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Hiranand Vs. the Azad Hind Refugee Co-operative Stores Ltd. and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtRajasthan High Court
Decided On
Case NumberCivil Misc. Appeal No. 93 of 1958
Judge
Reported inAIR1961Raj233
ActsDebt Law; Displaced Persons (Debts Adjustment) Act, 1951- Sections 2(4), 2(10), 10 and 13
AppellantHiranand
RespondentThe Azad Hind Refugee Co-operative Stores Ltd. and anr.
Advocates: Mangha Ram, Adv.
DispositionAppeal dismissed
Cases Referred and Hardware (India) Co. v. Firm Shamlal and Bros.
Excerpt:
.....mentioned that the application under section 10 was not maintainable as the society was not a 'displaced person'.it was further contended that the application could not lie against the respondents as under the bye-laws the determination of disputes between the society and its members like the present one has to be made by reference to arbitration. the contention is clearly devoid of force and is rejected. 2. on a careful consideration of the facts and the circumstances of the case, i am satisfied that the application cannot he continued even as against respondent no. when the appellant came forward with a definite case under section 10 clearly on an allegation that the respondents were displaced persons, it is hardly open to him now to say that if the respondents are not proved to be..........justice chagla in overruling the objection observed that: 'there is no such legal entity as a firm. a firm is merely a compendious way of describing certain number of persons who carry on business as partners in a particular name, but in law and in the eye of law, the firm really consists of the individual partners who go to constitute that firm. therefore, if the individual partners of a firm satisfy the definition of 'displaced person' given in the act there is no reason why an application by a firm under section 13 cannot be maintained as the persons before the tribunal are the individual partners of the firm and not a legal entity consisting of the firm'. while i fully agree with the principle laid in the bombay case i must unhesitatingly state that the case cannot be of.....
Judgment:

L.N. Chhangani, J.

1. This is an appeal by Hiranand the petitioner in the original court against the order of the Civil Judge, Ajmer (Tribunal under the Displaced Persons Debts Adjustment Act -- hereinafter referred as the Act) dismissing the appellant's application under Section 10 of the Act.

2. The appellant put an application against the two respondents -- (i) The Azad Hind Refugee Co-operative Stores Ltd. having its registered office at Plaza Road, Ajmer and (ii) Hasmat Rai Secretary of the Society, for the recovery of Rs. 820/-. The claim was made on the following allegations:

3. The appellant is a displaced person from Sind. The respondent No. 1 is a co-operative society formed by the refugees for doing business for the benefit of the displaced persons. The respondent No. 2 -- Hasmat Rai is also a displaced person from Sind. The appellant became a member of the society in the end of the year 1949 and deposited Rs. 125/- as the share money. He further alleges to have made two deposits of Rs. 600/- each one on 23rd March, 1950 and another on 6th November, 1950.

The appellant resigned from the membership some-time in the year 1951 and thereafter he demanded the return of his share money as also the deposited amounts. He was paid only an amount of Rs. 600/- and the society respondent refused to pay the remaining amount. He accordingly applied under Section 10 of the Act and claimed Rs. 600/- on account of deposit, Rs. 12/- on account of share-investment and Rs. 95/- on account of interest total Rs. 820/-.

4. The application was resisted by the respondents who inter alia mentioned that the application under Section 10 was not maintainable as the society was not a 'displaced person'. It was further contended that the application could not lie against the respondents as under the bye-laws the determination of disputes between the society and its members like the present one has to be made by reference to arbitration.

5. The trial court framed four issues but the tribunal dismissed the appellant's application after deciding only one issue, viz. No. 3 which reads as follows:

'Whether the application is not legally maintainable?'

The Tribunal held that the society formed in India after partition could not be treated as a displaced person and, therefore, an application under Section 10 was not competent. The appellant had put in an application before the tribunal for entertaining his application as one under Section 13 and treating the case as one of mere misquotation of law.

Observing that an application under Section 13 could be made only within a year of the commencement of the Act and that Section 10 and Section 13 provide for claims against different kinds of debtors and that the procedure for the disposal of petitions under the two sections is different, the tribunal rejected the application and did not treat the case as one of mere misquotation of law. The appellant has Bled the present appeal being dissatisfied with the order of the tribunal.

6. I have heard Mr. Mangha Ram for the appellant. The respondent has not chosen to appear and oppose the appeal in spite of service of notice.

7. Mr. Mangha Ram in support of the appeal has made the following submissions:

(1) That the respondent-society comes within the definition of a 'displaced person'

(2) At any rate the application was maintainable against respondent No. 2 in the absence of findings that he is not a displaced person and that there was no cause of action against him.

(3) That at any rate there was no justification for rejecting the appellant's prayer for treating the application under Section 13 of the Act.

7A. Re. Point No. 1

It is not in dispute that the society was formed in India under a statute after partition and that it had and has its registered office in India. Evidently the society as such cannot be treated as a displaced person- It was however urged that as all the members forming the society tare displaced persons the society should be treated as a 'displaced person'. The question of fact whether all the members are displaced persons does not appear to have been investigated and determined and for the purposes of this appeal it would be assumed that all the members are displaced persons.

Mr. Mangha Ram relied upon some observations made by Chagla, C. J. in iron and Hardware (India) Co. v. Firm Shamlal and Bros., AIR 1954 Bom 423, in support of the contention. In that case certain displaced persons submitted applications before the tribunal in the name of the firms in which they were carrying on business- An objection was' raised that a firm cannot be treated as a 'displaced person'. The Chief Justice Chagla in overruling the objection observed that:

'There is no such legal entity as a firm. A firm is merely a compendious way of describing certain number of persons who carry on business as partners in a particular name, but in law and in the eye of law, the firm really consists of the individual partners who go to constitute that firm. Therefore, if the individual partners of a firm satisfy the definition of 'displaced person' given in the Act there is no reason why an application by a firm under Section 13 cannot be maintained as the persons before the tribunal are the individual partners of the firm and not a legal entity consisting of the firm'.

While I fully agree with the principle laid in the Bombay case I must unhesitatingly state that the case cannot be of relevance in the decision of the present case. A firm is not a legal entity apart from the partners and a principle stated with reference to a firm cannot be extended to a registered co-operative society.

A registered co-operative society is a body corporate with a perpetual succession and a common seal, and has power to hold property to enter into contracts to institute and defend suits and other legal proceedings. It will be wholly wrong to equate a society with a firm which is not a legal entity. A society is distinct from its members and it cannot be accepted that because the members who formed the society are displaced persons the society itself should be treated as a displaced person. The contention is clearly devoid of force and is rejected.

8. Re. Point No. 2.

The case of the appellant was that he became a member of the co-operative society and deposited Rs. 125/- on account of share-capital. Later on he deposited certain amounts with the society. The respondent No. 2 is merely the secretary of the society. He has been impleaded as a respondent in his capacity as a secretary. In that official capacity it will be hardly proper to treat him as a displaced person owing a debt under the Act to the appellant. Besides the appellant did not take any alternative ground that if the application is treated incompetent against respondent No. 1 it should be continued against respondent No. 2. On a careful consideration of the facts and the circumstances of the case, I am satisfied that the application cannot he continued even as against respondent No. 2.

9. Re. point No. 3.

Mr. Mangha Ram contended that the application was competent under Section 13 and the mention of Section 10 in the application should be treated as a case of mere misquotation of law. I cannot accept this argument. The two sections -- Sections 10 and 13 -- are entirely different in their scope- Section 10 contemplates applications against displaced debtors whereas Section 13 contemplates applications against non-displaced debtors.

Further Section 13 merely provides a procedure for granting a summary relief to the displaced creditors. It does not bar separate civil suits by the creditors. When the appellant came forward with a definite case under Section 10 clearly on an allegation that the respondents were displaced persons, it is hardly open to him now to say that if the respondents are not proved to be displaced debtors the application should be treated as one falling under Section 13 and that it was a case of mere misquotation of law.

An application under Section 13 has to be filed within one year from the day of the commencement of the Act. Thereafter the displaced creditor can-not proceed under this Act. He can only file a regular suit In this scheme of the Act the learned Tribunal was perfectly justified in the exercise of its discretion to reject the prayer of the appellant for converting the application under Section 10 into one under Section 13. There is no force in this contention either.

10. In these circumstances, the appeal failsand is hereby dismissed. As the respondents havenot cared to appear, there will be no order as tocosts.


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