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1965 Supreme(Bom) 135
IN THE HIGH COURT OF BOMBAY
(H. K. Chainani C. J. and S. P. Kottlal J.)
DHARAMCHAND PREMCHAND - Petitioner
v.
THE KOPARGAON TALUKA KAPUS GINNING AND PRESSING SOCIETY LTD. - Respondent
Advocates appeared
For petitioner -Bharad Manohar and U. R. Lalit.
For respondent No. l - R. W. Adik.
For respondent No.2- G. N. Vaidya, Asstt. Govt. Pleader.
The phrase "transactions under the provisions of section 45" in section 91(1)(c) of the Maharashtra Co-operative Societies Act, 1960, refers to transactions subject to restrictions prescribed under section 45, and disputes arising from such transactions are subject to arbitration under the Act.
Headnote:
CO-OPERATIVE SOCIETIES - DISPUTE RESOLUTION - JURISDICTION - TRANSACTIONS WITH NON-MEMBERS - INTERPRETATION OF SECTION 91(1)(C) OF THE MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960 - RESTRICTIONS ON TRANSACTIONS WITH NON-MEMBERS UNDER SECTION 45 - SCOPE AND APPLICABILITY.
Fact of the Case:
A dispute arose between a co-operative society and non-member petitioners over the purchase of cotton at an auction held by the society. The society sought to resolve the dispute through arbitration under section 91 of the Maharashtra Co-operative Societies Act, 1960, arguing that the transactions fell within the ambit of section 45, which deals with restrictions on transactions with non-members. The petitioners challenged the jurisdiction of the arbitration proceedings, contending that the dispute did not come under section 91 as they were not members of the society.
Finding of the Court:
The court held that the dispute did not fall within the purview of section 91(1)(c) of the Act, which allows for arbitration of disputes between a society and non-members who have engaged in transactions under the provisions of section 45. The court interpreted the phrase "transactions under the provisions of section 45" to mean transactions subject to restrictions prescribed under section 45. Since no such restrictions had been prescribed in this case, the court found that the dispute was not subject to arbitration under the Act.
Issues: 1. Whether the dispute between the society and the petitioners, who were non-members, fell within the ambit of section 91(1)(c) of the Maharashtra Co-operative Societies Act, 1960, which allows for arbitration of disputes between a society and non-members who have engaged in transactions under the provisions of section 45. 2. Whether the phrase "transactions under the provisions of section 45" in section 91(1)(c) includes transactions that are not subject to any restrictions prescribed under section 45.
Ratio Decidendi: The court interpreted the phrase "transactions under the provisions of section 45" in section 91(1)(c) to mean transactions subject to restrictions prescribed under section 45. The court reasoned that the Act did not intend for all transactions with non-members to be subject to arbitration under section 91, as evidenced by the specific categories of non-members mentioned in clauses (d) and (e) of section 91(1). Additionally, the court noted that section 45 empowers the government to prescribe restrictions on transactions with non-members, but it is not obligated to do so. Therefore, the court concluded that only transactions subject to such restrictions could be considered "transactions under the provisions of section 45" for the purposes of section 91(1)(c).
Final Decision: The court set aside the order referring the dispute to arbitration and directed that the society's application for a reference under section 91 be rejected.
CHAINANI C. J. - Respondent No.1 is a co-operative ginning and pressing society registered under the Co-operative Societies Act. The society purchases cotton from its members and sells it to other persons. On November 25, 1962, an auction was held by the respondent society. At that auction the petitioners offered the highest bids for three lots of cotton they also paid Rs. 11,000 in part payment of the price of the cotton. As the petitioners did not take delivery of the cotton or make further payments, the society approached the Registrar, Co. operative Societies, under section 91 of the Maharashtra Co-operative Societies Act, 1960, hereinafter referred to as the Act, for the dispute being decided under the provisions of the Act. The Registrar referred the dispute to his nominee under section 93 of the Act. Before the nominee an objection was raised that the dispute did not come within the purview of section 91 as the petitioners were not members of the respondent-society and that consequently the nominee had no jurisdiction to decide it. The nominee referred the matter to the Registrar for deciding the question under section 91 (2). The Assistant Registrar, who heard the matter, was of the opinion that the transactions between the petitioners and the society were under the provisions of section 4:5 and that consequently clause (c) in sub-section (1) of section 91 applied to them. He, therefore, held that there was a dispute within the meaning of sub-section (1) of section 91 and sent back the matter to the nominee for his decision. That order is being challenged before us. Before this order was made the petitioners had also filed a civil suit against the society for the return of the amount of Rs. 11,000 which they had paid to the society.
2. Sub-section (1) of section 91 of the Act provides that notwithstanding anything contained In any other law for the time being In force, any dispute touching business of a society shall be referred by any of the parties to the dispute, to the Registrar, if both the parties thereto are one or other of persons mentioned in clauses (a) to (e) in this sub-section. The petitioners are not members of the respondent-society. The only clause which can apply to them is clause (c) which is as follows :-
"(c) a person, other than a member of the society, who bas been granted a loan by the society, or with whom the society bas or had transactions under the provisions of section 45, and any person claiming through such a person:"
Section 45 states that save as is provided in the Act, the transactions of a society with persons other than members, shall be subject to such restrictions, if any, as may be prescribed. The word "prescribed" is defined in clause (21) of section 2 to mean "prescribed by rules". This section does not empower a society to enter into transactions with persons other than members. It empowers the State Government to make rules prescribing the restrictions under which a society may enter into transactions with non-members. No society can, therefore, enter into any such transaction unless it is in accordance with the prescribed restrictions. The power to enter into such transactions is, however, conferred by section 36, which states that the registration of a society shall render it a body corporate by the name under which it is registered, with power to enter into contracts and to do all such things as are necessary for the purpose for which it is constituted. No transactions are, therefore, entered into under section 45. The effect of this section only is to prohibit a society from entering into transactions with persons other than members except in accordance with such restrictions as may be prescribed under this section. Literally construed, therefore, the words "transactions under the provisions of section 45" in clause (c) of sub-section (1) of section 91 convey no meaning. No words in a statute should, however, be deemed to have been used without some purpose and the
