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1965 DIGILAW 130 (KER)

Cottage Industries Co Operative Society v. Ramaswami Achari

1965-06-09

C.A.VAIDIALINGAM

body1965
ORDER C. A. Vaidialingam, J. 1. In this revision petition Mr. George Varghese, learned counsel for the 1st defendant petitioner, the Cooperative society in question, challenges the decree and judgment of the learned Munsiff of Kottarakara in S. C. S. No. 43/1963 accepting the claim of the plaintiff and passing a decree in his favour. 2. According to the plaintiff, he had deposited a sum of Rs. 267/- in a savings bank account with the 1st defendant society, of which the plaintiff is also a member. Out of the amount deposited by him, the plaintiff states that he has withdrawn a sum of Rs. 50 and as the balance amount has not been paid inspite of demand, he has instituted the suit in question for realisation of the same. Both the cooperative society as well as its President, who were defendants 1 and 2 respectively in the action, took up two contentions viz., that the amount, for the recovery of which the plaintiff has instituted the suit, really represents a security deposit that has been made by the plaintiff, and that inasmuch as he is a member of the society, the proper remedy to be adopted will be as provided for in S.60 of the Travancore - Cochin Cooperative Societies Act (Act X of 1952). The same plea was also urged even on the assumption that the amount which is sought to be recovered represents amount due under a savings bank deposit. 3. Therefore the Trial Court had to consider two questions viz., as to whether the plea of the defendants that the amount, the recovery of which the plaintiff seeks in the suit, was really one deposited by him as security in connection with a contract for the construction of a building stated to have been taken and secondly as to whether their further contention that the plaintiff's remedy if at all, is not by coming to the civil court for relief, but to approach the Registrar of Cooperative Societies, under S.60 of the Travancore - Cochin Cooperative Societies Act, inasmuch as the dispute is one which touches the business of the society. The learned Munsiff has considered both the aspects and recorded findings as against the defendants. The learned Munsiff has considered both the aspects and recorded findings as against the defendants. So far as the nature of the transaction between the plaintiff and the defendants is concerned, the learned Munsiff is of the view that the claim of the plaintiff that the amount, which he seeks recovery of, is really a deposit made by him in savings bank account with the society is true and the case of the defendants that it really represents a security deposit, cannot be accepted. In fact, the learned Munsiff is of the view that the defendants, notwithstanding the fact that they have raised this contention, have let in no evidence whatsoever in support of such a plea. After finding to that extent in favour of the plaintiff, the learned Munsiff considers the further question as to whether, even in respect of relief sought for the recovery of amounts due to the plaintiff under a savings bank account from the society, of which he is a member, the provisions of S.60 of the Travancore - Cochin Cooperative Societies Act operate as a bar. So far as that is concerned, here again the learned Munsiff considers the bye laws of the society, in which one of the objects of the society is to promote cottage industries by raising funds by borrowing. In particular, the learned Munsiff refers also to the provisions regarding opening of savings bank accounts; and in that connection he refers to clause (d) of bye law 16 which provides for amounts being received by the society in savings bank account, both from members as well as non members, preference being shown to members. But the learned Munsiff, on the basis of a judgment of my learned brother T. C. Raghavan, J., reported in Coir Industrial Cooperative Society, Chingoli v. Govindan ( 1962 KLT 400 ), makes a distinction between transactions "for the purpose of the business" and transactions "touching the business of the Society", and ultimately the learned Munsiff comes to the conclusion that the case on hand does not fall within the latter type of cases referred to by the learned Judge in the decision referred to above. Therefore on that basis, the learned Munsiff came to the conclusion that S.60 of the Travancore - Cochin Cooperative Societies Act does not operate as a bar to the maintainability of the suit. 4. Mr. Therefore on that basis, the learned Munsiff came to the conclusion that S.60 of the Travancore - Cochin Cooperative Societies Act does not operate as a bar to the maintainability of the suit. 4. Mr. George Varghese, learned counsel for the 1st defendant revision petitioner, no doubt urged that the view taken by the learned Munsiff on both the points is erroneous. So far as the finding recorded by the learned Munsiff regarding the exact relationship, on the basis of which amounts were deposited by the plaintiff with the society in question, it is a pure finding of fact, and I do not think the learned counsel for the petitioner has been able to satisfy me that finding is not in any manner supported by the evidence on record. 5. Then the question is as to whether the view of the learned Munsiff that S.60 of the Travancore - Cochin Cooperative Societies Act is not a bar to the maintainability of the suit is correct. In this connection Mr. George Varghese pointed out that one of the objects of the society is to promote cottage industries by raising funds. In particular, the learned counsel relied upon clause (d) of bye law 16 referring to deposits being received by the society, wherein it is specifically stated that in the matter of receiving deposits both from outsiders as well as from members, preference will be shown to the latter. The learned counsel, based upon this provision, urged that the business of the society is for the purpose of improving cottage industries by raising funds, and raising of funds is also clearly indicated in the bye laws, namely by borrowing from members as well as from non members. Therefore the learned counsel urged that the claim made by the plaintiff, who is admittedly a member of the society, in respect of amounts stated to have been deposited by him with the society, the recovery of which he seeks in the present suit, is really one "touching the business of the society" and therefore is hit by the provisions of S.60 of the Act. In this connection the learned counsel referred me to the decision of Kumara Pillai, J., reported in Raman Achari v. Paramu Achari ( 1957 KLT 362 ), as well as a later decision of Madhavan Nair, J., reported in Narayana Pillai v. Easwara Pillai ( 1960 KLT 1288 ). In this connection the learned counsel referred me to the decision of Kumara Pillai, J., reported in Raman Achari v. Paramu Achari ( 1957 KLT 362 ), as well as a later decision of Madhavan Nair, J., reported in Narayana Pillai v. Easwara Pillai ( 1960 KLT 1288 ). Ordinarily I would have had to consider the scope of these decisions, as well as the decision of Raghavan, J., referred to earlier, more elaborately. But it becomes unnecessary in view of the recent Division Bench decision of this Court to which my attention has been drawn by Mr. M. Krishnan Nair, learned counsel for the plaintiff respondent. That decision is the one rendered by the learned Chief Justice sitting with Madhavan Nair, J., and is reported in Haji Mammu Keyi v. Thirurangadi P.C.C. Society ( 1963 KLT 950 ). No doubt the learned judges were, in that case, dealing with S.51 of the Madras Cooperative Societies Act, 1932, which provision is in pan materia with S.60 of the Travancore - Cooperative Societies Act, with which we are now concerned. In that case it is seen that one of the objects of the society was to "rent or own godowns for the stocking of paddy or rice or foodgrains or other articles purchased." The society in question, took on rent premises belonging to the plaintiff who was a member of the society. The plaintiff, inasmuch as the society committed default in the payment of rent, instituted the suit in question for recovery of arrears of rent. Objection was taken in the Trial Court by the society to the maintainability of the suit based upon S.51 of the Madras Act. That contention was overruled and a decree was granted in favour of the plaintiff as prayed for. There appears to have been an appeal; but before the appellate court this question was not raised, nevertheless the decree of the Trial Court was confirmed. The matter was taken in Second Appeal before this court, and it is there that the learned Judges had to consider the scope of the provisions contained in S.51 of the Madras Act. There appears to have been an appeal; but before the appellate court this question was not raised, nevertheless the decree of the Trial Court was confirmed. The matter was taken in Second Appeal before this court, and it is there that the learned Judges had to consider the scope of the provisions contained in S.51 of the Madras Act. The learned Chief Justice, after referring to the material part of the provisions contained in S.51 of the Act, refers to a Division Bench decision of the Bombay High Court reported in Shayam Cooperative Housing Society Ltd. v. Ramibai Bhagwansingh Advani (AIR 1952 Bombay 445), and ultimately lays down the principle that unless the dispute, is a dispute between the society and a member qua member, S.51 of the Madras Act will not come into play at all. In particular, in the case on hand to the facts of which I have already made reference earlier, the learned Chief Justice expresses the view that it can be stated that the dispute in that case was between a person who is a member of the society and the dispute also was one touching the business of the society. But that by itself, the learned Chief Justice observes, will not automatically attract the provisions of S.51 of the Madras Act. In that connection the learned Chief Justice further explains the position by saying that the dispute in that case was a dispute between the society and the owner of a godown who happens to be a member of the society, and that the dispute has nothing to do with his membership of the society at all. The learned Chief Justice finally winds up the discussion on this aspect by saying that the question for determination is whether the dispute should be between the society and a member qua member in order to attract the provisions of S.51 of the Madras Act. The learned Chief Justice finally winds up the discussion on this aspect by saying that the question for determination is whether the dispute should be between the society and a member qua member in order to attract the provisions of S.51 of the Madras Act. Applying that test, the learned Chief Justice ultimately comes to the conclusion that on the particular facts of that case, notwithstanding the fact that the plaintiff was a member of the society and the dispute also related to a dispute between the society and the member and related to a matter touching the business of the society, it cannot certainly be stated that the dispute is between the society and a member qua member; and on that basis, S.51 of the Madras Act was held to be not applicable. In that connection, the learned Chief Justice, if I may say so with great respect, has extracted a very pertinent observation occurring in a Bench judgment of the Bombay High Court in the decision referred to above, namely Shyam Cooperative Housing Society Ltd. v. Ramibai Bhagwansing Advani ( AIR 1952 Bom. 445 ), wherein the learned Judges had to consider a case where a society borrowed amounts from a member and when the member instituted a suit for recovery of that amount, the bar of S.54 of the Bombay Cooperative Societies Act, 1925 (corresponding to S.51 of the Madras Act and S.60 of the Travancore - Cochin Act) was sought to be invoked by the society. In the said Bombay case emphasis was laid that before S.54 of the Bombay Act could be invoked, the dispute must be a dispute between the society and a member qua member and that it must be a dispute in which the member must be interested as a member. The learned Judges further hold that the dispute must relate to a transaction in which the member must be interested as a member. If the member is interested in the dispute, just as any other stranger in respect of a particular transaction, the learned Judges of the Bombay High Court observe that S.54 of the Bombay Act will have no application. 6. If the member is interested in the dispute, just as any other stranger in respect of a particular transaction, the learned Judges of the Bombay High Court observe that S.54 of the Bombay Act will have no application. 6. Therefore, respectfully adopting the principles laid down by the Division Bench of this Court in Haji Mammu Keyi v. Thirurangadi P. C. C. Society ( 1963 KLT 950 ), in my view, the contentions of the learned counsel for the petitioner in the present case cannot be accepted. No doubt there is provision in the bye laws regarding receiving of deposits by way of borrowing by the society, both from members as well as from non members; and no doubt there is also a further provision that preference will be shown to members. But apart from that, no distinction whatsoever in the matter of payment of any higher rate of interest or otherwise has been shown to members; and there is nothing in the bye laws making it obligatory on the part of members to open any savings bank account with the society in question. In these circumstances the suit instituted by the plaintiff in this case must be considered not as a member as such, but really as a person who had made a deposit, which type of suit can be instituted by any stranger who may have made a similar deposit in the savings bank account with the society. The dispute in question cannot certainly be considered to be a dispute between the society and the plaintiff as a member of the society. And the view of the learned Munsiff on this aspect also has to be sustained, though for entirely different reasons. 7. The result is that this revision petition fails and is dismissed. The parties will bear their own costs.