Surat Textile Traders Co-operative Bank Limited vs Atul Chandravadan Shah

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1996 Supreme(Guj) 63

Gujarat High Court
Judgename :K.R.VYAS
Surat Textile Traders Co-operative Bank Limited - Appellant
Versus
Atul Chandravadan Shah - Respondent
APPEAL FROM ORDER 405 of 1995
Decided On : 02/05/1996

Advocates Appeared: C.J.Vin, DHIRENDRA MEHTA, M.G.NAGARKAR

Headnote:(a) Criminal Procedure Code, 1908 - Order 7, Rule 10 and Order 43 Rule (1)(a) - Gujarat Co-operative Societies Act 1961, Sec. 96(1) (a) & (b) - Suit by applicant Bank for recovery of misappropriated amount against respondents working as collecting agents of Bank - Jurisdiction - In view of this Court decision in Rasiklal vs. Kailash Gauri (1971) 12 GLR 355 the dispute between applicant Bank and its agents past or present are required to be resolved by the existing procedure prescribed under the ordinary law and not by special forum provided under the Act - Consequently appeal is allowed and order dated 27.4.95 by 4th Joint Civil Judge is set aside.The classification made by the legislature in regard to non-members suffers from a serious infirmity and that infirmity invalidates the classification. The special procedure is not made available to the entire class of non-members. Within the class itself, a discrimination has been made by the Legislature. The Legislature has picked out certain cetegories of non-members for the special procedure leaving the rest to be governed by the existing procedure. There is no intelligible differentia distinguishing non-members grouped together for the applicability of the special procedure from those left out of the group and even if some differentia can be discovered, it has no rational relation or nexus with the object of the impugned provisions. There is no rational basis on which differentiation has been made between some categories of non-members and others for applying the special procedure. There cannot be one procedure where the society is a creditor of a non-member and seeks to recover its dues from the non-member and another where the society is a debtor of a non-member and the non-member seeks to recover his dues from the society. That would be discrimination in the most vicious and above minable form and it would be unjustified from the point of view of the object of providing the special procedure.[Para 9]It was held that clause (a) without the words, "any past or present agent" and "deceased agent" and clause (b) of sec. 96 of the Gujarat Co-operative Societies Act are not violative of Article 14 of the Constitution but clauses (c), (d) and (e) and the words. "any past or present agent" , in clauses (a) of section 96 (1) along with Explanation II, which make the provision set out in the impugned provisions applicable only to certain special categories of non-members are ultra vires and void as offending Article 14 of the Constitution. In view of this, it is clear beyond any manner of doubt that the agents, past or present, referred to in caluses (a) and (b) of section 96 (1) of the Act alongwith Explanation II also dealing with other categories of agents are kept outside the purview, whose disputes are to be decided by the forum prescribed under section 96. Consequently, their dispute with the society are required to be resolved by the existing procedure prescribed under the ordinary law.[Para 10]The learned trial Judge was in error in allowing the application, Ex. 57, returning the plaint and has thereby committed an error in holding that the Civil Court has no jurisdiction to decide the dispute.[Para 12](b) Gujarat Co-operative Societies Act, 1961 - Sec. 167 - Notice - Requirement of - Notice is required to be given only where suit is to be filed against a society - It is not an obligatory requirement when society files the suit.The learned trial Judge has also committed an error in holding that as the plaintiff has not given a notice under section 167 of the Act, the institution of the suit itself is illegal. Reading section 167 of the Act,. it clearly transpires that the said notice is required to be given where the suit is required to be filed against a society, and when the society files the suit, it is not obligatory on its part to give a notice. Since the trial Court has not understood this difference and has erroneously recorded the finding consequently this finding is also required to be set aside.[Para 13]

K. R. VYAS, J.

( 1 ) THIS Appeal from order under Order 43, Rule 1 (a) of the Civil Procedure code arises out of the order dated 27-4-95 passed by the learned 4th Joint Civil Judge (S. D.), Surat, below Application, Ex. 57, in Special Civil Suit No. 178/93 holding that the civil Court has no jurisdiction to decide the suit. Consequently, therefore, the plaint was ordered to be returned to be presented to the Court in which the suit should have been instituted under Order 7 Rule (10) of the CPC. With a view to appreciate the issue involved in the present appeal in its proper perspective, the relevant facts need to be stated.

( 2 ) THE Surat Taxtile Traders Co-oprative Bank Limited, the original plaintiff is a co-operative society registered under the provisions of the Gujarat Co-operative Societies act, 1961. By an agreement dated 4. 7. 1991, respondent No. 1 was appointed as an agent to collect daily deposits for and on behalf of the appellant bank. It is the case of the appellant bank that respondent No. 1 was supposed to deposit the amounts so collected from the depositors with the bank and to make repayment thereof on maturity to the depositors. It appears that respondent. No. 1 got employment elsewhere, and therefore, he could not continue the said agency in his name with the result, he requested the appellant bank to transfer or enter into a fresh agreement of agency with his brother-in-law, respondent No. 4 herein. The appellant bank accordingly entered into agreement of agency with respondent No. 4 on 12. 8. 1991 and Respondent Nos. 2 and 3 stood as guarantors and witnesses.

( 3 ) IT is the case of the appellant bank that after about a period of 20 months, it received complaints from the depositors that they are not paid the amounts of deposits on their maturity and on inquiry, it was found that respondents Nos. 1 and 4 have misappropriated the amounts to the extent of Rs. 3,00,000/ -. It appears that on 16. 4. 1993, the present suit viz. special Civil Suit No. 178 of 1993 was filed by the appellant bank against the respondents in the court of learned 4th Joint Civil Judge (Senior Division) surat, for recovery of the said amounts alleged to have been misappropriated by the respondents along with 18% interest thereon with costs. The appellant bank also applied by an application, Ex. 5 for an injunction restraining the respondents from transferring in any manner the respective bungalows of respondents Nos. 2 and 3 and also prayed for attachment before judgment and other reliefs.

( 4 ) THE learned trial Judge granted ad-interim injunction against transfer and/or alienation of the properties in any manner during the pendency of the suit and issued a show cause notice as to why further reliefs should not be granted against the plaintiff.

( 5 ) RESPONDENTS Nos 1 and 2 instead of filing written statement to the suit or a reply to the application Ex. 5, filed an application Ex. 57 praying inter alia for return of the plaint on the grounds contending inter alia that the civil court has no jurisdiction to entertain the suit since notice under Section 167 of the Act was not issued before Filing of the said suit and the nature of dispute raised in the suit can only be entertained by the Board of nominees under Section 96 of the Act. The appellant bank filed its reply at Ex. 63 denying the aforesaid grounds. The learned trial Judge after hearing the parties, allowed the application Ex. 57 and ordered return of the plaint for presentation to the appropriate court. Hence, this appeal.

( 6 ) MR. D. R. Mehta, Learned advocate appearing for the appellant has challenged both the aforesaid findings recorded by the trial court. In the submission of Mr. Mehta, the learned Judge has committed an error in interpreting the relevant provisions of law viz. Sections 167 and 96 of the Act and has further misread the ratio of the judgment of this court.

( 7 ) MR. Vin and Mr. Nagarkar, learned advocates appearing for the respondents on the other hand

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1996 Supreme(Guj) 63

Gujarat High CourtJudgename :K.R.VYASSurat Textile Traders Co-operative Bank Limited - AppellantVersusAtul Chandravadan Shah - RespondentAPPEAL FROM ORDER 405 of 1995Decided On : 02/05/1996

Gujarat High Court
Judgename :K.R.VYAS
Surat Textile Traders Co-operative Bank Limited - Appellant
Versus
Atul Chandravadan Shah - Respondent
APPEAL FROM ORDER 405 of 1995
Decided On : 02/05/1996