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Judgment
This appeal has been preferred by defendant-appellant to
assail the judgment and decree dated 23rd December, 1995 passed
by learned Additional District & Sessions Judge No.4, Jaipur City,
Jaipur in Civil Original Suit No. 160/1985 whereby, learned trial
Court dismissed the suit for specific performance but decreed the
sum of Rs. 1,46,374.58 in favour of the plaintiff along with 18%
per annum interest thereupon till realization of the money.
Briefly stating the facts of the case giving rise to this appeal
are that the plaintiff being a registered company under Companies
Act entered into agreement with the defendant - Society
registered under Societies Act to purchase 50 residential plots and
paid a sum of Rs. 6,56,855/- as advance. The plots were to be
allotted in Nemisagar Colony. Defendant - Society allotted the
plots worth Rs. 3,41,986.86 only. It neither returned the money
nor allotted plot for the remaining amount. Notice under Section
143 of the Rajasthan Cooperative Societies Act was given on 30 th
December, 1983 but of no avail. Hence, the suit was filed.
By filing written statement, defendant No. 1 - Society denied
the facts mentioned in the plaint and also the fact of the oral
agreement with the Company to allot 50 plots. It was, however,
stated that one T.C. Kothari paid the amount for 13 plots which
were accordingly allotted to the concerned persons. It was also
stated that defendant entered into a compromise with the plaintiff
but plaintiff did not turn up to get the money back. Reply to the
notice was also sent to the plaintiff.
Defence of defendant No. 1 was closed on 20 th December,
1989. Defendant No. 2 was proceeded ex-parte vide order dated
26th July, 1987. No evidence was adduced on behalf of the
defendants. Issues were also not framed, as the defence of the
defendants was closed.
Learned counsel appearing for the appellant has argued
mainly on the ground that the learned trial Court has committed a
jurisdictional error in light of the provisions contained in Section
75 of Rajasthan Cooperative Societies Act, 1965 to which
corresponding provisions is Section 58 in the Cooperative Societies
Act, 2001. He has contended that on one hand, learned trial Court
has treated the plaintiff to be allottee of the plots and thus,
member of the society and on the other hand, it has been decided
that the provisions of Section 58 of Rajasthan Cooperative
Societies Act, 2001 are not applicable in the matter in hand. In
view of the abovesaid provision, the jurisdiction lies only with the
Registrar of Cooperative Societies and Civil Court is barred from
entertaining any such dispute. It has also been contended that
learned trial Court has erred in awarding the amount of interest
against the Society which is not conducting any business or
commercial activities. Moreover, excessive rate of interest @ 18%
per annum has been awarded. It has also been stated that proper
opportunity of hearing was not afforded to the defendant.
None has appeared on behalf of the respondent-plaintiff
Company to contest this appeal.
In light of the arguments advanced by the learned counsel
for the appellant before this Court, the judgment impugned and
the evidence available on record was critically examined.
Insofar as applicability of Section 58 of the Rajasthan
Cooperative Societies Act, 2001 to the matter in hand is
concerned, learned trial Court has inferred that if any dispute
arises between the members of the Society and the Society or its
office bearers touching the constitution, management or business
of the Cooperative Society, then only it shall be referred to the
Registrar and the jurisdiction of the Civil Court shall be barred. But
the subject matter of this suit is not a dispute touching the
constitution, management and business of the Cooperative
Society. It has been further held that the plaintiff - Company is
not a member of the Society, hence Section 75 (now Section 58 of
the Act of 2001) is not applicable in this matter.
As regards the nature and scope of the dispute, on close
scrutiny of the pleadings, it comes out that a sum of Rs.
3,06,855/- was paid to the defendant Society on behalf of some
other persons besides the amount given by the plaintiff Company.
But no evidence has been adduced regarding payment of this
amount of Rs. 3,06,855/-. But so far as the amount of Rs.
3,50,000/- is concerned, it was paid on behalf of the plaintiff
Company which the defendants have admitted to receive as per
para - 5 of the written statement. But it has nowhere been stated
that the amount was paid by the plaintiff Company as a member
of the Society. The averments made in the plaint disclose that
this amount was paid as advance for the plots under an oral
agreement. Simply because the amount was deposited by the
Company for allotment of certain plots, it cannot be inferred that
Company became member of the Society. Further, neither any
proof regarding membership of the Company nor any certificate
containing its membership number has been submitted by the
appellant - defendant in order to prove that the plaintiff Company
was a member of the Society. In view of this fact, it cannot be
inferred that plaintiff - Company was a member of defendant
Society and thus, the dispute between the two was a dispute
required to be referred to the Registrar under provisions of Section
58 of the Act of 2001. Moreover, the subject matter of the dispute
is not touching the constitution, management or the business of
the Cooperative Society; thus, the conclusion drawn by the
learned trial Court in rejecting the objection raised in respect of
Section 58 (Section 75 of the Old Act) appears to be perfectly
legal. There appears no substance in the argument advanced by
the learned counsel for the appellant in this regard. Consequently,
it cannot be inferred that the trial Court has committed a
jurisdictional error in entertaining the suit and proceeding to
decide it.
So far as the objection regarding Notice under Section 143 of
the Cooperative Societies Act not having been served upon the
Society, it appears completely baselss as the defendant No.1 has
himself admitted in the written statement filed on 22 nd March,
1986 that the reply to the notice was sent. Hence, this argument
is also bereft of any merit.
As regards the objection for not providing sufficient
opportunity of hearing to the appellant, on perusal of the record, it
appears that Vakalatanama was filed on behalf of appellant -
defendant No. 1 on 3rd October, 1985. Written statement was filed
by him on 22nd March, 1986. Several applications came to be filed
on behalf of the defendants under different provisions of law which
were considered and decided by trial Court. On account of
absence of defendant, ex-parte proceeding was initiated on 26 th
July, 1989 which was set aside vide order dated 17 th October,
1989. Thereafter, an application filed by the plaintiff under Order
11 Rule 21 CPC was decided on 20 th December, 1989 by which,
defence of the defendants was struck out. However, defendant did
not take any legal recourse against the order dated 20 th
December, 1989. It can thus be inferred that he was satisfied
with the said order which attained finality way back in the year
1989. Thereafter, the suit came to be decided on 23 rd December,
1995. Thus, it cannot be said that proper opportunity of hearing
was not provided to the defendant - appellant.
So far as the decreetal amount and the interest awarded
thereon is concerned, defendant himself has admitted in the
written statement to have received a sum of Rs. 3,50,000/- from
the plaintiff Company against which 13 plots worth Rs.
2,03,625.42 had been allotted and it had also been admitted that
a sum of Rs. 1,46,374.58 was lying with the Society. It has been
stated that the said money was kept for the prospective
development work of the colony. Learned trial Court has arrived
at the conclusion to award the decree for the said amount on the
ground that no detail of prospective development work was given
by the defendant nor any plot was further allotted to the plaintiff
as against the remaining amount. In view of this fact, decree for
the said amount was naturally due to be awarded and the
conclusion arrived at by the learned trial Court cannot be faulted
with.
So far as the rate of interest @ 18% p.a. is concerned,
though it has been alleged that rate is very excessive but the
appellant has failed to show on what ground, this rate is alleged to
be excessive. It is found that the appellant Society was dealing in
development of agricultural land into residential colonies and the
plots were allotted to plaintiff Company. The advance amount was
received by it from the plaintiff Company and some other persons
in the name of allotting plots to them. It is thus obvious that the
Society was working in the field of real estate development.
Looking to the nature of the activities run by the Society, it cannot
be said that it was not engaged in profit making out of some
commercial transactions. In view of above, this Court does not
feel inclined to interfere in the rate of interest made applicable by
the learned trial Court.
In view of whatever has been stated above, there is no force
in this appeal and it is accordingly dismissed while maintaining the
judgment and decree dated 23rd December, 1995.