Remanded

Jagdishbhai Kantibhai Patel v. Ananddhara Co.Op. Housing Soc. Ltd.

Gujarat HC17 Jul 2015SCA/6419/2015

Case brief

AI extract

What is this about?

This High Court set aside orders by the Board of Nominees and Gujarat State Co-operative Tribunal that dismissed a suit under Order VII Rule 11 CPC. Relying on Lokhandwala, the Court held the Board lacked power to dismiss without evidence on membership disputes, remitting the case for a proper trial on merits.

What did the court decide?

Orders dated 23.1.2014 and 13.5.2014 set aside. Suit No. 432 of 2011 restored to Board of Nominees for evidence-led decision on jurisdiction.

Jagdishbhai Kantibhai Patel Vs Ananddhara… — Pension and Retirement Benefits | Gujarat HC (2015)

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C/SCA/6419/2015 JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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SPECIAL CIVIL APPLICATION NO. 6419 of 2015

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FOR APPROVAL AND SIGNATURE:

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HONOURABLE MR.JUSTICE K.M.THAKER

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Sd/-

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1	Whether Reporters of Local Papers may be allowed to see the judgment ?	No
2	To be referred to the Reporter or not ?	No
3	Whether their Lordships wish to see the fair copy of the judgment ?	No
4	Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?	No

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JAGDISHBHAI KANTIBHAI PATEL....Petitioner(s)

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Versus

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ANANDDHARA CO.OP. HOUSING SOC. LTD & 6....Respondent(s)

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Appearance:

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MR K.M. PATEL SENIOR COUNSEL WITH MR MANISH S SHAH,

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ADVOCATE for the Petitioner(s) No. 1

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MR SHALIN MEHTA SENIOR COUNSEL MR NEERAJ J VASU, ADVOCATE

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for the Respondent(s) No. 1 - 6

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NOTICE SERVED for the Respondent(s) No. 7

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CORAM: HONOURABLE MR.JUSTICE K.M.THAKER

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Date : 17/07/2015

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ORAL JUDGMENT

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Heard Mr. Patel, learned Senior Counsel with Mr. Manish

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S. Shah, learned advocate for the petitioner and Mr. Shalin Mehta, learned Senior Counsel with Mr. Neeraj J. Vasu, learned advocate for the respondent Nos. 1 to 6

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Having regard to the facts of the case and nature of controversy, learned Senior Counsel appearing for the petitioner and respondents have jointly submitted that the petition may be decided finally at this stage.

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2.1 Therefore, the petition is taken up for hearing and final decision today, at the joint request of learned Senior Counsel.

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Considering the facts of the case and the submissions by learned Senior Counsel for the petitioner and respondents, Rule. Returnable forthwith. Mr. Neeraj J. Vasu, learned advocate has waived service of Notice of Rule on behalf of the respondent Nos. 1 to 6.

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In this petition the petitioner has challenged the judgment and order dated 13.5.2014 passed by the

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Gujarat State Co-operative Tribunal in Appeal No. 7 of 2014 below exhibit-21 whereby the application (exhibit21) came to be rejected.

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4.1 The petitioner has also challenged the order dated 23.1.2014 passed by the Board of Nominees, below exhibit 29 in Lavad Suit No. 432 of 2011 whereby the Board of Nominees rejected the suit of the petitioner. The petitioner has also prayed that the said Lavad Suit No. 432 of 2011 may be restored.

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4.2 By order dated 23.1.2014 the Board of Nominees allowed application filed by present respondent by invoking provision under Order 7 Rule 11(d) of C.P.C. and rejected the petitioner's suit at threshold by accepting defendant's defence and contention that the plaintiff i.e. this petitioner is not member of the society.

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4.3 The petitioner has stated below mentioned facts:-

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“3.6 It is submitted that after having received the above reply, the petitioner went to the society and inquired from the members about the real situation of the society and during that inquiry it was found that each member is allotted 200 yards plot and still plot number 20,21,22,27 and 28 are vacant. Petitioner says that having found this he approached the committee members to allot anyone plot out of these remaining plots and also shown his willingness to pay required amount but Devendrabhai as well as Chiragbhai Makwana has not

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answered straightway to the petitioner and the petitioner felt that they both wanted to create dummy members of their own and wanted to pocket the profits out of it and therefore, the petitioner filed one Lavad Suit bearing No. 432 of 2011 before the Learned Board of Nominees, Ahmedabad inter alia praying that the decree against the respondent no.1 society be passed to the effect that the petitioner can take any plot of 200 yards out of the plot no. 20,21,22,27 and 28 belonging to the respondent no. 1 society. It was also prayed inter alia that any resolutions, documentations or transactions done pursuant to the above plots of respondent No. 1 society be declared as illegal and made to damage the rights of the petitioner and it was also prayed in that suit that respondent no. 1 society be restrained from dealing in any manner with the above plots.....

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3.7 It is submitted that the respondent no. 1 society has appeared in that suit and filed its written statement on 10.8.2011...... It is submitted that in the above suit the present petitioner – original plaintiff has also prayed for interim injunction below Exhibit-6. It is submitted that the petitioner has also submitted written arguments for injunction application on 8.5.2013. It is submitted that in that suit court Commission was also done.....

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3.8 It is submitted that on 20.6.2012 the respondent No. 1 society made an application under Order 7, Rule 11 of the Code of Civil Procedure, 1908 for rejecting the plaint for want of jurisdiction. ..... It is submitted that pursuant to that application of the respondent no.1, the petitioner filed his written statement on 11.10.2012 wherein it was specifically contended that the application of the respondent no. 1 is misleading and against the provisions of law. It is submitted that though it was specifically contended that at the time of deciding the said application, the court is required to see only the plaint and the defense of the respondent cannot be considered nor any document produced by the respondent can be relied, although, the court below by placing reliance on the defense of the respondent no. 1 rejected the plaint of the present petitioner by passing order below exhibit-29 on 23.1.2014.

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3.9 Being aggrieved by and dissatisfied with the above order dated 23.1.2014 passed by the learned Nominees, the petitioner preferred Appeal No. 7 of 2014 before the Gujarat State Co-operative Tribunal at Ahmedabad on 7.2.2014 along with stay application. It is submitted that the respondent 7 before passing any interim order issued show cause notice returnable on 17.2.2014. It is submitted that on returnable date the respondent no. 1 through its secretary filed written statement to the stay application preferred by the petitioner in

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Appeal......

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3.10 It is submitted that on 13.5.2014 after hearing both the sides The Gujarat State Co-operative Tribunal at Ahmedabad without application of mind to the facts of the case confirmed the order passed by the learned Nominees below exhibit-29 on 23.1.2014.....”

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4.4 The petition is opposed by the respondents.

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4.5 The respondents have not filed any reply affidavit however, have opposed the petition on strength of the material on record of present petition.

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So as to consider the relief prayed for by the petitioner, it is appropriate to take into account factual background.

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5.1 From the details mentioned by the petitioner it appears that the petitioner has claimed that he is a member of the respondent no. 1 Co-operative Housing Society which is registered under the Gujarat Co-operative Societies Act, 1961 (hereinafter referred to as the “Act”).

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5.2 So as to support his claim about membership the petitioner has claimed that he has paid about Rs. 35000/towards cost of land and towards cost of share in the respondent No. 1 society.

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5.3 The petitioner has also claimed that the society accepted said amount however, at the relevant time the officer of the society did not issue receipt.

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5.4 To fortify his said submission the petitioner also relied on the Notice issued by the respondent society asking him to pay outstanding amount of Rs. 10,000/- and he claimed that the service of notice acknowledges his status as member of the society.

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5.5 With the same purpose the petitioner has also relied on the agenda of the meeting dated 21.2. 1993 which was forwarded to the petitioner by the Chairman of the society.

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5.6 The petitioner has claimed that the Chairman had forwarded the notice and the agenda to the petitioner in his capacity as member of the society and because he is a member of the society. According to the petitioner service of notice and agenda to the petitioner acknowledges and admits the fact claimed by him i.e. that he is member of the society.

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5.7 The petitioner has claimed that the Notice dated 23.8.1993 was also issued asking the petitioner to deposit outstanding amount on or before 21.11.1993.

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5.8 According to the allegations by the petitioner, when he started asking details about the alleged outstanding, the respondent no. 1 did not give any reply and therefore the petitioner, through his advocate, issued notice to the respondent and in reply to the notice, the respondent no. 1 society claimed that the petitioner is not member of the society.

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5.9 In this background and on such allegations the petitioner filed Lavad Suit no. 432 of 2011.

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5.10 It appears that alongwith the suit the petitioner also filed application seeking interim relief (i.e. exhibit-6).

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5.11 The petitioner also filed written arguments in support of the application for interim relief.

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5.12 The respondent No. 1 society claimed that the petitioner is not member of the respondent no. 1 society.

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5.13 The respondent no. 1 society in its written statement also disputed and opposed various allegations and claim raised and relief prayed for by the petitioner.

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5.14 Besides written statement which the respondent no.

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1 society filed, it also filed the application invoking provision under Order 7 Rule 11 and requested the Board of Nominees to reject the plaint / suit.

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5.15 The petitioner filed reply against the said application.

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5.16 It also appears from the record and from the submissions by learned Senior Counsel that after hearing contesting parties, the Board of Nominees accepted the respondent’s application under Order 7 Rule 11 and dismissed the suit / rejected the plaint by virtue of order (exhibit-29) dated 23.1.2014 in Lavad Suit No. 432 of 2011.

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5.17 Feeling aggrieved by the said order dated 23.1.2014 the petitioner filed Appeal No. 7 of 2014 before learned Tribunal.

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5.18 Learned Tribunal, after hearing both the sides, rejected the Appeal vide order dated 13.5.2014 and confirmed the order dated 23.1.2014 passed by the Board of Nominees.

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5.19 The petitioner is aggrieved by said two orders.

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5.20 Hence, present petition.

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The society has claimed that the Board of Nominees does not have jurisdiction to try and decide the suit because the plaintiff is not member of the society.

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6.1 As held by this Court in case between Lokhandwala Irfanbhai Hanifbhai vs. Dabhoi Mercantile Co-operative Society Ltd. [2014(1) GLR 786] the Board of Nominees does not have power akin to the Civil Court which is conferred with the authority to dismiss the suit in exercise of power conferred by virtue of Order 7 Rule 11 of the Code of Civil Procedure. Such power is not conferred on the board of nominees.

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6.2 Therefore in absence of such power the board of nominees cannot pass any order in respect of the

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application which is submitted by invoking provision under Order 7 Rule 11. Thus, on such ground the board of nominees could not have rejected the suit at its threshold.

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6.3 Besides this, the reply by the respondent no. 1 society and its claim that the petitioner is not member of the society give rise to the disputed issues of fact. The issue as to whether the petitioner is member of society or not and whether he is duly entered into society's register as its member or not, have arisen for consideration by the board of nominees.

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6.4 The said issue is such that the parties will have to establish their respective assertion by leading appropriate documentary and / or oral evidence.

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6.5 However, it appears that without considering these aspects, the board of nominees accepted application under Order 7 Rule 11 and rejected the suit / plaint at its threshold. The petitioner’s Appeal against the order yielded similar result.

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6.6 Even the learned tribunal failed to take into account

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that the board of nominees is not conferred with the power akin to the Civil Court who can in view of the provision under Order 7 Rule 11 dismiss the suit at its threshold, if any, of the eventualities or circumstances contemplated under clause (a) to clause (d) of Rule 11 is demonstrated before the civil court. It is pertinent that in those cases where disputed or triable issue arise then even civil court would be slow to exercise power under Order 7 Rule 11. Besides this for deciding such application only plain has to be taken into account and not the allegations or claims in the reply / written statement. The Board of Nominees and learned Tribunal failed to consider these aspects and without considering these aspects passed the impugned orders.

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6.7 Learned tribunal also failed to consider that even otherwise the respondent’s assertion that the board of nominees does not have jurisdiction to entertain suit is raised on singular assertion i.e. that the petitioner is not member of the society.

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6.8 Whether the petitioner is respondent society’s

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member or not whether he is duly entered into register of the society or not and / or whether he is paid partnership fees or not and / or any other amount as claimed by the society or its members or not could not have been decided at its threshold.

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6.9 The order dated 23.1.2014 passed by the board of nominees rejecting application / suit at its threshold by the authority under Order 7 Rule 11 is not maintainable because the board of nominees does not have such authority and jurisdiction to pass said order.

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6.10 Therefore said order dated 23.1.2014 deserves to be set aside.

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Since learned tribunal also failed to consider and appreciate the aspect raised by the petitioner in present case, the order passed by learned tribunal is also not maintainable, for the same reason which is applicable to the order passed by the board of nominees.

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7.1 Therefore order dated 13.5.2014 passed by learned Gujarat State Co-operative Tribunal in Appeal No. 7 of

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2014 below exhibit- 21 deserves to be set aside.

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In this view of the matter and for the foregoing reasons the order dated 23.1.2014 passed by board of nominees and the order dated 13.5.2014 passed by learned Gujarat State Co-operative Tribunal are hereby set aside.

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8.1 The matter is remitted to the board of nominees who will pass appropriate order in view of present order and restore the proceedings of Lavad Suit no. 432 of 2011 to its original file and status.

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Learned Senior Counsel for the respondent society submitted that though board of nominees is not conferred with the power similar to Civil Court’s power under Order 7 Rule 11, the board of nominees can certainly decide the objection against board's jurisdiction, as preliminary issue.

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9.1 Learned Senior Counsel for the respondent submitted that the objection goes to the root of the matter and touches the jurisdiction of the authority to entertain the litigation on hand and such objection should be considered and decided as preliminary issue.

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9.2 Learned Counsel for the respondent no. 1 society submitted that for the said purpose the petitioner will file appropriate application before board of nominees who may decide the application. It will be open to the petitioner, while replying the application which may be filed by the respondent no. 1 society, to claim right and opportunity of leading evidence.

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9.3 Learned senior counsel for the petitioner submitted that if such application is submitted the petitioner reserves right to oppose it and if the board of nominees grants such application and frames preliminary issue and proceeds to decide the same then, the parties will have to lead evidence to establish their respective claims and assertions.

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It will be necessary for the board of nominees to decide the issue in light of the documentary and / or oral evidence. This aspect will have to be considered and decided by the board of nominees depending on the application which may be submitted by the respondent no. 1 society and the reply which the petitioner may file in

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response to such application and that therefore the board of nominees will pass appropriate composite order in respect of the application/s by the parties.

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Learned senior counsel for the respondent no. 1 society submitted that the society will file appropriate application within period of 15 days after suit proceedings are restored.

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11.1 Learned senior counsel for the petitioner and respondent jointly submitted that the petitioner will also file appropriate reply and appropriate application and appropriate orders may be passed and the issue may be decided expeditiously

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It is further clarified that if the respondent no. 1 submits application requesting the Court to frame preliminary issue and to decide the objection as regards board's jurisdiction to hear and decide the Lavad Suit no. 432 of 2011 and if the petitioner also files application to lead evidence then the board of nominees shall independently decide such application in accordance with law as expeditiously as possible, preferably within one

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month, from the date of submission of the application and if the applications are allowed then issue may be decided as expeditiously as possible and preferably within four months.

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12.1 Board of Nominees will pass appropriate order, as may be required in the facts and circumstances of the case, in accordance with law and without being influenced by order dated 13.5.2014 and / or order dated 23.1.2014 passed by learned tribunal.

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12.2 It is clarified that this Court has not entered into merits of the dispute and / or rival claims by the contesting parties and this order shall not be construed as expression of this Court's view or opinion on merits of the dispute and / or merits of the proposed applications except to the extent by which the impugned orders are examined and set aside by this Court.

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With the aforesaid clarifications the petition is heard and finally decided by this order. Rule is made absolute to the aforesaid extent.

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Accordingly the petition stands disposed of in

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aforesaid terms.

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