In Re: Indo Farm Tractors and Motors Ltd. v. Rajpura Cooperative Agriculture Service Society
2019-04-25
VIVEK SINGH THAKUR
body2019
DigiLaw.ai
JUDGMENT : VIVEK SINGH THAKUR, J. 1. These objections have been preferred on behalf of Judgment Debtor No. 1 Cooperative Society under Order 21 Rule 58 CPC against the attachment of property of said Judgment Debtor on the ground that the said Society is a Society of poor and marginal farmers, who have invested their entire earnings with the Society, and property of the Society has been raised out of the deposits of members and in case this property is attached and sold, the Society would be unable to repay the fixed deposits of its poor members and first right on the property is of its members, who are poor and marginal farmers and further that Judgment Debtor Nos. 2 and 3 were having vested interest as they had misappropriated the amounts of the Society and thus entered into compromise having adverse impact on its members. 2. I have heard learned counsel for the parties and have also gone through the record. 3. Perusal of record reveals that originally Decree Holder had filed a civil suit for recovery of Rs. 1,19,50,000/- against the Rajpura Cooperative Agriculture Service Society Ltd. (Judgment Debtor No. 1/defendant No. 1), Mr. R.K. Saini Manager of defendant No. 1 Society as defendant No. 2 and Mr. Manmohan Singh President of defendant No. 1 Cooperative Society as defendant No. 3. Initially, defendant No. 1 Cooperative Society was being represented through its President Manmohan Singh (defendant No. 3). However, it appears from record that at that time, Society was being managed through Administrative Board headed by Administrator appointed by the concerned authority. The said Administrative Board, by passing a resolution on 28.5.2010, had authorized its Assistant Manager Nasib Singh to take appropriate action for the benefit of the Society including consulting the Advocate and contesting the case in the High Court. Thereafter, Nasib Singh, the Assistant Manager of the Cooperative Society, had signed power of attorney on behalf of defendant No. 1 (Judgment Debtor No. 1) on 17.6.2010 which was filed in the Court on 18.6.2010. At that time, Nasib Singh was not party to the suit in individual capacity. However, later on 29.5.2013 after conciliation before the Mediator on 14.12.2012, on an application OMP No. 227 of 2013, preferred by the plaintiff/Decree Holder, the said Nasib Singh was impleaded as defendant No. 4 as an authorized officer of defendant No. 1 Cooperative Society vide order 30.5.2013. 4.
However, later on 29.5.2013 after conciliation before the Mediator on 14.12.2012, on an application OMP No. 227 of 2013, preferred by the plaintiff/Decree Holder, the said Nasib Singh was impleaded as defendant No. 4 as an authorized officer of defendant No. 1 Cooperative Society vide order 30.5.2013. 4. During pendency of suit, matter was referred for mediation in November, 2012 vide order dated 9.11.2012 and Decree Holder/plaintiff and Judgment Debtors No. 1 and 2 had appeared before learned Mediator and parties have agreed to pass a decree for Rs. 80 lacs as a full and final claim in favour of plaintiff and the said amount was agreed to be payable within a period of one year from the date of grant of permission from the High Court to sell the immovable properties, on an application to be preferred by defendants and it was further agreed that in case of default in making payments, the defendants shall be liable to pay interest at the rate of 9% per annum on Rs. 80 lacs till final payment and further that recovery of entire amount will be affected in equal shares from defendants No. 1 to 3. 5. Later on, defendant No. 3 Manmohan Singh who was earlier proceeded ex-parte and was not present before learned Mediator, had appeared in the Court on 18.12.2012 and had deposed on oath that he had seen the report of learned Mediator available on record and being aware of the contents of report had admitted the same to be correct with assurance to abide by the settlement so arrived at. 6. Ultimately a joint application, OMP No. 228 of 2013 dated 29.5.2013, was preferred by the plaintiff/Decree Holder and original defendants No. 1 to 3 for passing a compromise decree in terms of agreement entered between the parties placed on record with this application wherein the settlement arrived at before learned Mediator was reiterated and endorsed. The case was listed for presence of parties on 11.6.2013 on which date after recording the statements of parties on oath, the suit was decreed in terms of agreement/ compromise. 7.
The case was listed for presence of parties on 11.6.2013 on which date after recording the statements of parties on oath, the suit was decreed in terms of agreement/ compromise. 7. It is contended on behalf of Judgment Debtor No. 1 Society that previous management of the Society had committed serious irregularities in the functioning of the Society and they had started their own business in the name of the Society causing huge losses to it and failure of previous management, to pay the amount payable to the Decree Holder, had resulted filing of suit, decree wherein has been sought to have been executed in the present execution petition wherein Judgment Debtors No. 2 and 3, who were at the helm of affairs of the Society at that time, had entered into compromise with the Decree Holder having adverse effect on interest of the Society and its members and thereafter, had filed an application under Order 23 Rule 3 CPC on the basis of agreement so arrived between the parties. According to Judgment Debtor No. 1, Nasib Singh through whom Judgment Debtor No. 1 was being represented in the suit, was also party to the suit as defendant No. 4 and there is every chance of collusive suit and sufficient for doubting that Nasib Singh to protect himself from the liability had entered into the compromise. 8. Aforesaid compromise has also been questioned on the ground that Judgment Debtors No. 2 and 3 having the vested interest, had misappropriated the amount of Society and had entered into the compromise without having any authorization to do so on behalf of the Society. It is further contended that they had committed a fraud upon the Society and had also issued cheques to repay their liabilities, whereafter, defendant No. 2 is stated to be undergoing sentence at Chandigarh and Judgment Debtor No. 3 is stated to have been convicted by the Court in the contempt proceedings and besides it, proceedings have also been initiated against defendants No. 2 and 3 against the Cooperative Society for recovery of amount and the property, sought to be attached, belongs to the poor and marginal farmers and as it has been raised through their investment of entire earnings, it is not liable to be attached and sold. 9.
9. During the arguments it is contended on behalf of Judgment Debtor No. 1 Cooperative Society that Judgment Debtor/Cooperative Society, being represented in the suit through Nasib Singh who was also later on added as defendant No. 4 in the civil suit, was not represented through authorized officer as provided under Section 2(11) of the H.P. Cooperative Society Act 1968. He has contended that Nasib Singh was Assistant Manager of Judgment Debtor Cooperative Society and the Assistant Manager does not find mention in the list of officers mentioned in this Section 2(11) competent to represent the Society and thus it is an inherent defect in the civil suit which renders the decree un-executable. 10. Learned counsel for Judgment Debtor No. 1 has also submitted that in fact defendants No. 2 and 3 were liable to pay the misappropriated amount of the society and therefore, for their own benefit they have collusively agreed to the compromise entered upon between the parties which was adverse to the interest of Judgment Debtor/Cooperative Society and its members. Therefore, attachment of the property of Judgment Debtor Society has been opposed. 11. Learned counsel for the Judgment Debtor No. 1 has submitted that property of Judgment Debtor No. 1 has only been attached but has not been sold yet and therefore he is entitled for filing present application under Order 21 Rule 58 CPC. 12. Learned counsel for Judgment Debtor No. 1 has also placed reliance upon Kancherla Lakshminarayana vs. Mattaparthi Syamala and Others, (2008) 14 SCC 258 and Maya Devi vs. Lalta Prasad, (2015) 5 SCC 588 for substantiating his arguments that his application under Order 21 Rule 58 CPC is maintainable on behalf of Judgment Debtor Society and objections so raised in this application are to be adjudicated on merits before proceeding further in the execution petition as all questions raised by the objector/Judgment Debtor No. 1 are to be comprehensively considered on their merits. 13.
13. Learned counsel for the Decree Holder/plaintiff has opposed the contention, advanced on behalf of Judgment Debtor No. 1 Cooperative Society, on the ground that Judgment Debtor No. 1, after passing of compromise decree, has no legal right to file the application under Order 21 Rule 58 CPC to stale the proceedings initiated for recovery of amount agreed by the Judgment Debtors payable by them to the Decree Holder particularly when the said compromise decree has not been assailed further. It is further argued that allegations of collusive suit by the Decree Holder/plaintiff raised by Judgment Debtor No. 1 is also not tenable for the reasons that Judgment Debtor No. 1 was being represented by Nasib Singh, Assistant Manager of Judgment Debtor No. 1 Society, who was duly authorized by the Administrative Board of the said Society and not only this, but also during the pendency of contempt proceedings against the said Nasib Singh, he had placed on record the communication addressed by him to the Chairman/President of Judgment Debtor No. 1 for making the payment to the plaintiff in compliance of compromise decree. Along with this letter Decree Holder has also placed on record the notice dated 18.12.2015 issued by the Assistant Manager Nasib Singh for calling the meeting of Management Committee of Judgment Debtor No. 1 and copy of resolution passed by Judgment Debtor No. 1 Society on 22.12.2015 in a meeting held in pursuance to notice dated 18.12.2015 wherein it was decided on behalf of Judgment Debtor No. 1 to pray for one year further time from the High Court for making the payment of amount in compliance of compromise decree. It is further contended that this application has been filed on behalf of Judgment Debtor No. 1 with only purpose to delay the recovery of amount by Decree Holder/plaintiff and avoid its liability on flimsy grounds. Lastly it is contended that by invoking the provisions of Order 21 Rule 58 CPC Judgment Debtor No. 1 has no right to reopen the case and the Executing Court is bound to execute the decree as it is without any modification therein.
Lastly it is contended that by invoking the provisions of Order 21 Rule 58 CPC Judgment Debtor No. 1 has no right to reopen the case and the Executing Court is bound to execute the decree as it is without any modification therein. To substantiate this plea of Decree Holder, reliance has been placed on Vedic Girls Senior Secondary School, Arya Samaj Mandir, Jhajjar vs. Smt. Rajwanti and Others, (2007) 5 SCC 97 , State of Punjab and Others vs. Krishan Dayal Sharma, (1990) AIR SC 2177 and Land Acquisition Collector, Mohali and Another vs. Surinder Kaur, (2013) 10 SCC 623 . 14. Learned counsel representing Nasib Singh has also strongly opposed the contention put forth by Judgment Debtor No. 1 that the said respondent was conniving with the plaintiff and had agreed to passing of compromise decree in order to avoid his liability and that the said Nasib Singh, being an Assistant Manager, was not competent to represent Judgment Debtor No. 1 Society. It is contended that he was duly authorised by Judgment Debtor No. 1 Society by passing a resolution on 14.6.2010 by Administrative Board of the Society and was directed to contest the suit on behalf of the Society, whereafter he had contested the suit with due diligence to the best of his ability through Advocate engaged by the Society as resolved in resolution dated 14.6.2010. Further it is contended that at the time of conciliation proceedings before learned Mediator the said Nasib Singh was not a party in his individual capacity but was representing Judgment Debtor No. 1 and he has been arrayed as defendant No. 4 on application of plaintiff but no relief was ever claimed in the plaint against him and during the compromise also, Judgment Debtor/defendant No. 1, defendant No. 2 R.K. Saini and defendant No. 3 Manmohan Singh had agreed for payment of decreetal amount by defendants No. 1 to 3 in equal shares on failure of payment of decreetal amount as per compromise decree and Nasib Singh was arrayed as a party as defendant No. 4, only being Assistant Manager of Judgment Debtor No. 1 Cooperative Society, but not in the individual capacity. 15.
15. As already noticed supra, initially suit was filed suing Judgment Debtor No. 1 Cooperative Society as defendant No. 1 through its Chairman Manmohan Singh, who, besides defendant No. 2 R.K. Saini, was also arrayed as defendant No. 3 in individual capacity. After receiving notice in the suit, defendant No. 3 Manmohan Singh had chosen not to contest the suit and for not appearing after due service, he was proceeded ex-parte. As the suit was filed as a summary suit under Order 37 Rules 1 and 2 CPC, defendants No. 1 and 2 had contested the same and had resisted the claim of plaintiff that they are having no defence to contest the suit and ultimately, had succeeded to make out a case for leave to defend the suit and accordingly, leave to defend the suit was granted to defendant No. 1/ Judgment Debtor No. 1 Cooperative Society and defendant No. 2 R.K. Saini by the Court vide order dated 21.3.2011. 16. Defendant No. 3 Manmohan had appeared in Court only after conciliation before learned Mediator with plaintiff and defendants No. 1 and 2 and vide order dated 28.12.2012 he was permitted to join the proceedings at that stage and on that day by making a statement on oath he had accepted the compromise entered before learned Mediator. Not only this, as has been stated in the main execution petition, after passing of compromise decree he has also deposited 1/3rd of the decreetal amount i.e. Rs. 26,66,667/- against his liability under the compromise decree. 17. After service, Judgment Debtor No. 1 Cooperative Society vide resolution dated 14.6.2010, through its Administrative Board had decided to defend the suit through Mr. Nasib Singh Assistant Manager, who in turn had signed his power of attorney on 17.6.2010 and had contested the suit. 18. As per compromise, on failure to make payment of agreed amount by the defendants to the plaintiff, defendant Nos. 1 to 3, i.e. Judgment Debtor No. 1 Cooperative Society, Judgment Debtor No. 2 R.K. Saini and Manmohan Singh (defendant No. 3 in the original suit) had undertaken to pay the said amount in equal shares. Nasib Singh Assistant Manager was added as defendant No. 4 at the later stage but after the settlement of dispute before learned Mediator at the time of filing of joint application by Decree Holder/plaintiff and defendants No. 1 to 3, for passing a compromise decree.
Nasib Singh Assistant Manager was added as defendant No. 4 at the later stage but after the settlement of dispute before learned Mediator at the time of filing of joint application by Decree Holder/plaintiff and defendants No. 1 to 3, for passing a compromise decree. Nasib Singh had signed the same being an authorized person to defend the case on behalf of defendant No. 1 Cooperative Society and at that time he was also not arrayed as defendant No. 4. He had not signed compromise as well as application in his individual capacity. The compromise decree was passed, as prayed by plaintiff and defendants No. 1 to 3 and defendant No. 3 Manmohan Singh has also deposited his share whereas defendants No. 1 and 2 have failed to pay the same. 19. For the non-compliance of undertaking given by defendants, plaintiff has preferred present execution petition for compliance of compromise decree and after filing present petition, plaintiff had also initiated contempt proceedings in COPC No. 1 of 2015 wherein Nashib Singh, who was also arrayed as a contemnor, had filed an application therein for placing on record certain documents along with affidavit. This application, filed by Nasib Singh, has also been placed on record by the Decree Holder/plaintiff, along with its reply to the present objections preferred by Judgment Debtor No. 1. It is evident from these documents that passing of compromise decree on 11.4.2013 was well within the knowledge of defendant No. 1 Cooperative Society through its Management Committee. From perusal of letter dated 18.12.2015 addressed by Nasib Singh to the President of Judgment Debtor No. 1 Society, it is evident that not only passing of compromise decree, was well within the knowledge of the Management Committee of Judgment Debtor No. 1, but filing of present execution petition as well as contempt petition was also in the knowledge of the Management Committee of Judgment Debtor No. 1 as it had been communicated by Nasib Singh to it. Nasib Singh being the Assistant Manager of Judgment Debtor No. 1 had also notified the meeting of Management Committee on 22.12.2015 by issuing notice dated 18.12.2015 and thereafter a meeting of the Management Committee was conducted on 22.12.2015 wherein President Jaswant Singh Vice President Parkash Chand, Jaswant Singh Cashier and six other members of Managing Committee were present.
Nasib Singh being the Assistant Manager of Judgment Debtor No. 1 had also notified the meeting of Management Committee on 22.12.2015 by issuing notice dated 18.12.2015 and thereafter a meeting of the Management Committee was conducted on 22.12.2015 wherein President Jaswant Singh Vice President Parkash Chand, Jaswant Singh Cashier and six other members of Managing Committee were present. From resolution No. 2, passed in the said meeting placed on record with reply of plaintiff, it is evident that entire episode was in the knowledge of the Managing Committee of Judgment Debtor No. 1 and after considering all facts and circumstances, it was resolved by the Managing Committee to seek one year time from the High Court for making the payment in compliance of compromise decree. After 2015 till filing of present objections under Order 21 Rule 58 CPC in April, 2018 there is not even a whisper on the part of Judgment Debtor No. 1 about the competency of Nasib Singh to represent Judgment Debtor No. 1 Cooperative Society in the civil suit. This is for the first time this objection has been raised during the course of arguments and filing a collusive suit for obtaining the decree has been alleged. 20. Definition of Officer under Section 2(11) of H.P. Cooperative Societies Act is inclusive which does not find specific mention of Assistant Manager therein but includes any Officer empowered under the Rules or by-laws to give directions in regard to business of Cooperative Society. Nasib Singh had entered into arena only in compliance of resolution of Administrative Board of the Society. 21. Application of Nasib Singh filed in contempt petitioner and his letter dated 18.12.2015 addressed to the President of Judgment Debtor No. 1, notice dated 18.12.2015 and resolution No. 2 dated 22.12.2015 filed with the said application, placed on record by Decree Holder, have not been rebutted either in pleadings or by placing any document on record. Rather there is positive action on the part of the Society endorsing the validity of act and conduct of Nasib Singh. 22. In the aforesaid facts and circumstances, it is evidently clear that Nasib Singh was duly authorized by the Administrative Board of Judgment Debtor No. 1 to represent it and was competent to defend and enter into the compromise on its behalf. There is no illegality committed by Nasib Singh on this ground. 23.
22. In the aforesaid facts and circumstances, it is evidently clear that Nasib Singh was duly authorized by the Administrative Board of Judgment Debtor No. 1 to represent it and was competent to defend and enter into the compromise on its behalf. There is no illegality committed by Nasib Singh on this ground. 23. So far as connivance of Nasib Singh with plaintiff or allegations of filing of collusive suit is concerned, nothing substantial has been brought to the notice of Court. Otherwise also, this Court is now acting as an Executing Court which is bound to execute the decree as it is, without any modification. Judgment Debtor No. 1, despite having knowledge of passing of compromise decree and representation of Judgment Debtor No. 1 through Nasib Singh, has not chosen to assail the same by filing appropriate proceedings in the competent Court of law. Present objections have been preferred on the affidavit of Yashwant Singh Chairman of Judgment Debtor No. 1. It is worth to notice that at the time of passing resolution No. 2 on 22.12.2015 also Jaswant Singh was President of Judgment Debtor No. 1 Cooperative Society. Even, if it is considered, for want of substantial evidence on record, that present Chairman/President of Judgment Debtor No. 1 Society and the Chairman/ President of Judgment Debtor No. 1 Society at the time of passing of resolution No. 2 on 22.12.2015 are not the same person, then also it does not make any difference as everything was in the knowledge of the Management of Judgment Debtor No. 1. Therefore, plea of in-competency of Nasib Singh to represent Judgment Debtor No. 1 or obtaining compromise decree by him in collusion with plaintiff is not sustainable. 24. Ratio of law as reiterated in State of Punjab vs. Kishan Dayal Sharma, Maya Devi and Vedic Girls Sr. Secondary School (supra) is undisputed wherein it is reiterated that Executing Court cannot act beyond the scope of decree and the Executing Court is required to act within the bounds of decree and it cannot add or alter the decree on its notion of fairness or justice and also principle of law reiterated in Surinder Kaur's case (supra) that at the time of deciding objections, Executing Court does not have jurisdiction to go into legality or correctness of judgment sought to be adjudicated. 25.
25. In present case, there is compromise decree in favour of Decree Holder and against Judgment Debtors/defendants No. 1 to 3 wherein defendants No. 1 to 3 have agreed to pay Rs. 80 lacs as full and final settlement and to indemnify the Decree Holder and undertaken to pay the said amount in equal shares and as per compromise of parties it is also agreed that aforesaid amount shall be repaid by selling the property of Judgment Debtor No. 1 after seeking permission from the Court, but Judgment Debtors have failed to comply with directions contained in compromise decree which led to filing of execution petition. Therefore, at this stage, it cannot be said that property of Judgment Debtor No. 1 cannot be sold for satisfying the decree under execution for recovering the decreetal amount falling in the share of Judgment Debtor No. 1, which was agreed to be paid in compromise on the basis of which decree has been passed. 26. Order 21 Rule 58 CPC provides adjudication of claims or objections by the Court to attachment of property on the ground that such property is not liable to such attachment. In the present case, the Decree Holder/plaintiff has placed on record the details/documents of property owned and possessed by Judgment Debtor No. 1 Cooperative Society which has been ordered to be attached, whereafter present application objecting the said attachment has been filed. The property belongs to Judgment Debtor No. 1, who has suffered the compromise decree wherein he is liable to pay at least 1/3rd of the decreetal amount. The attached property belongs to Judgment Debtor No. 1 and Decree Holder has right to recover the decreetal amount by selling the property belonging to Judgment Debtors. It is not the property of individual member of the Society. Judgment Debtor No. 1 Society is a separate legal entity capable of owning property independent of its members. Property of society is not property of individual. Rather, it is the property of Cooperative Society, no doubt to be utilized for the welfare of members of society, but to satisfy the decree passed against the Society is also legal duty of the Society. Therefore, there is no illegality or irregularity in recovering the amount from Judgment Debtor No. 1 by selling its property.
Rather, it is the property of Cooperative Society, no doubt to be utilized for the welfare of members of society, but to satisfy the decree passed against the Society is also legal duty of the Society. Therefore, there is no illegality or irregularity in recovering the amount from Judgment Debtor No. 1 by selling its property. The ground that said property has been purchased by utilizing the earnings of poor and marginal farmers who are members of society is not legally sustainable in the given facts and circumstances of the case. 27. It is not a case of Judgment Debtor No. 1 that this property belongs to someone else than the Judgment Debtor No. 1. No valid and just reason has been made out for not attaching and selling the property in question owned by Judgment Debtor No. 1. There is no material on record so as to establish that property of Judgment Debtor No. 1, so attached, is having first charge over it in favour of some third party other than the Decree Holder in preference to the right of Decree Holder flowing from the compromise decree. The pre-condition in application under Order 21 Rule 58 CPC is that there must have been attachment of property for execution of decree and claim should have been preferred or the objection should have been made to the attachment on the ground that such property is not liable to such attachment. 28. As noticed supra, though the fact that property has been attached, is existing, however, no ground is made out so as to hold that property in question is not liable to the attachment. 29. In view of above discussion, I find no merits in objections and accordingly, application is dismissed.