Gujarat High Court
Yogeshbhai Bhagvanbhai Kathariya & 3 vs Swastil Housing Corporation A ... on 4 May, 2015
Author: C.L. Soni
Bench: C.L. Soni
C/SCA/770/2015 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 770 of 2015
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE C.L. SONI Sd/-
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1 Whether Reporters of Local Papers may be allowed No
to see the judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of No
the judgment ?
4 Whether this case involves a substantial question of No
law as to the interpretation of the Constitution of
India or any order made thereunder ?
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YOGESHBHAI BHAGVANBHAI KATHARIYA & 3
Versus
SWASTIL HOUSING CORPORATION A PARTNERSHIP FIRM & 5
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Appearance:
MR JF MEHTA, ADVOCATE for the Petitioner(s) No. 1 - 4
DELETED for the Respondent(s) No. 3
MR SP MAJMUDAR, ADVOCATE for the Respondent(s) No. 1
MR. HJ KARATHIYA, ADVOCATE for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2 , 4 - 6
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CORAM: HONOURABLE MR.JUSTICE C.L. SONI
Date : 04/05/2015
ORAL JUDGMENT
1. By present petition filed under Articles 226 and 227 of the Constitution of India, the petitioners- original plaintiffs have called in question the order dated 23.12.2014 passed by Gujarat State Co- operative Tribunal ('the Tribunal) in Revision Application No.113 of Page 1 of 9 C/SCA/770/2015 JUDGMENT 2014 preferred by the respondent No.1, whereby the revision application was allowed and the order dated 19.9.2014 passed by Board of Nominee below Exh.38 for deletion of the respondent No.1 as party from the proceedings of the Lavad Suit and to dispose of the suit as dismissed against the respondent No.1 (defendant No.2) was set aside.
2. I have heard learned advocate Mr. J.F. Mehta for the petitioners and learned advocate Mr. S.P. Majmudar for respondent No.1.
3. Learned advocate Mr. Mehta submitted that deletion of respondent No.1 as party from the Lavad Suit proceedings was required after the defendant Nos.4 and 5 filed reply disclosing that partnership of respondent No.1 was dissolved and it was no longer continued as legal entity in the eye of law. Mr. Mehta submitted that in fact, deed of dissolution of partnership was presented by respondent No.1 and it was never in dispute that respondent No.1- partnership was dissolved and no interest in the plot which was subject matter of the suit for respondent No.1 could survive. Mr. Mehta submitted that in fact, a totally new partnership was constituted which had no connection with subject matter of the suit and respondent No.1 having lost its entity could not be said to be a necessary party for deciding the dispute in the suit filed by the petitioners. Mr. Mehta submitted that respondent No.1 has already filed separate and independent suit for the disputed property, wherein the petitioners have applied to be joined as parties and therefore, learned Board of Nominee committed no error in ordering deletion of respondent No.1 from the suit proceedings filed by the petitioners and rightly disposed of the suit so far as respondent No.1 is concerned. Mr. Mehta submitted that since learned Board of Nominee committed no error of jurisdiction and passed the order in consonance with the principles of law as regards continuation of the Page 2 of 9 C/SCA/770/2015 JUDGMENT parties in the suit, the Tribunal ought not to have interfered with such order while exercising the revisional jurisdiction.
4. As against the above arguments, learned advocate Mr. Majmudar submitted that on the basis of the reply preferred by defendant Nos.4 and 5, it was not open to the petitioners to seek deletion of respondent No.1 from the suit proceedings filed by the petitioners. Mr. Majmudar submitted that the pursis to delete respondent No.1 from the suit proceedings preferred by the plaintiffs was in collusion with other defendants just to deprive the respondent No.1 of its rights for the suit property. Mr. Majmudar submitted that though the respondent No.1 seriously opposed grant of pursis for deleting it from the suit proceedings on the ground that partnership of respondent No.1 did exist, such objection was ignored and pursis was accepted by learned Board of Nominee. Mr. Majmudar submitted that whether the partnership continued to exist or not was a question to be dealt with during the suit proceedings and therefore just on the basis of pursis, the respondent No.1 ought not to have been deleted as party from the suit proceedings. Mr. Majmudar submitted that the fact that respondent No.1 has already filed another suit, wherein the petitioners have submitted application to be joined as parties in respect of the property which is subject matter of the suit filed by the petitioners is itself a ground to show that the claim of the parties in respect of the suit property needs to be decided even in the proceedings of the suit filed by the petitioners and that could be done only in presence of the respondent No.1 and all questions, as to whether the respondent No.1 still exists as partnership or not or that its interest in the suit property survives or not could be decided when the suit is tried and decided. Mr. Majmudar submitted that since the Board of Nominee exceeded in its jurisdiction in ordering deletion of respondent No.1 from arena of the parties in the suit filed by the petitioners, the Tribunal could be said to have correctly exercised the Page 3 of 9 C/SCA/770/2015 JUDGMENT jurisdiction in allowing the application, which does not call for any interference by this Court in exercise of the powers under Article 226/ 227 of the Constitution of India
5. Having heard learned advocates for the parties, it appears that the petitioners filed Lavad Suit before the Board of Nominee seeking permanent injunction restraining the respondent No.1 and other defendants in the suit from transferring the common plot of defendant No.1 Society in any manner or from making any construction on the common plot or changing use of the common and also restraining the defendants from entering upon and taking possession of the common plot. Such suit is filed by the petitioners as members of the defendant No.1 society and the case put up is that the respondent No.1- defendant No.2 was given agreement of development and construction of the houses for the members of the society. The prayer made in the suit is on the averments made in the plaint that the respondent No.1 and other defendants, except defendant No.1 Society, have no right or title over the common plot of the society.
6. As per the Scheme of the Act, dispute in the suit referred under Section 96 of the Act to the Registrar of Board of Nominees is to be settled and decided under the provisions of Sections 98 and 99 read with Rule 41 of the Gujarat Co-operative Societies Rules, 1965 ('the Rules'). Sections 98 and 99 of the Act and Rule 41 of the Rules read as under:-
98. Settlement of disputes.-
(1) If the Registrar is satisfied that any matter, referred to him Is a dispute, within the meaning of Section 96 the Registrar shall, subject to the rules, decide the dispute himself, or refer It for disposal to a nominee, or a board of nominees, appointed by the Registrar:
Provided that no person who is connected with a dispute or with the society at any stage or has previously inspected the society or audited Its accounts shall be appointed as a nominee or as Page 4 of 9 C/SCA/770/2015 JUDGMENT member of the board of nominees to settle the dispute.
(2) Where any dispute Is referred under sub-section (1) for decision to the Registrar's nominee or board of nominees, the Registrar may at any time, for reasons to be recorded In writing withdraw such dispute from his nominee, or board of nominees, and may decide the dispute himself, or refer It again for decision to any other nominee, or board of nominees, appointed by him.
(3) Notwithstanding anything contained in Section 96, the Registrar may. If he thinks fit. suspend proceedings In regard to any dispute. If the question at issue between a society and a claimant or between different claimants. Is one Involving complicated question of law or fact, until the question has been tried by a regular suit Instituted by one of the parties or by the society. If any such suit Is not Instituted within two months from the Registrar's order suspending proceedings, the Registrar shall take action as Is provided in sub-section (1).
99. Procedure for settlement of disputes and power of Registrar, his nominee or board of nominees.-
(1) The Registrar, or his nominee or board of nominees , hearing a dispute under section 98 shall hear the dispute In the manner prescribed, and shall have power to summon and enforce attendance of witnesses Including the parties Interested or any of them and to compel them to give evidence, and to compel the production of documents by the same means and as far as possible In the same manner as provided In the case of a Civil Court by the Code of Civil Procedure, 1908 (V of 1908).
(2) Except where a dispute Involves complicated question of law or fact, no legal practitioner in his capacity as a legal practitioner or as person holding a power of attorney shall be permitted to appear on behalf of any party at the hearing of a dispute.
(3)(a) If the Registrar or his nominee or board of nominees Is satisfied that a person, whether he be a member of the society or not, has acquired any interest In the property of a person who Is a party to a dispute, he may order that the person who has acquired the Interest In the property may join as a party to the dispute: and any decision that may be passed on the reference by the Registrar or his nominee or board of nominees shall be binding on the party so joined. In the same manner as If he were an original party to the dispute.
(b) Where a dispute has been Instituted. In the name of the wrong person or where all the defendants have been not Included, the Registrar or his nominee or board of nominees may, at any stage of the hearing of the dispute If satisfied that the mistake was bonafide. order any other person to be substituted or added as a plaintiff or a defendant, upon such terms as he thinks just.
(c) The Registrar, his nominee or board of nominees may. at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Registrar, his nominee or board of nominees, as the case may be, to be just, order that the name of any party Improperly joined whether as plaintiff or defendant be struck out. and that Page 5 of 9 C/SCA/770/2015 JUDGMENT the name of any person who ought to have been joined whether as plaintiff or defendant or whose presence before the Registrar, his nominee or board of nominees as the case may be, may be necessary In order to enable the Registrar, his nominee or board of nominees effectually and completely to adjudicate upon and settle all the questions Involved In the dispute, be added.
(d) Any person who Is a party to the dispute and entitled to more than one relief In respect of the same cause of action may claim all or any of such reliefs; but If he omits to claim all such reliefs, he shall not forward claim for any relief so omitted, except with the leave of the Registrar, his nominee or board of nominees.
(4) Notwithstanding anything contained in sub-secs. (1), (2) and (3), the following disputes or class of disputes, if the plaintiff so desires, shall be decided summarily by the Registrar, or his nominee or board of nominees, in such manner as may be prescribed, namely:-
(a) any dispute for recovery of debt upon promissory note, hundi, bill of exchange or bond, with or without interest, whether agreed upon under such instrument or under the bye-laws;
(b) any dispute for recovery of a fixed sum of money or in the nature of debt, with or without interest, arising on a written contract;
(c) any dispute for recovery of price of goods sold and delivered, where the rate, quality and quantity are admitted in writing;
(d) any dispute for recovery of dues payable by a member of a housing society towards contribution for construction of the house, or any dispute in respect of repayment of any loan, interest on loan, ground rent, local authority taxes, sinking fund, water charges, electrical charges, maintenance and upkeep charges or charges for other services rendered by the society and the interest on such arrears, payable under the written agreement or under the bye-laws.
(5)(a) The defendant shall not be entitled to defend the dispute unless he obtains leave from the Registrar, his nominee or, as the case may be, board of nominees, in such manner as may be prescribed.
(b) The Registrar, his nominee or board of nominees may grant the leave under clause (a) on such conditions, as he or it thinks fit.
(c) The Registrar, his nominee or board of nominees shall not refuse the leave to defend the dispute unless he or it satisfies that the facts disclosed by the defendant do not indicate that he has substantial defence to raise or that the defence intended to be put up by him is frivolous or vexatious.
(d) Where the defendant fails to obtain such leave or fails to appear or defend the dispute in pursuance of such leave, the averments made in the plaint and documents produced therewith shall be deemed to have been admitted by the defendant:
Provided that the Registrar, his nominee or board of nominees in Page 6 of 9 C/SCA/770/2015 JUDGMENT his or its discretion may require any fact so admitted to be proved otherwise than by such admission.
(e) Where the conditions on which leave to defend is granted are not complied with by the defendant, the Registrar, his nominee, or as the case may be, board of nominees may pass an award against him, as if he has not been granted such leave.
(6) The Registrar, his nominee or as the case may be, board of nominees may under special circumstances set aside the award passed by him or it and if necessary, stay or set aside the execution, and may grant leave to the defendant to appear and defend the disputes, if it seems reasonable so to do, and on such terms as he or it deems fit.
41. Procedure of hearing and decision :-
(1) The adjudicating authority shall record a brief note in English or in Gujarati language of the evidence of the parties and witnesses who attend and upon the evidence so recorded and upon consideration of any documentary evidence produced by either side. a decision shall be given in accordance with justice, enquiry and good conscience and it shall be reduced to writing. Such a decision shall be given in open court either at once or on some future date of which due notice shall be given to the parties.
[(2) if any of the parties duly summoned or informed to attend, fails to appear, the dispute may be decided in accordance with the relevant provisions of Order 9 of the Code of Civil Procedure, 1908.] (3) Where the adjudicating authority is a board of nominees consisting of the board of nominees of two nominees and if their opinions (4) The decision shall be communicated to the parties by-
(a) pronouncement of the award; or
(b) registered post to any party which may be absent on [the date if due notice of the decision is not given to such party,]
(c) Ordinary post with UPC to any party which may be absent on the date if due notice of the date of decision is given to such party.
(5) After the decision of the case. if the adjudicating authority is a nominee or the board of nominees it shall return all the case papers to the Registrar.
7. As provided in the above-said provisions, dispute once referred to the Board of Nominee is to be decided on the basis of evidence led by the parties and in accordance with equity and good conscience. Though Section 99 of the Act gives power to Board of Nominee to join any party who acquires interest in the property of a person who is a party to a dispute and also a power to strike name of any party Page 7 of 9 C/SCA/770/2015 JUDGMENT improperly joined whether as a plaintiff or defendant, however, it also provides that Board of Nominee may order to join any person whose presence may be necessary in order to enable the Board of Nominee to effectively and completely adjudicate upon and settle all questions involved in the dispute. The case on hand does not cover the situation envisaged to strike out the name of a party. But, the order was made by Board of Nominee deleting respondent No.1 as party from the proceedings of the suit just on the basis of pursis of the plaintiffs, that too on the ground that respondent No.1 ceased to exist as partnership firm.
8. In any case, when an assertion is made in the plaint that respondent No.1 and other defendants, except the society, who is joined as defendant No.1, have no right or title in the common plot simply because in the reply filed by defendant Nos.4 and 5 that respondent No.1 was dissolved and was no longer a legal entity in the eye of law is no ground to permit deletion of such a party especially when such party opposed the assertion made in the pursis submitted by the petitioners- plaintiffs. In any case, it appears from the scheme of the Act, especially for deciding the dispute that once the dispute is referred to the Board of Nominee, it is within the domain of Board of Nominee to decide the same in accordance with the above-said provisions and simple deletion of party is not contemplated except when events/ situation as provided in Section 99 of the Act warrant striking of improperly joined party or joining of a necessary party. In fact, when right is claimed in respect of a common plot by the members of the society and there is opposition to such right for which even respondent No.1 has filed suit, as stated by learned advocates for the parties, it was not required of the Board of Nominee to order deletion of respondent No.1 as party from the suit proceedings and dispose of the suit against it. In such view of the matter, the Court finds that the Tribunal has rightly interfered with the order passed by Page 8 of 9 C/SCA/770/2015 JUDGMENT the Board of Nominee by allowing the revision application preferred by respondent No.1.
9. For the reasons stated above, the petition is dismissed. Notice discharged.
Sd/-
(C.L. SONI, J.) omkar Page 9 of 9