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2014 DIGILAW 548 (ORI)

Food Corporation of India v. Raghunath Mohaprabhu Labour Contract Society Ltd.

2014-09-01

B.P.RAY

body2014
JUDGMENT B.P. RAY, J. : This appeal has been preferred under Section 96 of Civil Procedure Code by the appellant challenging the judgment and decree dated 13.05.1997 passed by the learned Civil Judge, (Senior Division), Berhampur dismissing the Money Suit No.65 of 1984 against the respondent Nos.2 and 3 and ex parte against respondent No.1 without cost. 2.The appellant, who was the plaintiff in the Court below, had filed a money suit claiming an amount of Rs.2,38,084.03/- as compensation for breach of contract. The appellant’s case, in short, is that it had entered into an agreement with respondent No.1-Society (defendant No.1) for transporting food grains from railway and road heads to the former’s godowns, retail shops and warehouses in the districts of Ganjam and Phulbani. The contract was for a period of two years with effect from 19.08.1980. 3.As per the terms of the contract, respondent No.1 had deposited 50% of the earnest money amounting to Rs.31,500/- and the balance 50% of the earnest money was agreed to be adjusted by deducting 5% out of the bills submitted by respondent No.1 from time to time during execution of the work. Things continued as per the terms of the contract till 21.11.81, after which the respondent No.1 failed to carry out the work as per the terms of the contract despite allotment order being issued and received by him regularly, leading to breach of contract. 4.Seeing no other alternative, the appellant had to carry out the work by engaging ad hoc handling and transport contractors on payment of rates higher than what used to be paid to the respondent No.1 After closure of the contract, the appellant demanded from the respondent No.1 the amount spent in excess by engagement of ad hoc contractors for the work to be done by the respondent No.1. When the respondent did not respond, the appellant-plaintiff filed the suit against the respondent-defendant No.1 originally, claiming an amount of Rs.1,90,630.03/- together with the interest at the rate of 12% per annum from 11.10.82 till the date f filing of the suit with prayer for a money decree with interest pendent elite and future interest. 5.It is to be noted that during pendency of the suit, respondent No.1 Society was liquidated. Subsequently, the liquidator, i.e., Assistant Registrar of Co-operative Societies (in short A.R.C.S.), Berhampur was arraigned as a party, being respondent No.3. 5.It is to be noted that during pendency of the suit, respondent No.1 Society was liquidated. Subsequently, the liquidator, i.e., Assistant Registrar of Co-operative Societies (in short A.R.C.S.), Berhampur was arraigned as a party, being respondent No.3. After appearance, respondent No.3 intimated the Court that the appellant-Society comes within the jurisdiction of the A.R.C.S., Chatrapur. So, the appellant had also made the A.R.C.S., Chatrapur a party, being respondent No.2 herein (defendant No.2 in the Court below). 6.During course of trial, although the respondent No.1 had originally filed his written statement, it subsequently chose not to contest the suit and was set ex parte. Respondent No.2 filed written statement pleading that defendant No.1 (respondent No.1) is not coming within his jurisdiction. The defendant No.3 (respondent No.3) in his written statement pleaded, inter alia, that the learned trial Court has no jurisdiction to entertain the suit as only the liquidator has the power to settle any claim against a liquidated society. The defendants, with the pleadings as mentioned above, prayed for dismissal of the suit. 7.The learned trial Court, after considering the pleadings, framed as many as three issues, which are as follows : (1) Whether the plaintiff is entitled to the suit claim ? (2) Whether this Court has got jurisdiction to entertain the suit ? (3) To what relief ? 8.After considering the pleadings, materials on record and evidence adduced, the learned Court below has settled issue No.1 in favour of the plaintiff-appellant, holding that he is entitled to Rs.1,83,254.96, being the difference shown in the statement of account of the appellant. The finding of the learned trial Court as regards this issue is not in challenge by the appellant. 9.As regards issue No.2, it is clear from the records that the respondent No.1 Society was liquidated vide order No.3969 dated 29.06.1993 and the A.R.C.S. Berhampur, respondent No.3 was appointed as liquidator. This is also made clear by the affidavit dated 11.08.2014 filed by the Inspector of Co-operative Societies, Berhampur, pursuant to an order of this Court vide its order dated 25.07.2014. 10.The learned trial Court, while deciding on issue No.2, has taken into consideration Section 121(2) of the Orissa Co-operative Societies Act, 1962, the wordings of which are as follows : 121. 10.The learned trial Court, while deciding on issue No.2, has taken into consideration Section 121(2) of the Orissa Co-operative Societies Act, 1962, the wordings of which are as follows : 121. “Bar of jurisdiction of Courts.” :- (1) Save as provided in this Act no Civil or Revenue Court shall have any jurisdiction in respect of - (a) to (d) xxxxxxxx (2) While a society is being wound up, no suit or other legal proceedings relating to business of such society shall be proceeded with, or instituted against, the liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose”. (3) xxxxxxxxx” 11.The learned trial Court has observed that the appellant having already made the liquidator a co-defendant by amending the plaint and the liquidator having contested the suit, it was incumbent upon the appellant to take prior permission of the Registrar for proceeding with the suit as envisaged under Section 121(2) of the Orissa Co-operative Societies Act, 1962. This having not been done, the suit is liable to be dismissed. 12.Mr. Nayak, learned counsel for the appellant, submits that the said Section 121 of the Orissa Co-operative Societies Act, 1962 was substituted with effect from 1.5.1993 by Orissa Act, No.28 of 1991, the wordings of which are as follows :- “121. Bar of Jurisdiction of Courts - Save as provided under this Act, no Civil or Revenue Court shall have any jurisdiction on any ground whatsoever in respect of any proceeding under this Act or Rules or any order, decision, determination or award, by whatever expression called, made or given thereunder.” 13.Mr. Nayak, learned counsel for the appellant, firmly contended that since the society was liquidated after the date of substitution of the said Section 121, i.e., on 29.6.1993, the later Section 121 would govern the suit and not the already substituted Section 121. Therefore, the learned trial Court was wrong in applying a non-existent provision to dismiss the suit for want of jurisdiction. He further contended that since there was no requirement for obtaining leave of the Registrar under the present Section 121, the suit could not have been dismissed for want of jurisdiction. Therefore, the learned trial Court was wrong in applying a non-existent provision to dismiss the suit for want of jurisdiction. He further contended that since there was no requirement for obtaining leave of the Registrar under the present Section 121, the suit could not have been dismissed for want of jurisdiction. 14.The learned counsel for the State, on the other hand, contends that since the suit was filed in the year 1984 before the date of substitution of the said Section 121, the learned trial Court was correct in its application of the older Section 121 (2) and the suit, therefore, was rightly dismissed. 15.I am of the view that the most important aspect in determining whether the new Section 121 would apply or the earlier Section 121 would apply is the date on which the liquidation proceedings in respect of the respondent No.1 were initiated and not the date on which it was liquidated. This date, i.e., the date on which the liquidation proceedings were initiated is not forthcoming from the pleadings of the parties, the evidence adduced or the affidavit dated 11.8.2014 of the Inspector of Co-operative Societies. 16.Mr. Nayak, learned counsel of the appellant submits that a petition under Order 1 Rule 10 of the Civil Procedure Code was filed on 24.7.1993 by the plaintiff to add defendant No.3 (Liquidator) as a party to the suit which was allowed by the learned trial Court on 4.12.1993. The said Order 1 Rule 10 application being after the date of substitution of Section 121, he strenuously contended that the suit should not have been dismissed since there was no requirement for leave of the Registrar under the present Section 121. 17.On close scrutiny of the records of the learned Court below and the order sheet, I find that the defendant No.1 (the Society) had filed a petition under Order 1 Rule 10 of the Code of Civil Procedure to add A.R.C.S., Berhampur (Liquidator and Respondent No.3) as a party on 6.3.1992 with a copy being served to the plaintiff (appellant). This petition was allowed by the learned Court below on 28.4.1992 and the plaintiff was ordered to take necessary steps by 25.6.1992. This petition was allowed by the learned Court below on 28.4.1992 and the plaintiff was ordered to take necessary steps by 25.6.1992. This being the factual position, it becomes obvious that liquidation proceedings with respect to the respondent No.1 Society must already have commenced by 6.3.1992, much before the date of the substitution of Section 121 coming into effect on 1.5.1993. Therefore, I am not inclined to agree with Mr. Nayak, learned counsel for the appellant. I am of the opinion that the suit is hit by the mischief of Section 121 (2) before the said Section was substituted. It was, thus, imperative upon the plaintiff-appellant to have obtained leave of the Registrar as envisaged under the said Section 121(2) when he was made aware of it, during pendency of the suit or any time thereafter This not being done, the suit had no legs to stand and was rightly dismissed by the learned trial Court. 18.In view of the aforesaid observations, I find no merit in this appeal, which is accordingly dismissed. Appeal dismissed.