Bombay High Court
M/S Nitin Agencies Thro.Partners ... vs Sant Eknath S.S.Karkhana ... on 11 May, 2017
Bench: S.S. Shinde
WP 1969.95+
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 1969 OF 1995
S.B. Traders, a registered
Partnership Firm having its
Office at "Bohara Niwas",
Khadkeshwar, Aurangabad.
Through its partners;
1. Jaikumar s/o Hukumchand Bohara,
Age : 46 years,
2. Shekharchand s/o Champalal Sethi,
Age : 47 years,
3. Hukumchand s/o Tarachand Bohara,
Age : 78 years,
4. Mrs. Pushpalata Subhashchandra Bohara,
Age : 45 years,
5. Sangita Vijaykumar Sethi,
Age : 26 years,
6. Sunanda Vilaschand Sethi,
Age : 28 years.
All residing at "Bohara Niwas"
Khadkeshwar, Aurangabad.
...PETITIONERS
VERSUS
1. Sant Eknath Sahakari Sakhar
Karkhana Ltd.,
Paithan, Dist. Aurangabad.
Register No. ACE-PRO/(A) 7(5),
Paithan,
Through its Chairman,
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WP 1969.95+
2
2. Member,
Maharashtra State Co-operative,
Appellate Court,
Bombay.
Bench at Aurangabad.
3. Judge,
Co-operative Court,
Aurangabad.
...RESPONDENTS
...
WITH
WRIT PETITION NO. 1970 OF 1995
( WITH CIVIL APPLICATIION NO. 2477 OF 1995)
IN
WRIT PETITION NO. 1970 OF 1995
M/s Jai Travels,
Proprietor :- Shri Jaikumar s/o
Hukumchand Bohra, Age : 30 years,
Occupation : Business,
R/o. Bohra Niwas, Khadkeshwar,
Aurangabad.
...PETITIONER
VERSUS
1. Sant Eknath Sahakari Sakhar
Karkhana Ltd.,
Paithan, Dist. Aurangabad.
Register No. ACE-PRO/(A) 7(5),
Paithan,
Through its Chairman,
Shri Kalyanrao Pandharinathrao Patil.
2. Member,
Maharashtra State Co-operative,
Appellate Court,
Bombay.
Bench at Aurangabad.
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WP 1969.95+
3
3. Judge,
Co-operative Court,
Aurangabad.
...RESPONDENTS
...
WITH
WRIT PETITION NO. 1971 OF 1995
( WITH CIVIL APPLICATIION NO. 2476 OF 1995)
IN
WRIT PETITION NO. 1971 OF 1995
M/s. Deep Tyres,
Chandulala s/o Deepchand Kale,
Age : 51 years,
Occupation : Business,
R/o. Kopargaon, Dist. Ahmednagar.
...PETITIONER
VERSUS
1. Sant Eknath Sahakari Sakhar
Karkhana Ltd.,
Paithan, Dist. Aurangabad.
Register No. ACE-PRO/(A) 7(5),
Paithan,
Through its Chairman,
Shri Kalyanrao Pandharinathrao Patil.
2. Member,
Maharashtra State Co-operative,
Appellate Court,
Bombay.
Bench at Aurangabad.
3. Judge,
Co-operative Court,
Aurangabad.
...RESPONDENTS
...
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WP 1969.95+
4
WITH
WRIT PETITION NO. 1972 OF 1995
( WITH CIVIL APPLICATIION NO. 2475 OF 1995)
IN
WRIT PETITION NO. 1972 OF 1995
M/s. Nitin Agencies,
Bohra Niwas, Khadkeshwar,
Aurangabad. thorugh its
Partners.
1. Jaikumar Hukumhand Bora,
R/o. Aurangabad.
2. Subhashchandra Hukumchand Bora,
R/o. Aurangabad.
3. Vilas Champalal Sheti,
R/o. Aurangabad.
...PETITIONERS
VERSUS
1. Sant Eknath Sahakari Sakhar
Karkhana Ltd.,
Paithan, Dist. Aurangabad.
Register No. ACE-PRO/(A) 7(5),
Paithan,
Through its Chairman,
2. Member,
Maharashtra State Co-operative,
Appellate Court,
Bombay.
Bench at Aurangabad.
3. Judge,
Co-operative Court,
Aurangabad.
...RESPONDENTS
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WP 1969.95+
5
...
Mr. P.F. Patni, Advocate for Petitioners.
Mr. D.R. Kale, Advocate for Respondent No.1.
...
CORAM : S.S. SHINDE, J.
RESERVED ON : 9th May, 2017
PRONOUNCED ON : 11th May, 2017
...
JUDGMENT :-
Heard the learned counsel appearing
for the petitioners and the learned counsel
appearing for respondent no.1.
2. At the outset, it is necessary to
clarify that, in view of the settled position
of law, the Member, Maharashtra State Co-
operative Appellate Court Bombay, Bench at
Aurangabad and the Judge, Co-operative Court
at Aurangabad are not necessary parties.
3. The brief facts, as disclosed in the
WP 1969.95+
Petitions, are as under :-
(A) Petitioner in respective Petitions
is registered Partnership Firm/ Proprietary
Firm running the business of supply of
stores, consumables & spare parts etc. which
are needed for various industries including
Sugar Factories. Present Respondent No.1 is a
Co-operative Sugar Factory (A Co-operative
Society) named as "Sant Eknath Sahakari
Sakhar Karkhana Ltd., Paithan, Dist.
Aurangabad". The petitioners in respective
petitions supplied different goods to the
respondent no.1 -Karkhana, as per their
written orders. The transactions as to
supply of goods were continued and the
respondent No.1 used to make lum-sum payment
of part of the dues amount to the petitioners
firms.
(B) As per the bills and the books
WP 1969.95+
maintained by the petitioners in each of the
Petitions, the dues against respondent no.1
is as under :-
(a) As on 27.04.1987 : Rs. 3,53,859.75 paise
in WP No.1969 of 1995.
(b) As on 27.12.1988 : Rs. 35,000/- in WP
No.1970 of 1995.
(c) As on 27.12.1988 : Rs. 37,000/- in WP
No.1971 of 1995 and
(d) As on 27.12.1988 :Rs.4,79,328.24 paise
in WP No. 1972 of 1995.
(C) The newly elected members and
Managing Committee of respondent no.1 -
Karkhana declined to pay dues of the
Petitioners. Thereafter, the petitioners made
repeated requests to pay the dues, but the
respondent no.1 - Karkhana failed to make the
payment of dues. Therefore, the petitioners
issued notice through Advocate, but inspite
WP 1969.95+
of receipt of notices, respondent no.1 did
not reply the said notices or paid the dues.
(D) The petitioner in respective
Petitions therefore, constrained to file the
Dispute before the Co-operative Court at
Aurangabad as follows :-
(a) Dispute No. 34 of 1988 for recovery of
amount of Rs.3,53,859.75 paise along
with interest @ 18% p.a. (WP No.1969 of
1995).
(b) Dispute No.35/1988 for recovery of amount
of Rs. 35,000/- along with interest @ 18%
(WP No.1970 of 1995).
(c) Dispute No.33/1988 for recovery of amount
of Rs.1,37,500/- (WP No.1971 of 1995)
and
(d) Dispute No.32/1988 for recovery of amount
of Rs.4,79,328.40 paise (WP No. 1972
of 1995)
WP 1969.95+
(E) Respondent No.1 failed to file its
written statements opposing the claim of the
petitioners in each Disputes.
(F) The Judge, Co-operative Court passed
the Judgments and awards and allowed the
disputes filed by the respective petitioners.
(G) Present Respondent No.1 was
aggrieved by the Judgments and awards of
Co-operative Court preferred the Appeals
before the Maharashtra State Co-operative
Appellate Court Mumbai bench at Aurangabad as
follows :-
(a) Appeal No. 157 of 1991 (WP No.1969/1995).
(b) Appeal No. 167 of 1991 (WP No.1970/1995).
(c) Appeal No. 166 of 1991 (WP No.1971/1995)
(d) Appeal No.156 of 1991(WP No. 1972/1995)
WP 1969.95+
(I) The Co-operative Appellate Court
allowed all the abovereferred appeals and
returned the disputes for presenting it
before the proper Court. Hence these Writ
Petitions.
4. Mr. P.F. Patni, learned counsel
appearing for the petitioners submits that,
the Member, Maharashtra State Co-operative
Appellate Court Bombay, Bench at Aurangabad
(for short "the Co-operative Appellate
Court"), instead of deciding the appeals on
merits as well as the jurisdiction of the
Co-operative Court to adjudicate the
disputes, decided the appeals only on the
ground that, the Co-operative Court had no
jurisdiction to decide the Disputes filed by
the petitioners. It is submitted that, the
petitioners deposited Rs.5/- to become the
members of `C' class. After they deposited
the said amount in abidance with the terms
WP 1969.95+
and conditions of purchase orders issued by
respondent no.1. He submits that, in view of
condition no.5 of the terms and conditions of
the purchase orders, the petitioners were
obliged to deposit Rs. 5/- towards nominal
membership fees to become the nominal
members. Once the said amount is deposited by
the petitioners, it was for respondent no.1
to enroll the petitioners as `C' class
members. It is submitted that, on the date of
filing the dispute, the petitioners were
members of respondent no.1, and therefore, in
view of the judgments of the Bombay High
Court at Principal Seat, in the cases of
Ramagauri Keshavlal Virani V/s Walkeshwar
Triveni Co-operative Housing Society Ltd.,
and others1 and Chairman/Secretary, Shri
Shrinath Panipuravatha Sahakari Sanstha V/s
Nitin Agro Engineers and another2, the
petitioners are the members of respondent
1 1999(3) Mh.L.J. 145
2 2004(3) Mh.L.J. 908
WP 1969.95+
no.1 - karkhana. Even in the case of
Ramagauri Keshvlal Virani (supra), the High
Court has taken a view that, the membership
of the parties to the dispute has to be
considered on the date of filing of dispute.
It is submitted that, the Co-operative
Appellate Court, instead of deciding the
appeals on merits, proceeded to hold that,
the petitioners/Firms were not admitted to
memberships as on the date of transaction.
The case of the disputants is based upon the
payment of Rs.5/- as fees for becoming the
nominal members. The original receipts dated
8th October, 1987 for payment of Rs.5/- are
produced on record. It is submitted that, the
Co-operative Appellate Court observed that,
even assuming that, the disputants are
admitted to memberships on the basis of
payment of Rs.5/- as `C' class members, the
receipts are made on 8th October, 1987 as per
receipt Nos.4356, 3455, 1358 and 5357, and
WP 1969.95+
therefore, at the most, it can be said that,
the disputants are admitted as nominal
members on 8th October, 1987 or subsequent
thereto. The transaction in question was in
between the appellant i.e. respondent no.1
herein, and the respondents i.e. petitioners
herein, were for a period of 1984 to 1987
1984 to 1986 and 1982 to 1987 and the last
date of which is 29th January, 1987,
03.01.1986 and 04.01.1986, and therefore, the
payment of amount of Rs.5 is paid subsequent
to the period of transaction. Therefore, even
assuming that, the disputants were admitted
to memberships, it would be on or subsequent
to 8th October, 1987, which is the date after
the transaction in between the disputants and
the opponent.
5. It is submitted that, it was the
duty of the Co-operative Appellate Court to
record the findings on all the issues arising
WP 1969.95+
for consideration. It is submitted that, the
Co-operative Appellate Court ought to have
addressed himself, interpreting Section 91 of
the M.C.S. Act, 1961, to the effect that if
the Society wants to refer a dispute under
Section 91 against a person, such person
ought to be a member at least of 'C' class,
however for a creditor of a Society, to refer
a dispute, his being a member of 'C' class is
wholly irrelevant. It is submitted that,
Respondent No.1 has erroneously felt that,
that the pleading as to the "Creditor" is not
taken before Co-operative Court and is taken
for the first time in the Co-operative
Appellate Court. In fact petitioners having
proved and argued that disputants are the
creditor are already recorded by Co-operative
Court, and the said observations contained in
the Judgment of Co-operative Court are not
called in question as not true and genuine.
It is submitted that, the finding recorded by
WP 1969.95+
Co-operative Court about the petitioners
being 'C' class members and creditors is
based on legal evidence, presumptions and
inferences, and therefore, the Co-operative
Appellate Court while exercising jurisdiction
under Civil Procedure Code had no
jurisdiction to set aside a finding of fact,
which is illegal and perverse.
6. It is submitted that, the
Co-operative Appellate Court ought to have
been considered that in civil law, the
Appellate Court can re-appreciate the
evidence and record finding of fact, however,
findings and orders cannot be set aside
unless the Judgment under appeal could be
termed as illegal, unconscionable, beyond
jurisdiction or otherwise untenable. Only
because Appellate Court can take another or
different point of view than the Co-operative
Court, is not by itself adequate for
WP 1969.95+
Co-operative Appellate Court to exercise the
appellate powers to reverse the order under
appeal. It is submitted that, the
Co-operative Appellate Court has failed to
exercise the jurisdiction under section 91 of
the Maharashtra Co-operative Societies Act,
1961 and hence the Court exercising powers
and the jurisdiction has to see the 'equity'
and balance of justice.
7. The learned counsel invites my
attention to the findings recorded by the
Co-operative Court and submits that, the Co-
operative Court framed as many as four/five
issues. The preliminary objection was raised
by respondent no.1 i.e. appellant before the
Appellate Court that, the disputant is not
`C' Class member of the opponent - Karkhana.
While deciding the said issue the
Co-operative Court has discussed in detail in
the judgment that, the petitioners brought on
record the document i.e. receipt of payment
WP 1969.95+
of Rs.5/- deposited by the petitioners to
become nominal members. The amount was
deposited by the petitioners, they were not
under obligation to do anything further to
become the `C' class members. On the
contrary, it was for the opponent - Karkhana
to enroll the petitioners as `C' class
members. He submits that, the petitioners
filed application before the Co-operative
Court to call the `C' Class membership
register and bye-laws of the opponent -
Karkhanana and the opponent - Karkhana was
directed to file say on the said application.
The opponent - Karkhana inspite of receipt of
the copy of the application did not file the
documents. The disputants i.e. the
petitioners also filed application at page
185 of the original record and requested to
call certain documents from the opponent -
karkhana to decide the issue nos. 1 and 2,
the disputant prayed to call register of
WP 1969.95+
supply of machineries maintained by the
opponent - Karkhana, original ledger of
opponent, cash book, register of `C' class
members and the voters list of the opponent
-karkhana. The opponent neither filed any say
nor produced documents as per the
application. Therefore, the order was passed
on Exhibit-10 directing the parties to lead
evidence on all the issues. The matter was
posted for final hearing on issue nos.1 and
2. The disputants filed receipt nos. 4356,
3455, 1358 and 5357 dated 8th October, 1987
issued by the opponent - karkhana by which
the disputants paid Rs. 5/- towards admission
fees of `C' class membership. Therefore, it
is submitted that, the Co-operative Court
drive adverse inference against the opponent
- karkhana that, the opponent - karkhana has
not produced the record inspite of the
applications of the disputants for production
of the documents including the register of
WP 1969.95+
`C' class membership. Therefore, the Co-
operative Court has accepted the case of the
disputants that, they have become `C' class
members. It is submitted that, when such
findings of fact was recorded by the Co-
operative Court and even on other issues, the
Co-operative Court held in favour of the
petitioners and allowed the disputes, in that
case, the Co-operative Appellate Court ought
to have considered the appeals filed by the
opponent - karkhana not on the point of
jurisdiction but even other issues raised on
merits. It is submitted that, the Co-
operative Appellate Court proceeded to pass
the orders on the ground that, the
transaction in question are entered into by
the disputants and the opponent - karkhana
prior to the payment of amount of Rs.5/- on
8th October, 1987, and therefore, the
transactions are not in the capacity as
nominal members, and hence, the disputes
WP 1969.95+
filed by the petitioners i.e. disputants will
not be covered under Section 91 of the
Maharashtra State Co-operative Societies Act,
1960. Therefore, the learned counsel further
submits that, the Supreme Court in the case
of Deccan Merchants Co-operative Bank Ltd.,
V/s M/s Dalichand Jugraj Jain and others 3 has
taken a view that, the word "business" in
sub-sec. (1) of Sec.91 has been used in
narrower sense and it means the actual
trading or other similar business activity of
the Society which the Society is authorised
to enter into under the Act and the Rules and
byelaws. Five kinds of disputes are mentioned
in sub-section (1); first, disputes touching
the constitution of a society; secondly
disputes touching election of the office
bearers of a society; thirdly, disputes
touching the conduct of general meetings of a
society; fourthly, disputes touching the
3 AIR 1969 SC 1320
WP 1969.95+
management of a society; and fifthly,
disputes touching the business of a society.
It is clear that the word "business" in this
context 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. Relying upon the above observations
of the Supreme Court, it is submitted that,
so far the disputes raised by the petitioners
would fall in the category first i.e. the
disputes touching the constitution of a
society and therefore, the disputes filed by
the petitioners were maintainable before the
Co-operative Court. He also placed reliance
on the judgment of the Supreme Court in the
case Margret Almeida and others V/s Bombay
Catholic Co-operative Housing Society Ltd.,
and others4 and submits that, when section
91(1)(c) stipulates that persons other than
4 2012(5) Mh.L.J.4
WP 1969.95+
the members of the society with whom the
society has any transaction as one of the
classes of persons who could be parties to a
dispute amenable exclusively to the
jurisdiction of the Co-operative Court, such
a class is not an unqualified class. The
said sub-section further qualifies the said
class by expressly mentioning that the
transactions of such persons with a society
should be a transaction "in respect of which
restrictions and Regulations have been made
or prescribed under sections 43, 44, or 45 of
the Act". Therefore, to understand the exact
nature of the above mentioned class, an
examination of the scheme of sections 43, 44
is necessary.
Therefore, the learned counsel
appearing for the petitioners submits that,
the Petitions may be allowed.
WP 1969.95+
8. On the other hand, Mr. D.R. Kale,
the learned counsel appearing for respondent
no.1 submits that, merely because the
petitioners deposited Rs.5/- in the month of
October, 1987 and merely on depositing such
amount, the memberships are not granted. Even
for `C' class membership, there is procedure
prescribed under the Maharashtra State Co-
operative Societies Act, 1960 and the Rules
and unless the membership is
approved/accepted by the Board of Directors
after adhering to the procedure under the
aforesaid Act and Rules, the contention of
the petitioners that, since the petitioners
deposited Rs.5/- and on depositing such
amount, they became nominal members is devoid
of any merits. It is submitted that, the
Co-operative Court did not take into
consideration that, there is procedure to
become `A', `B' or `C' class member. It is
submitted that, even though the petitioners
WP 1969.95+
deposited the amount on 8th October, 1987, the
alleged transaction between the petitioners
and the opponent - karkhana is prior to
depositing the amount of Rs. 5/- by the
petitioners, and therefore, the said alleged
transaction between the petitioners and the
opponent - Karkhana was even prior to deposit
of Rs.5/- by the petitioners and in view of
the said position, the petitioners' grievance
raised in the disputes on merits about the
alleged recovery of amount from the sugar
factory could not have been entertained by
the Co-operative Court. Therefore, the
Appellate Co-operative Court, taking into
consideration, all the aforesaid aspects
reached to the conclusion that, in first
place the petitioners have never became the
members of the respondent - sugar factory and
secondly, even if the date of deposit of
Rs.5/- i.e. 8th October, 1987 is taken into
consideration, in that case also the
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petitioners were not members on the initial
date of entering into alleged transaction
with the opponent - karkhana, and therefore,
the disputes filed by them should not have
been entertained by the Co-operative Court,
since the Co-operative Court had no
jurisdiction to entertain such disputes
keeping in view the provisions of Section 91
of the Maharashtra Co-operative Societies
Act, 1960. The learned counsel invites my
attention to the judgment of the Bombay High
Court bench at Aurangabad in the case of
Belganda Sahakari Sakhar Karkhana Ltd.,
Bhoras, Dist. Jalgaon V/s Keshav Rajaram
Patil5 and submits that, in respect of
dispute between a society and its member
regarding matter which does not arise out of
the provisions of the Maharashtra Co-
operative Societies Act, the Co-operative
Court has no jurisdiction to entertain the
5 1994(2) Mh.L.J. 1756
WP 1969.95+
same. He also invites my attention to the
judgment of the Bombay High Court bench at
Aurangabad in the case of Mula Pravara
Electric Co-operative Society Ltd., V/s
Maharashtra State Electricity Distribution
Company Ltd.,6 and submits that, dispute
between the society and member may not always
touch business of society due to nature of
dispute or nature of transaction, and
therefore, the Civil Court has jurisdiction
to decide the dispute. It is submitted that,
when the Co-operative Court had no
jurisdiction to entertain the dispute in that
case, it was not necessary for the Co-
operative Appellate Court to render the
findings on merits of the contentions raised
by the disputants, and therefore, the Co-
operative Appellate Court has rightly decided
the appeals only on the basis of the
preliminary issue that, the Co-operative
6 2016(3) Mh.L.J. 190
WP 1969.95+
Court had no jurisdiction to entertain the
disputes. Therefore, he submits that, the
Petitions are devoid of any merits and the
same may be dismissed.
9. I have given thoughtful
consideration to the submissions of the
learned counsel appearing for the petitioners
and the learned counsel appearing for
respondent no.1. With their able assistance,
I have perused the pleadings in the
Petitions, grounds taken therein, annexures
thereto and the findings recorded by the Co-
operative Court and also the Co-operative
Appellate Court.
10. In my opinion, it is not necessary
to address the contentions raised on merits
and keeping in view the order passed by the
Co-operative Court, I am confining the
adjudication of these Writ Petitions in
WP 1969.95+
respect of jurisdiction of the Co-operative
Court to entertain the disputes, however
keeping in view the findings recorded by the
Co-operative Appellate Court.
11. The Co-operative Court has framed as
many as four/five issues for its adjudication
and determination. The issue no.1 reads
thus :-
"Issue no.1. Does the disputant prove
that the it is `C' class member of the
opponent - karkhana ?
In respect of the said issue, there
is detailed discussion in the judgment of the
Co-operative Court. The Co-operative Court
has adverted to the contentions of the
petitioners and also the respondent -
karkhana. It is recorded by the Co-operative
Court that, the opponent - karkhana filed
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application at Exhibit 7 for deciding the
issue regarding `C' class membership of the
disputant firms as a preliminary issue and
also prayed to decide the issue no.2
regarding tenability of the disputes, as
preliminary issue. The opponent - karkhana
filed say to the aforesaid issue nos.1 and 2.
The disputants i.e. petitioners herein filed
application at page 179 to call the `C' class
membership register and bye-laws of the
karkhana. The opponent - karkhana was
directed by the Court to file say on the said
application, however, the opponent karkhana
neither filed reply nor placed on record the
documents. Thereafter, the Co-operative Court
passed the order on 30th June, 1990 to hear
the parties on issue nos.1 and 2. The
disputants filed another application at page
185 and requested to call certain documents
from the opponent karkhana to decide the
issue nos.1 and 2. The disputants prayed to
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call register of supply of machineries
maintained by the opponent - karkhana,
original ledger of opponent, cash book,
register of `C' class members and the voters
list of the opponent - karkhana. The opponent
- karkhana neither filed any say nor produced
documents as per the application. Therefore,
the Co-operative Court passed the order on
Exhibit-10 directing the parties to lead
evidence on all the issues. However, on the
insistence of opponent - karkhana, the
arguments were again heard and parties were
given opportunity to lead the evidence on all
the issues including issue nos.1 and 2 as per
the order dated 3rd April, 1991 and
thereafter, the case was fixed for final
hearing. The Co-operative Court has recorded
that, the disputants filed Receipt Nos. 4356,
3455, 1358 and 5357 dated 8 th October, 1987
issued by the opponent - karkhana. It is
observed that, the said receipt is at page
WP 1969.95+
189 and it shows that, the disputants have
paid Rs.5/- towards admission fees (`C' class
membership). It appears that, the disputants
led evidence. He examined Shri J.H. Bohara,
partner of his firm. His deposition is at
Exhibit-12. In the deposition Shri J.H.
Bohara, he stated on oath that, as per
condition No.5 in the purchase order, the
disputant was required to become nominal
member of the opponent Karkhana. Therefore,
the disputant paid Rs.5/- for becoming 'C'
class member of the opponent Karkhana. He
stated on oath that the disputant firm is 'C'
class member of the opponent karkhana."
12. It appears that, the learned
Advocate for the opponent - karkhana cross
examined the said witness and suggested that,
there is no resolution of Board of Directors
admitting him `C' class member. It appears
that, even the witnesses were examined on
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behalf of opponent karkhana. After
appreciation of the evidence of both sides,
the Co-operative Court reached to the
conclusion that, the opponent - karkhana has
not produced the record inspite of the
applications of the disputants, and
therefore, the case of the disputants that,
they have become `C' class members will have
to be accepted. Therefore, the case of
disputants that, they become `C' class
members deserves acceptance. It appears that,
the adverse inference was drawn against the
opponent - karkhana for not submitting the
`C' class membership register for perusal of
the Court. In addition to aforementioned
issue, the Co-operative Court also proceeded
to decide the other three/four issues on
merits including the issue of jurisdiction,
whether the disputant proves their claims in
the disputes and whether, the opponent
karkhana is liable to pay interest @ 18% p.a.
WP 1969.95+
on the said amounts. Therefore, the
adjudication by the Co-operative Court was on
all the issues framed by that Court.
13. Upon careful perusal of the findings
recorded by the Maharashtra State Co-
operative Appellate Court, it appears that,
the Co-operative Appellate Court considered
the preliminary issue raised by the appellant
- karkhana confined to issue no.1 i.e. Does
the disputant prove that it is `C' class
member of the opponent - karkhana ?, which
was framed by the Co-operative Court. The
Appellate Court, after adverting to the rival
contentions observed that, even assuming
that, the disputants are admitted to
memberships, it will be required to be seen
as to whether the firms were admitted to
memberships as on the date of transaction. It
is further observed that, the disputants
deposited an amount of Rs.5/- and produced
WP 1969.95+
the original receipts dated 8th October, 1987
for payment of Rs.5/-. It is further observed
that, even if the cases of the disputants are
accepted that, the disputants deposited
Rs.5/- on 8th October, 1987 and to that effect
the receipts are produced on record, the
transaction in question in between the
appellants and the respondent were for the
period from 1984 to 1987, 1984 to 1986 and
1982 to 1987 and the last date of which is
29th January, 1987, 03.01.1986 and 04.01.1986,
and therefore, the payment of amount of
Rs.5/- is paid subsequent to the period of
transaction. Therefore, even assuming that,
the disputants were admitted to membership,
it would be on or subsequent to 8th October,
1987, which is the date after the transaction
in between the disputants and opponent. It
further appears that, the Co-operative
Appellate Court placed reliance in the case
Deccan Merchants Co-operative Bank (supra)
WP 1969.95+
and also other judgments and reached to the
conclusion that, it is settled principle
that, unless the transaction is effected by
the person in his capacity as a member, the
jurisdiction under Section 91 of the M.C.S.
Act, 1960 is not attracted. If the
transaction entered into before admitting
the persons, it would the transaction with
non-member and dispute filed by such person
would not be covered under Section 91. It is
further observed that, in the present case,
admittedly, the transactions in question are
entered into by the disputants prior of the
payment of amount of Rs.5/- on 8 th October,
1987, and therefore, the said transactions
are not in a capacity as nominal members, and
therefore, the dispute filed by the
disputants would not be covered under Section
91 of the Maharashtra Co-operative Societies
Act, 1960.
WP 1969.95+
14. Upon careful perusal of the
judgments of the Co-operative Appellate
Court, except the aforementioned findings,
there is no findings on other issues, which
were considered by the Co-operative Court
including on merits of the claims of the
disputants. Ultimately, the Appellate Court
held that, the disputes filed by the
disputants stand dismissed for want of
jurisdiction and the same was returned for
presenting it in a proper Court.
15. If the findings of the Co-operative
Appellate Court are considered in the light
of the authoritative pronouncement of the
Bombay High Court bench at Aurangabad in the
case of Chairman/Secretary, Shri Shrinath
Panipuravatha Sahakari Sanstha (supra), it
will have to be held that, the said findings
are not in consonance with the ratio laid
down in the aforementioned judgment. In para
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7 of the said judgment, the Court has
adverted to the arguments of the learned
counsel appearing for the bank in the said
case that, the dispute was not maintainable
under Section 91 of the M.C.S. Act, 1960 and
on the ground that, the contractor was not a
member of the society at the time of alleged
agreement dated 30th January, 1988 and 4th
February, 1988 entered with the society. It
appears that, there was tripartite agreement
between the contractor, society and the bank.
The High Court held that, there is no merit
in the contentions raised by the bank,
because the relevant date for consideration
of maintainability of the dispute under
Section 91 is not the date of agreement but
the date on which the dispute is instituted
before the Co-operative Court.
16. Coming to the facts of the present
case, the petitioners i.e. disputants filed
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the disputes before the Co-operative Court in
the year 1988. As it has already come on
record that, the petitioners i.e. disputants
have deposited Rs.5/- on 8th October, 1987.
The Co-operative Court has considered the
case of the disputants and while answering
the issue no.1 i.e. does the disputants prove
that, it is `C' class member of the opponent
- karkhana ?, have recorded the finding that,
the case of the disputants that, they have
become `C' class members will have to be
accepted. The said finding recorded by the
Co-operative Court is after appreciation of
evidence brought on record by the disputants
and also by the opponent - karkhana. As long
as the said finding is intact and is not
negated, it will have to be held that, on the
date of filing disputes in the year 1988, the
disputants became `C' class members of the
respondent - karkhana. The Co-operative Court
has also pronounced the judgments on other
WP 1969.95+
issues on merits of the claims of the
disputants for an outstanding amount, as has
been mentioned in the respective Disputes. In
that view of the matter, in my opinion, the
findings recorded by the Co-operative
Appellate Court and the orders passed are not
in consonance with the law laid down in the
aforementioned two judgments of the High
Court, in the cases of Ramagauri Keshavlal
Virani (supra) and Chairman/Secretary, Shri
Shrinath Panipuravatha Sahakari Sanstha
(supra).
17. Apart from discussion in foregoing
paragraphs, in my considered opinion, the
Co-operative Appellate Court ought to have
decided the Appeals on merits addressing all
the issues, which were framed, considered and
decided by the Co-operative Court in
disputes. In that view of the matter, the
impugned judgment and order of the Co-
WP 1969.95+
operative Appellate Court in respective
proceedings filed by respondent no.1 herein,
stand quashed and set aside. The respective
Appeals are restored to its original file.
The State Co-operative Appellate Court is
directed to hear the parties on merits and
decide the appeals on all the points
including the jurisdiction and merits
touching to all the issues, which are
considered, answered and decided by the Co-
operative Court, and render the final
judgment, as expeditiously, as possible and
in any case not later than one year from
today. Accordingly Rule made absolute in the
above terms. The Petitions stand disposed of
accordingly. Pending civil applications stand
disposed of accordingly. No orders as to
costs.
18. However, it is clarified that, all
the contentions raised on law as well as
WP 1969.95+
facts, on all the points/issues, are left
open to be agitated before the Co-operative
Appellate Court.
(S.S. SHINDE, J.)
SGA
