In the case of A.R. Antulay vs. R.S. Nayak, reported at AIR 1988SC 1531, in paragraph 189, the Hon'ble Apex Court makes reference to its
earlier judgment in the case of Mathura Prasad vs. Dossibai and finds that a
question relating to the jurisdiction of a Court cannot be deemed to have
been finally determined by an erroneous decision of the Court. If by an
erroneous interpretation of statute, the Court holds that it has no
jurisdiction, it cannot operate as res judicata. Similarly, erroneous decision
assuming such jurisdiction cannot operate res judicata between same parties,
whether the cause of action in the subsequent litigation is same or otherwise.
The Hon'ble Apex Court states that in determining the application of the rule
of res judicata, the court is not concerned with correctness or otherwise of
earlier judgment. The matter in issue, if it is one purely of fact, decided in
earlier proceeding by a competent court, must in a subsequent litigation
between same parties, be regarded as finally decided and cannot be reopened.
However, the Hon'ble Apex Court further states that a mixed question of law
and fact determined in earlier proceeding between the same parties may not,
for the same reason, be questioned in a subsequent proceeding between the
same parties. But when question is one purely of law and it relates to the
jurisdiction of the court or a decision of the Court sanctioning something
which is illegal, by resort to rule of res judicata, a party affected by the
decision is not precluded from challenging the validity of that order. TheHon'ble Apex Court states that a rule of procedure cannot supersede the law
of land.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH
WRIT PETITION NO. 4312 OF 2006
1. Pukhraj s/o Mohanlal Vyas,
Versus
1. Sanmitra nagri Sahakari Pata
Sanstha Limited,
a Cooperative Society, registered
under the M.C.S. Act, 1960,
CORAM : B.P. DHARMADHIKARI, J.
DATE OF PRONOUNCING THE JUDGMENT : JANUARY 08, 2007.
By this Writ Petition, the petitioners, borrowers have challenged
the judgment dated 27.1.2006 delivered by the Judge, Cooperative Court,
Amravati, in Dispute No.222 of 2005 and the judgment dated 27.7.2006
delivered by the Member, Maharashtra State Cooperative Appellate Court,
Mumbai, Nagpur Bench, Nagpur, in Appeal No.10 of 2006 confirming it.
Earlier also they filed a writ petition vide Writ Petition No.2460 of 2005
which was decided by this Court on 29.7.2005. Then dispute before the
Cooperative Court was directed to be decided within six months from the
date of judgment of this Court and the petitioner was protected subject to his
furnishing bank guarantee for an amount of Rs. Three lakhs. It is in this
background that the parties urged for expeditious disposal of writ petition
itself on merits at the stage of admission. Accordingly, writ petition was
heard from time to time and is being disposed of finally.
2. In view of the earlier litigation which ultimately resulted in filing
of Writ Petition No.2460 of 2005, the facts are not much in dispute.
Respondent No.1 before this Court is a Cooperative Society registered as
Credit Cooperative Society having its registered office at Amravati. The
petitioners had applied for loan to said bank in the year 1991 and accordingly
loan of Rs.1,87,500/- was sanctioned to them. In the year 1993, Respondent
No.1 – Society started recovery by instituting proceedings under Section 101
of Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as
the Act) and the Assistant Registrar Cooperative Societies accordingly issued
a recovery certificate with interest @ 21% per annum on 4.4.2000. The said
recovery certificate was challenged by the petitioners by filing Revision under
Section 154 of Maharashtra Cooperative Societies Act vide Revision No.45 of
2000 and that Revision was dismissed on 20.8.2001. The petitioner then filed
Writ Petition No.3134 of 2001 before this Court and it appears that the
learned Single Judge of this Court directed the petitioners to deposit amount
of Rs. One lakh by order dated 4.9.2002. The petitioners filed Letters Patent
Appeal No.169 of 2002. It was allowed but in the meanwhile, the petitioners
deposited amount of Rs. One lakh. Writ Petition was ultimately allowed and
the Divisional Joint Registrar was directed to hear both the parties and take
fresh decision. The Revision was decided again on 20.9.2003 and recovery
certificate was set aside and the matter was remanded back to lower
authority. Taluqa Deputy Registrar, Amravati, on 2.12.2003 issued the
recovery certificate under Section 101 of the Act for amount of Rs.5,23,295/-.
The petitioners again challenged said certificate vide Revision No.39 of 2003
and as it was not accompanied by mandatory deposit of 50%, Writ Petition
No.796 of 2004 was filed before this Court by the petitioners. This Court
then directed the Divisional Joint Registrar to decide pending revision within
15 days. The Revision was again allowed and the matter was remanded
back. Taluqa Deputy Registrar on 16.3.2005 granted recovery certificate for
Rs.6,59,142/- with future interest at 21% per annum with quarterly rests.
The petitioners filed Revision No. 21 of 2005 before the Divisional Joint
Registrar and on 13.5.2005, the said Revision came to be dismissed. Writ
Petition No.2460 of 2005 was then filed before this Court and the order as
mentioned above came to be passed in it on 29 /7/2005.
3. It appears that in the meanwhile, the present petitioners filed
Dispute under Section 91 of the Act sometimes in the month of March 2005
before Co-operative Court and in it they sought direction to recalculate the
outstanding amount in their loan account after adjusting fixed deposit
amount of Rs.75,000/- with interest thereon and the amount of Rs.18,750/-
invested towards shares on 17.5.1993 and dividend upon it and subsequent
payments made by the petitioners thereafter. Declaration was also sought
that no amount was outstanding from the petitioners to the Society. The said
Dispute was opposed by Respondent No.1 – Society on various grounds
including the tenability of dispute under Section 91 of the Act in the matter
in view of the decision under Section 101 of the Act. The dispute came to be
decided on 27.1.2006 and Cooperative Court held that the petitioners –
disputants before it could not prove that accounts of Respondent No.1 –
Society were not correct and he also could not prove that they were entitled to
recalculation of accounts. It, therefore, dismissed the dispute with costs. The
cooperative appellate court has dismissed the appeal preferred by the present
petitioners by upholding the award/ judgment of the Cooperative Court.
4. I have heard Shri Bhangde, learned Senior Advocate with Shri
Agrawal, Advocate for the petitioners Shri M.D. Samel, learned Advocate for
respondent No.1 and the learned AGP for respondent No.2.
5. The learned Senior Advocate has argued that the Cooperative
Court has erred in dismissing the dispute under erroneous impression. He
argues that Respondent No.1 – Cooperative Society has not led any oral
evidence and in these circumstances, the evidence led by present petitioners
ought to have been accepted. The attention has been invited to discussion on
issues No. 11 and 12 by the Cooperative Court to state that the burden has
been wrongly placed upon the petitioners by the Cooperative Court. It is
argued that the best evidence to show correctness or otherwise of accounts
maintained by it was with Respondent No.1 and Respondent No.1 therefore
ought to have produced entire evidence and accounts in this respect before
the Cooperative Court. It is contended that it was not necessary for the
petitioners to call for those accounts and it is argued that as the society did
not furnish said accounts before the Cooperative Court, an adverse inference
under Section 114(g) of the Indian Evidence Act ought to have been drawn
against Respondent No.1. The learned Senior counsel has invited attention
to the judgment reported in the case of Gopal Krishnaji vs. Mohd. Haji Latif,
reported at AIR 1968 SC 1413, Punit Rai vs. Dinesh Chaudhary, reported at
(2003) 8 SCC 204 and City Bank N.A. vs. Standard Chartered Bank, reported
at (2004) 1 SCC 12, in support of the contention that merely because the
dispute is filed by the petitioners and not by Respondent No.1, Respondent
No.1 - Cooperative Society is not absolved of its responsibility to produce best
evidence available with it to satisfy the Court about genuineness of its stand.
It is argued that the Cooperative Court as also Cooperative Appellate Court
ought to have appreciated the fact that there was challenge to correctness or
otherwise of the accounts maintained by Respondent No.1 and the petitioners
by expert’s evidence demonstrated that there were errors. It is contended
that in such circumstances, failure to apply law correctly has resulted in
refusal on the part of Cooperative Court and Cooperative Appellate Court to
discharge jurisdiction available to it. The attention is also invited to
statement of accounts placed on record by present Respondent No.1 to show
how there are some errors in it. The attention is even invited to application
moved under Section 101 of the Act by Respondent No.1 to point out that the
application nowhere mentions quarterly rests and there is no prayer as such
for quarterly rests.
6. The petitioners have also invited attention to promissory note
which mentions the rate of interest at 21% without specifying any interval of
rests. The agreement on which Respondent No.1 placed reliance is also
pointed out to show that the agreement has not been proved before the
Cooperative Court at all and what has been proved is only signature of
petitioners upon it. It is stated that this agreement mentions quarterly rests
but then said clause and agreement has not at all been proved. Attention has
been invited to provisions of Section 79 and Section 80 of Negotiable
Instruments Act to state that in these circumstances rate of interest as
mentioned in promissory note alone is determinative. The attention is also
invited to evidence of Chartered Accountant Shri Mehta and interest
calculation done by him at Exh. 53 on record of Cooperative Court. It is
stated that this interest calculation has been done on the basis of material
available with the petitioners and said Chartered Accountant has also
considered the fixed deposit receipts of Rs.26,620/- and Rs.48,380/- with there
due date of maturity and has accounted for it in his statement of accounts. It
is argued that as per statement of accounts prepared by this Chartered
Accountant after giving due credit to the petitioners for the Fixed Deposit
Receipts mentioned above, it is apparent that the amount outstanding was at
the most of Rs.95,536/- while the petitioners paid about Rs. One lakh by
17.4.2003. It is contended that Respondent No.1 – Society therefore could
have at most recovered interest for one year only. It is pointed out that this
aspect has not been appropriately appreciated either by the Cooperative
Court or by the Cooperative Appellate Court. It is stated that even
appreciation of evidence of Shri Mehta by Cooperative Court or Cooperative
Appellate Court shows non application of mind. It is stated that reasons put
forth for not accepting the said evidence are unsustainable. It is stated that
even Cooperative Appellate Court has misdirected itself by observing that
statement of account has been prepared uni-laterally without considering the
records of the Society. It is argued that it was for Cooperative Society to
place its record for consideration before the Cooperative Court and in view of
the evidence of expert placed on record in the light of Statement of Account,
the dispute ought to have been allowed. The learned Senior Advocate has
also placed reliance upon the judgment of the Hon'ble Apex Court in the case
of Ishwar Bhai C. Patel vs. Harihar Behera, reported at 1999 (3) SCC 457
particularly paragraphs 23 and 29.
7. As against this Shri Samel, Advocate for respondent No.1 has
contended that there was no plea of improper accounting or protest about
quarterly compounding of interest in dispute before the Cooperative Court.
It is further argued that case law about burden of proof cited by the
petitioners is totally irrelevant because nature of documents concerned in
those cases is entirely different. It is contended that those cases consider
documents which relate to title or description or location or situation of
property. It is contended that the documents like statement of accounts are
not considered in those judgments. It is further argued that the dispute
raised before the Cooperative Court was containing very specific grievance.
Court’s attention is also invited to grievance as made by the petitioners in
paragraph 3 of their dispute. It is contended that 10% of loan amount is
required to be invested in the shares of Respondent No.1 – Society as per byelaws. It is further stated that disputant made grievance that at the time of
disbursement of loan, signatures of disputants were obtained on blank
documents without explaining contents thereof. Attention is also invited to
discussion in paragraph 4A of dispute in this respect and it is contended that
grievance made is against Shri Alashi and Shri Deshpande and not against
Respondent No.1. The contents of Fixed Deposit Receipts are also pointed
out to state that interest at 15.5% was to be compounded quarterly and
maturity value is also mentioned in the said document. It is contended that
premature encashment of Fixed Deposit Receipts results in reduced rate of
interest. It is further contended that there was no question of premature
appropriation of these Fixed Deposit Receipts towards loan account. It is
further argued that dispute about rate of interest or its quarterly rests has
been raised for the first time in writ petition and there was no such dispute
before the Cooperative Court or Cooperative Appellate Court and such a
dispute cannot be considered for the first time in writ jurisdiction. It is
stated that there are no pleadings as required under Order 6, Rule 2 of Civil
Procedure Code in this respect. It is repeated by the learned Advocate that
only dispute raised before the Cooperative Court was about appropriation of
paragraph 3 of their dispute. It is contended that 10% of loan amount is
required to be invested in the shares of Respondent No.1 – Society as per byelaws. It is further stated that disputant made grievance that at the time of
disbursement of loan, signatures of disputants were obtained on blank
documents without explaining contents thereof. Attention is also invited to
discussion in paragraph 4A of dispute in this respect and it is contended that
grievance made is against Shri Alashi and Shri Deshpande and not against
Respondent No.1. The contents of Fixed Deposit Receipts are also pointed
out to state that interest at 15.5% was to be compounded quarterly and
maturity value is also mentioned in the said document. It is contended that
premature encashment of Fixed Deposit Receipts results in reduced rate of
interest. It is further contended that there was no question of premature
appropriation of these Fixed Deposit Receipts towards loan account. It is
further argued that dispute about rate of interest or its quarterly rests has
been raised for the first time in writ petition and there was no such dispute
before the Cooperative Court or Cooperative Appellate Court and such a
dispute cannot be considered for the first time in writ jurisdiction. It is
stated that there are no pleadings as required under Order 6, Rule 2 of Civil
Procedure Code in this respect. It is repeated by the learned Advocate that
only dispute raised before the Cooperative Court was about appropriation ofFixed Deposit Receipts and not accounting of payment of Rs.15,000/- made by
the petitioners to Shri Alashi and Shri Deshpande. It is argued that the
dispute as filed under Section 91 of the Act could not have been gone into
because adjudication under Section 101 of the Act attained finality. It is
further stated that in view of the judgment of the learned Single Judge of this
Court dated 29.7.2005, the said certificate under Section 101 attained
finality. It is further argued that plea of bar of jurisdiction has been
specifically raised by Respondent No.1 before the Cooperative Court and also
before the Cooperative Appellate Court. Shri Samel, Advocate states that
accounts were filed in Section 101 proceedings and without accounts,
recovery certificate could not have been granted. It is further argued that
accounts were also furnished to the petitioners during proceedings in their
earlier Writ Petition No.2460 of 2005. The attention has been invited to
pages 67 to 70 of Writ Petition No. 2460 of 2005 in this respect.
8. To substantiate that the earlier adjudication under Section 101 of
the Act has become final and operated as res judicata, Shri Samel, Advocate
has invited attention to the judgment of Division Bench of this Court in the
case of Vasundhara vs. R.B.S. Bank Ltd., reported at 2003 (4) Mh.L.J. 315
and K.V.S. Society Ltd. vs. Dinkar Bhimrao, reported at 2003 (1) Mh.L.J.
152. To show that the petitioners are challenging accounts on new grounds
in Writ Petition and said challenge cannot be entertained, the learned
counsel has placed reliance upon the judgment in the case of Khimji Vidhu
vs. Premier High School, reported at 2000 AIR SCW 2333, Ouseph Mathai
vs. M. Abdul Khadir, reported at AIR 2002 SC 110, R.P. Sawant vs. Bajaj
Auto Ltd., reported at 2002(1) Mh.L.J. 626, S.A.R.D.S.P. Mandal vs.
Bhujgonda, reported at 2003(3) Mh.L.J. 602 and Kantilal vs. Sayarabai,
reported at 2003(3) Mh.L.J. 52. To justify the action of Respondent No.1 of
not prematurely appropriating Fixed Deposit Receipts towards loan account,
attention has been invited to Division Bench judgment of this Court in the
case of State Bank of India vs. Neela Ashok, reported at 2000(1) Mh.L.J. 801.
The attention has been invited to statement of account to show that
appropriation of amount of Fixed Deposit Receipts has been done properly.
Lastly Shri Samel, Advocate states that the courts below have erroneously
held that issue of tenability of dispute under Section 91 of the Act stood
foreclosed in view of the judgment of this Court in Writ Petition No.2460 of
2005.
9. In reply arguments, the Senior Advocate has contended that the
pleadings about correctness of statement of accounts were very much there indispute and he has taken the court through dispute as also written statement
to point out that Respondent No.1 – Society also understood its existence. It
is stated that though Respondent No.1 – Society did not lead oral evidence,
they tendered necessary documents to justify their action but ultimately
could not prove their stand. The attention is also invited to written
arguments filed by the petitioners before the Cooperative Court and reliance
is placed upon the judgment of the Hon'ble Apex Court in the case of Ram
Sarup Gupta vs. Bishun Narain Inter College, reported at AIR 1987 SC 1242,
to point out how pleadings are to be construed. About objection to viability of
dispute under Section 91 of the Act, attention has been invited to the
judgment of the learned Single Judge of this Court dated 29.7.2005 and to
state that said judgment became final because Respondent No.1 – Society did
not challenge it. It is contended that said judgment cannot be reopened by
Respondent No.1 – Society again in these proceedings. The reliance has been
placed upon the judgment of the Hon'ble Apex Court in the case of Authorised
Officer (Land Reforms) vs. M.M. Krishnamurthy Chetty, reported at (1998) 9
SCC 138 and Shipping Corporation of India Ltd. vs. C.L. Jain Woollen Mills,
reported at (2001) 5 SCC 345 for this purpose. Lastly the learned Senior
Advocate for the petitioners has argued that there was failure on the part of
the Courts below to draw adverse inference. The Statement of Account andevidence of Chartered Accountant of the petitioners could not have been
rejected and provisions of Sections 79 and 80 of Negotiable Instruments Act,
could not have been overlooked by the Courts below hence there is scope of
interference in writ jurisdiction. The learned Senior Advocate has placed
reliance upon the judgment of the Hon'ble Apex Court in the case of
Vindhyachal Prasad Jaiswal vs. VIIth Additional District Judge, reported at
1994 Supp. (2) SCC 137 and Ashok Kumar vs. Sita Ram, reported at (2001) 4
SCC 478, to substantiate his stand.
10. In view of the arguments advanced before me, the first and
foremost question which falls for consideration is whether dispute under
Section 91 of the Act was maintainable before the Cooperative Court at the
instance of present petitioners against whom an order under Section 101 of
the Act is also passed. The learned Senior Advocate for Petitioners has
placed reliance upon the judgment in case of Authorised Officer (Land
Reforms) vs. M.M. Krishnamurthy Chetty, (supra). Perusal of this judgment
reveals that there the High Court had remanded the matter back to the
Authorised Officer for fresh consideration in the light of judgment of High
Court in the case of Naganatha Ayyar vs. Authorised Officer. When the
matter was pending before the Authorised Officer, the Hon'ble Apex Courtreversed the judgment of High Court in Naganatha Ayyar vs. Authorised
Officer. The Authorised Officer thereafter decided remanded ceiling
proceedings in the light of judgment of the Hon'ble Apex Court. The land
owner came in revision before the High Court with a stand that order of
remand passed by the High Court asking the Authorised Officer to decide the
dispute in the light of Naganatha Ayyar vs. Authorised Officer was not
challenged by the Authorised Officer before the Supreme Court and as such
said remand order has become final. The land owner contended that the
Authorised Officer was duty bound to pass orders in the light of judgment of
Naganatha Ayyar vs. Authorised Officer only. The High Court accepted said
contention and then Authorised Officer approached the Hon'ble Apex Court.
The Hon'ble Apex Court maintained the order of High Court by observing
that the order of remand passed by the High Court attained finality and
hence the Authorised Officer was duty bound to consider the position in the
light of judgment in the case of Naganatha Ayyar vs. Authorised Officer,
though said judgment was reversed later on by it.
11. In Shipping Corporation of India Ltd. vs. C.L. Jain Woollen Mills,
(supra) relied upon by petitioners the Hon'ble Apex Court has considered the
question whether in the facts of the case before it, the importer of goods canbe made liable to pay demurrage/ detention charges. It was undisputed that
under the terms and conditions of Bill of Lading, the appellant carrier had a
lien over the goods until all the dues were paid and the goods having been
kept, not being released, the carrier-Corporation was entitled to charge
demurrage charges. Appellant carrier before Hon’ble Apex Court was not
party to these proceedings. But in view of the specific directions of the Delhi
High Court in writ petition filed by the importer of the goods, challenging the
legality of the order of the Customs Authorities in confiscating the goods and
levying penalty which reached finality because of dismissal of Special Leave
Petition filed against it by the Union of India, the Hon'ble Apex Court has
held that (in view of the said directions of Delhi High Court) the liability of
importer to pay demurrage charges ceases and the question could not have
been reopened.
12. Thus, perusal of both rulings above clearly show that the question
considered therein was not pertaining to inherent lack of jurisdiction. Here,
the learned counsel for respondent No.1 has specifically contended that in
view of the provisions of Section 101 of the Act read with Section 154 and
Section 163 thereof, dispute under Section 91 of the Act was not
maintainable. The perusal of judgment of the Division Bench of this Court inthe case of Vasundhara vs. R.B.S. Bank Ltd. (supra), particularly paragraphs
5 and 6 support the contentions of Respondent No.1. The said paragraphs
read as under :
“5. Section 101 was inserted in the statute book by
Maharashtra Act 27 of 1969. Intention of the legislature while
enacting the provisions of Section 101 was to provide a speedy
remedy to class of societies referred to in the section against its
defaulting members. The section provides summary method of
recovery of loan, seasonal finance, subscription etc. of certain
types of societies from their members upon the societies
furnishing statement of account in respect of the arrears to the
Registrar. Sub-section (1) provides that the Registrar may
make enquiry in respect thereof and then issue certificate for
recovery of arrears. Sub-section (2) empowers the Registrar to
take action suo motu if the society fails to take action under
sub-section (1). Sub-section (3) provides that the amount of
arrears stated in the certificate is final and conclusive proof of
the arrears stated therein and the same is recoverable,
according to law, for the time being in force, for recovery of
land revenue.
6. The opening words of section 101 “Notwithstanding
anything contained in sections 91, 93 and 98” gives overriding
effect to the said section. Therefore, for recovery of loans,
subscription, seasonal finance etc. it is not necessary for the
society to refer the dispute to the Cooperative Court under
section 91. The plain reading of section 101 reveals that a
special class of societies is carved out who can apply to the
competent authority under section 101 and those societies
alone can obtain recovery certificate in accordance with the
said section. The provisions of sections 91 and 101 are
separate and distinct and act in different spheres. By virtue of
section 101 a summary and speedy remedy has been provided
to certain types of societies. Further it is to be noted that by
virtue of section 101 finality is attached to the certificate
granted by the Registrar under this section. It is, therefore,
clear that the certificate issued under section 101 cannot be
challenged under Section 91. Only remedy of the party
aggrieved is to file revision application under section 154 of the
Maharashtra Cooperative Societies Act. Section 101 is a
speedy remedy to recover the amount and when statute gives
finality to the action or order it can be challenged only a
manner prescribed by statute. Therefore, a dispute under
section 91 would be completely barred. We may mention that
two learned single Judges of this Court have taken a view that
certificate under section 101 is final and conclusive and the
dispute to challenge the certificate cannot be filed under
section 91. (See Shri Kedarling Vikas Seva Scy. Ltd. vs.
Dinkar Bhimrao Raut and ors., 2003(1) Mh.L.J. 152 = 2003 (1)
All MR and Bhusawal People's Bank Ltd. vs. Vijay Ramdas
Rane and Ors. (Writ Petition No. 2277 of 2001 decided by Naik
J. on 30th/31st January, 2002
13. The learned Single Judge of this Court in the case of K.V.S.
Society Ltd. vs. Dinkar Bhimrao, (supra) again takes the similar view.
There, after rejection of writ petition, Respondent No.1 before the High Court
filed dispute under Section 91 of the Act for declaration that entry shown in
counter was not binding on them and they were not required to pay said
amount and further relief that certificate issued under Section 101 of the Act
against them in respect of said amount should not be allowed to be enforced
by the petitioner society. In paragraph 7, the learned Single Judge has
concluded that such dispute under Section 91 of the Act was barred and
hence writ petition filed by the Cooperative society impugning cognizance of
such dispute has been allowed.
14. In this respect reference can also be made to Division Bench
judgment of this Court in the case of K.V. Sundaram vs. Raj Rajeshwari
Cooperative Housing Society, reported at 1980 Mh.L.J. page 4. There the
controversy has been considered in the light of provisions of Section 35 of Act
which deals with expulsion of member and Rule 29 of Maharashtra
Cooperative Societies Rules, 1961, which provides for summary enquiry in
the matter of such expulsion. The Division Bench has concluded that in view
of the provisions of Sections 152, 154 and 163, dispute about the expulsion ofmember could not have been raised under Section 91 of the Act. The
Division Bench noticed that decision under Section 35 has been made
appealable under Section 152(4) and said order subject to revision is final.
The reference has also been made to revisional jurisdiction under section 154.
The provisions of Section 91 of the Act with Section 149 are also considered
by Division Bench. Section 97 providing appeal to Cooperative Appellate
Court is also taken into consideration and then provisions of Section 149(11)
are mentioned to point out finality given to orders passed in the appeal or in
revision by Cooperative Appellate Court. The Division Bench has also
mentioned Section 163(3) which prohibits challenge to orders, decisions or
awards in any other Court upon merits or upon any other ground whatsoever.
The observations in paragraph 19 of this judgment are important and said
observations at page 15 of the report are as under :
“Now, once the Registrar decides whether he will
give approval to the Resolution or not and that order is
subjected to an appeal, then subject to the provisions of section
154, that order or if there is an appeal, the appellate order will
become final, in view of the express provisions of section
154(2). Now, when the finality is given under the Act to
certain orders or decisions, then those decisions are not open to
challenge under the very Act except in the manner provided by
the Act. If the decision rendered in a proceeding under section
35 confirmed or modified under section 152, is allowed to be
challenged under section 91, an anomaly will be created. The
provisions under section 152(4) will then become otiose. Not
only are orders referred to in section 152 given a finality under
the Act but they are further made final under section 163(3) of
the Act and they cannot be challenged in any Court. There is,
therefore, a clear indication in section 152(4) that the orders
which are made final under that provision could be subjected to
scrutiny only in the revisional jurisdiction under the Act and
cannot be subjected to scrutiny or brought into question under
any other provision under the Act. Thus notwithstanding the
fact that section 91 does not expressly exclude the proceedings
under section 35, on a harmonious construction of the
provisions of sections 35, 152 and 154 on the one side and
sections 91, 97 and 149 on the other, will have to be held that
each one of these two sets of provisions must independently
operate in their own fields and the correctness of the order
under section 35 cannot, therefore, be subjected to scrutiny or
adjudication in a proceeding under section 91.”
( emphasis added)
15. It is, therefore, clear that when provisions of Maharashtra
Cooperative Societies Act, provide for a remedy of revision and said order has
been made final, the petitioners could not have raised any dispute under
Section 91 of the Act to challenge the recovery certificate issued under
Section 101 of the Act. However, the petitioners contend that dispute under
Section 91 of the Act is tenable because of orders of this Court dated
29.7.2005 in Writ Petition No.2460 of 2005. After perusal of judgment of this
Court dated 29.7.2005, I am not in a position to accept this argument. After
briefly mentioning the facts and rival contentions in first four paragraphs, in
paragraph 5 this Court has found that the interest of justice would be met if
it is directed that the impugned order should not be given effect to until a
decision is given by Cooperative Court in the dispute filed by the petitioners.
It is, therefore, apparent that this Court has not quashed and set aside the
issuance of recovery certificate in any way or revisional order maintaining it.
This Court has also not said anything about tenability of dispute under
Section 91 of the Act or otherwise. In paragraph 6 of said judgment, this
Court has directed the petitioners to furnish bank guarantee of Rs. Three
lakhs with Cooperative Court and in paragraph 7 it has been made clear that
in default, the recovery certificate would become operative immediately. In
paragraph 8, the learned Single Judge has clarified that the Cooperative
Court would decide the dispute on its own merits without being influenced by
any observations made by any of the authorities. It is, therefore, not possible
to interpret this judgment to mean that this Court has permitted proceedings
under Section 91 of the Act to go on merits and any challenge to those on the
ground of tenability of proceedings was foreclosed. The Cooperative Courthas not properly considered the observations of the learned Single Judge of
this Court in this respect while answering issues No. 14 and 15 before it.
16. In the judgment in the case of Ram Sewak vs. Munnalal, reported
at AIR 1988 SC 452, the Hon'ble Apex Court has made certain important
observations about the concept of res judicata. The Hon'ble Apex Court has
noticed its earlier observations in the case of Hazi Abdul Karim vs. Mohd.
Ismail and found in paragraph 10 that finding only on collateral fact of
jurisdiction cannot operate as res judicata in later proceedings between the
same parties. The Hon'ble Apex Court notices that even though in previous
proceeding a decision of collateral fact about jurisdiction is wrongly given, it
is binding on parties for limited purpose i.e. insofar as those proceedings are
concerned and it would completely defeat the ends of justice if such erroneous
decisions are allowed to become final and perpetuate itself. The Hon'ble Apex
Court notices that it would be conducive to ends of justice that in later
regular proceedings, parties should not be thwarted on earlier wrong findings
and should be afforded full opportunity of demonstrating that condition
precedent to the existence of jurisdiction were absent.
17. In the case of A.R. Antulay vs. R.S. Nayak, reported at AIR 1988SC 1531, in paragraph 189, the Hon'ble Apex Court makes reference to its
earlier judgment in the case of Mathura Prasad vs. Dossibai and finds that a
question relating to the jurisdiction of a Court cannot be deemed to have
been finally determined by an erroneous decision of the Court. If by an
erroneous interpretation of statute, the Court holds that it has no
jurisdiction, it cannot operate as res judicata. Similarly, erroneous decision
assuming such jurisdiction cannot operate res judicata between same parties,
whether the cause of action in the subsequent litigation is same or otherwise.
The Hon'ble Apex Court states that in determining the application of the rule
of res judicata, the court is not concerned with correctness or otherwise of
earlier judgment. The matter in issue, if it is one purely of fact, decided in
earlier proceeding by a competent court, must in a subsequent litigation
between same parties, be regarded as finally decided and cannot be reopened.
However, the Hon'ble Apex Court further states that a mixed question of law
and fact determined in earlier proceeding between the same parties may not,
for the same reason, be questioned in a subsequent proceeding between the
same parties. But when question is one purely of law and it relates to the
jurisdiction of the court or a decision of the Court sanctioning something
which is illegal, by resort to rule of res judicata, a party affected by the
decision is not precluded from challenging the validity of that order. TheHon'ble Apex Court states that a rule of procedure cannot supersede the law
of land.
18. Similar view is taken by the Hon'ble Apex Court in the judgment
in the case of Life Insurance Corporation of India vs. M/s. India Automobiles
& Co., reported at AIR 1991 SC 884, in paragraph 22 and recently in
Management of M/s. Sonepat Cooperative Sugar Mills Ltd. vs. Ajit Singh,
reported at AIR 2005 SC 1050. It is, therefore, apparent that there can be no
objection of res judicata when question of jurisdiction of Cooperative Court to
take cognizance of the matter before it under Section 91 of the Act is raised.
In view of the facts mentioned above, it is clear that there was no issue in
relation to jurisdiction of Cooperative Court under Section 91 of the Act
before the learned Single Judge in Writ Petition No.2460 of 2005 and there
was no need to apply mind to said aspect in that petition. No such
arguments either in favour of jurisdiction or against jurisdiction were
advanced by any of the parties. It is, therefore, difficult to hold that said
judgment of learned Single Judge dated 29.7.2005 in Writ Petition No. 2460
of 2005 foreclosed the scrutiny into the question of jurisdiction of Cooperative
Court.19. It is, therefore, apparent that this Court was not inclined on
29.7.2005 to interfere in the orders passed under Section 101 of the Act or
revisional orders passed by the Divisional Joint Registrar. Those orders,
therefore, attained finality and the petitioners could not have got those
orders rescinded or modified in any way in their dispute under Section 91 of
the Act. The errors alleged by petitioners like in accountings or in
appropriation or adjustment of F.D.Rs. or share money, failure of Society to
prove loan agreement, interest rate stipulated in promissory note & use of
quarterly rests are all questions of facts adjudication of which has attained
finality. These issues do not permit reopening of orders passed by Taluqa
Deputy Registrar on 16.3.2005 & by the Divisional Joint Registrar on
13.5.2005, which formed subject matter of Writ Petition No. 2460 of 2005
dismissed on 29 /7/2005 In view of this position, it is apparent that dispute
filed by the petitioners before the Cooperative Court at Amravati was itself
not maintainable. In view of this finding, it is not necessary for this Court to
consider other arguments advanced by respective counsel in this writ
petition.
20. Writ Petition is accordingly dismissed. Rule discharged.
However, in the facts and circumstances of the case, there shall be no order as to costs.
Print Page
earlier judgment in the case of Mathura Prasad vs. Dossibai and finds that a
question relating to the jurisdiction of a Court cannot be deemed to have
been finally determined by an erroneous decision of the Court. If by an
erroneous interpretation of statute, the Court holds that it has no
jurisdiction, it cannot operate as res judicata. Similarly, erroneous decision
assuming such jurisdiction cannot operate res judicata between same parties,
whether the cause of action in the subsequent litigation is same or otherwise.
The Hon'ble Apex Court states that in determining the application of the rule
of res judicata, the court is not concerned with correctness or otherwise of
earlier judgment. The matter in issue, if it is one purely of fact, decided in
earlier proceeding by a competent court, must in a subsequent litigation
between same parties, be regarded as finally decided and cannot be reopened.
However, the Hon'ble Apex Court further states that a mixed question of law
and fact determined in earlier proceeding between the same parties may not,
for the same reason, be questioned in a subsequent proceeding between the
same parties. But when question is one purely of law and it relates to the
jurisdiction of the court or a decision of the Court sanctioning something
which is illegal, by resort to rule of res judicata, a party affected by the
decision is not precluded from challenging the validity of that order. TheHon'ble Apex Court states that a rule of procedure cannot supersede the law
of land.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH
WRIT PETITION NO. 4312 OF 2006
1. Pukhraj s/o Mohanlal Vyas,
Versus
1. Sanmitra nagri Sahakari Pata
Sanstha Limited,
a Cooperative Society, registered
under the M.C.S. Act, 1960,
CORAM : B.P. DHARMADHIKARI, J.
DATE OF PRONOUNCING THE JUDGMENT : JANUARY 08, 2007.
By this Writ Petition, the petitioners, borrowers have challenged
the judgment dated 27.1.2006 delivered by the Judge, Cooperative Court,
Amravati, in Dispute No.222 of 2005 and the judgment dated 27.7.2006
delivered by the Member, Maharashtra State Cooperative Appellate Court,
Mumbai, Nagpur Bench, Nagpur, in Appeal No.10 of 2006 confirming it.
Earlier also they filed a writ petition vide Writ Petition No.2460 of 2005
which was decided by this Court on 29.7.2005. Then dispute before the
Cooperative Court was directed to be decided within six months from the
date of judgment of this Court and the petitioner was protected subject to his
furnishing bank guarantee for an amount of Rs. Three lakhs. It is in this
background that the parties urged for expeditious disposal of writ petition
itself on merits at the stage of admission. Accordingly, writ petition was
heard from time to time and is being disposed of finally.
2. In view of the earlier litigation which ultimately resulted in filing
of Writ Petition No.2460 of 2005, the facts are not much in dispute.
Respondent No.1 before this Court is a Cooperative Society registered as
Credit Cooperative Society having its registered office at Amravati. The
petitioners had applied for loan to said bank in the year 1991 and accordingly
loan of Rs.1,87,500/- was sanctioned to them. In the year 1993, Respondent
No.1 – Society started recovery by instituting proceedings under Section 101
of Maharashtra Cooperative Societies Act, 1960 (hereinafter referred to as
the Act) and the Assistant Registrar Cooperative Societies accordingly issued
a recovery certificate with interest @ 21% per annum on 4.4.2000. The said
recovery certificate was challenged by the petitioners by filing Revision under
Section 154 of Maharashtra Cooperative Societies Act vide Revision No.45 of
2000 and that Revision was dismissed on 20.8.2001. The petitioner then filed
Writ Petition No.3134 of 2001 before this Court and it appears that the
learned Single Judge of this Court directed the petitioners to deposit amount
of Rs. One lakh by order dated 4.9.2002. The petitioners filed Letters Patent
Appeal No.169 of 2002. It was allowed but in the meanwhile, the petitioners
deposited amount of Rs. One lakh. Writ Petition was ultimately allowed and
the Divisional Joint Registrar was directed to hear both the parties and take
fresh decision. The Revision was decided again on 20.9.2003 and recovery
certificate was set aside and the matter was remanded back to lower
authority. Taluqa Deputy Registrar, Amravati, on 2.12.2003 issued the
recovery certificate under Section 101 of the Act for amount of Rs.5,23,295/-.
The petitioners again challenged said certificate vide Revision No.39 of 2003
and as it was not accompanied by mandatory deposit of 50%, Writ Petition
No.796 of 2004 was filed before this Court by the petitioners. This Court
then directed the Divisional Joint Registrar to decide pending revision within
15 days. The Revision was again allowed and the matter was remanded
back. Taluqa Deputy Registrar on 16.3.2005 granted recovery certificate for
Rs.6,59,142/- with future interest at 21% per annum with quarterly rests.
The petitioners filed Revision No. 21 of 2005 before the Divisional Joint
Registrar and on 13.5.2005, the said Revision came to be dismissed. Writ
Petition No.2460 of 2005 was then filed before this Court and the order as
mentioned above came to be passed in it on 29 /7/2005.
3. It appears that in the meanwhile, the present petitioners filed
Dispute under Section 91 of the Act sometimes in the month of March 2005
before Co-operative Court and in it they sought direction to recalculate the
outstanding amount in their loan account after adjusting fixed deposit
amount of Rs.75,000/- with interest thereon and the amount of Rs.18,750/-
invested towards shares on 17.5.1993 and dividend upon it and subsequent
payments made by the petitioners thereafter. Declaration was also sought
that no amount was outstanding from the petitioners to the Society. The said
Dispute was opposed by Respondent No.1 – Society on various grounds
including the tenability of dispute under Section 91 of the Act in the matter
in view of the decision under Section 101 of the Act. The dispute came to be
decided on 27.1.2006 and Cooperative Court held that the petitioners –
disputants before it could not prove that accounts of Respondent No.1 –
Society were not correct and he also could not prove that they were entitled to
recalculation of accounts. It, therefore, dismissed the dispute with costs. The
cooperative appellate court has dismissed the appeal preferred by the present
petitioners by upholding the award/ judgment of the Cooperative Court.
4. I have heard Shri Bhangde, learned Senior Advocate with Shri
Agrawal, Advocate for the petitioners Shri M.D. Samel, learned Advocate for
respondent No.1 and the learned AGP for respondent No.2.
5. The learned Senior Advocate has argued that the Cooperative
Court has erred in dismissing the dispute under erroneous impression. He
argues that Respondent No.1 – Cooperative Society has not led any oral
evidence and in these circumstances, the evidence led by present petitioners
ought to have been accepted. The attention has been invited to discussion on
issues No. 11 and 12 by the Cooperative Court to state that the burden has
been wrongly placed upon the petitioners by the Cooperative Court. It is
argued that the best evidence to show correctness or otherwise of accounts
maintained by it was with Respondent No.1 and Respondent No.1 therefore
ought to have produced entire evidence and accounts in this respect before
the Cooperative Court. It is contended that it was not necessary for the
petitioners to call for those accounts and it is argued that as the society did
not furnish said accounts before the Cooperative Court, an adverse inference
under Section 114(g) of the Indian Evidence Act ought to have been drawn
against Respondent No.1. The learned Senior counsel has invited attention
to the judgment reported in the case of Gopal Krishnaji vs. Mohd. Haji Latif,
reported at AIR 1968 SC 1413, Punit Rai vs. Dinesh Chaudhary, reported at
(2003) 8 SCC 204 and City Bank N.A. vs. Standard Chartered Bank, reported
at (2004) 1 SCC 12, in support of the contention that merely because the
dispute is filed by the petitioners and not by Respondent No.1, Respondent
No.1 - Cooperative Society is not absolved of its responsibility to produce best
evidence available with it to satisfy the Court about genuineness of its stand.
It is argued that the Cooperative Court as also Cooperative Appellate Court
ought to have appreciated the fact that there was challenge to correctness or
otherwise of the accounts maintained by Respondent No.1 and the petitioners
by expert’s evidence demonstrated that there were errors. It is contended
that in such circumstances, failure to apply law correctly has resulted in
refusal on the part of Cooperative Court and Cooperative Appellate Court to
discharge jurisdiction available to it. The attention is also invited to
statement of accounts placed on record by present Respondent No.1 to show
how there are some errors in it. The attention is even invited to application
moved under Section 101 of the Act by Respondent No.1 to point out that the
application nowhere mentions quarterly rests and there is no prayer as such
for quarterly rests.
6. The petitioners have also invited attention to promissory note
which mentions the rate of interest at 21% without specifying any interval of
rests. The agreement on which Respondent No.1 placed reliance is also
pointed out to show that the agreement has not been proved before the
Cooperative Court at all and what has been proved is only signature of
petitioners upon it. It is stated that this agreement mentions quarterly rests
but then said clause and agreement has not at all been proved. Attention has
been invited to provisions of Section 79 and Section 80 of Negotiable
Instruments Act to state that in these circumstances rate of interest as
mentioned in promissory note alone is determinative. The attention is also
invited to evidence of Chartered Accountant Shri Mehta and interest
calculation done by him at Exh. 53 on record of Cooperative Court. It is
stated that this interest calculation has been done on the basis of material
available with the petitioners and said Chartered Accountant has also
considered the fixed deposit receipts of Rs.26,620/- and Rs.48,380/- with there
due date of maturity and has accounted for it in his statement of accounts. It
is argued that as per statement of accounts prepared by this Chartered
Accountant after giving due credit to the petitioners for the Fixed Deposit
Receipts mentioned above, it is apparent that the amount outstanding was at
the most of Rs.95,536/- while the petitioners paid about Rs. One lakh by
17.4.2003. It is contended that Respondent No.1 – Society therefore could
have at most recovered interest for one year only. It is pointed out that this
aspect has not been appropriately appreciated either by the Cooperative
Court or by the Cooperative Appellate Court. It is stated that even
appreciation of evidence of Shri Mehta by Cooperative Court or Cooperative
Appellate Court shows non application of mind. It is stated that reasons put
forth for not accepting the said evidence are unsustainable. It is stated that
even Cooperative Appellate Court has misdirected itself by observing that
statement of account has been prepared uni-laterally without considering the
records of the Society. It is argued that it was for Cooperative Society to
place its record for consideration before the Cooperative Court and in view of
the evidence of expert placed on record in the light of Statement of Account,
the dispute ought to have been allowed. The learned Senior Advocate has
also placed reliance upon the judgment of the Hon'ble Apex Court in the case
of Ishwar Bhai C. Patel vs. Harihar Behera, reported at 1999 (3) SCC 457
particularly paragraphs 23 and 29.
7. As against this Shri Samel, Advocate for respondent No.1 has
contended that there was no plea of improper accounting or protest about
quarterly compounding of interest in dispute before the Cooperative Court.
It is further argued that case law about burden of proof cited by the
petitioners is totally irrelevant because nature of documents concerned in
those cases is entirely different. It is contended that those cases consider
documents which relate to title or description or location or situation of
property. It is contended that the documents like statement of accounts are
not considered in those judgments. It is further argued that the dispute
raised before the Cooperative Court was containing very specific grievance.
Court’s attention is also invited to grievance as made by the petitioners in
paragraph 3 of their dispute. It is contended that 10% of loan amount is
required to be invested in the shares of Respondent No.1 – Society as per byelaws. It is further stated that disputant made grievance that at the time of
disbursement of loan, signatures of disputants were obtained on blank
documents without explaining contents thereof. Attention is also invited to
discussion in paragraph 4A of dispute in this respect and it is contended that
grievance made is against Shri Alashi and Shri Deshpande and not against
Respondent No.1. The contents of Fixed Deposit Receipts are also pointed
out to state that interest at 15.5% was to be compounded quarterly and
maturity value is also mentioned in the said document. It is contended that
premature encashment of Fixed Deposit Receipts results in reduced rate of
interest. It is further contended that there was no question of premature
appropriation of these Fixed Deposit Receipts towards loan account. It is
further argued that dispute about rate of interest or its quarterly rests has
been raised for the first time in writ petition and there was no such dispute
before the Cooperative Court or Cooperative Appellate Court and such a
dispute cannot be considered for the first time in writ jurisdiction. It is
stated that there are no pleadings as required under Order 6, Rule 2 of Civil
Procedure Code in this respect. It is repeated by the learned Advocate that
only dispute raised before the Cooperative Court was about appropriation of
paragraph 3 of their dispute. It is contended that 10% of loan amount is
required to be invested in the shares of Respondent No.1 – Society as per byelaws. It is further stated that disputant made grievance that at the time of
disbursement of loan, signatures of disputants were obtained on blank
documents without explaining contents thereof. Attention is also invited to
discussion in paragraph 4A of dispute in this respect and it is contended that
grievance made is against Shri Alashi and Shri Deshpande and not against
Respondent No.1. The contents of Fixed Deposit Receipts are also pointed
out to state that interest at 15.5% was to be compounded quarterly and
maturity value is also mentioned in the said document. It is contended that
premature encashment of Fixed Deposit Receipts results in reduced rate of
interest. It is further contended that there was no question of premature
appropriation of these Fixed Deposit Receipts towards loan account. It is
further argued that dispute about rate of interest or its quarterly rests has
been raised for the first time in writ petition and there was no such dispute
before the Cooperative Court or Cooperative Appellate Court and such a
dispute cannot be considered for the first time in writ jurisdiction. It is
stated that there are no pleadings as required under Order 6, Rule 2 of Civil
Procedure Code in this respect. It is repeated by the learned Advocate that
only dispute raised before the Cooperative Court was about appropriation ofFixed Deposit Receipts and not accounting of payment of Rs.15,000/- made by
the petitioners to Shri Alashi and Shri Deshpande. It is argued that the
dispute as filed under Section 91 of the Act could not have been gone into
because adjudication under Section 101 of the Act attained finality. It is
further stated that in view of the judgment of the learned Single Judge of this
Court dated 29.7.2005, the said certificate under Section 101 attained
finality. It is further argued that plea of bar of jurisdiction has been
specifically raised by Respondent No.1 before the Cooperative Court and also
before the Cooperative Appellate Court. Shri Samel, Advocate states that
accounts were filed in Section 101 proceedings and without accounts,
recovery certificate could not have been granted. It is further argued that
accounts were also furnished to the petitioners during proceedings in their
earlier Writ Petition No.2460 of 2005. The attention has been invited to
pages 67 to 70 of Writ Petition No. 2460 of 2005 in this respect.
8. To substantiate that the earlier adjudication under Section 101 of
the Act has become final and operated as res judicata, Shri Samel, Advocate
has invited attention to the judgment of Division Bench of this Court in the
case of Vasundhara vs. R.B.S. Bank Ltd., reported at 2003 (4) Mh.L.J. 315
and K.V.S. Society Ltd. vs. Dinkar Bhimrao, reported at 2003 (1) Mh.L.J.
152. To show that the petitioners are challenging accounts on new grounds
in Writ Petition and said challenge cannot be entertained, the learned
counsel has placed reliance upon the judgment in the case of Khimji Vidhu
vs. Premier High School, reported at 2000 AIR SCW 2333, Ouseph Mathai
vs. M. Abdul Khadir, reported at AIR 2002 SC 110, R.P. Sawant vs. Bajaj
Auto Ltd., reported at 2002(1) Mh.L.J. 626, S.A.R.D.S.P. Mandal vs.
Bhujgonda, reported at 2003(3) Mh.L.J. 602 and Kantilal vs. Sayarabai,
reported at 2003(3) Mh.L.J. 52. To justify the action of Respondent No.1 of
not prematurely appropriating Fixed Deposit Receipts towards loan account,
attention has been invited to Division Bench judgment of this Court in the
case of State Bank of India vs. Neela Ashok, reported at 2000(1) Mh.L.J. 801.
The attention has been invited to statement of account to show that
appropriation of amount of Fixed Deposit Receipts has been done properly.
Lastly Shri Samel, Advocate states that the courts below have erroneously
held that issue of tenability of dispute under Section 91 of the Act stood
foreclosed in view of the judgment of this Court in Writ Petition No.2460 of
2005.
9. In reply arguments, the Senior Advocate has contended that the
pleadings about correctness of statement of accounts were very much there indispute and he has taken the court through dispute as also written statement
to point out that Respondent No.1 – Society also understood its existence. It
is stated that though Respondent No.1 – Society did not lead oral evidence,
they tendered necessary documents to justify their action but ultimately
could not prove their stand. The attention is also invited to written
arguments filed by the petitioners before the Cooperative Court and reliance
is placed upon the judgment of the Hon'ble Apex Court in the case of Ram
Sarup Gupta vs. Bishun Narain Inter College, reported at AIR 1987 SC 1242,
to point out how pleadings are to be construed. About objection to viability of
dispute under Section 91 of the Act, attention has been invited to the
judgment of the learned Single Judge of this Court dated 29.7.2005 and to
state that said judgment became final because Respondent No.1 – Society did
not challenge it. It is contended that said judgment cannot be reopened by
Respondent No.1 – Society again in these proceedings. The reliance has been
placed upon the judgment of the Hon'ble Apex Court in the case of Authorised
Officer (Land Reforms) vs. M.M. Krishnamurthy Chetty, reported at (1998) 9
SCC 138 and Shipping Corporation of India Ltd. vs. C.L. Jain Woollen Mills,
reported at (2001) 5 SCC 345 for this purpose. Lastly the learned Senior
Advocate for the petitioners has argued that there was failure on the part of
the Courts below to draw adverse inference. The Statement of Account andevidence of Chartered Accountant of the petitioners could not have been
rejected and provisions of Sections 79 and 80 of Negotiable Instruments Act,
could not have been overlooked by the Courts below hence there is scope of
interference in writ jurisdiction. The learned Senior Advocate has placed
reliance upon the judgment of the Hon'ble Apex Court in the case of
Vindhyachal Prasad Jaiswal vs. VIIth Additional District Judge, reported at
1994 Supp. (2) SCC 137 and Ashok Kumar vs. Sita Ram, reported at (2001) 4
SCC 478, to substantiate his stand.
10. In view of the arguments advanced before me, the first and
foremost question which falls for consideration is whether dispute under
Section 91 of the Act was maintainable before the Cooperative Court at the
instance of present petitioners against whom an order under Section 101 of
the Act is also passed. The learned Senior Advocate for Petitioners has
placed reliance upon the judgment in case of Authorised Officer (Land
Reforms) vs. M.M. Krishnamurthy Chetty, (supra). Perusal of this judgment
reveals that there the High Court had remanded the matter back to the
Authorised Officer for fresh consideration in the light of judgment of High
Court in the case of Naganatha Ayyar vs. Authorised Officer. When the
matter was pending before the Authorised Officer, the Hon'ble Apex Courtreversed the judgment of High Court in Naganatha Ayyar vs. Authorised
Officer. The Authorised Officer thereafter decided remanded ceiling
proceedings in the light of judgment of the Hon'ble Apex Court. The land
owner came in revision before the High Court with a stand that order of
remand passed by the High Court asking the Authorised Officer to decide the
dispute in the light of Naganatha Ayyar vs. Authorised Officer was not
challenged by the Authorised Officer before the Supreme Court and as such
said remand order has become final. The land owner contended that the
Authorised Officer was duty bound to pass orders in the light of judgment of
Naganatha Ayyar vs. Authorised Officer only. The High Court accepted said
contention and then Authorised Officer approached the Hon'ble Apex Court.
The Hon'ble Apex Court maintained the order of High Court by observing
that the order of remand passed by the High Court attained finality and
hence the Authorised Officer was duty bound to consider the position in the
light of judgment in the case of Naganatha Ayyar vs. Authorised Officer,
though said judgment was reversed later on by it.
11. In Shipping Corporation of India Ltd. vs. C.L. Jain Woollen Mills,
(supra) relied upon by petitioners the Hon'ble Apex Court has considered the
question whether in the facts of the case before it, the importer of goods canbe made liable to pay demurrage/ detention charges. It was undisputed that
under the terms and conditions of Bill of Lading, the appellant carrier had a
lien over the goods until all the dues were paid and the goods having been
kept, not being released, the carrier-Corporation was entitled to charge
demurrage charges. Appellant carrier before Hon’ble Apex Court was not
party to these proceedings. But in view of the specific directions of the Delhi
High Court in writ petition filed by the importer of the goods, challenging the
legality of the order of the Customs Authorities in confiscating the goods and
levying penalty which reached finality because of dismissal of Special Leave
Petition filed against it by the Union of India, the Hon'ble Apex Court has
held that (in view of the said directions of Delhi High Court) the liability of
importer to pay demurrage charges ceases and the question could not have
been reopened.
12. Thus, perusal of both rulings above clearly show that the question
considered therein was not pertaining to inherent lack of jurisdiction. Here,
the learned counsel for respondent No.1 has specifically contended that in
view of the provisions of Section 101 of the Act read with Section 154 and
Section 163 thereof, dispute under Section 91 of the Act was not
maintainable. The perusal of judgment of the Division Bench of this Court inthe case of Vasundhara vs. R.B.S. Bank Ltd. (supra), particularly paragraphs
5 and 6 support the contentions of Respondent No.1. The said paragraphs
read as under :
“5. Section 101 was inserted in the statute book by
Maharashtra Act 27 of 1969. Intention of the legislature while
enacting the provisions of Section 101 was to provide a speedy
remedy to class of societies referred to in the section against its
defaulting members. The section provides summary method of
recovery of loan, seasonal finance, subscription etc. of certain
types of societies from their members upon the societies
furnishing statement of account in respect of the arrears to the
Registrar. Sub-section (1) provides that the Registrar may
make enquiry in respect thereof and then issue certificate for
recovery of arrears. Sub-section (2) empowers the Registrar to
take action suo motu if the society fails to take action under
sub-section (1). Sub-section (3) provides that the amount of
arrears stated in the certificate is final and conclusive proof of
the arrears stated therein and the same is recoverable,
according to law, for the time being in force, for recovery of
land revenue.
6. The opening words of section 101 “Notwithstanding
anything contained in sections 91, 93 and 98” gives overriding
effect to the said section. Therefore, for recovery of loans,
subscription, seasonal finance etc. it is not necessary for the
society to refer the dispute to the Cooperative Court under
section 91. The plain reading of section 101 reveals that a
special class of societies is carved out who can apply to the
competent authority under section 101 and those societies
alone can obtain recovery certificate in accordance with the
said section. The provisions of sections 91 and 101 are
separate and distinct and act in different spheres. By virtue of
section 101 a summary and speedy remedy has been provided
to certain types of societies. Further it is to be noted that by
virtue of section 101 finality is attached to the certificate
granted by the Registrar under this section. It is, therefore,
clear that the certificate issued under section 101 cannot be
challenged under Section 91. Only remedy of the party
aggrieved is to file revision application under section 154 of the
Maharashtra Cooperative Societies Act. Section 101 is a
speedy remedy to recover the amount and when statute gives
finality to the action or order it can be challenged only a
manner prescribed by statute. Therefore, a dispute under
section 91 would be completely barred. We may mention that
two learned single Judges of this Court have taken a view that
certificate under section 101 is final and conclusive and the
dispute to challenge the certificate cannot be filed under
section 91. (See Shri Kedarling Vikas Seva Scy. Ltd. vs.
Dinkar Bhimrao Raut and ors., 2003(1) Mh.L.J. 152 = 2003 (1)
All MR and Bhusawal People's Bank Ltd. vs. Vijay Ramdas
Rane and Ors. (Writ Petition No. 2277 of 2001 decided by Naik
J. on 30th/31st January, 2002
13. The learned Single Judge of this Court in the case of K.V.S.
Society Ltd. vs. Dinkar Bhimrao, (supra) again takes the similar view.
There, after rejection of writ petition, Respondent No.1 before the High Court
filed dispute under Section 91 of the Act for declaration that entry shown in
counter was not binding on them and they were not required to pay said
amount and further relief that certificate issued under Section 101 of the Act
against them in respect of said amount should not be allowed to be enforced
by the petitioner society. In paragraph 7, the learned Single Judge has
concluded that such dispute under Section 91 of the Act was barred and
hence writ petition filed by the Cooperative society impugning cognizance of
such dispute has been allowed.
14. In this respect reference can also be made to Division Bench
judgment of this Court in the case of K.V. Sundaram vs. Raj Rajeshwari
Cooperative Housing Society, reported at 1980 Mh.L.J. page 4. There the
controversy has been considered in the light of provisions of Section 35 of Act
which deals with expulsion of member and Rule 29 of Maharashtra
Cooperative Societies Rules, 1961, which provides for summary enquiry in
the matter of such expulsion. The Division Bench has concluded that in view
of the provisions of Sections 152, 154 and 163, dispute about the expulsion ofmember could not have been raised under Section 91 of the Act. The
Division Bench noticed that decision under Section 35 has been made
appealable under Section 152(4) and said order subject to revision is final.
The reference has also been made to revisional jurisdiction under section 154.
The provisions of Section 91 of the Act with Section 149 are also considered
by Division Bench. Section 97 providing appeal to Cooperative Appellate
Court is also taken into consideration and then provisions of Section 149(11)
are mentioned to point out finality given to orders passed in the appeal or in
revision by Cooperative Appellate Court. The Division Bench has also
mentioned Section 163(3) which prohibits challenge to orders, decisions or
awards in any other Court upon merits or upon any other ground whatsoever.
The observations in paragraph 19 of this judgment are important and said
observations at page 15 of the report are as under :
“Now, once the Registrar decides whether he will
give approval to the Resolution or not and that order is
subjected to an appeal, then subject to the provisions of section
154, that order or if there is an appeal, the appellate order will
become final, in view of the express provisions of section
154(2). Now, when the finality is given under the Act to
certain orders or decisions, then those decisions are not open to
challenge under the very Act except in the manner provided by
the Act. If the decision rendered in a proceeding under section
35 confirmed or modified under section 152, is allowed to be
challenged under section 91, an anomaly will be created. The
provisions under section 152(4) will then become otiose. Not
only are orders referred to in section 152 given a finality under
the Act but they are further made final under section 163(3) of
the Act and they cannot be challenged in any Court. There is,
therefore, a clear indication in section 152(4) that the orders
which are made final under that provision could be subjected to
scrutiny only in the revisional jurisdiction under the Act and
cannot be subjected to scrutiny or brought into question under
any other provision under the Act. Thus notwithstanding the
fact that section 91 does not expressly exclude the proceedings
under section 35, on a harmonious construction of the
provisions of sections 35, 152 and 154 on the one side and
sections 91, 97 and 149 on the other, will have to be held that
each one of these two sets of provisions must independently
operate in their own fields and the correctness of the order
under section 35 cannot, therefore, be subjected to scrutiny or
adjudication in a proceeding under section 91.”
( emphasis added)
15. It is, therefore, clear that when provisions of Maharashtra
Cooperative Societies Act, provide for a remedy of revision and said order has
been made final, the petitioners could not have raised any dispute under
Section 91 of the Act to challenge the recovery certificate issued under
Section 101 of the Act. However, the petitioners contend that dispute under
Section 91 of the Act is tenable because of orders of this Court dated
29.7.2005 in Writ Petition No.2460 of 2005. After perusal of judgment of this
Court dated 29.7.2005, I am not in a position to accept this argument. After
briefly mentioning the facts and rival contentions in first four paragraphs, in
paragraph 5 this Court has found that the interest of justice would be met if
it is directed that the impugned order should not be given effect to until a
decision is given by Cooperative Court in the dispute filed by the petitioners.
It is, therefore, apparent that this Court has not quashed and set aside the
issuance of recovery certificate in any way or revisional order maintaining it.
This Court has also not said anything about tenability of dispute under
Section 91 of the Act or otherwise. In paragraph 6 of said judgment, this
Court has directed the petitioners to furnish bank guarantee of Rs. Three
lakhs with Cooperative Court and in paragraph 7 it has been made clear that
in default, the recovery certificate would become operative immediately. In
paragraph 8, the learned Single Judge has clarified that the Cooperative
Court would decide the dispute on its own merits without being influenced by
any observations made by any of the authorities. It is, therefore, not possible
to interpret this judgment to mean that this Court has permitted proceedings
under Section 91 of the Act to go on merits and any challenge to those on the
ground of tenability of proceedings was foreclosed. The Cooperative Courthas not properly considered the observations of the learned Single Judge of
this Court in this respect while answering issues No. 14 and 15 before it.
16. In the judgment in the case of Ram Sewak vs. Munnalal, reported
at AIR 1988 SC 452, the Hon'ble Apex Court has made certain important
observations about the concept of res judicata. The Hon'ble Apex Court has
noticed its earlier observations in the case of Hazi Abdul Karim vs. Mohd.
Ismail and found in paragraph 10 that finding only on collateral fact of
jurisdiction cannot operate as res judicata in later proceedings between the
same parties. The Hon'ble Apex Court notices that even though in previous
proceeding a decision of collateral fact about jurisdiction is wrongly given, it
is binding on parties for limited purpose i.e. insofar as those proceedings are
concerned and it would completely defeat the ends of justice if such erroneous
decisions are allowed to become final and perpetuate itself. The Hon'ble Apex
Court notices that it would be conducive to ends of justice that in later
regular proceedings, parties should not be thwarted on earlier wrong findings
and should be afforded full opportunity of demonstrating that condition
precedent to the existence of jurisdiction were absent.
17. In the case of A.R. Antulay vs. R.S. Nayak, reported at AIR 1988SC 1531, in paragraph 189, the Hon'ble Apex Court makes reference to its
earlier judgment in the case of Mathura Prasad vs. Dossibai and finds that a
question relating to the jurisdiction of a Court cannot be deemed to have
been finally determined by an erroneous decision of the Court. If by an
erroneous interpretation of statute, the Court holds that it has no
jurisdiction, it cannot operate as res judicata. Similarly, erroneous decision
assuming such jurisdiction cannot operate res judicata between same parties,
whether the cause of action in the subsequent litigation is same or otherwise.
The Hon'ble Apex Court states that in determining the application of the rule
of res judicata, the court is not concerned with correctness or otherwise of
earlier judgment. The matter in issue, if it is one purely of fact, decided in
earlier proceeding by a competent court, must in a subsequent litigation
between same parties, be regarded as finally decided and cannot be reopened.
However, the Hon'ble Apex Court further states that a mixed question of law
and fact determined in earlier proceeding between the same parties may not,
for the same reason, be questioned in a subsequent proceeding between the
same parties. But when question is one purely of law and it relates to the
jurisdiction of the court or a decision of the Court sanctioning something
which is illegal, by resort to rule of res judicata, a party affected by the
decision is not precluded from challenging the validity of that order. TheHon'ble Apex Court states that a rule of procedure cannot supersede the law
of land.
18. Similar view is taken by the Hon'ble Apex Court in the judgment
in the case of Life Insurance Corporation of India vs. M/s. India Automobiles
& Co., reported at AIR 1991 SC 884, in paragraph 22 and recently in
Management of M/s. Sonepat Cooperative Sugar Mills Ltd. vs. Ajit Singh,
reported at AIR 2005 SC 1050. It is, therefore, apparent that there can be no
objection of res judicata when question of jurisdiction of Cooperative Court to
take cognizance of the matter before it under Section 91 of the Act is raised.
In view of the facts mentioned above, it is clear that there was no issue in
relation to jurisdiction of Cooperative Court under Section 91 of the Act
before the learned Single Judge in Writ Petition No.2460 of 2005 and there
was no need to apply mind to said aspect in that petition. No such
arguments either in favour of jurisdiction or against jurisdiction were
advanced by any of the parties. It is, therefore, difficult to hold that said
judgment of learned Single Judge dated 29.7.2005 in Writ Petition No. 2460
of 2005 foreclosed the scrutiny into the question of jurisdiction of Cooperative
Court.19. It is, therefore, apparent that this Court was not inclined on
29.7.2005 to interfere in the orders passed under Section 101 of the Act or
revisional orders passed by the Divisional Joint Registrar. Those orders,
therefore, attained finality and the petitioners could not have got those
orders rescinded or modified in any way in their dispute under Section 91 of
the Act. The errors alleged by petitioners like in accountings or in
appropriation or adjustment of F.D.Rs. or share money, failure of Society to
prove loan agreement, interest rate stipulated in promissory note & use of
quarterly rests are all questions of facts adjudication of which has attained
finality. These issues do not permit reopening of orders passed by Taluqa
Deputy Registrar on 16.3.2005 & by the Divisional Joint Registrar on
13.5.2005, which formed subject matter of Writ Petition No. 2460 of 2005
dismissed on 29 /7/2005 In view of this position, it is apparent that dispute
filed by the petitioners before the Cooperative Court at Amravati was itself
not maintainable. In view of this finding, it is not necessary for this Court to
consider other arguments advanced by respective counsel in this writ
petition.
20. Writ Petition is accordingly dismissed. Rule discharged.
However, in the facts and circumstances of the case, there shall be no order as to costs.
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