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Judgment
S.R. Brahmbhatt, J.—Heard learned advocate Shri DM Thakkar for the Petitioner. None is present for the Respondents. The Petitioner, a Cooperative Society has by way of this petition under Article 226 & 227 of the Constitution of India challenged the order dated 29/7/2002 passed by Gujarat State Cooperative Tribunal at Ahmedabad in Appeal No. 407 of 1998 and allied group of matters in reversing the judgment & order dated 25/8/1998, passed by Learned Member of the Board of Nominees, Rajkot, whereby the Lavad Suits of the present Respondents were dismissed. The facts in brief leading to filing this petition deserves to be set out as under.
It is the case of the Petitioner society that it is a serving Cooperative Society registered under the provisions of Gujarat Cooperative Societies Act. The society is rendering services to its members engaged in agricultural activities. The Petitioner has stated on oath in the petition that the Petitioner society is rendering their services to the members who are growing cotton. The cotton is required to be processed in ginning mills. The members were therefore under an obligation to execute a letter of authority empowering the society to act on their behalf at their costs & risks and all the Respondent Nos. 1 to 16, as averred in the memo of the petition, had executed such letter of authority and the same are produced on record. No service charge was being collected by the society for rendering the services. The cotton thus received under the aforesaid letter of authority was sent to Wankaner Taluka Cooperative Processing Society Ltd. In one such incident when the Respondents cotton was received under the letter of authority, as stated herein above, it was sent to Wankaner Taluka Cooperative Processing Society Ltd., and when it was lying under the custody of Wankaner Taluka Cooperative Processing Society Ltd., on 22/5/1989 an accident of fire occurred and the goods were destroyed. The Wankaner Taluka Cooperative Processing Society Ltd., had taken insurance of the goods which is Respondent No. 17 herein. As per the claim settled by the insurance company the value of the raw material of the Respondents members was compensated at Rs. 113.60 per 20 kg cotton. Said amount was received and in turn it was passed on to the respective members. The members filed suit in the Board of Nominees, at Rajkot, joining the present Petitioner as Defendant No. 1 and Wankaner Taluka Cooperative Processing Society Ltd as Defendant No. 2. The Nominee Court dismissed the suit for the reasons stated thereunder vide order dated 26/5/1998. The findings came to be recorded that the Plaintiffs failed in proving their case for recovering the dues from Defendant No. 1, i.e. present Petitioner and so far as Defendant No. 2 is concerned, it stood deleted. The order of deletion of Defendant No. 2 had not been challenged by any one.
Being aggrieved & dissatisfied with this order dated 26/5/1998 present Respondents herein above from Nos. 1 to 16 preferred appeal before the Gujarat State Cooperative Tribunal, Ahmedabad, and the appellate authority vide its order dated 29/7/2002 allowed the appeal and determined that the cotton price should have been Rs. 130.60 per 20 kg., and on that basis ordered payment of difference in the appeal which was actually paid by the insurance company and which was passed on to the members through Respondent No. 17 as well as present Petitioner. The order was thus made against present Petitioner which is subject matter of challenge in this petition under Article 226 & 227 of the Constitution of India.
This Court vide order dated 22/7/2003 (Coram: K.A. Puj, J) granted permission to Petitioner to delete Respondent No. 17 and thereafter issued notice which was made returnable on 11/8/2003. This Court (Coram: Jayant Patel, J) vide order dated 6/10/2003 issued rule and ordered to be heard with Special Civil Application No. 12454 of 2002. At this stage it is to be noted that said Special Civil Application No. 12454 of 2002 came to be withdrawn and the permission for withdrawal was granted by this Court (Coram: K.S. Jhaveri, J) vide order dated 25/11/2004, recording the following order.
Mr. D.M. Thakkar for the Petitioner states that the impugned order was taken in review at the instance of the society and the original impugned order is set aside. He therefore submitted that the present petition will not survive. Accordingly the petition is disposed of as having become infructuous. Rule is discharged with no order as to costs.
Learned advocate for the Petitioner drew attention of the Court to the letter of authority which is forming part of the record which is executed and signed by the members, who are said to have authorised the Petitioner society to send goods i.e. raw material to the processing unit of original Respondent No. 17 at the entire risk & cost of the members, Respondent Nos. 1 to 16 herein. The terms & conditions mentioned thereunder go to show that the Petitioner was merely acting as an agent on behalf of the members whose raw material was being sent for processing. Learned advocate for the Petitioner further submitted that for doing this service no remuneration or any emoluments were received as the society was rendering their services of this nature. There was in fact no consideration received from the members for rendering this particular service. Learned advocate heavily relying upon the letter of authority signed by members concerned submitted that the authority so signed would go to show that the member retained his lien over goods and his claim over the goods were otherwise to be dealt with by original Respondent No. 17 and Defendant No. 2 in Lavad Suit. Condition No. 10 indicate that Defendant No. 2 in Lavad Suit was even entitled to ultimately sell the goods in a raw material form or processed form and whatever cost is received was to be accepted by the member. In other words, the Defendant No. 2 in the Lavad Suit was empowered by Respondent No. 1 to 16 to deal with their goods and even to sell them at appropriate rate which was thereafter to be accepted by the Respondent Nos. 1 to 16.
Learned advocate thereafter invited this Court''s attention to the findings recorded by the Nominee Court and submitted that the order passed by the Nominee Court was just & proper and therefore, appellate authority ought not to have interfered with the same. Learned advocate appearing for the Petitioner has extensively read the decision rendered by the appellate authority and contended that the findings are contrary to the material on record and the findings are such no prudent man could have ever arrived at. The appellate court was to examine the material on record based upon which the court of the first instance i.e. Nominee Court had decided the suit against the Plaintiffs. This being a case in appeal the appellate court ought to have appreciated this aspect in its proper perspective.
Shri Thakkar further submitted that the appellate court has not properly adverted to the document which is produced in this compilation at page-10, namely the authorization letter. The appellate authority has erroneously and without appreciating the fact placed on record held that as the present Petitioner did not come out with clear evidence with respect to the amount paid by the insurance company it has liability to be held responsible for making payment of the difference.
This Court heard learned advocate for the Petitioner. As recorded in the beginning, none is present for the Respondents, though the matter was called out twice. Hence the Court had left with no choice but to proceed with the matter in absence of any advocate for the other side/ Respondents. The fact remains to be noted that the document produced at page-10 which is forming part of the record of Lavad Suit clearly indicate that, it is in form of authorization authorizing the Petitioner society in accepting the goods, namely cotton from its member who is issuing the authorization letter to be sent to the original Defendant No. 2 i.e. The Wankaner Taluka Cooperative Processing Society Ltd., for processing. While undertaking the said exercise and accepting the goods the society is authorized by member on the terms & conditions mentioned therein. In other words, the society is said to have accepted the goods on terms & conditions mentioned therein which are binding upon both, namely the member and the society. The member agreed that the society would send the goods to The Wankaner Taluka Cooperative Processing Society Ltd., for processing. The ownership of the goods being raw or processed would be that of the member applicant. The condition No. 4 indicate that by this authorization letter the applicant member namely Respondent Nos. 1 to 16 in their individual capacity entrusted the goods to the society as their agent and attorney and this power given to society was said to be irrevocable. Clause 6 of the said authorization letter indicate that in any extraordinary circumstance, if the goods are damaged, then neither the Sangh i.e. The Wankaner Taluka Cooperative Processing Society Ltd., or the present Petitioner would be responsible. Clause 8, 9, 10 and 11 go to show that the applicant member gave all the powers and accepted that the Sangh i.e. original Defendant No. 2 was entitled to sell the raw or processed goods at the rate and that rate would be acceptable and it would be passed on to the applicant member as & when it is received by the society.
The aforesaid terms & conditions go to show that the appellate court could not have arrived at a rate based upon the list of rates which themselves were fluctuating from Rs. 110 to 133 per 20 kg., of cotton. In my view when the Respondent No. 2, i.e. The Wankaner Taluka Cooperative Processing Society Ltd., was deleted from the suit and said deletion order had remained unchallenged, and when Petitioner society was not in any way responsible for the goods in question, except passing it on to the original Defendant No. 2, then, in such a case appropriate appreciation of the facts as brought out on record was required to be made by the appellate court. The appellate court has clearly erred in coming to the conclusion which is based upon surmise & conjecture. Learned advocate for the Petitioner is right in his contention that the appellate court ought not to have held Petitioner responsible for not indicating the exact amount received from the insurance company. In fact the insurance was taken by the original Defendant No. 2 i.e. The Wankaner Taluka Cooperative Processing Society Ltd., and it was stated by the witness at the relevant time in the suit itself before the Nominees Court that the amount per kg received was passed on to the member. Meaning thereby the insurance company paid amount of Rs. 113.60 per 20 kg., and it was passed on to the respective members. Now, this fact had not been appreciated in its true perspective by the appellate court and therefore, in my view the decision cannot be sustained in eye of law.
It is also required to be noted at this stage that the appellate court has not given any reason for arriving at a particular reason for holding it to be payable to member Respondent Nos. 1 to 16. In fact the price quoted from the price list were the price actually fetched from the market or likely to be fetched in the marked. In absence of specific pleadings with regard to quality of raw material in question and its worth in the market based upon appropriate assessment would render such fixing and determining the rate far from being reasonable. It is pertinent note that the insurance company has paid the money and the same money was passed on to the member has been established on record. Therefore, for this reason, I am of the view that the order of the appellate court is not required to be sustained.
The appellate court has also not clearly recorded in its finding for fixing liability upon the present Petitioner. The appellate court has adverted to the aspect of original Defendant No. 2 being deleted and the order of deletion not being challenged by either side, but that in itself should not be sufficient ground for fastening liability of payment of difference to present Petitioner / original Defendant No. 1.
It is reiterated at the cost of repetition that the member Respondent Nos. 1 to 16 in fact were bound by the terms of their authorization and appropriate interpretation of those terms would go to show that the present Petitioner could not have been fastened with any liability whatsoever arising out of the damage sustained by the goods in the fire which occurred at the premise of original Defendant No. 2 who stood deleted and said deletion order had remained unchallenged.
In the result, the petition is required to be allowed, and is accordingly allowed. The common order impugned dated 29/7/2002 passed by the Gujarat State Cooperative Tribunal, Ahmedabad, i.e. appellate authority is hereby quashed and set aside. The order passed by the Nominee Court is restored. Rule made absolute. However no order as to costs.