Andhra HC (Pre-Telangana)
Muthu Nithya Reddy And Mohan Reddy And ... vs Deputy Registrar Of Co-Operative ... on 27 April, 2001
Equivalent citations: 2001(5)ALT31, [2002]111COMPCAS724(AP), 2001 A I H C 3536, (2001) 5 ANDH LT 31 (2002) 111 COMCAS 724, (2002) 111 COMCAS 724
Author: S.B. Sinha
Bench: S.B. Sinha
JUDGMENT
1. The question which arises for consideration in these appeals is as to whether the provisions of Order 1, Rule 10 of the Code of Civil Procedure, 1908 (for short "the Code"), have any application in the proceedings under the A. P. Co-operative Societies Act, 1964 (for short "the Act").
2. The second respondent-bank is a co-operative society registered under Section 7 of the Act. In terms of the bye-laws of the said society the members can borrow amounts from it. The recovery proceedings were initiated against the appellants in these appeals before the first respondent.
3. In the said application the cause of action was said to have arisen on August 6, 1998, as would appear from its application which is in the following terms :
The cause of action arose on August 6, 1997, i.e., on the date respondent No. 1 approached the petitioner's-bank for sanction of cash credit facility for Rs. 98,00,000 and when respondent No. 1 executed promissory note in support of the cash credit facility, and when the petitioner's-bank on September 15, 1999, got issued the legal notice to the respondents on their failure to repay the loan amount and the case is within the period of limitation.
4. On or about January 4, 2001, an affidavit was filed by the second respondent herein stating :
That the petitioner is basically a co-operative society registered under Section 7 of the A. P. Co-operative Societies Act. The proposed respondent No. 4, namely, Mr. M. Mohan Reddy is the member of the petitioner society with registration No. 9972. The proposed respondent No. 4 having had created and floated a company, i.e., respondent No. 1 herein, and to promote such business had taken loan from the petitioner as member of the petitioner society and he fell due. Respondent No. 1 herein is being only the creation of respondent No. 4, and respondent No. 4 is being in substance and reality the borrower from the petitioner as its member, respondent No. 4 is as such the proper and necessary party to the above proceedings along with his creation respondent No. 1 herein. Therefore, given this fact, respondent No. 4 is needed to be made party to the above proceedings as the principal borrower and defaulter. As such, in the interest of justice and for proper adjudication of the matter it is just and essential to permit the petitioner to implead respondent No. 4 in the array of respondents and to proceed against them, lest the petitioner will suffer irreparable loss and injury.
5. That due to inadvertence respondent No. 4 was not made party to the proceedings earlier.
6. However, in interlocutory application No. 22 of 2000 in ARC. No. 69 of 1999 which is the subject matter of Writ Petition No. 400 of 2001 it was further stated :
I submit that Muthu Nitya Reddy is mortgagor in the loan obtained by the first respondent. He is the owner of and the same has been mortgaged with our bank with an undertaking that, in case the loanee i.e., the first respondent fails to discharge the loan amount along with interest, the property mortgaged can be put to auction to realise the due amount to the petitioner-bank. Due to oversight, she was not made party to the proceedings. She is a proper and necessary party to the proceedings as she offered her above-mentioned property for creation of equitable mortgage. If she is added the case can be adjudicated and just decision could be arrived at.
7. Hence it is prayed that the hon'ble court may be pleased to implead the proposed respondent as fourth respondent and pass such other order or orders deemed fit and proper in the circumstances of the case.
8. Applications seeking to implead necessary parties had been filed. Those applications were allowed and questioning the same writ petitions were filed before this court. A learned single judge of this court held that the Code applies.
9. Section 61 of the Act provides for settlement of disputes by referring the same to the Registrar. The said provision reads thus :
"61. Disputes which may be referred to the Registrar.--(1) Notwithstanding anything in any law for the time being in force, if any dispute touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society, 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 committee or any officer, agent or employee of the society ; or
(c) between the society or its committee, and any past committee, any officer, agent or employee, or any past officer, past agent, or past employee or the nominee, heir or legal representative of any deceased officer, deceased agent or deceased employee of the society ; or
(d) between the society and any other society, such dispute shall be referred to the Registrar for decision.
Explanation.--For the purposes of this sub-section a dispute shall include-
(i) a claim by a society for any debt or other amount due to it from a member, past member or the nominee, heir or legal representative of a deceased member, whether such debt or other amount be admitted or not;
(ii) a claim by surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or other amount due to it from the principal debtor as a result of the default of the principal debtor whether such debt or other amount due be admitted or not;
(iii) a claim by a society against a member, past member, or the nominee, heir or legal representative of a deceased member for the delivery of possession to the society of land or other immovable property resumed by it for breach of the conditions of assignment or allotment of such land or other immovable property . . ."
10. The Governor of Andhra Pradesh in exercise of powers conferred upon him under sub-section (1) of Section 130 of the Act, made Rules known as A. P. Cooperative Societies Rules, 1964 (for short "the Rules"). Sub-rules (1) and (2) of Rule 49 of the Rules are as follows :
"Procedure for arbitration and settlement of disputes.--(I) A reference to the Registrar of any dispute under Section 61 of the Act shall be in writing. (2) The period of limitation for referring a dispute touching the constitution, management or the business of a society to the Registrar under subsection (1) of Section 61 of the Act shall be regulated by the provisions of the Limitation Act, 1963, as if the dispute is a suit and the Registrar, a civil court:
Provided that a dispute arising between the parties mentioned in Clause (a) of sub-section (1) of Section 61, shall, where the dispute relates to any act or omission on the part of the society or its committee, or any past committee, 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 be referred to the Registrar within six years from the date on which the act or omission with reference to which the dispute arose, had occurred."
11. Thus by reason of a statutory rule a legal fiction has been created and the provisions of the Limitation Act have been made applicable in such cases.
12. Article 137 of the Schedule appended to the Limitation Act provides for limitation of three years for initiation of such a proceeding.
13. Although a question has arisen as to whether the Code would apply to a proceeding under Section 61(1) of the Act or not, in our opinion, the same is not very material.
14. Even if the provisions of Order 1, Rule 10 of the Code ipso jure are not applicable to a proceeding under Section 61{1) of the Act, the general principles underlying the same may be applicable.
15. However, having regard to the provisions of Section 21 of the Limitation Act such an application for impleading a person must be filed within the period of limitation. Order 1, Rule 10, sub-rule (5) of the Code is as follows :
"Subject to the provisions of the Indian Limitation Act, 1877 (15 of 1877), Section 22, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons."
16. The period of limitation during which such an application has to be filed has been provided for in Section 21 of the Limitation Act, 1963, which reads : "Effect of substituting or adding new plaintiff or defendant.--(I) Where after the institution of a suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been instituted when he was so made a party :
Provided that where the court is satisfied that the omission to include a new plaintiff or defendant was due to a mistake made in good faith it may direct that the suit as regards such plaintiff or defendant shall be deemed to have been instituted on any earlier date.
(2) Nothing in sub-section (1) shall apply to a case where a party is added or substituted owing to assignment or devolution of any interest during the pendency of a suit or where a plaintiff is made a defendant or a defendant is made a plaintiff."
17. No order under Section 21 of the Limitation Act was passed. In Ramlingam Chettiar v. P. K. Pattabiraman , it has been held thus :
"Section 21 of the Limitation Act contemplates two situations--one under the substantive provision which provides that where after filing of suit, a new plaintiff or defendant is substituted or added, the suit shall, as regards him, be deemed to have been brought on the day when he was added or substituted as a party in the suit. The second situation contemplated under the proviso to the substantive provision is where the court is satisfied that a new plaintiff or defendant was omitted to be added or substituted due to a mistake in good faith, the court may direct that the suit, as regard the newly added or substituted party, shall be deemed to have been instituted on any earlier date. Thus, under the proviso, if the court is satisfied, it can direct that the suit as regards newly added or substituted plaintiff or defendant shall be deemed to have been instituted on an earlier date. In such a case, the court after substituting or adding a party in the suit is required to pass a separate/ further order that the suit, as regards the newly added defendant or plaintiff, shall be deemed to have been instituted with effect from the date the suit was laid. Merely adding or substituting a plaintiff or defendant by the court is not enough. In the absence of any order that the impleadment of newly added or substituted party shall take effect from the date of institution of a suit, the period of limitation so far as the newly added or substituted (sic) shall run from the date of their impleadment in the suit."
18. A legal fiction as is well known must be read in its entirety. In East End Dwellings Co. Ltd. v. Finsbury Borough Council [1951] 2 All ER 587 (HL) Lord Asquith J. laid down the law in the following terms (page 599) :
"If one is bidden to treat an imaginary state of affairs as real, one must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which, if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. One of these in this case is emancipation from the 1939 level of rents. The statute says that one must imagine a certain state of affairs. It does not say that, having done so, one must cause or permit one's imagination to boggle when it comes to the inevitable corollaries of that state of affairs. As some of my noble and learned friends have pointed out, if Parliament had intended the meaning contended for by the respondents, nothing would have been easier than to provide that the value should be assessed as if no war damage had occurred. Even, however, if the meaning of the words to be construed were not plain and the 'policy' of the legislation could legitimately be invoked as an interpretative factor, I am far from subscribing to the view that the policy in question is that for which the respondents contend, or that its importation would produce the result which they desire."
19. Learned counsel for the appellant submitted that having regard to the fact that only certain provisions of the Code apply as would appear from Section 120 of the Act, it cannot be said that all the provisions of the Code would apply. We agree with the said contention. It is now trite that if under the Act only some provisions of the Code are applicable the same ipso facto would not mean that all other provisions of the Code would apply or by reason thereof the Tribunal can be said to be a court although it may have all the trappings of a court. But there cannot be any doubt whatsoever that general principles embodied in the Code may be made applicable in such proceedings. We may note that although the Code by reason of Section 141 thereof has no application in writ proceedings, general principles thereof like res judicata are applicable in a writ proceeding also. In that view of the matter we are of the opinion that although Order 1, Rule 10 of the Code as such may not apply but the general principles governing the same would apply subject to the conditions laid down therein. In the instant case, as noticed hereinbefore, the provisions of the Limitation Act are applicable and in that view of the matter Section 21 of the Limitation Act, 1963, and the principles governing Order 1, Rule 10, sub-rule (5) of the Code shall apply in the instant case.
20. In that view of the matter all the appeals except Writ Appeal No. 400 of 2001 must be allowed. So far as Writ Appeal No. 400 of 2001 is concerned, as therein a plea of mortgage had been taken the period of limitation provided for in the Limitation Act being 12 years the said application may be said to be within the stipulated period and as such Writ Appeal No. 400 of 2001 is dismissed.
21. However, before parting with this case we may note that after the arguments were over and judgment had been reserved, some counter-affidavits have been filed without obtaining any leave from this court or without filing any application in that regard and as such we have not taken into consideration the said statements made in the said counter-affidavit. No costs.