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Provat Kumar Chatterjee Vs. State of West Bengal - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Commercial
CourtKolkata High Court
Decided On
Case NumberC.R. No. 203 of 1978
Judge
Reported inAIR1986Cal270
ActsWest Bengal Co-operative Societies Act, 1973 - Sections 39, 86 and 133(3); ;Constitution of India - Article 226
AppellantProvat Kumar Chatterjee
RespondentState of West Bengal
Advocates:Soumendra Chandra Bose, ;Arun Kumar Matilal and ;Chandra Sekhar Das, Advs.
DispositionPetition allowed
Excerpt:
- .....the rules, whichever may be prescribed. 10. the revision application was heard by the learned member of the tribunal and by a reasoned judgment and order dated oct. 18, 1977, the said tribunal dismissed the revisional application preferred on behalf of the writ petitioner holding, inter alia, that 'advancement of loan', to non-member could come within the purview of 'affairs' of a cooperative society under section 86 of the said act although advancement of loan to non-members was specifically barred by section 39 of the said act.11. the learned tribunal, however, came to the conclusion that there was much force behind the arguments of the learned advocate for the petitioner in the revisional application, but as the plaintiff bank was helpless in the matter of filing dispute.....
Judgment:
ORDER

Paritosh K. Mukherjee, J.

1. The present writ petitioner is a Guarantor to Purulia Co-operative Bank Ltd. (hereinafter referred to as the said Bank) for obtaining loan of Rs. 45,000/- at an interest of 10% per annum by the Respondent Nos. 7 and 8, namely, Biswanath Chaterjee and Sm. Tapati Chatterjee who are carrying on business under the name and style of Bichitra Sales Corporation at Purulia, dealing in various kinds of electrical goods etc.

2. The Respondents Nos. 7 and 8, however, failed to repay Rs. 44,999.99 on account of 'principal' and Rs. 6,743,40 on account of 'interest' after expiry of the relevant date i.e. June 28, 1975 and accordingly, the Bank, by service of registered notice dated Oct. 30, 1975, called upon the said Respondents Nos. 7 and 8 to repay the said amount.

3. Thereafter, a dispute under Section 86 of the West Bengal Co-operative Societies Act, 1973 (hereinafter referred to as the said Act) was raised before the Assistant Registrar. Co-operative Societies, Purulia at the instance of the Respondent Bank, and Arbitration CaseNo. 5 of 1975-76 was started, which was not contested by Respondents Nos. 7 and 8.

4. The Writ Petitioner being the guarantor to the Bank contested the said arbitration by filing Written Statement and stated, inter alia, that the said arbitration proceeding was bad in law and not maintainable. In the written statement, dealing with 'factual aspect, the writ petitioner submitted that excepting the agreement dated Feb. 15, 1973, the writ petitioner did not sign any paper and/or documents and the signatures appearing on any other documents were not his signatures.

5. The District Auditor of Co-operative Societies, Respondent No. 4, who was appointed Arbitrator, of course, did not consider the said documents and by his judgment and Award dated Sept. 3, 1976 (which has been annexed as Annexure 'C' to the writ petition), directed Defendants Nos. 1, 2 and 3 i.e. (writ petitioner herein) to pay bank Rs. 53,487.77 p. by Sept. 30, 1976.

6. In the written statement, defendant submitted before the learned Arbitrator that the Stamp, on which the Bond was executed on Aug. 17, 1974, was purchased on Sept. 11, 1974, and the writ petitioner's assertion that he never put his signature on the said Bond was also recorded in the order but the Arbitrator parsed an Award as follows :

'The defendants Nos. 1, 2 and 3 shall pay within 30-9-75 to the plaintiff Bank, namely. Purulia Central Co-operative Bank Ltd. the sum of Rs. 53.487.77 (Rupees Fifty-three thousand four hundred eighty-seven and seventy-seven paise). 1. On account of principalRs.44,999.002. On account of interest thereon calculated up to 31-7-76 @ 10% per annumRs. 8,263.773.The principal amount shall carry interest @ 10% per annum up to the date of final realisation. Cost & % of the princ.225.00

Rs.

53,487.77'

7. The writ petitioner, being aggrieved by the said decision preferred an application-in-revision, under Section 133(3) of the said Act and took specific ground that the Assistant Registrar, Co-operative Societies, Purulia, had no jurisdiction, to entertain the dispute, which arose out of a matter not 'relating to the affairs of the Society'. On the ground that the transactions out of which the impugned dispute arose could not be included as 'affairs of the Society' viz., the Bank.

8. It was also alleged in the said revision application that the impugned Award having been passed in contravention of the provisions of Section 39 of the West Bengal Co-operative Societies Act. 1973 it was unenforceable in law.

9. At this stage, it would be convenient to set out the provisions of Section 39 of the said Act hereinbelow :

'39. Restrictions on lending. -- (1) A cooperative society shall not make loans-

(a) to any person other than a member; or

(b) to a member in excess either of themaximum or of the normal credit determinedby the society for that member in accordancewith the rules, whichever may be prescribed.

10. The revision application was heard by the learned Member of the Tribunal and by a reasoned judgment and order dated Oct. 18, 1977, the said Tribunal dismissed the revisional application preferred on behalf of the writ petitioner holding, inter alia, that 'advancement of loan', to non-member could come within the purview of 'affairs' of a Cooperative Society under Section 86 of the said Act although advancement of loan to non-members was specifically barred by Section 39 of the said Act.

11. The learned Tribunal, however, came to the conclusion that there was much force behind the arguments of the learned Advocate for the petitioner in the revisional application, but as the plaintiff bank was helpless in the matter of filing dispute against the Defendant No. 3 (viz. writ petitioner herein) as if an agreement is bound to be void, under Section 65 of the Indian Contract Act, any person, who has received any advantage under said agreement or contract was bound to restore it or to makecompensation for it to the person from whom it received.

12. Mr. Somendra Chandra Bose, learned Advocate for the petitioner, submitted in the first place, that the writ petitioner, being a Guarantor to the loan, the impugned Award cannot bind him and the reference itself under Section 86 of the said Act was not maintainable in law, so far as the writ petitioner was concerned and he also submitted that the Award was passed against the Defendants Nos. 1 and 2 (i.e. Respondents Nos. 7 and 8 herein) who had taken the loan from the Respondent Bank and as such, the Award money could be recovered from them and not from the present petitioner.

13. Referring to the provisions of Section 39 of the said Act of 1973, he further submitted that `loan' having been granted in contravention with the provisions of Section 39 of the said Act, could not be recovered from a 'non-member', namely, from the present petitioner. He added that the dispute could not come under Section 86 of the said Act and submitted that since this dispute could not be treated as 'dispute relating to the affairs of the co-operative society', as, admittedly, the writ petitioner, being not a member of the co-operative society, reference itself was bad.

14. The Rule was issued on Jan. 24, 1978 and I find that Junior Government Advocate entered appearance on behalf of Respondents Nos. 1 to 5 and Mr. A. K.. Chattopadhyay, had entered appearance on behalf of the Respondent No. 6, but when the Rule was taken up for hearing on June 21,1985, no one appeared on behalf of the said respondents and no affidavit-in-opposition was filed. Accordingly, this Court has to proceed on the basis, as if there is no appearance on behalf of the respondents.

15. 1 accordingly, deal with the points urged by Mr. Bose and assess whether the order passed by the Member, Co-operative Tribunal dated Oct. 18,1977 has been passed, in accordance with law.

16. Turning to the first branch of submissions of Mr. Bose, I may refer to the provisions of Section 39 of the said Act, a cooperative society shall not make any loan to any person other than a member and in theinstant case the Defendants Nos. 1 and 2 (Respondents Nos. 7 and 8 herein) and the writ petitioner were, admittedly not members of the Society and as such, it cannot be called that they come within the purview of 'affair' of the co-operative society within the meaning of Section 86 of the said Act.

17. In any event, nodispute could be raised against the present writ petitioner under Section 86 of the said Act and the reasoning given by the learned Member of the Co-operative Tribunal for non-acceptance of the submission of the writ petitioner's Advocate that the disputed loan, being hit by Section 39 of the said Act, even if the same was made under the deed of agreement dated Feb. 15, 1973, it was not recoverable in view of Section 23 of the Indian Contract Act, cannot be sustained in law.

18. Non-acceptance of the submissions, on behalf of the writ petitioner in the revision petition, although the learned Tribunal admitted that there was much substance and force behind the aforesaid submissions of the learned Advocate, namely, the plaintiff Bank would be absolutely helpless in the matter of recovering the amount of loan could not be a relevant consideration for refusing relief in the revisional application by the learned Tribunal.

19. In my opinion, the Tribunal having recorded the relevant conclusion that the Defendant No. 3 (viz, writ petitioner herein) did not receive from the plaintiff bank any monetary advantage, should not have affirmed the decision of the learned Arbitrator and should not have rejected the revisional application, as before concluding its judgment the learned Tribunal has expressed its views that in exercising revisional jurisdiction, discretion could not be exercised in favour of the writ petitioner.

20. These reasonings of the Tribunal, in my view, suffer from the defect of error apparent from the face of the record and as such the said order should be struck down.

21. In that view this writ petition is entitled to succeed. Rule is accordingly, madeabsolute.

22. Let a Writ in the nature of Certiorari be issued accordingly.

23. I make it clear, nothing contained in this judgment will take away the right of the Respondent Bank to realise the sum from Respondents Nos. 7 and 8 in accordance with law.

24. There will be no order as to costs.


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