Karnataka High Court
Muneerahmad S/O Gaibusab Momin vs The Mudhol Co Op Bank Limited Mudhol on 22 July, 2024
Author: M.G.S. Kamal
Bench: M.G.S. Kamal
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CRP No. 100134 of 2023
IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH
DATED THIS THE 22ND DAY OF JULY, 2024
BEFORE
THE HON'BLE MR JUSTICE M.G.S. KAMAL
CIVIL REVISION PETITION NO.100134 OF 2023
BETWEEN:
1. MUNEERAHMAD S/O. GAIBUSAB MOMIN,
AGE: 61 YEARS, OCCU: BUSINESS,
R/O: MUDHOL - 587 313, TQ: MUDHOL,
DIST: BAGALKOTE.
2. NOORAJANABI W/O. MUNEERAHMAD MOMIN,
AGE: 57 YEARS, OCCU: HOUSE HOLD AND BUSINESS,
R/O: MUDHOL - 587 313, TQ: MUDHOL,
DIST: BAGALKOTE.
3. FAZALALI S/O. MUNEERAHMAD MOMIN,
AGE: 35 YEARS, OCCU: BUSINESS,
R/O: MUDHOL - 587 313,
TQ: MUDHOL, DIST: BAGALKOTE.
4. ISMAIL S/O. MUNEERAHMAD MOMIN,
AGE: 37 YEARS, OCCU: BUSINESS,
R/O: MUDHOL - 587 313,
TQ: MUDHOL, DIST: BAGALKOTE.
Digitally signed
by V N BADIGER
Location: High 5. BIBIJAN W/O. ISMAIL MOMIN,
Court of
Karnataka AGE: 33 YEARS, OCCU: HOUSE HOLD
AND BUSINESS, R/O: MUDHOL - 587 313,
TQ: MUDHOL, DIST: BAGALKOTE.
6. MAIBUBSAB S/O. GAIBUSAB MOMIN,
AGE: 59 YEARS, OCCU: BUSINESS,
R/O: MUDHOL - 587 313,
TQ: MUDHOL, DIST: BAGALKOTE.
7. JUBEDA W/O. MAIBUBSAB MOMIN,
AGE: 55 YEARS,
OCCU: HOUSE HOLD AND BUSINESS,
R/O: MUDHOL - 587 313,
TQ: MUDHOL, DIST: BAGALKOTE.
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CRP No. 100134 of 2023
8. MAHAMAD ARIF S/O. MAIBUBSAB MOMIN,
AGE: 39 YEARS, OCCU: BUSINESS,
R/O: MUDHOL - 587 313, TQ: MUDHOL
DIST: BAGALKOTE.
9. IMRAN S/O. MAIBUBSAB MOMIN,
AGE: 33 YEARS, OCCU: BUSINESS,
R/O: MUDHOL - 587 313,
TQ: MUDHOL, DIST: BAGALKOTE.
10. SABA W/O. MAHAMAD ARIF MOMIN,
AGE: 34 YEARS,
OCCU: HOUSEHOLD AND BUSINESS,
R/O: MUDHOL - 587 313, TQ: MUDHOL,
DIST: BAGALKOTE.
11. ALLABHAKSHA S/O. RASULSAB ATTAR,
AGE: 61 YEARS, OCCU: BUSINESS,
R/O: HULAKUND - 591 114,
TQ: RAMADURG, DIST: BELAGAVI.
12. VIDYA W/O. PRABHAKAR APARAJ,
AGE: 36 YEARS, OCCU: BUSINESS,
R/O: TERDAL - 587 315,
TQ: TERDAL, DIST: BAGALKOT.
...PETITIONERS
(BY SRI ARUN L. NEELOPANT, N.B.JODALLI
SMT. KAVITA S. JADHAV, ADVOCATES)
AND:
THE MUDHOL CO - OP BANK LIMITED, MUDHOL,
REPRESENTED BY ITS AUTHORIZED SIGNATORY
AND LIQUIDATOR BY NAME SHRISHAIL
S/O. RUDRAPPA BADAGI, AGE: 46 YEARS,
OCC: ASST. REGISTRAR OF CO OP SOCIETIES,
R/O: JAMBAGI B K - 587 330,
TQ JA:MAKHANDI, DT: BAGALKOT.
...RESPONDENT
(BY SRI BHAT U.A. GANAPATHI (G.A.BHAT), ADVOCATE)
THIS CIVIL REVISION PETITION IS FILED U/SEC. 115 OF CPC,
PRAYING TO, SET ASIDE THE IMPUGNED ORDER DATED 01.06.2023
PASSED BY THE ADDITIONAL CIVIL JUDGE AND JUDICIAL
MAGISTRATE FIRST CLASS MUDHOL IN O.S.NO.238/2022
DISMISSING THE I.A.NO. II FILED BY THE PETITIONERS UNDER
ORDER 7 RULE 11 (A) AND (B) OF CPC SEEKING TO REJECT THE
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CRP No. 100134 of 2023
PLAINT AS PER ANNEXURE-A AND ALLOW THE INTERIM
APPLICATION NO.II FILED BY THE PETITIONERS, IN THE ENDS OF
JUSTICE AND EQUITY AND ETC.,
THIS CIVIL REVISION PETITION, COMING ON FOR FURTHER
HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER
1. Petitioners are the defendants in O.S.No.238/2022 pending consideration on the file of Additional Civil Judge and JMFC, Mudhol aggrieved by the order dated 01.06.2023 passed on I.A.No.2 filed by the petitioners herein under Order VII Rule 11(a) and (d) of CPC, by which the said application filed by the petitioners herein has been rejected.
2. The above suit is filed by the respondent-Co- Operative Bank for relief of permanent injunction restraining the petitioners herein from alienating or creating any third party interest over the suit property. It is contended by the respondent-Co-operative Bank that the petitioners have availed financial assistance from the respondent-Co-Operative Bank and have created charge over the suit property by executing deeds of mortgage. -4-
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3. Petitioners herein who appeared in the said suit filed application under Order VII Rule 11(a) and (d) of CPC seeking rejection of the plaint on the ground that the suit is not maintainable in view of the provisions contained under Sections 118, 70 and 103 of the Karnataka Co- Operative Societies Act, 1959, (for short 'the Act, 1959'), and also in view of the provisions contained under Section 41(h) of the Specific Relief Act, 1963 (for short 'the Act, 1963'). The Trial Court taking note of the contentions urged by the petitioners herein and also taking note of the relief sought in the plaint, declined to accept the contentions and consequently rejected the application. Aggrieved by the same, the petitioners are before this Court.
4. Learned counsel Sri.Arun L Neelopant appearing for the petitioners reiterating the grounds urged in the memorandum of petition refer to sub-Clause (c) of sub Section (1) of Section 118 of the Act, 1959, there is bar for and contended that in respect of the disputes which are -5- NC: 2024:KHC-D:10252 CRP No. 100134 of 2023 covered under sub- Clause (c) of sub-Section (1) of Section 118 of the Act, 1959 prohibits filing of any suit before the Civil Court. He further refers to Section 41(h) of the Act, 1963, to contend that the injunction be refused when there is an equally efficacious remedy available. Thus, on these two counts, learned counsel submits that the respondent-Co-Operative Bank, if required, may seek remedy under Section 103 of the Act, 1959, in the nature of seeking attachment of the property which is more efficacious than the permanent injunction as sought for. He submits that filing of the injunction suit is only to harass the petitioners.
5. Heard. Perused the records.
6. Section 118 of the Karnataka Co-Operative Societies Act, 1959, which bars jurisdiction of Civil Court, reads as under:
"118. (1) Save as provided in this Act, no [civil, labour or revenue court or Industrial Tribunal] 1 shall have any jurisdiction in respect of, ---6-
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(a) the registration of a co-operative society or bye - laws or of an amendment of a bye-law;
[(b) the removal of a member or the removal and disqualification of a director or the removal of a board;
(c) any surcharge application required under section 69 or any dispute required under section 70 to be referred to the Registrar or the recovery of moneys under section 100 or the execution of any award or order referred to the Registrar for execution under section 101]
(d) any matter concerning the winding up and the dissolution of a co-operative society. (2) While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with, or instituted against, the Liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose.
(3) Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any court on any ground whatsoever."
7. Admittedly, dispute is raised between the parties and is referred for adjudication under Section 70 of -7- NC: 2024:KHC-D:10252 CRP No. 100134 of 2023 the Act, 1959. Also be relevant to refer to Section 71 of the Act, 1959 which refers to disposal of dispute.
8. Sections 70 and 71 of the Karnataka Co- Operative Societies Act, 1959 reads as under:
"70 Disputes which may be referred to Registrar for decision.- (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a cooperative society [XXX] arises,--
(a) among members, past members and persons claiming through members, past members and deceased members, or
(b) between a member, past member or person claiming through a member, past member or deceased member and the society, its [board] or any officer, agent or employee of the society, or
(c) between the society or its [board] and any past [board], any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs, or legal representatives of any deceased officer, deceased agent, or deceased employee of the society, or
(d) between the society and any other co-
operative society, [or a credit agency.] -8- NC: 2024:KHC-D:10252 CRP No. 100134 of 2023 such dispute shall be referred to the Registrar for decision and [no civil or Labour or Revenue Court or Industrial Tribunal] shall have jurisdiction to entertain any suit or other proceeding in respect of such dispute.
(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a cooperative society, namely:--
(a) a claim by the society for any debt or demand due to it from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;
(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor, as a result of the default of the principal debtor whether such debt or demand is admitted or not;
(c) any dispute arising in connection with the election of a President, Vice-President or any office-bearer or Member of board of the society;]
(d) any dispute between a co-operative society and its employees or past employees or heirs or legal representatives of a deceased employee, including a dispute regarding -9- NC: 2024:KHC-D:10252 CRP No. 100134 of 2023 the terms of employment, working conditions and disciplinary action taken by a co-operative society [notwithstanding anything contrary contained in the Industrial Disputes Act, 1947 (Central Act 14 of 1947)] ;
(e) a claim by a co-operative society for any deficiency caused in the assets of the co-operative society by a member, past member, deceased member or deceased officer, past agent or deceased agent or by any servant, past servant or deceased servant or by its [board], past or present whether such loss be admitted or not.] (3) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the constitution, management or the business of a co-operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court.
71. Disposal of disputes.- (1) The Registrar may, on receipt of the reference of a dispute under section 70,--
(a) decide the dispute himself, or
(b) transfer it for disposal to any person who has been invested by the State Government with powers in that behalf, or
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(c) refer it for disposal to one arbitrator appointed by the Registrar.
(2) The Registrar may withdraw any reference transferred under clause (b) of sub-section (1) or referred under clause (c) of that sub-section and decide it himself.
(3) The Registrar or any other person to whom a dispute is referred for decision under this section may, pending the decision of the dispute, make such interlocutory orders as he may deem necessary in the interests of justice.
[(3A) When a dispute is referred to an arbitrator under clause (c) of sub-section (1), the award shall, subject to such rules as may be prescribed, include the fee payable to the arbitrator and the fees and expenses payable to the Registrar. Such an award shall not be invalid merely on the ground that it was made after the expiry of the period fixed for deciding the dispute by the Registrar, and shall, subject to appeal or revision, be binding on the parties to the dispute.] (4) Notwithstanding anything contained in section 70, when any dispute under clause (a) or (b) of sub-section (1) of the said section is referred for decision to the Registrar, and the Registrar is satisfied on an application by the society concerned that in the interest of the society it is necessary for an effective decision of the dispute to implead persons who cannot be made parties to the dispute in proceedings before him, he may permit the society to institute a regular
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NC: 2024:KHC-D:10252 CRP No. 100134 of 2023 suit in a Civil Court having jurisdiction and the Civil Court shall be competent to entertain such suit.
[(5) The dispute under sub-section (1) shall be decided within a period of twelve months excluding the period of stay granted by the Court if any. However, the Registrar may for reasons to be recorded in writing extend the said period not exceeding eighteen months.] [Provided that the State Government shall, on a report made by the Registrar, may extend the period beyond eighteen months if it is satisfied that, there are genuine/valid grounds for such extension]"
9. Perusal sub-Section (3) of Section 71 of the Act, 1959 further clarifies that the Registrar is vested with power to make such interlocutory orders, as he may deem necessary in the interest of justice.
10. Section 41(h) of the Specific Relief Act, 1963 reads as under:
"41(h) when equally efficacious relief can certainly be obtained by any other usual mode of proceeding except in case of breach of trust;"
11. Thus, cumulative effect of reading of the aforesaid provisions of the Act, 1959 makes it clear that Section 118 of the Act, 1959 expressly bars jurisdiction of
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NC: 2024:KHC-D:10252 CRP No. 100134 of 2023 the Civil Court in the matters of reference made under Section 70 of the Act, 1959. Though the trial Court has taken note of these aspects of the matter has however observed that relief sought in the instant case is a permanent injunction and that only Civil Court could grant such relief. As pointed out by the learned counsel for the petitioners sub-Section (3) of Section 71 of the Act, 1959, which provides for the manner of disposal of dispute by the Registrar on receipt of reference of dispute under Section 70 of the Act, 1959, also authorizes Registrar to pass such interlocutory orders as may be necessary in the matter.
12. In that view of the matter, the application filed under Order VII Rule 11 CPC, ought to have been considered by the trial Court as there is an express bar under Section 118 of the Act, 1959, which also covers the cases of this nature.
13. Learned counsel for the respondent does not dispute the above position of law.
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14. Submission taken on record.
15. Accordingly, the following:
i) Petition is allowed.
ii) The order dated 01.06.2023 passed on I.A.No.2
in O.S.No.238/2022 pending on the file of Additional Civil Judge and JMFC, Mudhol is set aside, consequently I.A.No.2 filed by the petitioners herein under Order VII Rule 11(a) and (d) of CPC, is allowed.
SD/-
JUDGE KGK/CT-ASC List No.: 1 Sl No.: 29