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Arya Co-operative Bank Society Vs. Pandit Shiv Charan - Court Judgment

LegalCrystal Citation
Subject Trusts and Societies
CourtAllahabad
Decided On
Reported inAIR1940All482
AppellantArya Co-operative Bank Society
RespondentPandit Shiv Charan
Excerpt:
- - the passing of a personal decree against the plaintiff is a matter which is clearly outside the sub-section or the rule. if that be the construction of the award, then clearly the arbitrator acted in excess of his authority and the civil court has complete jurisdiction to set aside the award......arbitrator merely to decide matters concerning the estate of a deceased member. the passing of a decree personally against the plaintiff cannot come under that jurisdiction. the lower court has drawn a distinction between the jurisdiction of the registrar or arbitrator to pass a decree dealing with the estate of the deceased members and the decrees personally against the plaintiff which have actually been granted by the arbitrator. this view of the sub-section and of a similar rule under that sub-section has been taken by a bench of the patna high court in mahabir prasad v. basudeo narayan (1925) 12 air pat 575. the facts set out were:the society having a claim against munshi nath sahay took proceedings under the co-operative societies act, and the matter was referred to the.....
Judgment:

Bennet, J.

1. These are two second appeals brought by the Arya Co-operative Bank Society against decrees of the lower Appellate Court. The opposite party Pt. Shiv Charan was the plaintiff and the Society was the defendant. The first mentioned appeal is from a decree in O.S. No. 409 of 1936 and that suit dealt with an arbitration decree in case No. 39 of 1932. There was a member of the Society called Pran Sukh who owed the Society money and he died seven years before the suit. The Society claimed that the plaintiff represented Pran Sukh and plaintiff said he did not represent Pran Sukh. The Society then referred this matter to the Registrar under Rule 115, U.P. Co-operative Societies Rules of 1937. The Registrar referred the matter to an arbitrator Gauri Shankar and Gauri Shankar passed what purported to be a personal decree against the plaintiff in case No. 39 of 1932 of the arbitrator. The other original suit, No. 417 of 1936 which forms the subject of the second appeal No. 1984 of 1937, arose by a claim of the Society against Sukh Ram, the father of plaintiff. In the same way the Society referred this matter to the Registrar under Rule 115 and the Registrar referred the matter to Gauri Shankar and Gauri Shankar passed a personal decree against the plaintiff in case No. 40 of 1932.

2. The plaintiff then brought a suit in the Civil Court for a declaration that the personal decrees passed against him were null and void and further that certain proceedings in execution in the Court of the Collector taken under those decrees were null and void and that the property mentioned in the plaint which had been attached in execution of those decrees was not attachable or saleable. The defence was among other grounds that the suit was not cognizable in the Civil Court. This is the first matter which has been argued in these appeals. The trial Court held that the suits were not cognizable in the Civil Court and dismissed the suits. The lower Appellate Court reversed that decision and granted a relief as follows in appeal No. 42 of 1937:

The result is that I allow the appeal, set aside the decree and judgment of the lower Court and decree the salt inasmuch as a declaration is granted that the decree of the arbitrator is not binding on the appellant except in his capacity as representative of the deceased member Piran Sukh and further that the property attached at present mentioned in the plaint is not liable to attachment in the decree.

3. The Court further ordered:

The other appeal, No.46 of 1937, is also allowed, the judgment and decree of the lower Court is set aside and the suit is decreed inasmuch as a declaration is granted that the decree of the arbitrator is not binding on the appellant except in his capacity as representative of Sukh Ram, deceased, and that the property attached is not liable to attachment.

4. It will be observed that the lower appellate Court has held that the personal decrees against the plaintiff are null and void and that the Civil Court can set those personal decrees aside and that the attachment in consequence of those decrees should also be set aside. The Court has however held that the decree of the arbitrator would be binding on the plaintiff so far as he was a legal representative of the deceased Pran Sukh or of the deceased Sukh Ram. The two second appeals ask that the decree of the trial Court should be restored and learned Counsel, when asked what was it that he desired in second appeals, stated that the suits should be dismissed on the ground that the Civil Court had no jurisdiction. In other words, this means that the personal decrees against the plaintiff should stand and the proceedings of attachment in execution of those personal decrees. The question therefore is whether the arbitrator had jurisdiction to pass personal decrees against the plaintiff. For authority for this proposition, learned Counsel referred to the Co-operative Societies Act, Act 2 of 1912, Section 43(2)(i) which states that the Local Government may frame rules for purposes as follows:

Provided that any dispute touching the business of a Society between members or past members of the Society or persons claiming through a member or past member or between a member or past member or persons so claiming and the committee or any officer shall be referred to the Registrar for decision or, if he so directs, to arbitration, and prescribe the mode of appointing an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar or such arbitrator or arbitrators, and the enforcement of the decisions of the Registrar or the awards of arbitrators.

5. In accordance with this rule-making power the local Government have framed Rule 115 in the United Provinces Co-operative Societies Rules of 1937 as follows:

Any dispute touching the business of a registered Society (i) between members or past members of a Society or persons claiming through a member or past member, (ii) or between a member or past member or persons so claiming and the society or its committee or any officer of the Society, (iii) between the society or its committee and any officer of the Society, and (iv) between two or more registered societies, shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the Registrar.

6. Now it will be observed that the plaintiff is not a person claiming through a member or a past member of the Society. On the contrary, the plaintiff is a person who says that he is not the representative of the past member who has now died. The plaintiff therefore does not come either under the rule or under the sub-section which authorizes the Local Government to make the rule. Jurisdiction has been specially given to the Registrar of Co-operative Societies to decide certain matters under this rule and sub-section, or to refer those matters for decision by an arbitrator. As this jurisdiction is contrary to the ordinary civil jurisdiction of the Civil Courts, therefore, the jurisdiction must be construed strictly. The passing of a personal decree against the plaintiff is a matter which is clearly outside the sub-section or the rule. Both the sub-section and the rule give jurisdiction to the Registrar or the arbitrator merely to decide matters concerning the estate of a deceased member. The passing of a decree personally against the plaintiff cannot come under that jurisdiction. The lower Court has drawn a distinction between the jurisdiction of the Registrar or arbitrator to pass a decree dealing with the estate of the deceased members and the decrees personally against the plaintiff which have actually been granted by the arbitrator. This view of the sub-section and of a similar rule under that sub-section has been taken by a Bench of the Patna High Court in Mahabir Prasad v. Basudeo Narayan (1925) 12 AIR Pat 575. The facts set out were:

The Society having a claim against Munshi Nath Sahay took proceedings under the Co-operative Societies Act, and the matter was referred to the arbitration of the Registrar of the Society. The Registrar made an award against the present plaintiffs, who are the sons of Munshi Nath Sahay. The plaintiffs now bring the suit out of which this appeal arises for a determination of the question whether the Co-operative Society is entitled to a personal decree against them.

7. Munshi Nath Sahay had died. It was held by the Court:

There is no doubt that the Co-operative Society has complete power to refer any matter in dispute between them and the estate of a deceased member to the arbitration of the Registrar. But there is no power in the Registrar of Co-operative Societies to compel strangers to appear before him unless they are sued as representing the estate of a deceased member. The award of the Registrar is in form an award against the present plaintiffs personally, but in substance it is an award against them as representing the estate of their deceased father.... But the decision of the learned Judge in the Court below assumes that the award was against the present plaintiffs personally. If that be the construction of the award, then clearly the arbitrator acted in excess of his authority and the Civil Court has complete jurisdiction to set aside the award. It is now agreed between the parties that whatever the Registrar may have done, the award will be treated as an award against the present plaintiffs as representing the estate of Munshi Nath Sahay and that it will he enforceable as against the estate of Munshi Nath Sahai in the hands of the present plaintiffs.

8. It is in accordance with this ruling that the lower Court has granted orders in first appeal. Learned counsel for the appellant referred to Bharmakka Bistappa v. Mallappa Fakirappa : AIR1926Bom352 . That however does not appear to have been a case with a personal decree against the plaintiff and therefore the question which is now before this Court did not arise. What was decided was that the plaintiff was the legal representative of a deceased debtor who had been a member of a Co-operative Society. No personal decree however was granted against the plaintiff as legal representative. Following the Patna ruling Mahabir Prasad v. Basudeo Narayan I(1925) 12 AIR Pat 575 consider that the Court below was correct in holding that the personal decrees by the arbitrator against the plaintiff were beyond the jurisdiction of the arbitrator and that those decrees must be set aside except in so far as they affect the plaintiff in his capacity as a representative of the deceased Pran Sukh or the deceased Sukh Ram.

9. The next matter which was argued was grounds Nos. 3, 5 and 6 in regard to the attachment in execution of the decree. This attachment was as an arrear of land-revenue by the Collector. It was pleaded that there was a binding decision of the Collector and that the suit so far as it concerned the attachment would be barred by Section 233(m), U.P. Land Revenue Act, Act 3 of 1901. Now the attachment was in execution of personal decree against the plaintiff. Agreeing with the Court below, I hold that these personal decrees are invalid. It would therefore follow that the attachment under those personal decrees must also be held invalid and this is the relief which has been decreed by the Court below, namely that the property attached and mentioned in the plaint was not liable to attachment in the personal decree. The Court has held that the decrees of the arbitrator are binding on the plaintiff in his capacity as representative of the two deceased. That being so, if an application in execution is made a question will arise as to whether the property to be attached is or is not part of the estate of the deceased. No such question can have arisen because there is no such decree Consequently there can be no decision of the Collector which would be final on that point. There is no merit therefore in grounds Nos. 3, 5 or 6 of this appeal. Ground No. 7 set out that the Court granted a declaration in excess of what was originally prayed for in the relief. This is inaccurate, and it was not shown that the relief was less than what had been granted in the decree. I find no merits in these second appeals and I dismiss them with costs. Permission is granted for Letters Patent Appeals.


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