Bombay High Court
Apna Sahakari Bank Ltd. & Ors vs Dattatraya Die Works By M.B. ... on 2 May, 2016
Bench: M.S. Sonak
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 2719 OF 2002
Apna Sahakari Bank Ltd. and ors. .. Petitioners.
vs.
Dattatraya Die Works .. Respondent.
Mr. C.P. Deogirikar for the Petitioners.
Mr. R.V. Govilkar for the Respondent.
CORAM : M. S. SONAK, J.
Date of Reserving the Judgment : 22 April 2016.
Date of Pronouncing the Judgment :
ig 02 May 2016.
JUDGMENT :-
1] The challenge in this petition is to the judgment and order dated
7/14 March 2002 made by the Maharashtra State Cooperative
Appellate Court, Mumbai (revisional court) in Revision Application No.
143 of 2001 holding that the dispute raised by the respondent, was one
touching the business of the petitioner society and therefore, could be
adjudicated under Section 91 of the Maharashtra Cooperative Societies
Act, 1960 (MCS Act).
2] Mr. Deogirikar, learned counsel for the petitioners, has submitted
that the dispute raised by the respondent could not be said to be
touching the business of the petitioner bank and unless this
jurisdictional parameter was satisfied, there was no question of
adjudicating such dispute under Section 91 of the MCS Act. Mr.
Deogirikar submitted that the claim for damages raised by the
respondent was liable to be rejected even on merits. However, he
submitted that since the dispute did not fall within the purview of
Section 91 of the MCS Act, the revisional authority was duty bound to
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uphold the decision of the cooperative court upon such preliminary
issue. Mr. Deogirikar placed reliance upon the decision in cases of
Shyam Co-operative Housing Society Ltd. Vs. Ramibai Bhagwansing
Advani and ors.1, Deccan Merchants Co-operative Bank Ltd. Vs. M/s.
Dalichand Jugraj Jain and ors2 Vs. 1969 SC 1320 and Belganda
Sahakari Sakhar Karkhana Ltd. Bhoras, Dist. Jalgaon Vs. Keshav
Rajaram Patil3, in support of the grounds raised in the petition.
3] Mr. R.V. Govilkar, learned counsel for the respondent, on the
other hand, submitted that the respondent who is admittedly the
member of the petitioner bank had obtained a loan from the petitioner
bank. The petitioner bank, in the course of recovery of such loan
amount illegally locked the respondent's premises, thereby, occasioning
loss to the respondent. In these circumstances, Mr. Govilkar submitted
that the dispute raised was clearly one touching the business of the
petitioner bank being grant and recovery of loans to and from its
members. For these reasons, Mr. Govilkar submitted that this petition
may be dismissed.
4] In order to appreciate the rival contentions, reference is
necessary to the provisions contained in Section 91 of the MCS Act,
which reads thus:
91. Disputes.- (1) Notwithstanding anything contained in any
other law for the time being in force, any dispute touching the
constitution, elections of the committee or its officers, conduct of
general meetings, management or business of a society shall be
referred by any of the parties to the dispute, or by a federal society
to which the society is affiliated or by a creditor of the society, to
1 AIR 1952 Bombay 445
2 AIR 1969 SC 1320
3 1994 Mh.L.J. (2) 1756
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the co-operative Court if both the parties thereto are one or other of
the following:-
(a) a society, its committee, any past committee, any past or
present officer, any past or present agent, any past or present
servant or nominee, heir or legal representative of any deceased
officer, deceased agent or deceased servant of the society, or the
Liquidator of the society or the official Assignee of a de-registered
society.
(b) a member, past member of a person claiming through a
member, past member of a deceased member of society, or a society
which is a member of the society or a person who claims to be a
member of the society;
(c) a person other than a member of the society, with whom the
society, has any transactions in respect of which any restrictions or
regulations have been imposed, made or prescribed under sections
43, 44 or 45, and any person claiming through such person;
(d) a surety of a member, past member or deceased member, or
surety of a person other than a member with whom the society has
any transactions in respect of which restrictions have been
prescribed under section 45, whether such surety or person is or is
not a member of the society;
(e) any other society, or the Liquidator of such a society or-de-
registered society or the official Assignee of such a de-registered
society.
Provided that, an industrial dispute as denned in clause (k)
of section 2 of the Industrial Disputes Act, 1947, or rejection of
nomination paper at the election to a committee of any society , or
refusal of admission to membership by a society to any person
qualified therefor or any proceeding for the recovery of the amount
as arrear of land revenue on a certificate granted by the Registrar
under sub -section (1) or (2) of section 101 or sub -section (1) of
section 137 or the recovery proceeding of the Registrar or any
officer subordinate to him or an officer of society notified by the
State Government, who is empowered by the Registrar under sub
-section (1) of section 156, or any orders, decisions, awards and
actions of the Registrar against which an appeal under section 152
or 152 A and revision under section 154 of the Act have been
provided shall not be deemed to be a dispute for the purposes of this
section.
(3) Save as otherwise provided under sub-section (2) to section
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93, no Court shall have jurisdiction to entertain any suit or other
proceedings in respect of any dispute referred to in sub -section (1).
Explanation 1.-A dispute between the Liquidator of a society
or an official Assignee of a de-registered society and the members
(including past members, or nominees, heirs or legal representative
or deceased members) of the same society shall not be referred to
the co-operative Court under the provisions of sub-section (1).
Explanation 2.-For the purposes of this sub-section, a dispute
shall include-
(i) a claim by or against a society for any debt or demand
due to it from a member or due from it to a member, past member
or the nominee, heir or legal representative of a deceased member,
or servant for employee whether such a debt or demand be
admitted or not;ig
(ii) a claim by a surety for any sum or demand due to him
from the principal borrower in respect of a loan by a society and
recovered from the surety owing to the default of the principal
borrower, whether such a sum or demand be admitted or not;
(iii) a claim by a society for any loss caused to it by a
member, past member or deceased member, by any officer, past
officer or deceased officer, by any agent, past agent or deceased
agent, or by any servant, past servant, past servant or deceased
servant, or by its committee, past or present, whether such loss be
admitted or not;
(iv) a refusal or failure by a member, past member or a
nominee, heir or legal representative of a deceased member, to
deliver possession to a society of land or any other asset resumed by
it for breach of condition as the assignment.
5] The petitioner bank is a cooperative society registered under the
provisions of the MCS Act. One of the objects of the petitioner bank is
to engage in the business of banking. As a result, it is the business of
the petitioner bank to grant and to recover loans to its members. There
is no dispute in the present case that the petitioner bank had indeed
advanced loan to the respondent for the purposes of the respondent's
business of manufacturing plastic products etc.
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6] If the dispute application made by the respondent in the
Cooperative Court is perused, the allegation therein is that the
petitioner bank acting through its officers/employees, on 3 March 1992
entered into the respondent's factory premises, which have been
mortgaged to the petitioner bank as security for repayment of loan,
ordered the respondent's manager and workers out of the premises,
closed the shutter of premises and finally put a lock upon the factory
premises. The respondent has also alleged that the petitioner bank
informed the respondent that unless the respondent deposits Rs.5 Lacs
towards the loan amount, the petitioner bank will not hand over the
keys of the lock and consequently possession of the factory premises.
On basis of such cause of action, the respondent has raised his
monetary claim against the petitioner bank.
7] The Cooperative Court, by its order dated 6 July 2001 partly
upheld the preliminary objections as to maintainability raised by the
petitioner bank and held that the dispute application, insofar as it
relates to the claim of damages, does not come within the purview of
Section 91 of the MCS Act, but held that remaining part of the dispute
is maintainable.
8] The respondent thereupon instituted Revision Application No.
143 of 2001 before the revisional court, which has, by the impugned
judgment and order dated 14 March 2002, allowed the revision
application and set aside the order of the Cooperative Court dated 6
July 2001. Perusal of the impugned judgment and order makes it clear
that the revisional court has applied the correct legal parameters to the
facts and circumstances of the present case to hold that the dispute
raised by the respondent can be said to be touching the business of the
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petitioner society. There is neither any jurisdictional error nor is the
appreciation of legal position, vitiated by manifest illegality.
Accordingly, there is no case made out to interfere with the impugned
order in the exercise of supervisory jurisdiction under Article 227 of the
Constitution of India.
9] In this case, admittedly, it is the business of the petitioner bank to
advance and consequently recover loans to and from its members. The
respondent is admittedly a member of the petitioner bank and in that
capacity has availed loan from the petitioner bank. At this stage, we are
not concerned with truth of the allegations in the dispute application
raised by the respondent. However, the allegation indicates that the
petitioner bank, in the course of its business of recovery of loan which
it had sanctioned to the respondent, purported to lock or take over
possession of the mortgaged property. Such allegation, indeed raises a
dispute, which touches the business of the petitioner society. The
expression "touching the business of the society" is quite wide and
would include any matter which relates to, concerns or affects the
business of the society.
10] In the case of Deccan Merchants Co-operative Bank Ltd.
(supra), one of the questions which arose for determination was the
meaning of the expression "touching the business of the society". Upon
analysis of the provisions contained in Section 91 of the MCS Act, the
Hon'ble Apex Court held that the word "business" does not mean affairs
of a society because election of office-bearers, conduct of general
meetings and management of a society would be treated as affairs of a
society. The word "business" has been used in a narrower sense and it
means the actual trade or other similar business activity of the society
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which the society is authorized to enter into under the Act and the
Rules and byelaws. The Hon'ble Apex Court went on to hold that the
question whether a dispute touching the assets of a society would be a
dispute touching the business of the society 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 those parts is a part of the business of the society. But it may
be that it is the business of the society to construct and buy houses and
let them out to its members. In that case letting out property may be
part of its business. Since, the Hon'ble Apex Court in the said decision,
was concerned with a cooperative bank, it held that ordinarily a
cooperative bank cannot be said to be engaged in business when it lets
out properties owned by it. On this short ground, the Hon'ble Apex
Court held that the dispute between the tenant and a member of the
bank in a building which has subsequently been acquired by the
cooperative bank, cannot be said to be a disptue touching the business
of the bank.
11] The decision in case of Deccan Merchants Co-operative Bank
Ltd. (supra), is inapplicable to the fact situation with which we are
concerned. As noted earlier, in this case, the business of the petitioner
bank is to advance and consequently recover loans to and from its
members. If therefore, any dispute arises in relation to such business,
then such dispute is one which touches the business of the petitioner
bank. In fact in case of Deccan Merchants Co-operative Bank Ltd.
(supra), the Hon'ble Apex Court has held that the nature of business
which a society does can be ascertained from the objects of the society
though, it cannot be said that whatever the society does or is
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necessarily required to do for the purpose of carrying out its objects can
be said to be its part of business. Further the Hon'ble Apex Court also
held that the word "touching" is very wide and would include any
matter which relates to or concerns the business of the society. Thus
construed, the decision in case of Deccan Merchants Co-operative
Bank Ltd. (supra), in fact, assists in sustaining the impugned order
made by the revisional court.
12] In case of Shyam Co-operative Housing Society Ltd (supra),
the Division Bench of this Court in the context of provisions contained
in Section 54 of the Bombay Cooperative Societies, Act, 1925 has held
that before a case can fall under Section 54, it is not sufficient that
there should be a dispute touching the business of the society. What is
further required is that the dispute must be between the society and its
member, and proper emphasis has to be laid upon the expression
"member" used in the section. The dispute must be between the society
and the member as a member or quae a member. It must be a dispute in
which a member must be interested as a member. It must relate to a
transaction in which the member must be interested as a member. It is
not even every dispute between a society and a member which falls
within the ambit of Section 54. There may be many disputes between
the societies and its members in which the members are not concerned
as members at all, and they are in the same position as strangers. The
Division Bench was concerned with a case where the society had
obtained a loan from one of its member when infact, the objects of the
society did not include taking of loans, but included buying, selling,
hiring, letting, developing land in accordance with the cooperative
principles. In this fact situation, the Division Bench held that the
dispute between the member and the society was not one in which the
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member was really interested in his capacity as a member. The member,
in the said case, was in the same position as a stranger. The society in
the said case, might have raised a loan from the stranger. There is no
obligation upon the society to raise the loans only from its members
nor there is any obligation upon its members to advance loans to the
societies. In such peculiar fact situation, the Division Bench held that
the dispute, even though, was between the member and the society,
was not covered under Section 54 of the Bombay Coopertive Societies
Act, 1925.
13]
Again aforesaid decision in case of Shyam Co-operative Housing
Society Ltd (supra), is quite distinguishable. In this case, the object of
the petitioner bank is to advance loan to its members. The business of
the petitioner bank is to advance loans to its members. The loan
advanced to the respondent was in his capacity as a member of the
petitioner bank. The dispute in the circumstances, not only relate to the
business of the bank, but the involvement of the respondent is quae its
capacity as a member. Besides, in case of Shyam Co-operative Housing
Society Ltd (supra), the finding of fact noted by the Division Bench
was that the object of the society concerned was not taking of loans.
Accordingly, the said decision does not assist the petitioner in the
propositions advanced.
14] In Belganda Sahakari Sakhar Karkhana Ltd. Bhoras, Dist.
Jalgaon (supra), the dispute arose in the context of construction of a
godown. As a matter of coincidence, the tender of the contractor, who
was the member came to be accepted and such member was assigned
contract for construction of the godown. In the light of this peculiar
fact, this Court held that the dispute between the member qua his
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capacity as a contractor and the society was not covered under Section
91 of the MCS Act. Again, such decision, is clearly not applicable to the
facts and circumstances of the present case with which we are
concerned.
15] At the cost of repetition, it must be emphasized that at this
stage, we are not concerned with the truth of the allegation in the
dispute application. Upon a demurer, however, the petitioner has not
succeeded in making out a case that the dispute as raised does not
touch the business of the society. Accordingly, there is no case made out
to interfere with the impugned order in exercise of jurisdiction under
Article 227 of the Constitution of India.
16] Under Article 227 of the Constitution of India, this Court, does
not exercise any appellate jurisdiction. The main purpose for assigning
such jurisdiction to this Court is to see that the Courts and Tribunals
sub-ordinate to it act within the bounds of their jurisdiction. Only, if
this Court comes to the conclusion that the Court or inferior Tribunal
has committed a manifest error by misconstruing certain documents or
if this Court comes to the conclusion that on the materials it is not
possible for a reasonable man to come to a conclusion arrived at by the
inferior Tribunal or the inferior Tribunal failed to take into
consideration certain materials or has taken into consideration some
materials, which are not admissible, then this Court will be fully
justified in interfering with the impugned order in exercise of
jurisdiction under Article 227 of the Constitution of India. No such
circumstances have been demonstrated by the petitioner in this case.
This petition is therefore liable to be dismissed. It is however, clarified
that this Court has not adverted to the merits of the dispute between
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the parties. Therefore, all contentions of all parties as regards the
merits of the disputes are kept open to be decided by the Cooperative
Court in accordance with law and the materials which the parties may
have placed or may place before it. Any observations, either in the
impugned order or in the present order are only in the context of
determination of the jurisdictional issue and therefore, the cooperative
Court while deciding the dispute on merits, need not be influenced by
any such observations.
17] For the aforesaid reasons, this petition is dismissed. The interim
order, if any, stands vacated. There shall be no order as to costs.
(M.S.SONAK, J.)
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