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Judgment
Ratnam, J.—The Plaintiff-Bank is the Petitioner in all these civil revision petitions, which arise out of orders dismissing the applications filed by the bank to implead the Assistant Director of Fisheries, Madras, as the third Defendant to the suits. The suits had been instituted by the Bank for the recovery of money due from the first Defendant in the suits, who are members of the second Defendant Co-operative Society. According to the case of the Petitioner Bank, amounts were advanced to the first Defendant in the suits, who had created a lien in favour of the Petitioner-Bank over his share in the second Defendant Co-operative Society. Thus, Defendants 1 and 2 are sought to be made liable-for the recovery of the amounts advanced and the suits were instituted for this purpose. During the pendency of the suits, the second Defendant, viz., The Madras Fisheries Co-operative Boat Operating Society went into liquidation and the Assistant Director of Fisheries Madras, had been appointed as the Official Liquidator. Since he was the person competent to represent the Co-operative Society in liquidation, the Petitioner-Bank took out applications in the respective suits to implead the Official Liquidator of the second Defendant-society as the third Defendant to the suit.
Those applications were resisted on the ground that u/s 65 of the Tamil Nadu Co-operative Societies Act, 1961 (here in after referred to as the Act) an elaborate enquiry in relation to the affairs of the second Defendant society was made by the officers and a report was submitted to the Registrar of fisheries Co-operative Societies recommending the winding up of the society u/s 85(1) and by proceedings dated 7th February 1978, orders were passed by the Registrar of Co-operative Societies winding up the said Co-operative Society u/s 86 of the Tamil Nadu Co-operative; Societies Act 1961 and the Assistant Director of Fisheries, Madras was appointed as official Liquidator. According to the Respondents, as per Section 89 of the Act, suits and other legal proceedings shall not lie or be continued against the liquidator as such, except by the leave of the Registrar and subject to such terms as he may impose and since the Petitioner-Bank had not obtained any such leave for filing the applications, the applications were unsustainable and are liable to be dismissed.
The learned Ninth Assistant Judge, City Civil Court Madras, who enquired into the applications, held that though the suit is not filed challenging the order of winding up or cancellation of the registration, yet, it relates to the affairs of the society and therefore, the provisions of Section 89 of the Act will be a bar, especially in the absence of leave granted by the Registrar. Consequent to these conclusions, the applications filed by the Petitioner-Bank were dismissed.
The learned Counsel for the Petitioner contends that inasmuch as the activities or the affairs of the Co-operative society are not the subject matter of the suits which have been filed for the recovery of money only, the bar u/s 89 of the Act cannot apply to the instant case. The further submission is that Section 73 of the Act provides for the adjudication of every conceivable disputes which may arise in relation to a co-operative society and that provision being exhaustive, there is no scope in the present case for the applicability of Section 89 of the Act In other words, the learned Counsel for the Petitioner contends that the present disputes does not touch the affairs of the registered society on any matter and, therefore, no leave of the Registrar is necessary. Before proceeding to consider these submissions, it is necessary to notice Section 89 of the Act which runs thus:
Bar of legal proceedings: Save in so far as is expressly provided in this Act, no civil court shall take cognizance of any matter connected with the winding up or cancellation of the registration of a registered society under this Act, and when a liquidator has been appointed, no suit or other legal proceeding shall lie or be proceeded with against the liquidator as such or against the society or any member thereof on any matter touching the affairs of the registered society, except by leave of the Registrar and subject to such terms as he may impose.
It is at once apparent that on the facts of the present case, the first portion of the section is inapplicable. The second portion of the section contemplates a case where a liquidator has been appointed pursuant to the provisions of the Act. In such a case, the section enacts a bar against the institution and the continuation of legal proceedings against the liquidator as such or against the society or any member thereof on any matter touching the affairs of the registered society. If the proceeding has to be either instituted or proceeded with against the liquidator or against the society or any member of a society in respect of which a liquidator has been so appointed, leave of the Registrar has to be obtained and it is open to the Registrar to impose such terms as he thinks fit under the circumstances. There is no bar against the institution as such in the instant cases, as the suits themselves had been instituted prior to the liquidation of the second Defendant society and the question is only. whether the suits already instituted can be proceeded with against the society by impleading the liquidator who has since been appointed. The words touching the affairs of the registered society occurring in Section 89 of the Act have been used in other enactments relating to the organisation and administration of co-operative societies in this country. The object of introducing a provision similar to Section 89 of the Act is to resolve as far as possible all disputes by utilising the hierarchical machinery provided under the Act itself without resort to Court Section 89 of the Act is such a provision. The use of the words in matters touching the affairs of the registered society is indicative of the very wide amplitude of the coverage of matter pertaining to a registered society. The object of the legislation which brought forth these co-operative societies for a definite or specific purpose was not only to secure autonomy in the matter of internal administration, but to provide a scheme to include forums for settlement of disputes without interference by ordinary Courts of the land. The word touching means in reference or in relation to, respecting, regarding or concerning and this indicates that the dispute need not directly arise out of the business of the society, but it would suffice if it relates to or it is as regards or concerning the business of the society, Further, the word used in Section 89 of the Act is not business, but affairs,. The ordinary meaning of that word is transactions in general, ordinary pursuits etc,. The use of this word indicates that matters contemplated as falling within the scope of Section 89 of the Act are not restricted to matters arising from and out of the business of the society only, but extend as well to matters which are in some manner related to or connected with the transaction of the society. Even if the word affairs can be construed to have been used in an interchangeable sense for the word business, the claim in the present suits would be a claim against or the liability of the liquidated society at the instance of the Petitioner, a creditor and a stranger to the society, arising out of its affairs. It must also be stated that the adjudication of such a claim is not within the scope of Section 73(1) of the Act. But u/s 87 the liquidator appointed, as in the present case, has been invested with the power to investigate all claims against these registered society, which would also take in the claim in these suits made by the Petitioner against the second Respondent. It is therefore not possible to accept the contention of the learned Counsel for the Petitioner that Section 73 is exhaustive of all cases of disputes arising under the Act. That even a claim like the one made by the petitioner as against a society in liquidation ought to be investigated and settled by the liquidator appointed by the Registrar u/s 86, is the true purport and intendment of Section 87(2) of the Act. The Petitioner could not have straight away proceeded as against the party sought to be impleaded as the third Defendant to the suit without obtaining the leave of the Registrar as stated in Section 89 of the Act. As stated already in the instant case, the disputes between the parties would be one touching the affairs of registered society, and, therefore, the suit-instituted by the Petitioner against Defendants 1 and 2 cannot be proceeded with against the third Defendant, who cannot also be impleaded, unless the Registrar grants leave to that effect. Indeed, a situation almost similar to the one in the instant case was dealt with by VeerasWami, J. (as he then was) in The The Thiruchankattankudi Tenants Co-operative Farming Society Vs. Sri Rudrapathiswaraswami Devasthanam, Thiruchankattankudi, In that case, the suit was for recovery of a large sum of money as arrears of rent for fasli 1373 and 1374 instituted by the The Thiruchankattankudi Tenants Co-operative Farming Society Vs. Sri Rudrapathiswaraswami Devasthanam, Thiruchankattankudi, . Farming Society which figured as the Defendant raised the plea that the suit did not lie without the leave of the Registrar and Section 89 of the Act was relied on in this connection. The learned Subordinate Judge held that the words affairs of the society in Section 89 would comprehend domestic affairs and would not include the claim made in that suit. Dealing with the scope 6f Section 89 of the Act, Veera Swami J. (as he then was) observed thus:
Section 89 provides for bar of legal proceedings, when a society enters upon liquidation; and the policy behind the section is the same as the one behind similar provisions in the Companies Act or in the insolvency legislation. A claim made or which is pending when a society is wound up cannot be proceeded with in a civil court. Section 48 of the old Act of 1932 contained a similar provision. The affairs of the society, in my view, will certainly embrace a claim or liability against the society.
With respect; I am in entire agreement with the view expressed above. In this view, it is unnecessary either to refer or to deal with the other decisions on which reliance was placed by the learned Counsel for the Petitioner in support of the submission that only a claim arising out of the business activities of a registered society, would fall within the scope Section 89 and no more. The result is the order of the Court below perfectly correct and does not merit any interference. The civil revision petitions fail and are dismissed. No costs.
However, the dismissal of these civil revision petitions will not in any manner preclude the Petitioner from applying to the Registrar of Co-operative Societies for leave to pursue the suits as against the proposed third Defendant and, if such leave is granted, the suits will be thereafter appropriately dealt with by the Court below.