MAIN POINTS
Decision whether section 167 is attracted to a particular suit is judicial, therefore within jurisdiction of civil court.
Tenability of a suit can only be decided by a civil court.

JUDGMENT :

S.A. Bobde, J.

Leave granted.

2. This appeal is preferred by a Company which has been refused permission to continue the suit filed by it before the City Civil Court, Ahmedabad by the Registrar of Co-operative Societies on the ground that the suit is not tenable because notice of its institution required by Section 167 of the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as the Co-operative Societies Act).

3. The appellant, a Private Limited Company entered into a lease agreement dated 1-10-1998. Under the agreement it took on lease the mill of the respondent Cooperative Society for a period of five years. Disputes having arisen, the appellant filed a suit against the respondent society on 26-4-2000 before the City Civil Court at Ahmedabad. The appellant sought recovery of Rs.2,51,89,606.79/- (Rupees Two Crores, Fifty One Lakhs, Eighty Nine Thousand, Six Hundred Six and Paise Seven Nine only) with interest at the rate of 21% per annum.

4. Within a year of filing the suit, the defendant Society, the respondent herein, was wound up by an Order dated 19-4-2001 passed by the Commissioner, Cottage and Village Industries, Gujarat. Since the suit had been filed prior to the winding up order, the appellant was obliged to apply for leave to continue the suit by virtue of Section 112 of the Co-operative Societies Act. That Section reads as follows:-

“112. Bar of suit in winding up and dissolution matters

“Save as expressly provided in this Act, no Civil Court shall take cognizance of any matter connected with the winding up or dissolution of a society under this Act; and when a winding up order has been made no suit or other legal proceedings shall lie or be proceeded with against the society or the liquidator, except by leave of the Registrar, and subject to such terms as he may impose:

Provided that where the winding up order is cancelled, the provisions of this section shall cease to operate so far as the liability of the society and of the members thereof to be sued is concerned, but they shall continue to apply to the person who acted as liquidator.” (emphasis supplied)

5. The controversy is: whether the Registrar, while considering whether leave should be granted can hold that the suit itself is not tenable for want of notice. Initially the Registrar passed a non-speaking order dated 6-6-2003 refusing permission to continue the suit. On 28-11-2005, however, the Registrar passed a speaking order refusing permission to continue the suit. It is this order that has given rise to the present controversy. The main reason why the Registrar refused permission to continue the suit for recovery of money against the respondents is that according to the Registrar, Section 167 of the Co-operative Societies Act requires a plaintiff to give notice to the Registrar stating the cause of action and the relief which the plaintiff claims. Such a notice not having been given by the appellant, the appellant is not entitled for leave to continue the suit against the defendant. In other words, according to the Registrar, the plaintiff's suit is not tenable for want of notice under Section 167 and, therefore, leave to continue such a suit is liable to be refused under Section 112 of the Co-operative Societies Act. Section 167 reads as under:

“167. Notice necessary in suits Save as otherwise provided in this Act, no suit shall be instituted against a society, or any of its officers, in respect of any act touching the business of the society, until the expiration of two months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left.”

6. In view of such refusal, the appellant's suit became untenable. The appellant, therefore, challenged the order of the Registrar refusing leave before the learned Sin