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2025 Supreme(Telangana) 616
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
MOUSHUMI BHATTACHARYA, B.R. MADHUSUDHAN RAO, JJ.
M/s. Sant Damaji Sahakari Sakhar Kharkana Ltd. - Appellant
Versus
M/s. Ajaykumar Sushilkumar - Respondent
Civil Revision Petition No. 241 of 2025
Decided On : 16-04-2025
Advocate Appeared:
For the Appellant : Damodar Mundra
For the Respondent: B. Vamshidhar Reddy
The Commercial Court has jurisdiction over commercial disputes involving non-members, overriding the provisions of the Maharashtra Co-operative Societies Act, 1960.
Headnote:(A) Maharashtra Co-operative Societies Act, 1960 - Sections 91, 163, and 164 - Commercial Courts Act, 2015 - Section 21 - Dismissal of application under Order VII Rule 11 of CPC - Petitioners contended that the suit was barred by limitation and jurisdiction of Civil Court was excluded under the Act, 1960 - Respondent filed suit for recovery of money for inferior quality goods supplied - Trial Court held that limitation is a mixed question of fact and law, requiring full trial - Court found no perversity or illegality in the trial court's order. (Paras 4, 20, 21)
(B) Jurisdiction - The Commercial Court has jurisdiction to try suits involving commercial disputes, even if the parties are not members of the society, as per the overriding provisions of the Commercial Courts Act, 2015. (Paras 20, 21)
Facts of the case:
The petitioners, a Co-operative Society, were sued for recovery of Rs.2,32,88,194/- for supplying inferior quality gunny bags. The petitioners argued the suit was barred by limitation and jurisdiction under the Act, 1960.
Findings of Court:
The trial court dismissed the petitioners' application, stating that the limitation issue is a mixed question of fact and law, requiring a full trial.
Issues: Whether the suit was barred by limitation and whether the Civil Court had jurisdiction under the Act, 1960.
Ratio Decidendi: The court ruled that the trial court's dismissal of the application was justified, as the limitation issue could not be resolved without a full trial.
Result: CRP.No.241 of 2025 is dismissed.
- Civil Revision Petition No. 241 of 2025 filed against order dated 12.11.2024 dismissing I.A. No. 157 of 2024 under Order VII Rule 11 CPC in COS No. 18 of 2024. (!)
- Suit by respondent (plaintiff) for recovery of Rs. 2,32,88,194/-, including Rs. 1,12,13,218/- principal, against petitioner No. 1 (co-operative society registered under Maharashtra Co-operative Societies Act, 1960) for inferior quality gunny bags supplied (148 grams instead of 160 grams). (!)
- Petitioners' grounds for rejection of plaint: non-compliance with Section 12(A) Commercial Courts Act; barred by limitation under Article 24 Limitation Act (last payment 14.12.2018); jurisdiction barred under Sections 91, 163 Maharashtra Co-operative Societies Act. (!) (!)
- Prior suit COS No. 44 of 2021 rejected on 24.10.2023 for failure to issue notice under Section 164 Maharashtra Co-operative Societies Act; respondent claimed "C" class membership but disputed by petitioners. (!) (!)
- Respondent's counter: prior suit rejected on technical grounds; court waived pre-institution mediation under Section 12(A) Commercial Courts Act due to urgency; limitation extended by COVID-19 suo motu order; fresh notice issued 11.01.2024 under Section 164; limitation mixed question of fact/law; not a member, dispute not covered by Sections 91, 163. (!) (!) (!) (!)
- Trial court dismissed application holding Sections 91, 163 inapplicable and limitation requires full trial. [4]
- Petitioners argued applicability of Section 91(c) r/w Sections 45, 163(1)(b); notice under Section 164 non-compliant; respondent surrendered to Act, 1960 jurisdiction by not appealing prior rejection. [5]
- Respondent argued Section 21 Commercial Courts Act overrides; suit for goods supply is commercial dispute under Section 2(1)(c)(xviii) above Rs. 1 crore; Section 45 concerns loans, not goods recovery with non-member. [6]
- Definition of "member" under Section 2(19) Maharashtra Co-operative Societies Act excludes respondent. [9]
- Fresh suit COS No. 18 of 2024 filed 18.03.2024 post-notice 11.01.2024; reply by petitioner 26.02.2024. (!)
- Section 45 restricts non-member transactions; Section 91(1)(c) covers non-members only if restrictions under Sections 43-45 apply; Section 163(1)(b) bars civil court for disputes referred to co-operative court. (!)
- Commercial Courts Act definitions: Section 2(1)(c)(xviii) covers goods sale agreements; Section 6 jurisdiction; Section 21 overriding effect. (!)
- Limitation: last payment 14.12.2018; prior suit 2021 within COVID extension to 08.03.2021; period till 11.01.2024 notice excluded under Sections 14, 15(2) Limitation Act; mixed question for trial. (!) (!)
- Section 91 requires both subject-matter and parties to fit specified categories; non-members outside if no prescribed restrictions. (!) (!) (!) (!)
- Commercial Courts Act (2015) overrides Maharashtra Co-operative Societies Act (1960) via Section 21; Commercial Court has jurisdiction for non-member commercial disputes; no evidence of restrictions under Act, 1960. (!)
- Trial court order lacks perversity/illegality; CRP dismissed, no costs. (!) (!) (!) (!)
ORDER :
B.R. Madhusudhan Rao, J.
1. This Civil Revision Petition is filed aggrieved by the order passed by the Additional Special Court in the cadre of District Judge for Trial and Disposal of Commercial Disputes at Hyderabad in I.A.No.157 of 2024 in COS.No.18 of 2024, dated 12.11.2024, wherein the application filed by the petitioner under Order VII Rule 11 of Civil Procedure Code (CPC) was dismissed.
2.1 The contentions of the petitioners in I.A.No.157 of 2024 (under Order VII Rule 11 of CPC) is that respondent No.1/plaintiff filed suit for recovery of money and damages against the petitioners for a sum of Rs.2,32,88,194/- out of which Rs.1,12,13,218/- is the principal amount against the supply of material to the petitioner No.1/society. Petitioner No.1 is a Co-operative Society registered under the provisions of the Maharashtra Co-operative Societies Act, 1960 (hereinafter called as ‘the Act, 1960’) vide registration No.SUR/MDA/TRG(A)-15/S/1/1989 dated 26.04.1989 before the State of Maharashtra. The petitioner No.1 is running a sugar factory and for the purpose of the business used to purchase gunny bags from the respondent No.1. Earlier respondent No.1 used to supply gunny bags with good quality with weightage of 160 grams however the supply that made by the respondent No.1 was of inferior quality which weighed around 148 grams due to which disputes arose. The petitioners have raised contentions that plaint has to be rejected on the grounds of (i) non-compliance with the mandatory provisions of Section 12(A) of the Commercial Court Act, (ii) barred by limitation and (iii) jurisdiction of the Civil Court is barred under Section 91 read with Section 163 of the Act, 1960.
2.2. The plaint is barred under Article 24 of the Limitation Act, 1963 (hereinafter referred to as ‘the Act, 1963’) and it is sated in the plaint that the last payment made by the petitioners is on 14.12.2018, the suit is hopelessly barred. Respondent No.1 has earlier filed COS.No.44 of 2021 which was rejected by the Commercial Court vide order dated 24.10.2023 as the respondent No.1 failed to comply issuance of notice under Section 164 of the Act, 1960. Respondent No.1 is a member of the society for making transaction of goods and made compliance for becoming “C” class member of the society. The dispute is covered under the business of society under Sections 91 and 163 of the Act, 1960. The business of the societies shall be referred to the Co-operative Court and the Civil Court has no jurisdiction to try the same and prayed to reject the plaint as the suit has been initiated without complying with the pre- institution mediation as it is barred by limitation and lack of jurisdiction.
3.1 Respondent No.1 has filed counter and contended that earlier they have filed suit for recovery of money and damages vide COS.No.44 of 2021 before the Commercial Court and the petitioners have filed I.A.No.389 of 2022 under Order VII Rule 11 of CPC seeking rejection of plaint as the respondent failed to give mandatory notice under Section 164 of the Act, 1960, the suit came to be rejected vide order dated 24.10.2023. The suit in COS No.44 of 2021 was rejected on technical and legal grounds. Respondent No.1 has filed an application seeking permission of the Court to waive the pre-institution mediation and settlement as mandated in Section 12(A) of the Commercial Courts Act, 2015 (hereinafter referred to as ‘the Act, 2015’) and the Court was pleased to allow the application foregoing the pre-limitation mediation between the parties on the ground of urgency.
3.2 Respondent No.1 has filed application under Order XXXVIII Rule 5 of CPC seeking to furnish security in respect of the suit claim in COS.No.18 of 2024. Respondent No.1 has lawfully obtained the leave of the Court. It is settled law that the Court only needs to look at the plaint and the documents filed along with the same and cannot look at the defence of the petitioners. The Apex Court in suo-motu Writ Petition (Civil) No.3 of
