BHAGWAN Vs. LIQUIDATOR OF SHRI BHUPAL CO OPERATIVE SOCIETY LIMITED PRATAP NAGAR UDAIPUR
LAWS(RAJ)-1994-9-42
HIGH COURT OF RAJASTHAN
Decided on September 20,1994

BHAGWAN Appellant
VERSUS
LIQUIDATOR OF SHRI BHUPAL CO OPERATIVE SOCIETY LIMITED PRATAP NAGAR UDAIPUR Respondents

JUDGEMENT

NAOLEKAR, J. - (1.) THE respondent Liquidator of Shri Bhupal Cooperative Society Ltd. , Pratap Nagar, Udaipur, has filed a suit for possession of the property belonging to the society and for damages for use and occupation of the property in suit by the appellant @ Rs. 125/- p. m. starting from December, 1971, upto the date of the delivery of possession. THE suit was filed on the allegations that the defendant-appellant Shri Bhagwan was member of the plaintiff Society, which is a registered Cooperative Society. Plots No. 16,17,64,65 and 66 in class A area in the locality Pratap Nagar, Udaipur, were allotted by the society to the defendant. THE major portion of the money was required for making construction, was spent by the Society. It was required to be paid back by the appellant-defendant. THE amount of Rs. 6,894. 17 remained unpaid to the society. THE agreement was entered between the parties. As per the agreement, the amount was required to be paid back to the society by the defendant in a period of 10 years in the monthly instalments. It is further agreed that in case of four consecutive defaults in payment of the instalments, the society shall be entitled to forfeit the house. More than four instalments remained unpaid and the society after service of notice, forfeited the property. THE plot was in possession of the society. In the month of November, 1971, the defendant broke open the lock of the garage and trespassed upon the society and, therefore, the suit for possession and for damage for use and occupation.
(2.) THE defendant-appellant entered appearance and filed his written statement alleging that the construction over the plot was not made by the society nor it was allotted to the defendant by the society. The defendant has neither led oral nor documentary evidence before the trial court. The plaintiff has examined his witnesses and the trial court recorded the findings that the property belong to the Society, that the funds and plots were allotted to the defendant-appellant by the plaintiff Society and that the defendant was member of the Society and that the plaintiff has successfully proved his case that the amount remained outstanding towards the defendant on account of the expenses incurred by the plaintiff Society in raising construction over the plots. That the Society has a right to forfeit the property on 4 consecutive defaults in payment of instalments. According to the trial court, the defendant has illegally taken possession of the suit property, that the civil court has jurisdiction to try the suit as it was filed by the Liquidator, when the Society has been dissolved and the Liquidator is appointed, s. 75 goes into oblivation. Section 75 cannot be made applicable to suit filed by the Liquidator. The trial court on these findings, decreed the suit for possession and damages. It is argued by the counsel for the defendant-appellant that by virtue of s. 75 read with s. 137 of the Cooperative Societies Act, 1965 (for short 'the Act'), the Society or the Liquidator or Society through Liquidator cannot file a suit in the civil court and civil court has no jurisdiction to adjudicate upon any dispute between Society and its members regarding any dispute touching the constitution, management, or the business of the Cooperative Society. On the other hand, it is contended by the counsel , for Respondent-Society, that the objection to the jurisdiction of the civil court can be raised u/s 75 of the Act if the dispute is in relation to or touching the constitution, management or the business of the cooperative society. The dispute can be in relation to constitution or management or the business of the cooperative society which are three distinct facts and, therefore, in the absence of the specific pleading to the jurisdiction of the civil court as to whether the bar of a civil court's jurisdiction is claimed because of the dispute touching the constitution or management or business of the Society, collectively or individually, the Court cannot determine the question as to the bar of the civil court's jurisdiction. It is further argued that s. 75 of the Act has no application to the suit filed by the Liquidator. I shall first take up the question of the application of s. 75 as to the suit filed by the Liquidator who has been appointed by the Registrar on winding up of the Society and for the said purpose, it will be fruitful to quote certain sections. The relevant portion of s. 75 of the Act reads as under : "75. Disputes which may be referred to arbitration.- (1) Notwithstanding any thing contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a co-operative society arises - (a) among members, past members and person claiming through members, past members and deceased members, or such dispute shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. (2) for the purpose of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a co-operative society, namely : - (a) a. claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not; Section 137 reads as under : - "sec. 137. Bar of jurisdiction of courts.- (l) Save as provided in this Act, no civil or revenue court shall have any jurisdiction in respect of, - (a) the registration of a co-operative society or of an amendment of a bye-law; (b) the removal of committee; (c) any dispute required under section 75 to be referred to the Registrar; and (d) any matter concering the winding up and the dissolution of a co-operative society. (2) While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with, or instituted against, the Liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose. (3) Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any court or any ground whatsoever. " Section 75 provides that notwithstanding anything contained in other law for the time being in force, if there is any dispute between the member and the society and if the dispute touches the constitution, management or business of the cooperative society, the civil court's jurisdiction is barred. Section 137 lays down that no civil or revenue court shall have any jurisdiction in respect of any dispute required u/s 75 to be referred to the Registrar. Section 78 of the Act authorises Registrar to wind up the society after giving due opportunity to the Society of making representation. On the order of winding up made by the Registrar u/s 78, he may appoint a Liquidator of the Society u/s 79 (1) of the Act. Section 79 (2) reads as under : - "a Liquidator shall, on appointment, take into his custody or under his control, all the property, effects and actionable claims to which the society is or appears to be entitled and shall take such steps as he may deem necessary or expedient, to prevent loss or deterioration of, or damage to, such property, effects and claims. " So under this section, the Liquidator on his appointment, shall take into his custody or under his control, all the property, effects and actionable claims to which the society is or appears to be entitled and shall take such steps as he may deem necessary or expedient, to prevent loss or deterioration of, or damage to, such property, effects and claims. This provision authorises Liquidator to take steps which are necessary or expedient to prevent loss, deterioration or damages to society's properties, effects and claims. Section 80 relates to the powers of Liquidator and lays down that on his appointment by the Registrar u/s 79 of the Act, all the assets of the society, under the order of winding up, shall vest in the Liquidator and that the Liquidator has power to realise such assets by the sale or otherwise. Sub-section (2) (a) of s. 80 reads as under : - " (2) Such Liquidator snail also have power, subject to the control of the Registrar - (a) to institute and defend suits and other legal proceedings on behalf of the co-operative society by the name of his office;" This provision gives powers to the Liquidator to institute and defend a suit and other legal proceedings for and on behalf of the cooperative society by the name of his office. The words "other legal proceedings" would include the proceedings u/s 75 of the Cooperative Societies Act. Thus, by virtue of sub-section (2) of s. 79 and sub-section (2) (a) of s. 80, the Liquidator has been authorised by law to take legal proceedings for and on behalf of the cooperative society to safeguard the interest and to prevent loss or deterioration or damage to property, effects and claims of the society. In fact, on the winding up order being passed by the Registrar and the Liquidator appointed, the Liquidator steps into the shoes of the cooperative society, and continues to be so, until the termination of the winding up proceedings. He is authorised by law to file proceedings before the Registrar u/s 75 of the Act for and on behalf of the co- operative society. The finding recorded by the trial court that the Liquidator does not have any authority to take up proceeding u/s 75 and, therefore, civil suit is maintainable, is not a correct proposition of law hereinbefore mentioned, of the Cooperative Societies Act. It is true that the pleadings should contain material facts on which the party relies for his claim or defence. Whatever is necessary to substantiate the plea raised in defence, has to be given by the party. The function of the particulars of the fact is to present a full picture of the defence, information in detail is to make the opposite party to understand the case raised by the defence. It is for the purpose of providing full opportunity to the opposite party to know the case he has to meet and thereby to prevent element of surprise at the trial and to limit the generality of the pleadings and confine it to limited issue to be tried and thus save unnecessary expenditure. The main purpose of the specific pleading is that the opposite party should know as to what case he has to meet and thus to prevent the surprise at the trial.
(3.) IN the peculiar circumstances of the present case that no evidence has been led by the defendant-appellant, if the court can reach to the finding of the business of the society on the basis of the evidence led by the plaintiff-respondent alone, it could not be said that the plaintiff has been taken by surprise because the necessary particulars have not been provided by the defendant in its defence. The defendant-appellant has raised the defence that the civil court has no jurisdiction to try the civil suit. Whether from the evidence led by the plaintiff it can be demonstrated as to what is the business of the plaintiff- respondent Society and whether the dispute raised in the suit touches the business of the Society will depend upon the appreciation of allegations made in the plaint and the evidence led by the plaintiff himself. It is alleged in the plaint by the Society that the Society is a registered cooperative society having its registration No. 949, that the Society has extensive property in Pratap Nagar, Udaipur, which includes bungalows and the open plots. That the defendant is a member of the Society and in that capacity, he had been allotted plots No. 16,17,64,65 and 66 and some buildings have been constructed over it by the Society. However, as full amount was not paid, certain amount was due against the defendant and it was agreed to be repaid in instalments by the defendant, with the condition that on four consecutive defaults, the Society will be entitled to forfeit the property. As the defendant has not paid the amount, the property was forfeited and the suit for possession was filed. The plaintiff has examined two witnesses. P. W. 1 Ladharam has stated that the plots in question were allotted to the defendant by the Society and the Society has constructed six garages over it. The entire amount was spent by the Society on construction. On calculation, the amount of Rs. 6894. 17 was found due and the agreement Ex. 1 was entered into. The Society has 125 members and the defendant was one out of them, the Society was given Rs. 25,000,00/- by the Union Govt. and Rs. 4 lacs by the State of Mewar as loans P. W. 2 Tirathdas has stated that the Society has allotted plots to the defendant. The plaintiff has made construction of garages over it and the agreement was entered into between the parties for repayment of the amount. The defendant has illegally and forcibly took possession of the property. Ex. 1 dated 3. 12. 73 is a document executed between the parties. It contained recital that party No. 1 i. e. defendant was allotted plots No. 16,17,64 and 66 'a' Class area (garages) in township of Pratapnagar by party No. 2 i. e. Society and that the building on the said plot was partly constructed by party No. 2 with its own funds and the rest of the construction was completed by party No. 1 with its own funds, whereas a sum of Rs. 6,894. 17 is due to party No. 2 against party No. 1 and, therefore, party No. 1 agreed to pay that sum within ten years by monthly equal instalments of Rs. 57. 46 each commencing from 1. 1. 63. It has agreed that if party No. 1 fails to pay any of the four monthly consecutive instalments, the party No. 2 after giving one month's notice, shall have the right to forfeit the building in favour of the Society and also evict or eject party No. 1 or any person in occupation of the premises or to enter the premises. Ex. 2 is dated 15. 3. 75 is the order issued by the Liquidator for forfeiture of the building. The document contains the terms that the plots were allotted to the defendant and only a sum of Rs. 725/- were received as a contributory deposit towards the cost of the garages, the instalments are outstanding, the allottee has not paid the amount of monthly instalments as per the terms of the agreement and thus, as per the rules and bye-laws of the Society and the agreement executed by the allottee, the buildings are forfeited. In Deccan Merchants Co-operative Bank Ltd. vs. M/s Dalichand Jugraj Jain (1), the Supreme Court had an occasion to construe the meaning of the expression "touching the business of the society" occurring in s. 91 (1) of the Act. The Court has observed that the answer depends on the words used in the Act and that the non-obstiante clause clearly ousts the jurisdiction of the civil courts if the dispute falls squarely within the ambit of s. 91 (l) of the Act. Their Lordships observed as under : - "the question arises whether the dispute touching the assets of a society would be a dispute touching the business of a society. This would depend on the nature of the society and the rules and bye-laws governing it. Ordinarily, if a society owns buildings and lets out parts of buildings which it does not require for its own purpose it cannot be said that letting out of those parts is a part of the business of the society. But it may be that it is the business of a society to construct and by houses and let them out to its members. In that case letting out property may be part of its business. " The word "business" is to be construed in narrower sense and means the actual trading or other similar activities of the society which the Society is authorised to enter into under the Act and the Rules and bye-laws. But the word "touching" is to be given wide meaning and would include any matter which relates to or concerns the business of a society. Bat would not, of course, include the transaction which affects the society. ;


Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.