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HIGH COURT OF CALCUTTA
S.N. Mallick, J.
Sumumar Ghosh
vs.
Krishnanagar City Co-operative Bank Ltd.
CIVIL REVISION C.O. 2864 of 1995
Decided On : May 22, 1997
COOPERATIVE SOCIETY DISPUTE - JURISDICTION - WEST BENGAL COOPERATIVE SOCIETIES ACT, 1983 - SECTIONS 2(20), 95(1), 134(2) - CIVIL COURT JURISDICTION BARRED IN DISPUTES RELATING TO COOPERATIVE SOCIETY BUSINESS OR AFFAIRS - MONEY CLAIM BY BANK AGAINST EMPLOYEE FOR DEFALCATION IS A DISPUTE TO BE REFERRED TO REGISTRAR.
Fact of the Case:
The plaintiff, a cooperative bank, filed a money suit against its employee, the defendant, for defalcation of funds. The defendant filed an application under sections 21 and 9 of the Code of Civil Procedure and sections 95(1) and 134(d) of the West Bengal Cooperative Societies Act, 1983, seeking rejection of the plaint on the ground that the dispute was barred under the Act. The trial court rejected the application, holding that the dispute did not relate to the affairs of the cooperative society and that the court had jurisdiction to entertain the suit.
Finding of the Court:
The High Court allowed the revisional application filed by the defendant and set aside the trial court's order. The court held that the dispute concerned the business of the cooperative bank and related to its affairs, and was therefore required to be referred to the Registrar under section 95 of the Act. The court further held that the civil court had no jurisdiction to entertain the suit.
Issues: Whether the dispute between the plaintiff cooperative bank and the defendant employee concerning the defalcation of funds was a dispute relating to the affairs of the cooperative society and therefore required to be referred to the Registrar under section 95 of the West Bengal Cooperative Societies Act, 1983.
Ratio Decidendi: The court held that the dispute concerned the business of the cooperative bank and related to its affairs, and was therefore required to be referred to the Registrar under section 95 of the Act. The court relied on the definition of "dispute" in section 2(20) of the Act, which includes "any matter capable of being the subject of civil litigation and includes a claim in respect of any sum payable to or by a co-operative society". The court also relied on the provisions of section 95(1) of the Act, which require any dispute concerning the business of a co-operative society or relating to its affairs to be referred to the Registrar.
Final Decision: The High Court allowed the revisional application filed by the defendant and set aside the trial court's order. The court held that the dispute concerned the business of the cooperative bank and related to its affairs, and was therefore required to be referred to the Registrar under section 95 of the Act. The court further held that the civil court had no jurisdiction to entertain the suit.
S.N. Mallick, J.
The instant revisional application under s. 115 of the Code of Civil Procedure has been preferred by the defendants/petitioners against Order No. 11 dated 28.8.95 passed by the learned Assistant District Judge, 1st Court, Krishnanagar, Nadia in Money Suit No. 32 of 1995 rejecting their application under s. 21 read with s. 9 of the Code of Civil Procedure and under s. 95(1) read with s. 134(d) of the West Bengal Cooperative Societies Act, 1983.
2. In the said application the defendants took the plea in their application that the above Money Suit filed by the plaintiff/opposite party, The Krishnanagar City Co-operative Bank Limited against them for a money decree of rupees 5,71,000/- along with a decree for compensation tentatively assessed at Rs. 100/- was not maintainable in law before a Civil Court for being barred under s. 95(1) and s. 134(d) of the West Bengal Co-operative Societies Act, 1983 (hereinafter referred to as the 'Act").
3. Admitted or undisputed facts on record are as follows :
The defendant/petitioner No. 1 is an employee of the plaintiff Co-operative Bank. In fact, he is the Assistant Cashier of the opposite party now under suspension. The petitioner No. 2 is his wife being the defendant No. 2 in the Money Suit. It has been alleged that in course of his employment the petitioner No. 1 without the knowledge of the plaintiff Bank defalcated and misappropriated from 25.4.94 to 20.5.95 a sum of Rs. 5,65,000/- deposited with the Bank by different account holders.
Admittedly, the petitioners have a joint S.B.A/C. with the plaintiff Bank, being No. 15407. It is the case of the plaintiff that the above defalcated sum was deposited by the petitioners in their above Savings Bank Account in part and the balance with other financing Bank. It is also stated in the plaint that the petitioner No. 1 defalcated a further sum of Rs. 6,000/- deposited by one of the account holders on 15.5.95 in his Savings A/C. No. 7362. Accordingly, the total defalcation detected by the plaintiff was of Rs. 5,71,000/- recovery of which was claimed in the above Money Suit. The petitioners before filing any written statement filed the application under s. 121 read with s. 9 of the C.P. Code and under s. 95(1) read with s. 134(d) of the Act for rejection or return of the plaint alleging that the above suit was barred under s. 95(1) and under s. 134(d) of the Act.
4. The learned Trial Judge rejected the said application by the impugned order and held as follows :
"Having regard upon the facts and circumstances and legal aspect I am of opinion that the defendant/petitioner has been hopelessly failed to establish the suit bars or parricates the jurisdiction of this Court in respect of the subject-matter of the dispute under reference. So, I have no hesitation to decide that the plaintiff is a registered Co-operative Bank and the defendant No. 1 is an employee designated as Clerk under the bank and the dispute alleged in the plaint of the suit is not a dispute relating to the affairs of the Co-operative Society as has been defined in s. 95 clause 1 of the Act and the dispute under reference does not bar the jurisdiction of this Court as per the provision of s. 134(2) of the Co-operative Societies Act and that is why this court shall have every jurisdiction in regard to the subject-matter".
5. The learned Trial Judge while rejecting the application has further held that "there has been a clear prima facie case of fragment breach of rule and there is total violation of the procedure and a clear and cogent reason to express that the alleged activities of the defendant No. 1 is a serious breach of duty and thereby committed misappropriation of huge amount of the plaintiff bank".
6. Considering the circumstances of the case, the learned Trial Judge has held that in view of the spirit of law and the administration of justice, he is of the opinion that the dispute of subject-matter does not require to be referred to the Registrar under s. 95
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