K. RAMASUBRAMANIA MUDALIAR Vs. THE SALEM URBAN CO-OPERATIVE SOCIETY, LIMITED, REPRESENTED BY ITS SECRETARY AND ANR.

JUDGEMENT

(1.) THE question involved in this second appeal is whether the Registrar or an arbitrator appointed by him under Section 51 of the Madras Co -operative Societies Act (VI of 1932) has the power to pass a decree against the property mortgaged to the Society so as to bind a subsequent alienee who was made a party to the arbitration proceedings. The plaintiff is the purchaser from one David Dorairaja of a house which had been mortgaged by the vendor to the defendant, the Salem Urban Co -operative Society, Ltd., for a sum of Rs. 1,500 taken as a loan on the 7th February, 1933, on a mortgage of the suit house. Having purchased the property on the 20th June, 1934, subject to the mortgage in favour of the Society, the plaintiff sent a cheque for a certain amount but the defendant -society refused to accept it claiming a larger amount. Thereafter the respondent -society filed claim No. 170 of 1935, before the Sub -Deputy Registrar of Co -operative Societies implead -ing both the original borrower David Dorairaja and also the appellant, the subsequent vendee. The Sub -Deputy Registrar gave a decision upholding the claim of the present appellant that he was bound only to pay Rs. 1,433 instead of the larger sum claimed by the Society. Unfortunately for reasons best known to himself, the appellant who was also a party to the proceedings before the Registrar did not pay the sum adjudged even though at an earlier stage he had sent a cheque for that sum. Thereupon the respondent -society applied for execution of the decision or decree which is provided for under Section 57 -A and rule XXII, Clause 7 of the rules made under the Madras Co -operative Societies Act and the property was purchased by the respondent. The present suit is filed to establish the plaintiff's title and for an injunction restraining the respondent from dispossessing the appellant. Both the lower Courts dismissed the suit and hence this second appeal.

(2.) THE chief argument of Mr. Ramaswami Aiyangar, the learned advocate for appellant, is that under the Act, the Registrar or an arbitrator has no power to give a decision or to pass an award directing sale of the mortgaged property and much less to pass such a decree so as to bind a subsequent mortgagee or a subsequent alienee. The decretal order, as we may call it, runs thus:

(3.) THIS explanation was added in the Madras Act so as to remove any doubt on the question whether a debt due by a member is a dispute touching the business of a registered society. Even prior to this explanation, the Courts held under the Imperial Act, II of 1912, that a claim by the Society to recover a debt due by a member is a dispute under the Act. There cannot possibly be any doubt that the mam business of these registered societies is to advance loans to the members and recover them; and if the loan is not returned and a claim has to be made, it is obviously a dispute touching the business of the Society.