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Judgment
Gokulakrishnan, J.—This Letter Patent Appeal is against the order passed by the learned single judge in Spl. C.A. No. 2776 of 1988. The appellant herein came forward with this application to issue an appropriate writ in order in quash and set aside the orders passed below exhibits 9 and 10, by the Co-operative Registrar''s nominee in Lavad Case No. 817 of 1988, which was ultimately confirmed by the Co- operative Tribunal in Revision Application No. 60 of 1988.
The learned single judge has dismissed the said special civil application and has also refused to grant stay in order to enable the appellant herein to prefer an appeal before this court.
In order to appreciate the contentions raised before this court by learned counsel, Mr. F.A. Memon, for the purpose of admission of the Letters Paten Appeal, we have to refer to certain facts.
The appellant herein is a partner in the second respondent-firm. The second respondent-firm applied for a loan to the first respondent herein amounting to Rs. 9,70,000 to run a cycle stand. It is stated that such a loan was sanctioned by the first respondent in the name of the appellant, since it was the appellant who applied for loan. But the facts reveal that such a loan was sanctioned by the first respondent for the purposes of the second respondent-firm in order to enable its partner, who is the appellant herein to get the licence for running the cycle stand at the Kalupur Railway Station at Ahmedabad. The necessary deposit was made by the appellant in order to get the licence and the licence was granted, to be effective from September 1, 1987, to August 31, 1990. It is the case of the appellant that the borrowed the said sum of Rs. 9,70,000 from the second respondent and has also paid to one of its partners various sums, amounting to more that Rs. 2,00,000. The first respondent herein invoked the jurisdiction of the authorities concerned under the Gujarat Co- operative Societies Act, 1961, and a suit was filed before the Registrar''s nominee as provided under the Act. It is for the realisation of the amount of loan advanced by the first respondent to the second respondent. In the said suit, two prayers were asked for under exhibits 9 and 10. Under exhibit 9, the second respondent wanted to take possession of the cycle stand and the Registrar''s nominee granted the same on April 21, 1988, stating that such possession will be taken from April 21, 1988, uptill May 30, 1988. In respect of the prayer which is exhibit 10, the Registrar''s nominee appointed the branch manager of the first respondent-bank as the receiver and such an order was passed on April, 21, 1988, itself Mr. Memon, learned counsel appearing for the appellant, fairly states that he is not agitating in regard to the order passed under exhibit 9 since it has lapsed already and he is concerned only with regard to the order passed under exhibit 10. As regards the order appointing a receiver under exhibit 10, the matter was taken up by way of a revision before the Tribunal. Pending the revision application, a stay application of the said order was given by the appellant herein. On May 17, 1988, the Tribunal granted the stay. On May 18, 1988, the Tribunal also directed that the stay on condition that the appellant deposits a sum of Rs. 1,000 every day. On May 27, 1988, the Tribunal heard the interim application finally and vacated the order of stay on the same day itself. Hence, the appellant moved the High Court by filling Special Civil Application No. 2776 of 1988, and got an interim stay on the same condition imposed by the Tribunal originally. This was obtained on June 2, 1988. Subsequently, the special civil application came to be heard by the learned single judge of our High Court on June 15, 1988, and the same has been dismissed. It is against this order that the present Letter Patent Appeal has been filed.
Mr. Memom, learned counsel appearing for the appellant, contended that the loan was obtained by the partnership firm while the licence was obtained by the appellant in his individual capacity. Further, the licence was operative from September 1, 1987, while the power of attorney, which is the basis on which the learned judge dismissed the special civil application was executed on August 31, 1987, and as such, such power of attorney cannot have any effect. It is stated by Mr. Memon that on the date of execution of the said power of attorney, there was absolutely no licence either in favour of the appellant or in favour of which the appellant is a partner.
The next contention raised by Mr. Memon is that the Registrar''s nominee has no power to appoint a receiver since all the power he derives is only u/s 100 of the Gujarat Co-operative Societies Act.
The next contention of learned counsel is that the learned single judge, while passing the order in question, has not properly noted the facts of the case inasmuch as he has stated that the date of the power of attorney is March 31, 1988, while its date is August 31, 1987, and that the licence expires in August, 1988, while actually it expires on August 31, 1990, and the order was passed without application of mind. Mr. Memon further contended that by appointed the receiver, the appellant is deprived of his livelihood and as such, it offends article 21 of the Constitution. It is further stated by Mr. Memon, that there is no relationship between the appellant and the co- operative bank for the purpose of invoking the jurisdiction u/s 96 of the Gujarat Co-operative Societies Act.
It is seen from the irrevocable power of attorney executed by the second respondent of which the appellant is a partner, that a specific mention has been made that the loan was received from the first respondent-bank to the tune of Rs. 9,70,000 in order to get the licence for running the gives ample power to the first respondent to take over the management and assets of the firm in case of default in the payment of the amount as per the conditions of the agreement for sanctioning the loan. It is unnecessary for us to refer elaborately to the power of attorney since the power given is very wide and it is for the first respondent to exercise the same in any manner it likes, including getting a receiver appointed for the purpose of running the business. The facts of the case clearly reveal that much earlier to the date of grant of licence, which is from September 1, 1987, the tender has been accepted and the parties were aware of the same and that is made clear from the averment made in the power of attorney, which is also signed by the appellant herein. Hence, there is absolutely no substance in the argument to the effect that such power could not have been granted even before obtaining the licence. It is for the purpose of paying the earnest money that the loan has been got from the first respondent-bank, even though the licence was taken in the name of one of the partners of the second respondent-firm. The appellant now turns round and says that the licence is in his individual capacity, and as such, he cannot be bound by the second respondent and a receiver cannot be appointed and no action can be taken against the appellant herein. The argument runs counter to the facts of the case and also the averments in the irrevocable power of attorney executed by the appellant on behalf of the second respondent- firm. In substance, the licence, though taken in the name of the appellant as one of the partners of the firm, is for the benefit of the firm and the loan obtained clearly established that it is for paying the deposit money and earnest money towards the licence now in question.
Section 100 of the Gujarat Co-operative Societies Act, 1961, reads as follows:
"100. (1) Where a dispute has been referred to the Registrar or his nominee or board of nominees u/s 98 or u/s 100 or where the Registrar or the person authorised u/s 93 hears a person against whom charges are framed under the section, the Registrar or his nominee or board of nominees, or, as the case may be, the person so authorised u/s 93 is satisfied on enquiry or otherwise that a party to such dispute or against whom proceedings are pending u/s 93 with intent to defeat, delay or obstruct the execution of any award or the carrying out of the any order that may be made, -
(a) is about to dispose of whole or any part of his property, or
(b) is about to remove the whole or any part of his property from the jurisdiction of the Registrar, may, unless adequate security is furnished, direct conditional attachment of the said property and such attachment shall have the same effect as if made by a competent civil court.
(2) Where direction to attach property is issued under sub-section (1) the Registrar, his nominee or board of nominees or the person authorised u/s 93 shall issue a notice calling upon the person whose property is so attached, to furnish such security within such period as may be specified in the notice, and if the person fails to provide the security so demanded, the Registrar or his nominee or board of nominees or, as the case may be, the person authorised u/s 93 may confirm the order and, after the decision in the dispute or the completion of the proceedings referred to in sub- section (1) may direct the disposal of the property so attached towards the claim, if awarded.
(3) Attachment made under this section shall not affect the right subsisting prior to the attachment of the property, of persons not parties to the proceedings in connection with which the attachment is made, or bar any person holding a decree prior to such attachment against the person whose property is so attached from applying for the sale of the property under attachment in execution of such decree."
By reading the section, it is clear that the power to attach would include all the powers effectively enforce the rights of the co- operative bank including the appointment of a receiver to take charge of the property and collect the amount and the incidental power, since they are inherent in the power given under sections 96 and 100 of the Gujarat Co-operative Societies Act. Mr. Memon, learned counsel appearing for the appellant, after submitting that there is absolutely no power for the Registrar to appoint the receiver, contended that the order appointing the receiver is a nullity and, hence, has to be quashed. Interpreting the section, we have already held that such power is with the Registrar.
The decision in the case Kiran Singh and Others Vs. Chaman Paswan and Others, , cited by Mr. Memon, is a case where there is absolutely no jurisdiction for a court to pass such an order. In those circumstances, the Supreme Court held (at page 342):
"The answer to these contentions must depend on what the position in law is when a court entertains a suit or an appeal over which it has no jurisdiction, and what the effect of section 11 of the Suits Valuation Act is on that position. It is a fundamental principle well-established that a decree passed by a court without jurisdiction is nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial or whether it is in respect of the subject-matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties. If the question now under consideration fell to be determined only on the application of general principles governing the matter, there can be no doubt that the District Court of Monghyr was `coram non judice'', and that its judgment and decree would be nullities. The question is what is the effect of section 11 of the Suits Valuation Act on this position."
Mr. Memom cited another decision in the case of Dr (Smt.) Kuntesh Gupta Vs. Management of Hindu Kanya Mahavidyalaya, Sitapur (U.P.) and Others, . This is a case in which the Supreme Court had an occasion to consider as to whether a quasi-judicial authority can exercise the power of review when such power has not been expressly conferred upon it by the statute. The Supreme Court held that such power cannot be exercised by the quasi-judicial authority in the absence of an express provision in the statute and held as follows (at page 2188):
"It is now well-established that a quasi-judicial authority cannot review its own order, unless the power of review is expressly conferred on it by the statute under which it derives its jurisdiction. The Vice-Chancellor, in considering the question of approval of an order of dismissal of the principle, acts as a quasi- judicial authority. It is not disputed that the provisions of the U.P. State Universities Act, 1973, or of the statutes of the University do not confer any power of review on the Vice-Chancellor. In the circumstances, it must be held that the Vice-Chancellor acted wholly without jurisdiction in reviewing her order dated January 24, 1987, by her order dated March 7, 1987. The said order of the Vice- Chancellor dated March 7, 1987, was a nullity."
We do not think that these two decisions have any application to the facts of the present case.
It is contended by Mr. Memon that by appointing the receiver, the appellant is deprived of his livelihood. We are afraid that we cannot countenance such an argument. The appellant who is one of the partners of the firm got the loan through the partnership from the first respondent. After considering fully the legality of the recovery, the first respondent is legally proceeding against the parties concerned in order to recover its lawful dues. The question of deprivation of the livelihood cannot at all come into play on the facts and circumstances of the present case.
It is contended that there is no relationship between the partnership concern, that is respondent No. 2 and the bank, i.e., respondent No. 1 for the purpose of invoking section 96 of the Gujarat Co-operative Societies Act. Mr. Memon, learned Counsel appearing for the appellant, said that such a point was raised before the learned single judge, but it has not been dealt with by the learned single judge. Factually, it is seen from the plaint filed before the Registrar that there is a clear mention to the effect that the firm is a member of the Co- operative bank, who is respondent No. 1. Further, the loan taken for the business, though the licence for the said business stands in the name of the appellant, is only for the benefit of the second respondent-firm of which the appellant is a partner. Hence, the appellant and the firm are fully liable to answer the claim of the bank. It is found from the grounds of appeal that the appellant has not taken this point. Whatever it may be, we do not find any substance in this contention for the reasons state above and further, the irrevocable power-of-attorney executed by the appellant and the second respondent in favour of the first respondent clearly binds the appellant and the second respondent in favour of the first respondent clearly binds the appellant answer the claim of the bank. For all these reasons, we do not think that there is any substance in this contention raised by the learned counsel appearing for the appellant herein. The facts of the case clearly establish that the partnership is benefited by the loan advanced by the first respondent and such a loan was got for the purpose of its partner who is the appellant herein. The irrevocable power of attorney makes it clear that the licence is for the benefit of the firm i.e., the second respondent herein. Correctly and legally, the plaint has been filed before the Registrar''s nominee and the Registrar''s nominee, by his power under sections 96 and 100 of the Gujarat Co-operative Societies Act, 1961, has exercised the jurisdiction and has appointed the receiver in order to safeguard the interest of the co-operative bank which is the first respondent herein.
It is made clear that the order of the learned single judge, to the effect that the receiver would pay necessary salary to the staff, will stand.
The decision given by us is on the basis of the documents produced before us and arguments advanced before us.
For all these reasons, we do not find any merits in any of the contentions raised by the learned counsel appearing for the appellant herein and accordingly, this Letters Patent Appeal is dismissed.
Mr. Memon, learned counsel appearing for the appellant, finally submitted that stay of this order may be granted in order to enable the appellant to approach the higher forum. The learned single judge thought it fit to dismiss such a prayer. The amount due to the bank runs to several lakhs. Even on a modest rate, the interest will be more than Rs. 1,000 per day. Considering the huge amount to be paid to the first respondent co-operative bank, we do not think that the order appointing the receiver can be stayed any further. Hence, the prayer to grant stay is refused.