Bileshwar Corporation v. Shantinagar Shela Co Operative Housing Society Limited
2022-10-06
NISHA M.THAKORE, SONIA GOKANI
body2022
DigiLaw.ai
JUDGMENT : Sonia Gokani, J. 1. This appeal is preferred by the original plaintiff under Section 96 of the Civil Procedure Code, 1908 whereby, the challenge is made to the judgment and decree dated 06.07.2022 passed by the Principal Senior Civil Judge, Sanand in Special Civil Suit No. 407/2017 in the following factual background. Factual Matrix. 1.1. The respondent society has rights in the suit property being block/survey no. 211 to 216-220, 224-229, 231-234, 235/paiki in all admeasuring 2,20,189 sq. mts. (2,63,349 sq. yards) of Village Shela, Takula Sanand, Ahmedabad. 1.2. By way of an agreement to sale dated 22.12.2006, the respondent – original defendant agreed to sell the suit property to the plaintiff appellant for a sum of Rs. 15,80,08,800/-. As per the Clause 3 of the agreement, the society had agreed to sell the suit property in favour of the appellant on payment of 50% of the sale consideration. In compliance of the said terms, by 24.12.2007, the appellant paid Rs. 11,49,60,600/- which is roughly 75% of the sale consideration. 1.3. It is averred that the society was avoiding the execution of the sale deeds on one or the other pretext, hence, the Memorandum of Understanding (MOU) was executed between the parties, where also the respondent had admitted the execution of agreement to sale. The terms contained therein recognized the fact that the amount of Rs. 11.49 crores (rounded off) was already paid by the appellant. It was also agreed that the appellant would have 75% share in the suit property and one Mr. Ashish Patel, the Chairman of the society would have 25% of the share. The respondent had executed the sale deed in favour of the appellant for survey no. 227 and 228 on 14.09.2007. However, it was later on found that the respondent – society had not cleared the rights of certain persons in the said land which had led to the litigation and the sale transaction was subsequently reversed and the sale deeds were cancelled on 06.05.2011 without any consideration being paid to the appellant. 1.4. The Special Civil Suit No. 272 of 2013 had been preferred before the Senior Civil Judge, Ahmedabad Rural by the appellant plaintiff. It was renumbered as 407 of 2017 in the Court of Principal Senior Civil Judge, Sanand. This was for specific performance, declaration and permanent injunction. An application for injunction below Exh.
1.4. The Special Civil Suit No. 272 of 2013 had been preferred before the Senior Civil Judge, Ahmedabad Rural by the appellant plaintiff. It was renumbered as 407 of 2017 in the Court of Principal Senior Civil Judge, Sanand. This was for specific performance, declaration and permanent injunction. An application for injunction below Exh. 5 also was preferred for interim injunction during the pendency of the suit. The defendant appeared and filed the application below Exh. 15 under Order 7 Rule 11 for rejection of the plaint. The plaintiff appellant filed the reply to the same vide Exh.17. It is also his grievance that no written statement or documentary evidence in support of its case have been filed by the respondent and the respondent continuously remained absent in the suit proceedings. 1.5. In June, 2022, when the appellant came to know that the respondent – society had initiated the transactions to alienate the part of the suit property being Survey Nos. 229, 224, 219, 220, 226 etc. the appellant preferred an application below Exh. 51 praying to decide the interim injunction application for stay. The appellant also filed list of documents below Exh. 50 to include the sale deeds of the said parcels of lands. The complaint by the Directorate of Enforcement before the Special Court under the Prevention of Money Laundering Act, 2002 had been placed into service. It was recorded that though Rs. 11.49 crores was paid by the appellant, the Chairman of the Society Mr. Ashish Patel did not execute the sale deeds in favour of the appellant and laundered the money. The appellant produced the record of Special Civil Suit No. 51 of 2020 preferred by the present respondent society wherein execution of the agreement to sale and MOU although admitted, the respondents have sought cancellation on the ground that society is not able to fulfill the conditions of the agreement. 1.6. It is the say of the plaintiff that the original defendant chose not to remain present in the suit proceedings and hence, it was imperative to decide an application for injunction vide Exh. 5 to protect the suit property. Despite the urgency, the Trial Court vide order dated 22.06.2022 directed to hear application below Exh. 15 preferred under Order 7 Rule 11 of Civil Procedure Code (CPC hereinafter) before the injunction application. The Court allowed Exh.
5 to protect the suit property. Despite the urgency, the Trial Court vide order dated 22.06.2022 directed to hear application below Exh. 15 preferred under Order 7 Rule 11 of Civil Procedure Code (CPC hereinafter) before the injunction application. The Court allowed Exh. 15 vide its order dated 06.07.2020 and dismissed the suit on the ground that notice under Section 167 was not sent to the Registrar of Co-operative Societies prior to the initiation of proceedings as otherwise obligated under the law and hence, the suit is held to be barred by law. By an order dated 06.07.2020, below Exh. 52, the Court granted one month’s time for further action. Prayers : 2. An aggrieved appellant – original plaintiff is before this Court seeking to question and challenge the said order by way of appeal under Section 96 of the CPC where the prayers sought for are as follows: “(A) Your Lordships may be pleased to admit and allow the present appeal; (B) Your Lordships may be pleased to quash and set aside the judgment and order dated 06.07.2022 passed by Principal Senior Civil Judge, Sanand below Exh. 15 in Special Civil Suit No. 407 of 2017 (Old No. Special Civil Suit No. 272 of 2013); (C) Your Lordships may be pleased to grant such other and further relief as may be deemed fit and proper in the facts and circumstances of the case and in the interest of justice.” 3. The main thrust of arguments on the part of the appellant is that the trial Court ought to have considered the fact that that the decree sought for is of specific performance of agreement which can be granted and the same would be governed by the provisions of the CPC, therefore, the provisions of the Cooperative Societies Act are not attracted to the fact of the present case and hence, has committed an error in dismissing the suit relying on Section 167 of the Gujarat Cooperative Societies Act. It is further urged that the Court also has not chosen to appreciate that the Societies registered for sr. no. 305 and the business of the society is restricted to sr no. 305 only. It is not registered for suit property and hence, transaction in the suit was not touching the business of the society.
It is further urged that the Court also has not chosen to appreciate that the Societies registered for sr. no. 305 and the business of the society is restricted to sr no. 305 only. It is not registered for suit property and hence, transaction in the suit was not touching the business of the society. The business of the society is not to sell the land and the respondent also had not stated that the suit transaction is touching the business of the society. The by-laws of the societies and other evidence would be needed for establishing that the business of the society was to sell the land. The Court on a presumption that any transaction, relating to purchase or sale of the land is touching the business of the society, has allowed the application. According to the appellant, no proceeding for winding up of the respondent – society have been initiated and hence, Section 167 has not applied and no notice is required to be given to the Registrar. 4. On issuance of the notice in this appeal, the other side appeared and filed the affidavit-in-reply. Mr. Vikram Desai, working as a Chairman of the respondent society has in compliance of the order of this Court dated 08.08.2022, where the Court directed not to make any change in the status of the suit land and to provide the details of status of these lands as on 08.08.2022 in writing. It is the say of the respondent that survey number wise, in the statement provided to the Court makes it clear that the allotment of land in question is in accordance with its legal commitment since these lands have been allotted to various members of the respondent society from the year 1996 and this fact is well within the knowledge of the appellant. However, for placing on record the details of allotments and sale made to the members of the respondent society on record, Annexture- B is presented for perusal and due consideration. The respondent society, as per this affidavit, has not effected any change in the status of allottees/ members. 5. Affidavit-in-rejoinder by one Mr. Uday Dineshchandra Bhatt, Partner of Bileshwar Corporation, a Registered Partnership Firm contends that Vikram Desai as a chairman of respondent society has filed affidavit, however, his name is not borne out from the list of members.
The respondent society, as per this affidavit, has not effected any change in the status of allottees/ members. 5. Affidavit-in-rejoinder by one Mr. Uday Dineshchandra Bhatt, Partner of Bileshwar Corporation, a Registered Partnership Firm contends that Vikram Desai as a chairman of respondent society has filed affidavit, however, his name is not borne out from the list of members. No plot has been allotted to him by society and thus, he cannot be a chairman. It is further said that the statement is completely vague and self-contradictory. It is further the say of the appellant that the statement that society holds land as per the village form no. 7/12 is meaningless, if the cases of allotment and creation of third-party rights as has been correctly understood by the respondent, then allotment status on suit land is relevant and ownership details of society are meaningless and are also incomplete and without particulars. The status required is the dates when the society became owner of those lands by registered sale deed. The same has not been provided deliberately to suppress that barring block nos. 227 and 228, all other sale deeds are of recent time of the years 2021-2022. 5.1. It is also further the claim of the appellant that the lands in question are allotted to various members of the society since the year 1996 is not true. The society owns the vast area of land other than the suit land and the allotments of other lands is not relevant. The respondent has not produced specific details of allotment of suit land. It is further alleged that Annexure-B is misleading as an attempt is made to create a picture as if allotments are made and possession is given to members, but, number of persons are shown without any basis of title and the list does not indicate survey numbers of referred plots.
It is further alleged that Annexure-B is misleading as an attempt is made to create a picture as if allotments are made and possession is given to members, but, number of persons are shown without any basis of title and the list does not indicate survey numbers of referred plots. Not only that, the allotment appeared to be subject matter of original Special Civil Suit No. 941 of 2011 subsequently transferred to the Sanand Court and renumbered as RCS No. 381 of 2015 which has been preferred by the respondent society and its developer Ashish Patel of Radhe Developers against 145 persons categorically stating that these are proposed allotments, allottees have no rights in land, no payment for land has been made by proposed allottees, and that they are not accepted as members by the society, share certificates are not issued and physical possession remains with the society. 5.2. It is further said that Annexure-B does not reveal the details of sub plots and sale, survey number wise and therefore, it is not possible to believe that the same is the information concerning the suit land. It is alleged that the supplied information deliberately suppresses true picture and also tend to include subplots and sale of other lands of the society which do not form part of the suit land. Some of these allotments have been cancelled by the society with the consent of those persons and that fact also has been suppressed. It is further averred that in Civil Suit No. 941 of 2011 preferred by the society, it shows that the society is not a genuine housing society and is a front and dummy entity created by Mr. Ashish Patel, MD of Radha Developers. The management of society is controlled by Mr. Ashish Patel through persons shown as office bearers like Vikram Desai who are not even members of the society. 6. The affidavit-in-sur-rejoinder and further affidavit in compliance of the orders dated 08.08.2022, 25.08.2022 and 29.08.2022 is by Mr. Vikram Desai for and on behalf of the Shantinagar Co-operative Housing Society Limited – respondent. 6.1. It is his say that nothing has been brought on record with regard to the structure of the firm as on the date of the filing of the affidavit or the competence of the person filing the affidavit.
Vikram Desai for and on behalf of the Shantinagar Co-operative Housing Society Limited – respondent. 6.1. It is his say that nothing has been brought on record with regard to the structure of the firm as on the date of the filing of the affidavit or the competence of the person filing the affidavit. It is clarified that the list, Annexure-B to the affidavit dated 24.08.2022, by him does not pertain nor does it include an exhaustive list of members. It consists of the members in whose favour sale deeds have been executed and the allotment letters have been given, who could claim some right on the land either directly or by payment of the full amount as the society was required to provide the details of the status of the land and not the members. Mr. Desai has stated on oath that he has been a member of the respondent society since 2013 and was appointed as chairman of the respondent society on 15.03.2015, was appointed as a chairman as per the established procedure laid down in the law. 6.2. According to this respondent, the appellant was aware of all the allotments including the superimposed map and was also aware of which allotment falls under which survey number, the respondent society did not produce the same. Appellant strangely claims ignorance only to further digress from the issue on hand, which is a short question of the applicability of Order 7 Rule 11 of the CPC and Section 167 of the Gujarat Co-operative Societies Act, 1965. A detailed version of the status of the lands in question as on date is annexed with the present affidavit. It is submitted that the survey number of the lands in question, a more detailed version of the status as on date, along with the date and month on which the respondent society had withdrawn the civil suit and name of the respondent society entered into the 7*12 forms are given and placed on record. 6.3. It appears that these lands in question have been allotted to various members of the respondent society since the year 1996 and this is said to be well within the knowledge of the appellant.
6.3. It appears that these lands in question have been allotted to various members of the respondent society since the year 1996 and this is said to be well within the knowledge of the appellant. It is the say of the respondent that the Special Civil Suit 941 of 2011 was filed to restrict the defendant – members in the suit from transferring the plots without permission of the respondent society as without making the full and final payment to the respondent, the members were selling the land to the third party and creating confusion and litigation. It is never denied that the list of members listed as defendants are not members of the respondent and they have not paid any amounts to the respondent. It is merely stated that balance payments are due, and they may not create third party rights without making the balance payments. In fact, the stand of the respondent society was categorical that the respondent was duty bound to get the allotment deeds executed in favour of the defendant – members of the suit subject to payment of full consideration towards the allotted plots. Thereafter the respondent society has executed the allotment deeds in favour of the very members in the suit who have paid the complete consideration towards the plot. 6.4. It is further stated that Mr. Uday Bhatt, a partner of the appellant and the deponent of the affidavit has also signed as a witness in two allotment deeds executed in 2011 which highlighted that the person who on behalf of the appellant has filed the affidavit and the appellants were fully aware and directly involved in the allotment of the land to the members of the respondent society and the allotment deeds are executed in favour of the allottees as and when full consideration towards the allotted plot was received. The malafides alleged on the part of the appellant is baseless and according to the respondent, the appellant was well aware that the MOU and the agreement to sell were not to be acted upon or performed which is evident from their active involvement in signing as a witness in two allotment deeds executed by the respondent society.
The malafides alleged on the part of the appellant is baseless and according to the respondent, the appellant was well aware that the MOU and the agreement to sell were not to be acted upon or performed which is evident from their active involvement in signing as a witness in two allotment deeds executed by the respondent society. This also proves that the appellant was aware that the respondent society had floated a scheme in the name of “Radhe Acres” which covered various survey numbers including the survey numbers forming a part of the agreement to sell/MOU and the respondent had made various plottings in the survey numbers and as and when consideration towards the allotted plots was received from the allottees, allotment deeds were executed in their favour. Furthermore, the fact is also borne out from the schedule in the said allotment deeds which proves that “Radhe Acres” is a consolidated scheme which consisted of the survey numbers even forming a part of the agreement to sell. Moreover, the booking letters in favour of Mr. Uday Bhatt disproves the stance of the appellant and substantiates the respondent’s stance that the appellant knew that the MOU and agreement to sell were not to be acted upon before Mr. Uday Bhatt has booked the very same plots that the appellant claimed to be a recipient of in the MOU and yet the appellant went ahead to file suit for specific performance in 2013 indicating their malafides. A sample allotment deed executed in favour of the members of the said suit and the allotment deeds where Mr. Uday Bhatt has signed as a witness, are also brought on the record. 6.5. According to the respondent, Criminal Misc. Application No. 6619 of 2018 was filed by Mr. Uday Bhatt and Mr. Nilesh Bhatt – the partners, who filed the present first appeal, to quash the FIR No. I-05/2018, as they two were aware that the title of lands for which sale deeds were executed was unclear and there was litigation concerning the same. It was categorically agreed upon between the partners of the appellant to cancel the sale deeds for Survey Nos. 227 and 228 and clearly highlighted that rather than having the allotments cancelled, it was agreed that the sale deeds/ MOU/ agreement to sell would be cancelled.
It was categorically agreed upon between the partners of the appellant to cancel the sale deeds for Survey Nos. 227 and 228 and clearly highlighted that rather than having the allotments cancelled, it was agreed that the sale deeds/ MOU/ agreement to sell would be cancelled. It is further the say of the respondent that the alleged PMLA complaint against Mr. Ashish Patel, as argued before this Court, is red herring and a malafile digression from the issue at hands, indicating an oblique motive on the part of the appellants. This case, at best, pertains to the applicability of a notice under Section 167 of the Gujarat Cooperative Societies Act, 1962 and the provisions of Order 7 Rule 11 of the Code of Civil Procedure. However, since the appellant raised the PMLA issue before this Court, it is submitted that the PMLA complaint arose from an FIR filed by a partner of the appellant firm itself where even Mr. Uday Bhatt and Mr. Nilesh Bhatt were accused and they moved Cr.M.A. 6619 of 2018 before this Court. The FIR was ultimately quashed against all accused including Mr. Ashish Patel, Mr. Uday Bhatt and Mr. Nilesh Bhatt by consent. 6.6. In wake of the recent decision of the Apex Court in case of Vijay Madanlal Choudhary vs. Union of India, reported in 2022 SCC OnLine SC 929, it is urged that now it is a settled law that a PMLA complaint cannot stand without the scheduled offence (which has been quashed in this case) and unnecessary proceedings to end the untenable PMLA complaint are being pursued by the accused therein. Moreover, the PMLA complaint is a much subsequent fact that was never a part of the original documents filed by the appellant in the suit for specific performance nor a part of the pleadings for the reasons best known to the appellant. 6.7. It is urged by the respondent that the respondent has always been ready and willing to settle the dispute at hands. The society has filed an application for settlement before the Trial Court in 2018. The respondent is ready to end the dispute. It is well within the knowledge of the appellant that the MOU/Agreement to sell cannot be executed, and therefore, the entire proceedings against the respondent are not maintainable.
The society has filed an application for settlement before the Trial Court in 2018. The respondent is ready to end the dispute. It is well within the knowledge of the appellant that the MOU/Agreement to sell cannot be executed, and therefore, the entire proceedings against the respondent are not maintainable. Yet, in the interest of justice, equity and good conscience, the respondent society and Radhe Developers (India) Limited have submitted before this Court that the developer offers to refund the entire amount paid by the appellant firm along with interest at 12% p.a. till date, since the payment made is of Rs. 11,49,60,600/- in tranches from 22.12.2006 till 29.12.2007, however, the respondent is willing to consider that the entire payment having been received on 22.12.2006 and along with 12% interest, the total amount of Rs. 68 crores as of 31.08.2022, the Developer is ready and willing to offer within a reasonable time. Mrs. Shruti Dobariya, authorized person on behalf of the developer, indicated the willingness on the part of the developer to offer this amount. 7. In response to this affidavit, Mr.Uday Bhatt filed his affidavit reiterating that the respondent society – the original defendant never remained present nor had filed the written statement, therefore, the right was closed. The respondent has now filed the affidavit in essence, which is the reply on merits, making averments for the first time and has produced new documents which are not part of the suit proceedings and has nothing to do with declaring the status of the land, therefore, the same are not permitted to be brought on the record. 7.1. It is further said that the allegations of rift and aspersions regarding competence to file the affidavit are all baseless. The appellant is a registered partnership firm and the suit and pleadings are filed by the firm through a partner named in the partnership deed. It is further said that Shri Vikram Desai is not allotted any plot in society despite which, he claims that he is a chairman and was elected as chairman on 15.03.2015 and therefore is authorized to file pleadings on behalf of the society, is incorrect. It is his say that a person who does not hold a plot in the housing co-operative society, is not eligible to exercise rights of a member including right to vote and contest elections.
It is his say that a person who does not hold a plot in the housing co-operative society, is not eligible to exercise rights of a member including right to vote and contest elections. Even otherwise, as per Section 74(1C) of the Gujarat Co-operative Societies Act, the term of the managing committee is 5 years from the date of election and Section 74(1C)(ii) provides that elected members of the managing committee and its office bearer shall cease to hold the office on the date of expiry of term. Therefore, even if, Mr. Vikram Desai is appointed on 15.03.2015, he would cease to hold the office on 14.04.2020. He is neither eligible to exercise any rights as a member, nor is he the chairman and is not authorized to file the affidavit on behalf of the society and the same may not be taken on record as reply of the society. This establishes that the society is not a genuine Co- Operative Housing Society and is controlled and managed by the builder/ developer through persons not eligible to be members of committee or office bearers. 7.2. It is further their say that statement of one Nilesh Trivedi recorded in ED proceedings wherein he has stated that Mr. Ashish Patel was his friend from school and he had made Nilesh Secretary from 2001 to 2009 and later chairman of the society from 2009 to 2012, however, management of society was looked after by Mr. Ashish Patel. Mr. Nilesh is not holding any plot in society. It is denied that the appellant was aware of all the allotments made by society. Out of 17 survey numbers forming the suit land, till date, society does not have sale deed in its favour for survey nos. 211, 216, 217, 218, 233, 234 and 235 paiki and sale deeds of survey nos. 219, 220, 224, 225, 226, 229, 231 and 232 were executed in favour of the society in 2021 and 2022, despite which it had falsely claimed that the sub-plots on the same are allotted and sold. Many plots in the suit land, according to the appellant as per Annexure-B, have still not been allotted nor sold to any person. In some of the plots, incomplete names of persons are mentioned without detail of title deed.
Many plots in the suit land, according to the appellant as per Annexure-B, have still not been allotted nor sold to any person. In some of the plots, incomplete names of persons are mentioned without detail of title deed. Some plots are shown to be sold to some persons recently other than those who are claimed to be allotted in 1996-2001 and only few plots are shown to have been sold to some of the allottees during the period from the years 1996-2001. The society also cancelled many allotments of 1996-2001 and the said details have not been revealed. The respondent society and its developers are playing fraud and after pocketing the sale consideration in 2006 from the appellants, are now collecting money from third parties and are profiting from the same at the expense of the appellants and such other persons. 7.3. It is further their say that the society itself has filed Civil Suit No. 941 of 2011 stating that the allotments of 1996-2001 were provisional allotment and land contribution was not paid and therefore, such persons are not entitled to any rights on the plot. That being the case, the society cannot now take a contrary stand that society is duty bound to execute allotment deeds to such persons on payment of money, more particularly, when society in 2006 had agreed to sell the land to the appellant and has pocketed total sale consideration. It is denied that allotment deeds were executed for the sub-plots by the society before the filing of the suit no. 272 of 2013 by the appellant. The same may be true for sub-plots in lands of the society other than suit in survey nos. 227 and 228 with which the appellant is not concerned. 7.4. It is further urged that Mr. Uday Bhatt has signed as witness in allotment deeds for sub-plot nos. 15 and 17 which are part of survey nos. 212, 221 and 222 which do not form part of suit land and therefore, has no bearing to the dispute and on that basis, no inference can be drawn that appellant knew that agreement to sell and MOU were not to be acted upon or performed. So far as allotment deed of sub-plot no. 103 is concerned, the same had not been signed by Mr, Uday Bhatt as witness or in any other capacity. Many other aspects have been disputed.
So far as allotment deed of sub-plot no. 103 is concerned, the same had not been signed by Mr, Uday Bhatt as witness or in any other capacity. Many other aspects have been disputed. The PMLA proceedings also, according to the appellant, is not part of the suit proceedings and position as canvassed by the respondent regarding PMLA proceedings, according to the appellant, have been misconceived. The society whose money is laundered by Mr. Ashish Patel is trying to canvass that the PMLA complaint does not stand. It further fortifies the fact that the co-operative society is a dummy society created, managed and controlled by Mr.Ashish Patel and therefore, Section 167 and requirement of notice under the same is not applicable. 7.5. It is further said that the respondent society and developer has made numerous promises for settlement from time to time since 2014 and has never honored the same. Recently, in the year 2016, it had agreed to give 1,50,000 sq. yards of land towards settlement. Not an inch of land was given under the pretext that the original landowners were not ready to execute the sale deeds. Thereafter, in 2020, it had agreed to pay a sum of Rs. 360 crores. Not a single penny was paid. On the contrary, from the list produced at Annexure-B it transpires that during the said period, attempts have been made by the society and developer to create third party rights in the suit land. Now the offer which is made by the developer and not the respondent society to pay Rs. 68 crores, this shows that the offer is not bona-fide and is merely an eye wash. The society has recently got a sale deed in its favour for some of the suit lands and most of it is unsold, but, it has no intention to perform its part of the agreement to sell. 8. The further affidavit-in-sur-rejoinder to the affidavit-in-rejoinder denies all allegations and reiterates all contentions. 9. This Court has heard extensively learned senior advocate Mr. Mihir Joshi appearing with learned advocate Mr. Saurabh Amin and assisted by learned advocate Mr. Jigar Raval and learned Advocates Mr. Bhadrish Raju assisted by learned advocate, Mr.Dhanesh Patel. The rival submissions of the parties do not require any reiteration as the same are along the line of pleadings. Bar Under the Law and Order VII rule 11 CPC: 10.
Mihir Joshi appearing with learned advocate Mr. Saurabh Amin and assisted by learned advocate Mr. Jigar Raval and learned Advocates Mr. Bhadrish Raju assisted by learned advocate, Mr.Dhanesh Patel. The rival submissions of the parties do not require any reiteration as the same are along the line of pleadings. Bar Under the Law and Order VII rule 11 CPC: 10. The short question that requires the attention of the Court is as to whether, it is a matter which can be disposed under Order 7 Rule 11 of CPC on the ground that the notice to the Co-operative under Section 167 of the Co-operative Societies Act had not been issued and this legal bar would result in the suit to have failed eventually necessitating the action on the part of the trial court under Order 7 Rule 11 of the CPC. 11. The provision of Order 7 Rule 11 of the CPC would be required to be reproduced at this stage: “11. Rejection of plaint.
11. The provision of Order 7 Rule 11 of the CPC would be required to be reproduced at this stage: “11. Rejection of plaint. The plaint shall be rejected in the following cases- (a) where it does not disclose a cause of action; (b) where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so; (c) where the relief claimed is properly valued, but the plaint is returned upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp-paper within a time to be fixed by the Court, fails to do so; (d) where the suit appears from the statement in the plaint to be barred by any law: Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not be extended unless the Court, for reasons to be recorded, is satisfied that the plaintiff was prevented by any cause of an exceptional nature form correcting the valuation or supplying the requisite stamp-paper, as the case may be, within the time fixed by the Court and that refusal to extend such time would cause grave injustice to the plaintiff.” 11.1 It is quite clear from this provision that the plaint shall be rejected where it does not disclose the cause of action, where the relief is undervalued and plaintiff on being required by the Court to correct the valuation within a time fixed also has not so done it. Where the relief claimed is properly valued but the claim is written upon a paper insufficiently stamped and plaintiff on being required by the Court to supply a requisite stamp paper, if has failed to so do it or where the suit appears from the statement of plaint to be barred by law, or where it is not filed in duplicate or where the plaintiff needs to comply with the provision of Rule 9.
However, in the case of correction of the valuation or supplying of the requisite stamp papers, if the Court is satisfied for the reasons recorded that the plaintiff was prevented by any cause of exceptional nature from correcting the valuation or supply of requisite stamp papers within the time limit and refusal to extend the time would cause the injustice to the plaintiff, the Court, has powers to so do it. This provision Order 7 Rule 11 of CPC shall need to be looked into for deciding an application and the relevant facts are to be gathered from the averments made in the plaint and the documents relied upon by the plaintiff and never on the strength of the defense put forth. At any stage of the suit, these powers can be exercised i.e. before registering the plaint or after issuing the summons to the defendant before the conclusion of the trial. What is germane are the averments in the plaint and the defendant’s written statement is wholly irrelevant. There shall not be any insistence for even written statements to be filed. After affording an opportunity of being heard to the parties the application under Order 7 Rule 11 requires to be decided in accordance with law. 12. Before we advert to the various precedents, it would be worthwhile to reproduce the decision of T. Arvindandam (supra) where the hon’ble Supreme Court emphasized the approach of Courts to take a firm stand where it finds that the litigation is covered under this provisions and the entire matter does not require the trial. 11.1 Taking firstly, the decision of T. Arivandandam vs T. V. Satyapal & Another [ AIR 1977 SC 2421 ], where the Apex Court has laid down succinctly the law on this issue which guides all courts all these years. Apt would be to reproduce the relevant observations, as under : "If on a meaningful-not formal-reading of the plaint it is manifestly vexatious, and merit-less, in the sense of not disclosing a clear right to sue, he should exercise his power under O. VII, R. 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled.
Apt would be to reproduce the relevant observations, as under : "If on a meaningful-not formal-reading of the plaint it is manifestly vexatious, and merit-less, in the sense of not disclosing a clear right to sue, he should exercise his power under O. VII, R. 11, C.P.C. taking care to see that the ground mentioned therein is fulfilled. And, if clear (clever) drafting has created the illusion of a cause of action, nip it in the bud at the first hearing by examining the party searchingly under Order X, C.P.C." The observations of their Lordships in the aforesaid case clearly brings out the scope of the provisions of Clause (1) of Order VII, Rule 11, C.P.C. and the question as to whether the plaint discloses a clear right to sue or not must be decided on the basis of the substance of the allegations made in the plaint or by examining the plaintiff under Order X, C.P.C. The Court should not be led away merely by the manner or form in which the plaint is drafted and it should bestow its attention to the substance of the allegations made therein and it is on this account that their Lordships of the Supreme Court observed that there should be meaningful and not a formal reading of the plaint. 12.1 Apt would be to look into be to refer to some of the decisions relied on by both the sides on the issue where the basic principles continue to govern the fate of every matter decided under order 7 Rule 11 of the CPC. 12.2 The decision of the Apex Court in case of Saleem Bhai and Others vs. State of Maharashtra and Others [ (2003) 1 SCC 557 ] and plethora of other decisions on this issue reiterate as to what are the germane facts for deciding the application under Order 7 Rule 11, to say with one voice that the averments in the plaint are important and not the pleas taken in the written statement. Any direction on the part of the Trial Court to file the written statement without deciding an application under Order 7 Rule 11 is bad in law. Again, the exercise of the powers under this order can be at any stage of the suit before the conclusion of the trial.
Any direction on the part of the Trial Court to file the written statement without deciding an application under Order 7 Rule 11 is bad in law. Again, the exercise of the powers under this order can be at any stage of the suit before the conclusion of the trial. There shall not be any requirement of further elaboration of this aspect nor citing more decisions on the subject. Notice under section 167 and law on the act touching the business of society 12.3. What is very vital for the instant case is that the trial court on the ground of non issuance of prior notice under Section 167 of the provision of Gujarat Co-operative Societies Act has barred the continuity of the proceedings which provides thus:- “167. Notice necessary in suits:- Save as otherwise provided in this Act, no suit shall be instituted against a society, or any of its officers, in respect of any act touching the business of the society, until the expiration of two months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plant shall contain a statement that such notice has been so delivered or left.” 12.4. The Courts have interpreted the provision of Section 167 of the Co-operative Societies Act time and again. The first decision which deserves the consideration is of Patel Meghjibhai Vithabhai vs. Khetivadi Utpadan Bazar Samiti, Upleta [ 1995(2) GLR 1497 ], where the order was passed by the learned Civil Judge, Upleta below Exh. 15 in Regular Civil Suit rejecting the plaint of the petitioner and the same was challenged under the revision application under Section 115 of the CPC. An application was made by the defendant that the plaint should be rejected under Order 7 Rule 11 (d) since the same was barred by Section 58 of the Gujarat Agricultural Produce Market Act, 1963. After hearing the parties by the order which was impugned before the Court, the learned trial Judge accepted the application and rejected the plaint and therefore, the petitioner – original plaintiff had approached the Court questioning the correctness of the impugned order.
After hearing the parties by the order which was impugned before the Court, the learned trial Judge accepted the application and rejected the plaint and therefore, the petitioner – original plaintiff had approached the Court questioning the correctness of the impugned order. This Court interfered with the order in the revisional jurisdiction by holding that the respondent had made an application contending that the cognizance of the suit was barred under Section 58 of the Act for want of the required statutory notice. The want of notice can be a ground for the defense to the suit, but in order to press the ground into service, the defendant was required to file his written statement taking such a defense in black and white. It could have prayed to the Court according to the revisional Court for framing a preliminary issue by making a necessary application under Order 14 Rule 2 of the Code. Such an application on the part of the respondent was considered as misconceived and this Court held that the Court had no jurisdiction to entertain such misconceived application. 12.5. In yet another decision, this Court in case of Emrald Co-operative Housing Societies Limited vs. Gulamkadar s/o Gulam Husain Abdulkadar And Bai Shakarbu Decd. [ (2019) 2 GLH 559 ], in a group of civil revision applications was considering the order passed under Order 7 Rule 11(d) of CPC whereby the respective suits were rejected, the common question of fact and law arose in the group of matters and this Court decided the same by a common order. While dealing with the question of law, the Court considered the provision of Order 7 Rule 11 in reference to Section 167 of the Co-operative Societies Act. The ban of Section 167 of the Co-operative Societies Act was much pressed into service to urge that the words “touching to the business of the society” are clearly spelt out by the series of decisions and the Court held that if it is a case which challenges the sale deed, and is having even any indirect effect on touching the business of the petitioner society, there would arise a necessity of giving statutory notice under Section 167 of the Co-operative Societies Act. “29.
“29. The next limb of the submission is related to section 167 of the Gujarat Cooperative Societies Act, which would be touching to the maintainability of the suit itself and to test such submission, the words "touching to the business of society" are to be understood in the context of its reliability to the extent of present petitioner society, which would reflect that present society is registered as a Cooperative Housing Society established with an object of providing housing accommodation as the name is reflecting. So, as a set up of society, main object is to purchase the land for housing, which tantamount to be the business of the society itself and as such, the petitioner being a housing society and the suit is filed for the purpose of setting aside the transaction about purchase of the land, the same would definitely be touching the main object of the society. Since the cause of action of assailing the sale transaction is directly relating to the purchase of the land of the petitioner society, which is a housing society, the common parlance of the word 'touching' connotes a 'concern'. Therefore, the challenge to the very transaction of the land purchased by the petitioner housing society is concerning the main object of the society and as such also, a statutory provision contained under section 167 of the Cooperative Societies Act has a role to play. This pre- requisite and a condition precedent before filing the suit against the Cooperative Housing Society, therefore, appear to have not been complied with. The clear reading of provisions of section 167 in the context of housing society definitely need not be much amplified since the suit has a direct bearing with the main object of the society.” The Court held that non-compliance of Section 167 cannot be ignored. The suit against the co-operative housing society in respect of the business of the society, if no statutory notice was given under Section 167 to the Society prior to filing of the suit, the plaint is liable to be rejected. 12.6. This Court in case of Bank of India vs. H.C.Raval [First Appeal No. 3396/2014, decided on 24.09.2018], was considering the challenge to the judgment and decree passed in a suit instituted with a prayer to declare that recovery certificate issued by Registrar, Board of Nominees as null and void.
12.6. This Court in case of Bank of India vs. H.C.Raval [First Appeal No. 3396/2014, decided on 24.09.2018], was considering the challenge to the judgment and decree passed in a suit instituted with a prayer to declare that recovery certificate issued by Registrar, Board of Nominees as null and void. In the matter before the Court, the plaint had been rejected on two counts. Firstly, with regard to the failure to issue statutory notice under Section 167 of the Gujarat Cooperative Societies Act and secondly, for want of jurisdiction of the Court to try the suit when Section 166 of the Gujarat Co-operative Societies Act is in picture. 12.7 The learned Single Judge had an occasion to consider the question of bar of jurisdiction of the Court under Section 166 of the Co-operative Societies Act and the necessity of issuance of notice under Section 167. The court had extensively considered the law on the subject and also considered Section 80 of the Code of Civil Procedure which specifically speaks of a notice mentioned therein as a condition precedent from filing of the suit of the nature indicated therein and the requirement of compliance of issuance of notice under Section 167 as a condition precedent for filing of suit as a mandate of law. To hold that in order to appreciate as to whether a statutory notice under Section 167 of the Act is required or not, the facts of each case are required to be examined first with a view to decide whether the dispute or impugned action is relatable or attributable to the main object of the society or touching its business. The Court further held that it cannot be contended that all the disputes or all actions in a suit against the society registered under the Act would be pertaining to the business of the society. What is the nature of the dispute and the scope of controversy in each case should be examined for considering as to whether the same touches its business.
What is the nature of the dispute and the scope of controversy in each case should be examined for considering as to whether the same touches its business. “22 The pith and core of the concept of interpretation of pleading in all the precedents have been discharged in the background of the fundamentals in the relevant provisions of the C.P.C. Rules 2, 6, 8, 9 and 10 of Order VI mandatorily imposes on the parties as to what they are bound to state, and all other facts or particulars to be stated are either desirable or useful to settle the issues and to try them to render proper decision. It is Rule 2 of Order VI of the Code of Civil Procedure which mandates that every pleading shall contain and contain only a statement in concise form of material facts on which the party pleading relies for his claim or defence, as the case may be, but not the evidence by which they are to be proved. Rule 6 of Order VI contemplates the condition precedent to plead the performance of such a condition precedent etc., etc., to be complied with in the nature of the case. Similarly Rule 8 of Order VI mandates that where there is a plea of contract, it must be specifically denied by the opposite party. According to Rule 10 of Order VI, the plea of malice, fraudulent intention, knowledge or condition of the mind etc., are mandatorily to be stated. Wherever, a notice is mandatory, there must be a specific plea in the plaint according to Rule 11 of Order VI. There is no other mandatory requirement in regard to the pleas or defence in the pleading. They may depend upon the facts and circumstances of each case, wherein the Court may give directions to the parties to supplement the pleadings to render full and effective justice. That is why Order VI, Rule 17 of the Code of Civil Procedure empowers the Court to amend the pleading even without the parties desiring or initiating. A simple and bare reading of the entire Order VI of the Code of Civil Procedure shows that the pleas like adverse possession, easement etc., need not be specifically pleaded.
That is why Order VI, Rule 17 of the Code of Civil Procedure empowers the Court to amend the pleading even without the parties desiring or initiating. A simple and bare reading of the entire Order VI of the Code of Civil Procedure shows that the pleas like adverse possession, easement etc., need not be specifically pleaded. It is also to be made very clear in view of Rule 2 of Order VI and other rules supra of the Code of Civil Procedure that the parties will bring all the necessary facts on record which generates law either in pure and simple manner or mixed questions of law and facts. It is for the Courts to evolve such generated results. Possibly the parties and the learned Advocates representing them will assist the Court in doing that. 23. In order to appreciate as to whether a statutory notice under Section 167 of the Act is required or not, the facts of each case are required to be examined first with a view to decide whether the dispute or the impugned action is relatable or attributable to the main object of the society or touching its business. It is true that it cannot be contended that all the disputes or all actions in a suit against the defendant / society registered under the Act, would be pertaining to the business of the society. What is the nature of the dispute and what is the scope of controversy in each case should be examined or touching its business. The express “touching” in Section 167 of the Act would mean, “concerning”. There is no doubt in my mind that the dispute in the present case is one relating to the business of the society. The express “business” would be interpreted to mean the “actual trading or commercial or other similar business activity” of the society which the society is authorised to enter into in accordance with the rules and its byelaws. The Supreme Court in the case of Cooperative Central Bank Ltd. vs. Additional Industrial Tribunal, A.P., Hyderabad reported in AIR 1970 SC 245 , also observed that "any dispute touching the business of the society is limited to dispute directly relating to actual trading or commercial activities of a society".
The Supreme Court in the case of Cooperative Central Bank Ltd. vs. Additional Industrial Tribunal, A.P., Hyderabad reported in AIR 1970 SC 245 , also observed that "any dispute touching the business of the society is limited to dispute directly relating to actual trading or commercial activities of a society". The observation of the Supreme Court in that case would go to show that the Court is required to ascertain from the facts of each case as to whether or not the dispute or impugned action between the members or non-members on one side and the registered cooperative society on the other side, is touching its business, in the light of the facts of each case, keeping in view the main object emerging from the byelaws of the society and the main business carried on by the society. 24. In the aforesaid context, a reference deserves to be made to the Division Bench ruling of this Court in the case of M.G. Patel and Co. v. Alka Coop. Society reported in 1980 (2) XXI (2) GLR 498. It appears that in that case a suit against a Cooperative Society was filed without serving the statutory notice as required under Section 167 of the Act. The fatality of the suit on account of such omission was sought to be resisted on the ground that the act complained of was not "touching the business of the society". In that context, this Court has held : “The business of the society, as could be gathered from the Certificate of Registration, Ex. 107, was to construct buildings on Cooperative basis, to purchase lands, to sell lands, to hire lands, to develop lands end to prosecute, other objects, which would ultimately ameliorate the physical, education and cultural wellbeing of its members. The purchase of land is one of the main objects of the society. Any cause of action that has got a direct bearing with the purchase of land has to be said as touching the business of the society. The word 'touching" from its common sense connotation is suggestive of concerning'. The plaintiffs claim for the unpaid amount of consideration is directly rooted in the defendant-society's purchase of land. The question of payment of consideration arose because the society was out to purchase the land in prosecution of its objects.
The word 'touching" from its common sense connotation is suggestive of concerning'. The plaintiffs claim for the unpaid amount of consideration is directly rooted in the defendant-society's purchase of land. The question of payment of consideration arose because the society was out to purchase the land in prosecution of its objects. So the question of consideration, its payment or non-payment, is invariably associated with the purchase of land by this defendant-society. In our view, therefore, it is too spacious a plea to be urged that the present subject-matter of the suit is not touching the business of the society. It vitally concerns itself with the business of the society as we are almost compelled to hold, despite our dislike for the rejection of an otherwise tenable claim only on a technical plea.” 25. In this connection, a reference again deserves to be made to the aforesaid Division Bench ruling of this Court in the case of M.G. Patel & Co. (supra). Therein is dealt with the paramount idea underlying the provisions of Section 167 of the Act. It is held: “The paramount idea underlying the provisions of Section 167 of the Act is to pointedly bring to the notice of the Registrar, a public functionary, that he is under a legal duty to see that a litigation between a Cooperative Society on one hand and a private party on the other hand is averted as far as possible by exercise of his supervisory powers. Unless his pointed attention is drawn to this duty of his by means of a notice, which would clearly purport to be one under Section 167 of the Act, though it may not specifically bear that label, he will not be prompted or inspired to invoke his supervisory jurisdiction and intervene to arrest the future filing of the litigation. If no notice is served as required under Section 167 of the Act, the paramount object underlying it will be frustrated. Even at the cost of repetition, the paramount object underlying it is to see that the society is not unnecessarily dragged to a Court of law in a matter touching its business. In that context of the matter, the expression “touching the business of the society” has received interpretation from this Court in its aforesaid Division Bench ruling in the case of M.G. Patel & Co. (supra).
In that context of the matter, the expression “touching the business of the society” has received interpretation from this Court in its aforesaid Division Bench ruling in the case of M.G. Patel & Co. (supra). This Division Bench ruling of this Court is binding to me sitting as a single Judge. In my humble opinion, it provides a complete answer to the submission urged before the by Mr. Trivedi, for the appellant in support of this appeal. ” It is thus clearly held that if no notice is served under Section 167 of the Act, the paramount object underlying would be frustrated. It is unequivocally held that the object of the said provision is that the society is not unnecessarily dragged in to the Court of law in a matter touching its business. 12.8 The expression “touching the business of the society” has received interpretation in the case of M.G. Patel & Co. (supra) where the Court is categorical that litigation of the cooperative society on one hand and a private party on the other hand is averted and it is a duty of the Registrar, a public functionary to so do it as far as possible by exercise of his supervisory powers and his pointed attention is drawn to this duty of his by means of a notice, which would clearly purport to be one under Section 167 of the Act, though it may not specifically bear that label, he will not be prompted or inspired to invoke his supervisory jurisdiction and intervene to arrest the future filing of the litigation. 12.9 The Court also considered that the objection about the maintainability of the suit for want of notice was taken at the initial stage and the plaint did not disclose that notice had been served in accordance with law. Therefore, it held that the trial Court ought not to have embarked upon the trial of all the issues involved but ought to have proceeded to to reject the plaint under Order 7, Rule 11(d) of the Code of Civil Procedure.
Therefore, it held that the trial Court ought not to have embarked upon the trial of all the issues involved but ought to have proceeded to to reject the plaint under Order 7, Rule 11(d) of the Code of Civil Procedure. The Supreme Court in case of Gangappa Gurupandappa Gugwad vs. Rachawwa, AIR 1971 SC 442 , has held in para 10 of its judgment as under:- "No doubt it would be open to a Court not to decide all the issues which may arise on the pleadings before it if it finds that the plaint on the face of it is barred by any law. If for instance the plaintiff's cause of action is against a Government and the plaint does not show that notice under S. 80 of the Code of Civil Procedure claiming relief was served in terms of the said Section it would be the duty of the Court to reject the plaint recording an order to that effect with reasons for the order. In such a case, the Court should not embark upon a trial of all the issues involved and such rejection would not preclude the plaintiff from presenting a fresh plaint in respect of the same cause of action. But, where the plaint on the face of it does not show that any relief envisaged by S. 80 of the Code is being claimed, it would be the duty of the Court to go into all the issues which may arise on the pleadings including the question as to whether notice under S. 80 was necessary. If the Court decides the various issues raised on the pleadings, it is difficult to see why the adjudication of the rights of the parties, apart from the question as to the applicability of S. 80 of the Code and absence of notice thereunder should not operate as res judicata in a subsequent suit where the identical question arise for determination between the same parties." 12.10. The decision of Shankarbag Co-operative Housing Society Ltd. vs. Kumari Sarojben Maganbhai and another, reported in [ AIR 1991 GUJ 147 ], was also considering the question whether a notice under Section 167 of the Gujarat Co-operative Societies Act is mandatory.
The decision of Shankarbag Co-operative Housing Society Ltd. vs. Kumari Sarojben Maganbhai and another, reported in [ AIR 1991 GUJ 147 ], was also considering the question whether a notice under Section 167 of the Gujarat Co-operative Societies Act is mandatory. The Court held that the statutory notice under Section 167 of the Act is required only if the suit is in respect of any act touching the business of the society. Whether the suit transaction was an act, touching the business of the society is to be considered depending upon the facts of the case. Whether the impugned act or the suit dispute pertains to the business of the society can be judged in the light of the facts of a given case and if the Court comes to the conclusion that the impugned action or a dispute is referable to or attributable to the business of the society, then the statutory notice under Section 167 of the Act is a must. “12. The provisions of Section 167 may be considered at this stage. Statutory notice under Section 167 of the Act is required only if the suit is in respect of any act touching the business of the society. Whether the suit transaction was an act, touching the business of the society in all the three appeals is considered by the trial Court and it is held that the suit transactions in all the three matters were not in respect of any act of touching the business of the society. The trial Court has found that defendants have not led any evidence to show that the suit dispute was one in respect of act touching the business of the society. This finding of fact has remained unassailable. It is an admitted fact that the suits were filed by the plaintiffs for the recovery of amounts deposited with the defend ant-society. Whether the suit transaction or the dispute in the suit is an act touching the business of the society depends upon the facts of the case. Whether the impugned act or the suit dispute pertains to the business of the society can be judged in the light of the facts of a given case. If the Court comes to the conclusion that the impugned action or a dispute is touching the business of the society, then the statutory notice under Section 167 of the Act is a must.
If the Court comes to the conclusion that the impugned action or a dispute is touching the business of the society, then the statutory notice under Section 167 of the Act is a must. 13. No suits shall be instituted against the society or any one of its officers in respect of any act touching the business of the society until the expiry of two months next after notice in writing has been delivered to Registrar or left at his office stating the cause of action, the name, description and place of residence of the plaintiff and the relief which is claimed in the suit. It is also necessary that the plaint shall contain a statement that such notice has been also given as provided under Section 167 of the Act. Therefore, no suit shall be maintainable without statutory notice under Section 167 of the Act in respect of any dispute touching the business of the society. Therefore, it is required to be considered as to whether in the present case the suit disputes or the suit transactions were in any way referable to or attributable to the business of the society. The defendant-society raised this contention in the written statement. Defend ant-society has not examined any witness. No documentary evidence is produced by the defend ant-society in support of this contention. Therefore, the findings of the trial Court that the defendants have failed to show that the suit dispute was one in respect of an act touching the business of the society is fully justified. **** 17. In order to appreciate as to whether a statutory notice under Section 167 of the Act is required or not, the facts of each case are required to be examined first with a view to decide whether the dispute or the impugned action is relatable or attributable to the main object of the society or touching its business. It cannot be contended that all disputes or all actions in a suit against the defend ant-society registered under the Act would be pertaining to business of the society. What is the nature of dispute and what is the scope of controversy in each case has to be examined so as to consider whether it relates to the main object of the society or touching its business. The expression "touching" in Section 167 of the Act would mean, "concerning".
What is the nature of dispute and what is the scope of controversy in each case has to be examined so as to consider whether it relates to the main object of the society or touching its business. The expression "touching" in Section 167 of the Act would mean, "concerning". If the question is regarding dispute between the member of the co-operative bank and the registered society essential with main object of it cannot be said to be a dispute pertaining to the business of the society. The expression "business" could be interpreted to mean the "actual trading or commercial or other similar business activity" of the society which the society is authorised to enter into under the rules and its bye-laws. Learned counsel for the plaintiffs has placed reliance on a decision of the Supreme Court in the case of U. P. Co-operative Union Federation Limited v. Liladhar, reported in AIR 1981 SC 152 . Therein the dispute had arisen out of disciplinary proceedings taken against an employee by the society. The disciplinary proceedings terminated into dismissal of the employee working as a go down-keeper of the society. The Supreme Court was pleased to hold that such a dispute couldn't be said to be a dispute touching the business of the society. Similarly, the Supreme Court, in the case of Gujarat State Co-operative Land Development Bank Limited v. P. R. Mankad, reported in 20 Guj LR 701: ( AIR 1979 SC 1203 ), had an occasion to interpret expression "any dispute touching the business of the society". The Supreme Court in the case of Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, A. P., Hyderabad, reported in AIR 1970 SC 245 , also observed that "any dispute touching the business of the society is limited to dispute directly relating to actual trading or commercial activities of a society". The observation of the Supreme Court in that case would go to show that the Court is required to ascertain from the facts of each case as to whether or not the dispute or impugned action between the members or non-members on one side and the registered co-operative society on the other side, is touching its business, in the light of the facts of each case, keeping in view the main object emerging from the byelaws of the society and the main business carried on by the society.
It was held in that case that the dispute between an employee and the registered society with regard to the conditions of services couldn't be said to be a dispute referable to the main object or the business of the society.” 12.11. In case of Vimal Co-operative Housing Society Limited vs. Rajendrakumar Shankerbhai Bhagiya, reported in [ (2003) 2 GLH 58 ], the Revision Application was preferred against an order passed by learned Civil Judge where the Court had considered the factum of non-compliance of Section 167 of the Gujarat Co-operative Housing Societies Act. The Court was confronted a question whether referring to the statement made in the plaint would make the absolute bar envisaged by Section 167 operated in the case before it. For scrutinizing the contention, the Court examined two vital facts, the statement made in the plaint and secondly what is touching to the business of the society. To hold that the expression "touching" mentioned in Section 167 of the Gujarat Cooperative Societies Act would mean "concerning". The expression "business" mentioned in the said Section could be interpreted to mean the "actual trading or commercial or other similar business activity" of the society and this is with reference to the object of the society and the society through by-laws is authorized to enter into such activity. In the matter before this Court, the statement made in the plaint disclosed allegations on society to the extent of encroachment and fabrication of Public Record. This Court held that any Court will need to, in such circumstances, to ascertain facts of the case in this regard which would mean that by mere statements made in the plaint, a Court would not be in a position to come to the conclusion as to whether dispute raised is "touching to the business" of the society and the trial Court, therefore, had rightly rejected the application of rejection of plaint under Order 7 Rule 11 (d). Therefore, the revision application was not entertained. Relevant findings and observations deserve reference here: “32. To scrutinize the contention and the issues raised, the two very important facts are - (i) statement made in the plaint, and (ii) what is "touching to the business of the society", in the present case.
Therefore, the revision application was not entertained. Relevant findings and observations deserve reference here: “32. To scrutinize the contention and the issues raised, the two very important facts are - (i) statement made in the plaint, and (ii) what is "touching to the business of the society", in the present case. For the reference, it may be said that if the plaint is read as a whole and cannot be read otherwise the statements have been made that the plaintiff became member of the society in 1980, and was allotted Plot Nos. 71 and 72 admeasuring about 10,000 sq. feet land. The plaintiff has also stated that now the said plot belongs to his ownership. For this statement, the plaintiff relied upon certain documentary evidence. A statement is also made in the plaint that he obtained permission from the competent authorities to construct upon the plot, but he could not do that. On one fine day, he came to know that society was constructing a temple in his plot. When he met the President and Secretary of the Society, he was not satisfied. According to the further statement in the plaint he checked and verified the revenue record and found that without his knowledge and without, giving him an opportunity of being heard, his plot admeasuring 10,000 sq. feet was sliced in the revenue record and about 3,000 sq. feet of land was mutated in the name of defendant No. 6 out of the plot admeasuring 10,000 sq. feet allotted to the plaintiff. Since the plaintiff could not get the explanation to that entry, he filed the suit. Now with respect to his statement in the plaint, it is required to be borne in mind what is the touching to the business of the society. What is stated in the plaint is encroachment by the society on the plot allotted to a member. So, the plaint does not disclose a statement of mere allotment of plot but discloses encroachment by the society and allegation about the fabrication of the records for which the plaintiff has also filed a criminal complaint. Whether this statement made in the plaint amounts to the touching to the business of the society is a prime issue. 33. The expression "touching" mentioned in Section 167 of the Gujarat Cooperative Societies Act would mean "concerning".
Whether this statement made in the plaint amounts to the touching to the business of the society is a prime issue. 33. The expression "touching" mentioned in Section 167 of the Gujarat Cooperative Societies Act would mean "concerning". The expression "business" mentioned in the said Section could be interpreted to mean the "actual trading or commercial or other similar business activity" of the society. This is with reference to the object of the society and the society through by-laws is authorised to enter into such activity. In the matter of Co-operative Central Bank Ltd. and Ors. v. Additional Industrial Tribunal, A.P., Hyderabad, as reported in AIR 1970 SC 245 . The Apex Court had occasion to deal with the issue. It is clear from the above decision of the Apex Court that the Court is required to ascertain from the facts of each case as to whether or not the dispute raised is "touching to the business" of the society in the light of the facts of each case. The main object and authorization of society to entertain certain activity will have to be kept in mind. Therefore, whether a dispute is "touching to the business of society" is mixed question of law and fact. At times by mere statement made in the plaint, Court may come to the conclusion that dispute is covered by Section 167 of the Gujarat Co-operative Societies Act, 1961. When Court comes to this conclusion, from the statements of plaint, then the stage of rejection of plaint is provided by Order 7 Rule 11(D) of the Civil Procedure Code. But, if the Court has to ascertain the facts of the case in respect of the statement made in the plaint, then Order 7 Rule 11(D) of the Civil Procedure Code is not the proper stage to reject the plaint. 34. In the present case, as stated above, the statement made in the plaint discloses allegations on society to the extent of encroachment and fabrication of Public Record. Undoubtedly, any Court will have to ascertain facts of the case in this regard. Meaning thereby that by mere statements made in the plaint, a Court would not be in a position to come to the conclusion as to whether dispute raised is "touching to the business" of the society. That being the factual aspect of the case, trial Court rejected the Application at Exh.
Meaning thereby that by mere statements made in the plaint, a Court would not be in a position to come to the conclusion as to whether dispute raised is "touching to the business" of the society. That being the factual aspect of the case, trial Court rejected the Application at Exh. 33 for rejection of plaint under Order 7 Rule 11(D) of the Civil Procedure Code. 35. In revisional jurisdiction with limited scope and power, this Court is not inclined to enter into the disputed facts of the case as to whether the society encroached upon the land as per the statement made in the plaint, but if this is so, the order of rejection of a plaint on statement made in the plaint would, in the facts and circumstances not be proper. This is to be looked into and be decided by the trial Court. This Court cannot go into the propriety or impropriety of the statement made in the plaint at this stage and come to the conclusion that what is stated in the plaint is wrong. True it is that this could only be done by coming to the conclusion as to the facts involved in the case. As a revisional Court what is required to be seen is whether the trial Judge committed any jurisdictional error, illegality or material irregularity. The question is whether the trial Judge had jurisdiction to deal with the application Exh. 33 as envisaged by the Supreme Court in the matter of Vora Abbasbhai Alimahomed, reported in AIR 1964 SC 1341 (supra). The answer must be in the positive. This is a separate issue whether the trial Court had jurisdiction to try the suit, but undoubtedly the trial Court had jurisdiction to deal with the application Exh. 33. Therefore, the trial Court exercised the jurisdiction vested in it and there is no material irregularity or illegality committed by the trial Court in coming to the conclusion-because trial Court heard both the parties and thereafter felt that without ascertaining the facts as alleged in the plaint, it could not be said that the dispute is "touching to the business" of the society. Even if the order is erroneous but if the jurisdiction is exercised properly without any material irregularity, the order cannot be interfered with in the revisional jurisdiction of this Court.
Even if the order is erroneous but if the jurisdiction is exercised properly without any material irregularity, the order cannot be interfered with in the revisional jurisdiction of this Court. The trial Court felt that as per the statement made in the plaint the dispute was not covered either under Section 96 of the Gujarat Cooperative Societies Act, 1961 or under Section 167of the same Act and coming to this conclusion as above by no stretch of reasoning it can be said that the Court acted without jurisdiction or committed material irregularity or illegality. The decisions of various High Courts and the Apex Court cited by the learned Counsel for the petitioner would not be helpful to the petitioner in view of what is stated above.” 12.12 In case of Popat and Kotecha Property vs. State Bank of India Staff Association [ (2005) 7 SCC 510 ], the question was with regard to the rejection of the plaint under Order 7 Rule 11(d) and the Apex Court held that the said provision applied when the statement has made in the plaint without any doubt or dispute shown that the suit is barred by the law in force. It does not apply in case of any disputed question. The Court held that the disputed questions cannot be decided at the time of considering any application under Order 7 Rule 11 of the CPC. It is only when the averments in the plaint or the statements made by the plaintiff without any semblance of dispute or doubt reflects that the suit is barred by any law in force that such provision is required to be taken recourse to. 12.13 It was a case of an agreement entered into between the appellant and the respondent whereby the appellant agreed to build and develop the property owned by the respondent. It was stipulated in the agreement that after the completion of construction of the entire building, the respondent shall execute a registered sale deed in appellant’s favour granting lease of second to fifth floor. This was not done by the respondent despite the appellant’s communication. The suit therefore was filed seeking the prayer of declaration that the plaintiff alone would be entitled to let out the demised premise or the builder block.
This was not done by the respondent despite the appellant’s communication. The suit therefore was filed seeking the prayer of declaration that the plaintiff alone would be entitled to let out the demised premise or the builder block. A mandatory injunction directing the defendant to execute and register a Deed of Lease, in favour of the plaintiff in respect of the builder’s block in terms of the clause of agreement etc. had been sought for. When respondent had filed an application under Order 7 Rule 11 seeking rejection of the plaint on the ground that the suit was barred by limitation as it was preferred beyond the prescribed period of limitation, the High Court had held that the claims made in the plaint revolve round the nucleus i.e. focal point of the execution of lease deed which was to be done sometimes in 1985 and as the suit was filed in 1999, it was clearly barred by limitation. 12.14 The Supreme Court when examined the challenge, it held that when the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo Sable and Ors. v. Assistant Charity Commissioner and Ors., reported in ( 2004 (3) SCC 137 ), the inevitable conclusion is that the Division Bench was not right in holding that Order 7 Rule 11 CPC would be applicable to the facts of the case. There were diverse claims made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they had independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years need evidence to be adduced. It is not a case where the suit from the statement in the plaint could be said to be barred by law. The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11 and that was not so in a case before the Apex Court. “25.
The statement in the plaint without addition or subtraction must show that it is barred by any law to attract application of Order 7 Rule 11 and that was not so in a case before the Apex Court. “25. When the averments in the plaint are considered in the background of the principles set out in Sopan Sukhdeo's case (supra), the inevitable conclusion is that the Division Bench was not right in holding that Order VII Rule 11 CPC was applicable to the facts of the case. Diverse claims were made and the Division Bench was wrong in proceeding with the assumption that only the non-execution of lease deed was the basic issue. Even if it is accepted that the other claims were relatable to it they have independent existence. Whether the collection of amounts by the respondent was for a period beyond 51 years need evidence to be adduced. It is not a case where the suit from statement in the plaint can be said to be barred by law. The statement in the plaint without addition or subtraction must show that is barred by any law to attract application of Order VII Rule 11. This is not so in the present case.” 12.15. In case of Sterling Centre Premises Owners Coop. Societies Limited vs. Nanubhai R. Shah Prop. Of Dash Publicity, reported in [ (2006) 3 GLR 1853 ], in the revision application under Section 115 of the CPC, the Court was considering requirement of issuance of notice under Section 167 of the Act, to hold that if any suit is filed against a Co-operative Society in respect of any Act touching the business of the Society, such suit is not maintainable without a statutory notice. However, it is not the requirement of Section 167 that if a third party, who is not a member of the Society, institutes a suit, he is not required to give such notice. “6. It is required to be noted that if any suit is filed against a Cooperative Society in respect of any Act touching the business of the Society, such suit is not maintainable without a statutory notice. It is not the requirement of Section 167 that if a third party, who is not a member of the Society, institutes a suit, he is not required to give such notice.
It is not the requirement of Section 167 that if a third party, who is not a member of the Society, institutes a suit, he is not required to give such notice. The learned Judge has confused the issue by referring to Sections 96 and 97 of the Act. Those Sections have nothing to do with the suit filed by the plaintiff against defendant No. 2. It is irrelevant whether the plaintiff is a member of the Society or a third party. So far as Section 96 of the Act is concerned, the same deals with a dispute which is required to be referred to the Nominee of the Registrar. The learned trial Judge has completely misread the provisions of Section 167 of the Act, and on an erroneous ground, has rejected the application, and while doing so, has committed an error of jurisdiction in passing the impugned order. If a suit is instituted before a Civil Court against a co-operative society touching the business of the Society, then notice under Section 167 of the Act is mandatory. Whether the plaintiff is a third party, or not is absolutely irrelevant. 7. Since, the order passed by the learned trial Judge is based on a total misconception of law, this Revision Application is required to be allowed, and is allowed. The matter is remanded to the trial Court for re-consideration of the application filed by defendant No. 2 at Exh. 26. The learned trial Judge shall now decide the application afresh in the light of the observations made hereinabove. While deciding the application, the trial Court shall consider whether the dispute raised in the plaint touches the business of the Society, and after considering the aforesaid aspect, the learned trial Judge is directed to decide application at Exh. 26 within a period of three months from the date of receipt of, the writ from this Court.” 12.16. In case of Banaskantha District Oil Seed Growers Co-op. Union vs. Krishna Oil Mills, reported in [ (2013) 2 GLR 1386 ], the issue was relating to requirement to serve notice under Section 167 of the Act. The Court held that when dispute relates to the business of the society, it is a must.
In case of Banaskantha District Oil Seed Growers Co-op. Union vs. Krishna Oil Mills, reported in [ (2013) 2 GLR 1386 ], the issue was relating to requirement to serve notice under Section 167 of the Act. The Court held that when dispute relates to the business of the society, it is a must. However, it was not established by the by-laws of the society that the transactions between the parties related to business society, therefore, the suit cannot be dismissed for non-service of notice under Section 167. “13. In the present case, what is stated by the plaintiff in the plaint is that the defendant is doing business of purchasing, selling and exporting the oil. The plaintiff has not stated that such activity of the defendant is the business of the defendant in accordance with its objects. It appears that the plaintiff has made the above averments just to support its claim for money so that it can substantiate its case of supplying oil to the defendant. By such averments, the plaintiff could not be taken to have accepted that the activity of the defendant of purchase, sale and export of the oil is in consonance with its objects and therefore, by such averments, the defendant cannot be absolved from its obligation to prove that the activity of purchase, sale and export of oil was part of the business of the defendant, especially when the defendant has raised objection against the maintainability of the suit on the ground of non-service of the statutory notice under Section 167 of the Act. When the plaintiff is a non-member and when the defendant takes up plea of non-service of the notice under Section 167 of the Act, it was for the defendant to clearly prove that the transaction entered into between the parties was the business of the society and that could have been done only by production of the bylaws. The defendant could not have just remained content with adducing oral evidence by examining the Accountant. It is required to be noted that the witness has stated in his evidence that it is not correct that trading with non-member does not fall in the bylaws of the defendant but he simultaneously stated that such bylaws are not produced on record of the case.
It is required to be noted that the witness has stated in his evidence that it is not correct that trading with non-member does not fall in the bylaws of the defendant but he simultaneously stated that such bylaws are not produced on record of the case. It is also required to be noted that the defendant had ample opportunity to produce bylaws not only before the Trial Court but before the first Appellate Court as also before this Court by resorting to Order 41 Rule 27 of the Code of Civil Procedure. However, for the reasons best known to the defendant, the defendant has kept back such document of bylaws from the scrutiny of the Court. The Court does not encourage such conduct on the part of the party to the proceedings especially when such party fully knows about the issues focused in the proceedings and about repercussion of non-production of such vital and star document. If such party deliberately kept back such document from the Court, the Court is not only entitled to draw adverse inference against such party but would also resist attempt of such party from adopting indirect mode to support its plea by oral evidence. 14. Both the Courts below have recorded that purchase and sale of the oil may be the business of the defendant but whether such business can be done with non-member or whether such business is in accordance with the objects of the society, could be known only from the bylaws. The Courts below have thus recorded finding of fact that the business done by the defendant with the plaintiff could be said to have been done beyond the objects of the society. Such being the finding of fact recorded by the Courts below, in my view, it is not open to this Court to interfere with the judgment and decree passed by the Courts below under Section 100 of the Code of Civil Procedure.” 12.17 It is quite clear from this decision that the Court notice that the plaintiff in the plaint had stated that the defendant was doing business of purchasing, selling and exporting oil.
It did not state that such activity of the defendant is the business of the defendant in accordance with his object, but, only to support its claim for money, it had made the said averments to substantial its case of supplying oil to the defendant. By such averments, the plaintiff could not be taken to have accepted that the activity of the defendant of purchase, sale and export of oil is in consonance with object. Therefore, the Court held that the defendant cannot be absolved from its obligation to prove that the activity of purchase, sale and export of oil was part of the business of the defendant, especially when the defendant has raised objection against the maintainability of the suit on the ground of non-service of the statutory notice under Section 167 and this could have been done by the defendant by production of the by-laws and it could not have been complacent by adducing the oral evidence by examining the accountant. The by-laws had not been produced for perusal and the scrutiny of the Court. The Court held that the question as to whether the dispute touches the business of the society would depend upon the nature of the society and the Rules and bylaws governing it. Unless such bylaws are produced on record of the case by the party who raises a plea against maintainability of the suit, the Court would be justified in holding that the party had failed to substantiate such a plea in absence of production of bylaws. 13. In light of the various decisions the Court shall need to consider the order which is impugned. The application has been moved by the respondent - Shantinagar Co-operative Housing Society under Order 7 Rule 11 of the CPC urging inter alia that specific relief of agreement dated 22.12.2006 and the MOU dated 21.12.2006 has been sought and also for cancellation of registered documents dated 07.05.2011 and 25.05.2011 with permanent injunction and other reliefs. The plaintiff has also claimed to be a partnership firm and further claimed that one Mr. Ashvin Patel is a partner of the plaintiff firm.
The plaintiff has also claimed to be a partnership firm and further claimed that one Mr. Ashvin Patel is a partner of the plaintiff firm. The challenge is made on the ground that the certificate of registration issued by the Registrar of Firms bars the suit by the provision of Partnership Act, 1932 as the documents produced by the plaintiff do not meet the requirement of Section 69 of the Partnership Act and secondly the suit is barred under the provisions of Gujarat Co-operative Societies Act, 1961 for want of issuance if statutory notice as a condition precedent of filing of a suit. It further has stated that there is no question of the respondent requiring to file any written statement or a reply to the application for interim relief and this issue requires to be addressed at the outset. 13.1. This application was moved on 28.06.2013 in a suit preferred on 21.05.2013. This had not been heard for a long time and on 06.07.2022, the suit has been rejected under Order 7 Rule 11(d) of CPC. The Court was convinced that the suit is in the name of partnership firm under Order 30 Rule 1 of the CPC where the deed of partnership dated 01.04.2009 is already brought on record with certificate of registration, therefore, the challenge to the bar of the plaintiff’s suit under Section 69 of the Partnership Act was not found sustainable. 13.2. However, on the issue of the relief for specific performance of contract on the ground of breach of trust committed by the defendant society, it held that the notice is required to be issued as a condition precedent under Section 167 of the Act and when the transaction made between the plaintiff and the defendant is touching the business of the society, relying on the decision of Ravjibhai Desaibhai Patel Vs. Rajpath Co-operative Society, reported in [ 1976 GLR 1010 ], the Court held that the breach of Section 167 will entitle the defendant to raise the contention of rejection of the plaint under Order 7 Rule 11(d) of the CPC. 14. What has weighed with the Court is the fact that the defendant, as per the averment made in para 2 of the plaint, is the Co-operative Housing Society, registered under the Gujarat Co-operative Societies Act, 1961 vide registration No. C-16903 dated 14.11.1994.
14. What has weighed with the Court is the fact that the defendant, as per the averment made in para 2 of the plaint, is the Co-operative Housing Society, registered under the Gujarat Co-operative Societies Act, 1961 vide registration No. C-16903 dated 14.11.1994. The defendant is the legal owner of the suit land situated at Village Shela as mentioned in para 3 and 4 and the plaintiff entered into the agreement to sale through the chairman of the defendant housing society for the suit land on 26.12.2006 and created the MOU. Both the documents at 3/21 and 3/23 are respectively the agreement to sale and the MOU. The suit for specific performance of contract dated 26.12.2006 seeks the prayer of specific performance of contract. The logic of the Court is that the land is the basic requirement of activities/business of the society and any transaction relating to sale or purchase of the land is directly touching the business of the society and hence, the dispute involved is touching the business of the defendant – housing society. The plaintiff has since filed suit against the housing co- operative society and against his officers, hence court has concluded that Section 167 is applicable. 14.1. Relying on the decision of Ravjibhai Desaibhai Patel (supra ) , it held that until expiration of two months’ notice under Section 167 delivered to the Registrar or left to his office, no suit can be preferred as it is a mandatory requirement. It has also considered the decision of Patel Meghjibhai Vithabhai (supra), where the Court has held that to press the ground of the suit being barred for want of statutory notice, the defendant is required to file his written statement taking such defense in black and white and the Court shall need to be approached by preferring an application for preliminary issue. It chose to rely upon the decision of Emrald Co-operative Housing Societies Limited (supra) as also the decision of this Court in Sterling Centre Premises Owners Co-op. Societies Limited (supra) to hold that in both the matters, the Court has categorically held that if any suit is filed against the co-operative society in respect of any act touching the business of society, then such suit is not maintainable without statutory notice which is mandatory and whether the plaintiff is third party or not is not relevant. Applying the law to the factual matrix.
Applying the law to the factual matrix. 15. In our opinion, the Court has committed serious errors in dismissing the suit. Undoubtedly, the principles laid down are well entrenched and do not further require any elaboration nor do any reiteration of principles be necessary. The Court has overlooked vital aspects by merely reiterating the principle of law that the suit filed against the co-operative society in respect of any act touching the business of society since is mandatory, the application given under Order 7 Rule 11 of the CPC of rejecting the plaint shall need to be decided in favour of the respondent. Admittedly, the Court does not have with it the by-laws of the society. All the decisions are quite clear as to what is the business of the society and the same is to be considered from the averments made in the plaint and the documents produced along with the plaint. Till date, the regulations or the by-laws are not produced before this Court. What is sought is the agreement and the MOU. The Court has chosen to presume many aspects while holding that the suit is barred under Section 167 of the Act. There appears so many disputed questions of the facts to be determined by the Court as it emerges from the oral rival submissions of the parties and therefore, assuming that the question was open to be raised and considered as a preliminary issue as held in case of Patel Meghjibhai Vithabhai (supra), the aspect of want of statutory notice as a preliminary issue under Order 14 Rule 2 of the Code. Every matter shall need to be since closely examined, the Court, not only has overlooked the prayers, for want of the by-laws, it could not have categorically held that the suit is filed against the co-operative society in respect of the act touching the business of the society. What in fact is the business of the society shall need to be determined by the Court on the basis of the plaint if that is possible. Here, from the averments of the plaint, the complexities of the issues are quite apparent. 15.1. It emerges from the plaint that in December, 2006, Bileshwar Corporation through its partner entered into an agreement to sale in respect of the non-agricultural land of Survey Nos.
Here, from the averments of the plaint, the complexities of the issues are quite apparent. 15.1. It emerges from the plaint that in December, 2006, Bileshwar Corporation through its partner entered into an agreement to sale in respect of the non-agricultural land of Survey Nos. 211, 216, 217, 218, 219 220, 224, 225, 226, 227, 228, 229, 231, 232, 233, 234 and 235 having total area of 2,20,189 sq.mtrs with Shantinagar (Shela Co-operative Housing Society) through its chairman Ashish Prafulbhai Patel for consideration of Rs. 15,80,08,800/- and in consideration of the said agreement to sale, Rs. 25,00,000/- were paid to Mr. Ashish Patel, Chairman of this Co-operative Society as an advance by Bileshwar Corporation and in written, the booking letters dated 20.12.2006 were given to Bileshwar Corporation from a company named Radhe Developers India Limited in respect of total 28 number of plots having total area of 49,349 sq. yards. There were certain conditions mentioned in the agreement to sale which were to be complied by Mr. Ashish Patel and as they were not complied a Memorandum of Understanding was executed between Bileshwar Corporation through Mr. Uday Bhatt and Ashwin B. Patel and Shantinagar Co-operative Society through its Chairman Ashish Patel, containing the terms and conditions in the year 2007. Mr. Ashshi Patel had executed the sale deed in respect of lands bearing survey nos. 227 and 228 in Village Shela, Taluka Sanand in favour of Bileshwar Corporation through the partner Mr. Jaimin Patel that aforesaid agreement to sale and sale deeds and MOU were executed by Bileshwar Corporation, against which, it had paid a total amount of Rs. 11,49,60,600/- to Ashish Patel through its various cheques. From the year 2008 till 2010, Bileshwar Corporation had been pressing to Chairman, Shantinagar Co-operative Housing Society and owners of Radhe Developers Mr. Ashish Patel to handover them the clear documents of sale deeds in respect of the said lands however, the Shantinagar Co-operative Society did not handover the clear title of the land to Bileshwar Corporation and it is averred that various excuses had been put forward. 15.2. It further emerges that in the year 2011, one partner of Bileshwar Corporation Mr. Nilesh Bhatt on behalf of the firm and Nilesh Trivedi, Secretary of Shantinagar Cooperative Housing Society, on behalf of the society, executed cancellation deeds in respect of lands of survey nos. 227 and 228. This cancellation deeds bearing document nos.
15.2. It further emerges that in the year 2011, one partner of Bileshwar Corporation Mr. Nilesh Bhatt on behalf of the firm and Nilesh Trivedi, Secretary of Shantinagar Cooperative Housing Society, on behalf of the society, executed cancellation deeds in respect of lands of survey nos. 227 and 228. This cancellation deeds bearing document nos. 3131/11 and 3498/11 were executed in the office of Sub-Registrar, Sanand, Ahmedabad. They were the deeds executed by Mr. Nilesh Bhatt, the partner of Bileshwar Corporation. It emerges that one of the Partners of Bileshwar Corporation itself had initiated criminal prosecution against Mr Ashish Patel and also his own partners. This, as mentioned above, had resulted into the quashment of FIR against some of these persons on consensus. 15.3 It is pleaded in the plaint that such cancellation was without consideration as it was assured by the defendants that sale deeds of the aforesaid the said lands will be executed upon title clearance by settling the dispute with third party. It is further alleged that the defendants have settled a dispute with a third party whereby the third party has revoked their rights in the said lands. 15.4 It is further averred in the plaint that for the properties described in para-3 of the plaint, the defendants have entered into development agreement with Radhe developers whereby two sub-plots have been offered as security by executing registered allotment. 15.5 This surely is not a matter which can be permitted to be dismissed on the aspect of non issuance of notice under Section 167 of the Act. These details are only to reflect that things do not seem to reveal the usual nature of land disputes and in our opinion, role of each player deserves a closer scrutiny, to say the least so as not to prejudice the rights of the parties. “Here also, the objection of maintainability is from the respondents original defendants. Cooperative housing society cannot be presumed to be in the business of selling, developing, transferring etc. of land and therefore, once such objection has come from the other side, it cannot be accepted that the activity of the defendant is of purchase, sale, transfer, development of suit land in consonance with the object of the society.
Cooperative housing society cannot be presumed to be in the business of selling, developing, transferring etc. of land and therefore, once such objection has come from the other side, it cannot be accepted that the activity of the defendant is of purchase, sale, transfer, development of suit land in consonance with the object of the society. As held in case of Banaskantha district oil seed Growers cooperative union versus Krishna oil Mills (supra), averments of the plaintiffs in plaint are to support its claim for specific performance, by which, the defendant cannot be absolved of its liability to at least prove that the activity of hits is of sale, purchase of the land and it touches the business of society. The nature of society, its rules and pillows governing the same would need to be essentially and predominantly be on record in the matter where the party raises the plea of maintainability under section 167 of the act. This could have been also called for, for the purpose of determining this issue if the court needed assistance to decide this under Order 7 rule 11 of CPC on the strength of averments of plaint and accompanied documents without depending on defendants‘ plea. For subjective satisfaction of the court also, this would have been necessary. We also cannot be oblivious of the fact that during the course of hearing before us, the defendant has agreed to return the sale consideration with interest expressing impossibility of performance due to the contentions raised in affidavit in reply. Although, that revelation could not have been with the trial court and may not have been used in determining the application under Order 7 Rule 11 of CPC, this further fortifies our reasoning of this not being the matter to be terminated on this ground in absence of vital materials.
Although, that revelation could not have been with the trial court and may not have been used in determining the application under Order 7 Rule 11 of CPC, this further fortifies our reasoning of this not being the matter to be terminated on this ground in absence of vital materials. This issue as a preliminary issue would always be desirable.” 15.6 Thus, considering the complexity of the transactions involved the Court notices that though the focal point of dispute revolves around the suit lands of which the Cooperative Housing society claims to have right, based on which agreement to sell and MOU have been executed in favour of plaintiff firm, however, at this stage of order 7 rule 11, where one is required to look into the pleadings only, it would be unjust to go to hold as "touching the business of the society", without adverting to even bylaws, which otherwise is crucial to adjudicate upon the maintainability of suit being barred under section 167 of the Cooperative act. At the same time, the Court cannot draw adverse inference against the plaintiff merely because the other side is co-operative society. The nature of transactions of purchase and sale of land by cooperative society may or may not be the business of the defendant but whether such transaction entered upon with non member is in terms of the objects of the society, can only be carved out from the bylaws. In our opinion, the provision of section 167 of the Act being mandatory, the Courts are required to inquire first into the fact as to whether the transactions between the parties touches the business of the society even tangentially. Undoubtedly , the Court would be essentially required to examine the objects of the society through it's bylaws. The Court below committed serious error by entertaining application under order 7 rule 11 without adverting into the star document viz. the by laws of the society, merely on presumption and drawing adverse inference, only since the defendant is a registered cooperative society. At the most, considering the objection raised by the defendant with regard to maintainability of the suit in the given set of the facts, can be examined as a preliminary issue .
the by laws of the society, merely on presumption and drawing adverse inference, only since the defendant is a registered cooperative society. At the most, considering the objection raised by the defendant with regard to maintainability of the suit in the given set of the facts, can be examined as a preliminary issue . Conclusion, however, is inevitable to quash and set aside the order impugned of the trial court and restore the Special civil suit for the Court concerned to proceed in accordance with law. 16. The request at this juncture is made for continuing the arrangements which had been made earlier, to which, there is a serious objection on the part of the respondents on the ground that on merit, the matter has not been heard. It is also pointed out to this Court that at Annexure-B (from page 134 to 141) are the original allottees and therefore, from the agriculturists, when the land has been obtained, the respondent is obligated to initiate the proceedings of registering the documents. It is also further urged by learned Counsel Mr. Raju that the list at page 142 to 145 emanates from the original allotments to some of the persons who, later on, have sought to transfer the same to others. He has also ensured that separate accounts shall be maintained of any transfer that be made in the coming fortnight. 16.1. Learned senior advocate Mr.Mihir Joshi has strenuously urged that if this transfer is permitted till exhibit 5 application is decided on merits, in fact the petitioner may not be in a position to get the remedy which otherwise he is entitled to, therefore, for a period of 15 days, let the arrangement earlier ensured be directed to be continued. It is further pointed out to this Court that largely the original allotment is for the persons whose list has been placed at Anneuxre-B (from page 134 to 141), however, a serious dispute is raised with regard to the list on page 142 to 145 questioning its credibility. 17. As this Court has allowed the petition and revived the suit, the principle of lis pendens would, in any case, govern the parties. So far as Annexure-B (from page 134 to 141) is concerned, those are the original allottees. Any transfer in the interregnum to them shall be accounted separately.
17. As this Court has allowed the petition and revived the suit, the principle of lis pendens would, in any case, govern the parties. So far as Annexure-B (from page 134 to 141) is concerned, those are the original allottees. Any transfer in the interregnum to them shall be accounted separately. Considering the fact that there is a serious dispute in relation to the list from page 142 to 145 it is volunteered by the learned advocate, Mr.Bhadrish Raju on getting instructions that the respondent shall not be dealing with the said list for a fortnight for the purpose of transfer or otherwise in any mode or manner. 18. Both the parties to co-operate with the trial Court which shall initiate the hearing of Exh.5 within a period of two weeks from the date of receipt of a copy of this order and shall decide the same within a period of four weeks thereafter. 19. Without prejudice to the rights and contentions as may be raised by the parties that this arrangement has been made which shall be also subject to the order that would be passed by the trial Court concerned after hearing both the sides on merits of injunction application. None of the observations made by this Court in this order, while considering the matter on merit, shall in any manner prejudice the rights of either side. 20. In wake of this disposal, the civil application, if any, stands disposed of accordingly.