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1961 DIGILAW 87 (GUJ)

NAISHADRAI HIRALAL JOSHI v. BOMBAY STATE CO OPERATIVE LAND MORTGAGE BANK LIMITED

1961-08-09

M.R.MODY, N.M.MIABHOY

body1961
N. M. MIABHOY, J. ( 1 ) THIS writ petition is directed against an order dated 23 of June 1959 passed by the Assistant Registrar under section 59b of the Bombay Co-operative Societies Act 1925 (hereafter called the Act) and an order made by the same officer permitting the Bombay State Co-operative Land Mortgage Bank Ltd. (hereafter called the Bank) to withdraw an application made by it under section 54 of the Act for the decision of a dispute. ( 2 ) THE facts on which the petition is founded are as follows. The petitioners are Inamdars of the village Tadwa situated in Shahera Taluka District Panchmahals. Opponent No. 2 is the Assistant Registrar Co-operative Societies at Godhra. There is no dispute that at the relevant time this officer was empowered to discharge the functions of the Registrar. Opponent No. 3 is the Registrar Co-operative Societies appointed under the Act. Petitioners were the members of the Bank. On 17th April 1951 they executed three mortgage-deeds in favour of the Bank. The first was for a sum of Rs. 19 0 and the other two were for Rs. 6 0 each. By the mortgage-deeds petitioners mortgaged with the Bank the inam lands of the village Tadwa. All the three mortgages are stated to be usufructuary. The Bank however did not enter into actual and physical possession of the lands. It appears that those lands were in the possession of petitioners tenants. The amounts which the petitioners were entitled to recover from their tenants are described in the petition sometimes as land-revenue and sometimes as rent. Petitioners executed a rent-note on 17 in favour of the Bank in respect of the mortgaged lands. The amount which was payable under the rent-note for the first year was Rs. 2 430 and for the next 19 years the amount was Rs. 2 502 per annum. The installments were so modulated that the principal amounts and the interests thereon for the next 20 years would be completely redeemed on payment of the 20 annual installments. The first installment was payable on 31st of March 1952. There was a default clause which entitled the Bank to claim the whole of the amount due under the lease in case there was a default. It is not quite clear from the petition as to whether the petitioners paid any installment or not. The first installment was payable on 31st of March 1952. There was a default clause which entitled the Bank to claim the whole of the amount due under the lease in case there was a default. It is not quite clear from the petition as to whether the petitioners paid any installment or not. But it is common ground that the petitioners fell into arrears some time prior to 1953. Therefore the Bank made an application on 17th July 1954 under sec. 59 for a certificate to recover as arrears of land-revenue the arrears of rent then due. This certificate was granted by the Assistant Registrar on 24-2-1955. The amount recoverable under the certificate was Rs. 5 914 being the amount due to the Bank upto 17th July 1954 On 2 February 1956 the Bank wrote to the Mamlatdar Shahera inter alia requesting that officer to take prompt measures to prevent the Inamdars in the village Tadwa Taluka Shahera during the current season and to issue orders to the Talati of the village to recover the rent from the tenants against the Bank dues as land-revenue arrears. On this the Mamlatdar issued a notification on 9th February 1956 by which he informed the tenants of the petitioners that the Bank was to be considered as the occupant of the lands and if any payment was made to any person other than the Bank then the tenants would be doing so at their own risk. On 9th March 1957 the land development Officer of the Bank addressed a letter to one of the petitioners and requested him to request the Mamlatdar Shahera to ask the Talati to remain present on suitable dates at the village Tadwa when rent would be collected by the Bank and the petitioners. On 19-3-1958 the Mamlatdar addressed a letter to petitioner No. 2 acknowledging receipt of petitioner No. 2 letter dated 15-3-1958 and stated that the collection of rent from the tenants would be done by the Bank and that he had nothing to do in that respect. It appears that before this correspondence a dispute had already arisen between the petitioners on the one hand and the Bank on the other. It appears that before this correspondence a dispute had already arisen between the petitioners on the one hand and the Bank on the other. The petitioners had alleged that the Bank had been negligent and inactive in the matter of the collection of the dues from the tenants and that this negligence had occasioned loss and damages to the petitioners which they were entitled to recover from the Bank. It also appears that in the year 1958-59 on some occasions the petitioners called upon the Bank to furnish them with a statement of the amounts which it had recovered from their tenants. The petitioners allege that no such statement was ever furnished to them. The Personal Inam Abolition Act was passed in 1953. Thereafter by the letter dated 17th September 1956 the petitioners made a proposal to the Registrar that the amount of the compensation payable to the petitioners under the Personal Inam Abolition Act in respect of their Kharaba lands and the lands in the occupation of the tenants should be appropriated towards the mortgage dues of the Bank. On the 16th April 1958 the Bank made an application to the Assistant Registrar referring to him under section 54 of the Act a dispute between itself and the petitioners. The original application is not on the record and we have no idea as to what the dispute was which was referred to the arbitration of the Assistant Registrar. The dispute was referred by the Assistant Registrar to his nominee for decision. Whilst these arbitration proceedings were pending the Bank made on 21st August 1958 an application under section 59b of the Act requesting the Assistant Registrar to issue a certificate under that section in respect of the whole of the mortgage dues. The petitioners contested this proceeding under section 59b on several grounds one of which was that the Assistant Registrar had no jurisdiction to conduct proceedings under section 59b during the pendency of the arbitration proceedings under section 54. The objection was over-ruled and the Assistant Registrar granted on 23rd June 1959 a certificate under section 59b. On this the Bank on 29th June 1959 made an application for withdrawal of its application for decision of the dispute which had been made under sec. 54 of the Act with permission to make another application under the same section and on the same facts. On this the Bank on 29th June 1959 made an application for withdrawal of its application for decision of the dispute which had been made under sec. 54 of the Act with permission to make another application under the same section and on the same facts. This application for withdrawal was granted by the Assistant Registrar on 29th June 1959. The petitioners filed a revision application to the Registrar from the order dated 23rd June 1959 which granted certificate under section 59b of the Act. That revision application was dismissed by the Registrar respondent No. 3 on 19 of February 1960. ( 3 ) MR. Oza made the following submissions in support of this petition. The submissions were: (i) that the reference under section 54 of the Act could not be allowed to be withdrawn by the Assistant Registrar and that the only way in which the reference could have been legally terminated was by passing an award; (ii) that the Assistant Registrar had no power to take proceedings under section 59b of the Act during the pendency of the arbitration proceedings under section 54 of the Act; (iii) that in any event the Assistant Registrar and the Registrar should have given a set off to the petitioners for the amounts which ought to have been recovered by the Bank and which the Bank had failed to recover on account of its negligence and inaction. All these three submissions arise out of the averments made in the Writ petition and the grounds set out therein. In addition to this Mr. Oza intended to make two more submissions which ultimately he was constrained to admit had not been raised by the petitioners in the writ petition. These submissions were that section 59b only provided for the mode of recovery of amounts and did not empower the Registrar to determine the liabilities of the parties and that if the liability happened to be disputed in proceedings under section 59b then the provisions of that section could not be resorted to and that the only remedy of the party concerned was to take resort to the provisions of section 54 of the Act. The second and the latter two submissions are inter-connected and though the last two contentions have not been specifically taken in the petition we permitted Mr. Oza to raise those two contentions. The second and the latter two submissions are inter-connected and though the last two contentions have not been specifically taken in the petition we permitted Mr. Oza to raise those two contentions. We granted the permission because the three contentions were inter-connected and really formed part of the second submission. We propose to consider these contentions together for the same reason. ( 4 ) SO far as the first submission is concerned it does not appear to us to be factually correct. The averments on this submission are to be found in paragraphs 9 and 10 of the petition. From paragraph 9 it appears that the dispute under section 54 was referred to the nominee of the Assistant Registrar and the nominee was seized of that dispute. Prom paragraph 10 it appears that the Assistant Registrar permitted the Bank to withdraw the proceeding under section 54 with permission to make a fresh reference under section 54 of the Act. A copy of the application for withdrawal has not been annexed to the petition nor the order of the Assistant Registrar granting permission to withdraw. Prom the above averments it quite clear that there is no allegation that the Assistant Registrar had withdrawn the proceedings from the nominee under section 54 sub-section (2) of the Act. The averments read as if the application for withdrawal was made to the Assistant Registrar and permission granted by that officer whilst the matter was still pending before the nominee. In any case there is no averment that the Assistant Registrar had withdrawn the proceeding to himself. As we shall presently show having regard to the nature of the writ which is sought by the petitioners it is necessary to know what exactly was the order which was made and what was the law under which that order was purported to have been made by the Assistant Registrar. It is also quite clear from the same averments that what had happened in the arbitration proceedings was that the Bank withdrew the application for reference. It is true that the application was not for withdrawal of the proceeding simpliciter but it was accompanied with a request that permission should be granted to the Bank to make a fresh reference under the Act if necessary. It is true that the application was not for withdrawal of the proceeding simpliciter but it was accompanied with a request that permission should be granted to the Bank to make a fresh reference under the Act if necessary. However the petitioners do not challenge in the present proceedings that part of the order of the Assistant Registrar which grants the Hank permission to get a fresh reference made on the same cause of action. Mr. Oza only challenges that part of the order of the Registrar which permits the Bank to withdraw the proceeding. Now so far as the withdrawal of the reference is concerned the withdrawal was an act of the Bank. It was not an act of the Assistant Registrar at all. The question that arises for consideration is whether a person who has initiated proceedings under section 54 of the Act has or has no right to withdraw the reference application once it is made. Mr. Oza contends that once a proceeding under section 54 is initiated then the proceeding can be terminated only in one way and that is by passing of an award by the Registrar or his nominee. But before we consider this question it is necessary to see the exact prayer which the petitioners have made in this behalf. The relevant prayer is prayer No. 4 in which this is what the petitioners have asked for: That the opponent No. 2 be directed to exercise his powers under section 54 (2) of the said Act and to decide the dispute herein. It is important to notice that the petitioners do not ask for a writ for quashing the order of the Assistant Registrar made on 29th of June 1959. The direction which they seek is that that officer shall exercise the powers conferred upon him under section 54 (2 ). Therefore it is necessary to see the provisions of that sub-section. It is important to notice that the petitioners do not ask for a writ for quashing the order of the Assistant Registrar made on 29th of June 1959. The direction which they seek is that that officer shall exercise the powers conferred upon him under section 54 (2 ). Therefore it is necessary to see the provisions of that sub-section. They are as follows:54 Where any dispute is referred under sub-section (1) for decision by the Registrars nominee the Registrar may at any time for reasons to be recorded in writing withdraw such dispute from his nominee and may decide the dispute himself or refer it again to any other nominee appointed by him for decision: provided that no such dispute shall be withdrawn except on any of the following grounds : (i) the Registrars nominee has failed to decide the dispute within two months or such further period as may be allowed by the Registrar (ii) the proceedings before the Registrars nominee are vitiated in consequence of corruption or misconduct on the part of the Registrars nominee ( 5 ) THEREFORE in order that the Registrar may exercise the powers under sub-section (2) it is necessary (i) that there should be a reference pending before the nominee (ii) that the Registrar must withdraw the dispute under reference from the nominee to himself and (iii) that the Registrar must have withdrawn the dispute on either of the two grounds mentioned in the proviso. Now there is absolutely nothing on the record to show that the Registrar had withdrawn the reference proceedings to himself or that he had done so on one of the two grounds mentioned in the proviso. It is only if the Registrar has purported to act under section 54 subsection (2) that a writ can issue to him to perform the duties mentioned in sub-section (2 ). As already stated the averments do not make it clear that the proceedings were withdrawn from the nominee. Not only that but on the contrary the averments suggest as if the proceeding were still pending before the nominee when the application for withdrawal was made before the Assistant Registrar. In any case in the absence of a copy of the order of the Assistant Registrar it Is impossible to say that the Registrar withdrew the proceeding to himself on any of the two grounds mentioned in the proviso. In any case in the absence of a copy of the order of the Assistant Registrar it Is impossible to say that the Registrar withdrew the proceeding to himself on any of the two grounds mentioned in the proviso. Under the circumstances a writ of mandamus cannot be issued to the Assistant Registrar to perform the duties mentioned in sub-section (2) viz. of either deciding the dispute himself or referring it to another nominee appointed by him for decision. In view of our aforesaid conclusion it is not necessary for us to decide the main point which otherwise will have arisen for decision viz. whether a disputant under section 54 of the Act has no power of withdrawing the application for reference under that section. However as the matter was argued at some length by Mr. Oza we may only observe that he was unable to point out to us any provision in the Act which debars a disputant from withdrawing an application for reference. Ordinarily if a person initiates a proceeding he will have a right to withdraw the proceeding unless there is a prohibition prescribed by law. In this connection we may refer to Order 23 Civil Procedure Code. Sub-rule (1) of Rule 1 states that At any time after the institution of a suit the plaintiff may as against all or any of the defendants withdraw his suit or abandon part of his claim. Though there is this specific provision for withdrawal the right of a party to a suit to withdraw it does not arise necessarily from this particular provision. This provision appears to have been introduced more with a view to affirm the right of withdrawal and to make the subsequent provision which deals with a right to withdraw from a suit with permission to bring another complete by itself. Therefore so far as the first submission of Mr. Oza is concerned we do not think we can uphold the same. ( 6 ) SO far as the second and the last two submissions are concerned it is necessary to quote the relevant portion of section 59b of the Act. It is as follows:59b (1) Notwithstanding anything contained in sections 54 and 59 on an application made by a land mortgage bank for the recovery of arrears of any sum advanced by it to any of its members. . . . . . It is as follows:59b (1) Notwithstanding anything contained in sections 54 and 59 on an application made by a land mortgage bank for the recovery of arrears of any sum advanced by it to any of its members. . . . . . and on its furnishing a statement of accounts in respect of the arrears the Registrar may after making such enquiries as he deems fit grant a certificate for the recovery of the amount stated therein to be due as arrears. (2) A certificate granted by the Registrar under sub-section (1) shall be final and conclusive. The arrears stated to be due therein shall be recoverable according to the law for the time being in force for the recovery of land revenue. ( 7 ) FROM the provisions of the section it is quite clear that in order that the section may apply (1) there must be an application (2) the application must be by a land mortgage bank (3) the bank must furnish a statement of accounts. If these conditions are satisfied then a discretion is given to the Registrar to make such enquiry as he may deem fit and to grant a certificate for the recovery of the amount stated in the statement of accounts to be due as arrears. If a certificate happens to be granted by the Registrar then it will enable the bank to get the arrears recovered through the process prescribed for the recovery of arrears of land revenue. Now the contention of Mr. Oza is that this section does not entitle the Registrar to determine the liability of any of the parties if that liability is disputed. He contends that the power which is conferred by this section on the Registrar is not a quasi-judicial power but that it is essentially an executive power i. e. the power given by this section is only a power to recover an admitted amount and that it does not entitle the officer to determine the liability of one party to pay a sum of money to another party. Strong reliance is placed by Mr. Oza in support of this contention on the case of Kasturi and Sons (Private) Ltd. v. H. Salivteswaran and another reported in A. I. R. 1958 Supreme Court 507. Strong reliance is placed by Mr. Oza in support of this contention on the case of Kasturi and Sons (Private) Ltd. v. H. Salivteswaran and another reported in A. I. R. 1958 Supreme Court 507. The question which Their Lordships had to consider in this case was as to the true construction of section 17 of Working Journalists (Conditions of Service and Miscellaneous Provisions) Act 1955 This section enables a newspaper employee to make an application to the State Government for recovering his dues under any of the provisions of the Act from his employer. The section states that if the State Government or such authority as the State Government may specify in this behalf is satisfied that any money is so due it shall issue a certificate for that amount to the Collector and the Collector shall proceed to recover the amount in the same manner as an arrear of land-revenue. The contention which was raised before Their Lordships was that this section did not empower the State Government to determine a disputed liability but that it only provided for a procedure to recover the amount due from an employer that the section was limited in scope and that at the most it entitled the Government to determine such question as to whether an amount already found due by a competent authority was still due or whether any amount had or had not come to be paid after the liability had been determined by such a competent authority. In order to answer this question Their Lordships considered not only the provisions of the section but also the scheme of the Act and they also considered whether the usual powers which an authority empowered to determine a liability were or were not conferred by the Act upon the State Government. In order to answer this question Their Lordships considered not only the provisions of the section but also the scheme of the Act and they also considered whether the usual powers which an authority empowered to determine a liability were or were not conferred by the Act upon the State Government. After examining the question from these aspects Their Lordships came to the conclusion that the latter powers were not to be found conferred upon the State Government and that the scheme and the object of the section indicated that the power which was conferred upon the State Government was a limited power given to it essentially for the purpose of enabling it to recover a sum already found due from the employer to the employee and that in case there was any dispute between the parties regarding the liability to pay the State Government had not the authority to determine that dispute. It is quite clear that before the question can be answered the provisions of the section itself the scheme of the section its place in the Act and the object which the Legislature had in view in enacting section 59b of the Act must be examined. In this connection it is important to notice that there are important variations between the language of section 17 aforesaid and section 59b which we are called upon to interpret. In the first instance in our judgment effect must be given to the non-obstante clause which occurs at the beginning of this section and it is in the context of this clause that the section must be interpreted. The section states that the provision thereof are to come into operation notwithstanding anything contained in sections 54 and 59. We shall examine this clause with the special reference to section 54 and also in the context of section 59 Turning to section 54 there cannot be any doubt whatsoever that that section deals with the determination pure and simple of the liabilities of parties. That section enjoins that if there is any dispute regarding matters and between persons mentioned therein then that dispute shall be referred to the Registrar for decision by himself or his nominee It is not disputed by Mr. Oza that the functions assigned to the Registrar and his nominee are quasi-judicial functions and enables him and his nominee to determine the civil liabilities of the parties concerned. Oza that the functions assigned to the Registrar and his nominee are quasi-judicial functions and enables him and his nominee to determine the civil liabilities of the parties concerned. Now when the Legislature states that the provisions of section 59b are to apply notwithstanding anything contained in section 54 it cannot but mean that the provisions of the section must come into operation inspite of the fact that section 54 enjoins that the dispute relating to civil liability has to be referred to the arbitration of the Registrar and his nominee. If the authority in section 59b was not assigned the function of determining the same liability there was no occasion for the Legislature to enact the above provision in section 59b. Moreover there are certain other subsidiary points which may be borne in mind whilst interpreting section 59b. The first is that that the section does not confer the special privilege given in it on all persons who are obliged to arbitrate by section 54 but it does so from out of the several persons referred to therein only on two institutions viz. a land mortgage bank and a resource society. Secondly the authority who is entitled to act under section 59 is the highest authority entitled to act under section 54 of the Act. Only the Registrar has been given the power to act under section 59b and not his nominee. The nominee of the Registrar has not been given the powers mentioned in that section. Therefore the authority who would be exercising the powers under section 59b would be the self-same and the highest authority who would be exercising the quasi-judicial functions under section 54 of the Act and who has the power to determine the liabilities of parties. Thirdly the powers are to be exercised only after the land mortgage bank has furnished a statement of accounts. Fourthly the Registrar has been given the power of making an enquiry into the matter. Mr. Oza emphasized this fact that the enquiry which the Registrar was to make was not a full-fledged enquiry which one would expect from a quasi-judicial authority. Fourthly the Registrar has been given the power of making an enquiry into the matter. Mr. Oza emphasized this fact that the enquiry which the Registrar was to make was not a full-fledged enquiry which one would expect from a quasi-judicial authority. He contended that the enquiry was limited by the words such enquiry as he (i. e. the Registrar) deems fit and therefore he contended that the enquiry was essentially discretionary and that the vesting of this discretion showed that the Registrar was expected to act as an executive authority and not a quasi-judicial authority. In our judgment this is by no means conclusive. It is true that the Registrar has been invested with a discretion in the matter of the exercise at his jurisdiction but that discretion necessarily must be exercised in a judicial and not in an arbitrary manner. ( 8 ) MOREOVER the scheme of the three sections 54 59 and 59b does not leave any doubt that the Legislature intended to confer on the two institutions mentioned in section 59b a special privilege on account of the position which these institutions occupied in the scheme of co-operative societies. Section 54 as already stated enables the Registrar or his nominee to decide a dispute arising between the persons mentioned therein. Section 59 contains the procedure which is to be followed for executing the order passed by the authorities under section 54. That section states inter alia that when an order under section 54 is passed and is not carried out then on a certificate signed by the Registrar the order shall be deemed to be a decree of the Civil Court and that decree shall be executable according to the law and the rules for the time being in force for the recovery of arrears of land-revenue. These two sections stood as they stand to-day before section 59b was introduced by Bombay Act 16 of 1943. If the argument of Mr. Oza were to be upheld section 59 would be totally superfluous. If the two institutions were required first to proceed under section 54 of the Act then they would be required to take steps under section 59 for the purpose of recovery of their dues. This would mean that the aforesaid two institutions would never be required to have recourse to section 59b of the Act. If the two institutions were required first to proceed under section 54 of the Act then they would be required to take steps under section 59 for the purpose of recovery of their dues. This would mean that the aforesaid two institutions would never be required to have recourse to section 59b of the Act. In our judgment the scheme of the aforesaid three sections is that whereas all the persons who can get their disputes decided under section 54 of the Act must necessarily follow the procedure laid down in that section and for recovering their dues must follow the procedure laid down in section 59 in the case of the two institutions mentioned in section 49b the Legislature has given them the option of getting their rights determined and of realizing their dues without having to undergo the procedures laid down in section 54 and section 59 of the Act respectively. It is for these reasons that the Legislature has commenced the section 59b with the non-obstante clause notwithstanding anything contained in sections 54 and 59 of the Act. Under the circumstances in our judgment the contention of Mr. Oza that section 59b is only a section which relates to the mode of recovery and does not entitle the authorities mentioned therein to decide disputed claims cannot be upheld. ( 9 ) THE next argument of Mr. Oza is that though the provisions of section 59b can be invoked before the machinery under section 54 is brought into operation in any event that section is inapplicable when proceedings are once started under section 54 of the Act. For the reasons which we have already given whilst dealing with the other two branches of the three submissions of Mr. Oza we cannot agree with this branch of the submission also. In our judgment the non-obstante clause is a clear answer to this contention of Mr. Oza. As we have already stated section 59b confers an additional right and there is nothing either in section 54 and section 59 which suggests that this additional right cannot be availed of by the two institutions during the pendency of proceedings under section 54. On the contrary the non-obstante clause clearly indicates an intention to the contrary. Petition dismissed .