NAVJIVAN PAPER MART Vs. RAJKOT VIBHAGIYA NAGRIK SAHKARI BANK LIMITED

JUDGEMENT

(1.) The petitioner is a purchaser of a cutting machine from respondent No. 2 who had secured a loan from respondent No. 1 Co-operative Bank for purchasing the said machine and had created a charge on that machine in favour of respondent No. 1 Bank. As a result of this transaction of loan by respondent No. 2 with respondent No. 1 Bank of which respondent No. 2 was at the relevant time a member arbitration proceedings under the provisions of the Gujarat Co-operative Societies Act 1961 (hereinafter referred to as the Act) came to be instituted by respondent No. 1 Bank against the present petitioner respondent No. 2 and another person who was the surety of respondent No. 2. Those proceedings came to be started by respondent No. 1 Bank for the recovery of its dues advanced to respondent No. 2. The total amount of the dues including interest notice charges and liquidation charges for which the claim was made under the provisions of the Act was Rs. 2 155 Ps. In these proceedings the petitioner was impleaded as a party because he claimed his right or title to the machine hypothecated with respondent No. 1 Bank through respondent No. 2. It was alleged that the sale in favour of the petitioner by respondent No. 2 was void being in contravention of sec. 48(3) of the Act. The petitioner in those proceedings contended in the first instance that the Nominee of the Registrar had no jurisdiction because the petitioner was not a member of the respondent No. 1 Bank and secondly that he was a bona fide purchaser of this machine for value without notice of the alleged hypothecation of the machine by his vendor to respondent No. 1 Bank. Both these contentions were negatived by the Nominee of the Registrar who passed an award on April 24 1969 in the following terms:- ... I for the reasons detailed separately order that plaintiff do recover Rs. 2155-50 P5. with interest at 6 1/2 % from 1-7-1968 till realisation with costs of Rs. 83/from the defendants. Firstly defendants Nos. 1 and 2 (meaning thereby parties other than the present petitioner) are held liable for the suit claim and the deficit to be recovered from the machine in possession of deft. No. 3 (meaning thereby the present petitioner). That the amount shall carry interest at the rate of 6 1/2 % per annum from 24-4-1969 till realisation. The parties are informed about this decree. In the judgment upon which this Award followed the Nominee held that he had jurisdiction to hear the dispute and that the petitioner was not a bona fide purchaser of the machine for value without notice. Against this award the petitioner went in appeal to the Co-operative Tribunal before which the plea as to the petitioner being a bona fide purchaser of the machine for value without notice was not pressed. However the plea of want of jurisdiction was raised and the Tribunal negatived that plea and dismissed the appeal on March 25 1970 confirming the award passed by the Registrars Nominee. Hence the present petition has been filed to quash and set aside the judgment of the Nominee at Annexture A the award following that judgment at Annexture B and the order of the Co-operative Tribunal in appeal at Annexture C. A declaration was also claimed to the effect that secs. 96 and 98 to 107 and 48 the Act were ultra vires and void. Out of this challenge based on vires the challenge to secs. 96 and 98 to 107 has not been pressed before us and we are only concerned with the challenge to sec. 48 of the Act.

(2.) The correct date of the transaction of loan by respondent No. 2 with respondent No. 1 Bank has not been mentioned in the petition but we are told at the bar at the time of hearing that the loan was given on January 3 1958 and the hypothecation also took place on the same date. The claim by respondent No. 1 Bank for realization of its does under the provisions of compulsory arbitration under the Act was made on October 30 1968 The award was given by the Nominee on April 24 1969 and as stated earlier the Tribunal dispossed of the appeal on March 25 1970

(3.) The award passed by the Nominee has been challenged before us at the time of hearing only on two grounds and no other ground was pressed before us by the learned advocate for the petitioner. These two grounds were:-