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Maddimsetti Ramayya Vs. the Liquidator of Bollanka Co-operative Credit Society, Care of Deputy Registrar of Co-operative Societies and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai
Decided On
Reported inAIR1941Mad739; (1941)2MLJ72
AppellantMaddimsetti Ramayya
RespondentThe Liquidator of Bollanka Co-operative Credit Society, Care of Deputy Registrar of Co-operative Soc
Cases Referred and Govinda Chetti v. Uttukottai Co
Excerpt:
- - 3. the view taken by both the lower courts is that under section 48 of the co-operative societies act the plaintiff should have obtained leave of the registrar to institute the suit, that the said leave is a condition precedent to such institution and he having failed to do so, his suit must fail......question is whether this view is tenable. the facts briefly are as follows. the first defendant co-operative society obtained a decree against the second defendant in claim no. 2235 of 1932-33 for rs. 604-13-4 and in execution of the same brought the properties to sale. the plaintiff preferred a claim under rule 22 (17) (a) of the rules made under the madras co-operative societies act on the ground that he was a purchaser of the property under a registered sale deed dated 7th february, 1922. but the said claim was dismissed by the sale officer on 29th june, 1938. the plaintiff thereupon filed the present suit on 16th november, 1938, within six months of the said order to set aside the said sale and to establish his right to the property.3. the view taken by both the lower courts is that.....
Judgment:

Venkataramana Rao, J.

1. The question for decision in this second appeal is whether the plaintiff's suit is barred by Section 48 of the Madras Co-operative Societies Act. Both the lower Courts have dismissed the suit on the ground that it is so barred.

2. The question is whether this view is tenable. The facts briefly are as follows. The first defendant co-operative society obtained a decree against the second defendant in claim No. 2235 of 1932-33 for Rs. 604-13-4 and in execution of the same brought the properties to sale. The plaintiff preferred a claim under Rule 22 (17) (a) of the Rules made under the Madras Co-operative Societies Act on the ground that he was a purchaser of the property under a registered sale deed dated 7th February, 1922. But the said claim was dismissed by the sale officer on 29th June, 1938. The plaintiff thereupon filed the present suit on 16th November, 1938, within six months of the said order to set aside the said sale and to establish his right to the property.

3. The view taken by both the lower Courts is that under Section 48 of the Co-operative Societies Act the plaintiff should have obtained leave of the Registrar to institute the suit, that the said leave is a condition precedent to such institution and he having failed to do so, his suit must fail. Section 48 of the Cooperative Societies Act runs thus:

Save in so far as is expressly provided in this Act, no civil Court shall take cognizance of any matter connected with the winding up or dissolution, of a society under this Act, and when a liquidator has been appointed no suit or other legal proceeding shall lie or be proceeded with against the society except by leave of the Registrar and subject to such terms as he may impose.

4. It will be seen that the section itself saves cases which are expressly provided in the Act and it is only in cases where no such provision is made that the condition that no suit or legal proceeding shall lie against the society except by leave of the Registrar operates, Section 65 of the Co-operative Societies Act provides that the Local Government may make rules to carry out all or any of the purposes of this Act, and one of the purposes provided for is the investigation of claims and objections that may be preferred against any attachment effected by the Registrar or an officer empowered by him. In pursuance of this provision rules have been made and Section 65 (4) provides that all rules made under that section shall be published in the Fort St. George Gazette and on such publication shall have effect as if enacted in this Act. Such rules have been published and they take effect as if enacted in this Act and therefore form part of the Act. Rule 22(17) (a) to (c) provides for investigation of claims and objections. Rule 22(17)(a) provides that where a claim or an objection is preferred, the sale officer should investigate the claim or objection and dispose of it on the merits and Rule 22 (17) (c) is to the effect that where a claim or objection is preferred, the party against whom the order is made may institute a suit within six months from the date of the order to establish his right which he claims to the property in dispute but subject to the result of such suit, the order shall be conclusive. Therefore this clause expressly provides that a suit should be instituted within six months to set aside the order of the sale officer to establish the claimant's right to the property. As this suit is expressly provided for by the Act, it would come within the saving provided in Section 48. The society itself by its liquidator was a party to the order in the claim proceedings and the suit is only a continuation of the claim proceedings. Vide Phul Kumari v. Ghanshyam Misra . It is not possible to understand why, when the society itself was a party to an order, any further leave is necessary from the Registrar. That is why no restriction is placed in Rule 22 (17) (c) that the leave of the Registrar should be obtained before the institution of the suit. It would hardly be in the contemplation of the Legislature that leave should be sought from the Registrar at whose instance the sale was ordered. If the Registrar should decline to give leave or delay giving leave for six months there will be no remedy for the plaintiff and according to Rule 22 (17) (c) the order on the claim petition would be conclusive. Section 48 only contemplates cases where proceedings have to be initiated against the society and not to cases where a society itself was a party to an order in proceedings instituted by virtue of the Co-operative Societies Act. It seems to me therefore that the suit is maintainable. I therefore set aside the decrees of both the lower Courts and remand the suit for disposal according to law. Two cases were relied on by Mr. Lakshmayya on behalf of the respondent, namely, Subbayya v. Thippa Reddi : AIR1939Mad967 and Govinda Chetti v. Uttukottai Co-operative Society : AIR1940Mad831 , but none of them have any bearing on the question in issue in this case.

5. In the result the appeal is allowed and the suit remanded to the file of the District Munsif of Ramachandrapur for disposal. The respondents will pay the costs of the appellant throughout. The appellant will be entitled to refund of Court-fee.


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