FILM DEVELOPMENT CORPORATION OF ORISSA LIMITED v. SRI DEBENDRANATH MOHANTY
1998-07-09
P.K.TRIPATHY, S.N.PHUKAN
body1998
DigiLaw.ai
JUDGMENT : S.N. Phukan, C.J. - This writ petition has been filed under Articles 226 and 227 of the Constitution of India by Film Development Corporation of Orissa Limited, a Government of Orissa undertaking against the Urban Co-operative Bank, Smt. Indurekha Mohanty and her husband Sri P. K. Mohanty and also against the Asst. Registrar of Co-operative Societies, Cuttack. During the pendency of the writ petition, P. K. Mohanty died and in his place, his legal heirs were substituted. 2. On 30.4.1982, the petitioner-Corporation, opposite party-Bank and opposite party No. 3, Smt. Indurekha Mohanty, proprietor entered into a Tripartite Agreement whereupon the Bank-opposite party advanced a term loan of Rs. 4,58,990/- and the petitioner-Corporation, a soft loan of Rs. 1,00,000/- to opposite party No. 3. The loans were secured by mortgage of immovable properties, the Bank having first charge and the Corporation second charge in the said properties. Annexure-3 is the said agreement. The loan was secured for producing an Oriya film 'Mahasati Sabitri' by opposite party No. 3. According to Clause 17 of the Agreement, the amount deposited in terms of the agreement was to be apportioned between the Bank and the petitioner-Corporation in the ratio of 80:20 and thereafter adjusted against the loan. The film produced was to be hypothecated to the Bank and the Corporation. Opposite party No. 1 inducted the petitioner-Corporation to be a guarantor for opposite party No. 3 as a gesture of good-will and the said deed of guarantee is at Annexure-4. Though it is stated in the writ petition that liabilities of the guarantor arise only when the principal borrower fails to clear the dues and the properties secured are not sufficient to meet the claim, but from Clause (v) of the agreement, we find that liability was concurrent. 3. It is not necessary to state other facts in view of the prayer of the petitioner. On 21.6.1984, the petitioner was issued a notice in Dispute Case No. 64/83-84 from the opposite party No. 5, namely, Asst. Registrar of Co-operative Societies, Cuttack asking for appearance on 27.6.1984. It was stated that opposite party-Bank filed a claim case against the opposite party No. 3 and petitioner-Corporation and late P.K.Mohanty was also impleaded as opposite party thereto as surety but no relief was claimed.
Registrar of Co-operative Societies, Cuttack asking for appearance on 27.6.1984. It was stated that opposite party-Bank filed a claim case against the opposite party No. 3 and petitioner-Corporation and late P.K.Mohanty was also impleaded as opposite party thereto as surety but no relief was claimed. It has been stated in the writ petition, as the petitioner-Corporation was observing 'Golden Jubilee of Oriya Films', all the officials were engaged as the function was attended by VIPs from all over the country. However, the petitioner-Corporation filed an application in the above dispute case vide Annexure-12 asking for one month's time to file written statement. It was presented before opposite party No. 5 at 11 A.M. on 27.6.1984 and it has been alleged that though opposite party No. 5 stated that he would only grant 15 days' time and pass orders at 2 P.M. When the officers of the Corporation appeared, opposite party No. 5 stated that he will pass orders next date and communicate the same. Opposite party Nos. 3 and 4 appeared through counsel and also prayed for adjournment. They all left the office of the opposite party No. 5. On 6.7.1984, an order purported to have been passed on 29.6.1984 by the opposite party was served on the petitioner vide Annexure-13. The petitioner has alleged that instead of fixing a date for filing written statement, final order was passed authorising opposite party-Bank to adjust the loan amount including interest occurred on it till 29.6.1984 from the fixed deposit account of defendant No. 3 as per the Deed of Guarantee. 4. The petitioner has assailed the order on various grounds, the main ground being dispute case is not maintainable and secondly, the impugned order is bad in law inasmuch as no opportunity was given. 5. Regarding power of this Court vis-a-vis, the provisions of Co-operative Societies Act and Arbitration Act, the decision of Allahabad High Court in District Co-operative Federation Ltd. v. Registrar, Co-operative Societies, U.P., Lucknow and Ors. has been placed before us. The Bench of Allahabad High Court considering Section 46 of the Arbitration Act, 1940 and also U.P. Co-operative Societies Act, held inter alia that in respect of award made under the Co-operative Societies Act, provisions of Arbitration Act, 1940 shall not apply.
has been placed before us. The Bench of Allahabad High Court considering Section 46 of the Arbitration Act, 1940 and also U.P. Co-operative Societies Act, held inter alia that in respect of award made under the Co-operative Societies Act, provisions of Arbitration Act, 1940 shall not apply. It was further held on the basis of the provisions of U.P.Co-operative Societies Act and Rules framed thereunder and it is well settled that if the law requires a thing to be done in a particular manner it shall be done in that manner or not at all, the award was quashed as it was based on affidavits only and no evidence was adduced. We are in respectful agreement. 6. Section 68 of the Co-operative Societies Act, 1962 provides, for settlement of dispute and procedure for settlement of disputes are in Chapter VII under Rules 71 to 82-A. 7. According to Rule 71, reference of any dispute to Registrar u/s 68 shall be in writing and shall be accompanied by the documents mentioned in the said Section. According to Rule 72, every pleading shall be verified. Rule 73 provides that defendant may at or before the first hearing or within such time as the Registrar or other officers hearing the dispute, may permit, file written statement of defence. Rules 77 and 78 are very much important for our purpose which are quoted below : "77. Procedure for settlement of dispute : (1) In these proceedings the Registrar or the person or the Arbitrator to whom the dispute is transferred or referred for disposal under Clause (a), (b) or (c) of Sub-section (1) of Section 70, as the case any be, shall fix the date, hour and the place of hearing of the dispute and issue summons or notices in the manner laid down in Rule 150 to the parties concerned in the form specified by the Registrar at least seven days before the date fixed for hearing of the dispute.
(2) Where a dispute has been instituted in the name of a wrong person, where all the defendants have not been included, the Registrar or the person invested by the State Government with the powers in that behalf or the Arbitrator deciding the dispute may, at any stage of the hearing of the dispute, is satisfied, that the mistake was bona fide, order any other person to be substituted or added as a plaintiff or a defendant upon such terms as he thinks just. 78. Award of decision : (1) The Registrar, the Arbitrator or any other person deciding the dispute shall record a brief memorandum of the evidence of the parties and witness and upon the evidence so recorded and after consideration of any documentary evidence produced by the parties a decision or award, as the case may be, shall be given in accordance with justice, enquiry and good conscience by such Registrar, Arbitrator or other person. The decision or award shall contain the number of the reference, the names and description of the parties and particulars of the disputes and shall specify clearly the relief granted, the amount decreed, the future interest allowed, if any, and the costs awarded, if any, and shall be signed and pronounced in the presence of parties or communicated by certificate of posting. If no award or decision is pronounced immediately after the conclusion of the hearing of the dispute, the Registrar or other person deciding the dispute shall fix the date and place for the delivery of the award and shall, except for reasons to be recorded in writing, deliver the award on the date so fixed." 8. Thus, it is clear that the Registrar or other authorised officer has to give an opportunity to the defendant to file written statement and thereafter shall fix date, hour and place of hearing of the said dispute. The Registrar or any other person deciding the dispute shall record a brief memorandum of the evidence of the parties and witness and upon the evidence so recorded and after consideration of documentary evidence produced by the parties a decision or award, as the case may be, shall be given in accordance with justice.
The Registrar or any other person deciding the dispute shall record a brief memorandum of the evidence of the parties and witness and upon the evidence so recorded and after consideration of documentary evidence produced by the parties a decision or award, as the case may be, shall be given in accordance with justice. From the above, it is very clear that before deciding the dispute, or making an award, principle of natural justice has to be followed by giving a chance to the parties to file written statement adduced evidence etc. 9. We have called for the record from opposite party No. 5 and from the record, we find that on 27.6.1984, the petitioner-Corporation prayed for one month time to file written statement in the matter so also other defendant. But instead of granting time, the case was posted to 29.6.1984 for passing orders and on that date, the final impugned order was passed. No evidence was recorded and no opportunity was given to the parties to adduce evidence. There was no pleading duly verified on behalf of the plaintiff before the Asst. Registrar. No reason was recorded as to why the defendants were refused to file written statement. Therefore, the impugned order cannot stand as it is violative of the above rules and principles of natural justice. Accordingly, it is quashed along with letter dated 29.6.1984 from the Urban Co-operative Bank Ltd. to the petitioner-Corporation vide Annexure-14, The parties are directed to appear before the opposite party No. 5 within one month and thereafter, the opposite party No. 5 shall ensure that proper pleadings are filed as required under the rules and parties are allowed time to adduce evidence and after hearing the parties, shall pass appropriate orders. 10. By interim order dated 9.5.1997, we allowed that second copy of the film shall be handed over to opposite party No. 3 with a further direction to opposite party No. 3 to deposit Rs. 50,000/-with Registrar (Judicial) of the Court which has been kept in fixed deposit and quarterly interest was to be released to opposite party No. 3. Both the parties are given liberty to approach this Court for release of the amount and Registrar (Judicial) is directed to renew the fixed deposit, if the term has already expired for a period of six months. With the above direction and observation, the writ petition is disposed of.
Both the parties are given liberty to approach this Court for release of the amount and Registrar (Judicial) is directed to renew the fixed deposit, if the term has already expired for a period of six months. With the above direction and observation, the writ petition is disposed of. P.K. Tripathy, J. 11. I agree.