to the society's decisions.

4. Applicability of Judgments and Legal Precedents:
The court analyzed various judgments cited by both parties. It distinguished the Delhi High Court's judgment in *Sohan Nayyar vs. Lt. Governor of Delhi*, which was based on the Arbitration Act, 1940, and not applicable to the Arbitration and Conciliation Act, 1996. The court preferred the reasoning in the Madras High Court's judgment in *Chennai Container Terminal Pvt. Ltd. vs. Union of India*, which held that a third party cannot challenge an arbitral award under Section 34. The court also referred to the Supreme Court's judgment in *Benarsi Krishna Committee vs. Karmyogi Shelters Pvt. Ltd.*, which emphasized that the term 'party' under the Act refers to those directly involved in the arbitration agreement.

Conclusion:
The court concluded that the petitioners, being neither parties to the arbitration agreement nor to the arbitration proceedings, had no locus to file the petition under Section 34 of the Arbitration and Conciliation Act, 1996. The petition was dismissed as not maintainable, with no order as to costs.

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