1. This second appeal arises out of a suit for declaration that the suit Vaddanam belongs to the 3rd defendant and was validly pledged with the plaintiff on 19-11-1958 for a sum of Rs. 2,300 through the 4th defendant; that the plaintiff is entitled to possession thereof; and that defendants 3 to 5 should be directed to hand over the Vaddanam to the plaintiff or in default to pay its value.
2. The facts briefly stated are these. The plaintiff-firm does money-lending business at Kakinada. It has got licence for pawn-broker's business also. The 3rd defendant was in need of money. She sent for the clerk of the plaintiff's firm and asked him to arrange tor a loan tor her. The said clerk told her that they had no ready funds. As she was in urgent need of money, she made earnest request that the amount may be advanced on the pledge of her Vaddanam which pledge she would redeem. The 3rd defendant men sent the Vaddanam to the plaintiff's firm through 4th defendant with a letter Ex. A. 1 signed by her daughter, the wife of the 4th defendant. The plaintiff-firm had not sufficient funds in the account of pledge and pawn also. It therefore took the amount to the extent required from the other branch of its business and advanced in all a sum of Rs. 2,500 on the pledge of the gold Vaddanam. The transaction was duly entered in the accounts of the money-lending business of the plaintiff-firm but not in the pledge account. No pawn ticket also was issued. A pledge chit however was attached to the Vaddanam and an entry to that effect was made in the accounts. This was done on 19-11-1938.
On 25-1-1959 the 4th defendant sent a notice to the plaintiff for return of the Vaddanam to the 1st defendant. The plaintiff refused to comply with the demand because the 3rd defendant was the owner of the Vaddanam and she did not join in making such request. Then on 12-2-1959 at the instance of the 5th defendant, the sate officer of the Co-operative Department accompanied by the 5th defendant's Secretary one K. Subbanna and followed by peons and policemen came to plaintiff's firm and demanded the return of Vaddanam. In fact it is said that he forcibly seized the same notwithstanding the fact that the plaintiffs partner had questioned his authority and informed him that the Vaddanam was validly pledged with the firm. Two papers however were left in the plaintiff's shop when they went away with the Vaddanam. These are Exs. A. 10 and A. 11. Ex. A. 10 was a security bond executed in relation to the handing over of the jewel to the 5th defendant's Secretary by the Sale Officer of the Co-operative Department and Ex. A. 11 is a notice issued to the effect that the Vaddanam will be sold on 27-2-1959 in the event of non-payment of the amount due from defendants 3 and 4.
On enquiries the plaintiff came to know that the 5th defendant had obtained an award decree before the Deputy Registrar of Co-operative Societies against defendants 3 and 4, who were the members of the Co-operative Society and in execution of the said decree at the instance of the 5th defendant, the Sale Officer of the Co-operative Department came and acted in the manner stated above. In vain did the plaintiff ask at that time to produce the authority for making the demand. Thereafter the plaintiff complained to the Deputy Registrar of Co-operative Societies by way of petition of the extraordinary and illegal procedure adopted in taking away the Vaddanam. On 23-2-1959 he received a letter from the department that the petition made was detective for want of Rupees 1-50 nP. court fee. On 25-2-1959 the amount was remitted into the Sub Treasury and the Co-operative Department was intimated. Since nothing came out of that petition, the plaintiff having come to know that in pursuance of certain decrees, the properties would be sold in Court on 22-12-1959, came to the Court seeking the above mentioned reliefs.
The suit was resisted by defendants 1, 2 and 5. The 1st defendant was made party-defendant as be had instituted against 4tn defendant a money suit K. C. No. 111 of 1959 on the file of the District Munsifs Court, Kakinada and had applied under I. A. No. 299 of 1959 for attachment before judgment of the Vaddanam which was then in the custody of the 5th defendant after it was forcibly taken away from the plaintiff. After his suit was decreed, he filed E. P. No. 853 of 1959. The Vaddanam was directed by the Executing Court to be sold in execution of the decree. Likewise, the 2nd defendant had brought a suit for recovery of money against defendants 3 and 4 in S. C. No. 133 of 1939 on the file of the District Munsifs Court, Kakinada and got the Vaddanam attached before judgment in his I. A. No. 346 of 1959. These two defendants claimed that since the Vaddanam belonged to the 4th defendant and was in possession of the 5th defendant at the time when the attachment was made in their suits they were not necessary parties to the suit brought by the plaintiff.
The contention of the 5th defendant was that the pledge transaction relied on was neither true nor valid, that the Vaddanam at the time of its original attachment was not in actual possession of the plaintiff himself; that its attachment in execution of the 5th defendant's award decree passed against defendants 3 and 4 was in due accordance with law and that at any rate the suit is bad for non-joinder of the Deputy Registrar of Co-operative Societies as party.
The 5th defendant denies that the Vaddanam was forcibly seized from the plaintiff or that any pressure was brought to bear upon him to deliver the same to the Sale Officer. His case is that the Sale Officer along with the Secretary of the 5th defendant first went to the shop of defendants 3 & 4 to execute the award decree. They them went to the house of the 4th defendant. They saw the 3rd defendant who fold them that the 4th defendant was not in the house. When the sale Officer of the Co-operative Department informed her that they had come for attachment, she told them that she would bring the 4th defendant Meanwhile the 4th defendant was found leaving the house from the back door with his hand under the shirt. Immediately the Sale Officer and the 5th defendant's Secretary and the peon followed him The 4th defendant went into the plaintiff's shop and removed the Vaddanam from his waist and handed over the same to the Sait. The 5th defendant's Secretary asked the Sait not to take it as it was an attached article. Thereafter the Sait gave it to K. Subbanna, the Secretary, without raising any objection. In these circumstances, the 5th defendant contended that the Vaddanam was not forcibly seized and that the attachment was valid and the Civil Court has no jurisdiction to entertain the suit.
The trial Court, on the evidence adduced. found that the pledge was true, but was not valid, and that the Civil Court had no jurisdiction to entertain such suits. In this view, it dismissed the suit. On appeal, the Principal Subordinate Judge, Kakinada, held that the pledge was not only true but was valid, that the Sale Officer of the Co-operative Department at the instance of the 5th defendant acted arbitrarily and high-handedly as he took forcible possession of the Vaddanam Ironi the plaintiff without any authority from the Registrar of Co-operative Societies and in contravention of the mandatory provision of Rule XXII (6-A) framed under the Madras Co-operative Societies Act. He further held that the Civil Court bad jurisdiction. In this view, he allowed the appeal and decree the suit of the plaintiff with costs
3. The learned counsel for the appellant, Sri V. Suryanarayana, calls in question the correctness of the decision of the appellate Court both on points of validity of pledge and also of jurisdiction. He contends that the pledge itself was not true. But that has been found otherwise concurrently by both the Courts. Certainly that being a pure question of fact the finding reached by the lower appellate Court is Final and is not open to review in second appeal. So then the only contentions which need be considered now are whether the pledge transaction with the plaintiff was valid; whether the attachment claimed is in due accordance with law and whether the Civil Court had jurisdiction to entrertain the suit as brought by the plaintiff.
4. It is no) disputed that the plaintiff has got licence for pawn broker's business as required by Section 3 of the Madras Pawn Broker's Act (XXII) of 1943). The validity of the transaction is therefore, questioned not on the ground of his competence to carry on such business but on the basis of his alleged contravention of Sections 7 and 10 of the Madras Pawn Brokers' Act. While imposing an obligation on the pawn broker of giving a pawn ticket, Section 7 in terms directs that the pawn-broker shall not take a pledge in pawn unless the pawner takes a pawn-ticket. Admittedly no such pawn-ticket was issued. It is manifest therefore, that there was a contravention of Section 7 of Madras Act XXIII of 1943. Section 10 of the Act casts a duty on the pawn-broker to duly maintain an account in the pledge book in the prescribed form and give receipt for each amount paid and also supply A statement of account duly signed, on requisition in writing by the pawner. Sub-clause (2) of the said section refers further to the language in which it should be maintained. Admittedly the plaintiff did not maintain the account of pledge in a pledge book in the prescribed form. Contravention of Sub-clause (a) of Section 10(1) of Act 23 of 1943 is therefore obvious.
What then is the legal effect of these contraventions? Docs the pledge in pawn becomes null and void on that account? The answer must be found in the relevant provisions of the Act. What then is the provision applicable to the facts of the case? Of course there are several penal provisions in the Act; but admitted by Sections 18 and 21 arc the only provisions which need be considered on the facts of this case. Sections 18 and 21 of the Act (Madras Act XXIII of 1943) so far as relevant for our purpose read thus:
'Section 18: (1) Whoever contravenes any of the provisions of this Act or of any rule or of any terms or conditions of a licence made or granted thereunder shall, if no other penalty is elsewhere provided in this Act for such contravention, be punished with fine which may extend to fifty rupees and if such person has been previously convicted whether under this section or any other provision contained in this Act, with fine which may extend to one hundred rupees.
(8) Any Court convicting a pawnbroker of a contravention of the provisions of Clause (c) or Clause (d) of Sub-section (1) of Section 10, may direct him to furnish a receipt or statement of account in accordance with the provisions of that clause, and if the pawnbroker fails to comply with the direction, the Court may order his licence as a pawnbroker to be cancelled.
Section 21: Where a pawnbroker is guilty of an offence against this Act (not being an offence against any provision of this Act relating to licences), any contract of pawn or other contract made by him, in relation to his business of pawn-broker, shall nevertheless not be void by reason only of that offence, nor shall he by reason only of that offence, lose his lien on or right to the pledge or to the loan and the interest and other charges, if any payable in respect hereof,
Provided that if a pawnbroker fails to deliver to the pawner a pawn-ticket as required by Section 7 or fails to give to the pawner or his agent a receipt as required by Clause (c) of Sub-section (1) of Section 10 or to furnish on a requisition made under Clause (d) of that sub-section, a statement of account as required therein within one month after such requisition has been made, the pawnbroker shall not be entitled to any interest For the period o' his default;
Provided further that if in any suit or proceeding relating to a loan, the Court finds that a pawnbroker has not maintained accounts as required by Clause (a) or Clause (b) of Sub-section (1) of Section 10 he shall not be allowed his costs.'
It is clear that Section 18 is a general provision for punishing the persons contravening the provisions of the Act or rules or of the terms and conditions of licence and it would apply only where no penalty is provided elsewhere in the Act for such contraventions. Section 21, on the other hand, is concerned with the validity or otherwise of the contract of pawnbrokers who are guilty of any offence against the Act. So, then the question as to validity or otherwise of the pledge transactions where contravention of the provisions of the Act are alleged has to be judged only in the light of Section 21. The avowed province of Section 18 which in terms deals with punishments is necessarily different. Both the Courts below have therefore relied on Section 21 for coming to their conclusions in the matter. Of course on its interpretation the trial Court held that the contravention complained of conies within the offence under the provisions of the Act relating to licences, and that the pledge cannot be a valid pledge. The appellate Court, on the other hand, held that under the very terms of Section 21, the contravention of Ss. 7 and 10 of the Act do not make the pledge a void transaction.
There is little difficulty in agreeing with the appellate Court if only we bear in mind the provisions of Section 21, which are clear and categorical and lay down in the two provisos the penalty that the contravention of Sections 7 and 10 (1)(a) shall entail so far as rights under the contract are concerned. If by reason of the above contraventions, the Legislature had intended to declare or render the transaction of contract itself void there was no need for the provisos at all. The said provisos necessarily imply that though the transactions may not be void by reason of the contraventions, the pawnbrokers nevertheless would not be entitled to interest and costs as the case may be. That being the clear and obvious intention of the Legislature as gathered from the terms used it cannot be successfully contended that these contraventions constitute an offence against the provision of the Act relating to licence within the meaning of Section 21 sufficient by themselves to (sic)ender the transaction void. It is also argued that the provisos go against the main body of be section and hence ultra vires the power of legislature and ineffective. If is difficult to subscribe to any part of this contention for the reasons already given. In this premises, the pledge in question is not an invalid transaction, so That it may be said there was no relationship if pawner and pawnee as between the 3rd de-defendant and the plaintiff.
5. That apart in any event when the ornament was actually in the custody of the plaintiff by reason of its being delivered to him by he 4th defendant on behalf of the 3rd defendant, the plaintiff is entitled to its safe custody and to protection against hostile attacks of trespasser. Indeed the plaintiff could not be dispossessed, save in due process of law. The matter then for consideration is whether the attach went alleged was effected in accordance with law.
6. It is common ground that the 5th defendant got an award decree under the provisions of Madras (Co-operative Societies Act (VI of 1.932} from the Deputy Registrar of Co-operative Societies. Such an award given by the Registrar or Deputy Registrar relating to the matters in dispute touching the business of the society between the members of the Society under the mandatory provisions of Section 51(6)(a) of the Madras Co-operative Societies Act (VI of 1932) cannot be called in question in any Civil or Revenue Court. But the question here is not whether the decision given by the Deputy Registrar in relation to the dispute touching the business of the 5th defendant's Co-operative Society was wrong. The question is, whether the Vaddanam could be seized forcibly from the plaintiff's custody for the Court below has come to a definite conclusion on the evidence adduced that the Sale Officer of the Co-operative Society accompanied by the then Secretary of the 5th defendant one K. Subbanna and also the peons and the police went to the shop of the plaintiff and demanded the plaintiff to hand over the jewel to him threatening to break open the locks if their demands were not complied with and when the plaintiff's partner asked them to produce the authority for making that demand, they refused to give it and that the policeman wafting outside advised him to give away the Vaddanam and that they all talked in a threatening manner. Dazed and confused as he was, he was obliged to hand over the jewel to them. That is how the jewel was seized. This finding given by the lower appellate Court must be accepted as final. The question is whether such a seizure is valid in law? Section 57-A of the Madras Co-operative Societies Act runs as under:
'The Registrar or any person subordinate to him empowered by the Registrar in this be half may, subject to such rules as may be prescribed by the State Govt. and without prejudice to any other mode of recovery provided by of under this Act, recover-
(a) any amount due under a decree or order of a Civil Court, a decision or an award of the Registrar, or arbitrator or an order of the Registrar, obtained by a registered society including a financing bank or liquidator; or
(b) any sum awarded by way of costs under Section 41 to a registered society including a financing bank or (o the Government, or
Section 65 which empowers the State Govern ment to make rules to carry out all or any of the purposes of the Act provides in Sub-clause 2(ee) of the said section that such rules may prescribe the procedure for the attachment and sale of property under Section 57-A. The rules framed by the Government in pursuance of the said provision which have all the force of law, prescribed, in Rule 22, the procedure to be adopted in execution of a decree, decision or award. Sub-clause (c) of Sub-rule (6-A) of Rule XXII which relates, to the attachment of debt, share and other property not in possession of defaulter, so far as is relevant for our purpose reads thus:
'Other movable property not in the possession of the defendant except property deposited in, or in the custody of any Civil Court, the attachment shall be made by a written order signed by the Registrar of the district prohibiting
(iii) in the case of the other movable property except as aforesaid the person in possession of it from giving it over to the defaulter.'
Thus if the property sought to be attached is in the possession of third party, the attachment order has to be signed by the District Registrar and that will be expressly an order prohibiting the person in possession from giving it over to the party concerned. It is further prescribed in the rule that a copy of such order should be given to the party in possession of such property Both the Courts below have come to the conclusion that there has been flagrant breach of this rule in that no order of the Deputy or District Registrar was obtained, nor was it produced or shown to the person in possession of the movable property. In fact instead of directing him not to deliver the property to the defaulter, the property was actually seized from his custody and handed over to the 5th defendant. There can be little doubt that the procedure adopted was arbitrary and against the rules and provisions of the Act. When the mandatory provisions of law were thus ignored and the officer concerned without obtaining requisite authority to proceed in the matter, acted in a high-handed manner and against the clear provisions of law he cannot be deemed to have acted under the provisions of the Act.
It is no doubt true that Sub-rule (17) of Rule XXII prescribes procedure for investigation of claims and objections to attachment of property and confers on the aggrieved party a right to institute a suit within six months from the date of the order passed against him to establish the right he claims and provides at the same time that subject to the result of such suit, the order shall be conclusive. But when the officer was not clothed with the requisite authority to act under the provisions of the special Act and in fact acted against law it is not necessary to have recourse to the procedure prescribed under the said Act which governs the acts done thereunder. The aggrieved party has indeed the common law remedy.
In the instant case, no doubt the plaintiff had moved the Deputy Registrar complaining against the high handed manner in which the article was seized but he was later informed that his petition cannot be gone into, as the requisite court fee was not paid therefor. The petitioner thereafter even sent the requisite court-fee, but nothing came out of that petition. Then the petitioner approached the Civil Court, as he came to know that the property was about to be sold. When the party under the circumstances of the case could ignore the procedure in Sub-rule (17) which is intended for only attachments made under the Act and came direct to the Court for relief against the acts of trespass and forcible seizure the mere fact that he complained of arbitrary act of a sale Officer ought not stand in his way to come to the Court. That apart even if the attachment was under the Madras Co-operative Societies Act and in due accordance with its provision, intervener's suit is not barred in law. Civil Court's jurisdiction to try a suit for declaration of right in this behalf is neither expressly nor by necessary implication taken away.
It is common ground that the Madras Cooperative Societies Act (VI of 1932) does not contain express prohibition with regard to the bar of a suit in cases of attachment. In fact it has permitted remedy of suit against the order passed on intervened petition. Nevertheless it is urged that the remedy of suit must either be an alternative remedy or a remedy which is available only after the Registrar concerned has made his order in a claim petition duly filed. In the first mentioned event it is urged that the plaintiff having elected the remedy of a petition he cannot bring a suit. In the latter case civil suit is premature. It is difficult to subscribe to these contentions. The remedy of suit conferred by the statute is not an alternative remedy. Besides the petition filed as found by the Court below cannot be deemed to be one under the said statute. It was a mere complaint against the officer. The plaintiff need not wait therefore for the final order to be passed thereon. In my event when the petition was refused to be considered for want of court-fee and was not considered at all even after the payment of court-fee and the property was being put to sale, the plaintiff could of course come to the court.
It is contended that when the statute has prescribed a particular procedure and given a right of action, the person complaining can only resort to that procedure and the civil Courts jurisdiction in that behalf shall be held to be implidely barred. For this proposition, reliance has been placed on Subbayya v. Thippa Reddi, 1939-2 Mad LI 604: (AIR 1939 Mad 967); Ramayya v. Chittoor District Co-operative Deputy Registrar, 1945-2 Mad LJ 112: (AIR 1945 Mad 370) and Venkata Subbiah v. Chenchupalli Peeriah, : AIR1952Mad266 . All these cases are clearly distinguishable. They relate to suits to set aside the sale, in execution of a decree, held by the Deputy Registrar as Liquidator of the Co-operative Society for failure to follow strictly the procedure laid down in the rules under the Co-operative Societies Act. The actions were discountenanced on two grounds. Firstly, the requisite leave of the Registrar as enjoined by Section 18 of the Co-operative Societies Act which is a condition precedent for instituting the suit was not obtained. Secondly, a civil suit in matters of sale of immoveable properties in execution of a decree is impliedly barred as the special statute has not only pointed out the particular mode of redressing the injury but also set up a hierarchy of officers for the purpose of giving their decision and attached finality to the decision given. These are the two main grounds on which the above cases were decided.
The lads of the present case are basically different. Not only that there is no bar of a civil suit in matters of attachment of property, hut also the suit has been brought on common taw right against forcible and unauthorised seizure of the properly. Such suits stand on a different footing. In fact in the first of the cases cited above, Wadsworth, J. pointed out that the plaint in that case was not drafted as if the plaintiffs were merely seeking the common law remedy against a trespass by an unauthorised person upon property to which he was entitled and that it was drafted just as if the plaintiff had a right by statute to contest in the Civil Courts the regularity of the sale on the ground that the statutory formalities had not been complied with. It is clear from this authority that distinction should be made between cases which are brought for acts purporting to have he en done under the Co-operative Societies Act and also acts, which are done in clear contravention of that Act, for which the common law remedy as against a trespass by an unauthorised person is open. Such a point was not raised even in the course of argument in the other cases cited above, and all those cases as already mentioned referred to an action to set aside the sale. I need not discuss the authorities cited more elaborately. Suffice it to say that the facts of those cases are entirely different.
In the present case as already discussed even if the act complained of fell under the Act the right to suit was not taken away by the Act but, on the other hand, expressly stated to be existing. However the present suit does not purport to have been instituted under that Act. The case of the plaintiff in substance has been that the seizure was wholly in defiance of or in flagrant breach of the rules and provisions of the Act. It was not an attachment effected under the Act. It was an unauthorised seizure by a trespasser and hence the party has a remedy under the common law. In these circumstances there can be no doubt that an action does lie in a civil court. As held by the Privy Council in Secy. of State v. Mask and Co., AIR 1940 PC 105 the exclusion of jurisdiction of a civil court is not to he readily inferred, but such exclusion must either be explicitly expressed or clearly implied. It was also observed that even if the jurisdiction is so excluded, the Civil Court has jurisdiction to examine into cases where the provisions of the Act have not been complied with, or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure. The rule so stated was cited with approval by the Supreme Court in Firm Illuri Subbayya Chetty and Sons v. State of Andhra Pradesh, : 50ITR93(SC) and 326. Their Lordships observed at p. 324 thus:
'In dealing with the question whether civil courts' jurisdiction to entertain a suit is barred or not, it is necessary to bear in mind the fact that then: is a general presumption that there must be a remedy in the ordinary civil courts to a citizen claiming that an amount has been recovered from him illegally and that such a remedy can be held to be barred only on very dear and unmistakable indications to the contrary. The exclusion of the jurisdiction of civil courts to entertain civil causes will not be assumed unless the relevant statute contains an express provision to that effect or leads to a necessary and inevitable implication of that nature. The mere fact that a special statute provides for certain remedies may not by itself necessarily exclude the jurisdiction of the civil courts to deal with a case brought before it in respect of some of the mailers covered by the said statute '
Of course, the Supreme Court while explaining the intended meaning of the observations of the Privy Council in the afore-mentioned case with regard to non-compliance with the provisions of the statute said that it referred to non-compliance with fundamental provisions of the statute. Their Lordships observed thus:
'It is necessary to add that these observations (of the Privy Council) though made in somewhat vide terms, do not justify the assumption that if a decision has been made by a taxing authority under the provisions of the relevant (axing statute, its validity can be challenged by a suit on the ground that it is incorrect on the merits and as such, it can be claimed that the provisions of the said statute have not been complied with. Non-compliance with the provisions of the statute to which reference is made by the Privy Council must, we think, be non-compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction. Similarly, if an appropriate authority has acted in violation of the fundamental principles or judicial procedure that may also tend to make the proceedings illegal and void and this infirmity may affect the validity of the order passed by the authority in question. It is in cases of this character where the defect or the informity in the order goes to the root of the order and makes it in law invalid and void that these observations may perhaps be invoked in support of the plea that the civil court can exercise its jurisdiction notwithstanding a provision to the contrary contained in the relevant statute.'
It is clear from the above observations that the ouster of jurisdiction of the civil court cannot be readily assumed and even if the jurisdiction is excluded in oases where there is non-compliance with the fundamental principles of the statute or a failure to observe the fundamental principles in relation to procedure that may tend to make the proceedings illegal and void, the person aggrieved can seek remedy in civil courts. In the instant case, as I have pointed out, there was total violation of the procedure laid down by the rules; not merely that the act was done with out obtaining any authority from a competent person but also the property was in fact seized by acts, akin to those of trespassers, verging on the brink of criminality. It cannot therefore be said that the act was done under the provisions of the Co-operative Societies Act or the rules thereunder. The lower appellate Court was right in holding that the civil court had jurisdiction to entertain the suit. I, therefore, see no reason to interfere with the order made by the lower appellate court. No other point remains for consideration.
7. The second appeal is, therefore, dismissed with costs. No leave.