UMRETH URBAN CO. OPERATIVE BANK LIMITED v. CHAROTAR SAHKARI KHAND UDYOG LIMITED
2004-03-11
K.A.PUJ
body2004
DigiLaw.ai
K. A. PUJ, J. ( 1 ) THIS Appeal from Order is filed against the order passed by the learned Civil Judge ( S. D.), Anand, below a application Exh. 19 in Special Civil Suit No. 56 of 1996, whereby the learned Judge has returned the plaint for being presented to the appropriate Court on the ground that the Civil Court has no jurisdiction to entertain the said suit. ( 2 ) THE brief facts giving rise to present Appeal from Order are as under :the present appellant-Umreth Urban Cooperative Bank Ltd. has filed Special Civil Suit No. 56 of 1996 in the Court of learned Civil Judge ( S. D.), Anand for recovery of Rs. 39,21,866/- from the respondent-Charotar Sahakari Khand Udyog Limited. The State Government was impleaded in the suit as defendant No. 3 as the repayment of deposit of Rs. 24 lacs together with interest accruing thereon was guaranteed by the State Government, vide deed of guarantee executed on 31-8-1986. The deposit of Rs. 24 lacs was given for a period of one year to the respondent No. 1. Since the said amount has not been paid by the respondent No. 1 to the appellant, the appellant-Bank after serving statutory notice on the State Government as required by section 80 of the Code of Civil Procedure and a statutory notice to the Registrar, Cooperative Societies as required by Section 167 of the Gujarat Cooperative Societies Act, 1961, ( "the Act" for short ) filed the aforesaid suit in the Court of learned Civil Judge ( S. D.), Ananad, praying for a decree of Rs. 39,21,866/ -. ( 3 ) DURING the pendency of the said suit, on behalf of the respondent No. 1 an application Exh. 19 was filed praying for stay of the proceedings of the Civil Suit by raising two contentions named (i) the sugar factory of respondent No. 1 has been declared as relief undertaking for a period of one year with effect from 1-10-95 vide notification dated 31-1-96 under the provisions of Bombay Relief Undertaking (Special Provisions ) Act, 1958 and (ii) the suit is not maintainable since the dispute between a cooperative society and another cooperative society can be tried and decided by the Board of Nominees Court under Section 96 of the Gujarat Cooperative Societies Act, 1961.
( 4 ) THE present appellant has opposed the said application by contending that only the Civil Court has jurisdiction to entertain and decide the suit as it was not a dispute between the society and its members. It was further contended by the appellant that the provisions of Section 96 (1) (e) of the Act relied on by the present respondent No. 1 providing for resolution of dispute by the Registrars Nominees between a Cooperative society and any other Cooperative society has been declared unconstitutional and ultra-vires by this Court in the case of Rasiklal Patel v. Kailashgauri Ramanlal, (1971), 12 GLR 355. ( 5 ) THE learned trial Judge by his order dated 4-7-96 held that the Civil Court has no jurisdiction to entertain and decide the dispute between a cooperative and any other cooperative society and that the subject matter of the suit falls within the provisions of Section 96 (1) (e) of the Act and the dispute can be tried by the Court of Registrars Nominee under the provisions of the said Act. After having arrived at the said finding, the learned Judge has directed the plaint to be returned for being presented to the appropriate Court. ( 6 ) IT is this order which is under challenge in the present Appeal from Order. ( 7 ) MR. K. M. Patel, learned advocate appearing for the appellant submits that the learned trial Judge has not correctly appreciated the legal position. It is further submitted that the learned Judge has misinterpreted and wrongly distinguished the decision in the case of Mahavir Cotton Co. ,surendranagar vs Saurashtra Cooperative Spinning Mills Ltd. , Limbdi, reported in 1995 (2) G. L. R. 1394 wherein the Court has held that, "the transactions of the society with non-members are not subject to any restriction under Sec. 46. In absence of any restriction which would attract clause (c) of Sec. 96 (1), it is not possible to hold that Sec. 96 (1) (c) would be attracted.
In absence of any restriction which would attract clause (c) of Sec. 96 (1), it is not possible to hold that Sec. 96 (1) (c) would be attracted. " The Court has further observed that "even if this clause (c) is attracted, that clause (c) has already been struck down by a Division Bench of this Court in the case of Rasiklal Patel v. Kailasgauri Ramanlal Mehta ( Supra) wherein the High Court has allowed the petition by declaring that clauses (c) (d) and (e) and the words "any past or present agent" and "deceased agent" in clause (a) of Sec. 96 (1) as also Explanation II at the end of Sec. 96 as violative of Art. 14 of the Constitution and are,therefore, null and void. The plaint could not have therefore, been presented and filed before the Registrar under Section 96. " ( 8 ) LEARNED advocate for the appellant has further submitted that the learned trial Judge has wrongly placed reliance on the decision of this Court in the case of Dharoi Jalashya Matsya Udyog, Sahakari Mandli Ltd. and another, v. Gujarat Kendriya Matsya Udyog Sanstha, Ahmedabad, reported in AIR 1988 Gujarat, 193. In this case, the Court has observed that, "section 96 (1) (e) which says that, Any other society, or the Liquidator of such a society, clearly covers the dispute with the defendant No. 1 which is not a member of the plaintiff-society but admittedly it is a society registered under the provisions of the Act. Therefore, the contention that because defendant No. 1 society is not a member of the plaintiff-society the dispute is not covered by the provisions of Section 96 of the Act cannot be accepted. ". Mr. Patel has further submitted that in this judgement, the Division Bench judgment of this Court rendered in the case of Rasiklal Patel and Ors. (Supra) was not cited and hence it was not brought to the notice of the Court that clause (e) has been struck down by this Court. Mr. Patel has further submitted that even the decision rendered in the case of Dharoi Jalashya Matsya Udyog Sahakari Mandali Ltd. ( Supra ) was subsequently reviewed by this Court in Civil Misc.
(Supra) was not cited and hence it was not brought to the notice of the Court that clause (e) has been struck down by this Court. Mr. Patel has further submitted that even the decision rendered in the case of Dharoi Jalashya Matsya Udyog Sahakari Mandali Ltd. ( Supra ) was subsequently reviewed by this Court in Civil Misc. Application No. 459 of 1988, decided on 20th April, 1988, wherein the Court has observed that, in view of the fact that clause (e) of sub Section (1) of Section 96 of the Act is to be ultra-vires the provisions of Article 14 of the Constitution, the provisions of Section 96 (1) (e) would not be applicable to the society which is not a member society and to that extent the original order was reviewed. Mr. Patel has therefore, submitted that looking to the ratio laid down by this Court in the case of Rasiklal Patel and Ors. ( Supra ) as well as in the case of Mahavir Cotton Company (Supra ), the decision taken by the learned trial Judge is contrary to the law laid down by this Court and the Civil Court is the only competent Court having jurisdiction to decide the issue raised before it and the learned trial Judge should not have returned the plaint for presenting the same before the appropriate Court. ( 9 ) MR. Patel has further submitted that the State Government is also a party being a guarantor of respondent No. 1 and in any case, against the guarantor, the appellant could not file the suit before the Board of Nominees and in this view of the matter, the Civil Court is the only Court before whom the dispute can be raised and redressed. ( 10 ) MR. Ketan Dave, learned advocate appearing for the respondent-society which is under liquidation submits that the Civil Court has no jurisdiction and the Board of Nominees has the jurisdiction to decide the suit looking to the provisions contained in Section 96 (1) (a) of the Act. He has submitted that in view of the provisions contained in Section 96 (1), only two conditions are to be satisfied, firstly the dispute must be touching the constitution management or business of a society and secondly the parties thereto should be from amongst the persons mentioned in Cls. (a) to (e) of Section 96 (1) of the Act.
He has submitted that in view of the provisions contained in Section 96 (1), only two conditions are to be satisfied, firstly the dispute must be touching the constitution management or business of a society and secondly the parties thereto should be from amongst the persons mentioned in Cls. (a) to (e) of Section 96 (1) of the Act. Mr. Dave, in support of his submission, relied on the decision of the Honble Supreme Court in the case of Nayagarh Cooperative Central Bank Ltd. v. Narayana Rath and others, reported in AIR 1975 SC 1895 . The said case arose under Orissa Cooperative Societies Act, 1963. He has submitted that the provisions contained in Section 68 of the Orissa Cooperative Societies Act, 1963 and Section 96 of the Act are parimateria and while interpreting provisions contained in Section 68 (1) of the Act, the Honble Supreme Court has held that, " For the present purpose, Section 68 requires two conditions to be satisfied (i) that the dispute must be one touching the business of a society other than a dispute regarding disciplinary action taken by the society against a paid servant and (ii)) that the dispute must be one involving parties who are among those mentioned in the section. " The Court has further held that, " Here the parties concerned are among those listed in this section, and the dispute also touches the business of the society, the nature of the dispute being as stated in explanation 1. Prima facie therefore the requirements of Section 68 (1) are satisfied in this case. " Mr. Dave has therefore, submitted that in the present case also since both the conditions are satisfied, the proper forum to decide the dispute is the Court of Board of Nominees and not the Civil Court. The learned trial Judge has therefore, rightly returned the complaint. As far as the suit against the State Government is concerned, the State Government is a guarantor for the deposit given to respondent No. 1 and there is no ban under the Act that guarantor can not be sued before the Board of Nominees. He has therefore, submitted that this Court should not interfere in the order passed by the learned trial Judge by exercising the appellate powers in the present Appeal from Order.
He has therefore, submitted that this Court should not interfere in the order passed by the learned trial Judge by exercising the appellate powers in the present Appeal from Order. ( 11 ) AFTER having heard learned counsel appearing for the respective parties and after having considered the authorities cited before the Court, I am of the view that the learned trial Judge has committed an error of law in returning the plaint being presented the same before the appropriate Court and he has not correctly appreciated the law laid down by this Court in the above referred to judgments. The Division Bench decision of this Court in the case of Rasiklal Patel and Ors. (Supra) squarely covers the issue as clauses (c), (d) and (e) of Sub Section (1) of Section 96 were struck down by this Court by holding the same as unconstitutional and violative of Article 14 of the Constitution of India. The only clause which empowers the Board of Nominees to entertain the suit, looking to the facts and circumstances of the case is clause (e) of Sub Section (1) of Section 96 of the Act which has already been struck down. The learned trial Judge has not taken into consideration this aspect and he has simply relied upon the decision in the case of Dharoi Jalashya Matsya Udyog Sahakari Mandali Ltd. and another (Supra) which was decided without taking into consideration the Division Bench judgement of this Court in the case of Rasiklal Patel and others (Supra ). Even that judgment was subsequently reviewed, as the decision of this Court in the case of Rasiklal Patel and Ors. (Supra) was not pointed out before the learned Single Judge of this Court. Even the Supreme Court judgment in the case of Nayagarh Cooperative Central Bank Ltd. ( Supra ) does not render any assistance to the respondent No. 1 as in that case Section 68 of the Orissa Cooperative Societies Act, 1963 which is parimateria with clause (e) of Sub Section (1) of Section 96 of the Act which was struck down. Since clause (e) of Sub Section (1) of Section 96 of the Act was struck down, no reliance can be placed on that case.
Since clause (e) of Sub Section (1) of Section 96 of the Act was struck down, no reliance can be placed on that case. In the case before the Supreme Court, the relevant clause under consideration was clause 68 of the Orissa Act and the Honble Supreme Court held that the conditions contained in Section 68 were satisfied. ( 12 ) EVEN otherwise it was rightly contended by Mr. Patel that the State Government is also a party to the suit and but for clause (d) of Sub Section (1) of Section 96 of the Act, a guarantor can not be impleaded in the suit before the Board of Nominees and when the suit is filed before the Civil Court, the proper relief can be claimed against the guarantor before the Civil Court and not before the Board of Nominees. ( 13 ) HAVING regard to the facts and circumstances of the case and law laid down by this Court, I am of the firm view that the learned trial Judge is not right in returning the plaint for presenting the same before the appropriate Court and hence, the order passed by the learned trial Judge is required to be quashed and set aside. Accordingly, the Appeal from Order is allowed and the suit filed by the present appellant before the Civil Court ( S. D.), Anand is hereby restored to the file and the same is ordered to be proceeded with. Since the suit is of 1996 and eight years have passed without any effective adjudication, the trial Court is hereby directed to decide and dispose of the suit as expeditiously as possible, preferably within the period of six months from the date of receipt of writ of this Court or from the date of receipt of certified copy, whichever is earlier. There shall be no order as to cost. ( 14 ) AS the Appeal from Order is allowed, Civil Application No. 6251 of 1996 does not survive and is disposed of accordingly. .