IN THE HIGH COURT OF MADRAS
Beasley, C.J. and Bardswell, J.
Manjeri S. Krishna Ayyar
Versus
The Secretary, Urban Bank Ltd., Calicut and Anr.
Decided On : 26.01.1933
Letters Patent Appeal - Dispute between member of cooperative society and the society - Madras Co-operative Societies Act (VI of 1932) - Section 51, Bye-law No. 68 - The court discussed the definition of 'Officer' under the Act, the rules under both Acts, and the wider terms of Section 51 (1) of Act of 1932. The court emphasized the distinction between the capacities of the bank's legal adviser and Vakil, and ruled that the dispute did not fall under the Acts, allowing the appeal and directing the issue of the writ of prohibition.
Fact of the Case:
The appellant, a legal practitioner and member of a cooperative bank, was sued under Section 51 of the Madras Co-operative Societies Act for various charges and expenses. He sought a writ of prohibition, which was dismissed by the lower court.
Finding of the Court:
The court found that the dispute did not fall under the Acts, as it primarily concerned the appellant's acts as the bank's Vakil, rather than as a member or officer of the society.
Issues: The issues revolved around the jurisdiction of the Registrar under the Acts, the definition of 'Officer', and the applicability of the Acts to the dispute.
Ratio Decidendi: The court ruled that the dispute did not fall under the Acts, emphasizing the distinction between the capacities of the bank's legal adviser and Vakil, and the appellant's engagement in the business of the society as its Vakil.
Final Decision: The Letters Patent Appeal was allowed, and an order was made directing the issue of the writ of prohibition. Each party was directed to bear their own costs.
Beasley, J.
1. This is a Letters Patent Appeal from an order of Burn, J., dismissing the appellants petition for the issue by the High Court of a writ of prohibition prohibiting the respondents from proceeding with the trial of Suit No. 179 of 1932-1933 on the file of the Deputy Registrar of Co-operative Societies, Calicut.
2. The appellant who is a legal practitioner -was and is a member of the Calicut Cooperative Bank Ltd. He was a director of the bank from November, 1919, to December, 1929, and then again from October, 1930, to January, 1932. He was also the legal adviser of the bank from September, 1922, to December, 1929, and he was also the Vakil of the bank from July 1922, to March, 1932. The Secretary of the Calicut Urban Bank Ltd., tiled a suit under Section 51 of the Madras Co-operative Societies Act (VI of 1932) against the appellant claiming a sum of Rs. 6,017-7-1.
3. That amount is made up as follows:
Rs. A. P. (a) Out of pocket expenses charged by the appellant ... 1,007 1 0 (6) Extra fees charged by him for which there is no sanction of the Directors ... 892 12 0 (c) Aggregate of amounts paid in by him to the bank out of collec- tion from the banks borrower which are not found entered in the cash book of the bank and for which the appellant holds no valid receipts ... 4,117 10 1
4. The accounts of the appellant with the bank as its Vakil were the subject of an investigation by a special sub-committee of the Committee of Depositors appointed on the April 11, 1932. As a result of this investigation, the directors of the bank requested the Deputy Registrar of Cooperative Societies, Calicut, to cause the accounts to be audited and accordingly the acting Senior Inspector of Co-operative Societies conducted an audit and in his report he observed inter alia that items (a) and (b) were exorbitant and inadmissible. The appellant was accordingly called upon to pay the sum of Rs. 6,017-7-1 to the bank in default of which it was stated that a suit would be filed against him. He declined to pay and accordingly a reference was made under Section 51 of the Madras Co-operative Societies Act (VI of 1932) and a decree against him was asked for. The appellant raised the point that the Registrar had no jurisdiction to entertain this reference on the grounds that the matters complained of related to the conduct of the appellant in his capacity of Vakil conducting litigation on behalf of the bank and that the dispute did not touch the business of the Society. He accordingly moved for the issue of a writ of prohibition. Burn, J., dismissed that petition holding that under both the Coperative Societies Act (Act II of 1912) and the Act of 1932 there was a dispute between the petitioner and the Society which fell to be decided by the Registrar on the ground that the appellant was a member, the legal adviser and a member of the board of doctors of the Society and was an "Officer" of the Society, that the business concerning which the present dispute has arisen was business which came to him as legal adviser and that it was his position as legal adviser that made him a member of the board of directors. It is, in my opinion, not correct to say that the business of the society with, which the present dispute is concerned came to the appellant as its legal adviser because it is the appellants case and this is conceded also by the bank that the dispute arises out of matters relating to the appellants acts as the banks Vakil; and it is important to keep in mind the distinction between the two capacities of banks legal adviser and banks Vakil, In my opinion Burn, J., was right in holding that in the capacity of legal adviser to the bank the appellant was an "Officer" of the Society as denned by Section 2 of the Act which by Clause (d) includes "a chairman, secretary, treasurer, member of committee, or other person empowered under the rules of the bye-laws to give directions in regard to the business of the Society." There is no committee in
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