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1983 DIGILAW 580 (ALL)

RANI KRIPAL v. DORI LAL

1983-08-26

N.N.MITHAL

body1983
N. N. MITHAL, J. ( 1 ) THIS First Appeal From Order has been filed by two of the defendants in a suit filed by respondent for the recovery of a certain sum from all the three defendants. On an objection being taken by the defendants regarding jurisdiction of the court, it was held that the suit was barred under section 111 read with Section 70, U. P. Co-operative Societies Act, 1965. On appeal by the plaintiff, the said decision has been set aside. According to the order of the lower appellate court the plaintiff has been directed to first delete the name of respondent 3 from the array of defendants whereafter the suit will become cognizable by the Civil Court against the remaining defendants. Aggrieved by this order, defendants 1 and 2 have come up in appeal. The plaintiff respondent has also filed a cross-objection assailing the directions given by the lower appellate court and its other findings. ( 2 ) AT the very outset, it may be stated that the order passed by the lower appellate court is totally unjustified and I need not impress that it is no part of courts duty to advise as to the parties against whom plaintiff ought to proceed in the suit. It is also not its function to direct the deletion of any of the parties from the suit as directed by the order under appeal. It is entirely for the plaintiff to decide against whom he wishes to proceed in a suit, and, if necessary it is for the plaintiff himself to seek an amendment by deleting any name from the array of parties. Shri S. K. Verma, appearing for the respondent, has also very candidly conceded that the court had no power to give any such direction. ( 3 ) IN the present case, the plaintiff came to the court with an allegation that he was a member of defendant society, which was referred to as bank in para 1 of the plaint. The plaintiff had an account with it since 1966 in which rs. 10,000/- stood to his credit. Defendants 1 and 2 who are respectively the amin and supervisor of the Co-operative Society, had approached him and on their assurance that they will get back plaintiffs money lying in deposit with defendant 3 obtained his signatures on blank papers. It is alleged that a sum of Rs. 10,000/- stood to his credit. Defendants 1 and 2 who are respectively the amin and supervisor of the Co-operative Society, had approached him and on their assurance that they will get back plaintiffs money lying in deposit with defendant 3 obtained his signatures on blank papers. It is alleged that a sum of Rs. 9,800/- had been illegally withdrawn by them from plaintiffs account on different dates in collusion with defendant 3 and its employees who were negligent and has committed misconduct. He, therefore, claimed that the society was also liable for the amount. While dealing with cause of action for the suit, it was alleged in para 12 of the plaint that defendant 3 carried on business at village nizamabad within the jurisdiction of the court. ( 4 ) THUS, the only question for consideration in this case is whether on these allegations can it be said that the dispute was covered by provisions of section 70 ? According to Shri N. Lal, these allegations would clearly show that the dispute related to the business of the Society which was a Bank and was carrying on its business by keeping plaintiffs money in an account from which certain money had been fraudulently taken out by defendants 1 and 2 due to the negligence and misconduct of employees of defendant 3. According to him, the dispute was between the plaintiff, who was admittedly a member of the society, on the one hand and society or its employees on the other hand which related to the business of the society. Thus the matter was clearly covered by the provision of Section 70 (1 ). ( 5 ) SHRI Verma, on the other hand, contended that from a mere mention that defendant 3 society was Bank in para 1 of the plaint it cannot be assumed that it was carrying on business of banking. According to him, there was no close allegation in the plaint about the business of the society. The role of defendants 1 and 2 as alleged in the plaint also does not show any concern with the business of the society so as to bring the alleged dispute within the purview of section 70. According to him, there was no close allegation in the plaint about the business of the society. The role of defendants 1 and 2 as alleged in the plaint also does not show any concern with the business of the society so as to bring the alleged dispute within the purview of section 70. ( 6 ) ACCORDING to Section 111, U. P. Co-operative Societies Act, 1965, any dispute which is required to be referred to the Registrar for decision under section 70 of the Act cannot be questioned in a civil or revenue court and jurisdiction of these courts in those matters is completely barred. The relevant portion of Section 70, U. P. Co-operative Societies Act, 1965, is in the following language 3"70. Disputes which may be referred to arbitration (i) Notwithstanding anything contained in any law for the time being in force, if any dispute relating to. . . . . . . . the business of a Co-operative society. . . . . . . . . . . . arises (a ). . . . . . . . . . . . . . . (b) between a member, past member or any person claiming through a member, past member or deceased member, and the society, its committee of management or any officer, agent or employee of the society. . . . . . . . . . . . . . . . (c ). . . . . . . . . . . . . . . . . . . . . . . (d ). . . . . . . . . . . . . . . . . . . . . . Such dispute shall be referred to the Registrar for action in accordance with the provisions of this Act and the rules and no court shall have jurisdiction to entertain any suit or other proceeding in respect of any such dispute. (2 ). . . . . . . . . . . . . . . . . . . . . . . . (3 ). . . . . . . . . . . . . . . . . . . . . . . . (2 ). . . . . . . . . . . . . . . . . . . . . . . . (3 ). . . . . . . . . . . . . . . . . . . . . . . . " ( 7 ) ON a perusal of this provision, it is obvious that for the applicability of this section, the following pre-requisites must exist: (1) There should be a dispute. (2) The dispute should be regarding the business of a co-operative society ; and (3) The dispute should be between a member of the society and the society or its committee of management etc. ( 8 ) IF these conditions are fulfilled, the matter will be squarely covered by the provisions of Section 70 and the jurisdiction of the civil court would be completely barred. ( 9 ) ON an examination of allegations made in the plaint in the light of the above provisions, it appears that the plaint when read as a whole undoubtedly shows that transactions in dispute were in connection with the business of the society. The money was deposited by plaintiff with it for which an account number was also assigned to him and it was during the course of such dealings that the plaintiff was defrauded by appellants. Specifically it has not been alleged whether the Society was doing banking business or not but that is not relevant. All that need be examined is whether the money had been deposited by the plaintiff in connection with the work of the Society ? The fact that on deposit being made a separate account number was assigned to him goes a long way in showing that money was deposited in connection with some business of the society. ( 10 ) LEARNED counsel for the respondent has relied upon the case Belahri co-operative Society v. Puttu Lal, [air 1941 Oudh 315]. The said case, however, was based on the interpretation of a different provision and the language used therein is not similar to the one used in Section 70 of the Act. Apart from this, in that case the dispute had been referred to the arbitrator who had allegedly given his award but this fact was not in the knowledge of the parties. Apart from this, in that case the dispute had been referred to the arbitrator who had allegedly given his award but this fact was not in the knowledge of the parties. Subsequently the society made a second reference of the same dispute to another arbitrator and that award became final, as no appeal against it had been filed. When the society started execution in respect of the second award, the plaintiff filed a suit for injunction on the ground that the said award was a nullity and could not be enforced against him. In these circumstances it was held that while the first arbitration proceedings were still pending, a second reference of that dispute could no be made, It was in the light of these facts that is was observed that civil court had jurisdiction to entertain a suit if the society was acting wholly beyond its powers. That situation does not obtain in the present case. ( 11 ) REFERENCE has also been made to the case of Deer an Merchants Cooperative bank Ltd. v. M/s Dalchand Jugram Jain, [ air 1969 SC 1320 ], where also the facts were entirely different. The Bank as owner of the property was taking action against its tenants. An objection was taken about the bar of section 91 Maharashtra Co-operative Societies Act, which is some what similar to the provision of Section 70, U. P. Act, and it was held that the matter did not pertain to the business of the society. The court also observed (at p. 1326) ; "the word dispute covers only those disputes which are capable of being resolved by the Registrar or his nominee. It is very doubtful if the word dispute would include a dispute between a landlord society and a tenant when the landlord society has not been set up for the purpose of constructing or buying and letting out houses. " it also observed : "ordinarily if a society owns buildings and lets out parts of the buildings which it does not require for its own purpose, it cannot be said that letting out of those parts is part of the business of the society. " ( 12 ) THIS case, therefore, is completely off the point which is involved in the present appeal. ( 13 ) IN Co-operative Central Bank Ltd. v. Addl. " ( 12 ) THIS case, therefore, is completely off the point which is involved in the present appeal. ( 13 ) IN Co-operative Central Bank Ltd. v. Addl. Industrial Tribunal, [ air 1970 SC 245 ] on which reliance was placed by the respondents learned counsel, the facts were again different. There the service conditions of the employees of ft co-operative department had been altered and a dispute arose between the parties regarding the same. An industrial dispute about this was raised where the Bank took an objection that the jurisdiction of the Industrial Tribunal was barred in view of the provisions contained in the Co-operative Societies Act. In these circumstances, it was held that the matter in dispute was not one touching upon the business of the society. These cases, therefore, do not support the contention which is sought to be urged by the respondent. On the other hand, shri N. Lal has relied upon The Zamindara Bank, Sherpur Kalan v. Suba [air 1924 Lah 418] where a Division Bench of that court was dealing with a suit for declaration filed against the Co-operative Department that certain loans alleged to have been executed by the plaintiffs were forgeries. It was held that the plea regarding bar of civil court jurisdiction taken by the defendant was sound as the matter related to a dispute concerning the business of the co-operative society. That case, however, does not give further details of the facts of the case and it is not very helpful. ( 14 ) OTHER cases which have been cited at the bar mainly relate to an earlier controversy which was raised in the courts as to the meaning of the words "touching the affairs of the society" and "a dispute relating to the business of-the society". The court has laid down in those cases that the word touching or affecting are of a much wider import than the words relating to. In any case, if the dispute is one which either relates to or touches the business of the society, the matter would be covered by the provisions of Section 70 of the Act. The court has laid down in those cases that the word touching or affecting are of a much wider import than the words relating to. In any case, if the dispute is one which either relates to or touches the business of the society, the matter would be covered by the provisions of Section 70 of the Act. Thus, as I have observed earlier in the present case, the allegation with which the plaintiff came to the court, it was obvious that it was referring to some business which was being carried on by the society and the dispute also related to the very, same matter. Under the circumstances, the dispute was one which related to the business of the society and was clearly excepted from the jurisdiction of the civil court and the parties were bound to approach the Registrar under Section 70 for arbitration. ( 15 ) IN view of what has been stated above, I find that the order of the court below to the contrary is not correct, and the civil court had no jurisdiction to decide the matter. In the circumstances, the appeal succeeds and is hereby allowed. The order of the lower appellate court is set aside and it is held that the civil court had no jurisdiction to try the suit and as such the plaintiffs suit is dismissed. The cross objection is also dismissed. It is, however, made clear that the plaintiff will be free to take such legal action for getting the dispute referred to arbitration or otherwise as may be available to him in law. No order as to costs. Appeal allowed.