Veraval Peoples Co-operative Bank Ltd. and Branch Manager Veraval Peoples Co-op Bank Ltd. vs Tulsi Industries

M.D. Shah, J.—Present respondent is original plaintiff and present petitioners are original defendants in Special Civil Suit No. 77 of 2007. The original plaintiff has filed suit for getting decree of Rs. 2,50,000/- as damages caused due to cross negligence on the part of original defendant No. 1-Bank and original defendant No. 2-Branch Manager, as without verifying signature on the cheque, cheque is cleared and loss in incurred to the plaintiff. Suit is filed on 31.12.2007. Present petitioners appeared before the Court and filed their written statement and denied allegations made in the plaint wherein issue was raised with regard to jurisdiction of the Court and therefore, also the suit is required to be dismissed. Thereupon, issues were framed and affidavit of chief examination of the plaintiff was placed on record and matter was kept for cross examination of the plaintiff. During pendency of the suit, present petitioners submitted application vide Exh. 33 under Order 7 Rule 10 and 11 of the CPC with a prayer to return the plaint or to reject the plaint It is mainly contented in the application that present petitioner Bank is registered under Cooperative Society and Banking Regulation Act and original plaintiff is member of said bank and share certificate is also issued in favour of the plaintiff and so this dispute is between member and society and so Civil Court has no jurisdiction and matter be referred to Board of Nominees.

The original plaintiff filed reply vide Exh. 11 and mainly contended that no specific contention is raised in reference to said issue and at belated stage now it is not open for the original defendants to raise this issue. Even while framing the issues, this specific issue is also not raised and issues are framed and the matter is kept for cross examination of the plaintiff and application be rejected.

After giving opportunity to both the sides, learned Trial Court rejected the said application Exh. 33 by order dated 30.08.2011. Hence, this petition.

Mr. R.C. Kakkad, learned advocate appearing for the petitioners herein-original defendants submitted that prima facie considering the plaint, it seems that dispute is between plaintiff and defendant in reference to touching business of the society and Civil Court has no jurisdiction and matter is required to be referred to Board of Nominees. He also took this Court to the written statement filed by the petitioners herein and stated that contention is raised that suit is barred for jurisdiction of the Court and so it cannot be said that contention is not raised before the Trial Court. It is also submitted that so far as issue of jurisdiction is concerned, it can be raised at any time. It is also submitted that learned Trial Court has not considered the above aspects and by that committed error in rejecting the application. He has relied on the decision of the Hon''ble Supreme Court in the case of Deccan Merchants Co-operative Bank Ltd. Vs. Dalichand Jugraj Jain and Others, .

It is submitted by Mr. Majmudar, learned advocate for the respondents herein that order passed by the Trial Court is legal and not required to be interfered in exercise of powers under Article 227 of the Constitution of India. It is also submitted that application was submitted at belated stage and in light of judgment of the Hon''ble Supreme Court in the case of Ramesh Chand Ardawatiya Vs. Anil Panjwani, , the application submitted by the petitioners is required to be dismissed. He has also relied on the decision of this Court in the case of Mahendrakumar Inrasingji Cotton Pvt. Ltd. v/s. State of Gujarat reported in 2009 (4) GLR 2995.

This Court has gone through the plaint, order dated 30.08.2011 passed by the Trial Court and written statement filed by the petitioners. In para 17 of the plaint, it is mentioned that cheque is presented by unknown person and if the plaintiff will get the information about his whereabouts, then, his right will be kept open to join him as party. It is not in dispute that cheque was tampered with and fraud is committed and though plaintiff has not signed the cheque, cheque was cleared and he incurred loss of Rs. 2,50,000/-. So in opinion of this Court, so far as this issue is concerned, it is not touching the business of the society and Civil Court has jurisdiction and therefore, learned Trial Court has rightly rejected the application. In the case of Mahendrakumar (Supra), this Court in para 11.1 has held as under:--

11.1 So far as section 167 is concerned, it mandates issuance of notice before institution of suit against a society or its officer in respect of any Act touching the business of the society and, therefore, requirement of issuance of notice prior to institution of suit or otherwise is to be looked into by the Civil Court where the suit is pending. In case if objection is raised by the defendant in this regard at that point of time the Civil Court can certainly look into necessary material including pleadings in the suit to decide about nature of the suit, relief claimed and whether provisions of the Cooperative Society Act are applicable and issuance of notice or otherwise is mandatory and if mandatory non compliance there of is fatal or not. By placing reliance on provisions of section 167 and considering the fact of non issuance of notice by petitioner to respondent No. 4 before institution of suit was not within purview of Registrar considering an application for leave while exercising powers u/s 112 of the Act. It is more so, a careful perusal of sections 166 and 167 of the Act reveals that sub section (2) of section 166 which bars jurisdiction of Courts refer to suit or other legal proceedings relating to the business of such society was to be proceeded with or instituted against a society which is being wound up or any matter touching the affairs of the society except by leave of the Registrar and section 167 is about prohibition of institution of a suit against a society or of its officer in respect of any Act touching the business of the society therefore, sub section (2) of Section 166 is wider in terms when it refers to ''any matter touching the affairs of the society'' then a reference to a phrase ''any Act touching the business of the society'' as referred to in section 167 of the Act requiring notice to be issued before institution of the suits. Therefore, only Civil Court can decide the above aspects whether issues involved in the suit proceedings had anything to do with the Act touching the business of the society or touching the affairs of the society depending upon the facts and circumstances of each case. Even, other issues about breach of terms and conditions in various clauses of the agreement dated 1.10.1998 and recital in the lease agreement has any bearing or relevance on the phrase namely any Act touching the business of the society or affairs of the society can only be gone into by the Civil Court after discussing and scrutinizing the evidence on record.

There is no substance in the argument of Mr. Kakkad, learned advocate for the petitioners that legal notice was also issued u/s 167 and reply is also filed by the petitioners which shows that plaintiff intents to initiate proceedings under the Gujarat Cooperative Societies Act and so jurisdiction is only with Board of Nominees and learned Trial Court has not considered the same, in opinion of this Court, under the statutory provisions of law, notice is required to be given and after giving notice the provisions, if suit is filed in the Civil Court, it cannot be said that Civil Court has no jurisdiction to decide the suit. Considering allegations made in the plaint, in opinion of this Court, learned Trial Court has rightly rejected the application and no interference is required under Article 227 of the Constitution of India. It is pertinent to note that in the written statement the petitioners herein have not specifically mentioned that Board of Nominees has jurisdiction and not Civil Court. But at belated stage, after framing of issues, petitioners herein submitted application and now the matter is kept for cross examination of the plaintiff and therefore, Trial Court has rightly rejected the application. So far as reliance placed on the decision in the case of Deccan Merchants (supra) by the learned advocate for the petitioners is concerned, on facts the said case is not helpful to the petitioners. Considering the nature of allegations made in the plaint and as alleged fraud is committed while presenting the cheque, in opinion of this Court Civil Court has jurisdiction to decide the suit. In view of above, the petition is dismissed. Rule discharged. Interim relief if any stands vacated.