1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH : NAGPUR LETTERS PATENT APPEAL NO. 480 OF 2010 IN W.P. NO. 3492/06. Late Sheshrao Patil, Ginning and Pressing Sahakari Society Maryadit, Pusad .vs. Sudhakarrao Naik Sahakari Sakhar Karkhana Maryadit, Pusad Office Notes, Office Memoranda of Coram, appearances, Court's orders Court's or Judge's orders or directions and Registrar's orders. Mr. S. Paliwal, Advocate for appellant, None for respondent, though served. CORAM : S.A. BOBDE & P.D. KODE, JJ. DATED : DECEMBER 14, 2010. 1] This Letters Patent Appeal is preferred against the judgment of the learned Single Judge of this Court upholding the findings of the Cooperative Courts below that the dispute filed by the appellant Cooperative Society against the respondent Cooperative Society cannot be entertained by a Cooperative Court under Section 91 of the Maharashtra Cooperative Societies Act, 1960. 2] The appellant is a Cooperative Ginning Factory registered under the Maharashtra Cooperative Societies Act, 1960 and carrying on its business in Pusad, district Yavatmal. The respondent is also a 2 Cooperative Sugar Factory carrying on its business in the same district. The respondent Cooperative Society approached the appellant Cooperative Society for a loan of Rs.10,00,000/- at the rate of interest of 20% per annum. The loan was specifically sought to complete the installation of its plant and machinery. The respondent Society had completed the construction of about 80% of its factory. Work to the extent of 20%, however, had remained and the machinery had remained to be installed. Since it did not have sufficient funds, it approached the appellant society for a loan by letter dated 14.8.1996. The appellant Society gave a loan of Rs.10,00,000/- to the respondent sometime in August, September, 1996. The respondent did not repay. The appellant, therefore, filed a Dispute before the Cooperative Court, Amravati. 3] The Cooperative Court held that the appellant proved the suit claim along with the rate of interest on the deposit. However, the Cooperative Court held that it had no jurisdiction to entertain the dispute because a dispute between two societies cannot be entertained under the Maharashtra Cooperative Societies Act, 1960. The Cooperative Court held that the dispute is not in respect of a transaction between a member or a past member and is not tenable under Section 91 of the Maharashtra Cooperative Societies Act, 1960. 3 4] The appellant carried the matter in appeal. The Appellate Court took the same view on the question of jurisdiction and held that the dispute is not maintainable. The Appellate Court held so on the basis that it is not the business of either of the societies to give or take deposits and the loan given by the appellant to the respondent society did not touch the business or management of the society. 5] The appellant challenged the above judgments by way of a Writ Petition, which has been dismissed on the ground that there are concurrent findings of two Courts below on the question. The Letters Patent Appeal is preferred against the said judgment. 6] Mr. S. Paliwal, learned Advocate for the appellant, submitted that the dispute is tenable under Section 91 of the Maharashtra Cooperative Societies Act, 1960, since it is a dispute to which both the parties are Cooperative Societies and it relates to the management or business of a society and in any case, it relates to the management or business of the opponent society which has a bye-law which enables it to borrow, which reads as follows :- “4. Capital : Capital can be raised in following manner : (1) Selling the shares, 4 (2) Accepting deposits (from members), (3) Loan or overdraft, (4) Issuing debentures, (5) Accepting donations, grants or financial help, (6) By entrance fee, share transfer fee and nomination fee”. According to the learned Counsel, it is in any case a transaction in respect of which restrictions or regulations have been imposed under Sections 43, 44 & 45 of the Maharashtra Cooperative Societies Act, 1960 and, therefore, is clearly covered by Section 91(1)(c) of the Maharashtra Cooperative Societies Act, 1960. Section 91 reads as follows :- “S. 91. Disputes : (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, elections of the committee or its officers other than elections of committees of the specified societies including its officer, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated or by a creditor of the society, to the co-operative Court if both the parties thereto are one or other of the following :-- 5 (a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the Liquidator of the society or the official Assignee of a de-registered society; (b) a member, past member of a person claiming through a member, past member of a deceased member of society, or a society which is a member of the society, or a person who claims to be a member of the society; (c) a person other than a member of the society, with whom the society, has any transactions in respect of which any restrictions or regulations have been imposed, made or prescribed under sections 43, 44 or 45, and any person claiming through such person; (d) a surety of a member, past member or deceased member, or surety of a person other than a member with whom the society has any transactions in respect of which restrictions have been prescribed under section 45, whether such surety or person is or is not a member of the society; (e) any other society, or the Liquidator of such a society or 6 de-registered society, or the official Assignee of such a de-registered society; Provided that, an industrial dispute as defined in clause (k) of section 2 of the Industrial Disputes Act, 1947, or rejection of nomination paper at the election to a committee of any society other than a notified society under section 73-IC or a society specified by or under section 73-G, or refusal of admission to membership by a society to any person qualified therefor or any proceeding for the recovery of the amount as arrear of land revenue on a certificate granted by the Registrar under sub-section (1) or (2) of section 101 or sub- section (1) of section 137 or the recovery proceeding of the Registrar or any officer subordinate to him or any officer of society notified by the State Government, who is empowered by the Registrar under sub-section (1) of section 156, or any orders, decisions, awards and actions of the Registrar against which an appeal under section 152 or 152A and revision under section 154 of the Act have been provided, shall not be deemed to be a dispute for the purposes of this section.” (2) Deleted, 7 (3) Save as otherwise provided under sub-section (2) to section 93, no Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1)............” 7] The Section clearly contemplates that the kind of disputes referred to therein may be referred to a Cooperative Court provided the disputes pertain inter alia to (a) management or business of a society, (b) if both the parties thereto or one or the other of those mentioned therein in clauses (a) to (e). Applying the provision to the present dispute, it is clear that both sides to the present dispute are Cooperative Societies and, therefore, fall within sub-clause (a). Moreover, we are of the view that the deposit was obtained by the respondent society for completing the construction of its factory building and for installation of plant and machinery and was clearly a dispute touching the management or business of that society. It is not the requirement of Section 91 that the dispute should concern the management or business of both societies who are parties to the dispute. Moreover, there is merit in the contention that vide clause (c) disputes between a society and a person other than a member of the society in respect of a transaction on which restrictions or regulations have been imposed or preferred under Sections 43, 44 & 45 of the Act are tenable. There is no dispute that the present transaction in 8 respect of which the dispute arose must be taken to be a transaction covered by Section 44 since it deals with a loan made by one society to any person other than a member. We may also note that it does not appear to have been the case of any party to the dispute that the loan was taken contrary to the provisions of Section 44 which empower a society to make loan to another society with the special sanction of the Registrar. 8] In fact, we may note that in spite of repeated notice from this Court, none has appeared on behalf of the respondent society, though served. In this view of the matter, we hold that the Cooperative Courts had jurisdiction under Section 91 of the Maharashtra Cooperative Societies Act, 1960 to deal with the present dispute and we set aside the judgment of the Courts below that the claim was not tenable under Section 91 of the Maharashtra Cooperative Societies Act, 1960. We set aside the judgment of the Appellate Court and remand the matter back to the Appellate Court for a fresh decision. The Appellate Court shall decide the matter in accordance with the law within a period of three months from the date it receives the writ from this Court. Order accordingly. Judge Judge J.