Panchanan Banerjee v. Nirmal Chandra Lahiri — 1945 DIGILAW 150 (CAL)

JUDGMENT 1. The Appellants, Panchanan Banerjee and Natulal Banerjee, are two brothers. They were members of the Chatra Serampore Co-operative Society, a society registered under the Co-Operative Societies Act, Act II of 1912. On the 9th January, 1935, these two persons, as members of the aforesaid Society, borrowed a sum of Rs. 1,000 from the Society, and, as security for that loan, executed a mortgage of certain properties in favour of the Society. On the 13th October, 1939, the Society assigned this mortgage to Nirmal Chandra Lahiri, a person who is not a member of the Society. On the 20th May, 1941, Nirmal Chandra Lahiri brought a suit on the mortgage, being Title Suit No. 17 of 1941. He sued the two Banerjee brothers making them Defendants Nos. 1 and 2 and he made the Co-operative Society a pro forma Defendant. In that suit he asked for the usual mortgage decree against the Defendants, and there was an additional prayer that if, for any reason, it was held that he could not obtain a mortgage decree from the Defendants Nos. 1 and 2, the decree should be passed in his favour against the pro forma Defendant, namely, the Co-operative Society. 2. The mortgagors alone contested the suit, the Co-operative Society not appearing. 3. The defence taken was two-fold. Firstly, it was contended that the Civil Court had no jurisdiction to entertain the suit by reason of the provisions of Rule 22 (1) of the rules framed under sec. 43 (2) (1) of the aforesaid Act II of 1912. The second point taken by the defence was that if it were held that the Court had jurisdiction to entertain the suit, they should be given the benefit of the Bengal Money-Lenders Act and an instalment decree should be passed against them. 4. The learned Subordinate Judge has held against the Defendants on both the points. Hence, this appeal. 5. I shall take up for consideration the second point, vis., whether the Bengal Money-Lenders Act can be availed of by the Defendants in this suit. In my opinion, the decision of the learned fudge on this point is correct and the learned Advocate for the Appellants in the course of his argument agreed that it was so. The loan was advanced by the Co-operative Society. The Bengal Money-Lenders Act in giving a definition of what constitutes a loan under sec. In my opinion, the decision of the learned fudge on this point is correct and the learned Advocate for the Appellants in the course of his argument agreed that it was so. The loan was advanced by the Co-operative Society. The Bengal Money-Lenders Act in giving a definition of what constitutes a loan under sec. 2 (12) of the said Act excludes from the definition a loan advanced by a Co-operative Society--see sec. 2 (12) (d) (ii). It is quite clear, therefore, that the loan advanced to the Defendants was not a loan within the meaning of the Bengal Money-Lenders Act. The question which arises is whether the loan altered its nature by reason of the fact that the Co-operative Society assigned its rights for the recovery of the loan to the Plaintiff. We cannot see how the nature of the loan could be altered by reason of the assignment. The debt was transferred to the Plaintiff together with its attribute. If the debt did not constitute a loan within the meaning of the Bengal Money-Lenders Act, then what the Plaintiff got was a debt which did not constitute a loan under the Bengal Money-Lenders Act. We hold, therefore, that the loan in suit is not a loan within the meaning of the Bengal Money-Lenders Act and that, consequently, the provisions of the Act do not apply to this case. The Defendants are therefore, not entitled to get any instalments. 6. The next question for determination is whether the aforesaid r. 22 (1) prevents the Court from entertaining this suit. The learned Advocate for the Appellants seemed to argue that if it be held that the assignment did not alter the nature of the loan, it necessarily follows that r. 22 (1) would exclude the jurisdiction of the Court. We are quite unable to accept this argument. The question, whether the jurisdiction of the Court below has been excluded or not, must be decided by reference to the provisions of r. 22 (1). Rule 22 (1) is as follows: Any dispute touching the business of a registered society between members or past members of the society, or persons claiming through a member or past member, or between a member or past member or persons so claiming and the committee or any officer, shall be referred in writing to the Registrar. 7. Rule 22 (1) is as follows: Any dispute touching the business of a registered society between members or past members of the society, or persons claiming through a member or past member, or between a member or past member or persons so claiming and the committee or any officer, shall be referred in writing to the Registrar. 7. In order that this rule should apply, two conditions will have to be fulfilled: (1) the dispute must touch the business of the registered society and (2) the dispute must be one between members or past members of the society, or persons claiming through a member or past member inter sc or the dispute must be one between a member or past member, or persons so claiming on the one hand and the committee or any officer of the society on the other. Before the rule can apply, both these conditions must co-exist. In the present case, we are of opinion that neither of these two conditions exists. The present dispute, in our opinion, is not a dispute touching the business of the Co-operative Society. The business of the Co-operative Society will not be affected in any way by this dispute or by the decision of this dispute. The Co-operative Society has assigned its rights to the Plaintiff. If the Plaintiff recovers from the Defendants, the business of the Co-operative Society will not be in any way affected or touched. If the Plaintiff fails to recover from the Defendants, then also the business of the Co-operative Society will not in any way be touched. We are at present excluding from consideration the claim of the Plaintiff against the Co-operative Society because that claim was not pressed or resisted. If that claim had been pressed or resisted and we had to consider it, then different considerations may have applied. But in so far as the suit is treated as a suit against principal Defendants Nos. 1 and 2, it is not a dispute which touches the business of the registered society. If that claim had been pressed or resisted and we had to consider it, then different considerations may have applied. But in so far as the suit is treated as a suit against principal Defendants Nos. 1 and 2, it is not a dispute which touches the business of the registered society. The learned Advocate for the Appellants argued that as the loan was originally advanced by the Co-operative Society, and as the Plaintiff merely stands in the shoes of the Co-operative Society, the dispute between the Plaintiff and the mortgagors is really a dispute between the Co-operative Society and the mortgagors and therefore it is a dispute which touches the business of the Co-operative Society. We are not impressed by this argument. It is true that originally the transaction was between the Co-operative Society and the Defendants. But the present dispute in no way touches the business of the society because the society has given up all its rights in the transaction to the Plaintiff. The learned Advocate's contention may have been tenable if the words of the rule were "any dispute arising out of a transaction relating to the business of the society." The rule is not framed thus. The rule uses words which are very significant. It says "any dispute touching the business of the registered society." It does not even use the words "concerning the business of the registered society." It is obvious that the rule was framed with the intention of preventing the business of a Cooperative Society being interfered with by litigation in the ordinary Courts. That was clearly the object of the rule. If the Civil Court entertains a dispute of the kind involved in the present suit, the business of the Co-operative Society is in no way interfered with. The learned Advocate for the Appellants relied upon the case of Dacca Co-operative Industrial Union, Ltd. v. Dacca Co-operative Sankha Silpa Samities, Ltd. 42 C. W. N. 391 (1937) as supporting the interpretation of r. 22 (1). In our opinion, this case does not in any way support the argument of the learned Advocate. There, there was a dispute between a member of the society and the society regarding a loan taken by such a member from the society. In our opinion, this case does not in any way support the argument of the learned Advocate. There, there was a dispute between a member of the society and the society regarding a loan taken by such a member from the society. It was argued that the word "business" used in r. 22 (1) means merely the internal management of the Co-operative Society and it was decided that such a restrictive meaning could not be given to the word "business" and that the word "business" included the financial obligation of the members to the society and that any dispute concerning such financial obligations would be a dispute concerning the business of the society. In our opinion, that case has nothing to do with the point arising in the present case. What are concerned with is to decide whether the dispute involved in the present suit touches business of the society, and we are of opinion that the society having given up all its rights in the mortgage, the dispute between the assignee and the mortgagors does not in any way touch the business of the society. 8. We now turn to the next point, viz., whether the parties to the dispute are parties contemplated by r. 22 (1). That rule deals with disputes between the members or past members or persons claiming through them inter se on the one hand and the disputes between members or past members or persons claiming through them and the committee or any officer on the other. In the present case, the Defendants Nos. 1 and 2 are certainly members of the Co-operative Society. The dispute, however, is not between them inter se. The dispute is between them on the one hand and the Plaintiff on the other. The Plaintiff is not a member of the Co-operative Society nor does he constitute the committee of the Co-operative Society, nor is he an officer thereof. It was sought to be argued that as an assignee from the Co-operative Society, the Plaintiff could be treated as representing the society, or as claiming through the society. Now r. 22 (1) does not deal with the dispute between the members and anyone claiming through the society or claiming under any officer of the society. It was sought to be argued that as an assignee from the Co-operative Society, the Plaintiff could be treated as representing the society, or as claiming through the society. Now r. 22 (1) does not deal with the dispute between the members and anyone claiming through the society or claiming under any officer of the society. In the case of members the rule is careful to provide that past members and persons claiming through a member or a past member are placed in the same category as a member. But when dealing with the committee of the society or with any officer of the society, the rule does include persons claiming through or under them. That being so, we are of opinion that the present dispute is not between such persons as are contemplated by r. 22 (1). For this reason also that rule would not apply. We, accordingly, uphold the decision of the learned Subordinate Judge and dismiss the appeal with costs--hearing-fee, two gold mohurs.