Skip to content


T.S. Narayana Aiyar and ors. Vs. the Co-operative Urban Bank Ltd. Through Its Secretary and anr. - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies
CourtChennai
Decided On
Reported inAIR1936Mad81; (1935)69MLJ726
AppellantT.S. Narayana Aiyar and ors.
RespondentThe Co-operative Urban Bank Ltd. Through Its Secretary and anr.
Cases ReferredThe Municipal Permanent Investment Building Society v. Richards
Excerpt:
- - clearly this clause would apply to the existing directors and the question to be decided is whether it would apply to persons who were once directors and whose action as such directors is the subject-matter of dispute but who at the time of the reference to the registrar are no longer directors......within clause (b) or clause (c) of section 51. clause (b) refers to a dispute between a member, past member or person claiming through a member, past member or deceased member and the society. no doubt the present petitioners are members of the society but it is quite clear that the dispute in question concerns none of their actions or claims as members but only their actions as directors. on the authority of an english case the municipal permanent investment building society v. richards (1888) 39 ch. d. 372, it is quite clear that clause (b) cannot be applied to the present case. clause (c) relates to disputes between the society or its committee and any officer, agent or servant of the society. clearly this clause would apply to the existing directors and the question to be decided.....
Judgment:
ORDER

King, J.

1. This is a petition requesting issue of a writ of prohibition to the Deputy Registrar of Co-operative Societies, Tinnevelly, in the following circumstances. A dispute arose between the Tinnevelly Co-operative Urban Bank, Ltd., and six persons who are members of the bank and were all its directors, regarding the loss sustained by the bank owing to the negligence of these persons in sanctioning a certain loan. It may be mentioned that of these six persons five are no longer directors of the bank though they still continue to be members and the sixth remains a director. The dispute was referred to the Registrar of Co-operative Societies under Section 51 of the Madras Co-operative Societies Act VI of 1932, for decision by him and it was referred by him to the Deputy Registrar.

2. The present petitioners who are the five ex-directors referred to, objected to the jurisdiction of the Deputy Registrar on the ground that the dispute did not fall within the terms of Section 51 of the Act. The Deputy Registrar passed orders on this preliminary objection to the effect that he had jurisdiction and the petitioners now wish this Court to issue a writ of prohibition against any further proceedings in the arbitration.

3. It is of course conceded that the dispute in question is one touching the business of the bank. The question then has to be decided whether it comes within Clause (b) or Clause (c) of Section 51. Clause (b) refers to a dispute between a member, past member or person claiming through a member, past member or deceased member and the society. No doubt the present petitioners are members of the society but it is quite clear that the dispute in question concerns none of their actions or claims as members but only their actions as directors. On the authority of an English case The Municipal Permanent Investment Building Society v. Richards (1888) 39 Ch. D. 372, it is quite clear that Clause (b) cannot be applied to the present case. Clause (c) relates to disputes between the society or its committee and any officer, agent or servant of the society. Clearly this clause would apply to the existing directors and the question to be decided is whether it would apply to persons who were once directors and whose action as such directors is the subject-matter of dispute but who at the time of the reference to the Registrar are no longer directors.

4. Prima facie I would have been inclined to hold that Clause (c) would apply were it not for the fact that in Sections 51 and 49 specific reference is made to past officers. In Section 49(1) for instance it is said, that:

Where in the course of an audit...it appears that any person who has taken part in the organisation or management of the society or any past or present officer of the society has misappropriated....

the Registrar may take certain steps. In Section 51(b) which immediately precedes the clause which we are now discussing, reference is specifically made to disputes between 'a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or servant of the society'. When we find these two instances of particular reference being made in the Act itself to past officers and past-members it seems to me that if this Clause (c) was intended to apply to a dispute of this kind between the society and its past officers specific mention would have been made of past officers in this clause also. In the absence of such specific reference that clause cannot, I think, apply to the present dispute. The result is that the Registrar has no jurisdiction under Section 51 to decide this dispute and a writ of prohibition must issue. The petitioners' costs which I fix at Rs. 100 will be paid by the bank which is represented by the first respondent.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //