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1966 DIGILAW 71 (PAT)

Pioneer Co-operative Housing Society Ltd. v. State Of Bihar

1966-05-13

S.C.MISRA, TARKESHWAR NATH

body1966
Judgment Tarkeshwar Nath, J. 1. This is an application by the Pioneer Co-operative Housing Society Ltd. (hereinafter to be referred to as the Housing Society) under Articles 226 and 227 of the Constitution of India for an appropriate writ quashing the order of the Joint Registrar. Co-operative Societies, dated 6-5-1960. 2. The petitioner is a Housing Society established in 1928 and this Society provides lands and funds to its members for constructing residential houses This society generally borrowed money from the Stale Co-operative Bank Ltd. and then it advanced loans to its members. The petitioner advanced loan to Basudeo Kumari (opposite party No. 3) which enabled her to purchase 11 kathas of land bearing plot Nos. 352. 353 and 356 of khata No. 45, tauzi No. 415. Opposite party No. 3 constructed a house on a portion of that land and executed a simple mortgage bond in respect of that land and the house in favour of the petitioner as security for the loan taken by her. Opposite party No. 3 failed to pay the dues of the petitioner and then there was a preliminary award in accordance with the provisions of the Bihar and Orissa Co-operative Societies Act on 3-3-1956. Subsequently, there was a final mortgage award on 28-1-1957 for Rs. 8,191.20 p. with interest by the Assistant Registrar, Co-operative Societies, Patna against opposite party No. 3. The petitioner then levied execution by filing Certificate Case No. 128 M. B. of 1957-58 in the Court of the Certificate Officer for the realisation of the said dues. Opposite party No. 3 first sold that house with 4 kathas of land (out of the mortgaged properly) to one Mt. Sampatia for Rs. 7,200 and she left Rs. 5,000 out of the consideration money with the vendee Mt. Sampalia for payment to the petitioner towards the decretal dues under the award. Mt. Sampatia never made any payment to the petitioner and subsequently she died. Opposite party No. 3 later on sold 7 kathas of land, that is the remaining portion of the mortgaged properly to Miss. Alomina Masoria, Srimati Lal Pari Devi, Sri Nanhak Mahton and Sri Dip Narain Prasad and Ramadhin Prasad and they paid Rs. 5,000 to the petitioner in part payment of the said dues. The petitioner released from sale the said 7 kathas of land. Alomina Masoria, Srimati Lal Pari Devi, Sri Nanhak Mahton and Sri Dip Narain Prasad and Ramadhin Prasad and they paid Rs. 5,000 to the petitioner in part payment of the said dues. The petitioner released from sale the said 7 kathas of land. On account of the sale of 4 kalhas and 7 kathas of land by opposite party No. 3 she had no right, title and interest left in those lands and the various purchasers became entitled to those lands. There was another transaction of sale and the heirs of Ml. Sampatia sold 4 kathas of land with the house which Mt. Sampatia had purchased from opposite party No. 3 to one Gunanand Jha and that purchaser paid Rs. 3,500 to the petitioner in part payment of the balance of the dues under the award. 3. Opposite party No. 3 filed an application before the Registrar, Co-operative Societies, sometime in February 1959, that is two years after the award had become final, for a direction on the petitioner to return Rs. 5,000 to her which the petitioner had received from the purchasers of 7 kathas of land and an order that the petitioner should realise the entire dues under the award, first by the sale of 4 kalhas of land and the house. This application of opposite party No. 3 was registered as Patna Award Case No. 4 of 1959 in the Court of the joint Registrar, Co-operative Societies (Headquarters) Bihar. Patna. The petitioner objected to it on the ground that the award having become final and opposite party No. 3 having sold the entire mortgaged property she had no interest left in it and she was not entitled to ask for the refund of Rs. 5,000 which was paid to the petitioner in part satisfaction of the mortgage dues. Another contention was that Gunanand Jha not being a party to the proceeding no order could be passed directing the petitioner to realise the dues only from Gunanand Jha. The joint Registrar, Co-operative Societies (Headquarters) (opposite party No. 2) overruled the objections of the petitioner and directed the petitioner to realise the entire amount of loan from 4 kathas of land and the house sold by opposite party No. 8 to Mt. Sampatia or her successors-in-interest and refund the amount realised in excess of the mortgage debt to opposite party No. 3. Sampatia or her successors-in-interest and refund the amount realised in excess of the mortgage debt to opposite party No. 3. The petitioner, being aggrieved by this order has filed the present application for an appropriate writ quashing the order of the Joint Registrar. The notice of this application was issued to the purchasers named above except Ramdahin Prasad, Although they were not made parties by the petitioner. 4. A question arose before the Joint Registrar as to whether he was competent to hear the application filed by opposite party No. 3 in view of the provisions of Section 48 of the Bihar and Orissa Co-operative Societies Act. It was urged before him that he had no jurisdiction to modify the mortgage award passed by the assistant Registrar, Co-operative Societies, and no appeal had been preferred against the said award. The Joint Registrar took the view that the decree in favour of the petitioner and against opposite party No. 3 was not being challenged by opposite party No. 3 and she in fact admitted the loan and her liability to pay the same. She, however, contended that the present purchaser Gunanand Jha was actually liable for the payment of the entire dues along with interest thereon and the amount of Rs. 5,000 which was paid by the purchasers of the 7 kathas of land to the petitioner should be paid back to her. The joint Registrar treated the said application of opposite party No. 3 as an application for review. 5,000 which was paid by the purchasers of the 7 kathas of land to the petitioner should be paid back to her. The joint Registrar treated the said application of opposite party No. 3 as an application for review. The terms of Sec. 48 of the Bihar and Orissa Co-operative Societies Act are very wide and Sec. 48 (1) (b) provides as follows: "If any dispute touching the business of a registered society (other than a dispute regarding disciplinary action taken by the society or its managing committee against a paid servant of the society) arises- XX XX XX XX XX (b) between a member, past member, persons claiming through a member, past member or deceased member, or sureties of members, past members or deceased members, whether such sureties are members or non-members, and the society, its managing committee or any officer, agent or servant of the society; or XXX XX XX XX XX such dispute shall be referred to the Registrar ; XXX XX XX XX XX Sub-section(2) of Sec. 48 provides: "The Registrar may on receipt of such reference- (a) decide the dispute himself, or (b) transfer it for disposal to any person exercising the powers of a Registrar in this behalf, XXX XX XX XX XX Section 6 1) of the Bihar and Orissa Co-operative Societies Act provides that the State Government may appoint a person to be Registrar of Cooperative Societies for the State or any portion of it, and may appoint persons to assist such Registrar. Sub-section (2) (a) of Sec. 6 reads thus: "The State Government may, by general or special order published in the Official Gazette, confer, (a) on any person appointed under Sub-section (1), to assist the Registrar, all or any of the powers of the Registrar under this Act except the powers under Sec.26". The dispute in the present case related to the realisation of the dues of the Housing Society, the petitioner from its member or the transfers of the member. Opposite party No. 3 is a member of this Society and the above-mentioned purchasers were claiming interest in the mortgaged property through opposite party No. 3. The dispute in the present case related to the realisation of the dues of the Housing Society, the petitioner from its member or the transfers of the member. Opposite party No. 3 is a member of this Society and the above-mentioned purchasers were claiming interest in the mortgaged property through opposite party No. 3. The dispute regarding the realisation of the dues of the Society came within the purview of Sec. 48 and the said dispute having been referred to the Registrar it was open to him to transfer it for disposal to the joint Registrar under Sec. 48 (2) (b) read with Sec. 6 (2) (a) of the said Act. In these circumstances, the Joint Registrar (opposite party No. 2) had the power to bear the application filed by opposite party No. 3. 5. Learned counsel for the petitioner submitted that the award in question having become final, it was open to the petitioner to realise the dues from the entire mortgaged property, 11 kathas of land and the house and the order of the Joint Registrar directing the petitioner to return Rs. 5000.00 to opposite party No. 3 was erroneous and without jurisdiction. There are certain facts about which there can be no dispute. The final award was for Rs. 8191.20P with interest. There was no appeal against that award and as such it became final. Opposite party No. 3 first sold 4 kathas of land and the house to Mt. Sampatia and a sum of Rs. 5000.00 was left with her for the payment of the mortgage dues but she did not pay it. Later on, opposite party No. 3 sold 7 kathas out of the mortgaged property to other persons already indicated above and those purchasers paid Rs. 5000.00 to the petitioner. On that payment the petitioner released 7 kathas from sale. The position thus is that opposite party No. 3 had sold the entire mortgaged property and she had no interest left in it. It was open to the mortgagee decree-holder petitioner to realise the mortgage dues from the sale of the entire mortgaged property and the petitioner having realised Rs. 5000/-the decree was satisfied to that extent. Opposite party No. 3 was in no event entitled to get Rs. 5000.00 from the petitioner. The heirs of Mt. It was open to the mortgagee decree-holder petitioner to realise the mortgage dues from the sale of the entire mortgaged property and the petitioner having realised Rs. 5000/-the decree was satisfied to that extent. Opposite party No. 3 was in no event entitled to get Rs. 5000.00 from the petitioner. The heirs of Mt. Sampatia sold the 4 kathas of land and the house to Gunanand Jha and the latter paid Rs. 3500 to the petitioner towards the part payment of the mortgage dues. In this manner, the petitioner had received, all told, a sum of Rs. 8500.00 towards the decretal dues and learned counsel for the petitioner submitted that a sum of about Rs. 1500.00 was still due as the total dues with interest came to about Rs. 10,000/-. The Joint Registrar (opposite party No. 2), while dealing with this point observed that Mt. Sampatia died without paying up the dues of the society and her heirs sold away that land and the house to one Shri Gunanand Jha, and the deed executed in his favour was not before this Court but apparently the previous stipulation in the deed would be binding on Shri Gunanand Jha also and as such he was liable for the payment of the entire dues of the society along with the interest thereon before the property can actually become his He further took the following view: "It is not known under what circumstances the petitioner was forced to sell away the remaining 7 kathas of land also for a sum of Rs. 5,000/-. Neither she nor the opposite party clarified this point but whatever may have been the reason the fact remains that Shri Gunanand Jha is liable for the payment of the entire dues of the Society and if the petitioner paid any sum over and above what her house and 4 kathas of land were going to bring her according to the terms of the deed should, in all fairness, be hers." He then concluded that the Housing society (petitioner) should realise the entire amount of loan from 4 kathas of the land and the house sold by opposite party No. 3 to Mt. Sampatia or her successors-in-interest and refund the amount realised in excess of the debt to opposite party No. 3. Sampatia or her successors-in-interest and refund the amount realised in excess of the debt to opposite party No. 3. I have already indicated above that opposite party No. 3 was in no event entitled to the refund of the amount of Rupees 5000.00 which the petitioner had realised from the purchasers of 7 kathas. 6. Another question for consideration is as to whether the Joint Registrar was entitled to direct the petitioner to realise the entire dues from the sale of 4 kathas of land and the house which purchased by Gunanand Jha from the heirs of Mt. Sampatia. This order was against Gunanand Jha but he was not a party to the application before the Joint Registrar (opposite party No. 2) Learned counsel for the petitioner submitted that the order of the Joint Registrar was on the very face of it without jurisdiction, inasmuch as he could not pass an order against Gunanand Jha without giving any notice to him and affording an opportunity to him for representing his case. Mr. Jagdish Pandey for opposite party No. 3 strenuously contended that even if the order of the Joint Registrar was erroneous in law for some reason or other, this Court should not entertain this application for a writ under Article 226 of the Constitution of India, inasmuch as the petitioner had another remedy by way of appeal under Sub-section (6) of Sec. 48 of the Bihar and Orissa Cooperative Societies Act, which provides as follows: "Any person aggrieved by any decision given in a dispute transferred or referred under Clause (b) or (c) of Sub-section (2) may, within three months from the date of such decision, appeal to the Registrar." He submitted that the petitioner had to exhaust its remedies as provided under the law before moving this Court for a writ under Articles 226 and on this ground alone the present application should be held to be not maintainable. In support of it, learned counsel referred to the decisions in A.V. Venkateswaran v. Ramchand Sobhraj Wadhwani, AIR 1961 SC 1606; Thansingh Nathmal V/s. Supdt. of Taxes, Dhubri, AIR 1964 SC 1419 and The British India Steam Navigation Co. Ltd. v. Jasjit Singh, AIR 1964 SC 1451 . In support of it, learned counsel referred to the decisions in A.V. Venkateswaran v. Ramchand Sobhraj Wadhwani, AIR 1961 SC 1606; Thansingh Nathmal V/s. Supdt. of Taxes, Dhubri, AIR 1964 SC 1419 and The British India Steam Navigation Co. Ltd. v. Jasjit Singh, AIR 1964 SC 1451 . But before referring to these decisions it will be proper to refer to the other decisions relied upon by the learned counsel for the petitioner, as some of them were earlier in point of time. Learned counsel for the petitioner has first referred to Bibi Nazma Khatoon V/s. R. P. Sinha, AIR 1954 Pat 43 . The Custodian Mr. S. N. Ray had passed an order on 29-9-1950 confirming the sale so far as the 8 annas share of Bibi Asghari Khatoon was concerned. On 10-12-1952, after lapse of more than two years, Mr. R. P. Singh, who had become Custodian, issued a notice to one of the petitioners to show cause why the order of his predecessor, Mr. S. N. Ray, should not be reviewed, and the order of confirmation of the sale should not be set aside. But no notice was given to the petitioner Bibi Nazma Khatoon. Mr. R. P. Singh set aside the order of his predecessor on the ground that the transaction of sale was mala fide. The order of Mr. R. P. Singh was impeached and one of the grounds was that no notice of the proceeding was given to Bibi Nazma Khatoon and in absence of such a notice the entire proceeding initiated by Mr. R. P. Singh suffered from want of jurisdiction. Dealing with this contention, their Lordships observed as follows: "It is a fundamental principle of justice that the party against whom a judgment or order is to operate should have an opportunity of being heard. The principle is embodied in the maxim audi alteram partem. That is the general rule, and a breach of this rule affects the jurisdiction of the Court or Tribunal which passes final order. To illustrate the rule, reference may be made, for instance, to Capel V/s. Child, (1832) 2 Cr. and J. 558 at pp. 579, 580 in which a complaint was made to the Bishop of London that the incumbent of a parish in his diocese had neglected his duties. To illustrate the rule, reference may be made, for instance, to Capel V/s. Child, (1832) 2 Cr. and J. 558 at pp. 579, 580 in which a complaint was made to the Bishop of London that the incumbent of a parish in his diocese had neglected his duties. The Bishop, without calling upon him to show cause, issued a requisition, ordering him to nominate a curate at a certain stipend to assist in the duties of the parish. The incumbent ignored the order whereupon the Bishop appointed a curate, and, upon the incumbent neglecting to pay the stipend, directed sequestration. The incumbent brought an action against the sequestrators for fees detained, and on a special case stated for the opinion of the Court of Exchequer it was held that the requisition and the proceedings founded on it were void. In the present case, therefore, the order of review made by Mr. R. P. Singh must be held to be without jurisdiction on the ground that no notice was served upon Bibi Nazma Khatoon who had purchased a share of the house in question. Another question discussed In the course of argument was as to whether the power of the High Court under Article 226 of the Constitution could be Invoked in a ease where the petitioner had an alternative remedy by way of revision or appeal. It was held that as a general rule, the writ of certiorari or prohibition will not lie when there was an alternative procedure by way of appeal or revision provided in the statute. But there was an exception in a case where the want of jurisdiction complained of was based upon the violation of some fundamental principle of Justice, and in such an exceptional case, the existence of a remedy by way of appeal or revision was no answer to an application asking for a writ of certiorari or prohibition. Their Lordships made the rule absolute in that case and granted a writ of certiorari quashing the order of the Custodian Mr. R. P. Singh dated 18-12-1952. Their Lordships made the rule absolute in that case and granted a writ of certiorari quashing the order of the Custodian Mr. R. P. Singh dated 18-12-1952. Learned counsel next relied on State of U.P. V/s. Mohammad Nooh, AIR 1958 SC 86 and there also the scope of interference on an application under Article 226 was considered S. R. Das C. J. observed as follows: "If an inferior Court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior courts sense of fair play, the superior Court may we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the Court or tribunal of first instance, even if an appeal to another inferior Court or tribunal was available and recourse was not had to it or if recourse was had to it, if confirmed what ex facie was a nullity for reasons aforementioned. This would be so all the more if the tribunals holding the original trial and the tribunals hearing the appeal or revision were merely departmental tribunals composed of persons belonging to the departmental hierarchy without adequate legal training and background and whose glaring lapse occasionally comes to our notice. The superior Court will ordinarily decline to interfere by Issuing certiorari and all we say is that in a proper case of the kind mentioned above it has the power to do so and may and should exercise it. We say no more than that." It was held that certiorari will lie on requisite grounds, although a right of appeal existed. He then referred to Calcutta Discount Co. Ltd. V/s. Income-tax Officer, AIR 1961 SC 372 . Shah, J. observed that it was well settled that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction, and where such action of an executive authority acting without jurisdiction subjected or was likely to subject a person to lengthy proceedings and unnecessary harassment, the High Courts, it is well settled, will Issue appropriate orders or directions to prevent such consequences. It was urged in that case that the Company there had sufficient opportunity to raise the question viz. whether the Income-tax Officer had reason to believe that underassessment had resulted from non-disclosure of material facts, before the Income-tax Officer himself in the assessment proceedings and if unsuccessful there before the appellate officer or the appellate tribunal or in the High Court under Sec. 66(2) of the Indian Income-tax Act. With regard to this contention, their Lordships observed that the existence of such alternative remedy was not however always a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction from continuing such action. I would now refer to the other decision in AIR 1961 SC 1506 and this was relied upon by Mr. Jagdish Pandey. The contention of the learned Solicitor General in that case was that the existence of an alternative remedy was a bar to the entertainment of a petition under Article 226 of the Constitution unless (1) there was a complete lack of jurisdiction in the officer or authority to take the action impugned, or (2) where the order prejudicial to the writ petitioner was passed in violation of the principles of natural justice and could, therefore, be treated as void or non est. Their Lordships pointed out that the rule that the party who applied for the issue of a high prerogative writ should, before he approached the Court, have exhausted other remedies open to him under the law, was not one which barred the jurisdiction of the High Court to entertain the petition or to deal with it, but was rather a rule which Courts have laid down for the exercise of their discretion. The position thus is that even according to this decision the existence of another remedy does not affect the jurisdiction of the Court to issue a writ, but the existence of an adequate legal remedy is to be taken into consideration when the Court is approached for relief under Article 226 of the Constitution. Mr. Jagdish Pandey had referred to AIR 1964 SC 1461. Gajendragadkar C. J. observed as follows: ".. . .. The High Court should be slow in encouraging parties to circumvent the special provisions made providing for appeals and revisions in respect of orders which they seek to challenge by writ petition under Article 226. Mr. Jagdish Pandey had referred to AIR 1964 SC 1461. Gajendragadkar C. J. observed as follows: ".. . .. The High Court should be slow in encouraging parties to circumvent the special provisions made providing for appeals and revisions in respect of orders which they seek to challenge by writ petition under Article 226. In the present case, however, these writ petitions were presumably submitted because they raised a question of some importance which had already been raised by some appeals properly brought before this Court under Article 136, and so, we have allowed the counsel to argue these writ petitions on the question of construction alone." The next case, Thansingh Nathmal V/s. Superintendent of Taxes, relied upon by Mr. Jagdish Pandey is reported in the same volume AIR 1964 SC 1419 In that case, against the order of the Commissioner there was no prayer before the Commissioner for making a reference to the High Court and no petition was filed even before the High Court for a direction to the Commissioner to state the case on a question of law arising out of the Commissioners order The appellants there, however, had moved the High Court challenging the competence of the Provincial Legislature to extend the concept of sale, and invoked the extraordinary jurisdiction of the High Court under Article 226 and sought to reopen the decision of the taxing authorities on question of fact. Dealing with this matter. Shah J. observed that the jurisdiction of the High Court under Article 226 of the Constitution was couched in wide terms and the exercise thereof was not subject to any restrictions except the territorial restrictions which were expressly provided in the Articles But the exercise of the jurisdiction was discretionary; it was not exercised merely because it was lawful to do so. His Lordship further observed as follows: "The High Court does not therefore act as a court of appeal against the decision of a court or tribunal to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court normally will not permit by entertaining a petition under Art 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up." Learned counsel for the petitioner referred to another decision of the Supreme Court in M. G. Abrol, Addl. Collector of Customs V/s. Shantilal Chhotelal and Co.. AIR 1966 SC 197 . The contention in that case was that the High Court should not have exercised its jurisdiction under Article 226 of the Constitution, as the respondents had an effective remedy by way of appeal to higher Customs authorities. But the High Court rightly pointed out that the respondents had no effective remedy, for they could not file an appeal without depositing as a condition precedent the large amount of penalty imposed on them I would then quote the relevant lines: "That apart, the existence of an effective remedy does not oust the jurisdiction of the High Court, but it is only one of the circumstances that the Court should take into consideration in exercising its discretionary jurisdiction under Article 226 of the Constitution. In this case, the High Court thought fit to exercise its jurisdiction under Article 226 of the Constitution and we do no see any exceptional circumstances to interfere with its discretion." Lastly, learned counsel for the petitioner referred to a Division Bench of this Court in Nandkumar Tewari V/s. AH Hasan, AIR 1960 Pat 127. Their Lordships relied on the case of AIR 1954 Pat 48 and held that although the petitioners had not availed themselves of the alternative remedy, they were entitled in the special circumstances of that case to the relief sought for under Article 226. 7. Their Lordships relied on the case of AIR 1954 Pat 48 and held that although the petitioners had not availed themselves of the alternative remedy, they were entitled in the special circumstances of that case to the relief sought for under Article 226. 7. The principle deducible from these decisions is that the exercise of the jurisdiction under Article 226 is a discretionary one and the facts and circumstances of each case have to be examined before the court grants a writ on an application under Article 226. The remedy provided under Article 226 cannot be a substitute for ordinary remedies. But while granting a writ the Court has to keep in view as to whether the aggrieved party had another and adequate remedy for getting relief. In the present case, Gunanand Jha had no notice and he was not given an opportunity to represent his case before the Joint Registrar. The order of the Joint Registrar (opposite party No. 2) directed that the entire decretal dues would be realised from the sale of 4 kathas of land and the house in possession of Gunanand Jha and this is undoubtedly prejudicial to him and such an order could not be passed against him in the present proceeding. This order cannot be enforced against him by the petitioner. The order no doubt entities the petitioner to realise the entire dues from the land and house in possession of Gunanand Jha but if the petitioner adopts that course, he would be resisted by Gunanand Jha on the ground that this order was not effective and operative against him. For this reason, it is open even to the petitioner to contend that the order in question is without jurisdiction in absence of Gunanand Jha. If an order is to be passed against a person he has a right to be heard before the passing of that order and that was laid down in Bibi Nazma Khatoons case (AIR 1954 Patna 43) already referred to. This by itself is sufficient to quash the order of the Joint Registrar (opposite party No. 2). It is true that the petitioner did not prefer an appeal before the Registrar under Section 48 (6) of the Bihar and Orissa Co-operative Societies Act against the said order, but the said order must be held to be in the present case as being without jurisdiction for the reasons indicated above. It is true that the petitioner did not prefer an appeal before the Registrar under Section 48 (6) of the Bihar and Orissa Co-operative Societies Act against the said order, but the said order must be held to be in the present case as being without jurisdiction for the reasons indicated above. The order directing the petitioner to refund the amount of Rs. 5,000 as well was erroneous and the petitioner having realised that amount in satisfaction of the mortgage dues could not be asked to refund that amount. There is no jurisdiction in law for the order of refund. 8. In the result, the application is allowed and a writ of certiorari is granted quashing the order of the Joint Registrar, Co-operative Societies (opposite party No. 2) dated 6-5-1960. There will be no order for costs of this application. Misra, J. 9 I agree.