Lohani Co-op. Credit & Services Society Ltd., Lohani vs Bhagwanpuri

J.V. Gupta, J.—This is a defendant''s second appeal against whom the suit for the grant of the permanent injunction has been decreed by both the Courts below.

Bhagwanpuri, the plaintiffrespondent, field the suit for the grant of the permanent injunction with the allegations that he was a resident of village Lohani. He never took any loan from the defendant society, nor was he a guarantor for any body for the payment of the loan to it. Since it was taking coercive steps to recover some amount from him; hence the present suit. The suit was contested inter alia on the preliminary grounds that the same was not maintainable for want of notice under section79 of the Punjab Cooperative Societies Act, 1961 (hereinafter called the Act). It was also pleaded that the civil Court had no jurisdiction to try the suit by virtue of the provisions of section 82 read with section 55 of the Act. On merits, it was pleaded that the plaintiff was a member of the society since October 5, 1971. He took a loan of Rs. 2,000/ and purchased fertilizer on credit in the amount of Rs. 2,600/ on the same day, from it. The plaintiff also executed a promote and the other documents relating to the same. He also acknowledged the debt of Rs. 4,600/ on December 10, 1978 and the entries to that effect were made in the record of the society. However, the trial Court found that the society had failed to prove that the plaintiff was, in fact, its member and that he ever borrowed any amount from it by executing the pronote dated April 29, 1977. On the question of notice as required under section 79 of the Act, it found that since the society had failed to prove that the plaintiff was its member, it was not necessary for the plaintiff to serve any notice under section 79 of the Act. In view of these findings, the plaintiff''s suit was decreed. In appeal, the learned Additional District Judge affirmed the said findings to the trial Court and, thus, maintained the decree passed in favour of the plaintiff. Dissatisfied with the same, the defendant has filed this appeal in this Court.

At the motion hearing, it was urged that no suit could be maintained without serving a notice under section 79 of the Act. Thus, the only point to be decided in this appeal is : whether the suit filed by the plaintiff who has been held to be not a member of the society, is maintainable in the absence of a notice under section 79 of the Act, or not ? Section 79 of the Act reads,

"Notice necessary in suits. No suit shall be instituted against a cooperative society or any of its officers in respect of any act touching the business of the society until the expiration of three months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left."

In Rajpal Grover v. The Guru Nanak Joint Cooperative Farming Society Ltd., Gumthala Garhu, 1982 Punjab Law Journal 289, it has been held by me that section 55 of the Act only deals with the disputes which may be referred to the arbitration. Those disputes are out of the ambit of section 79 of the Act, which contemplates a notice when a suit is to be instituted against a cooperative society in respect of any act touching its business. Thus, the question remains to be decided is: whether the present suit is with respect to an act touching the business of the defendant society or not ?

It has not been denied that the defendantsociety is a credit and service society. The main business of the society is to give loans or credit to its members and other persons. Under the circumstances, it could not be disputed that the present suit relates to an act touching its business. If it so, then the notice under section 79 of the Act, was a condition precedent to the filing of the present suit by the plaintiff who is not its member. The learned counsel for the respondent relied upon Rajpal Grover''s case (supra) to contend that notice under Section 79 of the Act, was not necessary before the institution of the suit if the plaintiff was not a member of the society. No such proposition has been laid down in the abovesaid case. As a matter of fact, it was found as a fact therein that the act did not touch the business of the society and, therefore, the notice under section 79 of the Act, was not required to be given. Thus, the aforesaid case has no applicability to the facts of the present case.

In view of the above discussion, this appeal succeeds and is allowed with costs. The judgments and the decrees of the Courts below are set aside and the plaintiff''s suit is dismissed for want of the notice under section 79 of the Act.