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Co-operative Development Union Ltd. Vs. Dewan Sugar Mills Sakoti Tanda - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberFirst Appeal No. 77 of 1952
Judge
Reported inAIR1957All771
ActsCode of Civil Procedure (CPC) , 1908 - Order 41, Rule 23; Co-operative Societies Act, 1912 - Sections 43; Co-operative Societies Rules, 1912 - Rule 115
AppellantCo-operative Development Union Ltd.
RespondentDewan Sugar Mills Sakoti Tanda
Appellant AdvocateJagnandan Lal, Adv.
Respondent AdvocateB.L. Gupta, Adv.
DispositionAppeal allowed
Excerpt:
.....well-founded, and the other as to whether the dispute in regard to that claim could be decided by the civil..........is whether the reference to arbitration was a valid one. that depends on whether under rule 115 the dispute referred to arbitration was a dispute touching the business of the defendant registered society. two things have therefore to be decided: (1) whether there was a dispute, and (2) whether the dispute was touching the business of the society. explanations 1 and 3, cited above, though not exhaustive-of the matters they deal with, do no doubt afford clues in respect thereto. as noticed already, the defendant had claimed from the plaintiff a certain amount as due to it for price of sugarcane which the plaintiff had refused to pay.the dispute that thereupon arose between the parties was therefore a dispute of the nature contemplated by explanation 1. furthermore, one of the.....
Judgment:

Chowdhry, J.

1. This is defndant's first appeal tinder Order 43, Rule 1 (u), C. P. Code, from an order of remand passed by the learned Small Cause Court Judge of Meerut on appeal from a decision of the Mun-sif of Meerut.

2. The plaintiff in this case was the Dewan Sugar Mills Sakoti Tanda and the defendant the Co-operative Development Union Limited at Sakoti Tanda, both being societies registered under the Co-operative Societies Act (II of 1912). Under Rule 115 of the Rules framed under Section 43 of the said Act any dispute touching the business of a registered society between, inter alia, two or more registered societies shall be decided either by the Registrar or by arbitration and shall for that purposes be referred -in writing to the Registrar.

Explanation 1 of that rule provides that a dispute shall include claims for amounts due when a demand for payment is made and is either refused or not complied with whether such claims are admitted or not by the opposite party. Explanation 3 of that rule provides, Inter alia, that the business at a, society includes an matters relating to the objects of the society mentioned In the bye-laws. Under Rule 116 the Registrar on receipt of a reference shall either decide the dispute himself, or refer it for decision, among others, to an arbitrator.

3. The defendant Union used to supply sugarcane to the plaintiff Mills in the 1942-43-season. Prom 9-11-1942 to 30-11-1942 the supply was made at 0-8- per maund, but on or after the last mentioned date the defendant stopped the supply an a demanded payment of price at a 'higher rate. Certain negotiations between the parties followed thereafter, and the Government increased the rats from -/8- to /-10- per maund by a Notification dated 30-12-1942. On a dispute arising- between the parties as to the rate at which price of sugar-cane was payable for a certain period, the defendant referred the dispute to the Registrar for arbitration under Rule 115, and under Rule 116 the Registrar referred it for decision to the Cane Development Officer Ramjiwan Garg. The arbitrator gave an award on 7-2-1948 in favour of the defendant Union. The plaintiff Mills thereupon . appealed to the Registrar, arid the Registrar remanded the case on 2-9-1948. Thereupon 27-10-1948 was the date fixed for hearing before the arbitrator. A day before that the present suit was instituted for a declaration that the reference to arbitration, & proceedings following thereafter were illegal, ultra vires & unenforceable. Apart from challenging the legality of the reference, the plain-flff also alleged in the plaint that the defendant was not entitled to claim the price at the enhanc-ed rate.

The defendant contested the suit pleading that his claim was well-founded, that the reference to arbitration was legal and that the civil court had no jurisdiction to adjudicate on the dispute between the parties.

4. It would thus appear that the parties were at issue on two main points. One was as to whether the claim of the defendant against the plaintiff was well-founded, and the other as to whether the dispute in regard to that claim could be decided by the civil court. The disposal of the latter question depended on whether the reference to arbitration was legal and valid. The learned Munsif held in favour of the validity of the reference to arbitration. He held himself precluded therefore from entering into the merits of the disputes. In the result he dismissed the suit with costs.

The defendant went up In appeal, and the appeal was heard by the learned Small Cause Court Judge at Meerut. The appellate judgment is not very clear or cogent but the view taken appears to have been that the dispute between the parties was not referable to arbitration and should have been adudicated upon by the learned Munsif. The appellate court therefore allowed the appeal, set aside the judgment of the trial court and remanded the case for decision according to the direction given in the body of the Judgment. The directions given in the body of the judgment were that the trial court shall try three issues: (1) 'Whether there was any complete (sic) contract between the parties with regard to increased rate or not', (2) 'If so. were the defendants entitled to claim higher rate or not and (3) 'Whether the plaintiff was entitled to the relief claimed by him'. It is against this order of remand that the present appeal has been filed.

5. There was- preliminary objection raised on behalf of the plaintiff-respondent that no appeal under Order 43, Rule l(u), lay since the order of remand was not one falling within the purview of Order 41, Rule 23. The latter Rule, as amended by this Court, runs as follows:

'Where an appellate court has reversed adecree and all questions arising in the case have not been decided it may, if it thinks fit, by an order remand the case, and may further direct what issue or issues shall be tried in the case so remanded, and shall send a copy of its judgment and order to the court from whose decree the appeal is preferred, with directions to readmit the suit under its original number in the register of civil suits, and proceed to determine the suit; and the evidence (if any) recorded during the original trial shall subject to all just exceptions, be evidence during the trial after remand.'

6. The meaning of the words 'all questions arising in the case have not been decided' in the above rule is that they have not been decided by the trial court, and not that they have not been decided by the appellate Court. Bishwanath Sireh v. Abdul Jabbar : AIR1948All19 . Now from what has gone before it is clear that the trial Court had not decided 'all questions arising in the case' since it decided only the question of jurisdiction but not that of the plaintiff being, or not being, liable to pay the price at the enhanced rate demanded by the defendant. Indeed, after recording the finding it did, on the question of jurisdiction, the trial court could not have entered into the merits of the defendant's claim. There could be no doubt therefore that the order of remand passed by the lower appellate court was one under Order 41, B. 23, C. P. Code. That being so, the present appeal has been rightly filed under Order 43, Rule 1(u) of the Code. The preliminary objection therefore fails.

7. The only other point that falls for consideration is whether the reference to arbitration was a valid one. That depends on whether under Rule 115 the dispute referred to arbitration was a dispute touching the business of the defendant registered society. Two things have therefore to be decided: (1) whether there was a dispute, and (2) whether the dispute was touching the business of the society. Explanations 1 and 3, cited above, though not exhaustive-of the matters they deal with, do no doubt afford clues in respect thereto. As noticed already, the defendant had claimed from the plaintiff a certain amount as due to it for price of sugarcane which the plaintiff had refused to pay.

The dispute that thereupon arose between the parties was therefore a dispute of the nature contemplated by Explanation 1. Furthermore, one of the objects of the defendant Union under by-law 4 CO of its bye-laws being 'To arrange for the sale of the suggreane to its members', the dispute was certainly one touching the business of the registered society within the purview of Explanation 3.

It was argued by the learned counsel for the plaintiff respondent that the agreement on foot of which defendant laid his claim was an invalid agreement because it related to a matter - payment at an increased rate - depending upon the will of the Government and not on any of the parties. This is however a matter touching the claim of the defendant on merits which it was for the arbitrator to take into consideration. It is quite irrelevant for disposal of the question whether the reference to arbitration was a valid one. Once the disnute is found to be within the scope of arbitration, it is no part of the province of the Court to enter into the merits of the dispute. A. M. Mair and Co. v. Gordhandas Sagarnrull, : [1950]1SCR792 . I am therefore of the view that the decision of the trial court was quite correct.

8. In the result, the appeal is allowed and the judgment and decree of the lower appellate court are set aside and those of the Trial Court dismissing the suit are restored. The defendant will have its costs from the plaintiff in all the courts.


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