IN THE HIGH COURT OF GUJARAT AT AHMEDABAD CIVIL REVISION APPLICATION No 1233 of 1998 WITH CIVIL REVISION APPLICATION NO. 1239 OF 1998, 1240/98, 1242/98 AND 1243/98 For Approval and Signature: Hon'ble MR.JUSTICE S.K.KESHOTE ============================================================ 1. Whether Reporters of Local Papers may be allowed to see the judgements? YES J 2. To be referred to the Reporter or not? YES 3. Whether Their Lordships wish to see the fair copy of the judgement? NO 4. Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? NO 5. Whether it is to be circulated to the Civil Judge? NO -------------------------------------------------------------- RAJKOT NAGARIK SAHKARI BANK LTD. Versus BHAVESH CYCLE STORES -------------------------------------------------------------- MR A.D.MITHANI for Petitioner NOTICE SERVED for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE S.K.KESHOTE Date of decision: 30/12/98 ORAL COMMON JUDGEMENT 1. As all these civil revision applications have arisen from an identical order passed by the executing court, Civil Judge [S.D.] - Morvi in the Special Darkhast filed by the petitioners for execution of the decree, these Civil Revision Applications are taken up for hearing together and are being disposed of by this common judgement. 2. The facts of the case are taken from the Civil Revision Application No.1233/98. The petitioner Rajkot Nagrik Sahakari Bank Ltd. is a cooperative bank duly registered under the provisions of the Gujarat Cooperative Societies Act, 1961 [hereinafter referred to as 'the Act, 1961']. It is doing the banking business and the provisions of the Banking Regulations Act are also applicable to its business. The petitioner cooperative bank is doing the banking business to advance various loans and finance assistance to its members who are also its share holders. It is not in dispute that the respondents loanee / loanees is / are its members. 3. The petitioner filed an arbitration suit in the Court of the Board of Registrar's Nominees at Rajkot being Arbitration Suit No.196/92. This suit has been filed for the recovery of the loan amount with interest against the loanee and guarantors. In this arbitration suit, an award has been passed by the Registrar 's Board of Nominees on 17/10/92 and under that award, the petitioner bank is entitled to principal amount of loan with interest. After receipt of the certificate from the Registrar of the Cooperative Societies as provided u/s 103 of the Act, 1961, the petitioner for the execution of the award, a deemed decree filed Special Execution Petition No.29/93 in the Court of the Civil Judge [S.D.] - Morvi. It is the case of the petitioner that in all these cases, except the few cases i.e. of the execution of the award, a deemed decree, the judgement debtors there in have not raised any objections that the executing court has no jurisdiction to execute the award, deemed decree, as the award, deemed decree has not been transferred to it by the Registrar's Board of Nominee. The executing court itself suo motu taken this objection and under the impugned order, it has decided that this deemed decree [award] has been made by the Registrar's Board of Nominees at Rajkot and the same has not been transferred to it and unless it is transferred to it by the Court passing the same, it cannot be executed. Against this order, the bank has filed these Civil Revision Applications. 4. In these civil revision applications, in the civil revision applications in which the counsel have put appearance for the loanees, they have made a statement that they have no objection in case the court at Morvi proceed with the execution of the award, deemed decree. But as it is a legal question and it may arise in other matters pending or are to be filed by this bank or other cooperative banks in the civil courts, I consider it to be necessary and proper to decide this point in these civil revision applications. The learned counsel for the parties are also in agreement that otherwise also this point has not been decided by this Court so far, so to avoid future litigation on this point, the same may be decided by this Court in these civil revision applications. 5. Learned counsel for the petitioners contended that the learned executing court has totally ignored the relevant provisions of the Act, 1961 and of the Civil Procedure Code and passed the impugned order. The learned executing court has not considered that the Registrar's Board of Nominee exercises its powers not only for one district in respect of Lavad cases but even for more than one district. It is a special remedy provided under the Act, 1961 for adjudication and decision of the disputes between the cooperative societies and its members and to see that these matters are expeditiously disposed of, this special forum has been provided. The distinction is only that the dispute pertain to the recovery of the money is tried as arbitration case, Lavad Suit by the Registrar or its nominees, and ultimate the decision turns out to be an award under which the society has been made entitled for the recovery of the amount mentioned therein. As it has to be recovered by some mode and the legislation has taken care of it and two modes have been provided for its recovery. The one mode is by execution of the award considering the it to be a decree by legal fiction of the civil court and second by the recovery of the said amount as a land revenue. In these cases, I am only concerned with the mode of the recovery of the amount under the award as a decree of the civil court. Carrying this contention further, learned counsel for the petitioner submitted that this is a deemed decree by legal fiction and strict provisions of the CPC cannot be made applicable to the execution thereof. Other wise also, what he contended that in case the provisions of section 39 and order 21 rule 5 and 6 of the CPC are made applicable to this execution applications, then there may be two fold difficulties. Firstly is that very purpose and object of the expeditious disposal of the disputes between the cooperative societies and its members as provided by the Act, 1961 will be frustrated and secondly, recovery of the amount of the award will also be very difficult. The award has been given by legal fiction, force of a decree of civil court only for the purpose of execution thereof and not for any other purposes. That again in case the view taken by the executing court is upheld by this Court will nothing but only to render this special provision nugatory. Lastly it is contended that the Registrar's Board of Nominee is exercising the powers through out the district and in some of the cases, in more than one districts and in fact, it is not a civil court nor the award otherwise than legal fiction, passed by it a decree under the CPC, he has no power to transfer the same. Similarly, the Registrar also is not a civil court passing the decree which is required to be transferred for execution thereof to the civil courts. Not only this both of these authorities under the Act, 1961, are not the Civil Courts who are trying the civil suits, but by necessary legal fiction these awards have been given force of a decree as if passed by the Civil Court. In support of his contentions, the learned counsel for the petitioners has produced before the court some of the Government notifications issued from time to time under the Act, 1961. 6. Shri B.D.Karia, learned counsel for the respondent assisted the Court for reaching to a correct decision on this important question of law which has arisen for consideration in these civil revision applications. 7. Before proceeding with this judgement further, I consider it necessary to briefly refer the relevant provisions of the Act, 1961 and the Code of Civil Procedure. Section 96 [1] of the Act, 1961 reads - [1] Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, management or business of a society shall be referred in the prescribed form either 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 Registrar, if the parties thereto are from amongst the following :- [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; [b] a member, past member or a person claiming through a member, past member or a deceased member of a society, or a society which is a member of the society; [c] a person, other than a member of the society, who has been granted a loan by the society, or with whom the society has or had transactions under the provisions of section 46, land any person claiming through such a person; [d] a surety of a member, past member or a deceased member, or a person other than a member who has been granted a loan by the society under section 46, whether such a surety is or is not a member of the society; [e] any other society, or the Liquidator of such a society. 8. Sub-section [2] thereof lays down that, when any question arises whether for the purposes of sub-section [1] a matter referred to for decision is a dispute or not, the question shall be considered by the Registrar, whose decision shall be final. The section 98 of the Act provides that, if the Registrar is satisfied that any matter referred to him is a dispute, within the meaning of section 96 the Registrar shall, subject to the rules, decide the dispute himself, or refer it for disposal to a nominee, or a board of nominees, appointed by the Registrar. The proviso to section 98 [1] of the Act of 1961 is not relevant for the decision of this Civil Revision Application and therefore, it is not referred to. Sub-section [2] of section 98 of the Act, 1961 is material and relevant and I consider it to make a reference thereto in this judgement. Where any dispute is referred under sub-section [1] for decision to the Registrar's nominee or board of nominees, the Registrar may at any time, for reasons to be recorded in writing withdraw such dispute from his nominee, or board of nominees, and may decide the dispute himself, or refer it again for decision to any other nominee, or board of nominees, appointed by him. Sub-section [3] again of this section is not relevant and it is not stated herein. Section 99 of the Act, 1961 lays down the procedure to be followed by the Registrar or his nominee or board of nominees for settlement of a dispute and powers of the registrar, his nominee or board of nominees. The Registrar, or his nominee or board of nominee, hearing a dispute u/s 98 shall hear the dispute in the manner prescribed, and shall have power to summon and enforce attendance of witnesses including the parties interested or any of them and to compel them to give evidence, and to compel the production of documents by the same means and as far as possible in the same manner as provided in the case of a Civil Court by the Code of Civil Procedure, 1908. Sub-section [2] of this section reflects some important light on the issue. Only in the cases where a dispute involves complicated question of law or fact, no legal practitioner in his capacity as a legal practitioner or as person holding a power of attorney shall be permitted to appear on behalf of any party at the hearing of a dispute. Section 100 of the Act, 1961 to certain extent analogous to the provision of the CPC as contained in Order 38 thereof. Section 101 of the Act, 1961 provides that, when a dispute is referred to the Registrar for decision, he or his nominee or board of nominees may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute, on the expenses incurred by the parties to the dispute in connection with the proceedings, and the fees and expenses payable to the registrar or his nominee or as the case may be, board of nominees. Such an award shall not be invalid merely on the ground that it was made after the expiry of the period fixed by the Registrar, for deciding the dispute and shall, subject to appeal or review or revision, be binding on the parties to the dispute. Sub-section [2] and [3] of this section are not relevant for the purpose of decision of this case and the same are not being referred to herein. Section 103 of the Act, 1961 is a most crucial and relevant provision and the reference of the same has to made and I consider it to be appropriate to reproduce it in this judgement, which reads as under : 103. Money how recovered - Every order passed by the Registrar or a person authorised by him under section 93 or by the Registrar, his nominee or board of nominees under section 100 or 101, every order, passed in appeal under section 102, every order passed by a Liquidator under section 110, every order passed by the State Government in appeal against orders passed under section 110, and every order passed in revision under section 155, shall, if not carried out - [a] on a certificate signed by the Registrar or a Liquidator, be deemed to be a decree of a Civil Court, as defined in clause [2] of section 2 of the Code of Civil Procedure, 1908 [V of 1908] and shall, be executed in the same manner as the decree of such court, or [b] be executed according to the provisions of the Land Revenue Code and the rules thereunder for the time being in force for the recovery of arrears of land revenue: Provided that, any application for the recovery in such manner of any such sum shall be made to the Collector, and shall be accompanied by a certificate signed by the Registrar, or by any Assistant Registrar to whom the said power has been delegated by the Registrar. Such application shall be made within twelve years from the date fixed in the order and if no such date is fixed, from the date of the order." 9. Now, I may refer the relevant provisions of the Civil Procedure Code, 1908 [hereinafter referred to as 'the Code]. Sub-section [2] of section 2 of the Code defines the decree as follows : 'Decree' means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include - [a] any adjudication from which an appeal lies as an appeal from an order, or [b] any order of dismissal for default. 10. Section 38 of the Code says that a decree may be executed either by the Court which passes it or by the court to which it is sent for execution. Section - 39 : [1] The Court which passed a decree may, on the application of the decree holder, send it for execution to another court of competent jurisdiction - [a] if the person against whom the decree is passed actually and voluntarily resides or carries on business, or personally works for gain, within the local limits of the jurisdiction of such other court, or, [b] if such person has not property within the local limits of the jurisdiction of the Court which passed the decree sufficient to satisfy such decree and has property within the local limits of the jurisdiction of such other court, or, [c] if the decree directs the sale or delivery of immovable property situate outside the local limits of the jurisdiction of the Court which passed it, or [d] if the court which passed the decree considers for any other reason, which it shall record in writing, that the decree should be executed by such other court. [2] The Court which passed a decree may of its own motion send it for execution to any subordinate court of competent jurisdiction. [3] For the purposes of this section, a Court shall be deemed to be a court of competent jurisdiction if, at the time of making the application for the transfer of decree to it, such Court would have jurisdiction to try the suit in which such decree was passed. 12. Notification of Agriculture, Forests & Cooperation Department, Sachivalaya, Gandhinagar dated 17th May 1974 was issued by the Government of Gujarat in exercise of the powers conferred by sub-section [3] of section 3 of the Gujarat Cooperative Societies Act, 1961. In this notification, a reference has been made to section 5 of the Act, 1961. Learned counsel for the petitioner submitted that it is a misprint or error or may be accidental slip in the notification and the reference has been made therein to section 3 of the Act. If we go by the provision of section 5 of the Act, 1961, this order cannot be considered to be or what to say u/s 5 of the Act, 1961. After having a glance to the provision of section 3 of the Act, 1961 and in particular sub-section 3 thereof, there is justification in the explanation furnished by the learned counsel for the petitioner that the order aforesaid was made by the Government of Gujarat in exercise of its purported powers under the said provision. Sub-section [3] of this section empowers the State Government by general or special order to confer on a person or persons appointed under sub-section [2] all or any of the powers of the Registrar under the Act. However, every person appointed under sub-section [2] of section 3 of the Act, 1961 shall work under the general guidance and the superintendence and control of the Registrar. 13. From the order dated 17/5/74, I find that looking to the sizable or substantial quantum of the litigation of this nature, the Government of Gujarat taken cares thereof and permanent board of nominees of the Registrar have been appointed and that too, for more than one district. Under this order, the power of the Registrar were given to the Board of nominees of two members for Rajkot Division, which comprises of the districts Rajkot, Junagadh, Jamnagar, Bhavnagar, Surendranagar, Amreli and Kutch. Order dated 17/5/1974 reads as under :- Agriculture, Forests & Cooperation Department, Sachivalaya, Gandhinagar Dated : 17th May 1974. :: ORDER :: Gujarat Cooperative Societies Act, 1961 [Gujarat Act of 1962] No. DDC-1172 Or. No. 227 [4] : - In exercise of the powers conferred by sub-section [3] of section 5 of the Gujarat Cooperative Societies Act, 1961 [Gujarat Act x of 1962], the Government of Gujarat hereby confers on persons specified in column No.2 of the schedule annexed hereto the powers of the Registrar as specified against them in column 5 of the said schedule. :: SCHEDULE :: Sr.No. Persons Powers 1. 2. 3. [1] Rajkot Divisions All the powers of the Registrar under section 996 to 101 for Co-op. Societies situated in Rajkot Divisions comprising of Rajkot, Junagadh, Jamnagar, Bhavnagar, Surendranagar, Amreli & Kutch Districts. Board of Nominee of the Registrar con- sisting of the following names individually. [1] Shri V.K.Purohit [2] Shri K.V.Saiyed By order and in the name of the Governor of Gujarat. sd/- [J.P.SANGHVI] Under Secretary to the Government of Gujarat Agriculture, Forest and Cooperation Department 14. The Board of Nominees of the Registrar empowered to exercise all powers of the registrar u/s 96 to 101 of the Act, 1961 for the cooperative societies situated in the Rajkot division. 11. Reference may also be have to the notification dated 30th March 1991 of the Government of Gujarat published in the Government Gazette which reads as under:- 7. [Notification No. GHKH - 24 - 91 / DDC. 1188/5204/J dated 30/3/91, Pub. in Guj. Govt. Gaz. Ext. Pt-IV-B, dated 6/4/91, p. 96[1]. In exercise of the powers conferred by sub-section [3] of section 3 of the Gujarat Cooperative Societies Act, 1961 [Guj. X of 1962] and in supersession of Government Notification, Cooperation Department No. H - 28/84/DDC/7425/G dated 22nd March 1984, the Government of Gujarat hereby confers on the officers specified in column 2 of the Schedule annexed hereto, the powers of Registrar specified against them in column 3 in respect of societies specified in column 5 for the areas specified in column 3 of the said Schedule. 14. The certificate issued in favour of the petitioner u/s 103 of the Act 1961 made by the Assistant District Registrar, Cooperative Societies, Rajkot, reads as under : "Certificate :: Pursuant to Award passed by Arbitrator against below mentioned debtors of Shri Rajkot Nagrik Sahakari Bank Ltd., Rajkot Taluka, Rajkot, Dist. Rajkot, in Lavad Case No. 296/94 for recovering : Rs. 16,669/- principal outstanding dues Rs. ______ Expenditure of members Rs. 455/- Costs of registrar's nominee - board of of nominee Rs. ________ Amount of interest upto date of decree Total Rs. 17,149/- With interest at the rate of 14.5 % on principal amount of Rs.,16,604/- till realisation. Name of defendants 1. Bhavesh Cycle Stores 2. Jagjivan Bechardas This is to certify pursuant to section 103 of the Gujarat Cooperative Societies Act, 1961 [10 of 1962] that amount of award enclosed herewith is not recovered and it is hereby ordered to get executed the said award by Civil Court. sd/- Asstt. District Registrar Cooperative Societies, Rajkot" 15. In view of the notification of the Government of Gujarat dated 30th March 1991 published in the Government Gazette on 6/4/1991, this certificate issued by the Assistant District Registrar, Rajkot shall be taken to have been issued by the Registrar under the aforesaid provision. 16. It is not in dispute between the parties that the loan has been given to the judgement debtor by the branch of the petitioner bank at Morvi for business or trade. It is also not in dispute that the property both of moveable and immoveable of the debtor / defaulter, to the best of knowledge of the petitioner, are there at Morvi. 17. If we go by the provision of the CPC, then this deemed decree by legal fiction is executable by a court which passes a decree or by the court to which it is sent for execution. The controversy centres in this case on the question that this decree is passed or deemed to have been passed by the board of nominees of Registrar at Rajkot and though under the Act, 1961, he may not have powers to execute the same, but in case the petitioners desirous of executing the same at Morvi, it has to be transferred to that court for execution by the Registrar or an officer to which the powers of the Registrar have been delegated by the Government of Gujarat. 18. Learned counsel for the parties are not at variance that the award passed by the board of nominees of the registrar is not a decree of a civil court, but by virtue of provision of section 103 of the Act, 1961, by legal fiction, it shall be deemed to have been a decree of the civil court. Otherwise also, there cannot be any dispute on this point. 19. Therefore, I am in agreement