Himachal Pradesh State Co-Op Bank ... vs M/S. Gulshan Kumar And Brothers ...
2001 Latest Caselaw 75 Del

ORDER

J.D. Kapoor, J.

1. It appears that the plaintiff has not come before this Court with clean hands and as such is faced with an application under Order VII Rule 11 CPC read with Section 151 CPC firstly for the statutory provisions that not Court shall have any jurisdiction to entertain any suit or any proceedings is respect of such disputes between members who are governed by the HP Cooperative Societies Act, 1968 and secondly suit was filed in this Court after participating in the arbitration proceedings before the Arbitrator.

2. Plaintiff bank is a registered Society under the Himachal Pradesh State Co-operative Societies Act, 1968 having its registered office at Shimla. Defendant no.1 is a sole proprietorship concern running its business in the name and style of M/s. Gulshan Kumar & Brothers having its office at New Delhi Defendant No.2 is a sole proprietor of the defendant no.1/firm while defendants 3 to 10 are the guarantors. Plaintiff bank on the request of the defendant no.2 as sole proprietor of defendant no.1 and after due and usual verifications allowed through its branch office, the cash credit limit facility to the Defendant no.1. The rate of interest agreed by the defendants and chargeable by the plaintiff on such overdraft facilities was per prevalent rate of interest calculated at the rate of 24% per annum at quarterly rests.

3. Various documents namely loan application, demand promissory note, letter of undertaking, letter of waiver, agreement of hypothecation of goods, letter of guarantee were executed by the defendant no.1. After having availed the aforesaid cash credit facility, the defendant no. 1 firm failed and neglected to and here to the terms and conditions of the said loan facility resulting into overdrawing over and above the sanctioned limit of Rs. 3,00,000/- against clearing cheques which were presented by the defendant no.1 to the plaintiff bank from time. However the said clearing cheques stood dishonoured by the Drawee Bank resulting into overdrawing in excess to the sanctioned limit. That when all the efforts made by the plaintiff bank to recover the outstanding demands from the defendants and in bringing the defendants in disciplining their account failed, the plaintiff bank Section 72 of the Himachal Pradesh Cooperative Societies Act, 1968 and initiated the proceedings before the Registrar, HP Cooperative Societies, Himachal Pradesh against the defendants. It is further averred that in view of the objections raised by the defendants in regard to the maintainability of such arbitrations proceedings and to avoid multiplicity of litigation, unnecessary technical objections and legal controversy, the plaintiff preferred present civil remedy.

4. Admittedly, the disputes between the parties was referred to the Arbitrator in July, 1994 under Section 72 of the HP Cooperative Societies Act, 1968. The Learned Arbitrator vide his order dated 12.4.1996 dismissed the claims of the plaintiff herein under Section 73 of the HP Cooperative Societies, Act, 1968. After passing of the said order, the only remedy available to the plaintiff by way of Section 93 of the said Act was by way of appeal. Section 93 provides as under:-

"An appeal shall be under this Section against any decision or award under Section 73 of the Act."

Section 73 of the Act provides

"Notwithstanding anything 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 such disputes shall be referred to the Registrar for decision and no Court shall have jurisdiction to entertain any suit or other proceedings in respect of such dispute."

5. Apart from these provisions, Section 92 of the act also provides that no civil or revenue Court shall have any jurisdiction in respect of any dispute required under Section 72 to be referred to the Registrar. As it is apparent from the aforesaid provisions of law coupled with the fact that the plaintiff has also submitted itself to the arbitration proceedings, remedy available to the plaintiff is by way of appeal and not by way of filing the civil suit. Merely because some objections were raised by the defendants with regard to the maintainability of the arbitration proceedings they did not equip the plaintiff to seek the remedy by way of filing civil suit whereas the aforesaid provisions of the said Act specifically debarred and prevented the civil suit.

6. Accordingly, I feel inclined to allow the application and dismiss the suit being not maintainable. IA also stands disposed of.