The Chief Managing Director vs Arihant Industries

A.I.S. Cheema, J.—Heard learned counsel for the parties. The Civil Revision Application is admitted and taken up for final hearing with the consent of learned counsel for the parties.

The present revision has been filed by original defendants. Defendant No.3 who had moved application Exh. 13 in Special Civil Suit No.21/2012 filed by the respondent (original plaintiff) for recovery of money as bills had not been settled by the petitioners (original defendants) regarding the job of ginning and pressing done. The defendant No.3 filed application under Order 7 Rule 11(d) of the CPC read with Section 164 of the Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as the Cooperative Societies Act for short) claiming that the notice was required as per Section 164 of the Cooperative Societies Act to be given to the Registrar of the Cooperative Society, but the same has not been given and so, the plaint was liable to be rejected.

The trial Court received say of the plaintiff filed at Exh.14, and by order dated 2.8.2013, came to the conclusion that the matter related to recovery of money for work which was 3 not touching the business of the Society and that although the notice u/s 164 was given to the defendants and not to the Registrar, still the suit did not suffer for want of notice to the Registrar as it was given out of abundant precaution. In substance, the trial Court came to the conclusion that as the job concerned did not touch the business of the Society as the plaintiff was not member of the Society, and so the compliance of Section 164 of the Cooperative Societies Act was not required and so, the suit was not barred.

The original defendants have thus filed this revision application. Learned counsel for petitioners/ defendants submitted that the suit claim concerned business of the Society. Defendant Nos.1 to 3 are the authorities of the concerned Cooperative Federation and that plaintiff was given job of ginning and pressing cotton which was purchased from the farmers and collected at the factory of the plaintiff. According to the learned counsel, the job of the defendants is to collect the cotton and get ginning and pressing of the same done and converting the same into bales to sell the same in the market. Thus, according to counsel, it relates to the business of the Society and thus, according to him, notice u/s 164 of the Cooperative Societies Act was necessary to be given to the Registrar as defined in Section 3 of the said Act. It has been argued that, as the notice was not given, the suit could not have 4 been instituted. The learned counsel relied on the case of Noor Mohd. Shami Shaikh and Another Vs. Maharashtra Housing and Development Board and Others, The learned counsel submitted that, in that matter also the Court found that notice was required to be given and for want of the same, the plaint was liable to be rejected under Order 7 Rule 11(d) of the CPC. According to counsel for petitioners- defendants, plaintiff was member or not was not material as Section 164 did not distinguish on that count when matter relates to business of the Co-operative Society. The learned counsel submitted that, it is not a case that the plaintiff would be without remedy as plaintiff can still comply with the requirement of Section 164 of the Cooperative Societies Act and file the necessary suit in Court.

Learned counsel for the respondent supported the order passed by the trial Court and referred to the reasonings of the trial Court as his arguments. The learned counsel, however, was unable to show that if the plaintiff is not a member of defendant Society, plaintiff was not required to comply the provisions of Section 164 of the Cooperative Societies Act. The learned counsel submitted that the suit was for recovery of money and thus, it did not relate to business of the Society and so, the suit was maintainable. However, what actually appears from the record is that the defendants are office bearers of 5 Maharashtra State Co-operative Cotton Growers'' Marketing Federation Ltd., whose business is of purchasing cotton from the farmers and getting the ginning and pressing of the same done and then to sell the same in the market. This was got done as job work from plaintiff. When this is so, it cannot be said that the matter does not relate to the business of the Society. It is not a case that the defendants have taken any loan and plaintiff filed suit for recovery of such money. In that case, may be one could say that the suit for recovery of money does not touch the business of the Society as taking or dealing in loan is not its business. But in the present matter, it is a claim to recover outstanding does regarding ginning and pressing. The ginning and pressing got done clearly relates to the business of the Society.

Section 164 of the Maharashtra Cooperative Societies Act reads as under :

"164. NOTICE NECESSARY IN SUITS:-

No suit shall be instituted against a society, or any of its officers, in respect of any act touching the business of the society, until the expiration of two 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."

It is clear that, institution of the suit itself is not 6 permissible unless above notice is given to the Registrar. In the present matter, admittedly no notice was given to the Registrar as contemplated under the above Act. It was given to defendants, but not to the Registrar who could have taken steps to avoid the litigation. Looking to the facts of this matter, the suit is not maintainable for want of compliance of Section 164 of the Cooperative Societies Act.

For the above reasons, I find that the impugned order suffers from illegality and is not maintainable.

In the result, the Civil Revision Application is allowed. The impugned order is quashed and set aside. Plaint of Special Civil Suit No.21/2012 "M/s Arihant Industries Vs. Chief Managing Director & others", pending before the Civil Judge, Senior Division, Vaijapur is rejected under Order 7 Rule 11(d) of the Civil Procedure Code, 1908 as barred for non compliance of Section 164 of the Maharashtra Cooperative Societies Act. No order as to costs.