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2018 DIGILAW 466 (JHR)

Kailash Nath Agarwal @ Kailash Chandra Agarwal v. State of Bihar (Now State of Jharkhand)

2018-02-22

APARESH KUMAR SINGH, RATNAKER BHENGRA

body2018
ORDER : Heard learned counsel for the parties. 2. The appellants are the writ petitioners, being aggrieved by the common judgment dated 14.05.2009 passed in their individual writ petition by the learned Single Judge. 3. Writ petitioners approached this court being aggrieved by the orders passed by the Registrar, Cooperative Society in three such Award Cases bearing Nos. 109-111 of 2000 whereunder these cases were admitted for hearing and transferred to the Deputy Registrar C.S. (Hqrs.) Bihar, Patna for disposal in accordance with law. 4. Challenge was made to the entire proceedings of the Award cases as being wholly without jurisdiction. According to the writ petitioners/appellants herein the dispute raised by the Chairman/Honorary Secretary of the Society ( Respondent No. 4 herein) does not fall within the scope of section 48 of the Bihar Cooperative Societies Act. They relied upon the judgment of the learned Division Bench of this Court reported in 2003(2) JCR 188 (Jhr) in the case of M/s. Ashiana Housing and Finance (India) Ltd. Vrs. State of Jharkhand and Ors. The learned Division Bench in the said case had held that the Registrar had no jurisdiction to pass an order with respect to a 3rd party while deciding any question relating to legality and validity of the sale in favour of the writ petitioners. Such issue could be seen by a competent authority or a civil court of competent jurisdiction. On the part of the respondent/society, reliance was placed on the Explanation-(1) to Section 48 of the Act. Reference was also made to Section 57 of the said Act which bars the jurisdiction of the court. Learned Single Judge found prima facie substance in the submission of the petitioners with regard to the jurisdiction and authority of the learned Registrar to pass a decree but it was of the opinion that the petitioners should file a reply to the show cause notice since it was only at the notice stage. Liberty was reserved on the contentious issue of jurisdiction to the parties. 5. The case of all the writ petitioners of these three writ petitions falls in the same compass. For convenience sake facts as pleaded in W.P.(C) No. 2488 of 2000(R) are being noticed hereunder. The respondent no. Liberty was reserved on the contentious issue of jurisdiction to the parties. 5. The case of all the writ petitioners of these three writ petitions falls in the same compass. For convenience sake facts as pleaded in W.P.(C) No. 2488 of 2000(R) are being noticed hereunder. The respondent no. 4/Society alleged that the writ petitioners, after executing an agreement for sale, in 1992, in favour of the Society had handed over possession of the land but failed to execute the sale deed in their favour. Dispute relating to the title was raised on being asked to execute the sale deeds in the name of the Society. According to the writ petitioner/appellant in LPA No. 481 of 2009, in recent survey of 1982 by mistake the said land had been recorded in the name of another person and it had approached the competent court in a title suit for declaration of his name, title and ownership. The Board of Directors of the Society, by a resolution, decided to take recourse both civil and criminal against the seller. They accordingly chose to take three actions (a) to file Award case against each of these writ petitioner in the court of Asstt. Registrar Cooperative Societies Seraikella/Deputy Registrar Cooperative Societies Ranchi for a decree of the amount advanced together with 18% interest; (b) to place the stand and views of the Society before the court at Seraikella hearing the Title Suit; and (c) to file a criminal case against each of these writ petitioners for deceiving and cheating the society and for committing fraud and breach of trust as also to file a defamation case for the loss and injury caused to the society. On these averments they prayed for decision by applying in the prescribed format before the Registrar, Cooperative Societies, Bihar, Patna for an award in the light of the statement of claim and the resolution passed by the society. Against the appellant Kailash Nath Agarwal, a claim of Rs. 7,23,533/-was made. Similarly claims were made against the other appellants. 6. On this factual foundation, the only issue to be decided in the present appeals is whether the instant claim raised by the society falls within the contours of Section 48 of the Cooperative Societies Act, 2002 or not? Section 48 of the Cooperative Societies Act reads as follows :- “48. Similarly claims were made against the other appellants. 6. On this factual foundation, the only issue to be decided in the present appeals is whether the instant claim raised by the society falls within the contours of Section 48 of the Cooperative Societies Act, 2002 or not? Section 48 of the Cooperative Societies Act reads as follows :- “48. Disputes.-(1) 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- (a) amongst members, past members, persons claiming through members, past members or deceased members, and sureties of members, past members or deceased members, whether such sureties are members or non members; or (b) between a member, past member, persons claiming through a member, past member or deceased member, or sureties of members, past members or deceased member, whether such sureties are members or non members and the society, its managing committee or any officer, agent or servant of the society; or (c ) between the society or its managing committee and any past or present officer, agent or servant of the society; or (d) between the society and any other registered society; or (e) between a financing bank authorized under the provisions of sub-section (1) of section 16 and a person who is not a member of a registered society; such dispute shall be referred to the Registrar: Provided that no claim against a past member or the estate of a deceased member shall be treated as a dispute if the liability of the past member or of the estate of the deceased member has been extinguished by virtue of Section 32 or Section 63. Explanation.-(1) A claim by a registered society for any debt or demand due to it from a member, non-member, past member or the nominee, heir or legal representative of a deceased member or non-member or from sureties of members, past members or deceased members, whether such sureties are members or non-members, shall be a dispute touching the business of the society within the meaning of this sub-section even in case such debt or demand is admitted and the only point at issue is the ability to pay or the manner of enforcement of payment. Explanation.-(2) The question whether a person is or was a member of a registered society or not shall be a dispute within the meaning of this sub-section. (2) 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; or (c) subject to any rules refer it for disposal to an arbitrator or arbitrators. (3) Subject to any rules, the Registrar may withdraw any reference transferred under Clause (b) of sub-section (2) or referred under Clause (c) of the said sub-section and deal with it in the manner provided in the said sub-section. (4) The appointment of an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar or such arbitrators shall be regulated by rule. (5) In the case of dispute involving property which is given as collateral security, it shall be competent to the person deciding such dispute to issue mortgage award which shall have the same force as a mortgage decree of a competent Civil Court. (6) Any person aggrieved by any decision given in 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. (7) The Registrar, in the case of dispute under this section, shall have the power of review vested in a civil Court under Section 114 and under Order XL VII, Rule 1 of the Code of Civil Procedure, 1908, and also have the inherent jurisdiction specified in Section 151 of the said Code. (8) The Registrar may where it appears to him advisable, either on application or of his own motion, state a case and refer it to the District Judge for decision, and the decision of the District Judge shall be final. (8) The Registrar may where it appears to him advisable, either on application or of his own motion, state a case and refer it to the District Judge for decision, and the decision of the District Judge shall be final. (9) Save as expressly provided in this section, a decision of the Registrar under this section, and subject to the orders of the Registrar on appeal or review, a decision given in a dispute transferred or referred under Clause (b) or (c) of sub-section (2) shall be final.” From a bare reading of the main provision i.e. Section 48(1) (a to e), it is abundantly clear that the dispute could not fall under the scope of Section 48 as undisputably these writ petitioners were not members of the society, neither is the case of the society that they were members or past members or persons claiming to the members or sureties of members etc. Explanation (1), which has been relied upon by the counsel for the society speaks of claim by a registered society for any debt or demand due to it from a member, non member...... and which shall be a dispute touching the business of the society within the meaning of this sub section. The expression non member has been inserted by Act no. 16 of 1948. 7. The learned counsel for the appellants has pointed out that the inclusion of non member in Explanation (1) only, without any appropriate amendment to the main provision of section 48(1) of the Act, on its face, appears to be a contradiction in sorts when the main proviso refers to dispute touching the business of a society amongst members, past members etc.; between the society or its Managing Committee and any past or present officer, agent or servant of the society; between the society and any other registered society. The main provision did not contemplate a dispute between a society and a non member. The vires of the said explanation, however, is not under challenge here. We refrain from commenting upon the validity of the amendment thereof. However, on a plain reading of the Explanation also, this claim raised by the society would not fall within the meaning of debt or a demand due to it from a member or non member. The vires of the said explanation, however, is not under challenge here. We refrain from commenting upon the validity of the amendment thereof. However, on a plain reading of the Explanation also, this claim raised by the society would not fall within the meaning of debt or a demand due to it from a member or non member. The foundational facts pleaded in their claim petition, at the best, makes out a case of breach of promise in an agreement for sale. Remedy for such breach of promise would lie under the Specific Relief Act through a proceedings before the competent court of law where such issue of fact and law can be adjudicated upon on the basis of evidence. The society on its part has also alleged cheating and fraud on the part of these persons and had resolved to institute a criminal case and also a defamation case for realizing the loss. An act of cheating or fraud of a criminal nature does not lie within the scope of power of the Registrar under the Cooperative Societies Act to be adjudicated upon. It is a criminal cause of action which would be amenable to the jurisdiction of the competent court of criminal jurisdiction. The claim petition of the society itself shows that its a claim for award for realizing an alleged advance made to these persons. The same could not also fall within the meaning of a 'demand due'. The transaction between the society and these persons/writ petitioners were in respect of land under an agreement to sell. In those circumstances, the proceedings initiated before the learned Registrar, Cooperative Societies were beyond the scope of section 48 of the Act. Writ petitioners were, therefore, justified in questioning the jurisdiction of the learned Registrar, Cooperative Society in entertaining such a proceedings. If the proceedings were without jurisdiction, the writ petitioners could not have been compelled to submit to a notice to show cause issued thereunder. The learned Single Judge also seems to have formed a prima facie opinion that the learned Registrar, Cooperative Society had no jurisdiction or authority to entertain such a claim. In those circumstances, there was no justification to direct the petitioners to submit to the jurisdiction of the learned Registrar and offer their reply to the show cause notice. 8. The learned Single Judge also seems to have formed a prima facie opinion that the learned Registrar, Cooperative Society had no jurisdiction or authority to entertain such a claim. In those circumstances, there was no justification to direct the petitioners to submit to the jurisdiction of the learned Registrar and offer their reply to the show cause notice. 8. Having held as above, we are of the firm opinion that the proceedings impugned in the writ petition being without jurisdiction, cannot be sustained in the eye of law. Absence of jurisdiction goes to the root of the matter. Accordingly, the entire proceedings in the respective Award Case Nos. 109-111 of 2000 are quashed. The impugned judgment of the learned Single Judge is set aside. These appeals are allowed. Appeals allowed.