IN THE HIGH COURT OF KARNATAKA AT BENGALURU
V. Srishananda, J.
Dattaprasad Cooperative Society Ltd. - Appellant
Versus
Mr. H Shenoy, Major S/O Late Panduranga Rao And Ors. – Respondents
Regular First Appeal No. 1361, 1433, 1434, 1436 OF 2006 (DEC)
Decided On : 22-09-2023
Section 70 of the Karnataka Co-Operative Societies Act, 1959 provides that disputes touching the constitution, management, or the business of a cooperative society shall be referred to the Registrar for decision, and no Civil or Labour or Revenue Court or Industrial Tribunal shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute. Section 106(e-1) provides for an appeal against an order of the Registrar under Section 31 of the Act. Section 108 grants the State Government the power of revision and specifies the conditions under which it can be exercised. The Court analyzed these provisions to determine the jurisdiction of the Civil Court and the maintainability of the revision petition before the Government.
Fact of the Case:
Plaintiff, a cooperative society, filed a suit against the appointment of a Special Officer and the subsequent sale of property to the first defendant. The first defendant filed an application under Order VII Rule 11 of CPC to reject the plaint on the grounds that the Civil Court has no jurisdiction. The Trial Court allowed the application and rejected the plaint, directing the plaintiff to approach the relevant authority under Section 70 of the Karnataka Co-Operative Societies Act, 1959 for redressal. The validity of this order is the subject matter of the appeals.
Finding of the Court:
The Court analyzed the provisions of Order VII Rule 11 of CPC, Section 9 of CPC, Section 70 of the Karnataka Co-Operative Societies Act, 1959, Section 106(e-1) of the Act, and Section 108 of the Act. It concluded that a Civil Suit would be maintainable unless expressly barred by any other law. In this case, the dispute fell within the scope of Section 70 of the Act, which expressly barred the jurisdiction of the Civil Court. The Court also held that the revision petition filed before the Government was not maintainable as an appeal was provided under Section 106(e-1) of the Act. The order of stay passed by the Hon'ble Minister was non est as it was passed without jurisdiction. The Court further noted that the Special Officer had the power to execute the sale/conveyance deed in favor of the first defendant. The Court upheld the rejection of the plaint by the Trial Court.
Ratio Decidendi: The Court held that a Civil Suit would be maintainable unless expressly barred by any other law. In this case, the dispute fell within the scope of Section 70 of the Karnataka Co-Operative Societies Act, 1959, which expressly barred the jurisdiction of the Civil Court. The Court also held that a revision petition before the Government was not maintainable if an appeal was provided under Section 106(e-1) of the Act. The Court further held that the order of stay passed by the Hon'ble Minister was non est as it was passed without jurisdiction. The Court upheld the rejection of the plaint by the Trial Court.
Result: The appeals were dismissed and no costs were awarded.
JUDGMENT :
Heard Sri.N.D.Sathishchandra, learned counsel for the appellant, Sri.S.N.Prashant Chandra, learned counsel for respondent No.1 and Smt.M.V.Adithi, learned AGA for respondent No.2.
2. These four appeals are preferred against the common Judgment passed in O.S.No.2340/2004, O.S.No.2342/2004, O.S.No.2343/2004, O.S.No.2344/2004 and O.S.No.2345/2004 dated 27.02.2006, whereunder the learned Trial Judge entertained the applications filed by the first defendant under Order VII Rule 11 of CPC and allowed the same and rejected the plaint and directed the plaintiff to approach the relevant authority under Section 70 of the Karnataka Co-Operative Societies Act, 1959 (herein after referred to as 'Act' for short), for the redressal of the grievance.
3. Brief facts which are utmost necessary for disposal of these appeals are as under.
4. Plaintiff being a Co-Operative Society Ltd. registered under the provisions of Act, was functioning in the cause title address. On account of certain alleged miss deeds in the Society, the matter was referred to the Registrar and Joint Registrar of Co-Operative Societies (in short 'JRCS') by few of the members and the Registrar of Co-Operative Society by order dated 19.05.2003, appointed a Deputy Registrar of Co-Operative Societies (in short 'DRCS') Bangalore City-I, as the Special Officer to take the charge of the affairs of the Society in toto.A photo copy of the said order is produced before this Court today along with a memo by the appellant.
5. Appointment of the Special Officer to the plaintiff-Society was an appealable order as per Section 106(e-1) as the order of the appointment of Special Officer is Under Section 31 of the Act.
6. However, for the reasons best known to the plaintiff, order of the appointment of Special Officer was not challenged before the Karnataka Appellate Tribunal (Co-Operative) under Section 106(e-1) of the Act, but the plaintiff chose to approach the Government under Section 108 of the Act, by filling a Revision Petition in RP.No.CMW/39/CAP2003.
7. The then Hon'ble Minister acting under the powers of under Section 108 of the Act, stayed the appointment of Special Officer by order dated 11.06.2003 till next date of hearing. Next date was fixed as 30.07.2003.
8. It is contended by the plaintiff that on 30.07.2003 there was no sitting and the matter could not be taken up further. In the interregnum, the Special Officer said to have executed registered sale/conveyance deed in favour of the first respondent in all these cases on 11.08.2003, whereby a flat in the occupation of first respondent in all these appeals. Said action of the Special Officer is called in question in all these suits.
9. After the suit summons were issued, the first respondent, who is the first defendant in the Court below, filed an application under Order VII Rule 11 of CPC inter alia contended that Civil Court has no jurisdiction in view of Section 70 of the Act 1959 and therefore, sought for rejection of the plaint.
10. Application filed by the first defendant was opposed by the plaintiff by filing the written objection.
11. Learned Trial Judge heard the parties in detail in respect of the application filed by the first defendant in all these suits under Order VII Rule 11 of CPC and by virtue of impugned common order allowed the applications filed by the first defendant in all these suits and rejected the plaint with liberty to approach the authorities under the provisions of the Act by raising necessary dispute and seek redressal of the grievance of the plaintiff.
12. The validity of said common order passed by the Learned Additional City Civil Judge (CCH-19) dated 27.02.2006 is the subject matter of these appeals.
13. Sri.N.D.Sathishchandra, learned counsel reiterating the grounds of the appeal memorandum vehemently contended that the rejection of the plaint by the Trial Court acting under the powers vested in the Order VII Rule 11 of CPC and directing the appellant to exhaust the remedy before the authoriti
A Civil Suit would be maintainable unless expressly barred by any other law. Disputes touching the constitution, management, or the business of a cooperative society are to be referred to the Registr....
Authority under Section 70 enables the Additional Registrar to cancel improper allotments and registered sale deeds within cooperative societies, reinforcing adherence to bylaws and judicial oversigh....
Legal action under S.78 of the Maharashtra Co-operative Societies Act must respect principles of natural justice, including the right to respond to specific charges.
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