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Judgment
Natarajan, J.—These Appeals arise out of a common order passed by the learned District Judge of Ramanathapuram at Madurai in Original Petition. Nos. 6 to 9, 16 to 19, 21 to 24 of 1961 u/s 49(2) of the Madras Co-operative Societies Act VI of 1932. In all the appeals, the Respondents, viz. the Manamadurai Co-operative Urban Bank limited represented by its Secretary is the Appellant. When the appeals were taken up for hearing Mr. K. Parasaran, learned Counsel for the Respondents some of the appeals raised a preliminary objection stating that as against the order of the learned District Judge or Ramanathapuram, the Respondent therein ought to have filed regular appeals u/s 96 and Order XLI Code of Civil Procedure. Mr. R. Gopalaswami Iyengar, learned Counsel for the Appellant, countered the objection of Mr. Parasaran by the argument that, having regard to the subject-matter of the appeal and the provisions of the Madras Co-operative Societies Act, the Appellant was not obliged to file regular appeals and was entitled to file civil miscellaneous appeals. As the preliminary objection is concerned with the very maintainability of the civil miscellaneous appeals, it has become necessary to determine this question first before hearing the appeals on merits. To appreciate the arguments of both sides on this aspect of the matter, a brief reference to the facts is necessary.
The Respondents herein were formerly office- bearers in the Appellant Bank. In the audit report, for the year 1951-52, of the Appellant Bank, the auditor pointed out several irregularities and frauds resulting in loss to the Appellant Bank. The Special Officer appointed for the Appellant Bank made four claims before the Deputy Registrar of Co-operative Societies, Sivaganga against the former President, the former Secretary, the former Treasurer. the Directors and some of the employees of the Bank who were impleaded as Defendants. As against the employees of the Bank, the proceedings were conducted u/s 51 of the Madras Co-operative Societies Act, VI of 1932 (hereinafter referred to as the Act) while the proceedings against the former office-bearers and the Directors were conducted u/s 49 of the Act. A total sum of Rs. 23,477-45 p. was involved in the four claims; made before the Deputy Registrar. It was alleged in the plaints that the Bank was put to loss to the above extent due to the frauds and misdeeds of the employees and the former office-bearers. In each case the Deputy Registrar passed two separate awards for the same amount, one jointly against the office bearers, viz. the former president, the former Secretary and the former Treasurer and another against two of the employees of the Bank, viz., the former Head Clerk and the former Clerk-cum-Cashier.
Aggrieved by the awards, the former office-bearers preferred Original Petition Nos. 6 to 9 of 1961, 16 to 19 of 1961 and 21 to 24 of 1961 to the District Court, Ramanathapurain, u/s 49(2) of the Act. During the pendency of the proceedings, the former President, Sesha Iyengar died and his legal representatives moved the Court and brought themselves on record. On a consideration of the matter, the learned District Judge came to the conclusion that the former office-bearers Cannot be said to have been guilty of breach of trust in relation to the Society within the meaning of Section 19 of the Act and consequently, they were not liable for the loss sustained by the Bank on account of the frauds and misappropriations committed by the Head Clerk and the Cashier. In that view, the learned District Judge allowed the petitions filed by the former office-bearers and set aside the awards passed against them in the four arbitration references. It is to canvass the correctness of the order of the learned District Judge, the Respondent in the proceedings before the learned District Judge has preferred these appeals.
Before considering the arguments advanced by the learned Counsel as to whether the civil miscellaneous appeals are maintainable or not, it would be worthwhile making reference to Section 40 Sub-sections (1) and (2) of the Act (VI of 1932); Sub-sections (1) and (2) of Section 49 are as follows:
(1) Where in the course of an audit u/s 37 or an inquiry u/s 38 or an inspection u/s 39 or the winding up of a society, it appears that any person who has taken part in the organization or management of the society or any past or present officer of the society has misappropriated or fraudulently retained any money or other property or been guilty of breach of trust in relation to the society, the Registrar may, of his own motion or on the application of the committee or liquidator or of any creditor or 1 contributory, examine into the conduct of such person or officer and make an order requiring him to repay or restore the money or property or any part thereof with interest at such rate as the Registrar thinks just or to contribute such sum to the assets of the society by way of compensation in respect of the misappropriation, fraudulent retainer or breach of trust as the Registrar thinks just.
(2) The order of the Registrar under Sub-section (1) shall be final unless it is set aside by the District Court having jurisdiction over the area in which the headquarters of the society are situated or if the headquarters of the society are situated in the City of Madras, by the City Civil Court on an application made by the party aggrieved within three months of the date of receipt of the order by him.
It is thus seen that the order of the Registrar under Sub-section (1) of Section 49 of the Act shall become final unless it is set aside by the appropriate, in and over the area in which the headquarters of the Society are situated. The Act itself does not provide for any appeal as against the order of the District Court or the City Civil Court passed u/s 49(2) of the Act. It is now, however, well settled that where a legal right is in dispute and the ordinary Courts of the country are seized of such a dispute, the Courts are governed by the ordinary rule of procedure applicable thereto and an appeal would lie, if authorised by such rules, notwithstanding that the legal right claimed arises under a special statute which does not in terms confer a right of appeal.
In Kamamju v. Secretary of State for India I.L.R(1888) Mad. 309 a Full Bench of this Court held that a second appeal would lie to the High Court from a decision of the District Court passed on appeal u/s 10 of the Madras Forest Act, 1882. The Privy Council in Secretary of State for India v. Chellikani Rama Rao I.L.R.(1916) Mad. 617 approved the decision in Kamaraju v. Secretary of State for India I.L.R.(1888) Mad. 309 and held that though an appeal from the decision of the District Court to the High Court was not provided for in the Madras Forest Act, in a claim to lands which have been notified as reserve forest lands under the said Act, such an appeal would lie under the provisions of the CPC and that where, in such proceedings, the District Court was reached, that Court was appealed to as one of the ordinary Courts of the country with regard to whose procedure, Orders and decrees, the rules of the CPC were applicable. The Privy Council further held that in such a case, the ordinary incidents of litigation could only be excluded by specific provisions to, that effect. In Ramachandra Rao v. Ramachandra Rao I.L.R (2922) Mad. 320 the Privy Council held that when once an award in land acquisition proceedings as to the amount of compensation had become final, all questions as to fixing of compensation were then at an end and the duty of the Collector in the case of dispute as to the relative rights of the persons together entitled to the money was to place the money under the control of the Court and the parties could then proceed to litigate in the ordinary way to determine what their right and title to the property may be. The Privy Council further held that such a dispute between the interested parties as to the extension their interest in the compensation amount forms not apart of the award and it would be strange if a controversy between two people as to the nature of their respective interests in a piece of land should enjoy certain rights of appeal which would be wholly taken away when the piece of land was represented by a sum of money paid into Court. In that view the Privy Council held that where, in respect of a dispute a reference has been made to the Court u/s 31, Sub-section (2) of the Land Acquisition Act (1 of 1894) a decree thereon; not appealed from, renders the question of title res judicata in a suit between the parties to the dispute or those be regarded as one in a former suit within the meaning of Section 11; Code of Civil Procedure, 1908. Following Secretary of State for India v. Chellikani Rama Rao I.L.R.(1916) Mad. 617 the Privy Council held, in Maung Basanth Thaw v. Ma Pin A.I.R.1934 P.C. 181 that where a right of appeal is given to one of the ordinary Courts of the country, the procedure, orders and decrees of that Court will he governed by the ordinary rules of the Code of Civil Procedure. To the same effect is the decision of the Privy Council in AIR 1936 93 (Privy Council) . In Mr. Bhagwati v. Mr. Ram Kali (1939) 2 M.L.J. 98 the Privy Council summarised the earlier decision in Ramachandra Rao v. Ramachandra Rao ILR(1922) Mad. 320 as follows:
It was at one time a matter of doubt in India whether the determination of a Court to which a matter has been referred by the Collector u/s 18 of the Land Acquisition Act was such a decision. That doubt was resolved by a judgment of this Board in Ramachandra Rao v. Ramachandra Rao I.L.R(1922) Mad. 320 which decided that when a dispute as to the title to receive the compensation has been referred to the Court, a decree thereon not appealed from renders the question of title res-judicata in a suit between the parties to the dispute. In that case, some question arose as to whether any appeal lay to His Majesty in Council in a case where the determination of the Judge ended in an award and not in a decree. The Board took the view that where the matter referred was not the adequacy of the amount of. compensation that has been referred to the Court, a decree u/s 18 of the Land Acquisition Act might be, difficult questions of title, the resultant decision was not an award, but a decree.
In AIR 1948 12 (Privy Council) , the Privy Council, following the earlier decisions, held as follows:
Where a legal right is in dispute and the ordinary Courts of the country are seized of such disputes, the Courts are governed by the ordinary rules of procedure applicable thereto and an appeal lies if authorised by such rules, notwithstanding that the legal right claimed arises under a special statute which does not, in terms, confer a right of appeal.
In Raja of Sivaganya v. Karuppiak (1939) 49 L.W. 238, King J., following Ramachandra Rao v. Ramachandra Rao I.L.R.(1922) Mad. 320 held that as against an order made by a subordinate Judge on a reference made to him u/s 30 of the Land Acquisition Act, an appeal would lie to the High Court. A Full Bench of this Court in Chikkanna Chettiar alias V.S. Nanjappa Chettiar Vs. V.S. Perumal Chettiar and Another, held that by reason of the judgment of the Privy Council in Mr. Bhagwati v. Ram Kali (1939) 2 M.L.J. 98 all controversy was set at rest and that the pronouncement of the Privy Council in Ramachandra Rao v. Ramachandra Rao I.L.R.(1922) Mad. 320 must be taken to decide that an order, not merely an order on appeal, but an order) determining a reference u/s 18 or u/s 30 of the Land Acquisition Act, etc., is to be regarded as a decree and not as an award, The contrary view taken by a Full Bench of this Court in Rajagopala Chettiar v. Hindu Religious Endowments Board (1934) 46 M.L.J. 43 that an order passed by the District Judge u/s 84(2) of the Hindu Religious Endowments Act was not appealable to the High Court either under the Hindu Religious Endowments Act or under the Code of Civil Procedure, has been declared to be not good law by the later Full Bench which decided the case in Chikkanna Chettiar alias V.S. Nanjappa Chettiar Vs. V.S. Perumal Chettiar and Another, I shall have occasion, in a later portion of the judgment, to deal, at length, with these two Full Bench decisions, but suffice it to say, at this juncture, that Rajagopala Chettiar v. Hindu Religious Endowments Board (1934) 46 M.L.J. 43 (F.B.) is no longer good law. A Bench of this Court, to which I was a party, following the decisions referred to above, has held, in Dr. S. Subramania Iyer v. Secretary, The Karaikudi Co-operative Town Bank, Karaikudi Appeal Suit No. 263 of 1966 and Civil Revision Petition Nos. 543, 1408 and 1491 of 1966, dated 29th March 1973, that an appeal would lie to this Court against an order passed by the District Court u/s 49(2) of the Act. Though there was no occasion to consider whether a miscellaneous appeal would lie to this Court and the question that arose for consideration was only whether an appeal or a revision world He to this Court, the fact remains that the Bench upheld the maintainability of a regular appeal u/s 96 CPC against an order of the District Court u/s 49(2) of the Act. Therefore, the position of law which is now well established by the judicial pronouncements in the various cases referred to above clearly renders the impugned order of the District Court of Ramanathapuram an order appealable to this Court.
The question, however, remains as to whether the appeal should be preferred as a regular appeal against a decree u/s 96 and Order XLI CPC or as a civil miscellaneous Appeal against an order as contemplated and provided for u/s 104 and Order XLIII Rule 1 Code of Civil Procedure. As I have already referred to above, the contention of the learned Counsel for the Respondents is that the appeal should be under the former category while the contention of the learned Counsel for the Appellant is that it will fall only under the latter category. In support of his contention, Mr. R. Gopalaswami Iyengar argues that the proceedings contemplated u/s 49 of the Madras Co-operative Societies Act, 1932 are intended to provide a simple and speedy procedure for safeguarding the funds of a Cooperative Society and realising the amounts lawfully due to the Society, which had been misappropriated or fraudulently retained or embezzled. In support of his argument, he drew attention to the following features:
(i) u/s 49 of the Act, recourse is to be had, for realisation of the amounts belonging to a. society which had been misappropriated, embezzled or fraudulently retained, etc, to the Deputy Registrar of Co-operative Societies himself for passing an award, and not to the Civil Court by means of an irregular suit.
(ii) u/s 49(3), any sum ordered u/s 49 to be repaid to a Society or recovered ass a contribution to its asset may be recovered on a requisition being made in that behalf to the Collector by the Registrar in the same manner as arrears of land revenue.
(iii) For an application u/s 49(2) of the Act to the District Court against an award passed by the Deputy Registrar of Co-operative Societies, a Court-fee of only Rs. 10 was provided for under the Madras Court Fees and Suits Valuation Act ''(XIV of 1955) where the claim exceeded Rs. 1,000 and a court-fee of Rs. 5 only where the claim did not exceed Rs. 1,000 [Vide items (a) and (b) of Article 3(iii)A(1) of Schedule II to Act XIV of 1955].
The argument that was built up on these features was that it was the intention of the Legislature that long drawn out proceedings as in civil suits were not to be resorted to, but that a cheap and speedy method of adjudication of nights and of execution was provided for and therefore, the underlying idea of the Legislature was that costly and lengthy proceedings like a regular suit or appeal against a decree with all its incidents of payment of Court-fee, etc, were not contemplated. Mr. Gopalaswami Iyengar also argued that it would be most inequitable and unjust to call upon a Co-operative Society, which has instituted proceedings u/s 49 of the Act, to recover the losses caused to its funds by the office bearers and employees of the Society, to prefer a regular appeal against an order of the District Court u/s 19(2) of the Act after payment of the necessary Court-fees.
In the course of his arguments to justify the filing of the appeals as civil miscellaneous appeals, Mr. E. Gopalaswami Iyengar placed reliance upon the decision of the Supreme Court in National Sewing Thread Co. Ltd. Vs. James Chadwick and Bros. Ltd. (J. and P. Coats Ltd., Assignee), Reliance on this decision was placed by Mr. Gopalaswami Iyengar to counter the argument of Mr. K. Parasaran that unless the Appellant herein filed his appeals as regular appeals u/s 96 Code of Civil Procedure, the aggrieved Respondents would be deprived, of an opportunity to prefer a further appeal to the Supreme Court if the decision in the appeals went against the Respondents. The decision relied on by Mr. Gopalaswami Iyengar does not offer any solution to the problem on hand. That was a case arising under the Trade Marks Act, 1940 and Section 76(1) of the said Act specifically provided as follows:
Save as otherwise expressly provided in the Act an appeal shall lie.: within the period prescribed by the Central Government, from any decision of the Registrar under this Act, or the rules made thereunder to the High court having jurisdiction.
In conformity with the provisions in Section 76(1) of, the said Act, an appeal was preferred by one of the parties to, those proceedings) to the High Court of Bombay against the older of the Registrar of Trade Marks. Shah J. (as he then was) allowed the appeal and, as against his judgment, an appeal was preferred by the Respondents therein under Clause 15 of the Letters Patent of the Bombay High Court and the said appeal was allowed and the order of, the Registered was restored. The matter was then taken to the Supreme Court and one of the questions that arose for consideration by the Supreme Court was whether an appeal under Clause 15 of the Letter Patent of the Bombay High Court would lie as against the judgment of Shah J., The Supreme Court held that since the Trade Marks Act did not provide or lay down any procedure for the future conduct or career of the appeal preferred u/s 76(1) of the Trade Marks Act, 1940, the future conduct or career of the appeal had to be determined according to the rules of practice and procedure of that Court and in accordance with the provisions of the Charter under which that Court was constituted and which conferred on it power in respect of the method and manner of exercising that jurisdiction. Consequently, the Supreme Court held that when the High Court became seized of an appellate jurisdiction by virtue of Section 76 of the Trade Marks Act, it had to exercise that jurisdiction in the same manner as it exercised its other appellate jurisdiction and when such jurisdiction was exercised by a single Judge his judgment became subject to appeal under Clause 15 of the Betters Patent, there being nothing to the contrary in the Trade Marks Act to such a procedure being followed. In the case on hand, there is no provision under the Madras Co-operative Societies Act, 1982 for an appeal being preferred to this Court and consequent, the decision of the Supreme Court in National Sewing Thread Co. Ltd. Vs. James Chadwick and Bros. Ltd. (J. and P. Coats Ltd., Assignee), does not afford a guideline as to whether the appeals preferred by she Appellant should be treated as regular appeals to be heard by a Bench of two Judges or civil miscellaneous appeals to be heard by a single Judge. Yet another judgment relied on by Mr. R. Gopalaswami Iyengar is S.A. Industries v. Sarup Singh AIR 1965 S.C. 4442. On a perusal of the judgment, I find that this decision also does not advance the contentions of Mr. Gopalaswami Iyengar, in any manner. In the decision referred to above the Supreme Court had to consider whether an appeal heard and disposed of by a single Judge of the Punjab High Court, arising u/s 39 of the Delhi Rent Control Act, could be the subject matter of a further appeal to an Division Bench of the Punjab High Court under Clause 10 of the Letters Patent. The Supreme Court held that if a right of appeal Is given from an order of a Tribunal or a Court to the High Court without any limitation thereon, the appeal to the High Court will be regulated by the practice and procedure obtaining in the High Court and that any judgment made by a single Judge in such an appeal will, under Clause 10 of the Letters Patent, be subject to a further appeal in that Court. However, on a construction of Section 39 and Section 13 of the Delhi Rent Control Act, the Supreme Court held that the Legislature, while enacting the Delhi Rent Control Act, had taken away the right of appeal conferred by Clause 10 of the Letters Patent. In the case on hand, what we are principally concerned with'' is whether the appeal preferred by the Appellant in each of these cases which has not been provided for in the Madras Co-operative Societies Act, 1932, is to be treated as an appeal against a decree or an appeal against an order.
As I have already stated above, the appeals preferred by the Appellant are not by virtue of toy provision made in, the Madras Co-operative Societies Act, 1932, providing or conferring a right of appeal to. this Court against an order passed by the District Court u/s 49(2) of the Act. The Appellant is entitled to file an appeal against the order of the District Court u/s 49(2) of the Act, only by virtue of the general rule of law that once the ordinary Courts of the country are seized of a Minute regarding a legal right, thereafter the Courts are governed by the ordinary rules of procedure applicable thereto including the filing of appeals. on necessity, therefore, we must look to the provisions of the CPC to determine the character of the appeal the Appellant is entitled to file. I may straightaway say that, on a consideration off Section 96, Code of Civil Procedure, on the one hand and Section 104 thereof on the other, the provisions contained in Section 96 are wider than the provisions contained in Section 104. Section 96 CPC states that
save where otherwise expressly provided in the body of this Code by any other law for the time being in force, an appeal shall lie from every decree passed by any Court exercising original jurisdiction to the Court authorised to hear appeals from the decision of such Court.
It is, therefore, clear that in respect of decrees; passed by any Court exercising original jurisdiction, an aggrieved party is entitled to file an appeal and the only restriction that has been placed u/s 96(1) Code of Civil Procedure, is that there should be no contrary provision in the body of the CPC or any Other law for the time being in, forcible for the preferring of such an appeal. The one other restriction that has been placed is the one found in Section 96(3) which says that no appeal shall lie from a decree passed by a Court with the consent of parties. On the other hand, if we take Section 104 CPC for consideration, we find that an appeal shall lie only as against the orders mentioned in Clause (ff) (subject to the stipulation in the proviso), and Clauses (g), (1) and (i) and the orders enumerated in Order XLIII, Rule 1 Code of Civil Procedure, and from no other order, unless expressly provided by any other law for the time being in force. Admittedly an appeal against an order passed by the District Court u/s 49(2) of the Madras Co-operative Societies Act, 1932, is not one of the orders enumerated under rule 1 of Order XLIII CPC as an appealable order. The only objection that can be raised to an order passed by the District Court u/s 49(2) of the Act being treated as a decree is that the order cannot be deemed to be-a decree as defined in Section 2(2) CPC which inter alia defines a decree as a formal expression of an adjudication of all or any of the matters in controversy arising in a sure in this context it is worthwhile to note that an order passed by the District Court u/s 49(2) of the Act, will satisfy all the other requirements of a decree as defined in Section 2 (2) CPC except, that the formal expression of adjudication was not rendered in a suit. In my opinion, however, the limited construction of the word decree occurring in Section 2 (2) CPC to the formal expression of adjudication of rights by a Court only in matters arising in a suit, cannot any longer validly be contended on account of the decisions of the Privy Council in Ramachandra Rao v. Ramachandra Rao I.L.R (1922) Mad. 320 and Mr. Bhagwati v. Ram Kali (1939) 2 M.L.J. 98 and the Full Bench of this Court in Chikkanna Chettiar alias V.S. Nanjappa Chettiar Vs. V.S. Perumal Chettiar and Another, . In Ramachandra Rao v. Ramachandra Rao ILR (1922) Mad. 320 the Privy Council held that as against an order of the District Court on a reference u/s 18 of the Land Acquisition Act, an appeal to the High Court u/s 54 of the said Act was maintainable and the decision of the High Court in the appeal proffered to it had become final as no Brother appeal was preferred to the Judicial Committee. The Full Bench of this Court, in Rajagopala Chettiar v. Hindu Religions Endowments Board (1934) 46 M.L.J. 43 (F.B.) construed the decision of the Privy Council Ramachandra Rao v. Ramachandra Rao I.L.R.(1922) Mad. 320, as to have reference to an appeal preferred against a decree passed in appeal which was also defined as a decree in the Code of Civil Procedure, 1862. A later Full Bench of this Court in Chikkanna Chettiar alias V.S. Nanjappa Chettiar Vs. V.S. Perumal Chettiar and Another, has categorically stated that the differentiation made, by the earlier Full Bench of the decision of the Privy Council in Ramachandra Rao v. Ramachandra Rao. I.L.R.(1922) Mad. 320 as having reference to a decree passed in appeal, was not correct. In dealing with this matter. Leach C.J., speaking for the Bench, has held as follows:
In my opinion, all controversy is set at rest by the judgment of the Privy Council in Mr. Bhagwati v. Ram Kali (1939) 2 M.L.J. 98 . The opinion expressed in Ramachandra Rao v. Ramachandra Rao ILR (1922) Mad. 320 was there re-affirmed, notwithstanding the alteration made by the present Code in the definition of the word decree. In the light of the recent pronouncement of the Privy Council, Ramachandra Rao v. Ramachandra Rao I.L.R.(1922) Mad. 320 must be taken to decide that an order, not merely an order on appeal, but an order determining a reference u/s 18 or Section 30 it is admitted that there is no difference in principle between the two sections is to be regarded as a decree and not as an award. It follows that the interpretation in Ramachandra Rao v. Ramachandra Rao I.L.R (1922) Mad. 320, given by the Full C Bench in Rajagopala Chettiar v. Hindu Religious Endowments Board (1934) 46 M.L.J. 43 (F.B.) can no longer be regarded as being authoritative.
In view of this pronouncement of the Full Bench I must construe the order passed by the District Court u/s 49(2) of the Madras Cooperative Societies Act, notwithstanding the order not having been passed in a suit, to be, a decree within the meaning of Section 2(2) of Code of Civil Procedure. It, therefore, necessarily follows that only a regular appeal u/s 96 CPC can be preferred against the impugned order of the District Court. The result is that the Appellant Is not entitled to maintain these appeals as civil miscellaneous appeals. The appeals will, therefore, be returned to the Appellant for being represented as regular appeals in compliance with all requirements and formalities. Time for representation six weeks from today.