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Bhimsen Hanmant Vs. the Urban Bank - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Limitation
CourtMumbai
Decided On
Case NumberSecond Appeal No. 541 of 1943
Judge
Reported inAIR1947Bom370; (1947)49BOMLR160
AppellantBhimsen Hanmant
RespondentThe Urban Bank
DispositionAppeal dismissed
Excerpt:
bombay co-operative societies act (bom. vii of 1925), sections 59(1)(a), 54-bombay co-operative socieies (amendment) act (bom. xvi of 1943), section 3-indian limitation act (ix of 1908), sections 181, 182-award-execution of award-whether such award to be treated as a decree of civil court-applicability of article 182-retrospective effect of amending act.;under section 59(1)(a) of the bombay co-operative societies act, 1925, as it stood before its amendment by act xvi of 1943, the award sought to be executed under it must be treated as a decree of a civil court within the meaning of article 182 of the indian limitation act, 1908.;maratha co-operative credit bank, dharwar v. keshav, (1937) 40 bom. l.r. 889 followed.;the hubli urban co-operative society v. gururao bodhrao bengeri (1925).....gajendragadkar, j.1. this appeal arises in execution proceedings and raises one short question of law under section 59(1) (a) of the bombay co-operative societies act (bom. vii of 1925). the urban bank at muddebihal obtained an award against the appellant and five other persons under section 54 of the societies act. a dispute having arisen between the bank and the said persons it was referred for decision to a nominee of the registrar, and the award in question was passed by him on september 21, 1930. under the award the debtors were directed to pay rs. 451-3-0 with future interest at 121/2 per cent. per year on rs. 270. under section 59 (1) (a) a certificate was issued by the registrar on october 25, 1930, and the bank put the said award into execution by filing darkhast no. 196 of 1932.....
Judgment:

Gajendragadkar, J.

1. This appeal arises in execution proceedings and raises one short question of law under Section 59(1) (a) of the Bombay Co-operative Societies Act (Bom. VII of 1925). The Urban Bank at Muddebihal obtained an award against the appellant and five other persons under Section 54 of the Societies Act. A dispute having arisen between the bank and the said persons it was referred for decision to a nominee of the Registrar, and the award in question was passed by him on September 21, 1930. Under the award the debtors were directed to pay Rs. 451-3-0 with future interest at 121/2 per cent. per year on Rs. 270. Under Section 59 (1) (a) a certificate was issued by the Registrar on October 25, 1930, and the bank put the said award into execution by filing darkhast No. 196 of 1932 in the Court of the Civil Judge (Junior Division) at Muddebihal. This darkhast was filed on February 19, 1932, but since no steps were taken by the bank to pay the requisite process fee for the warrant ordered to be issued for the recovery of the amount, it was dismissed for want of prosecution on September 11, 1933. Thereafter the present darkhast was filed by the bank (No. 955 of 1934) in the same Court on September 18, 1934. The appellant: resisted the bank's claim to recover the amount in question mainly on the ground that the darkhast filed by the bank was barred by limitation. It was urged on his behalf that a darkhast by which an award made under Section 54 of the Societies Act is sought to be executed is governed not by Article 182 of Schedule 1 of the Indian Limitation Act, but by Article 181 of the said schedule. It was further contended on his behalf that the proceedings taken by the bank in the earlier darkhast of 1932 cannot assist the bank, since under Article 181 there is no question of keeping the decree alive for execution by taking any steps in aid of execution. Both the Courts below rejected the appellant's contention and held that the proper article to apply to the present execution proceedings is Article 182. On that view of the matter under Article 182(5) it was held that the previous darkhast was a step-in-aid of execution and that the present darkhast having been filed within three years from the date of the final order passed in the previous darkhast, the decree-holder's claim to execute the award was in time. Section 59(1) (a) of the Societies Act provides inter alia that every order passed by the Registrar or his nominee tinder Section 54 of the said Act shall, if not carried out, be executed on a certificate signed by the Registrar by any civil Court in the same manner as a decree of such. Court. Subsequent to the decision of the learned District Judge in this appeal Section 59(1) (a) has been amended in 1943 by Act XVI of 1943. The amended section reads thus:-

(1) Every order passed by...the Registrar or his nominee...under Section 54... shall, if not carried out,

(a) on a certificate signed by the Registrar or a liquidator, be deemed to be a decree of a Civil Court and shall be executed in the same manner as a decree of such Court;....

For the appellant it has been urged before us that the amended section cannot be held to be retrospective and that the question arising between the parties in the present appeal must be decided under Section 59 as it stood before the amendment. I will deal with this argument later. In the first instance I propose to consider the question by reference to the section as it stood before the amendment.

2. It has been conceded on behalf of the bank that an application made by the bank to execute an award passed in its favour after obtaining the necessary certificate from the Registrar under Section 59(1) (a) is governed by the provisions of the Indian Limitation Act. It is also not disputed before us that if Article 182 applies to the present application, the darkhast is in time. Similarly, if Article 181 applies, the present darkhast would be beyond time. That is how the short-question which arises for decision in the present appeal is which of the two Articles 181 and 182 of the Indian Limitation Act applies to an application made to execute an award under Section 59(2) (a) of the Societies Act.

3. In support of his contention that Article 181 applies to such an application the appellant has strongly relied upon a decision of a Division Bench of this Court in The Hubli Urban Co-operative Society v. Gururao Bodhrao Bengeri. (1935) Letters Patent Appeal No. 5 of 1933 (in S.A. No. 301 of 1931) decided by Beaumont C.J. and N.J. Wadia J., on January 30, 1935 (Unrep.) The question which arose before the Division Bench in the said Letters Patent Appeal was similar to the question with which we are dealing. An application had been made in the said case by the Hubli Urban Co-operative Society to execute an award made in its favour and its application was resisted by the debtor on the ground that the said application was barred under Article 181 of Schedule I of the Indian Limitation Act. In Second Appeal No. 301 of 1931 Mr. Justice Baker had held that the claim made by the society to enforce the award passed under Section 54 of the Act fell within the purview of Article 181 since the award could not be said to be an order or decree of any civil Court as required by Article 182. On that view Mr. Justice Baker had dismissed the appeal preferred by the Society. Against the said judgment the Society preferred the Letters Patent Appeal in question. While arguing the said Letters Patent Appeal before Beaumont C.J. and N.J. Wadia J. it was conceded on behalf of the society that if the award in question is not held to be an order of a civil Court, then Article 181 would apply and the appellant's darkhast would be barred. Proceeding to deal with the matter on that concession, the only question which arose for decision was whether in terms it could be said that the award made by an arbitrator under Section 54 of the Societies Act was an order or a decree of a civil Court. The learned Chief Justice examined the relevant provisions of the Co-operative Societies Act and came to the conclusion that there was no warrant for the suggestion made that the Registrar should be deemed to be a civil Court when he makes an award under Section 54 of the Act. 'The argument for the appellant.' observed Beaumont C.J. 'really involves that every person or body on whom is imposed by statute the obligation of deciding disputes between particular persons is to be regarded as a civil Court within the meaning of the limitation Act.' He took the view that such a contention was quite unarguable. On that view it was held that the darkhast filed by the appellant was barred under Article 181 of the Indian Limitation Act. As I have said above, the appellant himself had conceded that if in terms the award made by the Registrar under Section 54 was not held to be an order or a decree of a civil Court, then Article 181 would apply. That being the position, the Court did not think it necessary to consider the other aspects of the matter which would otherwise have been relevant and material. The question as to whether the provisions of the Code of Civil Procedure such as Sections 39, 48 and the rules under 0. XXI, would apply to an application made to execute an award was not argued before the Court and has not been considered. Similarly, the effect of the material words in Section 59(1) (a) where it is provided that every order therein referred to shall be executed in the same manner as a decree of such Court was also not considered. In that ease the appellant based his ease only on one argument, viz. that in making an award under Section 54 of the Societies Act the Registrar or his nominee must be deemed to be a civil Court and as such the order made by him must be taken to be an order of a civil Court. That is why the division bench disposed of the matter on that footing alone. They held that the Registrar cannot be said to be a civil Court while he is making an award under Section 54. It may be noticed that it was assumed in this case that applications made under Section 59(1) (a) to execute awards are governed by the provision's of the Limitation Act though there is no discussion about this point. Thus this decision does not afford any assistance in deciding the question as to the effect of the words 'in the same manner as a decree of such Court' used in Section 59(1) (a) of the Societies Act.

4. The same question arose before the same Bench in Raghavendra v. Industrial Bank, Guledgud (1935) 38 Bom. L.R. 927. In the said case an award had been made under Section 54 of the Societies Act and the certificate of the Registrar under Section 59(1) (a) had been granted on April 22, 1931. The society had presented the darkhast application on March 12, 1932. The debtor's contention that the said application was barred by limitation was negatived by both the Courts below. When the matter came before this Court in second appeal, Beaumont C.J. dealt with the effect of the provisions of Section 59 of the Societies Act and observed (p. 928) :-

It may perhaps be said that when a certificate is granted by the Registrar the award of the arbitrator should be treated as a decree of a civil Court.

He, however, pointed out that that would not help the appellant as the darkhast proceedings had been filed within three years of the date of the certificate. The learned Chief Justice then observed (p. 928) :-

I rather doubt myself whether the award ever becomes a decree of a civil Court within the meaning of Article 182 of the Indian Limitation Act; but,' he concluded, 'it is not necessary to consider that point.

It may be mentioned that the earlier decision of the same bench in the Hubli Urban Co-operative Society's appeal was apparently not cited before the Court and the matter was dealt with on the basis that the claim made by the society was in time whether Article 181 or 182 was applied. The doubt expressed by the learned Chief Justice as to whether an award passed by the arbitrator under Section 54 of the Societies Act could ever become a decree of a civil Court within the meaning of Article 182 is strictly speaking somewhat inconsistent with the view which was taken by the same bench in the Hubli Urban Co-operative Society's appeal where it had been held that such an award cannot be treated as a decree of a civil Court. Even so, the learned Chief Justice did observe, as I have just mentioned, that such an award may perhaps be treated as a decree of a civil Court for the purpose of execution. This decision also is not of much assistance. The question with which we are concerned did not in terms arise before the Court, and the learned Chief Justice had contented himself by merely expressing a doubt as to whether an award made under Section 54 of the Societies Act can ever become a decree of a civil Court within the meaning of Article 182 of the Indian Limitation Act. In this decision again it was assumed that an application to execute an award would be subject to the provisions of the Limitation Act.

5. In Maratha Co-operative Credit Bank, Dharwar v. Keshav (1937) 40 Bom. L.R. 889 the same question arose before a Bench of which Mr. Justice N.J. 'Wadia was a member. An application to execute an award had been made under the provisions of Section 59(1) (a) of the Societies Act and it had been dismissed by both the Courts below on the ground that it was barred by limitation. On behalf of the bank two points were urged before the Court in the said case. The first contention urged was that having regard to the provisions of the Bombay Co-operative Societies Act an award made under the provisions of that Act is not governed by or subject to the provisions of the Indian Limitation Act, and, secondly, it was contended that the application to execute the award in question was within time in view of the fact that the bank had taken some steps under Section 59(1) (b) of the Societies Act between March 1927 and July 1931, which steps amounted to steps-in-aid of execution within the meaning of Article 182(5). Mr, Justice Rangnekar, who delivered the judgment of the Court, repelled the first contention by observing that if the said contention was accepted, it 'would obviously lead to some absurd results', Curiously enough the contention that the provisions of the Limitation Act do not apply to an application made to execute an award under Section 59 (1) (a) of the Societies Act was sought to be supported by reference to the decision of this Court in Raghavendra's case. Mr. Justice Rangnekar held that the said decision did not support that contention at all. Dealing with the second contention urged before them Mr. Justice Rangnekar held that the steps taken by the bank to execute the decree under Section 59(1) (b) with the assistance of the Collector could not help to bring their present application for execution in time since under Article 182(5) the Collector could not be said to be the proper Court for execution. Article 182(5) requires that before any application could be treated as a step-in-aid of execution it must be shown that it was made in accordance with law to the proper Court for execution. According to Rangnekar J. the Collector to whom the application was made could not be regarded as such a Court. On that view it was held that the darkhast filed by the bank was beyond time.

6. It is obvious that the question as to whether the provisions of Article 182(5) could be pressed into service by the bank arose because the Court assumed that an application made by the bank would be governed by the provisions of Article 182. In this connection it must be mentioned that the decision in Raghavendra's ease was cited before the Court and in fact Mr. Justice N.J. Wadia who was a party to the said decision was also a member of this Bench, Even so, in dealing with the contentions urged before them the Court proceeded on the assumption that Article 182 would apply. Under these circumstances it may not be unreasonable to assume that the learned Judges did not share the doubt, expressed by Beaumont C.J. in Raghavendra's case. In fact, both the Courts below have relied upon this decision in support of their conclusion that the darkhast filed by the Urban Bank at Muddebihal in the present case is within time under Article 182.

7. In this connection it may be useful to refer to the decisions dealing with the question of limitation applicable to applications made to execute awards filed under Section 15 of the Indian Arbitration Act.

8. In Chaitram Sagormull v. Hardwari Mull & Co. I.L.R.(1927) Cal. 499 the Calcutta High Court were dealing with such an award. An application for execution of that award had been made and it was held that such an application would be governed by Article 183 of the Indian Limitation Act. Under is. 15 of the Indian Arbitration Act it is provided that the award when filed in a Court becomes enforceable 'as if it were a decree of the Court'. Dealing with the question of limitation Rankin C.J. observed as follows (p. 504) :-

Now, we have to consider the construction of Section 15 of the Indian Arbitration Act with a view to choose between two alternatives. One is the view that an award for purposes of limitation will be governed by Articles 182 or 183 according as it is filed in a Chartered High Court or not, and the other is the view that whatever happens to an award it can only he enforceable within a period of three years prescribed by Article 181 for applications for which no period of limitation is provided elsewhere in this schedule or by Section 48 of the Code of Civil Procedure.' Rankin C.J. then proceeded to hold that Section 15 covers the question of time within which the execution of a decree may be had, and came to the conclusion that to the execution of such an award Article 183 of the Limitation Act would apply.

9. This Court has taken the same view in Nadirshaw Contractor v. Gajraj Sheokarandas. : (1941)43BOMLR1006 It was held that such an award can be executed as a decree of the High Court at any time within twelve years from its date under Article 183 of the Indian Limitation Act. In support of the contention that the proper article to apply would be Article 181 the decision of this Court in Raghavendra's case was cited before the Court. Beaumont C.J. distinguished the said decision by observing (p. 1007) :-

The expression 'in the same manner as (which occurs in Section 59(1) (a) of the Societies Act) would seem to refer to the method of execution and would not, I think, cover the time within which execution must be enforced. But Section 15 speaks of the award being enforceable as if it were a decree of the Court, and it seems to me much easier to read that expression as including both the manner of execution and the time within which execution must take place.

Accordingly, Beaumont C.J. accepted the reasoning of Rankin C.J. in the Calcutta decision and held that Article 183 would apply and not Article 181. He, however, remarked that the point is obviously susceptible of argument; but since the Calcutta view as to the construction of Section 15 had stood for some years, he saw no reason why he should differ from it.

10. In Subba Rao v. Calicut Co-operative, Urban Bank [1940] Mad. 649 the Madras High Court was dealing with a similar question with reference to an award made under Section 51. of the Madras Co-operative Societies Act, 1912. Rule XV(7) (c) of the rules framed under the said Act states that on application to the civil Court having jurisdiction over the subject-matter of the decision or award, the Court shall enforce the decision or award as if it were a final decree of the Court. It was held that the execution of the award in question was governed by Article 182 and not Article 181. In dealing with the matter as to which article applied, Leach C.J. thus observed (p. 650) :-

It is conceded by the learned Advocate for the appellant, as it must be, that an award under the Co-operative Societies Act attracts all the provisions of the Code of Civil Procedure in the matter of execution. If it attracts all the provisions of the Code with regard to execution, it must, in our opinion, of necessity attract the provisions of the Limitation Act which apply to the execution of decrees.

The learned Chief Justice then proceeded to point out that if Section 48 applied, it would follow that the appropriate article to apply would be 182 and not 181, for, observed the learned Chief Justice (p. 651) :-

If Article 182 did not apply but Article 181 did, there would be a conflict as Article 181 fixes a period of three years and Section 48 a period of twelve years.

11. Reading Section 59, apart from all authorities, it seems to us that the Legislature clearly intended that an award made under Section 54 of the Act should be executed in the same manner as a decree passed by a civil Court. The manner of execution to which reference is made in Section 59(1) (a) would, we think, attract the application of the relevant provisions of the Code of Civil Procedure as much as those of the Indian Limitation Act. If the provisions of the Code in reference to the execution of decrees apply to the execution of such awards, we are unable to see why provisions of the Limitation Act in regard to the execution of such decrees should be held inapplicable to them. In the case of awards which are made enforceable as if they were decrees of a civil Court, it has been held by the High Courts of Calcutta, Bombay and Madras that applications made to execute them are governed by either Article 182 or 183. The expression that the award may be enforced as if it were a decree of a civil Court may perhaps be wider and somewhat more emphatic than the expression that the award may be executed in the same manner as a decree of a civil Court; but we do not think that the difference in the two expressions would justify the conclusion that in the ease of awards falling under the first category Article 182 of the Limitation Act would apply while in the case of the other awards Article 181 would apply. In both the cases the awards in terms continue to be awards and do not become decrees properly so called [vide Sassoon & Co. v. Ramdutt Ramkissen Das I.L.R.(1922) Cal. 1 The Legislature has, however, indicated that in executing the said awards they have to be treated as decrees and the procedure laid down by the Code in that behalf has, therefore, to be adopted. It seems to us that in both cases the object is the same, viz. that the awards should be treated as being analogous to decrees for the purpose of execution. We are, therefore, inclined to hold that the awards which have to be executed in the same manner as decrees of civil Courts can legitimately be regarded as 'decrees of civil Courts' within the meaning of Article 182.

12. It has not been seriously disputed before us that when an application is made under Section 59 (1) (a) it must comply with the requirements of O. XXI, Rule 11. Similarly, if all the details required by the said rule are not set out in the proper form, the Court can act under O. XXI, Rule 17, and ask for corrections to be made. 'Indeed, it is difficult to conceive that these awards can be executed in the same manner as decrees of civil Courts without adopting the procedure of execution laid down by the Code of Civil Procedure under O. XXI. The provisions of Sections 38, 39 and 48 would, for similar reasons, apply to such proceedings. It has been held by this Court in Krishnaji Shridhar v. Mahadeo Sakharam 23 Bom. L.R. 909 that in the case of an award passed under the Co-operative Societies Act (II of 1912) if an application is made to execute the award, the Court, to which such an application is made can transfer the award under Section 39 of the Code of Civil Procedure. It may be mentioned that Section 43 of the said Act empowered the making of rules and under Rule 34 thus framed awards passed under the said Act had to be executed in the same manner as decree of civil Courts. It was contended on behalf of the debtor that an award could not be transferred by the Court to which an application is made for its execution since it was not a decree and the provisions of Section 39 of the Code of Civil Procedure would be inapplicable. In fact, the contention thus urged had been accepted by the learned Judge before whom it was urged. When the matter came to this Court in a revisional application Macleod C.J. repelled the said contention because it seemed to him that it was based 'upon a somewhat narrow construction of Section 39'. The learned Chief Justice was of the opinion that 'as the petitioner could apply to the Poona Court to execute the decree as if the Poona Court had passed it' there was no reason why the Poona Court could not transfer it if the other requirements of Section 39 of the Code were satisfied. Thus the expression that the award may be executed in the same manner as a decree of a civil Court was held to mean that the said award may be executed as if it was a decree of a civil Court.

13. In this connection it may also be relevant to consider the object with which Section 59 was enacted. The Legislature seems to have intended that the societies in whose favour awards are made under Section 54 of the Societies Act should be entitled to execute their awards either with the assistance of civil Courts or at the hands of the Collector who is authorised to recover the dues in question as arrears of land revenue. The certificate which the Registrar has to grant in either case is not subject to any limitation. Prima facie an application made under Section 59(1)(b) for assistance of the Collector to execute the award is not subject to any limitation. Besides, Section 59A provides for an additional remedy to the society in whose favour an award has been made to take possession of the property of the defaulting debtor in certain cases. Thus the policy of the Legislature in making the provisions of Section 59 seems clearly to be to afford additional facilities to the societies to recover their dues. If the contention that the execution of such an award is governed by Article 181 is accepted, it will obviously lead to a conflict as pointed out by Leach C.J. in Subba Rao's case. Article 181 fixes a period of three years, whereas Section 48 provides for a period of twelve years for the execution of decrees. It would then mean that whereas a decree passed by a civil Court can be executed within twelve years provided it is kept alive by taking appropriate steps under Article 182 of the Limitation Act, an award made by an arbitrator would become unenforceable after three years either from the date when it is pronounced and communicated to the parties or from the date of the certificate granted by the Registrar under Section 59. Assuming that the expression that an award may be executed in the same manner as a decree of a civil Court is capable of the interpretation sought to be put upon it by the appellant, we would hesitate to accept that interpretation in view of the fact that it would lead to this somewhat startling and irrational result. Besides, it would, we think, be plainly inconsistent with the object of the provisions of Section 59 and Section 59A. In such a case the rule of construction enunciated by Beaumont C.J. in Emperor v. Somabhai Govindbhai : AIR1938Bom484 affords valuable assistance. Observed the learned Chief Justice (p. 1091) :-

A Judge must always consider the effect of any construction which he is asked to put on an Act of Parliament, and if he comes to the conclusion that a particular construction leads to a result which he considers irrational or unfair, he is entitled, and indeed bound, to assume that the Legislature did not intend such a construction to be adopted, and to try to find some more rational meaning to which the words are sensible.

That being the position, we are inclined to take the view that under the provisions of Section 59(1) (a) as they stood before the amendment the award sought, to be executed must be treated to be a decree of a civil Court within the meaning of Article 182 of the Limitation Act. We, therefore, think that both the Courts below were right in relying upon the decision of this Court in Maratha Co-operative Credit Bank, Dharwar v. Keshav. (1937) 40 Bom. L.R. 889

14. As I have mentioned at the outset Section 59 of the Societies Act has been amended in 1943. We think that the Legislature thought it necessary to make this amendment in order to remove any possible doubt as to the effect of the material words used in Section 59(1) (a) as it stood before the amendment. The amendment does not make any change in the provisions of the said section. It merely clarifies the position and is in that sense purely declaratory. Perhaps, such a clarification became necessary in view of the doubt expressed by Beaumont C.J. in Raghavendra's case. Besides, even if it is held that the amendment makes some change in the provisions of Section 59 (1) (a) by directing that the award, on a certificate signed by the Registrar, shall be deemed to be a decree of the civil Court, it would, we think, have to be given retrospective effect, since the amendment in question relates merely to the procedure as to how the money due under the award should be recovered. It is well settled that the general principle is that alterations in the procedure are always retrospective unless there be some good reason against it. Section 59 deals merely with procedure, and having regard to the nature of the amendment made we see no reason why it should not be given retrospective effect.

15. Since, however, we have held that even under the unamended section the award sought to be executed under Section 59(1) (a) must, for the purpose of execution, be treated to be a decree of a civil Court within the meaning of Article 182 of the Limitation Act, the question as to whether the amendment of 1943 should be given retrospective effect or not seems to us to be more or less academic.

16. The result is the appeal fails and is dismissed with costs.


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