Punjab-Haryana High Court
The Punjab State Cooperative Supply And ... vs The Jagraon Cooperative ... on 16 December, 2011
Author: K.Kannan
Bench: K. Kannan
CWP No.4593 of 1990 -1-
IN THE PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
CWP No.4593 of 1990
Date of Decision: 16.12.2011
The Punjab State Cooperative Supply and Marketing
Federation Ltd., Chandigarh
...Petitioners
Versus
The Jagraon Cooperative Marketing-cum-Processing Society
Limited, Jagraon and others
..Respondents
CORAM: HON'BLE MR. JUSTICE K. KANNAN
Present: Mr. Arun Nehra, Advocate Advocate for the
petitioners.
Mr. S.S.Sahu, Assistant Advocate General, Punjab
for the respondents.
K.Kannan, J.
The petitioner Markfed challenges the decision taken by the Authorities under the Cooperative Societies Act while adjudicating on the dispute raised by the petitioner Markfed for its alleged entitlement to the cost of repairs and the penal interest on the loan raised for construction of go- downs.
There had been an agreement entered into between the Cooperative Society and Markfed under the terms of which the Society was required to produce its own resources in the CWP No.4593 of 1990 -2- name of Markfed for construction of the godown and where the land had already been purchased in the name of the Society it should be transferred in the name of Markfed. The agreement provided that the Cooperative Society would make available the margin money upto 25% of the cost of construction which would be treated as a first advance and the consideration for transferring the godown to the Society would be on the basis of actual cost. The terms included the arrangement for necessary funds for construction of godowns either from its own resources or by raising loan from the Punjab State Cooperative Bank or the Agricultural Finance Corporation or from any other source. It specifically provided that the cost of godown should be repaid by the Society to the Federation in instalments as may be decided by the federation. The rent that would accrue as a result of the utilisation of the godown by the Society or the Federation has to be realised by the Society and credited or adjusted against instalments due to the federation. Clauses 6 and 7 which have been applied against the petitioner Federation or it is the interpretation of these clauses which have resulted in denial of the claims of the petitioner. Clauses 6 and 7 are as under:
Clause 6 :
"That the Federation shall maintain the godown properly and will undertake necessary repairs from its own resources.CWP No.4593 of 1990 -3-
Clause 7 :
That on repayment of entire loan by the Society to the federation and by the Federation to the financing agency along with the interest due, the godown shall be released by the Federation in favour of the Society and the same shall thereafter be the property of the Society."
The Authorities had found that in terms of clause 6 referred to above, it was the duty of the federation to maintain the building and undertake the necessary repairs and hence the said amounts could not be debited to the Society as payment towards the cost of construction. The authorities also found that the liability to interest for the amounts availed by the Federation from any financial institution for construction of the go-downs could be recovered from the society but any penal interest suffered by the Federation cannot be claimed through the Society.
The learned counsel argues that in terms of the principle of Section 70 of the Contract Act the Society which takes the benefit of a building in a state of repair by the fact that Markfed has suffered a detriment which was not intended to be done gratuitously, the same was liable to be recovered from the Society.
I would reject the contention by virtue of the specific clause contained under the agreement. Clauses 3 and 4 are also relevant and they are required to be reproduced : CWP No.4593 of 1990 -4-
Clause 3:
"That the Federation shall arrange the necessary funds for constructing the go downs either from its own resources or by raising loan from the Punjab State Co-operative Bank, Chandigarh through the Agricultural Refinance Corporation or from any other source.
Clause 4:
That the cost of the go down shall be repaid by the Society to the federation in instalments as may be decided by the Federation."
The funds for construction of the building which arise by the federation is an item of expenditure which it could obtain by way of recovery from the society as going towards the cost of construction on actual basis. The claim for interst would have also been possible by virtue of clause 7 which has been extracted above. If Markfed had not paid amount in the manner agreed to with the financial institution and suffers a penal levy, it should take responsibility for its own lapse and cannot claim it from the Society. A penalty is a result of a default and if such penalty is suffered by Markfed in the absence of specific clause under the agreement, there is no scope for its realisation.
In the same manner, when clause No.4 which is extracted above, provides for repayment of cost of construction and elsewhere in the same document, the CWP No.4593 of 1990 -5- transfer to the Society is required to be done on actual cost, the cost cannot include the repairs or maintenance charges undertaken during the time when Markfed was securing the benefit of construction. There is a definite distinction maintained under the terms as to how the liability is to be shared at various times. While it provides for cost of construction, it says that shall be borne in the ratio of 25:75 between the Society and the Markfed and it is that 75% of the cost incurred with interest that is provided under Clause 7 as capable of being realised from the Society. Repair or maintenance is not the same as the cost of construction. While there is a provision for recovery of cost of construction, Clause 6 is specific that the maintenance and repairs will be borne by the resources of Markfed itself. For whatever reason that was how the parties worked the respective rights under agreement.
I cannot rewrite agreement for the benefit of markfed by reading into the agreement the rights protected under the Rent Control legislation, in the manner pleaded before the Authorities. It has been attempted to be stated that a landlord is bound to maintain the building in a state of repair and that if the tenant has incurred expenditure, he shall be entitled to recover it from the landlord. We are not examining the rights of parties under any tenancy legislation. CWP No.4593 of 1990 -6- The Tenancy Act could be applied only for relationships as landlord-tenant and no portion of the Statute could be imported into contractual obligations that are driven through expressed terms. The rejection of the claim of Markfed by the parties was under the circumstances perfectly justified and I will find no reason to interfere with the same. The writ petition is dismissed.
( K. Kannan ) 16.12.2011 Judge Meenu