IMPORTANT POINT
Failure to apply for defense in a summary suit under the Gujarat Co-operative Societies Act results in acceptance of the claims made by the plaintiff.

JUDGMENT :

Vaibhavi D. Nanavati, J.

1. Heard Mr.Amit Joshi, learned advocate appearing for the petitioner and Mr.B.T. Rao, learned advocate appearing for the respondent no.3.

2. By way of the present petition, the petitioner herein has approached this Court, challenging the order dated 01.07.2003 passed by the respondent no.1 in Summary Lavad Case No.429 of 2003, duly produced at Annexure – A and has prayed for the following reliefs:-

“(A) be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction to quash and set aside the order and decree at Annexure-A to the petition dated 01.07.2003 and order at Annexure-B dated 28.12.2017 to this petition, in the interest of justice;

(B) Pending admission and final disposal of this petition, Your Lordships will be pleased to stay the order at Annexure-B and the proceedings of execution initiated thereupon at Annexure-G to this petition, in the interest of justice;

(C) Be pleased to award the cost of this petition;

(D) Such other and further relief that is just, fit and expedient in the facts and circumstances of the case may be granted."

3. Being aggrieved by the said order, the petitioner preferred appeal before the respondent no.2 being Appeal No.262 of 2009, which came to be dismissed by order dated 28.12.2017.

4. Briefly stated, it is the case of the petitioner that the letter of credit was obtained against the bank guarantee to the tune of Rs.10 lacs being sub-agent of the agent - respondent no.3 herein for distribution as well as providing fertilizer to the members of the petitioner co-operative society after arriving at an agreement with the respondent no.3 for a period of three years and thereafter, the same had been extended from time to time for a period of three years in which, the Gujarat State Co-operative Marketing Federation Limited is the Chief Distributor at Gujarat level. The petitioner is a member of the respondent no.3 and, therefore, the same was considered as sub-agent to entitle for distribution of taking benefits for the members of the petitioner - society, who are farmers of the Gondal area. Considering the described letter of guarantee, the petitioner was unable to recover and deposit the amount in terms of Rs.19,39,002/- including interest accrued thereon on 01.04.2003 to the respondent no.3 as per the account book. For the aforesaid reasons, the respondent no.3 preferred Summary Lavad Case No.429 of 2003 under Section 99(4) of the Gujarat Co-operative Societies Act, 1961 (for short, “the Act”) on 27.05.2003 for recovery of the said amount with interest at the rate of 12.5%. But, the bank guarantee had not been substituted from the amount, which had been demanded by the respondent no.3.

4.1. Mr.Joshi, learned advocate appearing for the petitioner submitted that the competent Court had not considered the bank guarantee in terms of Rs.10 lacs as well as not considered that the petitioner - society went into liquidation and the liquidator had not been made a party. It is submitted that the respondent no.3 - bank had not given fair opportunity to the petitioner and directly approached the respondent no.1 - Board of Nominees. It is submitted that the petitioner was ready and willing to deposit the disputed amount but, the respondent no.3 chose to remain silent spectator and initiated action against the petitioner herein and in view thereof, the impugned orders are required to be quashed and set aside.

5. Mr.B.T. Rao, learned advocate appearing for the respondent no.3 submitted that the findings are concurrently in favour of the petitioner whereby, the order passed in Summary Lavad Case No.429 of 2003 dated 01.07.2003 is duly confirmed by the appellate authority by order dated 28.12.2017. It is submitted that the aforesaid is not in dispute and in view thereof, the decree passed in favour of the respondent no.3 is required to be executed in terms of the order dated 01.07.2003 passed in Summary Lavad Case No.42