The Haryan Sugar and General Mills Production Co-operative Industrial Society Ltd. vs The Registrar, Co-operative Societies and Others

Harbans Singh Rai, J.—The petitioner-society was registered under the Punjabi Co-operative Societies Act in the year 1975 with the object to manufacture the Sulphur Sugar and Allied products. The society obtained a loan of Rs 2,15,735.05 from the respondent-Bank for running the above mentioned Mills. The members of the society oledged their land situated in district Hissar measuring 136 Kanals 18 Marlas in favour of the respondent-Bank, as a security while taking the loan. The petitioner society could not pay the instalments of the, loan within the stipulated period and as such the respodent-Bank raised a dispute against the petitioner-society for the recovery of the above mentioned amount and referred the same to the Registrar Co-operative Societies, Haryana in the year 1978 The Registrar entrusted the said dispute to the Additional Registrar, Co-operative Societies, Haryana, Chandigarh, who had been conferred the powers of the Registrar. The Additional Registrar, vide his order dated March 26, 1979 gave an award against the petittoner-society for the above mentioned amount of Rs 2.15;735.05. Copy of the order is Annexure P- l, The order of the Additional Registrar dated, March 26, 1979, was not challenged through appeal or revision either by the petitioner society or by the respondent-Bank and as such it became final. The respondent-Bank after the award moved an application before the Assistant Registrar, Co-operative Societies Ambala u/s 63 of the Punjab Co-operative Societies Act, 1963 for grant of certificate for the execution of the award as a decree of Civil Court The Assistant Registrar granted the certificate which is reproduced as under:-

"It is certified that the Registrar, Co-operative Societies, Haryana, Chandigarh, had authorised Sh. S. K. Maheshwari IAS, Additional Registrar, Co-operative Societies, Haryana, Chandigarh, as an arbitrator against the Haryana Sugar and General Mills Production Co-operative Industrial Society Ltd. Mohra Teh. and District Ambaia. Sh. S. K. Maheshwari IAS, Additional Registrar, Coop. Societies, Haryana, Chandigarh has given the award on 26-3-1979 for Rs. 2,15,735.05 and the interest at contracted rate of interest thereon against the Haryana Sugar and General Mills Production Coop. Industrial Society Ltd., Mohra. (Ambala). Now I hereby certify that u/s 63(a) of the Punjab Co-operative Societies Act, 1961 (which is also applicable in the State of Haryana) the above mentioned award is fit for execution and is deemed to be a decree of Civil Court and shall be executed in the manner as decree of such Court-"

Thereafter, the Assistant Registrar, Co-operative Societies, Ambala, before whom the application was filed for execution of the award as decree of Civil Court, referred the matter to the Assistant Registrar, Co-operative Societies, Hissar, as the land which was pledged in favour of the Respondent-Bank is situated in district Hissar Copy of the letter written by the Assistant Registrar, Ambala, to the Assistant Registrar, Hissar is Annexure P-2. The Assistant Registrar, Co-operative Societies, Hissar, appointed as Inspector in his circle as a Sales Officer for the purpose of executing the award. The Sales Officer wrote a letter to the petitioner society on May 19, 1983, asking it to pay an amount of Rs. 2,15,735.05 along with interest worked out to Rs. 85,888.08 totalling Rs. 3,0 l;624.03 towards the award against the petitioner-Society. Copy of the letter dated May 9, 1983, is Annexure P-3 The petitioner -Society after receipt of notice from the Sales Officer, deposited the amount of Rs. 3,05,162.02 on different dates. The petitioner-Society requested the respondent. Bank through a registered notice dated March 14, 1985, that the land of the members of the society be released as the amount of the award has been fully paid and the award stands satisfied. Copy of the letter/notice is Annexure P-4. The land was not released is spite of repeated reminders and ultimately the respondent-Bank wrote to the petitioner-society on September 10, 1987 that the tend would be released on the payment of interest up-to-date and further stated that the amount already paid has been credited into interest account and after adjustment of the same towards the interest the petitioner-society was still liable to pay an amount of Rs. 2,18,798.07 as principal and Rs. 1,37,965 55 as interest up to June 30, 1987. Copy of the letter dated 10-9-1987 is Annexuie P-8. The petitioner-society requested the respondent-Bank that since the future interest has not been stipulated in the award the same cannot be claimed from the petitioner- society. The respondent-Bank did not release the land in spite of numerous requests. The petitioner-society referred the matter to the Registrar u/s 102/103 of the Haryana Co-operative Societies Act, 1984 requesting that the demand of the respondent-Bank be quashed and the land of the petitioner be released. The Registrar did not order the release of the land and kept the case pending for about a year, and ultimately sent it back to the respondent-Bank as there was some discrepancy in the accounts and that needs to be reconciled. The case of the petitioner is that the petitioner is not liable to pay over and above the a ward and the demand of the respondent-Bank is against law and they are acting illegally in not releasing the land of the society.

The respondent in its written statement did not dispute the fact alleged in the petition, but stated that the respondent-Bank is not claiming any future interest. The respondent-Bank is claiming the amount as per award dated March 26, 1979, given by the Additional Registrar, Co operative Societies, Haryana and in view of para 7 of the agreement note dated March 12, 1975 executed between the petitioner Society and respondent-Bank The petitioner-Society had specifically accepted the rats of interest at the rate of 7 per cent in case the society fails to make the regular payment It was further pleaded that the society cannot take advantage of its own wrong The award of the Arbitrator, Annexure P l, given on March 26,1979 clearly provided that the petitioner-society will pay the principal amount of Rs 2,15,735 05 plus the agreed .rate of interest to the respondent-Bank. So, the respondents are entitled to the amount claimed for.

I have heard the learned counsel for the parties and given thoughtful consideration to their arguments.

The concluding part of award, Annexure P l, is as under :-

"in the circumstances, I am, of the opinion that the second party i.e., the Haryana Sugar and General Mills Production Co-operative Industrial Society Limited, Mohra should pay the principal amount of Rs. 1,15,735 05 (P) and the contracted rate of interest thereon to the first party."

On the basis of the award the decree certificate was prepared which had bean reproduced in the earlier part of the judgment, which had provided for the recovery of the decretal amount

Mr. Gobinder Singh Sandhu, learned counsel for the petitioner, has submitted that Section 34 of the CPC clearly provides that where the decree/award is silent with respect to the payment of future interest, on such principal sum from the date of the decree to the date of payment or other earlier date, the Courts shell be deemed to have refused such interest and a separate suit thereof shall not lie Mr. Sandhu further argued that the award which is sought to be executed did not provide for any future interest and that the respondent Bank will be entitled to the principal amount of Rs. 2 15,735.05 and the contracted rate of interest thereon, which will mean that the respondent-Bank is entitled to the principal amount and the interest up to the date of award and not the future interest, and in this view of the matter the claim of the respondent-Bank for future interest is not maintainable.

Section 34 of the CPC clearly provides that where the decree is silent qua future interest it shall be deemed to have been refused. The award sought to be executed is silent qua the future interest. It had not provided that the respondent-Bank shall have future interest also The contract between the parties terminates on the announcement of award After the announcement, it was the award which is to be executed and to see what are the terms and conditions. It is only the award which is to be seen and not the contract between the parties. As the award has not provided the future interest, the contention of Mr. Sandhu that the respondent-Bank is not entitled to the future interest in view of Section 34 of the Code of Civil Procedure, cannot be rejected. Since it was for the officer giving the award to have considered the question of awarding future interest and since, in the circumstances of the case, he did not think it appropriate to award the same, now the respondent-Bank cannot say that as at the time of advancement of loan they had contracted to have interest up to the date of the payment, so they are entitled to future interest. Their contention has no force in the eyes of law.

In view of the legal provisions as enacted in Section 34 of the Code of Civil Procedure, the award, is to be executed as it is. Since the provisions of the above said section had not provided to award future interest, the respondent-Bank is not entitled to claim for any future interest. The claim of the respoadent -Bank for any future interest is unfounded and prohibited by law. if the award has been satisfied, i e, if the principal amount and the amount of interest up to the date of award have been paid at the stipulated rate provided in the contract of the parties, the respondent-Bank shall have to release the land of the members of the petitioner-Society. It is, therefore, ordered that the respondent Bank shall release the land of the members of the petitioner- Society without any payment of future interest from the date of the award.

With this direction, this petition is allowed with no order as to costs.