Madras High Court
The Madras Journalists vs P.Rangarajan (Died) on 27 January, 2023
CRP.No.1935 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Date : 27.01.2023
CORAM
THE HON'BLE MR. JUSTICE G.K.ILANTHIRAIYAN
C.R.P.No.1935 of 2016
and C.M.P.No.10090 of 2016
The Madras Journalists
Cooperative Housing Society Ltd.,
rep by President
Park Area, Srinivasapuram,
Thiruvanmiyur
Chennai – 600 041. ... Petitioner
Vs.
1. P.Rangarajan (died)
2. Aakash Rangarajan
(R2 impleaded as legal
heir of the sole respondent
by an order dated 26.08.2022
in C.M.P.No.5200 of 2022
in C.R.P.No.1935 of 2016) ... Respondents
Prayer : Civil Revision Petition filed under Article 227 of the
Constitution of India, to set aside the fair and decreetal order dated
17.03.2016 made in I.A.No.9207 of 2015 in O.S.No.2446 of 2015 on the
file of the learned VI Assistant Judge, City Civil Court, Chennai.
Page 1 of 21
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
For Petitioner : Mr.P.Anbarasan
For Respondents : Mr.S.Parthasarathy,
Senior Counsel
for Mr.K.S.Naveen Balaji
ORDER
The Civil Revision Petition is filed to set aside the fair and
decreetal order dated 17.03.2016 made in I.A.No.9207 of 2015 in
O.S.No.2446 of 2015 on the file of the learned VI Assistant Judge, City
Civil Court, Chennai, thereby dismissing the petition filed by the
petitioner to reject the plaint.
2. Mr.P.Anbarasan, the learned counsel for the petitioner in the
Civil Revision Petition submitted that the deceased first respondent is the
plaintiff and the petitioner is the third defendant. The deceased first
respondent filed suit in O.S.No.2446 of 2015, for declaration declaring
that the letters issued by the petitioner dated 07.04.2015, thereby
cancelled the allotment of the house bearing No.111, Journalist Colony,
Thiruvanmiyur, as null and void and other reliefs. While pending the suit,
the petitioner filed petition for rejection of plaint on the ground that the
suit itself is barred by law.
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
2.1. The petitioner is a registered Cooperative Society and the
deceased first respondent is the member of the society. If any dispute
relates to the business of the society and there is a statutory obligation for
the parties to resort to Section 90 of the Tamilnadu Cooperative Societies
Act, 1983 which provides for arbitration of such disputes. Section 8 of
the Arbitration and Conciliation Act, 1986 makes it mandatory for a
judicial authority, before which an action is brought in a matter, which is
the subject matter of an arbitration agreement, shall refer the parties to
arbitration. The deceased first respondent has filed suit challenging the
order dated 07.04.2015 passed by the petitioner thereby cancelling the
allotment of house site to the deceased first respondent which is well
within the realm of the contract between the society and the deceased
first respondent for allotment of house sites and that such disputes have
to be first referred to arbitration under Section 90 of the Tamilnadu
Cooperative Societies Act, 1983.
2.2. He further submitted that Section 156 of the Tamilnadu
Cooperative Societies Act, 1983, specifies that no order, decision or
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
action taken under the said Act by an Officer authorised or empowered
shall be liable to be called in question in any court and no injunction shall
be granted by any Court in respect of anything which is done or intended
to be done under the Act. The impugned order in the suit is one passed
by the authorised person. Jurisdiction civil Court has no power, as the
Act expressly provides for legal remedy under Section 90 of the
Tamilnadu Cooperative Societies Act, 1983. However, without
considering the above, the Court below dismissed the petition for
rejection of plaint. In support of his contention, he relied upon the
following judgments:
(i) Rajamani Vs. Cooperative Sugars Ltd Chithur
reported in 1989 TLNJ 213
(ii) Sarangan Vs. Vadivelu Mudaliar and others
reported in (2009) 3 MLJ 463
(iii) Seni and others Vs City Civil Court, Chennai and others
in WP.No.34692 of 2014
(iv) Gopalakrishnan and others Vs. Secretary to Government
Housing and Urban Development Department
in WP.No.24649 of 2007
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
3. Per contra, Mr.S.Parthasarathy, learned Senior Counsel
appearing for the respondents submitted that the deceased first
respondent is the journalist and the Government of Tamilnadu has
extended the cash benefits to the journalists. The petitioner Society was
formed for the purpose of allotment of land to the allottees. Accordingly,
he had paid amount towards cost of the land and the petitioner Society
was formed for operation of the said scheme. The members of the Society
approached Indian Bank for loan to build houses for journalists. The
petitioner Society never paid other amount either towards cost of the land
or towards cost of the building. The deceased first respondent was
allotted plot No.111 in Thiruvanmiyur Housing Scheme. Thereafter,
construction was completed and the possession was handed over to him.
The house property has been assessed for property tax and he is regularly
paying the property tax. He is liable to pay outstanding loan amount to
the bank and 1% of the loan amount as commission to the petitioner
Society for the service rendered by the petitioner Society.
3.1. However, the petitioner Society served statement to the
deceased first respondent and directed him to pay 15.5% interest to the
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
Society on the compound interest and also penal charges for the amount
borrowed from the petitioner Society. Even as per the guideline issued by
the Registrar of Cooperative Societies, the petitioner Society is entitled to
charge only 1% as service charge. Therefore, the deceased first
respondent refused to pay the same and as such the allotment of the land
and building was cancelled by the impugned letter dated 07.04.2015.
Thereafter, the deceased first respondent has filed suit in O.S.No.2446 of
2015 challenging the impugned notice dated 07.04.2015 as null and void
and for direction to issue statement of accounts and to direct the Society
to accept 1% of service charges.
3.2. The learned Senior Counsel further submitted that the
provision under Section 90 of the Act and also under the bye-laws of the
Society for referring the disputes between the member and the society
touching the business of the society to the Registrar for arbitration. The
Act is a special enactment which provides machineries for settlement of
dispute between the member and the society, touching the constitution of
the Board or the management or the business of a registered society. The
dispute is with regard to the property allotted to the deceased first
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
respondent cannot be decided by the machineries provided under the Act.
There is no bar under Section 9 of C.P.C., to maintain the suit. The suit is
of a civil nature and the cognizance of the same is not a bar under Section
9 of C.P.C. Further, the Act does not provide any machinery to solve the
dispute or enforce any civil right. Therefore, there is no specific bar under
Section 9 of CPC.
3.3. He further submitted that the deceased first respondent was
alloted the house plot and as such the right of the deceased first
respondent to move to the civil court is not a bar. The dispute arose out of
civil right and he is not precluded from bringing the suit before the civil
court. The Act does not provide any machinery to solve the dispute or
enforce any civil right. In order to invoke power under Section 90 of the
Act, it should have been passed by the authority under the Act and it is
not an order passed under any provisions of the Act. Therefore, the
dispute between the petitioner Society and the deceased first respondent
could not be resolved under any of the provisions under the Act.
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
3.4. He also submitted that the deceased first respondent has
made specific allegation that he was not informed either by the bank or
Society while closing his using HLA account with the bank, there seems
to be preplanned to put hardship to the deceased first respondent in
keeping him in the dark on extending details of payments made by him
even at the earlier stage which also resulted in the Society allegedly
indulging in mismanagement of funds. Therefore, the petitioner Society
flouted the rules and have committed fraud on the deceased first
respondent. When it being so, it cannot be resolved before the Arbitrator
as contemplated under Section 90 of the said Act. Therefore, there is no
bar under Section 156 of the Tamilnadu Cooperative Societies Act, 1983
to file the suit. In support of his contention, he relied upon the following
judgments:
(i) Mardia Chemicals Limited Vs. Union of India
reported in (2004) 4 SCC 311
(ii) K.N.Mohan Raj Vs. The Registrar of Cooperative Societies
reported in 2016 Writ LR 96
(iii) Robin Thapa Vs. Rohit Dora
reported in (2019) 7 SCC 359
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
4. Heard, Mr.P.Anbarasan, learned counsel for the petitioner,
and Mr.S.Parthasarathy, learned Senior Counsel appearing for the
respondents.
5. The deceased first respondent filed the suit for the following
prayers:
(i) declaring the letter dated 07.04.2015
issued by the third defendant in cancelling the
allotment of the house bearing No.111, Journalist
Colony, Thiruvanmiyur, allotted to the plaintiff as
null and void and illegal.
(ii) direct the third defendant to issue audited
statement of accounts from 1992 to till 31.01.2012
(iii) direct the third defendant to accept the
one percent service charge as directed by the
Registrar
(iv) awarding costs of the suit and
(v) passing such further or other orders as
this Hon'ble Court may deem fit and proper in the
circumstances of the case and thus render justice.
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
6. While pending the suit, the petitioner Society filed petition
for rejection of plaint on the ground that the suit itself is barred by law.
According to the petitioner Society, it is a registered Cooperative Society
governed by the provisions of the Tamil Nadu Co-operative Societies Act,
1983. The petitioner purchased the land measuring 5.50 acres in
Thiruvanmiyur with the help of a loan granted by the Indian Bank. The
petitioner arranged for the construction of houses and mortgaged the
entire properties and raised a housing loan. Accordingly, the
petitioner/Society constructed 112 independent houses and 24 flats.
7. The deceased first respondent was alloted Plot No.111, on
29.09.1993 and the sale deed yet to be registered in their favour. They
failed to pay the monthly instalments and they wilfully defaulted the
monthly instalment to the petitioner. Therefore, they have dues to the
tune of Rs.38,03,827/-, Rs.51,96,436 /- as on 28.02.2015 and
Rs.21,30,972/- as on 30.11.2014. Therefore, the petitioner was not able
to clear the loans and the Society is facing SARFAESI proceedings
initiated by the banker. Even then, the deceased first respondent did not
make any payment to the petitioner/society. Therefore, the petitioner
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
society has no other option to cancel the plots/flats as per the terms of
allotment and to resume the plots/flats.
8. Accordingly, the petitioner society issued show cause notice
to the deceased first respondent as to why the allotment of plots/flats
should not be cancelled. In fact, he also replied through his respective
counsel. Without satisfying the reply, the petitioner/society by letter dated
07.04.2015 cancelled the allotment of the plots/flats in accordance with
the terms of allotment of plots/flats to its members. The said orders are
under challenge in the present suit.
9. On perusal of the plaint revealed specific allegations that the
petitioner Society indulged in mismanagement of funds and also
misappropriation of funds. Further averred that there are manipulation in
accounts by the petitioner Society to make illegal gains. Therefore,
though the Act is a special enactment which provides machineries for
settlement of dispute between the member and the society, touching the
constitution of the Board or the management or the business of a
registered society, the dispute is with regard to the property allotted to the
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
deceased first respondents and also the disputes with regards to the
management and misappropriation including the manipulation of records
cannot be decided by the machineries provided under the Act. Therefore,
there is no bar under Section 9 of CPC.
10. The learned Senior Counsel relied upon the judgment in the
case of Mardia Chemicals Limited Vs. Union of India reported in
(2004) 4 SCC 311, wherein it is held as follows:
50. It has also been submitted that an appeal is
entertainable before the Debt Recovery Tribunal only
after such measures as provided in sub-section (4) of
Section 13 are taken and Section 34 bars to entertain
any proceeding in respect of a matter which the Debt
Recovery Tribunal or the appellate Tribunal is
empowered to determine. Thus before any action or
measure is taken under sub-section (4) of Section 13, it
is submitted by Mr. Salve one of the counsel for
respondents that there would be no bar to approach the
civil court. Therefore, it cannot be said no remedy is
available to the borrowers. We, however, find that this
contention as advanced by Shri Salve is not correct. A
full reading of section 34 shows that the jurisdiction of
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
the civil court is barred in respect of matters which a
Debt Recovery Tribunal or appellate Tribunal is
empowered to determine in respect of any action taken
"or to be taken in pursuance of any power conferred
under this Act". That is to say the prohibition covers
even matters which can be taken cognizance of by the
Debt Recovery Tribunal though no measure in that
direction has so far been taken under sub-section (4) of
Section 13. It is further to be noted that the bar of
jurisdiction is in respect of a proceeding which matter
may be taken to the Tribunal. Therefore, any matter in
respect of which an action may be taken even later on,
the civil court shall have no jurisdiction to entertain any
proceeding thereof. The bar of civil court thus applies to
all such matters which may be taken cognizance of by
the Debt Recovery Tribunal, apart from those matters in
which measures have already been taken under sub-
section (4) of Section 13.
51. However, to a very limited extent jurisdiction
of the civil court can also be invoked, where for
example, the action of the secured creditor is alleged to
be fraudulent or their claim may be so absurd and
untenable which may not require any probe, whatsoever
or to say precisely to the extent the scope is permissible
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
to bring an action in the civil court in the cases of
English mortgages. We find such a scope having been
recognized in the two decisions of the Madras High
Court which have been relied upon heavily by the
learned Attorney General as well appearing for the
Union of India, namely V.Narasimhachariar (supra)
p.135 at p.141 and 144, a judgment of the learned
single Judge where it is observed as follows in para 22:
"The remedies of a mortgagor against the
mortgagee who is acting in violation of the rights, duties
and obligations are twofold in character. The mortgagor
can come to the Court before sale with an injunction for
staying the sale if there are materials to show that the
power of sale is being exercised in a fraudulent or
improper manner contrary to the terms of the mortgage.
But the pleadings in an action for restraining a sale by
mortgagee must clearly disclose a fraud or irregularity
on the basis of which relief is sought: 'Adams v. Scott,
(1859) 7 WR (Eng.) 213 (Z49). I need not point out that
this restraint on the exercise of the power of sale will be
exercised by Courts only under the limited
circumstances mentioned above because otherwise to
grant such an injunction would be to cancel one of the
clauses of the deed to which both the parties had agreed
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
and annul one of the chief securities on which persons
advancing moneys on mortgages rely. (See Rashbehary
Ghose Law of Mortgages, Vol.II, Fourth Edn., page
784).
11. He also relied upon the judgment in the case of K.N.Mohan
Raj Vs. The Registrar of Cooperative Societies reported in 2016 Writ
LR 96, wherein the Hon'ble Division of this Court held that when
allegations of fraud, misappropriation etc, are made, they cannot be
adjudicated under Section 90 of the Cooperatives Societies Act, 1988.
Section 90 is for the resolution of disputes as between the members or as
between the member on the other hand and the Society on the other
hand. This provision does not deal with the enquiry into the allegations of
those nature. In the case on hand, as stated supra, there are specific
allegations of fraud, misappropriation of records against the petitioner
Society herein. Therefore, these kind of disputes cannot be adjudicated
under Section 90 of the Tamilnadu Cooperative Societies Act, 1983.
12. Whereas the learned counsel appearing for the petitioner
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
Society relied upon the judgment in the case of Rajamani Vs.
Cooperative Sugars Ltd Chithur reported in 1989 TLNJ 213, wherein
the Hon'ble Division Bench of this Court held that a claim by a past
member of a registered Cooperative Society to recover certain amounts
from the society, alleged to have been given by him as loan or deposit to
the Society when he was a member, will fall within the scope of Section
73(1) (b) of the Tamilnadu Cooperative Societies Act, 1961 and will have
to be decided by the Registrar and a civil suit to recover such amount is
not maintainable.
13. He also relied upon the judgment in the case of Sarangan
Vs. Vadivelu Mudaliar and others reported in (2009) 3 MLJ 463,
wherein it is held that a bare perusal of the said Section would highlight
and spotlight the fact that if there is any dispute between the member or a
person claiming under a member and the Co-operative Society concerned,
such a dispute should be referred to the Registrar for decision.
14. He also relied upon the judgment in the case of Seni and
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
others Vs City Civil Court, Chennai and others in WP.No.34692 of
2014, wherein it is held as follows:
6.In the instant case the dispute pertains to the
affairs of the Society, which is registered under the
provisions of the Tamil Nadu Co-operative Societies
Act. Admittedly, the provisions of the Tamil Nadu Co-
operative Societies Act, is a complete code by itself
and it provides for hierarchy of remedies for parties
aggrieved by various decisions. Therefore, the
petitioners should necessarily avail the remedy
available under the Act, without resorting to the Civil
Forum.
15. In all the above cases, there were disputes between the
member and the society in respect of default in repayment of the loan.
Whereas in the case on hand, the deceased first respondent was already
allotted house plot and he availed loan from the bank to construct the
houses and thereafter the petitioner Society claimed more interest.
Therefore, the above judgments are not helpful to the case on hand.
16. Insofar as bar under Section 156 of the Tamilnadu
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
Cooperative Societies Act, 1983 specifies that no order, decision or action
taken under the said Act by an Officer authorised or empowered shall be
liable to be called in question in any Court and no injunction shall be
granted by any court in respect of anything which is done or intended to
be done. As rightly held by the Court below that no award or order had
been passed by any authority as enumerated under Section 156 of the
Tamilnadu Cooperative Societies Act, 1983 and the petitioner Society
cannot function as arbitrator or Registrar. Therefore, the suit is not barred
by any law and the Court below rightly dismissed the petition seeking
rejection of plaint. This Court finds no infirmity or illegality in the orders
passed by the court below.
17. Accordingly, the Civil Revision Petition stands dismissed.
Consequently, connected miscellaneous petition is closed. There shall be
no order as to costs.
27.01.2023
Speaking/Non-speaking order
Index : Yes/No
Internet : Yes/No
lok/rts
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
To
1. The VI Assistant Judge,
City Civil Court, Chennai.
https://www.mhc.tn.gov.in/judis
CRP.No.1935 of 2016
G.K.ILANTHIRAIYAN, J.
rts
C.R.P.No.1935 of 2016
and C.M.P.No.10090 of 2016
27.01.2023
https://www.mhc.tn.gov.in/judis
